Subsea 7 S.A.

Welcome, everyone, and thank you for joining us on a busy day. 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 our annual report or at the bottom of today's quarterly press release. I'll now turn the call over to John.

Thank you, Catherine, and good afternoon, everyone. I will start with a summary of the first quarter before passing over to Mark for more details on the financial results. Turning to slide three, Subsea 7 delivered first quarter adjusted EBITDA of $162 million, up 52% year on year, and with a margin of 12%. This is in line with our expectations for the quarter, and we're on track to meet the four-year guidance. During the quarter, we continue to win high-quality projects, and our backlog remain robust at $10.4 billion. This portfolio of firm work supports our expectations. for strong margin expansion this year, and a goal to achieve an 18 to 20% adjusted EBITDA margin in 2025. Our conversations with clients in both Subsea and Offshore Wind remain very positive, and we are excited about the opportunities for both businesses near term and over the longer term. Slide four shows the backlog by business units. With $4.8 billion of work for execution by the group in 2024, comprising of $3.9 billion in subsea and conventional and $900 million in renewables, we have very high visibility on the year ahead. Our firm work for 2025 continues to grow year on year, with awards worth $4 billion already secured. And now I'll pass over to Mark to run through the financial results.

Thank you, John, and good afternoon, everyone. I will 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 2024. Slide 5 summarizes the group's first quarter results. Revenue increased to $1.4 billion, up 12%, compared to the first quarter 2023, driven by large projects in subsea and conventional. Adjusted EBITDA of $162 million was up 52% compared with the prior year, and our margin increased by 300 basis points to 12%. This reflects the strong performance in subsea and conventional portfolio, partly offset by planned off-season vessel maintenance and heightened weather seasonality in the renewables business year. Net finance costs of $14 million a net foreign exchange gain of $49 million driven by movements in non-cash embedded derivatives and taxation of $26 million resulted in a net income of $29 million. This compared with a net loss of $29 million in the prior year period. I will now discuss the drivers for the group performance in the next few slides. Slide 6 presents the key metrics for our sub-seeing convention. Revenue was $1.2 billion, up 12% year-on-year, reflecting execution of the final hookup scope at Sangomar in Senegal, good progress offshore at Bacalao in Brazil, and ongoing engineering and procurement for Yggdrasil in Norway. Adjusted EBITDA was $160 million, equating to a margin of 13.4%, up 430 basis points from the prior year. These financials were underpinned by solid operational portfolio performance, the continued evolution of activity to higher margin contracts, and a $9 million net income contribution from one subsea. Net operating income was $47 million compared to $3 million in the same quarter last year. Selected renewables performance metrics are shown in slide 7. Revenue was $179 million, up 12% year-on-year, reflecting high activity in Taiwan, and Seaway AlphaLift completing the installation of transition pieces at Dollar Bank A, while Seaway Strachnoff was mobilizing for foundations installations at Dollar Bank B. Adjusted EBITDA was $1 million, resulting in an adjusted EBITDA margin of 0.7%. The Yunlin project in Taiwan made a good contribution to adjusted EBITDA in the quarter, but the result was, in part, adversely impacted by planned off-season maintenance for each of the seaway Emery, Phoenix, Moxie and Strasnoff, together with heightened weather seasonality. Similar to 2023, we expect Renewables Business Unit to generate a double-digit adjusted EBITDA margin in the full year. Slide 8 shows the cash flow waterfall for the first quarter. Net cash used in operating activities was $13 million, which included a $157 million adverse movement in working capital. This build is temporary in nature, and movements of this magnitude are to be expected when executing a portfolio with such scale and complexity characteristics. Net cash used in investing activities was $17 million, including capital expenditure of $83 million, partly offset by vessel disposal proceeds of $57 million. Net cash used in financing activities was $118 million, which included lease liability payments of $49 million, scheduled borrowing repayments of $31 million, and share repurchases of $15 million. At the end of the quarter, Cash and cash equivalents was $604 million, and net debt was $782 million. This included lease liabilities of $572 million, which increased by $113 million from the year-end position due to two new vessel charters, Ross Candies and Everthinks, and the extension of the existing Bocca subsea chart. These vessels have been chartered to meet the workload in Norway, Brazil, and the Gulf of Mexico. The group had liquidity of $1.5 billion at the quarter end, which included $860 million of committed, unutilized borrowing facilities. To conclude, slide 9 shows our guidance for the full year. Guidance for all elements remains unchanged. In 2024, we continue to expect revenue to be in a range of $6 to $6.5 billion, while we also continue to expect adjusted EBITDA to be between $950 million and $1 billion. As announced in February, we will pay approximately $170 million in dividends in 2024 and execute $80 million of share repurchases. The first of two equal dividend payments of three kroner per share will be made on Thursday the 14th of May. I will now pass you back to John.