Luxembourg – 27 February 2025 – Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY, ISIN: LU0075646355, the Company) announced today results of Subsea7 Group (the Group, Subsea7) for the fourth quarter and full year which ended 31 December 2024. Unless otherwise stated the comparative period is the full year which ended 31 December 2023.
Highlights
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Full year Adjusted EBITDA of $1,090 million, up 53% on the prior year, equating to a margin of 16%
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Fourth quarter Adjusted EBITDA of $315 million, up 29% on the prior year period, equating to a margin of 17%
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Robust free cash flow of $408 million in the fourth quarter, leading to a reduction in net debt (including lease liabilities) of $256 million compared to the third quarter
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Fourth quarter order intake of $2.3 billion, a book-to-bill ratio of 1.2
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A high-quality backlog of $11.2 billion implies over 80% visibility on 2025 revenue guidance and supports the outlook for Adjusted EBITDA margin expansion to 18 to 20%
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Dividend of approximately $350 million proposed, subject to shareholder approval, for payment in two equal instalments in 2025
| | Fourth Quarter | Year Ended |
| For the period (in $ millions, except Adjusted EBITDA margin and per share data) | Q4 2024
Unaudited | Q4 2023
Unaudited | 2024
Audited | 2023
Audited |
| Revenue | 1,869 | 1,631 | 6,837 | 5,974 |
| Adjusted EBITDA(a) | 315 | 245 | 1,090 | 714 |
| Adjusted EBITDA margin(a) | 17% | 15% | 16% | 12% |
| Net operating income | 126 | 55 | 446 | 105 |
| Net income/(loss) | 26 | (11) | 217 | 10 |
| | | | | |
| Earnings per share – in $ per share | | | | |
| Basic | 0.07 | (0.06) | 0.68 | 0.05 |
| Diluted(b) | 0.07 | (0.06) | 0.67 | 0.05 |
| | | | | |
| At (in $ millions) | | |
2024
31 Dec
|
2023
31 Dec
|
| Backlog(a) | | | 11,175 | 10,587 |
| Book-to-bill ratio(a) | | | 1.2x | 1.2x |
| Cash and cash equivalents | | | 575 | 751 |
| Borrowings | | | (722) | (845) |
| Net debt excluding lease liabilities(a) | | | (147) | (94) |
| Net debt including lease liabilities(a) | | | (602) | (552) |
(a) For explanations and reconciliations of Adjusted EBITDA, Adjusted EBITDA margin, Backlog, Book-to-bill ratio and Net debt refer to the ‘Alternative Performance Measures’ section of the Condensed Consolidated Financial Statements.
(b) For the explanation and a reconciliation of diluted earnings per share refer to Note 7 ‘Earnings per share’ to the Condensed Consolidated Financial Statements.
John Evans, Chief Executive Officer, said:
Subsea7 delivered another strong performance in the fourth quarter of 2024, building on the momentum already achieved over the past two years. With a quarterly Adjusted EBITDA of $315 million and a full year result of approximately $1.1 billion, we exceeded the top end of the guidance range we set out a year ago.
During the quarter we recorded order intake of $2.3 billion, resulting in a year end backlog of $11.2 billion. With $5.8 billion for execution in 2025 we are confident in the Group’s ability to generate strong Adjusted EBITDA and cash flow in the year ahead.
Interactions with clients remain constructive and high tendering activity continues to support our positive outlook. Against this backdrop the Board of Directors has proposed that in 2025, we return approximately $350 million in the form of a cash dividend. Since 2012, Subsea7 has returned approximately $2.5 billion to shareholders and this year’s commitment underscores our commitment to capital discipline and focus on delivering for all our stakeholders.
Fourth quarter project review
During the fourth quarter, Subsea7 continued to execute a portfolio of major projects in Brazil, where Seven Vega was active on the Mero 3 project, while Seven Cruzeiro installed umbilicals and Seven Merlin provided support. The pipelay support vessels (PLSVs) also achieved high utilisation. In the US, Seven Navica installed risers at Sunspear, and Seven Seas worked at Shenandoah and Cypre. Seven Borealis, Seven Pacific and Seven Arctic were active in Saudi Arabia, Egypt and Angola. Finally, in Norway, we made good progress in the fabrication of pipelines and bundles for the Yggdrasil project at our Vigra and Wick spoolbases.
The Renewables business performed strongly and delivered an Adjusted EBITDA margin of 21%. Seaway Alfa Lift and Seaway Strashnov were active on the Dogger Bank B project, installing monopiles and transition pieces. Having achieved good and predictable cycle times for monopile installation, our scope is nearing completion and we will mobilise to the Dogger Bank C project in April. During the quarter our cable lay activities centred on Taiwan where we were active on the Yunlin, Zhong Neng and Hai Long projects. In the US, Seaway Aimery installed cables at the Revolution project. Utilisation of the heavy transportation vessels was high.
Fourth quarter financial review
Revenue was $1.9 billion an increase of 15% compared to the prior year period. Adjusted EBITDA of $315 million equated to a margin of 17%, up from 15% in Q4 2023. This reflected another strong quarter of double-digit margins in Renewables and a robust performance in Subsea and Conventional.
Depreciation, amortisation and impairment charges were $189 million, resulting in net operating income of $126 million compared to $55 million in the prior year period. Net finance costs of $19 million and a net foreign exchange loss of $67 million, resulted in net income for the quarter of $26 million compared with a net loss of $11 million in the prior year period.
Net cash generated from operating activities in the fourth quarter was $487 million, including a $251 million improvement in net working capital, equating to a cash conversion of 1.6 times. Net cash used in investing activities was $69 million mainly related to purchases of property, plant and equipment and intangible assets. Net cash used in financing activities was $271 million including lease payments of $59 million. Overall, cash and cash equivalents increased by $135 million to $575 million at 31 December 2024 and net debt was $602 million, including lease liabilities of $455 million.
Fourth quarter order intake was $2.3 billion comprising new awards of $1.8 billion and escalations of $0.5 billion resulting in a book-to-bill ratio of 1.2 times. Backlog at the end of December was $11.2 billion, of which $5.8 billion is expected to be executed in 2025, $3.4 billion in 2026 and $2.0 billion in 2027 and beyond.
Commitment to shareholder returns
At the Annual General Meeting on 8 May 2025, the Board of Directors will propose that shareholders approve a cash dividend of NOK 13.00 per share, equating to approximately $350 million, payable in two equal instalments in May and November 2025. This represents a year-on-year increase of 40% in returns to shareholders and is equivalent to an approximate yield of 7% related to the cash dividend.
Outlook
We anticipate that revenue in 2025 will be between $6.8 billion and $7.2 billion, while the Adjusted EBITDA margin is expected to be within a range from 18% to 20%. We continue to expect margins to exceed 20% in 2026, based upon our firm backlog of contracts and the prospects in our tendering pipeline.
Driven by structural factors including economic development and energy security, the outlook for long-term energy demand growth remains positive. Subsea7’s exposure to both the hydrocarbon and renewable sectors leaves the Group well placed to benefit from this structural energy trend. Our focus on late-cycle, long-duration developments adds resilience to our strategy, while our track record for project execution and strong balance sheet support a market-leading position that benefits the Group, our customers and our shareholders.
Proposed Combination of Subsea7 and Saipem
On 23 February 2025, Subsea 7 S.A. announced an agreement in principle on the key terms of the proposed merger with Saipem S.p.A. In accordance with the memorandum of understanding signed between Saipem S.p.A. and Subsea 7 S.A., Subsea 7 S.A. shareholders will receive 6.688 Saipem S.p.A. shares for each Subsea 7 S.A. share held, and an extraordinary dividend for an amount equal to €450 million will be distributed immediately prior to completion. Subsea 7 S.A. and Saipem S.p.A. shareholders will own 50% each of the issued share capital of the combined company. The completion of the proposed combination is anticipated to occur in the second half of 2026, following completion of confirmatory due diligence, the approval of the final terms of the proposed combination by the Board of Directors of Subsea 7 S.A. and Saipem S.p.A., the execution of a satisfactory merger agreement, and relevant corporate and regulatory approvals.
Kristian Siem, Chairman of the Board of Directors and the largest shareholder of Subsea7, as well as the management of Subsea7 share a conviction that there is compelling logic in creating a global leader in energy services, particularly considering the growing size of clients’ projects. Saipem and Subsea7 are highly complementary in terms of market offerings and geographies. The combination would enhance value for shareholders, clients and other stakeholders, both in the current market and in the long term.
Conference Call Information
Date: 27 February 2025
Time: 12:00 UK Time, 13:00 CET
Access the webcast at subsea7.com or https://edge.media-server.com/mmc/p/aexdnm2p/
Register for the conference call https://register.vevent.com/register/BIec54517b2a53403badecf6512dc8b41a
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