dnb’s oil and offshore conference - kvaerner · hook-up and commissioning project management...

DNB’s oil and

offshore conference

Idar Eikrem, CFO

© Kvaerner 2017

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28.02.2017

Well positioned for future market opportunities

2

1) Leading contractor within proven track record

2) Competitive position strengthened a) Delivering projects predictably: Safely, on time, with right quality

b) Improved cost position

3) Near term market opportunities in selected regions

4) Solid financial platform

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Leading contractor in four segments

3

CONCRETE SOLUTIONS TOPSIDES ONSHORE

Global leader in marine concrete structures

Substructures

CONDEEPTM GBS

Floating concepts

LNG terminals

European leader in steel jackets

Steel jackets

Steel structures

Piping technology

Subsea on a stick®

Leading EPC

contractor to the

North Sea market

Topsides

Floating platforms

Leading

Norwegian EPC

contractor for

onshore plants

Upstream plants

Treatment

facilities

JACKETS

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Kvaerner’s core expertise

E P C HUC & I FEED DECOM

Engineering management

Assembly

Hook-up and commissioning

Project management

Fabrication Tow-out, installation,

production start

Concept development / FEED Procurement Project Management

Assembly

4

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Ongoing projects progressing well

5

Hebron: Detailed engineering, procurement,

construction and installation (EPCI) of GBS

Marine installation

Johan Sverdrup: EPC for the utility and living

quarters topside in JV with KBR

Nyhamna Expansion: EPCM onshore contract Johan Sverdrup: EPC contracts for the Riser,

Drilling and Process platform steel jackets

Aasta Hansteen: Sub-contract to provide services

for inshore and offshore hook-up and

commissioning assistance for the topsides

Njord A: Frame agreement for upgrading of the

semi-submersible platform

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Key financials Field Development segment

6

1 4

24

41

7

63

6

82

8

57

4

74

1

-

200

400

600

800

1 000

1 200

1 400

1 600

201

1

201

2

201

3

201

4

201

5

2016

Revenues NOK million

Adjusted EBITDA NOK million

Order backlog NOK million

10 8

87

9 8

19

16

09

1

17 5

31

14 9

17

10 3

64

3 000

6 000

9 000

12 000

15 000

18 000

201

1

201

2

201

3

201

4

201

5

201

6

14.4 5.6 4.4 5.2 4.1 7.1 EBITDA

margin %

8 7

59

20

22

3

22

80

9

16

45

1

14

34

6

6 4

59

4 000

8 000

12 000

16 000

20 000

24 000

2011

201

2

201

3

2014

201

5

201

6

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Solid financial platform

7

2016 revenues of NOK 10.4 billion

Improved project portfolio

Reduced admin costs / improved competitiveness

Reve

nu

es

&

EB

ITD

A

Net cash of NOK 3.0 billion

Negative working capital of NOK 1.5 billion

Robust capital structure with NOK 2.0 billion in undrawn facilities Bala

nce

sh

ee

t

2016 cash flow from operations of NOK 1.7 billion

2016 cash flow from investing activities of NOK 201 million

Annual maintenance capex of NOK 30-50 million Cas

h f

low

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On track for harvesting improvement effects

8

Cost base

for new

projects

reduced

~15 – 20 %

Cost b

ase

red

uctio

n

~2

0 –

25

%

2014

• 17 initiatives re competitiveness

2015

• Reduced vendor prices

• Improved productivity

2016

• Streamlined org.

• Admin. costs ÷NOK 200 mill

• Digitalisation / Use of robots

Cost base for

new projects

reduced

~5 – 10 %

2017

• Admin. costs ÷ NOK 100 mill

• Quality / delivery model

• Joint initiatives with clients

2017 2016 2013

Co

st le

ve

l in

ne

w p

roje

cts

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Pursuing selected prospects

9

Near term: Completion, HUC, decommissioning, modifications

Further outlook through 2017, 2018 and onwards: NCS: Potential for annual growth in number of PDOs. Greenfield / brownfield EPC for offshore platforms and onshore facilities Arctic projects, including demand for engineering and project management Selected prospects in new markets are being considered

Concrete

solutions

Steel jacket

substructures

Platform

topsides

Onshore

oil and gas plants

Market leader,

Norway

Leading position Market leader,

Europe

Market leader

globally

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Based on core competence, solid financial platform and credibility in the market

Strategic development

Leading EPC & HUC contractor

Subsea on a stick

Platform mod.

Decommissioning

Arctic LNG solutions




10

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Concluding remarks

11

Safe, predictable execution

Further improve competitiveness

Opportunities to refill order book

Resilient financial position:

Develop and grow the business

HSSE – core value and

licence to operate

Maintain and develop home

markets

Develop global delivery model

for Norway and abroad

Hands-on management

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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.

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.

Copyright and disclaimer

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