half year 2018 earnings update august 9, 2018 - …...the trademark "sbm offshore", the...
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© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
SBM Offshore
Barclays CEO Energy-Power Conference
September 4, 2018
2© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Disclaimer
The companies in which SBM Offshore N.V. directly and indirectly owns investments are separate legal entities. In this presentation “SBM
Offshore” and “SBM” are sometimes used for convenience where references are made to SBM Offshore N.V. and its subsidiaries in general.
These expressions are also used where no useful purpose is served by identifying the particular company or companies.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of SBM. All
statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are
statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown
risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these
statements. Forward-looking statements include, among other things, statements concerning the potential exposure of SBM to market risks
and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. All forward-looking
statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this
section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date
of this presentation. Neither SBM Offshore N.V. nor any of its subsidiaries undertakes any obligation to publicly update or revise any forward-
looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from
those stated, implied or inferred from the forward-looking statements contained in this presentation.
© 2018. This presentation is the property of SBM Offshore N.V. or any of its subsidiaries (together referred as “SBM”) and contains material
protected by intellectual property rights, including copyrights, owned by SBM. The trademark "SBM Offshore", the SBM logomark and the
SBM trademark “Fast4ward” which covers a proprietary and patented SBM technology, are registered marks owned by SBM.
All copyright and other intellectual property rights in this material are either owned by SBM or have been licensed to SBM by the rightful
owner(s) allowing SBM to use this material as part of this presentation. Publication or other use, explicitly including but without limitation to
the copying, disclosing, trading, reproducing, or otherwise appropriating of information, illustrations etc., for any other purposes, as well as
creating derivative products of this presentation, is prohibited without the prior express written consent of SBM.
© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Setting the scene
Long term macro trends
Why SBM Offshore?
4© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Why SBM Offshore, and why now..?
+25%Global energy demand
growth by 2040
50%of Deepwater projects
more competitive than
Shale
Perfectly
Positioned
5© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Leading Global FPSO Contractor
> 50FLOATING PRODUCTION
SYSTEMS DELIVERED
2LARGE PROJECTS UNDER
CONSTRUCTION
Early and late
cycle player99%
HISTORICAL OIL
PRODUCTION UPTIME
1st
FAST4WARDTM CONCEPT
TO PROJECT AWARD
10%GLOBAL DEEPWATER OIL
PRODUCED BY SBM UNITS
© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Setting the scene
Long term macro trends
Why SBM Offshore?
7© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Long Term Macro Trends
Population growing to 8.5 billion in
2040
Global energy demand +25% by
2040
Electricity demand doubles in
non-OECD countries, four times
faster than other fuels
Natural gas volume to increase
more than any other energy source
Oil continues to play a leading role
in the world’s energy mix until 2040
Electricity from Solar and Wind
+400% by 2040
+25%
Source: IMF, IEA, BP
8© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Oil Remains Primary Source
Source: EIA International Energy Outlook 2018
World Energy Consumption by Energy Source (quadrillion Btu)
1990 2000 2010 2020 2030 2040
0
50
100
150
200
250
History Projection
9© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Supply Gap
Lack of investment since
2014
Supply gap projected
Investment required
Not if,
but when
World Oil Supply and Demand
Existing supply + planned fields Extra recovery existing fields Demand range
Millio
n b
bls
/d
Source: IEA
10© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
0
20
40
60
80
100
120
140
TM
Shale2
Deepwater
30
35
40
45
50
55
60
0 2 4 6 8 10
Ave
rag
e B
ren
t B
rea
k-e
ve
n P
ric
e
(US
$/b
bl)
Average Payback Time (years)
Deepwater is Competitive
Deepwater continues to gain
competiveness
>50% Deepwater projects
more competitive than shale
Traditional Deepwater longer
cycle
Deepwater cycle
time is key
Source: Goldman Sachs, Rystad Energy, BofAML
(1) Goldman Sachs Top Projects 2018 cost curve by win zone (prospective projects)
(2) Top five shale plays used as representative example
(3) Size of bubble corresponds to greenfield Capex expected to be sanctioned in 2018
US$100 billion Greenfield cost3
Project Economics
Oil Projects Cost Curve1
Shale
Deepwater
Traditional
Bre
ak
-eve
n P
ric
e
(bb
l/U
S$
)
Cumulative Peak Oil Production (kboe/d)
5,000 10,000 15,0000
11© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Source: SBM Offshore research, company presentations
(1) Award FPSO Liza 2 subject to authorizations
Overall FPSO Market
Four awards to date in 2018
Up to 10 awards expected in
2018
2019 acceleration anticipated
Improving outlook
5
1
3
12
12
3
1 11
3
6
3
7
0
2
4
6
8
10
12
14
16
18
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 e2018e2019
Historical and Estimated Total FPSO Market Awards
SBM Offshore Awards FPSO Awards FPSO Awards Bear Case FPSO Awards Bull Case
© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Setting the scene
Long term macro trends
Why SBM Offshore?
13© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
0%
40%
80%
120%
Jan-11 Aug-11 Feb-12 Sep-12 Apr-13 Nov-13 Jun-14 Jan-15 Aug-15 Mar-16 Oct-16 May-17 Dec-17 Jul-18
SBM Offshore Relative Share Price Development
Dealt with the past…
2012 2014 2017 2018
Start internal investigation
and rights issue
Settlement Dutch
Prosecutor’s office
Resolution
US DoJ
Signed Brazilian
Leniency Agreement
2011
Provisions on Yme and
Deep Panuke platforms
Legacy costs approaching
SBM Market Cap
SBM Offshore
OSX
Brent
14© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Promising outlook thanks to
company positioning
…now perfectly positioned for the future
Regained all
markets access
Game changing
program
Industry leading
experience
Strong cash flows
for dividend & growth
2020 2021 20222019
US$ 16.1billion backlog
2023
Robust balance
sheet
US$ 0corporate debt
15© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Fast4Ward™ Philosophy
Our ambition is to transform the
business by reducing cycle time to
energy delivery, de-risking
projects, and improving quality &
safety. This is what we refer to as
Fast4Ward™
Fast4Ward™ is based
on five key principles
1. Client first
2. Standardization
3. Flawless execution
4. Integrated supply chain
5. Enabling digital solutions
Fast4Ward™ Better Performance, Delivered Faster
TM
16© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
The Answer
TM
Reducing cycle
time
Up to 12 months faster;
Up to $1 bn NPV gain
De-risking
projects
Enabling lower
break-evens
Standardized hull and
topsides
Less engineering hours
Integrated supply chain
Greater safety and reliability
Fast4Ward™ Better Performance, Delivered Faster
Lower Capex and Opex
17© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Time is Money
0%
10%
20%
30%
40%
50%
30 40 50 60 70 80 90 100 110 120
Oil
Co
mp
an
y I
RR
US$/bbl
Time to First Oil Scenarios1
1 yr gain
On time delivery
1 yr delay
2 yr delay
3 yr delay
290
489
699
899
1,106
-
500
1,000
1,500
30 50 70 90 110
US$/bbl
NPV impact 12 months acceleration to 1st Oil1
NP
V g
ain
(in
US
$ m
illio
n)
Fast4WardTM accelerates first
oil up to 12 months
Up to US$1 billion gain
Every 1 year acceleration
improves break-even up to
US$10 per barrel (IRR 15%)
Major client gains
Source: Barclays
(1) Based on Barclays model, reflects major world-class greenfield development
18© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
TM
0.5
0.7
0.9
1.1
1.3
1.5
1.7
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9
De-risking Delivery
Delivery is challenging
Fast4WardTM: lower risk and
higher return
Standardization and supply
chain integration
Experience matters
Source: Goldman Sachs, Rystad Energy, SBM Offshore company research
(1) Profitability Index = NPV/ Initial investment. Risk score is Goldman Sachs internal method based on technical and political risk
Risk
Deepwater
Pro
fita
bilit
y
FPSO delivery delay (months)
FP
SO
pro
jec
ts
Oil production sources
19© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Why SBM Offshore, and why now..?
+25%Global energy demand
growth by 2040
50%of Deepwater projects
more competitive than
Shale
Perfectly
Positioned
© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com
Q&A