Subsea 7 S.A.

Welcome everyone and thank you for joining us. With me on the call today are John Evans, our CEO, Mark Foley, our CFO, and Stuart Fitzgerald, CEO of Seaway7. The results press release is available to download on our website along with the slides that we'll be using during today's call. Please note that some of the information discussed on the call today will include forward-looking statements that reflect our current views These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast. For more information, please refer to the risk factors discussed in SODSI 7's 2022 annual report or today's quarterly press release. I'll now turn the call over to John.

Thank you, and good afternoon, everyone. I will start with a summary of the quarter before passing over to Mark to cover the financial results in more detail. Turning to slide three, Subsysen reported solid results for the third quarter with a group adjusted EBITDA of $201 million and a margin of 13%. Pre-cash flow generation was strong at $223 million, which reduced net debt to $606 million. We continue to grow our backlog with $2.1 billion of workbook this quarter, taking it to $10.8 billion, up 52% in the last 12 months. Tendering activities remain high, and we're seeing continued improvement in pricing. Overall, we're on track to meet adjusted EBITDA consensus for 2023 and remain confident in our longer-term expectation to return to a margin range of 15% to 20%. We expect to reach the upper end of this range in the fall year 2025. Turning to slide four for an update on key projects in the quarter. In Brazil, SEMVEGA and SEMPACIFIC remain active on Bacalhau project. Engineering is underway on BUJOS 8. And after the award of MERU4, the combined MERU3, MERU4 project is 20% complete. In Saudi Arabia, SEMBOREALIS completed the first campaign for MARJAM2, which reached 53% completion. We remain very active in Norway on several developments, including the large hydrosil field. In Senegal, a large proportion of our scope on Saint-Germain is now complete. In renewables, Seaway Strachanov completed the installation of all 95 monopiles on Dogger Bank A and is scheduled to install 95 monopiles on Dogger Bank B in 2024 and the final 87 monopiles on Dogger Bank C, following in 2025. Seaway Alphalift joined the active fleet in October, installing transition pieces at Dogger Bank A and the client recently celebrated first power on the development. When complete, this 3.6 gigawatts, 277 turbine development will supply enough clean energy to power 6 million homes. Turning to slide five, order intake in the third quarter was $2.1 billion, including new awards of $1.4 billion and escalations of $700 million. Our book-to-bill was 1.3 times. Overall, our group backlog increased to $10.8 billion, giving us a high degree of visibility on both the remainder of this year and next year. Our subsea order book increased 40% year-on-year to $9.1 billion, including $4.2 billion to be executed in 2024 on the equivalent Our renewables order book is $1.7 million, of which $700 million is due to be executed in 2024. And now I'll pass over to Mark to run through the financial results.

Thank you, John, and good afternoon, everyone. I'll begin the financial performance review with some details of group and business unit performance in the quarter before returning to the group cash flow and financial guidance for 2023 and 2024. Slide seven summarizes the group's third quarter performance in the context of the prior three years. Revenue in the third quarter increased 2% to $1.6 billion compared to the third quarter 2022, driven by increased activity on our major subsea projects. Adjusted EBITDA of $201 million was up 18% compared with the prior year, and the margin improved to 12.8%. Net income was $36 million after net finance costs of $12 million, a net foreign exchange loss of $7 million, and an effective tax rate of 22%. I will now discuss the drivers for the group's performance in the next few slides. Slide 8 presents the key metrics for subsidy and conventions. Revenue in the third quarter was $1.3 billion, up 30% year-on-year, reflecting good progress on Bacalao and Marjane 2 in Brazil and Saudi Arabia, respectively, as well as Sangomar, SLGC, and Clove 3 in West Africa. Adjusted EBITDA was $182 million, with a margin of 14.2%, a significant sequential uplift as the mix of work shifts towards contracts won in an improved pricing environment. Net operating income in sub-scene conventional was $76 million. The performance of the renewables business unit is summarized on slide nine. Revenue in the third quarter was $269 million, down 28% year on year, reflecting the phasing of major projects, as well as good performance on dollar bank A and Changfang and Zirao. Adjusted EBITDA was $31 million, resulting in an adjusted EBITDA margin of 11.7%, marking the second consecutive quarter of double-digit margins. We believe this margin level is sustainable for the remainder of the year. Net operating income in renewables was $4 million. Slide 10 shows the cash flow waterfall for the third quarter. Net cash flow from operating activities was $289 million, which included an expected favorable working capital movement of $88 million. This working capital unwind is expected to further continue in Q4 and 2024. Net cash used in investing activities was $61 million, mainly relating to milestone payments for the new build wind vessel, Seaway Venture. Free cash flow in the period was strong at $223 million. Net cash used in financing activities was $94 million. This included net repayment of borrowings of $31 million, as well as lease liability payments of $45 million, mainly related to chartered vessels. Cash and cash equivalents increased to $530 million. and net debt was $606 million at the end of the quarter. This included lease liabilities of $410 million. In July, additional core debt funding of $450 million was secured through a syndicate of five international banks, which has an 80% guarantee provided by UK Export Finance. This is a five-year amortising loan facility with a two-year availability period. The lenders have classified the facility as a green loan as the funds are for use within the renewables business unit to primarily finance the Seaway Alphalift and Seaway Vent special buildings. The group had liquidity of $1.5 billion at 30th September. To conclude, slide 11 shows our guidance for the full year 2023 and 2024. In 2023, We continue to expect revenue and adjusted EBITDA to be higher than 2022. Net operating income is still expected to be in line with last year. Our expectation for capital expenditure in 2023 has reduced slightly to $580 to $610 million. In 2024, we expect revenue to be in a range between $6 and $6.5 billion. while adjusted EBITDA is expected to increase to between $950 and $1 billion. Capital expenditure is expected to be in a range between $280 and $320 million, reflecting a return to a run-and-maintain level. I will now push back to John.