08.03.2012© Kvaerner 20121
DNB’s Oil, Offshore & Shipping ConferenceEiliv Gjesdal, CFOOslo, 8 March 2012
08.03.2012© Kvaerner 2012 © Kvaerner 2011
Kvaerner - Investment highlights
EXTENSIVE TRACK RECORD
Kvaerner is a “new” company with more than 40 years of experience from the world’s most demanding market
TAILORED TO MEET STRONG MARKET
With an unprecedented market growth ahead, Kvaerner is tailored to meet market trends as well as client demands
ALL SYSTEMS ARE IN PLACE
Delivery models, systems and experience in place to deliver sound profits and manage growth
FINANCIAL MUSCLE Access to opportunities and credibility towards customers
A SOLID POSITION FOR GROWTH
Five business areas with leading positions in their niches and technologies ready to capture growth
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Order intake and backlogOrder intakeNOK million
Order backlogNOK million
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Q4'10 Q1'11 Q2'11 Q3'11 Q4'110
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
1 136
10 046
Upstream Downstream & Industrials For execution in 2012 For execution in 2013For execution in 2014
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Key financialsRevenuesNOK million
EBITDANOK million
13 1
43
12 1
91
13 2
09
13 2
95
3 000
6 000
9 000
12 000
15 000
2008
2009
2010
2 01
1
-852
291 48
8
1 07
3
-1 000
-750
-500
-250
250
500
750
1 000
1 250
2008
2009
2010
2011
Net current operating assetsNOK million
-107
3
-1 9
06
-1 0
64
-1 2
35
-2 000
-1 500
-1 000
-500
2008
2009
2010
2011
EBITDA (6.5)% 2.4% 3.7% 8.1% margin
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Revenue distribution
Important projects in 2009Sakhalin-1 Adriatic LNG deliveredValhall jacket deliveredH-6e rigs delivered GjøaKashagan HUCCameron LNG LongviewGulf LNG
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Share of revenues 2009Percent
Share of revenues 2010Percent
Share of revenues 2011Percent
Important projects in 2010Sakhalin-1Gudrun jacketGjøa delivered Kollsnes onshoreMongstad Test CentreKashagan HUCCameron LNG delivered LongviewGulf LNG
Important projects in 2011Sakhalin-1Gudrun jacket deliveredClair Ridge jacketsEkofisk jacketsNordsee Ost wind jacketsSkarv FPSO deliveredKollsnes onshore deliveredEldfiskKashagan HUC deliveredLongview deliveredGulf LNG delivered
NorthSea
NOK 12.1 billion North
Sea
NOK 13.2 billion
JacketsNOK 13.3 billion
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-2000
-1500
-1000
-500
0
500
1000
Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
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Cash flow and working capital
6
NOK million 2011 2010Net CF from operating activities 1 069 (645)Net CF from investing activities (231) (26)Net CF from financing activities (1 105) 349Translation adjustment 8 53
Net +/- in cash and bank deposits (259) (269)
Net current operating assets (NCOA)NOK million
Downstream & Industrials
Upstream
Kvaerner Group
The EPC business is cash positive through negative working capital:
Customer pre-payments¹ of NOK 516 millionDownstream & Industrials: Capital tied up in the Longview project
¹ Billings in excess of cost and estimated earnings less amounts billed in advanced but not received (on a project by project basis).
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CONCRETE
Concrete substructures
Global leader in gravity based concrete structures
JACKETS
Large steel jackets for oil & gas installationsWind jackets
European leader in steel jackets
NORTH SEA
TopsidesFloatersOnshore upstream facilities
Leading EPC contractor to the North Sea market
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Kvaerner – a dedicated EPC company
UPSTREAM DOWNSTREAM & INDUSTRIALS
E&C AMERICASINTERNATIONAL
TopsidesFloatersOnshore upstream facilities
Spearhead for international expansion
Onshore facilitiesPower plantsSteel mills
A leading EPC contractor for the American market
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E&C Americas
EPC Centre EPC & project management for the
oil & gas industry including offshore topsides, LNG & gas processing, chemical, petrochemical, refining, power, utilities and infrastructure Approximately 150 employees
Union Construction General contracting and
maintenance services for Power, Steel and Petrochemical Industries Approximately 250 employees
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Jackets operational excellence
36 jackets delivered since 1975Yard upgraded to deliver three jackets annually from 2014Important steps towards operational excellence made
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The Verdal yard, Norway
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Jackets capacity
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2011 2012E 2013E 2014E
Gudrun
Ekofisk jacket
Nordsee Ost
Clair Ridge
Luno jacket
Hild jacket
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Tonnes (est.) 16 000 40 000 36 000 31 000
7 40
0
3 00
0
2 00
0 7 40
0
4 00
0
7 00
0
7 90
0 15 0
00
16 0
00
18 8
00
13 9
00
15 8
00
19 4
00
6 00
0
10 3
00
7 70
0
18 0
00
14 0
00 19 7
00
15 6
00
5 00
0
8 50
0
37 5
00
14 0
00 20 0
00
7 30
0
1 00
0
12 0
00
6 50
0
4 00
0
16 0
00
0
10000
20000
30000
40000
50000
1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Piles tonnageJacket tonnage
Jacket tonnage deliveredMetric tonnes
Current jacket portfolio
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North Sea
Illustration of Eldfisk 2/7S topsideOrmen Lange Gjøa
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North SeaReference projects – some examples
© Kvaerner 2011
•2010: Gjøa•2005: Kristin•2001: Snorre B•2000: Åsgard B•1997: Heidrun•1997: Njord•1992: Snorre A TLP
Floating facilities
Current projects include the EPC contract for the topside and bridges for Eldfisk 2/7S
Topsides* Drlling rigs Onshore FPSO
* For fixed platforms
•2003: Valhall drilling•2000: Grane•2000: Eldfisk•1999: Siri•1999: Oseberg Sør•1996: Sleipner West•1995: Troll gas•1989: Gullfaks C•1988: Oseberg A•1986: Gullfaks A
•2009: Aker Barents•2009: Aker Spitsbergen
•2011: Kollsnes upgrade•2011: Test Centre Mongstad•2007: Ormen Lange onshore terminal•2007: Snøhvit LNG•2005: Kårstø
•2011: Skarv•1999: Åsgard FPSO•1999: Jotun FPSO•1998: Laminaria•1997: Norne FPSO
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International
Target markets
COOEC yard, China
Demonstration moduleBrowse development
Kashagan project
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Concrete GBS for offshore platformsConcrete GBS for LNG facilitiesConcrete hulls for floating platforms
Concrete SolutionsImpressive track record
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Concrete Solutions
Nakhodka
Potential construction sites for future projects in NW Russia
Bull Arm
Hebron FEED and site preparations
Sakhalin 1 under construction
Algeciras
Adriatic LNG terminalMarkets
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The EPC project portfolio
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2010 2011 2012 2013 Valueat award
Kashagan HUC USD 1.6B
Kollsnes NOK 1.5B
Longview USD 654M
Gulf LNG USD 340M
Mongstad NOK 525M
Sakhalin-1 USD 600M
Ekofisk jacket Undiscl.
Nordsee Ost EUR 115M
Clair Ridge NOK 1.7B
V&M Star (Structural) Undiscl.
Skarv FPSO Undiscl.
Eldfisk NOK 5.5B
V&M Star (MEP) Undiscl.
Luno jacket NOK 1.1B
Hild jacket NOK 1.2B
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
North Sea International Jackets Concrete E&C Americas
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Number of EPC prospects higher than in decades
17 1 November 2011
HildLunoMarinerBressayLuvaDagnyDraupneVictoriaTommelitenSnorreSkrugardJohan SverdrupHavisOrmen LangeKollsnesSnøhvit Pahse IINyhavna extension
Existing and prioritised markets
North Sea Jackets International Concrete E&C AmericasBrowseOther international prospects on a case by case basis
LNG-LiquefactionGas processing/syngasChemical/phosphatesHeavy oilRefiningSteelPipe manufacturing industryGas fired power plantsPlant maintenance and servicesPower plant environmental compliance projects
White RoseHebron GBS EPC-phasePiltun SouthPetchora LNGKammennomyskoyeYamalDolginskoyeAmuligak
Note: The list is not exhaustive or indicative of Kvaerner’s priorities.
Montrose/ArbroathDagnyDraupneMarinerBressayPeregrino IIJackdawNordsee Ost extensionJohan Sverdrup
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Summary
Order backlog of NOK 10.0 billion
Unprecedented market outlook
High bidding activity materialising
Focus on operational excellence
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HSE – core value and licence to operate
Maintain and develop home markets
International expansion
Hands-on management
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Kvaerner – vision and mission
we executeamazing projects
we successfully realisedemanding fields
the world’s most
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Copyright and disclaimerCopyrightCopyright of all published material including photographs, drawings and images in this document remains vested in Kvaerner and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction.
DisclaimerThis Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Kværner ASA and Kværner ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Kvaerner’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Kværner ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Kværner ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Kværner ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
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