Messy 2Q? Yes. Story-Changing? No. Remain OW Following Results

研报英文原文证据摘录

Messy 2Q? Yes. Story-Changing? No. Remain OW Following Results

IdeaMExhibit 1: Summary of feedback today

Big topics What we heard What we think

Agree it is certainly not great news to see a downgrade, but Saipem had not cut

guidance in 1Q. With the situation around the SoH still uncertain, that was a risk

Guidance downgrade is a negative surprise.

going into results, which we noted in our preview. Also, the cut was SoH-driven and

not due to poor execution.

New guidance reflects additional costs, but assumes shipments go through Maybe, it is a risk if the SoH remains fully closed over that period. But then, there

the SoH in the end; could that pose more guidance downgrade risks in the should arguably be other macro implications from the continued closure (oil, gas,

future? OFS demand in other regions).

Guidance

If navigation through the SoH never fully normalises, additional costs

Agree, and that is a risk to the story. But in that case, all OFS companies present in

would have to be added to forecasts until the current backlog is

the ME will face that risk (Technip, etc).

concluded.

We are not big fans of guidance that includes W/C volatility either. But that was a

FCF guidance was retained due to W/C and that is a poor driver of FCF. point raised by most investors we spoke to and likely already reflected in the share

price weakness today.

We did not have that cost in our model, but it is an initiative aimed at making the

Redundancy company leaner in the end of the day (intent is to be NPV positive over time). The

The market was not expecting these incremental costs at this point.

provisions provisions were not driven by unforeseen costs from project execution, which would

have been a real concern.

Yes, big miss, driven by downtime.