Capital Markets Day 10 January 2013

Transcription

1 Capital Markets Day 10 January 2013 Time Topic Speaker Introduction Jan Arve Haugan, President & CEO Concept / Front End, Engineering and Procurement Janne H. Rasten, EVP Project Support Tony Allen, EVP International Construction Sverre Myklebust, EVP Jackets Tony Allen, EVP International Jim Miller, EVP E&C Americas Q&A part I Break Completion and Decommissioning Lars Eide, EVP North Sea Arctic opportunities Bjørn Gundersen, EVP Concrete Solutions Financial update Eiliv Gjesdal, CFO Summary and Q&A part II Lunch

2 Copyright and disclaimer Copyright Copyright 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. Disclaimer This 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. 2

3 Introduction Jan Arve Haugan, President & CEO Capital Markets Day 10 January 2013

4 Kvaerner executes amazing projects Specialised EPC company employees in 9 countries Revenues of NOK 13.3 billion (2011) Order backlog of NOK 21.8 billion* * As of 30 September

5 Safety our licence to operate Open and transparent reporting Continued pro-active focus Kvaerner 2011

6 Strong market in all target regions (Offshore EPC spending, USD billion) Arctic Canada and US Arctic Norway, NCS, DCS and UKCS Caspian Russia Asia Pacific/Australia 0,5 0,6 0,3 0,9 1,6 1,3 1,3 0,4 0,0 8,7 7,0 6,2 6,3 4,9 4,6 3,4 2,7 2,3 3,8 7,8 7,1 6,5 6,5 5,8 5,2 5,5 5,4 7,2 6,8 5,6 4,4 0,8 0,7 1,0 1,2 1,4 4,8 13,8 12,9 12,7 11,5 9,8 11,3 9,7 8,0 Source: Rystad DCube 6

7 Following our strategy Facsimile from Investor Presentation in June

8 External macro factors Global energy demand & supply Framework conditions Market & Competition Customers & Partners World energy supply and demand Demand: the light area Supply: the red and purple areas Source: Rice University report 8

9 Several discoveries last two years Source: Ukeblad, Newsinenglish.no, Reuters 9

10 EPC spending up 20% since Kvaerner listing Global offshore EPC spend by year USD million Market view January 2013 Market view, spring Source: Rystad Energy, Kvaerner analysis 10

11 Projects Average delay into the North Sea is ~9 months Delivery delay North Sea topsides since 1990 (Number of months) Average delay ~9 months Source: Rystad Energy 11 Kvaerner 2012

12 The value of timely delivery Source: Rystad Energy 12

13 Recognizing the importance of improved competitiveness Topside unit cost Capacity, tonnes per year China and other low cost areas Europe and North America Korea and Singapore Global large topside 1) capacity (tonnes/year) 1) Large topside defined as exceeding weight of tonnes 2) Source: Rystad Energy; Kvaerner analysis 13

14 EPC contracts 14

15 Customer drive 15

16 Proven Arctic execution Concrete leading the way 16

17 Execution 17

18 Topic Introduction Speaker Jan Arve Haugan, President & CEO Concept / Front End, Engineering and Procurement Janne H. Rasten, EVP Project Support Tony Allen, EVP International Construction Sverre Myklebust, EVP Jackets Tony Allen, EVP International Jim Miller, EVP E&C Americas Completion and Decommissioning Arctic opportunities Lars Eide, EVP North Sea Bjørn Gundersen, EVP Concrete Solutions Financial update Eiliv Gjesdal, CFO 18

19 C F E P C C D Concept / Front End, Engineering and Procurement Janne H. Rasten, EVP Project Support Tony Allen, EVP International Capital Markets Day 10 January 2013

20 C F E P C C D The project journey Project timing and estimated value months 6-8 months 36 months 6-8 months 12 2 months Concept FEED Engineering Procurement Construction Completion Decommissioning NOK ~10-20 million NOK ~30-60 million NOK ~ million NOK ~ million NOK ~150 2 million Analysis Concept selection Concept development Definition Cost estimate Requirements Design elements Detailed engineering Materials Labour Sub-contractors Construction management Construction Installation Hook-up Pre-start up Onshore disposal (1) Approximate values for a generic topside of ~ tonnes (2) Typical time requirement for Kvaerner s target scope; e.g., onshore deconstruction and disposal 20

21 Concept selection is subject to evaluations in the concept phase C F E P C C D Functional requirements Location Drivers 1 Oil/gas/water quantity and quality Pressure Temperature Production rate Injection requirements Drilling requirements Safety Remoteness Environmental conditions Water depth Soil Proximity to existing infrastructure Topside Substructure Edvard Grieg Export solution (1) Illustrative, not exhaustive 21

22 C F E P C C D The front end process within Kvaerner Opportunity Appraisal Feasibility studies Concept Selection Concepts most likely to succeed Most cost efficient concepts Selected concept System and discipline level Improved execution FRONT END (Pre FEED) Concept screening & selection ~2-3 years FEED Concept Definition ~0.5-1 year EPC 22

23 EPC project experience is embedded in our front end work C F E P C C D Concept FEED Engineering Procurement Construction Completion Decommissioning Front end work EPC execution phase Extensive experience data base with as built data (e.g., technical solutions, weight, cost, schedule) Strong knowledge of clients design basis Construction resources involved throughout the process Understanding of full lifecycle of a field 23

24 C F E P C C D Engineering influences all EPC project phases Engineering in different phases Engineering numbers for an EPC contract Proxy figures for tons topside C F E P C C D System and area engineering Engineering for procurement Engineering for fabrication Engineering for completion, testing and operation 350 engineers at peak manning engineering design documents 150 purchase orders supplier documents GB data stored 24

25 Procurement is complex and require close focus throughout the project C F E P C C D tonnes mechanical equipment tonnes pipes Ormen Lange example valves tonnes structure steel metres of cable installed 250 companies involved 25+ nationalities Total of people involved in the project ~ working hours on site Note: Picture and figures from the Gjøa project delivered by Kvaerner in

26 C F E P C C D Kvaerner has engineering and procurement presence around the world Kvaerner engineering and procurement locations US, Canonsburg Houston UK, London Norway, Oslo Stord Verdal Trondheim Finland, Ulvila Russia, Arkhangelsk China, Beijing Australia, Perth 26 Kvaerner 2012

27 C F E P C C D A flexible delivery model CONCEPT FEED ENGINEERING PROCUREMENT CONSTRUCTION COMPLETION ELDFISK (Topside) Aker Solutions Aker Solutions as subcontractor CLAIR RIDGE(Jacket) SAKHALIN (GBS) HEBRON (GBS) BROWSE (TLP) + Peter Kiewit + Aker Solutions Aker Solutions as subcontractor Peter Kiewit + COOEC CALPINE GARRISON (Gas fired power plant) WorleyParsons and Calpine Corp. + Parsons Brinckerhoff 27 Kvaerner 2012 Firm contract Potential agreement; for illustrative purposes

28 C F E P C C D Controlling engineering Project management Engineering management Full control Flexibility Engineering disciplines Efficient risk mitigation High quality at lower price Controlled by Kvaerner Flexibility wrt. in-house vs. subcontracting Kvaerner s highly experienced engineers have the expertise to efficiently manage the engineering phase 28

29 C F E P C C D Proven project execution model ( PEM ) M1A M1B M1C M1D M2A M2B M2C M3A M3B M3C M3D M4A M4B M4C M5A M5B M5C M5D M6A M6B M6C Feasibility & Concept System Definition Detailing & Fabrication Assembly & Erection System completion Contract Completion TA TB TC TD TE Tender & Kickoff Strategic Control Execution Tools 29

30 C F E P C C D Risk mitigation during project execution Phase timing in months Project risk Project progress Feasibility & Concept System definition Detailing and fabrication Assembly and Assembly & System Definition Detailing & Fabrication erection Erection System System completion completion Contract Completion Note: For illustrative purposes 30

31 A standardised procurement process yields good returns over time C F E P C C D Supplier Relationship Management activities Sourcing Procurement Need Requirements Sourcing - Audits - Approvals Inquiry process Purchasing process Quality surveillance expediting Material Control Logistics Warehousing Close out Performance evaluation Standardised proven processes ensure risk control and hence guaranteed delivery 31

32 Sourcing complexity Strategic segmentation of suppliers to optimise procurement activities C F E P C C D Sourcing complexity defined by: Criticality to project progress Lead time Technology ownership Supplier power Selective partnerships (12 % of total number of packages sourced 1 ) Strategic partners (4 %) Simplified selection (19 %) Standard procurement process (65 %) (1) Total number of sourced packages on a typical topside project is Impact on project profitability Impact on project profitability defined by: Category spend (MNOK) Category value-add (impact) 32

33 C F E P C C D Equipment constitutes 60-70% of procurement value, the remainder being bulk Procurement per category for sample topside project Percentage of total procurement value Other bulk 6% Valves 9% Vessels 5% 14% Pumps Equipment Bulk items Structural 7% Piping 7% Electrical bulk 6% 24% Generators and compressors 21% Other Equipment Typical procurement value of NOK 3-4 billion 33

34 EPC execution is a close interaction between the various disciplines C F E P C C D Project management Critical line Engineering Bid Final info Inquiry Purchase order Prelim info Close-out documentation Procurement (vendors) Drawings for fabrication Delivery of bulk Delivery of equipment Contract completion Construction 34

35 C F E P C C D Construction Sverre Myklebust, EVP Jackets Tony Allen, EVP International Capital Markets Day 10 January 2013

36 The topside is a complex delivery of assembled modules C F E P C C D Utility Helideck Space for drilling rig Flare Living quarter Process and wellhead Jacket 36

37 C F E P C C D Topside assembly facilities at Stord Surface protection STORD ambitions Annual throughput capacity: tonnes Parallel fabrication capacity: 1-2 Oil & Gas topsides Lead time large topside: 36 months Assembly crane Assembly hall Dry dock Administration office Camp Cutting shop Construction management office Outfitting quay Heated ware house/ service center Prefabrication Deepwater quay 37

38 C F E P C C D On-going topside and onshore projects - Norway ELDFISK TOPSIDE NYHAMNA ONSHORE EDVARD GRIEG TOPSIDE Client ConocoPhillips Project EPC contract to deliver topside and bridges the Eldfisk 2/7 S platform Ordered 18 March 2011 Contract value NOK 5.5 billion Delivery Early 2014 Client A/S Norske Shell Project EPCM for modifications and projects at the Ormen Lange/Nyhamna onshore facilities Ordered 19 April 2012 Contract value NOK 11 billion Delivery 6 years and 2+2 year options Client Lundin Norway AS Norway Project EPC of the topside for the Edvard Grieg platform Ordered 3 May 2012 Contract value NOK 8 billion Delivery April

39 C F E P C C D The steel jacket solution Steel substructure for topside Normally 4 or 8 legs Lifted or launched 4 topside guide pins Kvaerner own fabrication Subcontractor fabrication Drilling deck Horizontal elevations to support caissons and conductors Caissons (w/pumps for water supply) Risers for wellstream and oil and gas export Leg (subcontracted) Pile Cluster; pile sleeves & mudmats Bracings (subcontracted) Cluster (subcontracted) Edvard Grieg Jacket J-tube for umbilicals and control cables 39

40 C F E P C C D VERDAL ambitions Annual throughput capacity: tonnes Parallel fabrication capacity: 2-3 large Oil&Gas jackets Lead time large O&G steel jacket: 24 months Verdal the yard of possibilities Jacket assembly Surface protection Jacket prefabrication New assembly area and quay facilities Offshore wind assembly Offshore wind prefabrication 40

41 C F E P C C D On-going jacket projects North Sea CLAIR RIDGE NORDSEE OST EDVARD GRIEG MARTIN LINGE Client BP United Kingdom Client RWE Innogy Germany Client Lundin Norway AS Norway Client Total E&P Norway Project Clair Ridge Project Nordsee Ost, 49 jackets Project Edvard Grieg Project Martin Linge Ordered 12 July 2010 Ordered 17 June 2010 Ordered 19 January 2012 Ordered 13 February 2012 Delivery Spring 2013 Delivery 2012/2013 Delivery April 2014 Delivery Spring 2014 DP Jacket QU Jacket Height Height 168 m 167 m Height metres Height 134 m Height m 41

42 C F E P C C D Our scope of construction Project management Construction management Bulk procurement Method work Shop engineering Assembly and integration Testing and commissioning 42

43 C F E P C C D Clair Ridge Jacket 43

44 C F E P C C D Kvaerner has a proven track record internationally Hibernia, 1996 Laminaria, 1999 Sable Tier II, Kashagan epf, Sea Rose, 2005 Sakhalin II PA-B, 2005 Sakhalin II LUN-A, 2005 Adriatic LNG, 2008 Blind Faith, 2008 Kashagan HUC, 2012 Sakhalin 1 A-D, 2012 Hebron,

45 C F E P C C D Substantial number of opportunities internationally Selected sample prospects BROWSE EQUUS LAVERDA AMAULIGAK GUNFLINT ARCTIC DRILLING FACILITY WHITE ROSE Y. KORCHAGIN STAMPEDE SOUTH PILTUN 45 This list is not exhaustive nor indicative of Kvaerner target priorities

46 C F E P C C D Flexible international construction model VOSTCO yard Nakhodka, Russia Bull Arm yard, Canada COOEC yard Qingdao, China Strategic partnership (e.g. GBS projects in Far East Russia) Joint Venture with lease of construction site (e.g. Hebron in Canada) Contracting either within consortium or as a pure subcontract (e.g. Asia Pacific projects) 46

47 C F E P C C D Asia Pacific delivery model Kvaerner and COOEC collaboration consolidated with completion of a demonstration module in 2011 Developing into a top tier international yard COOEC yard Qingdao, China COOEC a natural partner for a long term relationship Long track record with increasing international scope COOEC Kvaerner demonstration module 47

48 C F E P C C D Browse Dry Tree Units a platform for growth Rigorous risk evaluation Technical Comprehensive FEED performed Simple process train Partnering Strong relationship Execution Proven track record of Tension Leg Platform (TLP) delivery Well managed risk profile 48

49 High value fabrication required for longer term market positioning and growth C F E P C C D Sustainable access to regional, low cost fabrication is a pre-requisite for the international delivery model Additional construction capacity required to maintain NCS market share International diversification brings low cost fabrication to NCS Increased market share globally and domestically 49

50 Sustainability through low cost fabrication and strategic partnerships C F E P C C D Kvaerner current construction sites Kvaerner potential future construction sites Current target markets CANADA NORWAY Verdal Stord NW RUSSIA POLAND CASPIAN FE RUSSIA Low cost fabrication 50

51 Our differentiators make us an attractive global partner C F E P C C D Value driven HSSE performance STATFJORD A (1977) Predictability through project execution excellence Seamless EPC deliveries through state of the art processes, methods, systems and tools Diverse product portfolio Highly qualified workforce able to adapt to new realities Successful deliveries of quality solutions for more than 35 years Predictable deliveries. Predictable performance. 51

52 C F E P C C D E&C Americas Jim Miller, EVP E&C Americas Capital Markets Day 10 January 2013

53 Managing unionized labour is a prerequisite in all regions where we operate Union labour areas C F E P C C D Union labour areas with Kvaerner track record Non-union labour areas Kvaerner has a strong track record and competitive advantage in managing projects involving unionized labour 53

54 C F E P C C D The business at a glance Key facts Permanent locations Construction Services Maintenance Renovation Geographical focus United States Canada Hammond, IN Burlington, Ontario Lump sum Contract formats Time & material Cost reimbursable Fixed fee/reimbursable Management and staff: ~220 Resources Union craftsmen: , more than at peak Fabrication Facilities Hammond, IN Corporate Office Canonsburg, PA 54

55 C F E P C C D Involved in three segments Share of rev % Power plants and environmental General construction services to more than 15 power plants Natural gas, combined cycle, pulverized coal Environmental controls on existing plants 33 % Steel Steel industry staff experience spans more than 35 years Premier provider to the steel industry 5 % Chemical / Petro Chemical Expansion of our core skill set 55

56 We leverage partnerships to complete our delivery model Kvaerner has direct contact with the clients, not through general contractors Power FE E P C C F E P C C D In-house Jointly with partner Third party is a general contractor not a subcontractor works in unionized sectors of the United States and Canada Steel Petrochemical FE E P C Service FE E P C Service Kvaerner has different value chain approach to various segments Kvaerner 2011

57 Demand for gas fired power plant Why is the gas fired power plant market interesting now? C F E P C C D + 60 GW capacity additions needed in US by 2020 Excess supply of shale gas Reduced gas prices more attractive for power production Emission regulations stricter regulation and taxes, gas more attractive than coal Well proven concept and relatively cheap to develop less capital intensive to develop than other sources Market drivers for gas fired power plants 57

58 New projects to be located in regions where Kvaerner has a strong presence C F E P C C D Historical and projected US capacity additions Total capacity additions (GW) Future outlook Comments 2 27 Approximately of the new projects will be in regions where Kvaerner is well positioned On-line New Capacity Capacity Under Construction Additonal Capacity Requirements Strong union relations Core skillsets including partnerships Strong track record Community recognition Source: Charles River & Associates Sep

59 C F E P C C D Calpine Garrison Energy Center General specifications Client: Calpine Corporation Location: Dover, Delaware Plant: Combined Cycle Power Plant 309 MW Natural gas fired facility JV Partner: Parsons Brinckerhoff (PB) Contract value: USD million Execution model Parsons Brinckerhoff Project management E P C Parsons Brinckerhoff Calpine Scope of Work Major equipment (HRSG, CTG, and STG)* supplied by client Engineering, supply of balance of plant equipment, and commissioning by partner (PB) JV project management and all site construction by Kvaerner *HRSG: Heat Recovery Steam Generator, CTG: Combustion Turbine Generator, STG: Steam Turbine Generator 59

60 C F E P C C D Completion and Decommissioning Lars Eide, EVP North Sea Capital Markets Day 10 January 2013

61 C F E P C C D Completion C F E P C C D Installation and hook-up Commissioning and start-up Offshore installation & hook-up Onshore installation & hook-up Commissioning Pre start-up Start-up Gjøa Offshore hook-up Kollsnes Onshore hook-up Aker Spitsbergen & Barents Commissioning & sea-trials TCM Commissioning and start-up 61

62 Kvaerner has been pursuing the installation and hook-up market for decades Examples of installation and hook-up projects C F E P C C D Statfjord A Oseberg A Gullfaks C Draugen Snorre A Troll A Njord A Oseberg Sør Eldfisk 2/7 E Valhall IP Kristin Gjøa 62

63 Kvaerner is now preparing the installation and hook-up activities for Edvard Grieg and Eldfisk C F E P C C D Edvard Grieg offshore hook-up Commissioning assistance Contract value of NOK 500 million Edvard Grieg Jacket Edvard Grieg topside and jacket Saipem S-7000 heavy lift 63

64 C F E P C C D Onshore installation and hook-up Kvaerner has been offering installation and hook up services to several onshore facilities through history Currently the Nyhamna EPCm project is being executed Trenger bilde i høytere kvalitet Strategy to pursue these jobs jointly with partners Nyhamna Installation is an integrated part of our EPC delivery and would not be pursued on a stand alone basis Kollsnes 64

65 Kvaerner has experience-based commissioning capabilities including tools and procedures C F E P C C D Full commissioning scope Provided key personnel Eldfisk 2/7 E Valhall IP Snorre B Njord A Oseberg Øst Navion Munin Visund Aasgard A Oseberg Sør Aasgard B Aker Spitsbergen Aker Barents TCM Mongstad Kristin Fram Vest Kårstø KEP 2005 Grane Topside Grane Drilling Snøhvit LNG Gjøa Kollsnes KOP EPC Kvaerner can take responsibility for the full commissioning scope or provide key personnel to projects, also projects where Kvaerner has not had the EPC Kvaerner 2011

66 C F E P C C D Decommissioning TOGI being lifted onto quayside at Eldøyane, Stord Troll Oil and Gas Injection (TOGI) decommissioning project 66

67 Kvaerner present in the low risk segments of the decommissioning market C F E P C C D C F E P C C D Offshore preparations Offshore removal and transport Onshore deconstruction and disposal Kvaerner s involvement Hazardous material studies and assistance work possible vehicle for early positioning for onshore disposal Total supplier of inshore and onshore deconstruction and disposal 67

68 Onshore deconstruction and disposal operations performed at Eldøyane site C F E P C C D Stord fabrication yard Eldøyane disposal site Kvaerner has a specialised decommissioning team and nearly 20 years track record The Eldøyane disposal site is developed to accommodate deconstruction and disposal activities. All work is performed with care for personnel and environment Typically more than 98% of the materials are reused or recycled 68

69 C F E P C C D Different approaches to the NCS and UKCS markets NCS: Targeting all structures Northern UKCS: Targeting larger structures installed at water depths >60 m 69

70 Arctic opportunities Bjørn Gundersen, EVP Concrete Solutions Capital Markets Day 10 January 2013

71 High potential in the Arctic by estimated reserves Estimated yet-to-find reserves of around 400 billion boe High end solutions needed Design challenges Extreme temperatures Ice conditions Remoteness Sensitive natural environment 71

72 Winterisation our second nature as Norwegians 72

73 Concrete gravity base structures a proven Arctic solution Sakhalin-II project Robustness to meet Arctic environment Year-round access to drill / maintain wells Significant local content Minimum maintenance Supports large topside weight Low lifecycle cost Installation independent of heavy lift vessel availability Integrated oil storage 73

74 Kvaerner track record the path to Arctic experience Canada Russia Russia Russia Canada 74 Arctic offshore projects

75 Kvaerner presence and activities in Canada & Alaska Current presence in Canada & Alaska Kvaerner EPC experience in Canada & Alaska Hebron, 1997 Hibernia project, Canada,1997 Sea Rose FPSO, Canada, 2005 On-going activities in Canada & Alaska Burlington St. John s The Hebron Project, on-going Positioned for Husky s White Rose WHP Concept studies for potential field development solutions on-going 75

76 Kvaerner presence and activities in Russia Current presence in Russia Kvaerner EPC experience in Russia Sakhalin-1 Arkutun-Dagi GBS, Sakhalin II PA-B, 2005 Arkhangelsk Moscow Nakhodka Kashagan epf, Kashagan HUC, 2012 On-going Pre-FEED project in Russia VNIIG Arctic exploration drilling GBS 76

77 Sakhalin 1 EPCI project delivered on time 77

78 Delivery model for further growth Self performing execution and local content Local partnership/jv approach Engineering with strategic partners Long-term presence in strategic regions VOSTCO yard, Nakhodka, Russia Client relationships and strategic partnerships Leverage GBS track record Successful project execution is all about people 78

79 Kvaerner well positioned for Arctic opportunities Kvaerner target waters Kvaerner offices / project locations Arctic GBSs delivered by Kvaerner Burlington St. John s Mackenzie delta & Beaufort Sea Grand Banks, inc. White rose Central Barents London Verdal Shtokman Stord Oslo Murmansk Pechora Arkhangelsk Kara Sea Yamal Ob&Taz bay Magadan Kamchatka Sakhalin Moscow Nakhodka 79

80 Financial update Eiliv Gjesdal, CFO Capital Markets Day 10 January 2013

81 ¹ Revenue distribution and profitability Revenues NOK Million North Sea Jackets E&C Americas Concrete solutions International E&C Americas (EPC Center) Q1-Q

82 The current EPC project portfolio Value at award Mongstad TCM NOK 525M Eldfisk topside NOK 5.5B Nyhamna onshore Edvard Grieg topside Nordsee Ost wind jackets NOK 11B NOK 8B EUR 115M Clair Ridge jackets NOK 1.7B Edvard Grieg jacket NOK 1.1B Martin Linge jacket NOK 1.2B Sakhalin-1 USD 600M Kashagan HUC USD 1.6B V&M Star (MEP) Undisclosed Calpine Garrison USD M North Sea Jackets Concrete Solutions International E&C Americas 82

83 Profit recognition Topside - phase timing in months Assembly of prefabricated modules Commissioning Prefabrication started Revenue recognition Profit recognition Risk FEED study finalised Start booking profits at 20% completion Mechanical completion System definition Detailing and fabrication Assembly and erection System completion Jacket example EPC duration months Topside and concrete structure example EPC duration months 83 Note: For illustrative purposes

84 Upstream segment Revenues and backlog NOK million North Sea Concrete Solutions Jackets International Backlog at 30 Sept 2012 North Sea Revenue potential of NOK 8-10 billion from one topside delivered each year plus onshore work Jackets Revenue potential of NOK 2-3 billion from 2-3 jackets delivered each year Wind business to be discontinued Concrete Solutions Current revenue potential of NOK 2-3 billion from one EPC project Q1-Q International Revenue potential depending on build up following project wins 84

85 Downstream & Industrials segment Annual revenues of USD million Current backlog implying lower activity first half of 2013 Normalised EBITDA margin of 3-5 percent Longview arbitration on-going Break even results expected until Longview resolved 85

86 Order backlog provides good foundation for revenue growth Solid long term revenue visibility Incorporated JVs will not be included in the backlog Additional orders of ~NOK 6 billion booked to date: Eldfisk hook-up and commissioning assistance Calpine Garrison power plant Increased scope for the Nyhamna onshore upgrade project 86

87 Adjusted 2013 revenues - NOK 13 billion with upside Main assumptions Secured 2013 revenues at 30 Sept 2012 totalling NOK 8.7 billion Incorporated JVs included with ~NOK 2.5bn in 2013 adjusted revenues Downstream & Industrials in low end of revenue range: USD million Recent orders contributing in 2013 Upside from potential award of topside and jacket projects first half of 2013 International upside Corporate costs of NOK million Note: Adjusted revenues include incorporated JVs 87

88 Cash positive, working capital will fluctuate The working capital will fluctuate with the project portfolio from quarter to quarter: Monthly invoicing Milestone payments Cash positive business through negative working capital: Customer pre-payments¹ of NOK 242 million (at 30 September 2012) Downstream & Industrials: Capital tied up in the Longview project NCOA increasing towards year end )Invoicing in excess of cost and estimated earnings less amounts billed in advance but not received (on a project by project basis). 88

89 Robust capital structure NOK million Property, plant and equipment Intangible assets Net current operating assets Net other non interest bearing assets¹ Net cash Total equity Loan facilities of NOK 3 billion A NOK 500 million term loan - 3 year - margin of 1.5%-2.5% above NIBOR A NOK 2.5 billion credit facility - 5 year - margin of % Purpose of loan facilities Buffer for working capital fluctuations Available for project guarantees Selective international expansion 1) Excluding interest bearing receivables which are included in net cash 89

90 Use of funds Recap from pre-ipo presentation, June

91 Financial items and tax 1 Financial items 2 Net interest expense NOK 50 million in up-front fees for the loan facilities distributed over 5 years Term loan interest rate: NIBOR plus 1.5% Other fees, e.g. commitment fees: 1% Bank deposits yielding low interest Current financial structure cost: approx. NOK 50 million (80% payable) Foreign currency All currency exposures from contracts are hedged Translation effects: mainly from US and Canadian subsidiaries and from Kazakhstan and Russia branches Tax Norwegian tax Nominal tax rate of 28% Timing of payment pending completion of projects US tax Nominal tax rate of approx. 40% Approx. USD 60 million in tax losses not recognised in the accounts Overall tax Current tax rate: 38-40% Target tax rate: 30% 91

92 Capex, investments and dividends 3 Capex and investments 4 Maintenance capex NOK million per year in total CAPEX NOK million Investments Upgrades of the Verdal yard totalling NOK 150 million completed in 2012 Upgrades at Stord including new crane of approx. NOK million of which approx. NOK 200 million in Maintenance Investments Q1-Q312 Predictable dividend Kværner ASA's dividend policy is based on visibility and predictability. The ambition is to pay semi-annual dividends with increases, in order to give a stable and predictable dividend growth, balancing out the underlying volatility of earnings. Ambition to increase by 10 percent annually NOK 0.53 per share paid in October 2012 NOK 0.55¹ per share expected paid in April ) Subject to approval by the Annual General Meeting 10 April Kvaerner 2012

93 Use of funds Balance sheet Revenues Summary Current project portfolio and new awards driving revenues Solid backlog foundation for revenue growth Adjusted 2013 revenues of NOK 13 billion with upside Robust capital structure with NOK 2.5 billion in undrawn facilities Cash positive but fluctuating project portfolio Significant capital tied up in Longview project Annual finance cost of NOK 50 million Long term target tax rate of 30% Annual maintenance capex of NOK million and committed investments of NOK 200 million Predictable dividend 93

94 Concluding remarks Project portfolio to improve competitiveness Capturing market opportunities Managing risk Attractive dividend policy Arctic opportunities HSE core value and licence to operate Maintain and develop home markets International expansion Hands-on management 94