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SBM Offshore Strategy and Emerging Opportunities
- 1. © SBM Offshore 2013. All rights reserved. www.sbmoffshore.com Barclays Conference, September 2013
- 2. IR- 09/09/2013 Some of the statements contained in this presentation that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of the Company’s business to differ materially and adversely from the forward-looking statements. Disclaimer 2 Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed, or expected. SBM Offshore NV does not intend, and does not assume any obligation, to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.
- 3. Agenda Who we are, where we are Emerging Opportunities Our Strategy 3
- 4. IR- 09/09/2013 SBM Offshore No.1 FPSO Player Worldwide 4 Financials in US$ billion 2013 IFRS Revenue Outlook 4.3 Directional* Backlog (as of 30/06/2013) 22.4 Market Cap (as of 11/09/2013) 4.3 Performance YE2012 167 years of FPSO operations 99 % Uptime 1 million barrels of throughput per day 5,460 Tanker Offloads The Company 4 Execution Centres 10 Shore Bases 5 Representative Offices 8,507 Employees Lease Fleet 16 FPSOs 2 FSOs 1 Semi Sub 1 MOPU 4¹ Directional view is a non-IFRS disclosure, which corrects the non-cash effects on revenue and earnings introduced by IFRS finance lease accounting
- 5. IR- 09/09/2013 We Deliver along the Full Product Lifecycle 5 Product Life Extension Leader in FPSO relocation World class after sales Operations 160+ years of FPSO experience 99+% production uptime Largest international FPSO fleet Installation Dedicated fleet Unparalleled experience Extensive project capability Construction Strategic partnerships Unrivalled project experience Procurement Integrated supply chain Global efficiencies Local sourcing Engineering 50 years of industry firsts Leading edge technology
- 6. IR- 09/09/2013 H1 2013 Key Figures (in millions of US$) 6*Restated for comparison purposes
- 7. IR- 09/09/2013 US$18.7 bn US$3.7 bn Directional Backlog 7 Lease & Operate Turnkey US$22.4 bn 0.0 0.5 1.0 1.5 2.0 2.5 3.0 H2 2013 2014 2015 inUS$bn Turnkey backlog: Directional¹ vs IFRS Directional IFRS 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 inUS$bn Lease & Operate backlog: Directional¹ vs IFRS Directional IFRS ¹ Directional view is a non-IFRS disclosure, which corrects the non-cash effects on revenue and earnings introduced by IFRS finance lease accounting
- 8. IR- 09/09/2013 SBM Lease Fleet Portfolio 8 L&O Portfolio Average Duration: 14.5 years
- 9. IR- 09/09/2013 • Continue strengthening Balance Sheet post Rights Issue • No dividend over 2013 • Sale of non-core assets ongoing • Contracts executed for FPSO Cidade de Maricá, FPSO Cidade de Saquarema and FPSO Stones • Delivery of Deep Panuke and FPSO OSX 2 • Updating 2013 IFRS revenue guidance to approximately US$4.3 billion • US$3.3 billion in Turnkey • US$1.0 billion in Lease & Operate H2 2013 Outlook 9
- 10. Agenda Who we are, where we are Emerging Opportunities Our Strategy 10
- 11. IR- 09/09/2013 Understanding Global Market 11
- 12. IR- 09/09/2013 Understanding Our Clients 12 Production vs. E&P Spending Sources: Pareto, Companies 0 100 200 300 400 500 600 Index E&P Spending (volume) E&P Spending (nominal) Oil & Gas production CAGR 6.8% 14.1% 1.8% • Cash Flows situation of clients • Cost of new developments • IOCs vs. NOCs • Delays in project sanctions due to increasing field complexity
- 13. IR- 09/09/2013 Demand for New Production Source: Morgan Stanley, IEA, Internal analysis 0 10 20 30 40 50 60 70 80 90 100 11 12 13e 14e 15e 16e 17e 18e inmillionbarrelsperday Demand Growth vs. Field Depletion 2011/12 Demand Existing Supply Offsetting decline (5% depletion rate) Meeting demand growth Spare capacity 13 Over 24 mln bbl/day = 2 x 2012 Saudi Arabia production
- 14. IR- 09/09/2013 • Deep and ultra-deep water breakeven costs are competitive • Average SBM Generation 3 FPSO production costs are below US$5/bbl Oil Production Dynamics 14 Breakeven Oil Price (IRR>10%) Sources: IEA, CERA, Total, Goldman Sachs, Internal analysis
- 15. IR- 09/09/2013 What’s Happening? 15 Source: Goldman Sachs • Remote discoveries favorable for FPSOs • Exponential technology demand • High end of FPSO market: production capacity above 100,000 bl/day 0 5,000 10,000 15,000 20,000 25,000 Onshore 0-500 500-1000 1000-1500 1500-2000 2000+ inmlnbbls Water Depth (m) Trends in Giant Field Discoveries Oil discoveries over past 3 years Oil discoveries over past 6 years
- 16. IR- 09/09/2013 • Offshore Growth CAGR 2012-15E: +20% • Ultra-deep Water Growth CAGR 2012-15E: +38% • Onshore Growth CAGR 2012-15E: +38% Capitalising on CAPEX 16 Source: Goldman Sachs 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 2010 2011 2012 2013 E 2014 E 2015 E inUS$mln Global Upstream CAPEX (in US$ mln) Total Onshore Deep water Ultra-deep water Other Offshore
- 17. IR- 09/09/2013 Regional Opportunities • Growth located in: North America Africa Latin America 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E inUS$mln Top 380 Giant Fields: Ultra-deep Water CAPEX North America Latin America Africa Asia- Pacific Other Source: Goldman Sachs 17
- 18. IR- 09/09/2013 -3,000 -2,500 -2,000 -1,500 -1,000 -500 0 1996 2001 2006 2011 2016 WaterDepth(m) Year of first oil Cd de Ilhabela Cachalote Cd de Anchieta Serpentina Xikomba Brasil Espadarte Kuito SBM Record in Serving Depth Trend 18 Marlim Sul Cd de Paraty P 57 Mondo Saxi N’Goma Kikeh Frade BC 10 Aseng Cd de Marica Cd de Saquarema Stones Source: Internal analysis-July 2013
- 19. IR- 09/09/2013 Scale and Complexity 19 Turrets – Swivel stack size Swivelstacksizeinmeters Source: Internal Analysis - August 2013
- 20. IR- 09/09/2013 Getting Complex November 20121996IR – 09/09/2013
- 21. IR- 09/09/2013 FPSO Awards in Review 21 Source: Internal Analysis - August 2013
- 22. IR- 09/09/2013 0 1 2 3 4 5 6 7 0 50,000 100,000 150,000 Awardswon Average production capacity (bbl/d) Engineering complexity FPSO Market 2010-2013 YTD Awards Converted FPSOs only Supply side Source: Internal Analysis – September 2013 22
- 23. IR- 09/09/2013 FPSO Market Outlook Field developments requiring FPSOs over the next 3 years More than 50 FPSO project awards anticipated SBM will focus on ~20 projects to obtain targeted share Source: Internal Analysis - August 2013 23 Lease Sale Lease or Sale 51 2 Asia 3 1 Other 4 3 North America 8 4 5 Africa 14 2 2 South America
- 24. Agenda Who we are, where we are Emerging Opportunities Our Strategy 24
- 25. IR- 09/09/2013 FPSO FPSO FPSO FPSO³ 25 The Company has refocused its product line on core FPSO products and associated services. By focusing on core products with historically good margins, whilst improving execution standards and project risk profiles, the Company believes it will return to delivering superior financial returns.
- 26. IR- 09/09/2013 Improving Risk/Reward Balance 26IR – 09/09/2013 • Unsustainable historic industry returns • SBM recent steps: Discipline in tendering Attractive niche position Not a commodity product Excellent operations (99% uptime) July 2013
- 27. IR- 09/09/2013 Improving Risk/Reward Balance 27IR – 09/09/2013 July 2013 Current Focus: Consultations with clients Improving standard terms and conditions in the industry contracting practice
- 28. IR- 09/09/2013 2013 Restoring Pride 28 Closure of legacy projects Selective bidding policy Investment in technological edge Strengthened balance sheet Directional reporting Reshaped organisation Still in Transformation Process
- 29. IR- 09/09/2013 Local Content: Competitive Advantage 29IR - 07/08/2013 Brazil: In-country presence since 1995 First FPSO in 1997 Brasa yard key asset for SBM Stake in biggest floating crane in Latin America Over 2,700 employees August 2013 29IR – 09/09/2013
- 30. IR- 09/09/2013 Local Content: Competitive Advantage 30IR - 07/08/2013 Angola: In-country presence since 1968 First FPSO in 1999 Paenal yard key asset for SBM: biggest crane in West Africa Over 1,400 employees August 2013 30IR – 09/09/2013
- 31. © SBM Offshore 2013. All rights reserved. www.sbmoffshore.com Q&A Session 31