Financial and economic results

Results of operations

The Saipem Group’s 2013 operating and financial results and the comparative data provided for prior years have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and endorsed by the European Commission. We note that:

  • European Commission Regulation No. 475/2012 dated June 5, 2012 approved the new version of IAS 19 ‘Employee benefits’. The requirements of the new standard are applied retrospectively to the opening values of the balance sheet at January 1, 2012 and the economic data for 2012. Their application produced a decrease in shareholders’ equity at December 31, 2012 of €28 million and an increase of €2 million in 2012 net profit;
  • the separate and consolidated financial statements at December 31, 2012 have been restated to take into account Consob’s observations regarding their non-compliance with international accounting standards and in particular with IAS 11 ‘Construction contracts’. The restatement produced a decrease in work in progress of €245 million and a corresponding decrease in shareholders’ equity with respect to the figures approved in the financial statements at December 31, 2012. It also had a negative effect of €245 million on 2012 net profit. The effects of the restatement on 2012 data are shown for comparative purposes in the balance sheet and income statement as at December 31, 2013 and for the year then ended.

The table below shows the most significant restated items from the financial statements at December 31, 2012 (which are indicated as either ‘approved’ – i.e. as presented in the annual report published at that date – or ‘restated’, in accordance with the methods described in the notes) and those at December 31, 2013 (which are indicated as either ‘consistent’, i.e. data that is consistent, for illustrative purposes, with the data presented in the approved 2012 annual report or ‘actual’, i.e. as reported in the annual report at December 31, 2013). For the purposes of uniformity, year-on-year comparisons from a purely operating perspective will refer to the ‘approved’ financial statements at December 31, 2012 and ‘consistent’ 2013 figures. For additional details, please refer to the section ‘Summary of the effects of restatement: financial statements’ and the section ‘Consob proceedings 1612/2013’ in the Notes to the consolidated financial statements.

2012 approved 2012 (1) restated (€ million)2013 consistent 2013 
13,369  13,124  Revenues  12,011  12,256 
2,207  1,971  EBITDA  626  871 
1,481  1,245  Operating profit  (98)  147 
902  659  Net profit  (404)  (159) 
1,628  1,385  Cash flow (net profit + depreciation and amortisation)  320  565 
922  687  Net current assets  829  829 
5,405  5,132  Shareholders' equity 4,652  4,652 

(1) Also includes the effects of the application of Revised IAS 19.

The following tables show 2013 consistent figures.

Saipem Group - Income statement

2012 approved2012 restated(€ million)2013 consistent2013 
13,369  13,124  Net sales from operations  12,011  12,256 
10  10  Other revenues and income 
(9,131)  (9,131)  Purchases, services and other costs  (9,073)  (9,073) 
(2,041)  (2,032)  Payroll and related costs  (2,320)  (2,320) 
2,207  1,971  EBITDA  626  871 
(726)  (726)  Depreciation and amortisation  (724)  (724) 
1,481  1,245  Operating result (EBIT)  (98)  147 
(148)  (155)  Net finance expense  (190)  (190) 
16  16  Net income from investments  13  13 
1,349  1,106  Result before income taxes  (275)  (30) 
(393)  (393)  Income taxes  (106)  (106) 
956  713  Result before minority interest  (381)  (136) 
(54)  (54)  Result attributable to minority interest  (23)  (23) 
902  659  Net result  (404)  (159) 

Net sales from operations amounted to €12,256 million, representing a decrease of 6.6% compared to 2012. These figures include the effect of the restatement, which led to an increase in 2013 revenues of €245 million. A comparison from a purely operating point of view between the 2012 approved financial statements and the 2013 ‘consistent’ financial statements shows a decrease of 10.2% compared with the previous year caused by a slowdown in new project awards and delays affecting the execution of a number of contracts in the order backlog.

EBITDA amounted to €871 million, representing a decrease of €1,100 million, or 55.8% versus 2012. 2013 consistent reporting data (i.e. not including the effects of restatement) showed EBITDA of €626 million, which represents a decrease of 71.6% compared with the approved 2012 financial statements.

Depreciation and amortisation of tangible and intangible assets amounted to €724 million, which was essentially in line with 2012.

EBIT for 2013 totalled €147 million compared with the €1,245 million reported in the restated 2012 financial statements. Seen from a purely operating point of view, 2013 EBIT totalled -€98 million, representing a decrease of €1,579 million compared with the 2012 approved financial statements. The decrease compared with 2012 was due to the deferral of revenues caused by a slowdown in new contract awards and by the fact that a small number of contracts already in the backlog were delayed in their execution, as well as to unforeseeable additional costs and the write down of a number of balance sheet items. The largest variations are analysed in detail in the subsequent sections describing the performance of the various business units.

Net finance expense increased by €35 million compared with 2012, mainly due to the increase in average net borrowings. Net income from investments amounted to €13 million, representing a decrease compared with 2012.

The result before income taxes amounted to -€30 million. Seen from a purely operating point of view, the result before income taxes for 2013 totalled -€275 million. Income taxes amounted to €106 million, representing a decrease compared with 2012 which was principally due to the fall in taxable income.

The 2013 net result totalled -€159 million, compared with the €659 million reported in the 2012 restated financial statements. Seen from a purely operating point of view, the net result for 2013 was -€404 million.

Operating result and costs by function

2012 approved2012 restated(€ million)2013 consistent2013 
13,369  13,124  Net sales from operations  12,011  12,256 
(11,360)  (11,351)  Production costs  (11,584)  (11,584) 
(154)  (154)  Idle costs  (163)  (163) 
(160)  (160)  Selling expenses  (145)  (145) 
(15)  (15)  Research and development costs  (14)  (14) 
(11)  (11)  Other operating income (expenses)  (15)  (15) 
(188)  (188)  General and administrative expenses  (188)  (188) 
1,481  1,245  Operating result (EBIT)  (98)  147 

In 2013, the Saipem Group reported net sales from operations of €12,256 million, which represented a decrease of €868 million compared with 2012. From a purely operating point of view, net sales from operations totalled €12,011 million.

Production costs (which include direct costs of sales and depreciation of vessels and equipment) amounted to €11,584 million, representing an increase compared with 2012. Idle costs increased by €9 million, mainly due to lower utilisation of vessels on projects.

Selling expenses of €145 million registered a decrease compared with 2012 (€160 million), as a consequence of a greater degree of selectivity and focus with regard to bid preparation.

Research and development costs expensed as operating costs decreased by €1 million.

General and administrative expenses amounted to €188 million.