Saipem: the Board of Directors approves the preliminary results for 2020
Saipem's performance in 2020 confirms the company's resilience to the unexpected and complex emergency caused by the Covid-19 pandemic, which is still in progress, which led to the revision of the growth prospects initially envisaged following the positive signs that emerged in 2019.
Saipem reacted promptly to the difficulties caused by the health crisis by activating preventive measures aimed at ensuring the health of its people and the substantial continuity of its operations worldwide. Despite an understandable slowdown, more significant on margins, the operating performance confirms the organisational capacity to effectively handle complex situations.
The backlog of over €25 billion is still sizable, diversified and increased compared with last year, following the new acquisitions of 2020 for approximately €8.7 billion. The financial structure is robust with a reduction of net debt, compared with the previous quarter, favoured by the good working capital dynamic.
Covid-19
Saipem continues to manage the current emergency situation by maintaining high levels of supervision and measures to prevent and tackle the pandemic in order to guarantee the health of its people, which remains the top priority.
In close coordination with the numerous health centres worldwide, Saipem is encouraging the vaccination process of its employees, albeit on a voluntary basis and in compliance with local vaccination campaigns, recommending the use of vaccines approved by the EMA or local government agencies.
During 2020, costs directly attributable to Covid-19 reached approximately €110 million, showing a decrease in the fourth quarter that reflects the company's adaptability, as well as the effectiveness of measures taken.
At present, out of a total of approximately 32,000 employees, the percentage of Covid-19 positive cases reported by Saipem has been around 8%, 4% of which are still infected and constantly monitored by the company.
Highlights
⦁ Sizable backlog worth over €25 billion1 at the end of 2020 (over 75% of the E&C portion non-oil related), still at the highest level and increased compared with the previous year, ensuring good visibility in the medium term
⦁ New contract awards in 2020 of approximately €8.7 billion (approximately 90% non-oil related), 1.2 times year's revenues
⦁ Revenues in 2020 of approximately €7.3 billion in line with the expected business scenario and adjusted EBITDA margin of 8.4%
⦁ On a divisional level in the fourth quarter:
⦁ Sequential improvement in volumes and margins of the onshore E&C division
⦁ Decrease in the offshore E&C division also caused by project operational difficulties
⦁ Results marginally improved in offshore drilling compared with the previous quarter, versus a slight decline in onshore drilling
⦁ Net debt before IFRS 16 of €872 million (approximately €1.2 billion post IFRS 16) at the end of 2020, decreasing from the previous quarter thanks to a favourable trend in working capital and capex rephasing
⦁ Robust financial structure with liquidity over €2 billion.
⦁ Achieved efficiency targets on the cost structure of approximately €190 million, of which €45 million structural, and a significant capex reduction of around €280 million
⦁ Future commercial opportunities remain considerable with an increase of those associated with the energy transition
Stefano Cao, Chief Executive Officer, commented:
“Exactly a year ago, we commented with renewed optimism 2019 results, proudly stating that we had exceeded all the targets set and returning to a dividend, although symbolic. After only a few days, amongst the first companies to do so, all of our people were invited to work remotely due to the outbreak of the Covid-19 pandemic that dramatically characterised the world throughout 2020 and is still afflicting the world today. Saipem reacted promptly and effectively to the pandemic both because it is used at dealing with emergencies and identifying ready and effective solutions thereto and because, since long time, is organisationally equipped to handle and communicate during crises. This has enabled us, albeit with slowdowns due to compliance with health and safety regulations imposed worldwide and due to the related economic crisis, to avoid the interruption of operational activities and, indeed, to implement significant improvements to business processes – also thanks to digitalisation - and to accelerate the strategic focus on the ecological transition and energy evolution. With this in mind, we propose solutions to tackle the climate change, to serve the demand to reduce carbon footprint, to change the energy paradigm and to develop sustainable mobility, through the construction of offshore green energy hubs, CO2 capture and storage projects, infrastructures for the production, storage and use of hydrogen. We are able to do this immediately, thanks to our technologies, our patents and, above all, the experience that comes from the dozens of projects already carried out in these fields. Leveraging on our credentials, we presented concrete proposals within the recovery plans supported by Next Generation EU. At the time of economic recovery, Saipem will be in a privileged position enabling it to compete as a key player for the award of new green and infrastructure projects”.
pdf - 12-2022