Saipem Spa

Good morning, this is the Chorus Call Conference Operator. Welcome and thank you for joining the CYPEM Full Year 2025 Results Conference Call. 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 send an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Alessandro Puliti, CEO of Saipem. Please go ahead, sir.

Good morning, and thank you for joining the presentation of Saipem Full ER 2025 results. I am here in Milan today with our CFO Paolo Calcagnini and with the other members of Saipem senior management team. Today's session will be structured as follows. I will begin with an overview of the key operational and financial highlights of the four quarters. Paolo will then provide more details on the financial results. and then I will wrap up the presentation with a few closing remarks, including the guidance for 2026. We will then open the floor to all your questions. Let's begin with the key highlights of the four quarters. In Q4, Saipem posted revenues of €4.5 billion, growing by 2% year-on-year and almost 20% sequentially. EBITDA in Q4 stood at €515 million, growing 21% year-on-year and 18% sequentially, corresponding to an EBITDA margin of 11.4%. Our balance sheet remains very strong. At the end of 2025, we recorded a net cash position of almost 1 billion euro, thanks to a free cash flow generation of more than 200 million euro in Q4. The order intake in the fourth quarter stood at €5.4 billion, representing a book-to-bill of 1.2 and a strong acceleration compared to the previous three quarters. Let's now look at the Q4 results in the context of what has been achieved by Saipem in the last four years. Since 2022, on the back of a strong order intake and a steady execution, we have delivered consistent growth, improved margins, and a significant cash flow conversion. In Q4 2025, Saipem delivered once again the strongest quarter ever in terms of revenue, EBITDA, and operating cash flow. EBITDA has increased by a factor of five times since the beginning of 2022, with EBITDA margins doubling in the same period. This trend reflects the shift toward offshore E&C and the steady progress made in the execution of the legacy backlog. EBITDA margin expansion is has also accelerated in 2025 compared to the previous years. We are also very pleased to report that the EBITDA growth has translated into cash flow with an 88% conversion rate in 2025. Let's now focus on the recent awards. As expected, we have seen a strong acceleration in order intake in Q4, with activity concentrated in the offshore ENC segment. The order intake in the quarter also reflects the resilience of the investor plans of national oil companies, in particular in the Middle East. In Qatar, we were chosen again by Qatar Energy LNG to deliver the APCI contract for the Comp 5 package of the NFPS compression project. These awards built on the Comp 2 and the Comp 3 packages, which are currently under execution by Saipem. The offshore campaign, COM5, is planned for 2029 and 2030, further enhancing the visibility on the utilization of our construction fleet. In Saudi Arabia, Saipem secured two offshore contracts under our long-term agreement with Aramco. The fabrication activity related to the two projects will take place in our Dammam facilities, supporting the growth of local industry and reinforcing our long-standing relationship with Aramco. In Turkey, Saipem was awarded an add-on contract for the additional work related to the third phase of the Sakaria gas field development. our Castorone pipeline vessel will execute the offshore campaign in the second half of 2027, in continuity with the activity already planned. And let me now turn your attention to our commercial pipelines. Despite the softness in commodity price experienced in 2025, our commercial pipeline remains robust. We currently see €54 billion worth of opportunities ahead of us. These include €32 billion in offshore and €22 billion onshore. Gas upstream projects continue to be an important component of our pipelines. In terms of geographies, we see several opportunities in the Middle East, Latin America, Far East, as well as in East and West Africa. 2026 is likely to be a strong year in terms of order intake. As you recall, the last year started slowly, but in Q3 and Q4 we experienced an acceleration in order intake. This phasing is likely also to be replicated in 2026, as many clients are planning their final investment decision in Q2 and Q3. Now I'd like to provide an operational update on two important projects for Saipem, Courcelles and P79. Looking at Courcelles to date, we have successfully drilled 18 sockets, with 46 remaining to be drilled. The drilling machine is performing well and in line with our expectations. In the coming months, we expect the piece of drilling to accelerate due to a combination of three factors. First of all, better weather conditions that will reduce the weather downtime. Second, the largest sockets in terms of diameters have been already drilled. And third, there will be a continuous learning curve in the execution. We remain confident that the drilling campaign will be completed in a timeline coherent with the expectation of our client. Let me now spend a few words on the delivery of the P79 FPSO to Petrobras. As you may recall, the project was awarded by Petrobras to Saipem back in 2021. The P79 FPSO is one of the largest globally, with a storage capacity of around 2 million barrels of oil and a production capacity of 180,000 barrels of oil per day. The construction of the FPSO was completed in 2025. with a sale away from South Korea taking place last November and the FPSO arriving at the Buzios fields two weeks ago. The construction of the FPSO involved almost 30 million hours of work on the side-to-side. The FPSO was delivered in a timeline coherent with the expectations of the client. And now, let me hand over to Paolo for more details on the financials.

Thank you, Sandro. Good morning, everyone. Let me start with slide 11, which shows the main highlights of Saipem results for the full year 2025. Revenue stood at 15.5 billion euro. This is a 7% increase compared to 2024. EBITDA grew by 29% year-on-year from 1.3 billion euro to 1.7 billion euro. EBITDA margin grew by 2 percentage point year-on-year from 9.1 to 11.1. This is mainly driven by the margin expansion of the offshore ENC business. Net result remained broadly stable year-on-year, mainly due to one-off non-monetary items below EBITDA. and higher financing costs and taxes. Operating cash flow stood at 1.5 billion compared to 1.1 in 2024. Let's now look at how the three businesses performed, starting from asset-based services on page 12. Revenue exceeded the 9 billion euro in 2025, a growth rate of 12% year-on-year. This was mainly driven by our surf and conventional operations, with a slight shift in mix in favor of conventional projects compared to the previous year. EBITDA almost reached €1.3 billion in 2025, with an EBITDA margin of 14.4%, up by 2.6 percentage points compared to 2024. In particular, EBITDA margin in Q4 stood at a solid 15.7%, also due to a marked increase in the utilization rate of our fleet in the quarter. EBIT margin also grew year-on-year from 5.7% to 6.1%, with 7.5% in Q4. but increase was less pronounced than at EBITDA level due to the growth in DNA associated with the leasing contracts. Looking at 2026, we anticipate low single digit growth in revenue and double digit growth in EBITDA compared to 2025, with a further improvement in EBITDA margin. The year 2026 will be more than 90% covered by the execution of projects already in the backlog. Let's now move to the drilling offshore segment, as outlined on page 13. Revenue for 2025 declined by 10% compared to the previous year. EBITDA declined by 5%, with the EBITDA margin improving by 170 basis points versus 2024. Such performance mainly reflects the reduction in fleet size by three units, following the suspension and termination of contracts by Aramco, as well as the costs associated with moving rigs to new locations. In particular, Q4 was impacted by the one-off cost related to the mobilization of the DVD to the Indonesia from West Africa and the related preparation costs. However, these negative factors were partially offset by higher day rates and better utilization for certain vessels. Looking now at 2026, we anticipate a double-digit decline in both revenues and EBITDA compared to 2025, with EBITDA margin declining year on year. This is mainly due to four factors. The concentration of various maintenance activities in the year related to the Peronegro 4, Peronegro 8, Peronegro 11, and Scarabeo 10. Some white spaces related to the deepwater fleet, lower day rates on selected rigs, and the release of Pioneer and Peronegro 12 jackups in 2025, which contributed to both revenue and EBITDA for the first part of the last year. Let's now conclude the review with energy carriers on page 14. Revenue remained broadly stable in 2025 versus 2024, while profitability more than doubled in 2025. On one end, this is due to the lower impact of legacy projects compared to the previous years, coupled with the results of the turnaround activity of the division started in 2022. On the other hand, however, as you may recall, the performance in 2025 has been negatively affected by Thai oil. Looking at 2026, we anticipate low single-digit decline in revenue and marginal improvement in EBITDA margin versus 2025. This is mainly due to the restart of the Mozambique LNG project, partially offset by the expected completion of several projects in the Middle East, West Africa and other regions. Let's now take a look at the figures below EBITDA, as shown on page 15. DNA grew by more than 40% in 2025 compared to 2024, surpassing the 1 billion euro mark. This increase was mainly due to the growth of the fleet on a chartered basis, with the addition of the Boltern, the Chenda and the Norma Frontier in 2025. DNA in 2025, in particular in Q4, was also impacted by certain one-off write-downs. For 2026, we expect DNA to remain around 1 billion euros, as we will continue to deploy a sizeable fleet on a chartered basis. Financial expenses totaled 189 million euros in 2025, an increase of 104 million euros year on year. This was largely driven by higher project hedging costs and exchange differences. which increased year on year by 52 and 43 million euros respectively. Higher hedging costs were the result of an increase in derivatives trading volumes combined with an adverse shift in the interest rate differential between the euro and the US dollar. Financing costs increased by 9 million euros as the increase in the interest component of lease of 20 million euros year-on-year, was partially compensated by a reduction of net financing costs by €11 million. For 2026, we expect financial expenses in line with 2025. Income taxes for 2025 stood at €207 million, an increase of €17 million year-on-year. The implied tax rate stood at 40% in 2025, representing a 2 percentage points increase versus 2024. This is mainly due to certain one-off items recorded in Q4 2025. Tax rate is expected to decrease in 2026 compared to 2025 towards the 33-38% area. Let's now focus on the cash flow and net financial position on page 16. In 2025, our pre-IFRS 16 net cash position improved by €316 million to almost €1 billion. This is mainly the result of cash generation for €792 million, partially offset by the €333 million dividend, as well as €40 million of share buybacks. Lease liabilities saw a net increase of 611 million euro to almost 1.3 billion euro at the end of 2025, largely due to the expansion of our chartered vessel fleet. In 2025, we signed new leases for 1.2 billion, including the extensions of existing vessels, and repaid 449 million euro of them. In addition, our net debt position has been further impacted in 2025 by the DVD purchase transaction whose accounting impacts of 2026 million euro are accounted for within lease liabilities. We expect lease liabilities to decline to approximately 900 million euro by the end of 2026 from approximately 1.5 billion at the end of 2025 this is a reduction of around 40 percent year-on-year the reduction reflects the return to the owners of certain chartered vessels deploying deployed on offshore projects in the middle east as those projects will reach completion and the expected completion of the purchase of the dvd which would reduce the lease liabilities but also reduce the available liquidity Lease repayments in 2026 are expected to grow toward the 650-700 million euro area. Prop up, let's quickly go over SIPM debt and liquidity position at the end of 2025. Our liquidity position is solid, it stands at 3.4 billion euro. This is made of 1.3 billion of available cash, 1.5 of cash in JVs, and 600 million euro in undrawn revolving credit facilities. As anticipated 12 months ago, we are looking to reimburse all gross debt that is due in 2026, which amounts to 271 million. We also have a clear target to achieve an investment-grade credit rating in the medium term. I'll now hand it back to Sandro for his closing remarks.