Saipem (SPM) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 19% YoY to €11.874bn; adjusted EBITDA increased 56% to €926m, and net profit was €179m.

• Record new contracts reached €17.659bn; year-end backlog was €29.802bn, with legacy projects below 10%.

• Operating cash flow was €586m; year-end net debt was €261m post-IFRS 16 and net cash was €216m pre-IFRS 16.

Financial highlights

• FY23 revenue was €11.874bn, up 19% YoY; adjusted EBITDA was €926m, up 56%, with a 7.8% margin.

• FY23 EBIT was €437m and net profit was €179m; FY22 reported net loss was €209m, while adjusted loss was €139m.

• 4Q23 revenue was €3.511bn, up 20% YoY; adjusted EBITDA was €286m versus €150m, and net result was €100m versus a €71m loss.

• FY23 operating cash flow was €586m versus negative €477m in FY22; cash flow excluding legacy projects was €968m, and free cash flow was €248m.

• FY23 capex was €482m, including the €92m Sea Lion 7 acquisition; no non-recurring expenses were recorded in 2023.

Outlook and guidance

• FY24 targets: revenue €12.7–13.3bn, EBITDA margin ~10%, operating cash flow net of lease payments €740–780m, and capex €440–480m.

• FY24–27 targets include ~€50bn order intake, 4–5% revenue CAGR over 2023–27, ~12% EBITDA margin in 2027, and ~€3bn cumulative operating cash flow net of lease payments.

• Plan capex is ~€1.4bn; low/zero-carbon contracts are targeted at about one-third of total orders. Dividends are targeted to resume in 2025 at 30–40% of free cash flow net of lease payments, subject to approval.

• Year-end backlog covered ~90% of expected 2024 revenue and ~60% of 2024–27 revenue; coverage was expected to rise in 1H24. Legacy-project cash outflow of ~€100m was expected in 2024.