Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Half Year 2023 Earnings. At this moment, all participants are in a listen-only mode. After the presentation, there will be an opportunity to ask questions. Just to remind you, this conference is being recorded. I would now like to hand over the conference to Mr. Bruno Chabas. Go ahead, please. Okay. Good morning, everybody, and welcome to the SBM Offshore Half- Year 2023 Earning Call. I'm Bruno Chabas, CEO of SBM Offshore, and I'm joined today by your COO, Øivind Tangen, and our CFO, Douglas Wood. Let me present SBM Offshore's results and our main achievements for the first half of the year, after which Douglas will go through our financial. As always, we welcome questions after the prepared section of this cell. Also, please note the disclaimer, and now let's go into the bulk of the presentation, and we're going to start with a reminder on how we create value to all stakeholders. As an energy transition company, we seek to reconcile growing demand for secure and affordable energy supply with sustainability by putting our oil and gas experience and deep water expertise at the service of a new energy era. The energy transition will not happen overnight. As such, we're pragmatic with a strategy that sets realistic pace for change, reducing costs and emissions from oil and gas production while developing competitive, renewable energy solutions. We deliver this strategy and create value through three platforms. First, the ocean infrastructure platform. With 15 assets, we lead and operate around the world, and five FPSO under construction, which will join the fleet within the next three years. This platform delivers cost and carbon efficient energy to the world. It generates our record backlog, providing predictable cash flow up to 2050. Next, transition the core platform, supporting our FPSO business transformation and decarbonization journey to remain competitive and carbon efficient through our emissionZERO program, which brings technological solutions to clients and addresses the strong FPSO market. Finally, new energy, through which we invest in new technology and solution, leveraging SBM Offshore decades of experience to support renewable and energy transition growing markets. Let's take a look at the highlights for the first half of the year. We deliver a strong performance across the board. Starting with operation performance. The construction of FPSOs, Prosperity and Sepetiba, is progressing well, with expecting first oil by year-end. Our fleet up time stood above 99%, and the HSSE performance was good, with a total recordable injury frequency rate of 0.12 below our yearly target. On the financial side, the first half 2023 directional EBITDA stands at $457 million, full year guidance is reiterated. Our order book has reached another record of $32.2 billion, or $3.2 billion new orders intake during the first half of the year, mainly due to the O&M agreement signed with ExxonMobil Guyana for our Guyanese fleet. We are also proud of the $3.2 billion secure for the financing of FPSO Almirante Tamandaré and Alexandre de Gusmão construction. Financing is now in place for the entire construction portfolio. The market outlook for FPSO, with both low cost and emission per barrel, remains positive. To meet this demand, we order two MPF hulls, one of which is under exclusivity agreement with ExxonMobil Guyana. To ensure the company remains competitive and relevant for the long-term future, we are adapting our organizational structure. Finally, we are progressing our transition journey. In floating offshore wind market, the three floating foundation of the Provence Grand Large project have successfully been loaded out. We continue to progress our emissionZERO program, supporting our oil and gas decarbonization mission, while we can be proud of the outstanding performance from units which joined the fleet recently, operating with much lower emission intensity than industry average. Before going through the main pack, let's start with current energy market challenges. Regardless of the scenario considered, whether it is net-zero scenario or the announced pledges scenario defined by the International Energy Agency, oil will be needed for decades to come. Combined with the natural decline of current oil production without new sources, sources of supply, the shortage will be between 10-20 million barrels of oil per day until at least the end of the decade. In this context, the world will need the lowest cost and emission solutions until renewable energy can cover global demand. Fulfilling future energy demand in an affordable and sustainable manner is possible with technology and investment, but it is also require pragmatism, transparency, and commitment from all stakeholders. In this context, deepwater FPSOs are the solution of choice to fulfill the oil supply gap, as they rank amongst the lowest in terms of emission intensity and oil breakeven prices. SBM Offshore, as a leader in this market, has a role to play in the energy transition, with FPSOs contributing to low development breakeven prices ranging between $25-$35 per barrel, with a greenhouse gas emission intensity of around 40% lower than oil and gas industry average. Based on the strong fundamentals from the previous slide, the market outlook for FPSOs is very positive. We foresee over 30 potential FPSO awards over the next three years. On average, 11 FPSO per year could be awarded, of which we see at least 50% of those being in our niche market of large and complex FPSO. Again, providing energy with the lowest breakeven prices and lowest emission intensity. The majority of award is expected in the high quality reservoir of South America, including Guyana and Brazil, where we have strong operating experience. We're also in other basin, in Western Africa, in the Gulf of Mexico, for which our Fast4Ward solution is also well suited. To address this positive market outlook, where our execution capacities stand at six FPSO at various stages of construction, we have two MPF hulls under construction, supporting our tendering activity. In the context of evolving financing market, with new model and sources of finance required, we continue to remain very selective and disciplined in order to continue to bring value to all stakeholders. Now, turning to execution. 2023 is a busy year for the company, but also very exciting as we will be delivering two major FPSO projects. FPSO Prosperity is in Guyanese waters and progressing on the hookup and installation campaigns, while FPSO Sepetiba sailed away from China in June for Brazil. Despite the challenging environment, both projects are on track to reach first oil by year-end, thanks to the excellent job performed by our teams and the collaboration with suppliers and clients. The use unit will have a relatively low emission intensity and low development oil, development oil breakeven prices, and will contribute to fulfill the world energy demand by adding 400,000 barrels of oil per day combined capacity. Looking at our entire execution portfolio, the overall progress on the 5 FPSO under construction, as well as the two NPF hulls, is good. As we're living the aftermath of the pandemic, combined with supply chain and inflationary constraints, project teams are putting a lot of effort in mitigating the impact to the extent possible. Delivery schedule are on track and the overall margin remain robust at portfolio level. Let me illustrate our execution performance, and let's zoom on how the company track record on how we're delivering FPSO and the value that we bring to our clients. Time to market is key for our clients' economics. On the graph to the left, we see that over the past 10 years, it takes on average, over nine years for deepwater field discovery to reach first oil. With our Fast4Ward program, we support our clients' outperformance with an average of seven years to reach first oil for SBM projects. This result requires discipline, experience, and strong project management, further enhanced by our own optimized and standardized FPSO design. This performance is further improved through our early engagement with clients, supply chain, and other contractors. To the right of the chart is the performance in Guyana, with time to market of less than five years for Destiny development, which targeted early production, and less than seven years for Unity development. To put things in perspective-... Around 240 million barrel of oil were produced by those two units between 2019 and 2023, which at today's price, is equivalent to over $20 billion. In the same time frame, the majority of fields in deepwater are not even close to producing. Time to market for developments using Prosperity and One Guyana FPSO are also expected to be less, below seven years, increasing further the value generated to all stakeholders. Let's turn to the Lease and Operate division. This segment continued to deliver solid results, with an uptime of 99.5% at mid-year. The number of operating units stand at 15, with an installed capacity of 1.8 million barrels of oil per day. Five units will be added to the operational fleet within the next three years. In total, it provides backlog visibility until 2050 and associated healthy and predictable cash flow. Again, to bring some perspective, the average cost of our fleet for our clients is between $6-$7 U.S. dollar per barrel produced, which underpin the resilience of our fleet cash flow and future cash flow. We signed a 10-year operation and maintenance agreement with ExxonMobil Guyana for the FPSO fleet in country. This is a testament to our operational excellence and value we bring to our clients. The contract capitalize on our developments in Guyana to date, positioning the company for long-term operation in the country, and enabling us to continue local and sustainable investment in people and infrastructure, as well as to deploy our digital and operational technology to the Guyanese fleet. With this agreement, we're operating and maintaining the unit through our integrating operation model together with ExxonMobil. This model is the first of its kind in the industry, and by integrating further our teams. The model's success is driven by better alignment on strategy, common focus on value, maximizing production, and cost reduction. We aim to eliminate duplication with less interfaces and improve scalability by combining SBM Offshore and ExxonMobil strength, including experience and resources. We truly believe it is the optimal solution to achieve excellence in the operation of Guyana's asset, bringing value to all stakeholders and setting a new performance benchmark for the industry. To further leverage our operating excellence and remain competitive for the long-term future, we are also adapting our organization. Firstly, we create a corporate and business solutions center to reorganize support and corporate functions. The objective of the multidisciplinary center is to increase synergies and improve efficiency, with several functions spread over the world, centralized and led from our Portugal office. SBM Offshore is strengthening its presence in India. To support the company's growth, we acquired the remaining 49% ownership held by our partner in our engineering center located in India. This acquisition is part of our strategy to develop a high-value engineering center focused on turnkey execution and innovation, while remaining cost disciplined and agile. The center has been renamed SBM Offshore India. We initiated the process to acquire partners, Sonangol equity shares in the leading operating entities in our fleet in Angola, namely FPSO N'Goma, Saxi Batuque, and Mondo. With a means to rationalize our activity, we are also divesting non-core activities in the construction yard Paenal, selling our equity shares against to Sonangol. The process is ongoing and will be subject to various conditions, precedence to reach final completion. The other key milestone towards adapting to the long-term future is our net-zero commitment. As an energy transition company, we are focused on our emissions reduction mission. In line with previous announcement, we have the ambition to achieve a net-zero by no later than 2050. To ensure we remain on track, the company has set intermediate targets, including: reducing by 50% greenhouse gas intensity for Scope three downstream lease assets from 2016 as a base year, achieving net-zero routine flare by 2030, and offer the market a near-zero emissions FPSO by 2025, which we'll now see how, in greater detail, how we're going to achieve this. In 2020, this company has been working on lowering emissions on FPSO through an ambitious program based on in-house concept, design, and technology development to support clients in reducing their carbon footprint. Looking at the program roadmap and past achievements, we now include closed flare in project tenders. We have digitalized our fleet through Smart Operations to monitor and reduce emissions, and we have a market-ready electrical drive FPSO. The next milestone is the design of a carbon capture module to be market-ready by the end of the year. We're progressing well on feasibility studies and getting the technology qualified. We are on track with our ambition to offer the market a near zero FPSO by 2025. In addition to our progress in the decarbonization roadmap, we are also moving forward on new energies development, especially on floating offshore wind, with the progress on large project reaching a new milestone. The 3 floating foundation built by the company have successfully been loaded out, and the turbine, with the capacity of each of 8.4 MW, are currently being assembled. This is the company's 1st pilot floating wind farm and the 1st project worldwide using tension leg mooring technology, which has a minimum motion and seabed footprint. Once commissioned, the farm will account for about 10% of the total installed floating wind electricity generation capacity in the world and will produce the equivalent of the annual electricity consumption of 45,000 inhabitants. On top of our pilot farm and considering the floating offshore wind market at large, we have the ambition to be a major player in the field, leveraging our EPC experience while remaining selective and disciplined, especially as the economics remain challenging. This market will take time to materialize. Most projects are expected to be sanctioned toward the end of the decade and beyond. We remain invested in this promising market through co-development projects in floating offshore wind, securing seabed rights and relevant permits together with partners to better understand the market and accelerate new technology deployment. Finally, we capitalize on decades of experience in floating solutions to support the energy transition. With over 500 floating anchored assets delivered in the last 60 years, we have the know-how, the strength, and the experience to support our clients in decarbonizing offshore energy production. As alternative energy markets are maturing, we will remain selective and disciplined in transferring our capabilities and developing appropriate technological solutions, whether it is for floating offshore wind, carbon capture, ammonia and hydrogen, or digital solutions. We are well positioned to capture promising future new market opportunities. Let's now turn to the financial. Douglas, the floor is yours. Thank you, Bruno. Good morning, everybody. With the finalization of the new 10-year O&M agreement in Guyana, our order book or backlog reached a new record level of $32.2 billion at the end of the first half. We've also fully secured the financing to deliver this backlog, raising an aggregate $3.2 billion in the first half for the FPSOs Almirante Tamandaré and Alexandre de Gusmão. With these, we finalized an overall $7.6 billion financing program for the five FPSOs in the construction portfolio. This is a pretty remarkable achievement, particularly given today's challenging financing environment, and we really appreciate the support of the 25 financial institutions that have worked with us to deliver this. Given the evolution of the financing market, new models and sources of finance will need to mature and evolve. We're well placed to capitalize on this new dynamic, given our ability to structure innovative models like in Guyana and the depth and breadth of our experience and relationships with financial institutions. On EBITDA, we continue to see good operational performance from the Lease and Operate portfolio, generating a strong level of cash flow, which we anticipate will increase over the next year with the two new vessels expected to join the fleet by year-end. While we continue to live with the after effects of the pandemic, plus supply chain and inflationary constraints, we are maintaining our guidance. The overall margin for the construction projects remains robust at portfolio level, you can see the overall margin in the IFRS numbers of 20%, with the average percentage of completion of the FPSO portfolio at approximately 70%. We're continuing to demonstrate our ability to materialize cash flow from our growing long-term order book, leaving us well positioned to fund growth and at the same time, offer attractive long-term cash returns to our shareholders. On this in May, we paid our previously announced $1.1 per share dividend, around $200 million in aggregate, which is equivalent to a yield of over 7%. If we turn to review the key metrics for the year on a directional basis, starting with the backlog, our foundation and generator of our substantial long-term cash flow. As mentioned, thanks to the O&M agreement in Guyana, once again, this stands at a record level, an increase of almost $2 billion over the first half. This increase is netted turnover, so we materialized an order intake of around $3 billion with no associated CapEx. We expect to generate an aggregate net cash flow of around $9.5 billion over the next 27 years from the lease and operate and BOT components of this. We move to net debt. This increased by around $1.1 billion to just under $7.2 billion, as we drew further on project financing to fund the large construction portfolio. To the P&L metrics. Total revenue was around $1.5 billion, compared with $1.76 billion for the same period in 2022. Now, the delta was driven by the turnkey segment, where revenue was around $560 million, compared with around $900 million in the year ago period. Here, the main impact was the comparative effect of the one-off boost we saw last year from the partial divestment of FPSOs Almirante Tamandaré and Alexandre de Gusmão. We also booked relatively less percentage progress on Almirante Tamandaré as the project reached the integration phase. Plus, we have the comparative effect of the fact that Liza Unity was completed in the first half of 2022. That means Liza Unity therefore commenced operations in the first half of 2022, and this helped to drive a 9% increase in lease and operate revenue to around $930 million. This, despite the fact that the FPSO Capixaba ceased operations in the year ago period and is now in the decommissioning phase. The segment also benefited from an increase in the reimbursable scope, contributing to its resilience in an inflationary and higher interest rate environment. We look at EBITDA. This was around $460 million, compared with around $500 million in the year ago period. While there was a slight increase in Lease and Operate EBITDA, with the main elements being the same as the revenue, turnkey EBITDA was $37 million negative versus $16 million in the first half of 2022. Some prior period one-offs have an impact here, like the sale of the SBM Installer. As we've been highlighting, for certain projects, it's been harder to fully mitigate impacts from the pandemic and the pressure on the global supply chain. It's worth here taking a moment again, as in fact, we did this time last year, to take a look at the turnkey model and how directional links to IFRS. Under directional, which aligns with cash flow, in turnkey, the result is mainly driven by the margin made on the portion of FPSO sold to partners. It doesn't include the margin made on the SBM ownership share of the five FPSOs currently in the construction phase. That's because the cash from this is generated from the backlog during the operating period. This part of the margin is, however, included under IFRS, which reflects the margin at overall construction portfolio level. As mentioned earlier, as you see here, this remains at a robust level. Under directional, therefore, during the first half, only a part of this overall portfolio margin compensated for costs allocated to turnkey. These include segment overheads and growth-related expenditures, such as sales and marketing, R&D, and investment in renewables. The directional turnkey margin is therefore influenced by choices made in relation to the level of ownership of FPSOs in the portfolio. These choices are driven by the optimization of the overall cash flow and economics for the company. In any event, on an overall lifecycle average basis, including BOT purchases, which will be booked in directional turnkey, the segment is expected to show a positive result. Finally, to wrap up the overall EBITDA story, as Bruno mentioned, we've established a new corporate business solution center in Porto, for which we have a one-off charge of $11 million in the first half. Going forward, we expect to see a benefit from efficiencies and overhead cost reduction from the CBSC across all segments. Now, if we turn now to cash flow on a directional basis. For cash from operations, given the two startups in the second half, phasing of dividend payments from JVs and linking with the EBITDA guidance, we'd expect higher cash flow in the second half, such that this will be sufficient to cover debt service tax and the dividends. In terms of debt and growth cash out, you see the impact of the significant construction phase we continue to be in, including two unallocated MPFs, and where we have an unwind of net working capital linked to the average maturity of the construction portfolio. You see, we drew as anticipated on the cash balance we had at the end of last year, which was still benefiting from the acceleration of earlier low-cost financing. On the debt side, we closed the two financings in the period, though the first drawdown on the Alexandre de Gusmão facility was only made in July. We finalized the $125 million funding loan with China Merchants Financial Leasing related to FPSO Cidade de Ilhabela and received the funds. We also secured short-term funds in the form of supply chain financing, or SCF, of EUR 50 million, or the dollar equivalent, which was drawn for $25 million at the end of the half. Looking at liquidity, at the end of June, we had $3 billion. In addition to cash, we have $1.8 billion from the undrawn portion of project debt and $0.8 billion under the RCF and new SCF. If we move to the details of the backlog and the forecast net cash flow going forward. As discussed, the main change on the backlog was the impact of the 10-year O&M agreement we signed in Guyana, representing an order intake of around $3 billion. Net of turnover in the period, this resulted in an increase of almost $2 billion versus the year-end. As we show on the large bar on the left, we expect the Lease and Operate part of this backlog to generate $8.9 billion aggregate net cash after tax, and the BOT sales to generate $0.6 billion. We've played this net cash backlog out over the lifetime of the backlog, where average expected net Lease and Operate cash flow from the blue bars has grown to $330 million per annum for the 27-year period, above the $320 million average at the year end 2022. One point to mention here is that ExxonMobil Guyana has indicated that it is contemplating the exercise of its contractual purchase option to acquire the FPSO Liza Unity towards the end of this year, just slightly ahead of the end of the maximum lease term in February next year. That would mean a slight acceleration of the first orange BOT bar. As ever, important to emphasize that the backlog net cash flow is underpinned by contracts from premium clients supporting carbon-efficient projects with very low operating breakevens and strong protection against inflation through escalation and reimbursable provisions. Updating then our discounted cash flow analysis of lease and operating BOT sales, we've kept the same discount rates for consistency, but if you want to use a different one, you can extrapolate where the delta is EUR 1-2 per share per%, where mathematically, as you go higher with the discount rate, it moves from two towards one. At the end of the first half, the EUR per share range increased by EUR 1 compared with the year end to EUR 24-28 per share, reflecting mainly the increase in backlog and associated net cash, more than offsetting the effect from the depreciation of the US dollar. If we look at capital allocation, key elements around growth remain similar. We have 5 large FPSOs in the construction or commissioning phase. Related to this, with our cash planning for project funding, we typically look to prioritize financing facilities, deferring our equity investment. The significant part of the cash net equity investment for these 5 projects was still to come at year end, 2022. On top of this, we have expenditures related to renewables pilot projects. The expected overall net equity spend on these from end 2022 remains in line with what we guided for at year end. To mention, we have the two MPFs in the mix, which give us an advantage position for new orders. As such, we're confident that we'll recover the investment, but a factor to accommodate in our liquidity thinking. The floating offshore wind development activities, where we'd expect our aggregate investment to recovered as a minimum. As of today, it's likely our max investment will run lower than the $200 million ceiling we set. On equity acceleration, at current pricing levels, debt capital markets continue to remain unattractive. We have, however, made some progress with the new financing linked to Illabella, and we continue to work on a number of options so that we're ready when the appropriate window of opportunity arrives. At the same time, the basis of our capital allocation model continues to grow, with total net cash expected to be generated from the lease and operate backlog, increasing to $9.5 billion, including the BOT sales, with a third of this to come in the next five years. This supports our ability to fund growth, but also offer very attractive long-term shareholder returns with our industry-leading dividend yield at more than 7%. That's it from me. Back to Bruno for the guidance. Okay, thank you, Douglas. Finally, we confirm the guidance for 2023. Directional revenue is expected to be above $2.9 billion, with Lease and Operate revenue at around $1.9 billion and turnkey revenues above $1 billion. Directional EBITDA is expected to be above $1 billion. If the purchase of FPSO Liza Unity, as already mentioned, occur in 2023, we will obviously revise the guidance accordingly. To conclude, the company is consistent in the delivery of its strategy with solid financial results, two major units on track for first oil this year, two hulls under construction to address the positive market outlook, and as an energy transition company, progressing on new energies and the company's mission reduction program. Our organization is evolving to leverage our expertise and remain competitive for the long-term future. On this, thank you for your attention, and the floor is now yours for your questions. Ladies and gentlemen, we will start the question and answer session now. To be registered for the question and answer queue, please press star one. The first question comes from the line of Luuk Van Beek from Degroof Petercam. Please go ahead. Yes, good morning. Thank you for taking my questions. First, I have a question on the supply chain challenges that you're facing. Can you comment on how you look at those going forward? Do you expect them to remain at a similar level in the second half of this year, or is it already becoming easier for you? The second question is on the floating offshore wind offering. Can you discuss a bit the timeline until you are able to tender commercially with your product? Obviously, you want to have the results of the units that you are currently building some data on that. You're optimizing the design. When, how, which steps are you taking? How long should it take before you can start commercial tendering? Yeah, okay. Thank you, Luuk, for your question. Øivind is going to go through the, the, the supply chain level at this stage, but let me take the floating offshore wind market. Obviously, going through the 1st pilot project on floating offshore wind, we have a lot of learning coming through that. In fact, this learning last year were shown in the 2nd version of a floater that we're developing also at this stage. What we're seeing in Parley is that the market is shifting to the right, and it's shifting to the right for a number of reasons, including logistic, including cost of those developments, and the difficulty of doing those developments. What we're doing at this stage is really engaging with a number of clients on Pre-FEED activities, trying to de-risk those projects and to see what is the best way to do so. We're doing this in a way to mitigate, to be disciplined and really to reduce the risk, but also to find solution with our clients. In summary, what I'm saying there, the level of activity in the floating offshore wind market, we expect this to be rather low, with a number of engineering study over the coming few years. With no project crystallizing for the coming few years, I would say two-three years. Guys, Øivind, sorry. Yeah. No, yeah. The supply chain challenges, as I see them across the portfolio. First and foremost, we're really happy with the progress across the project portfolio over the last quarter. There are parts of the project portfolio more exposed to these supply chain challenges than others, notably on the Brazil projects, that has represented a larger challenge. We do have now a very substantial degree of completion on this project, and we feel they are largely, at this time, mitigated and the ongoing projects, we don't expect to see any further impact from this. Okay. Thank you. Thank you, Luuk. The next question comes from the line of Mick Pickup from Barclays. Please go ahead. Good morning, gents. I'm just wondering if you can go through that turnkey loss again, Douglas. Obviously, it's caused a bit of consternation this morning. The bit I'm trying to get to is obviously, you've now said, look, it includes R&D, includes sales and marketing, includes overheads, but you've also got that other elimination of $50 odd million in the quarter, which I think that most people probably assume that includes most of the corporate overheads in there. It's just about allocation of costs, 'cause if there's no discrete turnkey revenues from turnkey contracts, then why are we allocating that much cost to that division? I guess. Okay, so yeah, I mean, in under directional turnkey, obviously, you're seeing the impact on a more of a kind of cash flow basis, whereas, as we explained in the presentation and in the release, and you can see from the IFRS results, the overall portfolio in turnkey is pretty healthy, but the cash flow from that is going to come later. It's so as, as such, and just thinking about the cash flow in turnkey, and we've always done this, so we have the turnkey, we have the turnkey overheads, we have the sales and marketing expenses, R&D, and renewables, including effectively some of the investment which gets expensed. Mechanically, that's what that's what you see. What I would note is that, yeah, we're maintaining the guidance, so this is what we did anticipate. As we've mentioned as well, the directional turnkey results, it's effectively, it's a, it's a function of choices that we make in terms of how much ownership share we want to maintain, and that's very much driven by cashflow management and economics. I didn't get the bit- Okay. About the $50, the $50 million you mentioned, Nick. Yeah. You have the other and the eliminations in your EBITDA. You have basically, EBITDA, you have turnkey, EBITDA, and you have other and eliminations. Yeah. Other. $50 million. Yeah, that's the corporate. That includes corporate costs and R&D. You're now telling me that's not allocated? Okay. No, R&D has always been in turnkey. R&D is always in turnkey. Yeah. Okay. You're now telling me... You give that DCF of the free cash flows- Yeah going forward. Yeah. Historically, I think the message has been, take off $75 million for corporate costs every year on top of that. Yeah. Put on a valuation assessment for turnkey and Operate, you get the group. Yep. Now you're telling me turnkey is a liability, not an asset? No, no, no, not, not, not at all. If, if, if you listen to, to what I said, I said that we expect turnkey over the cycle, to be positive. That's what we've always said when we talk about that, the, the capital allocation model. That includes the BOT sales as well, does it? Yes, it does. To be positive over the cycle. Yep. Yeah, we've been very consistent about that. I mean, I think it's a good, good point you make about the cash flow, because we can look at things on, you know, whatever, a three-month, six-month basis, but, you know, we're giving guidance effectively on the next now 27 years, which I think is pretty unique for among most companies. We're giving you the net cash. We're giving you guidance on the corporate overheads. We give, now give you some guidance on how much money we need to spend to realize that. You've got all of the components. We've increased the guidance effectively, the backlogs have gone up. Yeah, and we've taken into account in that obviously, everything we know about where we are with the, with the project, portfolio, at the moment. Really, the, the turnkey negative is really, how I look at it, it's a, it's a timing cash flow effect. Okay. Okay, a couple of follow-ups. Obviously, you also give the, the revenue in the backlog, and I think you've just accurately said, use a 60-odd% margin. You put in pure operating contracts in there. What sort of impact on that margin should we expect from the pure operating contracts? Obviously, they're not at 60-odd. Yeah. I mean, you, you can sort of mechanically see it from, from the, the backlog. I mean, it'll be it's a different different margin than obviously we get from the, from the FPSO. It's, it'll be be a bit dilutive, but as I mentioned, it's still excellent business. It's, it's, it's revenue and margin for which we're not having to make any CapEx. Okay. Then just one final quick one. Forgive me, it's probably something I've missed in the past, but what's happened to the wave energy converter? It's, so you have not missed it. It's a program which is still on the go. It was supposed, I mean, in all fairness, this is a program that we said was gonna be in the water by this year. In fact, we have had some delays and difficulty in developing the technology. We're still on track in developing the level of technology that we want to have, which is gonna be done by sometime next year, and we're looking at a way forward for this technology. Okay, and that's still planning to go in offshore Monaco Heliport? Trying to look for. No, we, at, at this stage, we're looking at ways to to, to do the development, the technical development and reducing the amount of cost. We're, we're assessing the necessity to go offshore on that. Okay, thank you. The next question comes from the line of Andre Mulder from Kepler Cheuvreux. Please go ahead. Yeah, good morning. Number of questions. Firstly, on the lease margin, you're now making 58.5 versus 61.7 last year. Is this the new reality? Should we still account for this 58.5, or is it just a small drop there? Yeah, looking at your guidance, looking at what you made in sales and what's in the backlog, it seems that lease is already over $2 billion, whereas in turnkey, you're below $1 billion. What's the reason for that? Third question on the backlog. I see that in turnkey, beyond 2025, there's an additional $100 million. What's that? One remaining question for the time being. Now, looking at the spread of the activities in the operations and maintenance parts, that is really increasing over time. I, I guess that has to do with aging. Those were my questions for the time being. Sorry, Andre, the last question, I'm not certain. Could you... Yeah. What I see in the development of the backlog, it shows that the bigger part of the $3 billion ends up in the later years. I guess that has to do with aging, because for the first few years, it's quite low, but if you look at the remaining. Oh, yeah. let's say 7, 7.5 years, it's higher. No. Okay. So, so, yeah, we're looking at the, the, the, the order intake on the first half of the year, which was $3.2 billion, and the, the bulk of it is linked to the Guyana Entreprises. The Guyana Entreprises contract is over a 10-year period, but some of it from a growth perspective, was already in the backlog because we had a BOT contract for the first two or three years of contract. There, there is a substitution of what we had in the backlog, so there is no change in the backlog, and you see the impact more toward the, the tail end. Your observation is correct. Most of the impact is gonna be after three years compared to the previous backlog. But now, Douglas, do you want to take the, the- Yeah. three, three other questions? On the, the, the lease margin, yeah, we're, we're very satisfied with the current level of margin, that we have. We've got a good fleet out time of 99.5%. Specifically, the reduction compared to previous pre-periods is mainly driven by the fact that, as I mentioned, we've had an increase in reimbursable scope, as we offset, which is a great feature offsetting in inflation, which we we charge to our clients, but then the margin that we're making on that reimbursable scope is less than the... It's still obviously, a very nice feature. We have a few dilutive effects of unit under extension. So, you know, we've had several of those recently, Serpentina, Espirito Santo, Saximondo, Kikeh. Those have, those have an impact. There are some positive and negative one-off, which are part of operation, which can create a bit of a variation. Overall, we are, we're happy with the margin and, yeah, just the impact of the reimbursable scope and the extensions. Yeah, on the lease guidance and, and, and the revenue, the backlog, as you, you point out, yeah, I guess, you, you'd say that points out to some upside. We've still got six months to go, two startups ahead of us. We, we left the guidance where it was, but we'll keep that under review as we go through the rest of the year. Then I think the point around the, the, the $100 million, that's really just kind of a rounding feature. Okay, thanks. Thank you. The next question, the next question comes from the line of Thijs Berkelder from ABN AMRO ODDO-BHF. Please go ahead. Yeah. Good morning, gentlemen. First question on one-off effects. At turnkey gross margin in H1 was more or less zero, so that makes a negative $40 million year-over-year. Can I explain that as the dimensions extra supply chain costs, meaning that they've now have gone, should that more or less bring $40 million more in the second half than in the first half? Secondly, can you maybe give one-off costs indication for the project in India, maybe for the offshore wind costs, as well as for the costs in H1, or maybe expected for Q2 in terms of restructuring of Angola? The my second question is more related to the higher financing costs. Interest rates, of course, going up all over the world, so also visible in your P&L. Where can we see that pushing up your bill towards customer-- towards the customers, or, or should we see that more coming out in the second half? Third question is a much more general question, is on your stock market listing. For many years now, you're trading at a 50% discount versus your own DCF calculations. How you say you work to create a shareholder return, but somehow financial markets simply do not want to value at your DCFs. Is there any discussion ongoing, ongoing private or becoming part of another list entity? Okay. Let me take the last question first, and Douglas Wood would go through the more of the detail. I mean, as you can well recognize from a management perspective, we have little influence on the perception on the financial market. We have done a lot of things to be clear on our strategy, to increase value from a cash flow standpoint and real valuation of the company, and that you can see over the years. If you look over the past 12 years, the backlog has been multiplied by more than two, the cash flow associated to that by a greater factor even. We generating value and generating real cash flow into the company. The way the perception of the market is whatever it is, and we're just showing that we are delivering on our strategy as an energy transition company. Eventually, reality is gonna strike, and we hope that we're gonna be valued at the proper level. That's where we are. Douglas, you want to go through more of the detail on the- Yeah. Okay. on the platform? Now, I think the first one was kind of the compare, what's going on with the comparative turnkey one-off effect. Yeah, as I mentioned in the speech, I mentioned the one-off effects. I said they had some impact, but more the point here is that some projects go better than others. And, yeah, we still, what you're seeing now is what I would say is like the after effects of the pandemic and supply chain that's now baked in, coming through into the directional result for the projects where we don't have a 100% ownership. What you're seeing there, it's the margin that we're taking on partners, and we tried to explain. Yeah. Overall, turnkey is good. You can see it in the IFRS numbers, but the, the, let's say the cash flow from the part that's going better is coming later. And we're seeing the impacts of the project where it's been more challenging to offset the impacts of the pandemic and some of the supply chain impact. That's really the overall story. Yes, it's overall good, but yeah, what you see is the projects that don't do that aren't that haven't done done so well. On the one-off costs, you asked about India. I think you see in the interim results, the purchase cost $21 million, that is in the balance sheet. We don't give a total breakdown on the turnkey numbers, but there is some breakdown. You can see it in the interims. You asked about Angola, what are the restructuring costs there? Actually, overall, we expect that to have a positive result. There are some details to be worked out, condition, precedent, et cetera, so we'll let you know what that is when the deal closes. You had a thing on financing costs. Obviously, you know, for us, we're pretty much fully hedged. Going forward for new projects, yes, to the extent that we have a model that involves significant amount of financing, then the cost will be be factored into to the cost of those deals for our for our clients. You know, as Bruno mentioned, the fundamentals of the of the deep water market, FPSOs are very strong, such that, you know, given those, we think that the clients will be able to will be able to accommodate those additional costs in our in our pricing. Okay. Those are the three, the three points. Thank you. Thank you. The next question comes from the line of Quirijn Mulder from ING. Please go ahead. Yeah, good morning, everyone. A couple of questions from ING, it's Quirijn Mulder. A couple of remarks here, maybe. First of all, maybe you can tell me what happened. If I look at the problem with the turnkey or, let me say, the lower than expected results in turnkey, there are in fact three suspects. That is Tamandaré, that is the Gusmao, and that is the Sepetiba. It looks like the effect of the COVID-19 is still playing a role here. Is the main shift, I know you're not willing to speak about too many details about individual projects, but is it somewhat legacy from Sepetiba still playing a role here? Given the fact that that is the, the most, was the most affected by COVID-19, and there's still some, some impact. Then certainly, and then secondly, on the turnkey, as I understand from the first half of 2022, you said, Gusmao is not contributing because of the moment of taking profit there. Was it positive in the second, in the first half of 2023, in according to plan? To give you, to give some feeling on what's exactly happening with the three Brazilian FPSOs. The other question is about Angola. I understand you're selling, Paenal, Paenal Yard, but picking up the 50% of the Mondo, Saxi Batuque, seems a little bit strange given the fact that these two projects are already in the extension phase, and I always see somewhat one year extension, but not more than that. Is there any prospect that these, that these vessels will continue to produce? For a longer period. Okay. Those are my questions. Yeah. The, I propose Douglas, to take those two questions. Yep. Okay. Indeed, I know as, as Øivind Tangen mentioned, what, what you see coming through turnkey and direction, it is the Brazilian projects. Yeah, for sure, all of those were awarded certainly before we started to see all these supply chain impacts. You know, we, there are, there are definitely impacts there. They're all. All of them have an all China execution model. When it comes to the pandemic, well, remember, actually, we had some challenges last year as well. They all were impacted to varying degrees. The fact is, whilst, yes, they're still generating a margin, so, we did see some, some, some margin contribution from all of them during this period. The fact is that versus the full turnkey costs, which are in directional, so the 100% of the turnkey costs are in directional. The margin from those three projects that we were able to book in the first half wasn't enough to offset the cost. Again, I go back to the fact that what we should really concentrate on is portfolio level. I think, you know, every EPC company, some projects go better than others. The portfolio level margin is very healthy, and that's the thing to concentrate on. As the timing of realization of the cash from that margin, you know, is going to be more back-ended, as a function of how we've chosen for good economic reasons to structure the contracts. On Angola, yeah, I mean, you know, in the, in the, in, in the price that we pay, it's an overall package, remember? As Bruno mentioned, basically, we're kind of simplifying our operations there. We took into consideration the outstanding terms on the, on all of the projects that we purchased. Okay, my final question, if I'm allowed, is on the guidance. I understand that the guidance, is it correct to understand that the guidance is depending on the moment you get the first oil of Prosperity starts and also Sepetiba in the second half of 2023? Yeah. Does that play? That's a factor. That's our assumptions relating that are taken into consideration in the guidance. We, as I always say, that's six months to go. We'll keep you posted as everything evolves. Okay. You have taken into account maybe something like October for for Prosperity and maybe December for Sepetiba. That is something which we can assume, or something like that? We've taken into account what we believe to be the realistic start-up dates. Okay. Thank you. All right. The next question comes from the line of André Mulder from Kepler Cheuvreux. Please go ahead. Hi, again, still a handful of questions left. Firstly, looking at the, the work in progress has risen from $3.6 billion to $4.5 billion. Can you give us the, the average stage of the projects, and can you remind us at what it was at the end of 2022? That's the first question. Second question is on financing. We've seen some banks are dropping out of oil and gas financing. How do you look at the, the pool? Is, is it decreasing or is it increasing? Are others taking their place? Related question to that, what about the Chinese? What, what, what, what, why is it taking so long to have this news on stake in, in Sepetiba by the, by the Chinese? A question on possible share buybacks. You currently have a mandate of 18 months for 10%. Is there any maximum that you could ask for the AGM? More than 10% or longer mandate than just 18 months? Question on the FSO seems to be an irregular product, an irregular client, an irregular country, so can you make some mention on that? Last on the offshore wind floater. Of the, let's say, 1,000 offshore wind projects, around 340 are floater projects, and it seems that semi-submersibles are taking an 80% share there. Do you still feel that it's possible to take a high market share in that, in that segment? There are other competitors with, with the TLP design next, next to you. How do you look at that field? Okay, let me take the two last questions first. Douglas will take the remaining one. Let me start, start with the floating offshore wind market. There are a number of projects, as you mentioned, in the drawing board, at this stage there is really limited projects which are going to go to FID in the near future. For a variety of reasons, the logistic, the complexity, the cost associated to that. Today, once we're going to have installed Provence Grand Large project, we will have 10% market share. We don't pretend that we're going to be able to grab 100% of the market with our technology. We believe that our technology is well suited for a number of alternatives, in particular, where the one which will require a low footprint and with a high level of stability. Now, this market is in this infancy. There is a lot of knowledge to get from the market. Let's get the track record on the installation of Provence Grand Large, and we'll see which technology is going to evolve and where to go. More generally, I think the way we're evolving in this market is not to get is to get technology agnostic in reality. What is important is the capacity to deliver, the capacity to the to commission those projects, and that's what the strengths of SBM Offshore is. If at the end of the day, we need to install semi submersible or any type of other technology, we will do so. With regard to the, the SS- FSO, potential FSO project that you mentioned, the rationale for that is in fact, as a company, we're a leader in anchoring system and complex anchoring systems. This FSO requires a disconnectable turret, which really is the, the sweet spot of what we're doing and requires a high level of technology. It's also a project which is in the market, which we believe has high potential growth and help us to enter this market with a limited level of risk. When we look at this, this project, plus a new client, who's associated with this project, it's one of the projects that we decided to focus our attention on, really to position ourselves into a new market with a new client and in a technology where we are the leader on. That's the reason that we're looking at this project, and being focused on this target project. Douglas? Okay. Running through your questions, on the sort of average completion level of the portfolio, the end of 2022 was 57%. Now, as I mentioned, we're about 70% at the moment. On financing, yeah, for sure. I think we're, we're seeing an evolution in the market, indeed, there are some players dropping out. I think many ECAs have now stopped, such that, you know, as we've said in the past, I think the, the, we in fact mentioned today, the models are going to evolve over time, potentially with maybe shorter term financing or different players coming in. You know, we've, we've talked in the past about potential interest of infrastructure funds, Chinese leasing and, and all of these things. The different sources of long-term financing, but also alternative models. As I mentioned, you know, with the depth of our relationship, both fronts, I think we are going to be well-positioned for this, this, this new dynamic relative to what is a strong opportunity set that where that strong economic fundamentals in terms of the FPSO pipeline. On, on talking of China, as we've continually mentioned, the so the, the CMFL deal on Sepetiba season coming in after startup. That's what you can expect at some point next year. And finally, you asked about buybacks and would we change the percentage? Right now, we don't have any plans to, to, to, to, change that. There's no, let's say, sort of maximum you could, you could ask the AGM for 15% or maybe a longer or a shorter mandate. Yeah. We, we, we could, but as I said, we don't have any, we don't have any plans to do that at the moment. We think we have a very robust capital allocation, shareholder returns policy. We've been increasing the dividend. That notwithstanding significant growth period, as we've discussed today, buybacks and buybacks remain part of the part of the equation. Okay. It's pretty clear. Thanks. The next question comes from the line of Arjan Sweere from Antaurus. Please go ahead. Yes, good morning. I have another question on the mitigation of the cost increases. You expect to deliver FPSOs in the second half of this years, of this year. I understand that you are in discussions with customers to mitigate the cost overruns. I just wonder, what happens if the customer is not willing to compensate? Will these costs then still have to be taken at the completion of the project? Just to be clear, today, the forecast that will, which translate into, both our result to date and the, the guidance that we have, are based on what we expect the project to give and, the, the, the result that we expect. They do not take into consideration, potential variation orders, which could come, or claims which will be, be happening. The information that we have at this stage when we close the account, are included both in our financial to date and the forecast, to complete. Okay. Thank you. That's clear. Two other questions. The net cash amounts to $380 million. Previously, you also indicated what the amount of net available cash is, why did you need to draw the RCF in the first half? The other question is, you've given the evolution of the financing markets and the new models, do you expect that the new models will imply a need for a larger initial equity investment by SBM? Yeah. Douglas, you want to take those 2 questions? Yeah. Firstly, the $380 cash, most of that, if you when you look in the details of the interim financial statements, you see that, you know, as, as, as ever, a portion of our cash is at the joint venture level. As such, it's not readily available. It's in the JV bank account. We've always been clear about that. With the RCF, it's a, it's really a timing thing, relative to, you know, bridging between either implementing financing for projects, or drawing on your drawdowns for project financing. You know, another point we have at the moment is the spend on the MPFs that we have. We've got two of those on the, on the go at the, at the moment. That's the, that's the background for that. The... Can you just repeat your second question, please? Yeah. you indicated the evolution of the financing markets- Yeah You see new financing models, and if that would imply a larger, initial- Yeah - equity investment by SBM. In principle, with the same model, and we've, we've actually mentioned this fact, for yeah, several, several years now. You know, larger FPSOs mean a larger absolute amount of equity investment. That's definitely a, definitely a feature in the mix now. Okay, thanks. The next question comes from the line of Sander Looby from Nerissa Research. Please go ahead. Hi, I have just the one question. In the past, you have mentioned that in 2025 and beyond, net cash inflows could allow for some more room for buybacks and maybe increase of dividend. How are you looking at this, at these investments into, for example, a new MPF hull versus share buybacks when the stock is trading at current levels? Yeah. Douglas, you want to go through the capital-allocation principles and what we have? Because I think it's important to put this in a context of where we are and in view of the market and the opportunity. Douglas? Yeah, I, I, I don't actually recognize the 2025 date in terms of a time when, when things will change. I, I think for quite a number of years now, we've had a very consistent capital allocation policy where we, we, we start with the, the cash from the Lease and Operate backlog. We look at that as driving the dividend. You know, as the Lease and Operate backlog has increased over the last few years, so we've increased the, increased the dividend, and there's no change to our policy regarding that. Then, you know, we need to think about growth and, and, and investment. We have to cover the turnkey overheads, as we've discussed on the call and in previous calls. You know, on average, we expect the turnkey portfolio to break even on a cash basis with some upside from the BOT payments. You look at that also in the mix, then we have the investment to come, and we've given you the investment for the incorporating the fact that, you know, FPSOs are larger these days. That, that gives you the full equation. We are in a period of significant growth. Yeah, we have the two MPFs, but there are a lot of which position us for quite an attractive opportunity set. That, that's if you like, I would say, a temporary investment, because, as I mentioned in the, in the speech, we expect to get our money back when we, finally allocate those to, to, to, to projects. Yeah, I think a pretty positive, cash flow, outlook, $200 million dividend, more than 7% yield. Yeah, we, we constantly monitor where we stand from a liquidity, perspective. We integrate the possibility to, do equity acceleration into that, but there are sort of less great opportunities than there were a few years ago, before the interest rates, went up. That's a, that's a, that's a component to think about, there. You know, as ever, and as I, I, I mentioned in answer to the previous question, and it says on the on the slide, we discussed on capital allocation, buybacks are still part of the overall mix. Yeah, maybe, if I just take the $950 required investments, and you look at the cash flows, that's where I get the 2025 and beyond, where there should be free cash again. Right. Maybe I should rephrase my question a little bit. I'm more asking if how the internal discussion, in those years, how you would look at investing in share buybacks or shareholder returns in any form versus investing in a new hull. How is that discussion internally? Yeah, well, I mean, we're in the FPSO business, so the market is as a positive outlook. You know, as what we always say is, yeah, we prioritize the dividend and growth. We're looking at growth. If there are attractive opportunities, those are the ones that we go for. That's the reason we see attractive opportunities. That's the reason, we're investing in the two unallocated hulls. If, then, as we look at our liquidity requirements, cash flow, et cetera, there's ac- access for a buyback, then, then we look at the buyback, and that's been consistently the way we've communicated on this and the way we think about it. Okay. Just to finish it off, the increased risk that might be there from inflation and those kinds of effects, doesn't change anything about the secondary nature of share buybacks in the share allocation or in the capital allocation decision? No, because a few points here. So on the in the Lease and Operate contracts, we have either indexation or they're reimbursable. Mm-hmm, so there's a hedge there. Then, you know, going forward, when we bid for new projects, we incorporate the latest market conditions, including supply chain costs and interest rate costs if we are going to be doing them on a Lease and Operate basis. I, I think the point is, it's kind of behind us now, but, you know, as, as everyone's well aware, there was quite a dramatic change in the, in the world, relative to, well, one, the pandemic and then the Russia-Ukraine war, which meant that in respect some of the assumptions that we bid into early attenders before those events happened, weren't quite enough to deal with the reality of wha t we faced. Okay. Thank you. Yep. Thank you. ... The next question comes from the line of Thijs Berkelder from ABN AMRO ODDO-BHF. Please go ahead. Yeah, thank you. Two additional questions, just as a, as a double check. You made gain on, let's say, interest hedges. Is, is that part of the P&L, or is that booked via other comprehensive income via the, the P&L? Second, question is, I'm looking at your slide 34. You are not that, far clear from your, from at least two of your three, covenants. And at the same time, your share price, like I said before, is, is continuing to trade at 50% discount to your own, let's say, DCF calculation. Are there discussions ongoing, let's say, to maybe slow down the pace of growth and, and to simply use the available cash to buy back shares at a 50% discount and, or, yeah, cut dividends, let's say, in half, and you still screen for dividend investors, but, but then you can use the other half for share buybacks at a 50% discount? Okay, thanks for this. The first one, on the hedging, those all run through other comprehensive income, so they're in the balance sheet and not the P&L. Yeah, when it comes to sort of shareholder returns, there are always differing opinions, when you ask people dividend versus share buyback, every person for every 1 person that says 1 thing, you find another that says the other. As of now, we have no plans to change our capital allocation policy as I went through in answer to the previous question. Is there not any discussion ongoing from, let's say, with the supervisory board? Shareholders are important group within the overall stakeholder group. Don't they want to see some action on, on, on the share price? Yeah, you, you, you have a point. The mission of a company is really to increase value to all stakeholders. By doing so, the best way for us to increase value to all stakeholders, is to increase the cash flow that the company is gonna be able to generate. We see a lot of opportunity to do so in the FPSO market. If the market were to turn, obviously, given our business model, when the market turns, you generate more cash flow and you have more opportunity to do things. Then we're gonna consider where we are. At the end of the day, our mission is really to increase value to all stakeholders, and the best way you increase value is by increasing the amount of cash flow that the company is gonna be able to generate, and that's what we're doing at this stage. We also have a clear capital allocation policy that we have voiced for the past few years. We're sticking to this one. Proof is the level of dividend that we have as a company. Today, what we're seeing is there is a lot of opportunity to grow the company, to increase the cash flow of the company, and that's the focus that we're having. Yeah. coming back on, on the, the gap between reported and governance on solvency, it's, it's, it's, it's small, and the interest cover ratio is also not that. That gap is also no longer that, that wide. Is, is there even any risk of having to raise equity? No. No. We don't, we don't see any, any risk at the moment. I think if when you look at the, the, the RCF, the key covenant is the lease backlog, cover ratio. You can see that's in a very healthy state. We have actually capacity to borrow above that. Yeah, the specificities of the calculation on interest cover ratio, it only we only get contribution from things that are operating. You'll note that we've got the two FPSOs starting at the end of the year, so we see no issues at all with that. Very good. Okay, that's what I wanted to hear. Yeah. Okay. Thank you. Thank you very much. There are no further questions in the queue, so I'll now turn the call back over to your hosts for some closing remarks. Thank you very much all for attending this call. Again, I believe as a company, we're consistent in delivering our strategy and with a set of solid results. I'm not gonna repeat all the key points that we have, but in the meantime, I thank all of you for attending this call, and you can now all resume, resume your normal summer activity. Thank you. Bye-bye. Ladies and gentlemen, thank you for attending. This concludes the SBM Offshore event call. You may now disconnect your line. Have a nice day.