Saipem Board Approves the Strategic Plan for 2017-2020
The Board of Directors of Saipem S.p.A., chaired by Paolo Andrea Colombo, today approved the Saipem Group’s Interim Report at September 30, 2016 (not subject to audit) and the Strategic Plan for 2017-2020.
Results for the first nine months of 2016:
o Revenues: €7,885 million (€8,445 million in the first nine months of 2015), of which €2,610 million in the third quarter
o Adjusted EBITDA: €997 million (€224 million in the first nine months of 2015), of which €328 million in the third quarter
o Adjusted operating profit (EBIT): €479 million (-€336 million in the first nine months of 2015), of which €155 million in the third quarter
o Adjusted net profit: €200 million (-€562 million in the first nine months of 2015), of which €60 million in the third quarter
o Reported net profit: -€1,925 million, net of write-downs of €2,125 million (-€866 million in the first nine months of 2015, net of write-downs of €304 million), of which -€1,978 million in the third quarter
o Capital expenditure: €167 million (€407 million in the first nine months of 2015), of which €70 million in the third quarter
o Net debt at September 30, 2016: €1,673 million (€5,390 million at December 31, 2015)
o New contracts: €6,627 million (€5,357 million in the first nine months of 2015), of which €3,299 million in the third quarter o Backlog: €14,588 million (€15,846 million at December 31, 2015)
Guidance for 2016 confirmed in line with that provided at H1
o Revenues: ~ €10.5 billion o Adjusted operating profit (EBIT): ~ €600 million
o Adjusted net profit: ~ €250 million o Capital expenditure: < €400 million o Net debt: ~ €1.5 billion
The Board of Directors of Saipem S.p.A. has approved the Strategic Plan, which identifies a series of measures that will allow the Company to face more challenging market conditions, with the recovery expected to take longer than previously estimated. Refocusing the business portfolio, de-risking operations, optimizing costs, making processes more efficient, and emphasising technology and innovation, are all reaffirmed as the basis of the Group’s strategy.
To achieve these objectives, it has been decided to adopt a new, leaner, more effective and more efficient organizational model, aimed at entrusting individual businesses with greater responsibility for project outcomes and performance. This will allow for increased decision-making agility, greater consistency between responsibility for results and attribution of decision making levers, complete autonomy in the identification of priorities, and greater focus on project execution.
Five divisions/companies will be created for the following sectors: Offshore Construction; Onshore Construction; Offshore Drilling; Onshore Drilling, and a new entity dedicated to high added value engineering activities and services, aimed at improving the offer in a structured way and bring the Company ever closer to its Clients’ needs.
As well as generating greater efficiency in its European based facilities (reduction in headcount of around 800), thanks to the new and leaner operating processes the new organization will lead to a better deployment of human resources competences within the Group. This in turn will enable a process of professional growth – vital for ensuring the retention of key resources – which the economic downturn in the sector has impeded, at least in part. Moreover it will permit maximum flexibility in the evaluation of strategic options for each individual business sector. The Strategic Plan also includes rationalization of the asset base, mainly concerning a number of vessels and rigs in the Drilling and Offshore E&C sectors, in addition to several yards in the Offshore and Onshore E&C sectors.
o Revenues: ~ €10 billion
o EBITDA: ~ €1 billion
o Net profit: > €200 million (inclusive of approximately €30 million for reorganization costs)
o Capital expenditure: ~ €0.4 billion
Stefano Cao, Saipem CEO, commented:
“In the first nine months of 2016, we achieved results that are both encouraging and in line with expectations, thanks to solid performances by both the Offshore E&C and Drilling sectors, the latter still benefiting from long-term contracts. In the third quarter, alongside our commitment to continuing our already planned efficiency measures, we saw a positive downtrend in net debt, the completion of the inaugural bond issue and a strong performance in terms of new contract awards. This has enabled us to confirm the guidance previously provided for 2016.
The downturn in our sector, which is lasting longer than initially expected, has affected market prospects and requires reduction in the value of the Company’s asset base. The Strategic Plan that we have just approved aims to respond to these challenges through the adoption of a new organizational model.
This provides for the creation of five divisions/companies dedicated to the following sectors: Offshore Construction; Onshore Construction; Offshore Drilling; Onshore Drilling, and a new entity providing high added value engineering activities and services which will allow Saipem to improve its offer in a structured way and satisfy Client needs even more effectively. This industrial strategy follows on from and completes the extraordinary measures carried out this year, such as the change in shareholding structure, the capital increase and the refinancing of the debt, all of which have enabled the Company to achieve solid financial stability”.
Source/ More On: Saipem
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