Subsea 7 S.A.

Welcome, everyone. With me on the call today are John Evans, our CEO, and Mark Soley, our CFO. The results press release is available to download on our website, along with the presentation slides that we'll be referring to during today's call. May I remind you that this call includes forward-looking statements that reflect our current views and are subject to risks, uncertainties, and assumptions. Similar wording is also included in our press release. I'll now turn the call over to John.

Thank you, and good afternoon, everyone. I will start with the highlights from 2021 before passing over to Mark to cover the financial results. Turning to slide three, revenues improved 45% year on year to $5 billion, and our adjusted EBITDA margin was broadly stable at 10%, giving us an EBITDA of $521 million, up 55%. Operating cash flow was $293 million, and we generated free cash flow of $127 million, resulting in net debt, including lease liabilities, of $55 million. As we announced with our results, the Board has decided to adopt the regular dividend policy. It is approved to total return to shareholders of $100 million in 2022, comprising of a regular dividend of NOC one per share, and a share of purchase of approximately $70 million. Both the regular dividend policy and the buyback mark the board's confidence in the financial position and the outlook for the group. During the year, we had good fleet utilization of 83%, with activity centered on Norway, the Gulf of Mexico, and Brazil. Our large EPSI projects, such as Seagreen, Bacalhau, Mero3, and Sakaria, are all making good progress. We ended 2021 with a healthy backlog of $7.2 billion after order intake of $6.1 billion. We made good progress in our strategies for both the subsea and the wind businesses, and increased our presence in the floating wind market I'll discuss these a little more in detail later. Turn to slide four and our recent operational highlights. The engineering and procurement phases of our major EPCIE projects are on track. In Brazil, fabrication of Bacalao project is progressing well, whilst on Mero 3 engineering is underway. In Turkey, we have started preparatory site works for SACAREA phase one. In Norway, we tested and commissioned the electrical heat trace flow line on Air Fugl 2, and we had several vessels, including the Senreger, working on Johan Svedrup 2, although we incurred some downtime for weather. In the Gulf of Mexico, we towed out the Kings Key FPU, and the seven navigator, Arctic, and Oceans all contributed to installation activities. At Jack St. Marlow, the production flow lines and risers were completed and loading out of equipment to the seven oceans has begun. In renewables, the Seagreen project remains on track with 10 foundations installed by the year end 2021 and a further 11 installed in January. Delivery of cables to our base in Scotland is on track and the installation of the first cables has commenced. The remaining foundations and in-array cables will be installed in 2022, as planned. Elsewhere, Seaway Strachanov installed 34 monopile foundations on Holanzi Kuzut, and the remaining 105 to be installed during 2022. Seaway Amory, Moxi, and Seamrest Branzer all continue to work on Horn-Z2. Turning to slide five, We had a very good year for new awards at $6.1 billion, up 38% year-on-year, resulting in a book-to-bill of 1.2. Q4 awards included Scarborough in Australia and the three-year PLSV contracts in Brazil. These were boosted in the fourth quarter by a high level of escalations. By the year end, the backlog had reached the highest levels since 2015 and we have good visibility on revenue for 2022, with $3.4 billion to be executed in subsea and conventional, and 0.9 of a billion dollars in renewables. Our backlog for execution in 2023 is $2 billion, and that is nearly 30% ahead of the level for the equivalent period this time last year. And now I'll pass over to Mark to run through the financial results in more detail.

Thank you, John, and good afternoon, everyone. I'll begin the financial results review with some details of business unit performance in the fourth quarter and full year before returning to the group income statement for some additional comments. Slide six summarizes the fourth quarter performance of our business units. Subsea and conventional generated $1 billion of revenue. 34% higher than the prior year, with notable contributions from Sakaria, Bacalao, projects in the Gulf of Mexico, and Saudi Arabia. Renewables revenue was $326 million, up 39% year-on-year, mainly driven by higher revenues from the Sea Green project, as well as contributions from New England, Holland's Accused South, and Hornsey, too. Adjusted EBITDA for sub-SEAN conventional was $133 million, broadly flat year on year, equating to a lower margin of 13% compared with 18% last year. This decline was due to the early phase of projects in the portfolio, lower client settlements, as well as some costs associated with waiting on weather in Norway. Adjusted EBITDA for renewables was $10 million, in line with the prior year period. This compares with the adjusted EBITDA reported by Seaway7 of $30 million. The $20 million difference reflects a charge on a wind project in Taiwan whose economic interest was retained by Subsea7 as part of the combination with OHT. After depreciation and amortization, net operating income for Subsea and Conventional was $50 million compared to our $37 million loss in the prior year quarter. which included $94 million of asset impairment charges, while renewables recorded a net operating loss of $12 million, compared with a loss of $2 million in the prior year. Turning to the full year, subsea and conventional revenue increased 33% to $3.7 billion, while revenue from renewables doubled to $1.3 billion, representing 25% of the group revenue. The greatest contributions in the year were from Sea Green and Renewables and the Bacalao, Mad Dog 2, Kings Quay and Saqqara projects in subsea and conventional. Adjusted EBITDA for subsea and conventional was $468 million, up 10% year-on-year, but equating to a lower margin of 13% compared to 16% last year. This was mainly due to the execution of early phases of projects in the portfolio awarded at a relatively low margin in prior years, low client settlements on certain projects, partly offset by low net COVID-19 costs. Adjusted EBITDA for renewables was $4 million, down from $12 million in 2020 due to charges in Taiwan resulting from operational delays, partly offset by good progress on Seagreen. After depreciation and amortization, full-year net operating income for subsea and conventional was $103 million, compared to $48 million in the prior year quarter, excluding $294 million of impairment charges, mainly related to vessels. Renewables recognized a net operating loss of $60 million, compared with a loss of $40 million in the prior year. Slide eight shows a summarized income statement. The group's fourth quarter revenue was $1.4 billion, 45% higher than the prior year period. Adjusted EBITDA of $143 million was down from $165 million last year. This resulted in an adjusted EBITDA margin of 10% About 600 basis points lower than the margin achieved in the prior year quarter due to the phasing of projects in their early stages, some downtime for weather, and charges relating to projects in Taiwan. The prior year fourth quarter benefited from the release of restructuring provisions of $13 million. Coming to the full year, revenue in 2021 was $5 billion, up 45% year on year. Adjusted EBITDA was $521 million, up from $337 million in 2020. The improvement included the reversal of restructuring charges of $37 million in 2021 compared to a charge of $86 million in 2020. Net COVID-19 costs of $27 million in 2021 were lower compared to $70 million incurred in 2020. Adjusted EBITDA margin was 10.4%, slightly up from 9.7% in 2020, while the underlying margin reflected the execution of projects awarded during the downturn, as well as the phasing of certain projects in their early stages and charges related to delays on projects in Taiwan. In 2021, net income benefited from the absence of asset impairment charges on Goodwill, property, plant and equipment, and right of use assets that reflect the COVID-19-induced deterioration in the outlook for oil and gas markets. Overall, net income for 2021 was $46 million, compared with a net loss of $1.1 billion in the prior year. Turning to slide nine for supplementary details of the income statement. Administrative expenses in the fourth quarter improved $10 million year on year, driven by impairment reversals of $4 million compared to a $14 million impairment charge in 2020, partly offset by the addition of administrative expenses related to the combination with OHT. Fourth quarter depreciation and amortization increased slightly to $112 million from $105 million mostly due to the addition of OHT's five heavy transportation vessels to the active fleet from 1st of October. Net finance costs fell by $3 million, mainly due to low charges related to lease liabilities, while taxation was $60 million, representing an ETR of 81%, elevated by a mix of profits in certain jurisdictions and irrecoverable withholding taxes. Moving to the full year, administration expenses were up $228 million, down $13 million year-on-year, benefiting from an impairment reversal to $4 million in 2021 compared to charges of $18 million in 2020, and credits related to restructuring of $3 million in 2021 compared to charges of $11 million in 2020. Depreciation and amortization was $444 million in 2021, up $2 million year-on-year, and included the OHT vessels in the fourth quarter. Net finance costs were $15 million in 2021, down $5 million year-on-year, mainly due to low charges related to lease liabilities. Taxation of $64 million, equating to an effective tax rate of 64%, was driven by the mix of profits in certain jurisdictions and irrecoverable withholding taxes. On slide 10, we divide up our cost histogram that shows our costs segmented into four categories. In 2020, You saw the impact of the cost reduction plan as we realigned our business in response to the COVID-19 pandemic and associated global economic slowdown. But costs have increased in 2021 in line with the industry recovery. Direct project costs are a function of the volume, mix and phasing of our activities and the pricing environment for procurement. In 2021, we saw a significant increase in our procurement costs, driven by the mix and phasing of our project portfolio, particularly our largest EPCI projects, for example, Sakaria, Bacalao and Seagreen. Our personnel costs increased to approximately $1.1 billion in 2021, as we expanded our tendering and engineering teams to address the shark uptick in industry activities. Personnel costs also include the extra gross costs incurred relating to COVID-19. Such costs include the need to have standby crews and the quarantining of crews in accordance with local regulations. Vessel and other costs increased to approximately $400 million. We ended the year with 34 vessels in our active fleet, up from 30 at the end of 2020. with the addition of five heavy transportation vessels from OHT, partially offset by the recycling of Seventh Eagle. Slide 11 shows our cash flow waterfall for the full year. Net cash generated from operating activities was $293 million, including a $202 million build in working capital. The latter was driven by the timing of milestone payments and working capital requirements associated with projects in the Middle East and delays in payment in Taiwan. Capital expenditure was $167 million, but well below our depreciation and amortization of $444 million, reflecting the absence of new-build vessels in the year. During the year, we incurred $93 million in lease payments, mainly related to charter vessels, and $93 million relating to dividend payments and share repurchases. In the fourth quarter, we drew down $200 million from the Group's UK export finance facility in advance of the anticipated working capital build in 2022. At the end of the year, we had $598 million in cash and cash equivalents, and moved to a net debt position of $55 million, including lease liabilities, compared to a net cash position of $44 million, including lease liabilities, at the end of 2020. The group's liquidity was $1.6 billion, which included $956 million of undrawn borrowing silvers. To conclude, slide 12 shows our guidance for the full year. Before I comment on the full year, I want to highlight that the first quarter has a heavy planned vessel maintenance schedule, with 10 vessels undertaking dry docking, modifications or maintenance. This is in addition to the northern hemisphere weather seasonality normally experienced during the quarter that results in lower activity. Quarter 1 adjusted EBITDA will be lower than prior comparator periods, however, full-year adjusted EBITDA is expected to be in line with or better than last year. Returning to the full year, revenue is expected to be broadly in line with 2021, while adjusted EBITDA, as mentioned a moment ago, and net operating income are expected to be in line with or better than last year. Our administrative expenses are expected to be in the region of $240 and $260 million, depreciation and amortization expense is expected to be between 460 and 480 million dollars, while net finance costs are expected to be between 20 and 25 million dollars. Taxation for the year is anticipated to be in the range of 35 to 45 million dollars. As we announced last quarter, Our capital expenditure in 2022 is expected to fall within the range of $420 to $440 million, inclusive of approximately $280 million relating to Seaway 7's new build vessel program. I will now pass you back to John.