Saipem Mixed bag in 2Q, but the Middle East is now in numbers

Research evidence excerpt

Saipem Mixed bag in 2Q, but the Middle East is now in numbers

ty arguably improved: FY26 Adj. EBITDA guidance has been

reduced to ca. EUR1.75bn from EUR1.9bn, reflecting both assumed Middle East disruption costs

(>EUR70mn) and the disposal of the shallow-water drilling fleet (ca. EUR20mn). However,

revenue guidance was maintained at ca. EUR15.5bn and free cash flow guidance remains

unchanged. The mix of earnings is arguably becoming more favourable, with increasing

exposure to higher-quality offshore activities and less reliance on shallow-water drilling. Order

intake also strengthened materially to EUR4,068mn in 2Q26, with a further EUR2.3bn secured in

July, supporting confidence in backlog conversion and 2027 growth.

Promising outlook for orders: Order momentum improved materially during the quarter, with

intake of EUR4,068mn in 2Q26 implying a 1.1x book-to-bill ratio and driving backlog to

EUR29.9bn. Management highlighted a further EUR2.3bn of awards secured in July and

reiterated confidence that FY26 order intake will exceed FY25 levels. Encouragingly, commercial

activity remains broad-based across offshore and onshore markets, with opportunities

spanning Africa, Latin America, the Middle East and Asia-Pacific, while the commercial pipeline

continues to expand. The combination of accelerating awards, strong customer demand and

full construction fleet utilisation for the next two years provides improving visibility on medium-

term growth.

Cash conversion structurally better: Perhaps the most encouraging aspect of the update was

the continued improvement in cash conversion. Free cash flow before lease repayments

reached EUR388mn in 1H26, equivalent to around two-thirds of full-year guidance despite the

Middle East cost burden.