Subsea 7

Earnings Release • Nov 21, 2024

Subsea 7 S.A. Announces Third Quarter 2024 Results

Subsea 7 S.A. Announces Third Quarter 2024 Results

Luxembourg - 21 November 2024 - Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY,

ISIN: LU0075646355, the Company) announced today results of Subsea7 Group (the

Group, Subsea7) for the third quarter which ended 30 September 2024.

Highlights

* Third quarter Adjusted EBITDA of $321 million, up 59% on the prior year

period, equating to a margin of 18%

* Robust free cash flow of $138 million in the third quarter, leading to a

reduction in net debt of $170 million

* Adjusted EBITDA in the first nine months of 2024 of $775 million, exceeding

the prior full year, driven by solid revenue growth and strong expansion of

margins to 16% from 11% in the prior year

* On track to deliver full year 2024 Adjusted EBITDA between $1,025 and $1,075

million, growth of over 40% year-on-year

* A high-quality backlog of $11.3 billion implies around 75% visibility on

2025 revenue guidance and supports the outlook for Adjusted EBITDA margin

expansion to 18 to 20%

* Approximately $250 million returned to shareholders in line with our

commitment to return at least $1 billion to shareholders over the period

from 2024 to 2027

Third Quarter Nine Months Ended

---------------------------------------------

For the period (in $ millions,

except Adjusted EBITDA margin and Q3 2024 Q3 2023 30 Sep 2024 30 Sep 2023

per share data) Unaudited Unaudited Unaudited Unaudited

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Revenue 1,834 1,578 4,968 4,342

Adjusted EBITDA((a)) 321 201 775 470

Adjusted EBITDA margin((a)) 18% 13% 16% 11%

Net operating income 163 64 319 50

Net income 98 36 190 21

Earnings per share - in $ per

share

Basic 0.31 0.11 0.60 0.11

Diluted((b)) 0.31 0.11 0.60 0.11

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30 Sep 2024 30 June 2024

At (in $ millions)     Unaudited Unaudited

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Backlog((a))     11,300 12,544

Book-to-bill ratio((a))     0.3x 2.3x

Cash and cash equivalents     440 290

Borrowings     (803) (783)

Net debt excluding lease

liabilities((a))     (363) (494)

Net debt including lease

liabilities((a))     (857) (1,027)

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(a) For explanations and reconciliations of Adjusted EBITDA, Adjusted EBITDA

margin, Backlog, Book-to-bill ratio and Net debt refer to the 'Alternative

Performance Measures' section of the Condensed Consolidated Financial

Statements.

(b) For the explanation and a reconciliation of diluted earnings per share refer

to Note 7 'Earnings per share' to the Condensed Consolidated Financial

Statements.

John Evans, Chief Executive Officer, said:

Subsea7 delivered strong financial results in the third quarter, with solid

progress on major projects in Subsea and Conventional, and high utilisation and

good performance from our Renewables fleet. In the first nine months of 2024,

the Group has delivered Adjusted EBITDA of $775 million, exceeding the prior

full year period, and we are on track to meet our profitability objectives for

2024.  With approximately three quarters of 2025 revenue already booked in

backlog, and with a beneficial project margin mix, I am confident that the

business will continue to deliver strong growth in profitability next year.

Subsea7's senior management team is focused on ensuring high conversion of

future profitability into cash flow and continues to prioritise shareholder

returns within our capital allocation framework, alongside a disciplined

approach to reinvestment. In February we committed to return at least $1 billion

to shareholders over four years from 2024 to 2027, and the first tranche of

approximately $250 million has been completed in November.

Third quarter project highlights

In Subsea and Conventional, our portfolio of projects in Brazil made good

progress, particularly Mero 3&4, where Seven Vega completed its first rigid

pipelay trip. Yggdrasil, in Norway, also made a good contribution with offshore

activities for Seven Arctic and Seven Navica, while in Guyana, the Gas-to-Energy

project approached operational completion. Marjan 2, in Saudi Arabia neared

completion, with the final platform float-over operation expected by year end.

In Renewables, utilisation of our key installation vessels was very high

including Seaway Aimery, at the Revolution inter-array cable project in the US,

Seaway Ventus, installing turbines at Borkum Riffgrund 3 in Germany, and Seaway

Strashnov and Seaway Alfa Lift at Dogger Bank B in the UK. We were also active

with cable lay in Taiwan where Seaway Phoenix and Seaway Moxie were working on

the Yunlin project while Maersk Connector continued to progress Hai Long.

Third quarter financial review

Revenue of $1.8 billion increased 16% compared to the prior year period.

Adjusted EBITDA of $321 million equated to an Adjusted EBITDA margin of 18%, up

from 13% in Q3 2023. This was driven by a strong performance in both business

units as major projects made good operational progress.

After depreciation and amortisation of $158 million, net operating income was

$163 million, compared to net operating income of $64 million in the prior year

period. Net finance costs of $20 million and taxation of $70 million, resulted

in net income for the quarter of $98 million compared with $36 million in the

prior year period.

Net cash generated from operating activities in the third quarter was $270

million, including a $27 million increase in net working capital. Net cash used

in investing activities was $126 million mainly comprising $132 million related

to the purchases of property, plant and equipment and intangible assets,

including Seven Merlin. Net cash used in financing activities was $78 million

including share repurchases of $20 million and lease payments of $60 million.

Overall, cash and cash equivalents increased by $150 million to $440 million at

30 September 2024. This resulted in net debt of $363 million excluding lease

liabilities, or $857 million including lease liabilities of $495 million.

Third quarter order intake was $0.6 billion comprising new awards of $0.3

billion and escalations of $0.3 billion resulting in a

book-to-bill ratio of 0.3 times. Book-to-bill for the first nine months of 2024

was 1.2 times. Backlog at the end of September was $11.3 billion, of which $1.8

billion is expected to be executed in 2024, $5.3 billion in 2025 and $4.2

billion in 2026 and beyond.

Outlook

Management remains confident in the outlook for the Group supported by a high

backlog, a robust tendering pipeline and positive conversations with clients in

both the subsea and offshore wind industries.

Regarding full year 2024, revenue is expected to be towards the upper end of the

range from $6.5 to $6.8 billion while Adjusted EBITDA is expected to be between

$1,025 and $1,075 million.

Looking ahead to full year 2025, revenue is anticipated to be between $6.8 and

$7.2 billion. As the mix of activity continues to shift to projects won in a

more favourable environment, our Adjusted EBITDA margin is expected to be

between 18 and 20%. This margin is expected to continue to improve, exceeding

20% in full year 2026.

Overall, through strong positions in lower-carbon oil and gas, as well as

offshore wind, Subsea7 is well-placed to deliver the energy the world needs for

today and tomorrow.

Conference Call Information

Date: 21 November 2024

Time: 11:00 UK Time, 12:00 CET

Access the webcast at subsea7.com (https://edge.media-server.com/mmc/p/sdhad4b2)

or https://edge.media-server.com/mmc/p/5nrn5bvo/

Register for the conference call

https://register.vevent.com/register/BI6983efafda664e1f94fb1a5d355e684b

For further information, please contact:

Katherine Tonks

Head of Investor Relations

Email: ir@subsea7.com (mailto:ir@subsea7.com)

Telephone: +44 20 8210 5568

Special Note Regarding Forward-Looking Statements

This document may contain 'forward-looking statements' (within the meaning of

the safe harbour provisions of the U.S. Private Securities Litigation Reform Act

of 1995). These statements relate to our current expectations, beliefs,

intentions, assumptions or strategies regarding the future and are subject to

known and unknown risks that could cause actual results, performance or events

to differ materially from those expressed or implied in these statements.

Forward-looking statements may be identified by the use of words such as

'anticipate', 'believe', 'estimate', 'expect', 'future', 'goal', 'intend',

'likely' 'may', 'plan', 'project', 'seek', 'should', 'strategy' 'will', and

similar expressions. The principal risks which could affect future operations of

the Group are described in the 'Risk Management' section of the Group's Annual

Report. Factors that may cause actual and future results and trends to differ

materially from our forward-looking statements include (but are not limited to):

(i) our ability to deliver fixed price projects in accordance with client

expectations and within the parameters of our bids, and to avoid cost overruns;

(ii) our ability to collect receivables, negotiate variation orders and collect

the related revenue; (iii) our ability to recover costs on significant projects;

(iv) capital expenditure by oil and gas companies, which is affected by

fluctuations in the price of, and demand for, crude oil and natural gas; (v)

unanticipated delays or cancellation of projects included in our backlog; (vi)

competition and price fluctuations in the markets and businesses in which we

operate; (vii) the loss of, or deterioration in our relationship with, any

significant clients; (viii) the outcome of legal proceedings or governmental

inquiries; (ix) uncertainties inherent in operating internationally, including

economic, political and social instability, boycotts or embargoes, labour

unrest, changes in foreign governmental regulations, corruption and currency

fluctuations; (x) the effects of a pandemic or epidemic or a natural disaster;

(xi) liability to third parties for the failure of our joint venture partners to

fulfil their obligations; (xii) changes in, or our failure to comply with,

applicable laws and regulations (including regulatory measures addressing

climate change); (xiii) operating hazards, including spills, environmental

damage, personal or property damage and business interruptions caused by adverse

weather; (xiv) equipment or mechanical failures, which could increase costs,

impair revenue and result in penalties for failure to meet project completion

requirements; (xv) the timely delivery of vessels on order and the timely

completion of ship conversion programmes; (xvi) our ability to keep pace with

technological changes and the impact of potential information technology, cyber

security or data security breaches; (xvii) global availability at scale and

commercially viability of suitable alternative vessel fuels; and, (xviii) the

effectiveness of our disclosure controls and procedures and internal control

over financial reporting. Many of these factors are beyond our ability to

control or predict. Given these uncertainties, you should not place undue

reliance on the forward-looking statements. Each forward-looking statement

speaks only as of the date of this document. We undertake no obligation to

update publicly or revise any forward-looking statements, whether as a result of

new information, future events or otherwise.

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange release was published by Katherine Tonks, Investor

Relations, Subsea7, on 21 November 2024 08:00 CET.