fourth quarter results 2016 - home - kvaerner...q4'15 q1'15 q2'16 q3'16...

Fourth quarter

results 2016

© Kvaerner 2017

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15.02.2017

Highlights

2

Fourth quarter 2016

Solid operational performance

Mating of Hebron GBS and topsides

Fourth roll-up of Sverdrup RP jacket

MoU signed for Njord A

Subsequent events

Workforce and organisation adjustments

Sverdrup riser platform hook-up contract

Decommissioning contract won

Njord A was docked as planned in December at Stord, Norway.

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15.02.2017

HSSE results

3

Lost time injury frequency (LTIF) & total recordable injury frequency (TRIF) Per million worked hours

1.9

0.3

0

1

2

3

4

Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

LTIs

0

5

10

15

Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

Serious incidents with no harm to people

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2011 2012 2013 2014 2015 2016

LTIF TRIF

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15.02.2017

Key financials

4

178

106 106

248 219

0

50

100

150

200

250

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

-1 0

57

-1 1

43

-14

69

-15

27

-15

34

-1 600

-1 200

-800

-400

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

2 5

77

2 2

28

1 8

59

1 9

75

1 8

34

500

1 000

1 500

2 000

2 500

3 000

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

EBITDA

margin

¹ As from Q3 2015, adjusting impact related to embedded derivatives in jointly controlled entities closely related to Kvaerner’s operating activities.

6.9% 4.8% 5.7% 12.6% 11.9%

Revenues

NOK million

Adjusted EBITDA¹

NOK million

Net current operating assets

NOK million

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15.02.2017

Order intake and backlog

5

0

200

400

600

800

1 000

1 200

1 400

1 600

Q4'15 Q1'15 Q2'16 Q3'16 Q4'16

0

3 000

6 000

9 000

12 000

15 000

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Note: All figures include scope of work of jointly controlled entities.

768

For execution in 2017

Estimated scheduling as of 31 December 2016:

For execution in 2018+

6 459

~20%

Order backlog

NOK million

Order intake

NOK million

~80%

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15.02.2017

Operational highlights

6

Hebron GBS

Johan Sverdrup utility and living quarters topside

Johan Sverdrup riser platform jacket

Nyhamna expansion

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15.02.2017

On track for harvesting improvement effects

7

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.l 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

Fourth quarter financials Idar Eikrem, Chief Financial Officer

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15.02.2017

Income statement

9

1 Revenues excluding Kvaerner’s scope of work of jointly controlled entities.

² As from Q3 2015, adjusting impact related to embedded derivatives in jointly controlled entities closely related to Kvaerner’s operating activities.

Amounts in NOK million Q4 2016 Q3 2016 Q4 2015 FY 2016 FY 2015

Total revenue and other income 1

1 834 1 975 2 577 7 896 12 084

Adjusted EBITDA 2

219 248 178 680 536

EBITDA 229 223 177 629 574

Depreciation and amortisation (27) (26) (20) (100) (81)

Goodwill impairment (198) - - (198) -

EBIT 4 198 156 331 493

Net financial income/(expense) (6) (36) 25 (117) 86

Profit/(loss) before tax (2) 162 182 214 579

Income tax expense (66) (42) (54) (132) (241)

Profit/(loss) from continuing operations (68) 119 128 82 337

Profit/(loss) from discontinued operations (32) 146 18 345 56

Net profit/(loss) (100) 265 146 426 393

Adjusted EBITDA margin 11.9 % 12.6 % 6.9 % 8.6 % 4.4 %

Earnings per share (NOK)

Basic and diluted EPS continuing operations (0.26) 0.45 0.48 0.31 1.26

Basic and diluted EPS total operations (0.38) 1.00 0.55 1.60 1.47

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15.02.2017

Field Development review

10

Financials

Improved performance and project portfolio mix

One off impact from settlement with sub-contractor

3 334

2 785

2 475 2 727

2 378

0

1 000

2 000

3 000

4 000

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Revenues

NOK million

202

123 122

265

232

0

50

100

150

200

250

300

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

EBITDA

NOK million

EBITDA-% 6.1% 4.4% 4.9% 9.7% 9.7% Note: All figures include Kvaerner’s scope of work of jointly controlled entities

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(2 000)

(1 500)

(1 000)

(500)

-

Q4'1

2

Q1'1

3

Q2'1

3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Q3'1

4

Q4'1

4

Q1'1

5

Q2'1

5

Q3'1

5

Q4'1

5

Q1'1

6

Q2'1

6

Q3'1

6

Q4'1

6

Cash flow and working capital development

11

Fluctuations in working capital

must be expected

Capital tied up in the Nordsee

Ost project

Net current operating assets (NCOA) – Continuing operations

(NOK million)

¹ Includes Longview settlement of USD 70 million in Q1 2016 and net insurance recovery of USD 23 million for the same project in Q2/Q3 2016.

Amounts in NOK million Q4 2016 Q3 2016 Q4 2015 FY 2016 FY 2015

Cash flow from operating activities1

244 407 566 1 718 1 183

Cash flow from investing activities (16) (22) 3 (201) (50)

Cash flow from financing activities (4) (4) (51) (30) (786)

Translation adjustments 4 (4) (1) (1) 6

Net increase/(decrease) in cash and bank deposits 228 377 518 1 486 352

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Balance sheet

12

Amounts in NOK million 31.12.2016 30.09.2016 31.12.2015

Assets

Total non-current assets 1 505 1 734 1 715

Current operating assets 1 427 1 007 1 740

Total cash and bank 3 047 2 819 1 560

Retained assets of business sold 1 33 633

Total assets 5 980 5 594 5 649

Equity and liabilities

Total equity 2 656 2 766 2 550

Other non-current liabilities 267 254 180

Current operating liabilities 2 961 2 534 2 797

Current tax liabilities 46 14 73

Retained liabilities of business sold 51 26 49

Total liabilities 3 324 2 828 3 099

Total equity and liabilities 5 980 5 594 5 649

Equity ratio 44 % 49 % 45 %

Net cash 3 047 2 821 1 562

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Market and outlook

13

Customers consider new projects based on lower cost

Kvaerner is attractive based on improved cost & proven predictable deliveries

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Pursuing selected prospects

14

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

15

Leading EPC & HUC contractor

Subsea on a stick

Platform mod.

Decommissioning

Arctic LNG solutions




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Concluding remarks

16

Solid performance in 2016

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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