Half Year 2018 Earnings Update August 9, 2018 - …...The trademark "SBM Offshore", the SBM logomark...

© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com

SBM Offshore

Barclays CEO Energy-Power Conference

September 4, 2018

2© SBM Offshore 2018. All rights reserved. www.sbmoffshore.com

Disclaimer

The companies in which SBM Offshore N.V. directly and indirectly owns investments are separate legal entities. In this presentation “SBM

Offshore” and “SBM” are sometimes used for convenience where references are made to SBM Offshore N.V. and its subsidiaries in general.

These expressions are also used where no useful purpose is served by identifying the particular company or companies.

This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of SBM. All

statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are

statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown

risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these

statements. Forward-looking statements include, among other things, statements concerning the potential exposure of SBM to market risks

and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. All forward-looking

statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this

section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date

of this presentation. Neither SBM Offshore N.V. nor any of its subsidiaries undertakes any obligation to publicly update or revise any forward-

looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from

those stated, implied or inferred from the forward-looking statements contained in this presentation.

© 2018. This presentation is the property of SBM Offshore N.V. or any of its subsidiaries (together referred as “SBM”) and contains material

protected by intellectual property rights, including copyrights, owned by SBM. The trademark "SBM Offshore", the SBM logomark and the

SBM trademark “Fast4ward” which covers a proprietary and patented SBM technology, are registered marks owned by SBM.

All copyright and other intellectual property rights in this material are either owned by SBM or have been licensed to SBM by the rightful

owner(s) allowing SBM to use this material as part of this presentation. Publication or other use, explicitly including but without limitation to

the copying, disclosing, trading, reproducing, or otherwise appropriating of information, illustrations etc., for any other purposes, as well as

creating derivative products of this presentation, is prohibited without the prior express written consent of SBM.


Setting the scene

Long term macro trends

Why SBM Offshore?


Why SBM Offshore, and why now..?

+25%Global energy demand

growth by 2040

50%of Deepwater projects

more competitive than

Shale

Perfectly

Positioned


Leading Global FPSO Contractor

> 50FLOATING PRODUCTION

SYSTEMS DELIVERED

2LARGE PROJECTS UNDER

CONSTRUCTION

Early and late

cycle player99%

HISTORICAL OIL

PRODUCTION UPTIME

1st

FAST4WARDTM CONCEPT

TO PROJECT AWARD

10%GLOBAL DEEPWATER OIL

PRODUCED BY SBM UNITS


Setting the scene


Why SBM Offshore?


Long Term Macro Trends

Population growing to 8.5 billion in

2040

Global energy demand +25% by

2040

Electricity demand doubles in

non-OECD countries, four times

faster than other fuels

Natural gas volume to increase

more than any other energy source

Oil continues to play a leading role

in the world’s energy mix until 2040

Electricity from Solar and Wind

+400% by 2040

+25%

Source: IMF, IEA, BP


Oil Remains Primary Source

Source: EIA International Energy Outlook 2018

World Energy Consumption by Energy Source (quadrillion Btu)

1990 2000 2010 2020 2030 2040

0

50

100

150

200

250

History Projection


Supply Gap

Lack of investment since

2014

Supply gap projected

Investment required

Not if,

but when

World Oil Supply and Demand

Existing supply + planned fields Extra recovery existing fields Demand range

Millio

n b

bls

/d

Source: IEA


0

20

40

60

80

100

120

140

TM

Shale2

Deepwater

30

35

40

45

50

55

60

0 2 4 6 8 10

Ave

rag

e B

ren

t B

rea

k-e

ve

n P

ric

e

(US

$/b

bl)

Average Payback Time (years)

Deepwater is Competitive

Deepwater continues to gain

competiveness

>50% Deepwater projects

more competitive than shale

Traditional Deepwater longer

cycle

Deepwater cycle

time is key

Source: Goldman Sachs, Rystad Energy, BofAML

(1) Goldman Sachs Top Projects 2018 cost curve by win zone (prospective projects)

(2) Top five shale plays used as representative example

(3) Size of bubble corresponds to greenfield Capex expected to be sanctioned in 2018

US$100 billion Greenfield cost3

Project Economics

Oil Projects Cost Curve1

Shale

Deepwater

Traditional

Bre

ak

-eve

n P

ric

e

(bb

l/U

S$

)

Cumulative Peak Oil Production (kboe/d)

5,000 10,000 15,0000


Source: SBM Offshore research, company presentations

(1) Award FPSO Liza 2 subject to authorizations

Overall FPSO Market

Four awards to date in 2018

Up to 10 awards expected in

2018

2019 acceleration anticipated

Improving outlook

5

1

3

12

12

3

1 11

3

6

3

7

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 e2018e2019

Historical and Estimated Total FPSO Market Awards

SBM Offshore Awards FPSO Awards FPSO Awards Bear Case FPSO Awards Bull Case


Setting the scene


Why SBM Offshore?


0%

40%

80%

120%

Jan-11 Aug-11 Feb-12 Sep-12 Apr-13 Nov-13 Jun-14 Jan-15 Aug-15 Mar-16 Oct-16 May-17 Dec-17 Jul-18

SBM Offshore Relative Share Price Development

Dealt with the past…

2012 2014 2017 2018

Start internal investigation

and rights issue

Settlement Dutch

Prosecutor’s office

Resolution

US DoJ

Signed Brazilian

Leniency Agreement

2011

Provisions on Yme and

Deep Panuke platforms

Legacy costs approaching

SBM Market Cap

SBM Offshore

OSX

Brent


Promising outlook thanks to

company positioning

…now perfectly positioned for the future

Regained all

markets access

Game changing

program

Industry leading

experience

Strong cash flows

for dividend & growth

2020 2021 20222019

US$ 16.1billion backlog

2023

Robust balance

sheet

US$ 0corporate debt


Fast4Ward™ Philosophy

Our ambition is to transform the

business by reducing cycle time to

energy delivery, de-risking

projects, and improving quality &

safety. This is what we refer to as

Fast4Ward™

Fast4Ward™ is based

on five key principles

1. Client first

2. Standardization

3. Flawless execution

4. Integrated supply chain

5. Enabling digital solutions

Fast4Ward™ Better Performance, Delivered Faster

TM


The Answer

TM

Reducing cycle

time

Up to 12 months faster;

Up to $1 bn NPV gain

De-risking

projects

Enabling lower

break-evens

Standardized hull and

topsides

Less engineering hours

Integrated supply chain

Greater safety and reliability

Fast4Ward™ Better Performance, Delivered Faster

Lower Capex and Opex


Time is Money

0%

10%

20%

30%

40%

50%

30 40 50 60 70 80 90 100 110 120

Oil

Co

mp

an

y I

RR

US$/bbl

Time to First Oil Scenarios1

1 yr gain

On time delivery

1 yr delay

2 yr delay

3 yr delay

290

489

699

899

1,106

-

500

1,000

1,500

30 50 70 90 110

US$/bbl

NPV impact 12 months acceleration to 1st Oil1

NP

V g

ain

(in

US

$ m

illio

n)

Fast4WardTM accelerates first

oil up to 12 months

Up to US$1 billion gain

Every 1 year acceleration

improves break-even up to

US$10 per barrel (IRR 15%)

Major client gains

Source: Barclays

(1) Based on Barclays model, reflects major world-class greenfield development


TM

0.5

0.7

0.9

1.1

1.3

1.5

1.7

0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9

De-risking Delivery

Delivery is challenging

Fast4WardTM: lower risk and

higher return

Standardization and supply

chain integration

Experience matters

Source: Goldman Sachs, Rystad Energy, SBM Offshore company research

(1) Profitability Index = NPV/ Initial investment. Risk score is Goldman Sachs internal method based on technical and political risk

Risk

Deepwater

Pro

fita

bilit

y

FPSO delivery delay (months)

FP

SO

pro

jec

ts

Oil production sources


Why SBM Offshore, and why now..?

+25%Global energy demand

growth by 2040

50%of Deepwater projects

more competitive than

Shale

Perfectly

Positioned


Q&A

Half Year 2018 Earnings Update August 9, 2018 - …...The trademark "SBM Offshore", the SBM logomark...

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