Subsea 7 S.A.

Welcome, everyone. 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 forecasts. For more information, please refer to the risk factors discussed in SOB C7's annual report or today's quarterly press release. The call today will be focused on our fourth quarter and full year results, and we ask that you limit your questions to this topic. I'll now turn the call over to John.

Thank you, Catherine, and good afternoon, everyone. I will start with a summary of the fourth quarter and the full year before passing over to Mark for more details of financial results. Turning to slide three, Subsea 7 delivered a fourth-quarter adjusted EBITDA of $315 million, resulting in a four-year EBITDA of $1090 million, up 50%. This was driven by both top-line growth of 14% and margin expansion of 390 basis points. We reported a strong performance in both subsea and conventional and renewables. After several new awards in the leading to a backlog of $11.2 billion at year end. This backlog of high-quality projects gives us excellent visibility on our revenue guidance for 2025. As a result of this visibility, as well as our optimism in the outlook, the Board proposes that the group will pay a dividend equating to $350 million in 2025, up 40% from the return made last year. Turning to slide four, after a strong fourth quarter, order intake in the full year was $8.2 billion, 10% year-on-year, and equating to a book-to-bill of 1.2 times. Slide five shows growth in the backlogs of both sub-sea and conventional and renewables. We continue to high-grade the backlog through selective bidding, particularly in offshore winds. We have a combined backlog visibility on the year ahead. And now I'll pass over to Mark to run through the financial results.

Thank you John and good afternoon everyone. I'll begin with some details of group and business unit performance in the full year before turning to the group cash flow and financial guidance for 2025 and some comments on shareholder returns. Slide six summarizes the group's results. In the full year, revenue was $6.8 billion, up 14% compared to 2023, driven by strong performances in both business units as major projects made good progress. Adjusted EBITDA of $1.09 billion was up 53% compared to the prior year, and our margin increased by nearly 400 basis points to 16%. After depreciation, amortization and impairments of $645 million, net finance costs of $77 million and an effective tax rate of 41%, net income was $217 million compared with $10 million in the prior year. I will now discuss the drivers of the group's performance in the next few slides. Slide 7 presents the key metrics for subsea and conventional. In the full year 2024, revenue was $5.5 billion, up 12% year on year, reflecting high activity in Brazil, Norway, Australia, and Turkey. Adjusted EBITDA of $897 million, equating to a margin of 16.3%, an increase of 390 basis points from the prior year. This result reflects the continued evolution of the backlog towards a mix of higher quality contracts. Subsea and Conventional benefited from a $36 million net income contribution from OneSubsea in the full year, in line with our expectations. We are pleased with the performance of our investment in OneSubsea and recognise the integration progress achieved in 2021. Net operating income was $404 million, more than double the $196 million reported in the prior year. Selected renewables performance metrics are shown in slide 8. Revenue in the full year was $1.2 billion, up 29% year-on-year, reflected continued activity in our core markets. where we are focused on a small group of clients who are long-term players in the sector. We also benefited from a full-year contribution from Seaway Alphalift and Seaway Ventures. Adjusted EBITDA was $185 million, equating to a margin of 15%, up from 10.8% in 2023. This was a result of high grading our portfolio project combined with solid project execution. Net operating income was $53 million, compared to a loss of $74 million in 2023. Slide nine shows the cash bridge for 2024. Net cash generated from operating activities was $931 million, which included a modest favorable movement in working capital. Capital expenditure was $349 million, including $83 million relating to the acquisition of 7 million. We also made the final payment of our 10% stake in 1 sub C of $153 million. Net cash used in financing activities was $680 million, which included lease liability payments, including principal and interest of $223 million, Net repayment of borrowings of $125 million, reflecting the amortization profile of our borrowing facilities. Dividends paid were $163 million, and sharing purchases of $87 million. At the end of the year, cash and cash equivalents decreased by $176 million to $575 million. Net debt was $602 million, including lease liabilities of $455 million. The group had liquidity of $1.3 billion at year end. To conclude the financials, slide 10 shows our guidance for the full year. In 2025, we expect revenue to be between $6.8 and $7.2 billion, with an adjusted EBITDA margin ranging from 18% to 20%. As profitability in our global operations continues to improve, we expect the effective tax rate to moderate to between 30 and 35%. Capital expenditure in the year is expected to be between $360 and $380 million. In 2026, we continue to expect an adjusted EBITDA margin of over 20%. In terms of the first quarter of 2025, I would like to take the opportunity to remind you that this quarter exhibits seasonality with lower activity in the Northern Hemisphere and also customary vessel planned maintenance. I would highlight among several vessels subject to planned maintenance, three in renewables, Seaway Ventus, AltaLift and Strasnoff, as well as two tightly vessels, Severnaviga and Borealis. The cumulative planned maintenance days in the first quarter of 2025 is expected to be around 600 days. This level is notably higher than the 460 days compared to the same quarter last year. Lastly, reflecting the group's performance, position, and prospects, the board will propose a 13-kroner per share dividend, including the 6-kroner per share regular dividend the annual general meeting on the 8th of may this aggregate level of shareholder sum equivalent to 350 million dollars and the proposed dividend equates to a seven percent dividend yield based on yesterday's closing share price the payments will be made in two equal installments on the 22nd of may and the 6th of november of this year i will now pass you back to john thank you mark