LETTER TO THE SHAREHOLDERS
Dear Shareholders,
Saipem's performance in 2024 confirms, for the third consecutive year, the Group's growth, characterised by the recovery of competitiveness and the improvement of margins, accompanied by the acceleration in cash generation, which has led to the decisive strengthening of the financial structure, allowing it to propose a higher-than-expected dividend for 2025, based on the 2024 results.
Among the most significant results of the year was the reduction in net financial debt. Also considering the debt relating to liabilities for leased assets, as of December 31, 2024, the Group is in a net cash position.
Revenue in 2024 amounted to €14.5 billion and EBITDA to €1.3 billion, representing growth of 23% and 44% respectively compared to the previous year. Net profit for 2024 was €306 million, an increase of 70% compared to 2023.
With new contracts amounting to €18.8 billion in 2024, the backlog reached an all-time high of €34 billion, providing excellent visibility on the objectives of the 2025-2028 Strategic Plan.
Saipem has updated its strategic guidelines, confirming the improvement in the Group's performance and its ability to take advantage of the current favorable market conditions. The 2025-2028 Strategic Plan provides for an increase in economic and financial objectives.
The 2025-2028 Strategic Plan is divided into four fundamental pillars: (i) a strong emphasis on execution excellence; (ii) capitalising on upstream Oil&Gas upcycle; (iii) the paradigm shift for Onshore Engineering & Construction and the implementation of a profitable Project Management Consultancy offer; and (iv) the broader offering in energy transition. These pillars are underpinned across the board by the following three additional principles: a clear and disciplined capital allocation with the aim of achieving an investment-grade credit rating in the medium term, business simplification and operational flexibility, as well as the continuous improvement of people's health and safety.
The Board of Directors also approved the update of the dividend policy that envisages the distribution to shareholders of at least 40% of Free Cash Flow (post repayment of lease liabilities).
2024 results
2024 closed with revenue of €14,549 million, up 23% compared to 2023. EBITDA was positive at €1,329 million (€926 million in 2023), thanks to the contribution of both Engineering & Construction and Drilling Offshore, while the net result amounted to €306 million (€179 million in 2023).
Capital expenditure made during the 2024 financial year amounted to €337 million compared to €482 million in 2023.
The pre-IFRS 16 net financial position as at December 31, 2024 was positive for €683 million, an improvement compared to the net cash of €216 million at the end of 2023, thanks to the growth in EBITDA, the lower incidence of projects awarded before 2022 and the strict discipline in the management of working capital. The net financial position, including IFRS 16 lease liability, amounted to €660 million, was positive for €23 million (negative for €261 million at the end of 2023).
New contracts, amounting to €18,812 million, recorded an increase of approximately 7% compared to 2023. The backlog at the end of 2024 reached an all-time high of €34,065 million, represented by more than 70% of projects in the Offshore business, both Engineering & Construction and Drilling.
Towards a sustainable business
Saipem's Sustainability Plan "Our journey to a sustainable business", approved by the Board of Directors for the period 2025-2028, is integrated into the company's strategic business guidelines. The Plan contains more than 100 objectives and consequent actions, indicators and targets on 13 sustainability issues concentrated in three pillars: fighting climate change and protecting the environment, focusing on people, creating value in the supply chain and in the local communities.
The 2024 Sustainability Report is Saipem's nineteenth Sustainability Report, a voluntary document structured according to the three pillars of the Plan and the related thematic areas, it is no longer just a moment of synthesis of all that the past year has entailed in terms of initiatives and results, but also aims to outline a vision of a concrete future, consisting of precise objectives, indicators and targets suitable for measuring their achievement, as well as responsibilities and resources assigned. The Report is titled "We Deliver" as it highlights the commitment to creating sustainable value for stakeholders, narrated through the participation and testimonies of Saipem employees.
At the same time, Saipem is also publishing the first "2024 Consolidated Sustainability Report" this year, prepared in accordance with the requirements of the new Italian legislation on sustainability reporting that implements the EU CSRD Directive, which is mandatorily integrated into the Annual Financial Report. Since sustainability disclosure became a European obligation in 2017, Saipem has made the far-sighted choice of integration into the Annual Report which, in addition to responding to compliance needs, demonstrates a vision that considers economic and financial sustainability and environmental, social and governance issues in their complementarity. In this sense, the description of the commitments made on these fronts and the initiatives implemented and oriented towards an increasingly sustainable business, for the benefit of our stakeholders, to face future challenges, continued.
For a Group like Saipem, which is committed to the construction of infrastructure in the energy and transport sector globally, as well as to supporting its customers on the path towards the energy and ecological transition, safety at work is a priority aspect of the business. In 2024, the TRIFR (Total Recordable Incident Frequency Rate) accident frequency index stood at 0.34, while the HLFR (High Level Frequency Rate Event) index, aimed at measuring all accidents with a high potential for harm to people, stood at 0.49. Saipem continues its commitment in this area through a program aimed at strengthening corporate culture, prevention measures and the implementation of new technologies. This approach aims not only at the absence of accidents, but above all to ensure the presence of safeguards that can significantly reduce the harmful extent of the same. A significant example is the introduction of electronic work permits (e-permit to work) and the progressive extension of the use of the Video Analytics digital solution, which, thanks to artificial intelligence, makes it possible to identify dangerous situations on our construction sites and on our fleet in real time, allowing the timely and effective implementation of corrective actions.
Saipem operates globally and is committed to contributing to the progress of local communities. The focus on social aspects, including human rights and labour protection, diversity and inclusion, and the contribution to the development of local communities takes the form of initiatives such as the creation of new jobs, the development of professional skills, the extension of ethical principles to develop a responsible supply chain, support for the local socio-economic fabric, the development of the human capital of the host communities and the introduction of corporate incentive objectives linked to gender equality.
Our commitment to the progressive reduction of the carbon footprint, in accordance with the agreements signed by Italy and Europe, continues through the Net Zero Programme launched several years ago. This program includes specific goals, including achieving carbon neutrality of Scope 2 emissions by 2025. In 2024, our energy efficiency initiatives and measures have made it possible to avoid over 70,000 tonnes of CO2 equivalent during the operations of our assets.
This year's ESG results, and performance demonstrate significant progress, supported by thoughtful and participatory governance. We have increasingly integrated sustainability aspects into our business strategies with the aim of creating value for our stakeholders. Our leadership position in the sector, highlighted by the main sustainability ratings and indices published by specialized agencies, and the recent recognition attributed to Saipem by a leading certification body for excellence in the management of ESG issues, confirm the goodness of the path of responsibility undertaken.
Market scenario
The current context is characterized by the prolonged positive cycle of Saipem's reference markets, and particularly the Oil&Gas market, in line with growth expectations both at the macroeconomic level and in access to secure and sustainable energy sources. However, some elements of uncertainty remain on the geopolitical level (in particular, the Russia-Ukraine conflict and instability in the Middle East) and on the economic level, linked to an intensification of protectionist policies and with the consequent risks on global supply chains. This required further attention from the Management in the formulation of accounting estimates and significant judgments. As a result, certain areas of the balance sheet, characterized by greater uncertainty in estimates, could be influenced by the future evolution of the aforementioned events and macroeconomic variables. Regarding oil and natural gas price trends, the Company believes that short-term volatility may have a limited impact on the Group's results given the nature of the Group's activities, characterized by projects with multi-year implementation times, depending on the complexity of the project. In the longer term, the outlook for an improvement in the external context is confirmed, supported by the multi-year growth cycle that the Oil & Gas market is going through and the consolidation of opportunities in the field of energy transition and clean technologies.
March 11, 2025
On behalf of the Board of Directors
The Chairman Chief Executive Officer and General Manager
Elisabetta Serafin Alessandro Puliti
