Isabel Green - Investor Relations Director Jean Cahuzac - Chief Executive Officer and Executive Director Ricardo Rosa - Chief Financial Officer John Evans - Chief Operating Officer

Fiona MacLean - Bank of America Merrill Lynch Andrew Dobbing - Danske Bank Phillip Lindsay - Credit Suisse Robert Pulleyn - Morgan Stanley Frederik Lunde - Carnegie Investment Bank Christopher Møllerløkken - SpareBank 1 Markets Anne Gjøen - Handelsbanken Capital Markets Haakon Amundsen - ABG Sundall Collier Amy Wong - UBS Morten Nystrom - Nordea Guillaume Delaby - Société Générale

Hello and welcome to the Subsea 7 Release of Q1 2017 Results. Throughout the call, participants will be in a listen-only mode. And afterwards, there will be a question-and-answer session. Just to remind you, the conference call is being recorded. Today I'm pleased to present, Isabel Green. Please begin your meeting.

Welcome, everyone, and good afternoon. With me on the call today, I have Jean Cahuzac, our Chief Executive Officer; Ricardo Rosa, our Chief Financial Officer; and John Evans, our Chief Operating Officer. The results press release is available to download on our website, along with the slides that we'll be using on today's call. Before I hand over, I just like to refer to the forward-looking statements slide, #2. Similar wording is also included in our press release. I'll now hand over to Jean.

Good afternoon and welcome to our first quarter results conference call. I will begin with the highlights of our performance during the quarter and the outlook for our business in the year ahead, before handing over to Ricardo, who will cover our financial results in more detail. I will conclude with a summary of our recent progress in achieving our strategic objectives and then we'll open the line for questions. Turning first to the highlights on Slide 4, revenue was $897 million in the quarter, 20% higher than the prior year period. We progress well with the Beatrice wind farm project, which more than offset the lower activity on oil and gas projects. Adjusted EBITDA of $268 million resulted in a margin of 30%, delivered as a result of excellent execution, innovative ways of working and strong cost discipline. Diluted earnings per share was $0.41. We invested in strengthening and extending our differentiated service, while maintaining our strong financial and liquidity position. We had $1 billion net cash as of the end of the quarter. Our acquisition of the remaining 50% of Seaway Heavy Lifting that we didn't already own was completed in March and is included in our reported results today. We achieved 65% active vessel utilization in the first three months of the year, slightly lower than the prior year with fewer projects offshore in the quarter. Total vessel utilization was 55%. We received three new-build vessels into our fleet in January, completing our investment program. Seven Cruzeiro commenced work offshore Brazil in January. Seven Arctic and Seven Kestrel carried out crew familiarization in the site in the quarter. And Seazen [ph] has started operation in the North Sea. Order backlogs stood at $5.7 billion at the end of March and moved from the year-end position as executed work was replaced by order intake and the consolidation of backlog from Seaway Heavy Lifting. The challenging industry conditions have not changed since we spoke to you in March. But what is encouraging is that we are working on early engineering studies and seeing increased client engagement. As we have said before, the phase's [ph] recovery is expected to be gradual. We believe many offshore projects are viable at the lower oil price, enabled by the process made by the industry on cost reduction. I turn now to Slide 5, to look at some of our recent operational progress in more detail. Offshore Egypt, the West Nile Delta Phase One project was substantially completed in the quarter with first gas achieved ahead of schedule. The platform extension and tie-in project of Burullus and the Atoll project both progressed well. Our bundle fabrication facility in Wick was busy despite the winter conditions, with three bundles launched in the quarter, two for the Western Isles project and one for the Callater project. Offshore Brazil, our latest PLSV to join the fleet, Seven Cruzeiro started our long-term day-rate contract. However, the contract for Seven Mar was terminated early when her permit to operate was blocked as a result of local content rules. Seven Waves is still expected to return to Brazil at the start of the third quarter when repairs to the damaged lay tower have been completed. Offshore Australia, the Persephone Phase 3 project was essentially completed. In the U.S. Gulf of Mexico, the Stampede and Coulomb Phase 2 project progressed well. The Beatrice wind farm project also progressed well with procurement and fabrication. Slide 6 shows our Subsea integration alliance activity in more detail. We are working at the forefront of the development of integrated SPS and SURF services. In the fourth quarter of 2016, we were awarded our first integrated contract of the Dalmatian field. This project have started well, and through collaboration and the elimination of bottlenecks, we are establishing better more cost effective ways to work together. In the first quarter 2017, we were awarded the Mad Dog 2 project, also in the U.S. Gulf of Mexico. This is the largest integrated award to date with 89 kilometers of pipeline and 22 wells. We see significant potential for integrated projects going forward. Clients interact is growing, and we are developing and deepening our relationship with OneSubsea. We expect to realize additional cost savings, further reduce interface risk and collaboratively deliver technological innovation. Moving on to Slide 7 to look at our backlog, we ended the first quarter with order backlog of $5.7 billion. This reflects the inclusion of $285 million of renewable backlog gained through the acquisition and consolidation of Seaway Heavy Lifting. And the cancellation of $106 million related to the PLSV Seven Mar. New awards of $626 million primarily reflected the Mad Dog 2 project awarded by BP and the Sole project awarded by Cooper, both announced in the first quarter. Unannounced awards included a call-off order under our frame agreement for diving services, and smaller awards for i-Tech Services and Renewables. Slide 8 lists some of the larger project tenders that we expect may be awarded to the market in the foreseeable future. In Norway, we are engaging FEED studies of Pil and Bue project for VNG as well as Skarfjell project for Wintershall. In South America, the Liza and Peregrino projects are currently being built. The Zinia and Zabazaba in West Africa, and Golfinho gas project in East Africa are being evaluated by the respective clients. We remain positive on the development outlook for gas for domestic consumption in India, with Reliance plant for KG-D6, and ONGC plant for Block 98/2. i-Tech Services is seeing improving condition for IMR and frame agreements in the North Sea. Renewables and Heavy Lifting activity remain centered on EPIC opportunities for offshore wind farms installation. As we mentioned back in March, we expect a gradual market recovery and anticipate an increase of awards to market within the next 12 months. Even so, most of the projects we have mentioned here are not expected to award SURF contract until late 2017. In the near-term, we anticipate continued high-levels of competition on project tenders. We also expect that our collaborative approach to client relationships as well our strong and differentiated offering would allow us to secure our fair share of new project awards. As we mentioned before, our disciplined stance on the appropriate project risk profile have not changed and will not change. I will now hand over to Ricardo to discuss our financial results in more detail.

Thank you, Jean, and good afternoon, everyone. Let's first look at the income statement highlights on Slide 10. First quarter revenue was $897 million, 20% higher compared to the prior quarter, mainly due to an increase of $218 million in Renewables, reflecting good progress made on the Beatrice project. This was partly offset by a 6% decline in SURF activity, with fewer large projects in execution and a 27% reduction in i-Tech Services. Adjusted EBITDA was $268 million, 6% lower year on year. This included a $7 million loss from associates and joint ventures, reflecting lower levels of offshore activity. The change in mix of our work was reflected in our adjusted EBITDA margin of 30%, down 8 percentage points from the prior year period. While we continue to benefit from strong execution and cost discipline, the lower number of large SURF projects and increased Renewables activity impacted the group's margin in the quarter. Net operating income was $169 million, a decline of 13% from the prior year quarter. We recognized a non-cash gain of $42 million on a business combination. This resulted from the acquisition in March of the 50% interest in Seaway Heavy Lifting that we did not already own. Accounting standards required us to re-measure our preexisting 50% stake to fair value with the difference to carrying amount being recorded as a tax-free gain. For the first two months of this year, Seaway Heavy Lifting was treated as an equity accounted joint venture. In March, it became a fully consolidated wholly owned entity. Upon acquisition, we recognized $483 million of net assets at fair value and goodwill of $42 million. Our effective tax rate was 29% for the quarter and net income was $146 million, in line with the prior year period. Diluted earnings per share was $0.41, of which $0.12 resulted from the re-measurement gain. Slide 11 shows the revenue and net operating income by business unit. In our SURF and Conventional business unit, first quarter revenue of $602 million was down 6% of the same quarter in the prior year. Activity in West Africa and the North Sea was lower year on year as for large projects in these regions were completed in 2016. These declines were partly offset by increased activity in Egypt and the positive impact from the addition of the new-build vessels, Seven Sun and Seven Cruzeiro to our fleet of PLSVs. SURF net operating income of $151 million benefitted from good execution, a low cost base and de-risking of projects. There was a 10% decrease in net operating income year on year, as a change in our mix of work started to impact our margin. i-Tech Services revenue was $76 million and net operating income was $11 million, 27% and 28% lower respectively compared to the prior year. Inspection, Maintenance and Repair activity increased in Australia, but this was more than offset by lower activity in the North Sea and Gulf of Mexico. We have introduced a new business unit this quarter for our Renewables and Heavy Lifting activity. The results generated from Seaway Heavy Lifting are included in this business unit, having previously been reported in our corporate segment. Renewables and Heavy Lifting generated revenue of $220 million, compared to $2 million in the prior year period. This was mostly from the Beatrice project, which progressed in the procurement and fabrication phases in the quarter. We reported a net operating loss of $4 million, due to the low utilization of the two heavy lifting vessels in the winter months. For reference, we have provided re-presented segmental results by quarter for 2016 in the appendix to this presentation. SURF and Conventional, and i-Tech Services have been re-presented to include their share of offshore resource management and asset impairments, which were previously categorized under the corporate segment. The Renewables and Heavy Lifting segmental results included Seaway Heavy Lifting on an equity accounted basis for the year. Slide 12 summarizes our cash flows in the period. Cash of $1.9 billion at the end of March represented an improvement of $196 million on the position at the end of December. This included an increase in borrowings as we drew down $301 million available under the ECA facility on delivery of the Seven Kestrel and the Seven Arctic. We generated $65 million in cash from operations with good first quarter EBITDA performance, largely offset by movements in working capital. We reported an outflow of $194 million related to our net operating liabilities, which decreased substantially in the quarter of certain project near completion. The acquisition of Seaway Heavy Lifting in March resulted in the net cash outflow of $111 million. This reflected an initial cash consideration of $279 million partially offset by the consolidation of $168 million in cash on Seaway Heavy Lifting's balance sheet. The group's balance sheet at quarter end included net operating liabilities related to Seaway Heavy Lifting of approximately $190 million. Our financial and liquidity positions remain strong. At the end of March, we had borrowings of $858 million comprising the outstanding balance on the convertible bond. The ECA facility and multi-currency term loan assumed on acquisition of Seaway Heavy Lifting. This resulted in the net cash position of $1 billion at the quarter end. In addition, we have continued access to the unutilized revolving credit facility of $750 million. Slide 13, sets out our guidance. We have updated our guidance to include the consolidation of Seaway Heavy Lifting and to reflect our performance year-to-date. We continue to expect revenue in 2017 to be broadly in line with revenue reported last year. Adjusted EBITDA percentage margin is expected to be lower than last year. We have raised our guidance to reflect continued benefits from cost savings, innovation, and more efficient ways of working, particularly on EPIC lump sum projects. We have updated our effective tax rate guidance to be between 28% and 33% for the full-year 2017. This is substantially lower than our previous guidance reflecting remeasurement gain on the acquisition of Seaway Heavy Lifting as well as the impact of it's relatively lower effective tax rate. This rate performance also reflects our updated EBITDA margin guidance. Our effective tax rate is sensitive to pre-tax profitability owing to the structure of tax regimes we operate under in certain jurisdictions. We have increased our guided range for the full-year 2017 for administrative expense by $20 million and depreciation and amortization by $40 million to reflect the inclusion of Seaway Heavy Lifting. The revised ranges of $210 million to $230 million, and $410 million to $430 million respectively. Our capital expenditure forecast includes Seaway Heavy Lifting, but it's unchanged at the range of $160 million to $180 million. I'll now pass you back to Jean.

Thank you, Ricardo. Let us turn now to Slide 15, we are delivering good performance as a result of our decisive and early action to adapt to the lower oil price environment. We are engaging earlier and delivering better lower cost solution for our clients. We have announced our market leading capabilities invested in our fleet and extended our presence in the renewables and heavy lifting market. Slide 16 illustrates how we can reduce our client's budget uncertainty by early engagement with our FEED and concept engineering alliance KG7. Engaging early reduces project cost and uncertainty by comprising this time to project sanction. When we are present from the start together with our alliance partners KBR and Granherne, you can influenced the design to ensure an optimize solution first time and it making costly design regulation for our clients. We are seeing an encouraging increase in early engagement in the market. We expect this to help drive more project sanctions and once awarded help projects achieve their planned solution, thereby reducing the risk of order-span and delays. Moving on to Slide 17, which cover the growing offshore renewable markets. Offshore wind farms are delivering clean energy solutions at increasingly competitive price [turning our] [ph] tower. We believe this market will continue to grow supported by government policies and need for alternative power sources to replace aging generation capacity. Economies of scale are driving change with more turbine spare [ph] wind farm and a trend towards larger turbines, each with greater power generating capacity. The complexity and size of the installation are increasing the needs for turnkey solutions and the larger foundations required higher specification heavy lifting vessel. Seaway Heavy Lifting has installed hundreds of wind turbine foundations with experience of monopile and jacket solution. Seaway Heavy Lifting also has an invaluable record in installing offshore substations on many European wind farms. Our increased presence in this growing market, diversified 37 client profile, that enables Seaway Heavy Lifting to grow its market share. Turning to Slide 18, we completed our latest new-build vessel investment program in the quarter with delivery of the remaining three vessels: Seven Cruzeiro, Seven Arctic and Seven Kestrel. We take a cost-conscious stance on retiring and returning vessels that are aged or surplus to requirement. This quarter, we returned Normand Oceanic at the end of its charter period. As part owners of the vessel, we are glad to confirm that it has since been chartered to a third party. We have scrapped Seven Discovery, a 27-year-old dive vessel and trying to retire Rockwater 1 from service this year. As a result of this disciplined approach, we have one of the most modern and versatile fleets in our market. Over two-thirds of our fleet is less than 12-years-old. We cover seven distinct operation categories with a range of capabilities within each one. Our fleet strategy is clear. We choose to own our high specification core assets, which ensures that we have control of our vessel design and functionality so that we have the right capability at the right cost. And then we charter additional capacity and lower specification vessels as required, maintaining flexibility to scale up or down to match client demand. To conclude on Slide 19, the market outlook has not changed with challenging condition and a gradual market recovery anticipated within the next 12 months. We have taken action on cost, formed strategic alliance and then announced our differentiated market position. It have supported excellent execution and enabled us to win a good share of the available work. The long-term outlook for offshore energy is intact. The changes we have made to lower the cost of offshore development have been highly effective and the improvements do not stop here. We believe integration, early engagement and innovation will deliver the sustainable cost reduction needed to remain commercial in a low oil price world. And now, John, Ricardo and I, will be pleased to answer your questions.

Thank you. [Operator Instructions] And our first question comes from Fiona MacLean from Merrill Lynch. Please go ahead. Your line is now open.

Hi, thank you. I have two questions, please. Firstly, in terms of the oil price environment that we're facing this year and the fact that you have been so strong at reducing and managing cost in your business, can you give us an indication of - would you feel you would have to do even more cost management if the oil price was not to rise sustainably above $55 for the rest of the year and obviously the implications that would have for your order intake? And secondly, in terms of future awards that you're bidding on, could you give us an update on Liza, please? Thank you.

So regarding your first question, remember that when we actually decided to adapt capacity to what we are saying in line with the evolution of the market, we're also committed to remain capability. And we are going to continue to keep the capability to be able to deliver the projects, win the jobs and then take opportunities when the market picks up, that hasn't changed. We thought the further cost reductions that which to be linked to further improvement in our process as new way of working. So we'll continue to work on that, it will be a gradual improvement. What is encouraging is even at today's oil price, what we are seeing is that the initiative taken by the industry and by Subsea 7 allows to make more and more project viable. And we see an increased interest of the clients to actually reopen files and consider project in the future. That will be a gradual improvement that we see some lights there. Regarding the future award, and when commenting on individual project basis, Liza is a project, which is they likely to go ahead and the commercial review ongoing, so we'll have more information I suspect in Q2.

Okay. That's it for me. Thank you very much.

Thank you. Our next question comes from Andrew Dobbing from Danske Bank. Please go ahead. Your line is now open.

Yes. Hi, Andrew Dobbing from Danske Bank. Couple of questions, please. First of all simple question, it looks like West Nile Delta Phase 1 finished early. You haven't been very specific on when Phase 2, at least the offshore phase of part two should start. Can we expect that to start early? I mean, should we see a big gap between this completion of Phase 1 and then the start of Phase 2? And the second question is we always see a seasonal sequential improvement in profitability from Q1 to Q2. It looks like at least the work I've done - looks like utilization has been particularly strong recovery from Q1 into Q2. And I guess we're going to get the benefit of the vessels working on Beatrice in Q2. So it kind of indicates that that margin improvement from Q1 to Q2 could be even stronger than it is typically. Is there anything to suggest that is not going to happen this year? Thank you.

Yes. Andrew, thank you for your question. I'm going to let John answer to your two questions. I just want to make one general comment. I think you have to be cautious to look at our business on the quarterly-by-quarterly basis. And you can have variation from one quarter to the other, what is important in the trend and what happened at the end of the year. John?

Yes. Just to carry on with Jean's point there. Yes, quarter one, we've benefitted from the Oceans working in the Gulf of Mexico on Stampede, and on Coulomb as well as heavy construction vessel working in Australia. Those assets are now redeploying back to the North Sea. So as you said that, Andrew, we will see those assets deploying into the North Sea, which is what we expect through the seasonal fluctuations that we see. But as Jean says, measuring us on quarters, as we all know, is not the easiest of tasks. If I look at West Nile Delta, we have completed Phase 1. Phase 2 starts this year with the shallow water pipelay. So we'll use the Antares this season to do the shallow water pipelay on that from the shore approach out to a deeper water location. So we do all the construction work onshore this year, and work to the handover point. And then next season then we have a further Borealis campaign, which is reasonably similar to Taurus & Libra in terms of work scope and work type. So we will be doing GFRs, deeper water phase in 2018 with the shallow water phase in 2017.

Is it fair to assume the kind of utilization of vessels on West Nile Delta Phase 2 in Q2 would be less than what it was on Phase 1 in Q1?

Yes. We are only using the Antares this year on Taurus & Libra. So the Borealis is not working on Taurus & Libra tour this year.

Okay. Thank you.

Thank you. Our next question comes from Phillip Lindsay from Credit Suisse. Please go ahead. Your line is now open.

Yes. Good afternoon, guys, and congratulations on another astonishing quarter. I got two questions, please. First one, just on the PLSVs, I know you've always said that the contracts were solid, and yes, you didn't suffer any concessions through the downturn. But what I'd like to get is a sense of profitability versus history. So not specific numbers, I know you won't disclose those, but directionally does the PLSV fleet today produce higher margins than two to three years ago? It's first question.

What I will say is that the PLSVs, and in particular, the new-build PLSVs [ph] are delivering the vessels as per our initial assumption, when we decided to embark in this new-build program, so no bad surprise there.

And then, clearly the guidance has changed on the back of Q1 and the SHL consolidation. Are you prepared to give us a sense of what the great driver this was? Was it more just another really excellent SURF and Conventional margin or did SHL have a greater bearing on this? Thanks.

I would say there was again, there was no surprises in what happened, but we are continuously monitoring what happening on the market, and the timing of some of the project, which varies - we can vary from what quarter to yield those. So this update of the guidance is based on our updated views three or four months after we made previous announcement. What I'd like to highlight and we said it before, but our delivery of project remains excellent and that explained it.

Okay…

Ricardo, you want to add the comment.

No. I think, all you covered it well, I think the fact is that we are very pleased with the impacted our cost reduction and resizing efforts are having on our margins, I think that we have an internal cost base it is competitive - very competitive. And we are still getting attractive prices from the supply chain, we are not seeing pricing pressures at the present time. And that compounded with good execution in de-risking is allowing us the perspective to revisit our guidance for the year.

And just one, last one for me, please. My doubt to, I think maybe perhaps one thing that surprised the market was the contract value, I think most we are assuming this kind of be a bigger number. But I'd just like to get a sense of how the contract structure, and the terms and conditions may differ from traditional SURF contracts in the past. Is your scope strictly lump sum perhaps you can just elaborate on that please?

John, do you want to go with that?

Yes. Mad Dog as we all know went through an extensive amount of reformatting in terms of the field layout, what in the scope and such a like through an iterative process with BP long before the bid came out. So what used to be Mad Dog, a couple of years ago is a very different field today. So BP has done a lot of optimization in layouts and such like. Our work is lump sum, and we have an agreement to manage the interfaces between the SURF and the SPS between our package and OneSubsea's package. But it's work that we've done before, work that we are very comfortable to do, and the general contract terms of very much in line with BP standard terms.

Okay. Super. Thanks, guys. Well done.

Thank you. Our next question comes from Rob Pulleyn from Morgan Stanley. Please go ahead. Your line is now open.

Yes. Good afternoon, gentlemen. Few questions if I may. Firstly, could we try and put a little bit of - or certainly I'll ask, if we could put a little bit of color around exactly what this guidance change leads to so. If I look at contingent numbers they are looking for around about 1,500 basis points of EBITDA margin contraction versus the clean number in 2016. Now would you consider that down or significantly down, just to try and bracket how we should be thinking about this? Secondly, in terms of the guidance revenue, if I add up the one quarter revenues plus the $2.7 billion in backlog you have, it seems like you've done for the year. Is the interpretation we should take that you win nothing else for 2017, execution in 2017? And thirdly, a little bit of details, if I look at the balance of the construction contracts, assets and liabilities on the balance sheet. They trailed from a net liability of $457 million at the end of 2016 to $271 million at the end of the first quarter. I was wondering what droves that and whether we should interpret that as being procurement on Beatrice? Thank you.

I can take the second question first, I mean, when we talked about additional work being awarded in 2017. One thing you have to consider is the lag time between the contract award and the execution. We are not - I mean, we are not - we are, again, still considering that there could be more work coming in. And that's why we adjust our guidance when things happen. There is always some lag time there. And in particular, on the timing of the offshore activity which shapes to additionally to six months, or a year, or 18 months later.

So generally, Jean, I think call-off type arrangements in the North Sea, that may be some of the new work we will get. New work that we'll get beyond that, will probably be for execution beyond 2017.

Yes. That's okay.

Regarding our guidance, I think what the message that we are sending that we've seen some improvement over the last three, four months, and what was going to happen in 2017. As we said several times, if we had question on the guidance, obviously we would have the obligation to report, if we had very different views.

Picking up on the all question on net working capital there, Rob. I think, we did generate relatively low cash - operating cash in the quarter is about $65 million, as we've shown in our financial statement. And this was driven by a - we have good EBITDA, but it was largely offset by reduction of $194 million on net operating liabilities in the quarter. And as we've discussed on previous quarters it's a swing in net working capital that we have been expecting, and we've always been factoring it into our cash flow projections. And it was driven this quarter by a combination of two main factors. The first one was certain SURF projects nearing completion. I mean, we've had some - had very significant top progression and very close to 100%. As well as the funding of fabrication activity on Beatrice, we received a number of client milestones in Q4. We are now utilizing those funds to execute the fabrication phase, and when I talk about fabrication, I mean the fabrication of the foundation, so in terms of start installation now in Q2. So it's a combination of those two elements, so on top of that going forward, we expect probably a further reduction in net operating liability position. But with the reduction in our capital expenditure commitments on the completion of the newbuild program, in the fact that we still have RCF undrawn, it's in the concern for us.

Okay. Thank you very much. I'm sorry, Ricardo, if I may just follow-up on that. Just so we can try to understand the mix dynamics of what's going on in the revenue. Would you be able to do - to let us know how much procurement on Beatrice for those - how much work or how much revenue on the fabrication actually happens at Beatrice in 1Q, just to get an idea of the business mix?

Well, we haven't - we don't give that level of granularity in our guidance. I mean, what we've said on the number of vacations is that the procurement element of the Beatrice contract, which is in total as worth approximately $1.3 billion. Is higher than what we would expect for average procurement on a traditional SURF project.

Okay. Fair enough. I'll turn it over. Thank you very much.

Thank you. The next question comes from Frederik Lunde from Carnegie. Please go ahead. Your line is now open.

Yes. Hi, congratulations on yet another very good quarter. I'll refrain from asking about share buybacks that if I could I'd like to ask about what you're seeing in terms of the spot market in the North Sea this summer [ph]?

John, you want to do?

Yes, I think, it's early first moment, we are back out working in the North Sea on our inspection, repair, and maintenance activities. Generally, the spot market tends to heat up towards the backend of the season around July and August, when all our clients have done there inspections and look to what they've got, and we see what happens there. So at the moment on North Sea is reasonably structure as we see it today with work load against drawdowns on our framework agreements on inspection, repair and maintenance, and CapEx work that we are doing at the moment. So I think we just wait and see, to see how that develops, we have some diving capacity that can be deployed in terms of the assets we got out there at the moment and pick up some of that capability. But we don't expect to see any major changes on the CapEx front for this year, Frederik.

Could you comment on the Seven Phoenix and site [ph] blocking? Could you confirm that the risk of site blocking now is off?

I wish I could say that the risk of blocking Brazil is always off, but I don't think I'll answer it that way, Frederik. We are working today on the Phoenix, but again as each renewal comes up on our licenses in Brazil there is always that potential opportunity.

One point, maybe to obvious that we don't have concerned on the new-build, which have higher specification, and cannot be replaced with Brazilian flag vessel with similar specification.

Great. And a final question, any news on EMS? Are you seeing any sort of a timeline or increased likelihood that transaction becoming something more than a loan?

I mean every Chapter 11 process is very complicated. We are participating in de-financing as we mentioned. In future we'll you some opportunities are made available. It's premature to conclude.

Great. Thank you.

Thank you. Our next question comes from Christopher Møllerløkken from SpareBank Markets. Please go ahead. Your line is now open. Christopher Møllerløkken: Yes. Good afternoon, gentlemen. You did pay an extraordinary dividend this year. Would you like your competitor TechnipFMC consider - starting with quarterly dividend?

I'd let our competitors answer themselves to what makes sense, what doesn't make sense for them. Ricardo, you want to add something?

I think, Chris, what do you have to bear in mind is that - with the merger with FMC, I think and perhaps their increased U.S. exposure, they are - my suspicion is that they have moved to a quarterly dividend policy in line with no more practice in the U.S., and I think this also is reflected in the announcement of the very significant share repurchase program. But as Jean said, probably making two details in observation and I'll let Technip comment on there and behalf. Christopher Møllerløkken: I was more asking on your behalf would this be something that Subsea 7 would consider?

Our policy is we do not have a regular dividend or we are very clear and we repeated a number of vacations that the inherent productivity of our business does not lend it to establishing a regular dividend via quarterly or annual. We have however remain, being shareholder friendly in our view, we distributed since 2011 of $1.2 billion of cash in the form of the dividends and share buybacks. And earlier this month, we just paid the dividend of $190 million or NOK 5 per share that we announced in March. Christopher Møllerløkken: Turning to another part. It is said that TechnipFMC is offering extended guarantees to their customers. When bidding, does anything prevent you and OneSubsea to offer similar guarantees to your corporation agreement?

Our corporation agreement with OneSubsea allows us to put commercial offers on the table to suit what clients are looking for. As we said many times on these calls, the model that we and OneSubsea have tried to do is the tailor offerings to suit what particular clients want rather than how a one size fits all. And as you can see our award on Dalmatian and Mad Dog 2 shows that the combination we put on the table it seems to work in certain cases.

I would just add that what we are seeing is what is being offered both by us and OneSubsea and fulfill everything that the clients are asking for. And that without increasing the risk profile on our side. So we're quite happy in the way it's going. Christopher Møllerløkken: And final, listening to your Italian competitor, they didn't seem to be that optimistic regarding one of the projects offshore India. You seem to be a bit more optimistic when it comes to contract of what's there. Any comments?

We are not commenting on contracts on an individual basis on contract-by-contract, and our approach hasn't change. I mean, the contract is never won before it's signed. Christopher Møllerløkken: Thank you.

Thank you. Our next question comes from Anne Gjøen from Handelsbanken. Please go ahead. Your line is now open. Anne Gjøen: Yes, thank you. First of all congratulation with very strong Q1. As you know, you have full ownership of Seaway Heavy Lifting, is it possible to indicate some project, whether tendering activity is ongoing or coming in offshore wind. And in Renewables on Heavy Lifting, is it there possible to indicate something about margins return for you on the wind project or something relative to the offshore project? Thank you.

Okay. Well, I'll answer your question in the sense of looking at how Jean's commentary mentioned. Seaway Heavy Lifting has sort of three different exposures that Renewables business. The first is what we called transportation and installing, the foundations, which can either be monopiles or foundation units. There is some bit into some of that work in Europe at the moment. Secondly, the EPIC contracts, and we've always said, they're much rarer in terms of size and scale. We don't expect the Beatrice every year coming through, but there our opportunities in the market longer-term, they are not currently bidding a number of those at the moment. But we are preparing to get ready. And thirdly then there has been a very good niche established with Seaway Heavy Lifting installing the substations each of these wind farms as a substation with jacket and quite a heavy topside with the substations. So at the present, we're bidding substations. And at present, we're actually installing three substations this month in the North Sea. In terms of margins, I don't think we'll comment on the margins overall. But it's a business that we are comfortable with, with the exposures. And we're comfortable with our ability to execute the work in each of those three different market segments.

I would only add, Anne, to John's comment that with the restructuring of our segment reporting and the creation of a standalone Renewables and Heavy Lifting business unit I think you will have more visibility on margins associated with our activities in Renewables and Heavy Lifting. And we believe that that will provide some additional clarity that today you may not have. Anne Gjøen: Thank you.

Thank you. Our next question comes from Haakon Amundsen from ABG. Please go ahead. Your line is now open.

Yes, hello, guys. Two questions for me. First of all, just to understand your margin guidance, is the margin upgrade simply a reflection of a couple of projects where the commercial outcome in 2017 is better than you expected or are there any sustainable effects that can spillover to 2018 for example? That's my first question. And the second question is if you can put some color on any potential IMR frame agreements which need renewal this year and how the profitability is on those kinds of projects relative to the SURF market please?

I mean, regarding - sorry, thank you. Regarding the question on the margin, I will take this question and then I will let John answer on the IMR side. First, I mean, the margin that you've seen in Q1 which will be for - I mean, they're not sustainable in the short term. We are seeing - we are going to see pressure on margin. We have been seeing pressure on margin in the last - in the recent past. However, we are able to optimize our margins through all the points that we mentioned before, the cost saving, the excellent execution, et cetera. So regarding our views for the margin of the year, also if you take some of the elements in consideration, including different timing of projects and also frame agreement on project, because I'd say it's a complex equation that we are trying to manage the best we can. Regarding the IMR angle for Mexico?

Yes, in the IMR Gulf of Mexico, there is an opportunity for renewal there in the bidding. It will take place in the next few months for BP's work. For the next few years, we're waiting incumbent [ph] at the moment. In the North Sea, as you know we have Statoil agreements, BP agreements and Shell agreements, which allow drawdowns against those IMR contracts. And we have a framework arrangement with multi-clients for about six clients called DSVI. And we're seeing a reasonable drawdown on the DSVI framework at the moment, which allows us to put the cash flow to work on new diving vessel, is going to work to do diving work this season in the North Sea. We also will be going over to Canada to complete the construction work on Hebron. And we will take some drawdown over an IMR framework there as well to do some inspection, repair and maintenance in Canada this summer as well with one of our vessels.

I will say as far as the trend is concerned the priority of a client is to maintain or develop production on existing installation, that's one of their key priorities. Very little work has been done in terms of IMR over the last two years. So we see the trend going in the right direction nowadays.

All right, thanks. That's it for me.

Thank you. Our next question comes from Amy Wong from UBS. Please go ahead. Your line is now open.

Hi, good afternoon. I have two pretty different questions. The first one relates to your bidding strategy. I mean, in the past you've talked about certain projects that are currently in your backlog right now. You were bidding at, quote unquote, like bare-bone margins. But, obviously, in this downturn you've been able to find ways to cut cost out. And actually, these days now become actually quite profitable projects. So can you talk about your bidding strategy today in terms of what kind of margins you're bidding at? And then how you think about the outturn where you're still then - then you kind of try to backfill for cost savings going forward? That's my first question, please.

Regarding the bidding strategy, our bidding strategy hasn't changed. First priority is avoid the risk, don't take more risk that we should. And that hasn't changed and keeping discipline is the priority. At the same time, regarding the bidding strategy, we're talking about the gradual recovery of the market. That means that what we are still seeing today is the pressure on margin with a lot of competition in particular for the smaller jobs around the world. So I think in terms of improvement of margin, need to be a gradual trend and there will be no step-change in the market, which is today quite competitive. Regarding the cost savings, we have achieved a lot of cost savings over the last two years. We are now talking about more continuous improvement in way of working. The magnitude of the cost saving is obviously very different.

Right, okay.

And we intend to maintain this newer working in the future, which will deliver superior margins when the market picks up.

Right, right, okay. Now, my second question relates more to the cost savings you guys are achieving on a project level in terms of - you mentioned in your opening remarks, making deepwater offshore projects much more competitive relative to other resources. So now they were 2.5 - 3 years into this downturn, can you identify, help us understand where you are still finding sources of cost reductions at a project level and how much incrementally more cost need to come down or how much more you think they can come down by to make offshore just generally a much more competitive resource.

Yes, John, you want to take this question?

Yes, Amy, I guess, it's a fundamental truism that it's what we end up building and what we end up installing that really defines the costs our client see. So there's been a lot of work on specification, how it needs to be built, what it is, how it's laid out, what you're trying to achieve as a client. Those type of discussions that we spoke about for the last 18 months, 2 years have been very productive for the industry overall, because it's starting look at it as a supplier-led solution rather than a standard specification-led solution. So when we look at costs and we see projects today that can be sanctioned in this world by our clients, a lot of that has been around what exactly is to be achieved and how it's to be achieved. Inside our own organization, we looked at our own costs and how we structure and how we then liquidate the projects and how we execute those. And we've done a lot of good work with a number of clients, about the atmosphere and the culture and environment we allow projects to be delivered as well. And some of the structures we have in the past weren't always conducive to good decision making at the time and such like - delivering projects depends on good decision making being made at the right time, and then finally good delivery at the very end. We're starting to see a number of those things come together on a number of our projects. There isn't one magic button you can press to say that's the thing that's contributed to it. But it's multifaceted, but we are reasonably pleased at the moment. We have a cost base for ourselves that can work in the industry today.

All right, okay. Thank you very much.

Thank you. Our next question comes from Morten Nystrom from Nordea. Please go ahead, your line is now open.

Yes, thank you. Lot of my questions have been answered. But first one, could you talk about the current tender list and try to, let say, compare this to one year ago, two years ago and then give us the highlights of the main changes? And secondly, do you have the impression that you are I would say more competitive on cost than your peers, meaning that you have been able to do or be more successful in taking out cost and then as such being more - able to be more competitive on new awards? Thank you.

I'm taking your second question. We are very pleased with what we have achieved internally regarding our cost. We are working even more pleased, because I strongly believe that we have made some set change, which are going to be there for a long term and improvement on our competitiveness, but also how we deliver the projects. I cannot comment on what the competition has been doing. The only thing I can say is that I'm also very pleased with our market share and what we got on the jobs which are available. Regarding the project, John, I would say the things haven't changed since we talked last quarter. We're talking about gradual recovery. And as we said I think in our comments, we think projects - a number of project not being award - before late 2017 or beginning of 2018. That's for the SURF project. Regarding the IMR, we see more visibility there. I think we're going to take one more question.

Thank you. The last question comes from Guillaume Delaby from Société Générale. Please go ahead. Your line is now open.

Yes, good morning. Thank you for taking my question. Clearly, you and Schlumberger become more and more vocal about the deepening of the alliance. And my question will be what is the main operating difference and what is the main economic difference between bidding on the project as a pure alliance and bidding at a project as a company.

Well, I can comment on the deepening of the alliance and John can give you a flavor of the difference. It takes time to actually know each other. It takes time to work closely together and we've seen no problems. We've seen the continuous improvement. And I think I would say every day, every week we are working closer and becoming more efficient in understanding each other. It's two different business to be in the manufacturing and to be a project delivering company. And I think we have the trust and the confidence on both sides. We chose to move forward. So I think it's working very, very well. John?

I think coming back to my other answer to the other question, I think ultimately it's about what the clients want and that's what we are trying to do here. It's to work on understanding what the client really needs in a particular field that we're looking at. How you ultimately contract and structure that and handle the interfaces and such like, there are ways of doing that as an alliance, as we've shown successfully on both the Dalmatian and Mad Dog 2 as of other people in this industry by being a single company. So we don't believe that our clients are missing out on anything by the way we structured our business. It's the quality of the discussion that we have with our clients and it's the quality input that OneSubsea and Subsea 7 can put on the table, that allows to make progress on certain projects here. So we don't see that as in any way, shape or form a restriction to the ability to succeed. But as I said earlier, we offer to clients only when they're interested in it and only when it makes sense for them in the way that we should interact. And we take every single project on a case-by-case basis and try to tailor a solution accordingly.

Thank you.

Thank you.

Well, I would like to thank all of you for participating to this earning call and looking forward to our next conversation at the next earning call. Thank you. Bye.

Thank you. This now concludes our conference call. Thank you for attending. You may now disconnect your lines.