Saipem Spa

Good morning, this is the conference call operator. Welcome and thank you for joining this IPAM 9 months 2025 results presentation. As a reminder, all participants are in listen-only mode. After the presentation there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Alessandro Puliti, CEO and General Manager. Please go ahead, sir.

Thank you and good morning. Thank you for joining us for the presentation of Saipem's results for the first nine months of 2025. I'm here in Milan today with our CFO, Paolo Calcagnini, and with the rest of the Saipem senior management team. During today's session, I will begin by presenting the key operational and financial highlights from the third quarter. Paolo will then examine more closely the financial results. And at the end, I will offer a few closing remarks before we open the floor to your questions. Let me begin with the key financials highlight of the quarter. In Q3, Saipem delivered revenues of €3.8 billion with a growth of 1.6% year-on-year and 2.1% sequentially. EBITDA stood at €437 million, growing 28.5% year-on-year and 5.8% sequentially. In Q3 2025, we posted the highest quarterly EBITDA since 2012. From a balance sheet perspective, we ended the quarter with a stable net cash positive pre-IFRS of €844 million, in line with the guidance communicated. Order intake stood at 3.2 billion euro in Q3, representing a book to bill of 0.9 and an acceleration compared to the previous two quarters. We expect this momentum to continue into Q4. Let's put the Q3 results in a broader perspective. Revenue has kept on climbing up over the last four years, on the back of the growth in backlog and supported by our steady execution. EBITDA has also constantly increased due to the quality of the new awards and to the reduced weight of legacy projects. The shifting mix toward offshore ENC and the progress made on the legacy backlog have resulted in EBITDA margin more than doubling and getting close to the 12% mark. As seen in previous years, we expect the four-quarter to be seasonally strong also in 2025. In the first nine months of the year, cash conversion remains close to 90%, having generated an operating cash flow almost equal to what we delivered in the full year 2024. Let's now deep dive into the order intake of the quarter, which is anchored on three key projects in Turkey, Guyana and Azerbaijan. These three projects confirm our strong relationship with Turkish Petroleum, ExxonMBP, and our continuation of previous projects developed for these three clients in the recent years. In Turkey, we will continue to develop the highly strategic Sakarya field. SIPEM has already successfully completed the first phase of the Sakaria Field Development Project, which was awarded back in 2021, and we are currently finalizing activities related to the second phase. The offshore campaign for the third phase will be conducted by SIPEM's Castorone Pipelay Vessel in 2027. In Guyana, the AMRED development marks the seventh project we are doing for Exxon in the country since 2017. Saipem will carry out the offshore operations mainly using the FDS-2 vessel as well as the Shenda, which is now part of our fleet on a chartered basis. Both Sakaria III and Hammerhead contribute for further extending the visibility of the utilization of our construction fleet from 2027 onwards. In Azerbaijan, the Chadeniz compression project follows the signing of a framework agreement with BP in 2024, and it further consolidates Saipan's presence in the Caspian Sea. where we have been operating since the late 90s. Let's now focus on our drilling offshore activity and the recent awards. The DVD will start operating for ENI in Indonesia toward the end of 2025. This is the beginning of a new chapter for the unit, which has operated in West Africa for about two years. who sees strong potential for long-term drilling campaigning for DVD in Indonesia. The Scarabeo 9 semi-sub remains focused in the Mediterranean Sea and has recently moved from Egypt to Libya, where she has started operating for ENI. The Santorini drill ship will continue to operate in West Africa for E&I in Ghana and in the Ivory Coast, before moving to the Mediterranean Sea to work for Energean. Lastly, the Scarabeo semi-sub received a 12-month extension from AKRBP in Norway and will now continue to operate in the country until end of 2027. We believe that we are approaching the turning point in the offshore drilling market, particularly in the deep-water activities, and we expect to see a significant ramp-up in demand from the second half of 2026 onwards. In shallow water, we are also engaged in constructive discussion with ENI in Mexico on the Perro Negro 10 unit. Let me now give you an update on CURSEL. Following the successful transfer of the drilling equipment from the volo-1 jack-up to the bolt-turned jack-up in Q2 2025, we resumed drilling activities in late August as per plan. We have now successfully completed four new drilling sockets, sockets number 5, 6, 7 and 8. and we are shortly start working on the socket number 9. We are very satisfied with the performance of the drilling machine and with the peace achieved in our operations. As such, the project timetable is confirmed. Drilling operations are expected to be finalized by end of 2026. Let's take a moment to review the utilization of our construction fleet. We have been operating at full capacity in 2025 and we are also fully booked for 2026. Looking ahead, the level of utilization for 2027 and 2028 has strengthened significantly in the last few months, mainly driven by the recent order intake. We expect to become fully booked for 2027 soon as we secure additional orders in the coming quarters. And let me now turn your attention to the commercial pipeline and the ongoing bidding activity. Despite recent market volatility, our pipeline remains robust. We have an opportunity set of €54 billion worth of projects in front of us, with around €33 billion in offshore activities. We expect €37 billion worth of upstream oil and gas projects to be awarded in the next 18 months, representing close to 70% of our total pipeline. Within that, infrastructure maintenance and upgrade projects remain significant, especially in the Middle East. We are also seeing growing momentum in LNG, fertilizer plants, CO2 management and biorefineries, which together account for around 20% of our pipeline. We are currently awaiting feedbacks on bids submitted totaling €13 billion and we are anticipated submitting additional €21 billion in bids between Q4 2025 and Q1 2026. With this level of activity, we are well positioned for continued success in the medium term. With that, I will now hand over to Paolo, who will walk you through the financial results in more details.

Thank you, Sandro, and good morning, everyone. Let's begin with slide 12, which provides an overview of our financial performance for the first nine months of 2025. We achieved an 8% year-on-year increase in revenue, reaching almost 11 billion euros. Our EBITDA grew by 33% to 1.2 billion. The growth was primarily driven by our offshore E&C operations. EBITDA margin continues to strengthen, now at 10.9%, up from 8.9% in the same period last year. This improvement reflects the growing contribution of our offshore ENC activities and the reduced impact of the legacy projects. We close the period with a net result of €221 million, marking a 7% increase compared to the last year. The operating cash flow stood at around 1.1 billion euro, mainly supported by the growth in EBITDA year-on-year. Let's now review the performance of our three businesses, moving to page 13. For the asset-based services, revenue for the first nine months of 2025 reached 6.3 billion euro, reflecting a robust 15% year-on-year increase. This growth was primarily driven by our surf and conventional operations, with a slight shift in mix in favor of conventional projects compared to the previous year. EBITDA rose to 875 million euro, reflecting a 38% increase, while the EBITDA margin improved to 13.8%. up by 230 basis points year on year. The increase in profitability is mainly driven by strong project execution in the Emirates and Qatar, the conclusion of the IRPA project in Norway, as well as progress on other initiatives in West Africa. Looking ahead to Q4 2025, we anticipate mid to high single digit growth in revenue compared to the third quarter of 2025, and a marginal improvement in the EBITDA margin. Turning to the drilling offshore on page 14. Revenue for the first nine months of 2025 amounted to €638 million, reflecting a 5% reduction compared to the same period last year. EBITDA increased by 4% year-on-year to €258 million with a solid EBITDA margin of 40.4%. The year-on-year performance of drilling offshore was primarily impacted by a reduction in the fleet size by 3 units following the suspension and terminations received from Saudi Aramco, as well as the additional mobilization costs incurred relocating rigs across different regions. These negative effects have been partially offset by the increase in the day rate of the Saipem 10,000, the higher level of activity of the Scarabeo 9 and the Pernonegro 13, and the one-off termination fee received for the Pernonegro 12. Lastly, please note that the extension of the SITEM leasing agreement for the DVD introduced a change in the accounting treatment starting from April 1, 2025. Leasing costs, which were previously netted at revenue level, are now capitalized and recorded as amortization below EBITDA. This has a positive impact both for revenue and EBITDA. For the fourth quarter of this year, we expect a mid-single digit growth in both revenue and EBITDA compared to the third quarter of 2025, supported by the new contracts signed recently. We will now conclude the review of business segments with energy carriers on page 15. Revenue increased by 2% year-on-year, reaching €4 billion. The EBITDA margin also improved compared to last year, reaching 1.7% in the first nine months of 2025, thanks to the lower impact of legacy projects compared to the previous years. For the last quarter of 2025, we expect double digit increase in revenue compared to the third quarter. Turning to page 16, I would like to highlight to you a few items below EBITDA. First, DNA reached 737 million euro, representing an increase of 249 million euro compared to last year. The growth of DNA is mainly due to the expansion of our construction fleet on a charter basis. in particular with the Boltern, the Chenda and the Norman Frontier, entering the fleet in 2025 and to the accounting impact of the extension of the DVD dealership lease. We expect DNA in Q4 to be broadly in line with what was recorded in Q3. Financial expenses totaled €141 million in the first nine months, increasing by €37 million year-on-year. The increase in financial expenses is a result of the growth of the interest component related to the medium to long-term leases, the higher project hedging costs driven by the widening interest rates differential between the US dollars and the euro, as well as the effect of FX movements, partially offset by lower net interest costs. Last but not least, income taxes declined by €14 million year-on-year, standing at €117 million for the first nine months of the year. The effective tax rate also decreased from 39% last year to 35% this year. Let's focus now on the cash flows and net financial position on page 17. Our net cash position pre-IFRS 16 has improved by 161 million euros. growing from €683 million at the end of December 2024 to €844 million at the end of September 2025. The positive development is mainly attributable to strong operating performance, favourable working capital trends, in particular in the first half of this year, And they proceed from the sale of our stake in KCA Doitag, partially offset by CAPEX and by the dividend payment. Least liabilities have increased by close to €600 million in the first nine months of the year, driven by higher volume of vessels chartered. and the accounting impact of the DVD lease extension. Looking ahead at Q4, as already anticipated, we expect positive, but limited cash flows generation, mainly due to the impact of the expected capital and lease repayments. I will now hand back to Sandro for his closing remarks.