Investor presentation 17 June 2011

Investor Presentation
Kvaerner Executive Management
Oslo Konserthus, Lille salen
17 June 2011
Copyright and disclaimer
Disclaimer
This presentation has been prepared by Kværner ASA to provide an overview of certain aspects of the operations and strategy of the Company. This presentation speaks as
of 17th June 2011, and there may have been changes in matters which affect Kværner ASA subsequent to the date of this presentation. Neither the issue nor delivery of this
presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the
affairs of Kværner ASA have not since changed, and Kværner ASA does not intend, and does not assume any obligation, to update or correct any information included in this
presentation
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, no assurance can be given that those expectations will be achieved or that the actual results will be as set out in the presentation.
Anyone considering taking actions based upon the content of this document is urged to base investment decisions upon such investigations as deemed necessary. No
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This presentation does not constitute or form a part of, and should not be construed as, an offer or invitation to subscribe for or purchase any securities of the Company and
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This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article
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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.
2
© Kvaerner 2011
17.06.2011
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
3
© Kvaerner 2011
17.06.2011
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
4
© Kvaerner 2011
17.06.2011
A strong name with a solid track record
Est
1841
Peter Steenstrup
First CEO
Aker
Engineering
Stord
Verdal
Aker
Maritime
Norw. Contractors
Maritime Group
Davy/John Brown/Trafalgar
Oluf A Onsum, founder
1850
5
1900
Kvaerner
Engineering
Egersund
Rosenberg
1950
© Kvaerner 2011
Aker
Solutions
Field
Development
ED&S / Field
Development
Kvaerner
(Oil & Gas)
2000
17.06.2011
Aker
Kvaerner
2008
Kvaerner
Global EPC
provider
With full focus on EPC field developments
Meeting low cost requirements
through strategic partnerships
More flexible
More focused
Meeting local content
requirements through local
partnerships
Field development market
poses unique challenges and
opportunities
Market requirements for
dedicated EPC contractors
6
© Kvaerner 2011
17.06.2011
Creating a focused
global EPC company
Fast track process to listing
May 2011:
July 2011:
AGM
Listing
January:
P&C sold to Jacobs
After AGM:
Kvaerner is owned 100 percent
by Aker Solutions until the listing in 3Q
7
Dec 2010:
March 2011:
Reorganisation decided
Kvaerner becomes a separate business area, and starts
operating as a company 100 percent owned by Aker Solutions
© Kvaerner 2011
17.06.2011
Kvaerner – a dedicated EPC company
DOWNSTREAM &
INDUSTRIAL
UPSTREAM
CONCRETE
Global leader in
Gravity based
concrete structures
Concrete
substructures
8
JACKETS
Eurpoean leader in
steel jackets
Large steel
jackets for oil &
gas installations
Wind jackets
© Kvaerner 2011
17.06.2011
NORTH SEA
Leading EPC
contractor to the
North Sea market
Topsides
Floaters
Onshore
upstream
facilities
INTERNATIONAL
Spearhead for
international
expansion
Topsides
Floaters
Onshore
upstream
facilities
E&C AMERICAS
A leading EPC
contractor for the
American market
Onshore facilities
Power plants
Steel mills
HSE mindset:
Just Care™
Through the implementation and
use of the HSE operating system,
Kvaerner has established:
A systematic approach to
improvement towards a common
set of HSE expectations
More efficient HSE interfaces,
internally and externally
Measurements of HSE compliance
and culture
A tool for increasing employee
engagement and achieving a HSE
culture where zero harm to
personnel, material and the
environment is sustainable
9
© Kvaerner 2011
17.06.2011
Experienced management team
Jan Arve Haugan*
Chief Executive Officer (from 1 August 2011)
Lars Eide
North Sea
Jan Arve Haugan has since 2009 been CEO of Qatar Aluminium
Ltd (Qatalum) - a 50/50 Joint Venture between Qatar Petroleum
and Hydro Aluminium - one of the largest primary aluminum plants
ever built in one phase. He holds a Master of Science in
Construction Management from the University of Colorado at
Boulder, USA.
Lars Eide has broad experience from a wide range of positions in
Aker Solutions, most recently as President of Aker Stord, Project
Director Gjøa EPCH and President of Aker Kværner Egersund. Mr.
Eide holds a Masters Degree from the Norwegian University of
Science and Technology.
Eiliv Gjesdal
Chief Financial Officer
Nina Udnes Tronstad
Jackets
Eiliv Gjesdal joined Aker Solutions in 2002 and has extensive
experience from finance and control functions. Mr. Gjesdal holds a
MSc in Economics and Business Administration from NHH in
Bergen, Norway, and is a state authorised public accountant in
Norway.
Nina Udnes Tronstad has since joining Aker Solutions in 2007 been
president of Aker Verdal. Prior to joining Aker Solutions, Ms Udnes
Tronstad held various technical and management positions in Statoil,
both upstream, midstream and downstream. Ms. Udnes Tronstad
holds a degree in chemical engineering from the Norwegian
University of Science and Technology.
Jan-Tore Elverhaug
Project Support
Bjørn Gundersen
Concrete
Jan-Tore Elverhaug has more than 30 years experience from the
offshore industry and has been part of the management in
Kværner Engineering and Aker Solutions, including EVP for Field
Development and President of Aker Stord. He is a Petroleum
Engineer from the Regional College of Stavanger in and holds a
business degree from the Norwegian School of Management.
Bjørn Gundersen has over 30 years experience from the oil and gas
industry. He has extensive experience through project management
positions for major world class offshore oil and gas projects, as well
as corporate business executive management positions, in Norway as
well as internationally. Mr. Gundersen holds a degree in civil
engineering from the Regional College of Stavanger.
Jan Øyri
Business Support (from 1 September 2011)
Jim Miller
E&C Americas
Jan Øyri has more than 15 years of experience with organisational
and production processes and management development from
companies like NCC, Elkem, Mesta and Norsk Hydro. Mr Øyri has
significant tenure as an Officer with the Norwegian Army and has
attended Norwegian Military Academy and the Norwegian Army
Staff College.
Jim Miller joined Aker Philadelphia Shipyard as President and CEO in
June 2008. Before that, he was President of Aker Solutions Process
& Construction (P&C) Americas. Mr. Miller graduated from the
University of Edinboro in Pennsylvania with a BA.
* Per Harald Kongelf will act as Interim CEO until 1 August 2011
10
© Kvaerner 2011
17.06.2011
Directors with long tenure from the industry
Kjell Inge Røkke
Chairman
Bruno Weymuller
Director
Kjell Inge Røkke is an entrepreneur and industrialist, and has
been a driving force in the development of Aker since the
1990s. Mr. Røkke owns 67.8 % of Aker ASA through privately
held companies organised under TRG. He holds the positions
as chairman of Aker ASA, Aker BioMarine ASA and Det
norske Oljeselskap ASA, and board member of Aker Solutions
ASA.
Bruno Weymuller served as Strategy Director of the Total Group
from 2000 to 2008. He started his career with positions within the
French Ministry of Industry, the Energy Directorate as well as the
Prime Minister‘s office. Mr. Weymuller has held various executive
positions in Elf Aquitaine (Total) from 1981 to 2008. Mr.
Weymuller is an alumnus of the Ecole Polytechnique and the
Ecole des Mines (Paris) and also holds an MSc from MI.T
Tore Torvund
Director
Lone Fønss Schrøder
Director
Tore Torvund holds the position as EVP of REC Silicon since
2009. Mr. Torvund has senior executive experience of more
than 20 years in the oil and gas industry, including as EVP of
E&P Norway at StatoilHydro, and EVP of Oil and Energy at
Norsk Hydro. He has held several management positions
related to drilling operations, field development and technology
projects. Mr. Torvund holds an M.Sc in Petroleum Engineering
from the Norwegian University of Science and Technology.
Lone Fønss Schrøder has broad international experience
acquired during 21 years in senior management, including board
positions at A.P. Møller-Maersk A/S. She is a chairperson for the
audit committee at Volvo, a non-executive director of Volvo PV in
Sweden and NKT A/S in Denmark, as well as non-executive
director and member of the audit committees of Aker Solutions
ASA, Vattenfall AB and Svenska Handelsbanken AB. Ms. Fønss
Schrøder has a law degree from the University of Copenhagen
and a Master of Economics from CBS.
Vibeke Hammer Madsen
Director
Vibeke Hammer Madsen is the CEO of HSH (The Federation
of Norwegian Commercial and Service Enterprises) since
2002. Prior to this, she was a partner in the PA Consulting
Group. From 1993 to 1999 she was a vice president holding
various positions in Statoil. Ms. Hammer Madsen holds a
number of board positions, was board member of Aker
Solutions from 2008 until May 2011. Ms. Hammer Madsen is a
graduate of the Norwegian School of Radiography.
11
© Kvaerner 2011
17.06.2011
Employee elected Directors:
Rune Rafdal
Ståle Knoff Johansen
Bernt Harald Kilnes
Tailored to meet market requirements
12
New frontiers
A significant part of new resources to be
found in remote areas, deepwater and/or
harsh environment
The “easy” oil is gone, and so is easy
contracting. Focus on relevant
technologies such as GBS and
advanced floaters
Local content requirements
A major part of new field developments
are located in closed markets
Local delivery models where
Kvaerner provides project
management, yard management and
risk expertise
Low-cost competition
Mature areas facing increased
competition from low-cost players
Proactively seeking low-cost
manufacturing capability through
strategic partnerships
Contract risk management
Customers increasingly favoring EPC
contracts with less reimbursable
elements
Creating a focused EPC player with
strong risk management capabilities
© Kvaerner 2011
17.06.2011
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
13
17.06.2011
© Kvaerner 2011
Unprecedented market outlook
Global Oil and Gas EPC
USD million
140 000
CAGR 2010-15: 15%
120 000
100 000
Oil price outlook fuelling EPC
market
80 000
60 000
40 000
20 000
2000
2005
2010
2015
2020
Global Offshore Oil and Gas EPC
USD million
60 000
CAGR 2010-15: 18%
50 000
Attractive marginal economics
driving investments in mature
areas
40 000
30 000
20 000
10 000
2000
2005
2010
2015
© Kvaerner 2011
17.06.2011
Source: Rystad Dcube April 2011
14
Increasing production in
frontier areas requires strong
field development capabilities
2020
Particularly strong outlook for home market
and core areas of competence
Global Oil & Gas offshore EPC: Harsh environment
USD million
North Sea Oil and Gas offshore EPC
USD million
30 000
30 000
CAGR 2010-13: 37%
CAGR 2010-15: 14%
25 000
CAGR 2010-15: 22%
25 000
20 000
20 000
15 000
15 000
10 000
10 000
5 000
5 000
2000
2005
2010
2015
Source: Rystad Dcube April 2011
15
© Kvaerner 2011
17.06.2011
16.06.2011
2020
2000
2005
2010
2015
2020
A strategy for growth
Kvaerner’s mission is to successfully plan and execute the world’s most
demanding EPC projects and to become a top league global EPC company
1
2
Capture expected market activity
Capturing growth and defending market positions in home markets
Export knowledge and competence
Leveraging the knowledge and competence from home markets to grow internationally; with
a particular focus on demanding projects
Refine delivery model
3
Increasing competitiveness through strengthening Kvaerner’s in-house capabilities,
entering into partnerships, and further develop value added fabrication partnerships and
regional delivery models.
Improve flexible engineering model
4
16
Further develop Kvaerner’s flexible engineering delivery model: Adding enhanced in-house
capabilities and subcontracted resources and entering into new joint ventures and
partnerships arrangements in addition to existing agreements
© Kvaerner 2011
17.06.2011
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
17
17.06.2011
© Kvaerner 2011
The EPC value chain
CONCEPT
FEED
ENGINEERING (E)
PROCUREMENT (P)
Analysis of
development
concepts
The chosen
concept is further
developed
Project
requirements are
identified
An appropriate
development
concept is selected
Facility owner
issues an invitation
to tender
Design elements
are chosen and
integrated
Definition and
corresponding cost
estimates
Encompasses the
detailed
engineering phase
NOK ~10 - 20 million
18
© Kvaerner 2011
Construction
management and
construction
On-site or at a yard
Module based
construction
NOK ~4,000 - 8,000 million
NOK ~30 - 60 million
Estimate figures for illustrative purposes
for a typical platform devlopment.
Procurement of
materials, labor and
sub-contractors
CONSTRUCTION (C)
~ 10 percent
17.06.2011
~ 50 percent
COMMISSIONING
Services aimed at
installing and
commissioning the
facility
Can be done by the
facility owner or by
the EPC contractor
NOK ~200 - 300 million
~ 40 percent
A flexible delivery model
CONCEPT
FEED
ENGINEERING (E)
PROCUREMENT (P)
CONSTRUCTION (C)
ELDFISK (Topsides)
Aker Solutions as subcontractor
GUDRUN (Jacket)
SAKHALIN (GBS)
HEBRON (GBS)
+
+
BROWSE (TLP)
Aker Solutions as subcontractor
19
© Kvaerner 2011
17.06.2011
COOEC as subcontractor
Potential agreement;
for illustrative purposes
COMMISSIONING
Engineering capacity and capability
Current projects and target prospects
~700 Kvaerner engineers
Self sufficient on Jacket and Concrete
Project management resources as well as fabrication/late phase engineering resources
Cooperation with Aker Solutions
Subcontractor agreement for ongoing projects
Resources dedicated for ongoing bids
Cooperation with other external engineering partners
Engineering strategy
Kvaerner to be involved in FEED phase for EPC phase positioning
Self sufficient on Jacket and Concrete
Kvaerner in front, with engineering subcontractor/partner/JV
Partner in front with Kvaerner involvement
Grow organically and through acquisitions
20
© Kvaerner 2011
17.06.2011
Value added procurement
All procurement functions are performed in-house
World-wide procurement resources
Developing a Global Sourcing Centre in China
8 400 tonnes
mechanical
equipment
25 500 tonnes
pipes
10 200 valves
Ormen Lange example
100 000 m3
concrete
11 000 tonnes
metres of cable
installed
~13 500 tonnes
deliveries from Polish
sub-suppliers
structure steel
550 companies
3 200 people
involved
living at site
Total of 11 000
people involved in
the project
21
2 200 000
© Kvaerner 2011
17.06.2011
~11 703 000
working hours on
site
50+ nationalities
High quality, cost-effective fabrication
Specialised in-house yards
1 000
experienced
operators
More~than
2 000
highly experienced
engineers and operators
Stord, Norway
Verdal, Norway
Value fabrication partner
An expanding network of qualified
partners
Specialised yards
COOEC (China)
Prefabrication suppliers in Poland
Fabrication on site
High quality
local content,
in important
High quality
local content
markets
Concrete, e.g. Sakhalin, Russia
Concrete, e.g. Hebron, Canada
High quality local content
22
© Kvaerner 2011
Value fabrication
17.06.2011
E&C Americas, e.g. Gulf LNG, USA
EPC contract formats
Contractual structures and risk
(Figures are illustrative)
0%
Field development contract format
(Project example)
Contractor risk
100 %
Lump sum
Measurement
Measurement
(rate based)
(norms/rate based)
Measurement
Cost/target
(reimbursable)
Lump
sum
Target
Target
(reimbursable)
Cost
reimbursement
100 %
23
Owner risk
0%
© Kvaerner 2011
17.06.2011
Procurement
Construction
Engineering
Project management
World class references
KRISTIN HPHT GAS PLATFORM
The first HPHT (high pressure, high
temperature) floating production gas
platform. Delivered in 2005.
SAKHALIN II GBS
Two concrete gravity based platforms
for the Sakhalin II project offshore the
Sakhalin island, East Russia.
Delivered in 2005.
ADRIATIC LNG TERMINAL
The world’s first offshore GBS based
LNG re-gasification terminal, a
strategic component of the Italian gas
system. Delivered in 2009.
GRANE PLATFORM JACKET
17 500 tonnes fixed steel
substructure for drilling, production,
processing and accommodation
facilities. Delivered in 2003.
ORMEN LANGE
The third largest gas field in Europe
and one of Norway’s largest onshore
plants. Delivered in 2007.
15 POWER PLANTS SINCE 2002
New plants, as well as retrofits,
environmental modifications,
maintenance and upgrades to
existing facilities
24
© Kvaerner 2011
17.06.2011
Tender risk review
- Corporate Risk Committee (CRC)
Mandatory for projects with certain characteristics (size, complexity etc.)
Shall review the risk / reward prior to tendering
Advisory role towards the line management
Open and honest discussions related to risks and rewards
CRC
Advisory body
TENDER TEAM
Prepares required
documentation
before meeting
Formal 2-3 hours meeting
involving a summary of the
project, risks and opportunities
as well as cost calculations
Output from the meeting is a
document reviewing memo
incl. key risk considerations
and recommendations
25
© Kvaerner 2011
17.06.2011
CEO
Authorisation
BOARD OF
DIRECTORS
Presentation and review of project
CRC recommendation and tender
team’s reply
The CEO and board of directors will
decide whether to prepare and hand
over tender to client
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
26
17.06.2011
© Kvaerner 2011
Two segments - five business areas
DOWNSTREAM &
INDUSTRIAL
UPSTREAM
CONCRETE
Global leader in
Gravity based
concrete structures
Concrete
substructures
27
JACKETS
Eurpoean leader in
steel jackets
Large steel
jackets for oil &
gas installations
Wind jackets
© Kvaerner 2011
17.06.2011
NORTH SEA
Leading EPC
contractor to the
North Sea market
Topsides
Floaters
Onshore
upstream
facilities
INTERNATIONAL
Spearhead for
international
expansion
Topsides
Floaters
Onshore
upstream
facilities
E&C AMERICAS
A leading EPC
contractor for the
American market
Onshore facilities
Power plants
Steel mills
Income statement
NOK million
Q1 2011
Q1 2010
2010
2009
2008
3 722
3 198
13 209
12 191
13 143
EBITDA
464
281
488
291
(852)
Depreciation and amortisation
(12)
(13)
(54)
(85)
(59)
EBIT
452
268
434
206
(911)
Net financial items
(1)
(21)
(30)
(78)
(23)
Profit before tax
451
247
404
128
(934)
(130)
(77)
(330)
(76)
242
321
170
74
52
(692)
12.5%
8.8%
3.7%
2.4%
(6.5)%
Revenues
Tax
Net profit
EBITDA margin
28
© Kvaerner 2011
17.06.2011
Historical financial highlights
Upstream Revenues and EBITDA
NOK million
10 000
8 000
6 000
4 000
2 000
0
-2 000
EBITDA-%
8 714
-1 018
7 050
928
2010: Increase in revenues and profitability
Increased revenues driven by Sakhalin and
Kashagan
Increased margins driven by project as well as
pension plan adjustments
2009: Lower activity in all business areas
The H-6e drilling rigs completed early 2009
Lower activity in Jackets and Concrete
9 192
-24
2008
2009
2010
-11.7%
-0.3%
10.1%
Downstream & Industrials Revenues and EBITDA
NOK million
6 000
4 539
5 274
4 049
4 000
2 000
173
315
2008
2009
-440
0
-2 000
2010
2008: Settlement on Frigg
Frigg decommissioning project and H-6e drilling
rigs impacting profitability
2010: Decrease in revenues
Revenue decrease due to completion of
Cameron LNG
Lower margins as a result of the Longview and
Hitachi
2009: Revenue increase
Driven by favourable phasing of projects
EBITDA-%
29
3.8%
6.0%
© Kvaerner 2011
-10.9%
17.06.2011
Q1 2011: Upstream Review
Operations
Market
High activity on projects at the Norwegian yards
The FEED and site preparation for the Hebron
project progressing well
Award of Eldfisk 2/7 S, a NOK 5.5 billion EPC contract
with ConocoPhillips to deliver the topside and bridges
of the production platform
Increased revenues and margins mainly driven by
the Sakhalin and Kashagan projects
Kvaerner selected as one of two remaining players for
key contracts for the Browse LNG development
The Kashagan HUC project has reached peak
activity and the project is nearing completion
Revenues, EBITDA and EBITDA margin
NOK million
4 000
3 000
3 113
2 145
2 000
1 000
233
1 739
29
Order backlog and order intake
NOK million
3 059
12 000
2 195
10 648
10 376
6 955
234
431
476
4 000
3 426
1 342
995
Q1'10
Q2'10
755
0
Q1'10
Q2'10
Q3'10
Q4'10
Q1'11
10.9%
1.7%
10.7%
13.8%
15.6%
Revenues
30
11 387
14 273
12 735
8 000
0
EBITDA-%
16 000
Order backlog
EBITDA
© Kvaerner 2011
17.06.2011
Q3'10
Order intake
Q4'10
Q1'11
Q1 2011: Downstream & Industrial Review
Operations
Market
Low activity and weak margins, mainly due to
Longview project
Awarded the V&M pipe mill installation project by V&M
Star LP
The Longview project towards completion in Q3’11
and Gulf LNG completion end 2011.
Fostering strategic partnerships to jointly pursue North
American power projects
Arbitrational award on the Hitachi project
Positive markets within most segments and high
bidding activity
Revenues, EBITDA and EBITDA margin
NOK million
1 500
1 068
1 112
8 000
1 047
822
1 000
500
-137
Q1'10
Q2'10
4.5%
-5.8%
Revenues
31
5 356
4 683
4 000
-64
-500
5 066
673
48
0
EBITDA-%
Order backlog and order intake
NOK million
3
Q3'10
-286
Q4'10
Q1'11
-13.1%
-34.8%
0.4%
EBITDA
© Kvaerner 2011
17.06.2011
298
2 059
1 053
819
531
1 404
104
Q2'10
Q3'10
Q4'10
Q1'11
0
Q1'10
(1) The CAD 400 million contract with TransCanada for a gas fired
power plant was removed from the backlog in Q4’10.
Order backlog
Order intake
Robust capital structure
NOK million
31.03.2011
Total non-current assets
NCOA
Net cash
Adjustments
31.03.2011 Adjusted
1 728
1 728
(1 337)
(1 337)
3 903
(2 007)
1 896
Equity
(2 858)
700
(2 158)
Other non interest bearing items
(1 436)
1 307
(129)
Final steps towards standalone unit (adj.)
Equity – reduced by NOK 700 million
Transfer of personnel in Kværner
Engineering AS and personnel in Aker
Solutions AS in intra-group transactions
Other non interest bearing items – reduced
by NOK 1 307 million
Internal receivables and liabilities towards
the Aker Solutions settled before
consummation
Net cash – reduced by NOK 2 007 million
Settlement of the transactions above
32
© Kvaerner 2011
17.06.2011
Loan facilities of NOK 3 000 million
Loan facilities fully underwritten by DnB
NOR, Nordea and SEB
A 500 MNOK term loan - 3 year - margin of
1.5% above NIBOR
A 2 500 MNOK credit facility - 5 year margin of 2.1-2.5%
The credit facility successfully syndicated
to 5 additional banks
Cash positive, fluctuating working capital
NOK million
Net CF from operating activities
Q1 2011
831
Q1 2010
(492)
2010
(645)
2009
1,230
2008
(2 162)
Net CF from investing activities
(42)
(17)
(26)
(102)
(110)
4
(310)
349
(1 065)
3 278
57
(41)
53
(405)
408
850
(860)
(269)
(342)
1 414
Net CF from financial activities
Translation adjustment
Net +/- in cash and bank deposits
Net current operating assets (NCOA)
NOK million
Q2'09
Q4'09
Q2'10
Q4'10
0
-500
-1 000
-1 500
-2 000
33
© Kvaerner 2011
17.06.2011
The EPC business is cash positive
through negative working capital
Up-front payments and milestone
payments
NCOA is fluctuating with project
portfolio
Fluctuations can be as much as
NOK 500 million to NOK 1 000
million during a month
Working capital range expected to
be within NOK -500 million and
NOK -1 500 million
CAPEX and Investments
Historical capex review
Investment plans
2010: General maintenance
Maintenance capex
Capex related to maintenance
Expected at NOK 30 - 50 million per year
2009: Mainly related to North Sea
Verdal 2011-2012: NOK 100-150 million
A new barge for load-out and construction at
Stord
In addition to maintenance at Stord and E&C
Americas
Improved capacity, paint shop and misc.
Investment plans
Investments to be considered case-by-case
2008: Investments at Stord
New building and barge
CAPEX
NOK million
100
Other investments
NOK million
100
5
80
80
60
60
56
20
31
52
6
0
4
20
0
-20
-20
2008
2009
2010
Buildings and sites
Machinery, equipment and software
Under construction (including transfers)
34
54
40
40
© Kvaerner 2011
17.06.2011
22
19
-4
-4
-3
2008
2009
2010
Other investments
Acquisition of subsidiary, net of cash acquired
Proceeds from sale of PP&E
Dividend capacity and growth possibilities
Cash conversion
Simplified illustration
Tax rate
Tax rate in Norway
(28 percent) and the tax
rate in the US (approx.
40 percent)
EBITDA
Maintenance capex
Between NOK 30 to
50 million per year
High cash conversion provides
both dividend capacity and
growth possibilities
30%-50% of net profits to be
distributed as dividends
Revenue recognition as well
as project phasing may cause
certain fluctuations
Strong cash flow from
operations of NOK 831 million
in Q1-2011
Dividend policy
Between 30 and 50
per cent of net profit
17.06.2011
Dividend
© Kvaerner 2011
Growth
capital
Tax
Financial
items
Maintenance
CAPEX
35
Quarterly key figures
NOK million
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
3 198
2 848
3 237
3 932
3 722
281
(35)
97
145
464
8.8%
(1.2)%
3.0%
3.7%
12.5%
NOK million
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Order intake
1 634
2 034
4 237
1 282
7 049
16 462
16 007
17 419
12 435
15 676
Revenues
EBITDA
EBITDA margin
Order backlog
36
© Kvaerner 2011
17.06.2011
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
37
17.06.2011
© Kvaerner 2011
E&C Americas Business Area
Jim Miller, EVP E&C Americas
E&C Americas
Overview – two different legal entities
Union Construction
Houston EPC Centre
23%*
77%*
~250 employees
Revenues (2010): NOK 3 317 million
~160 employees
Revenues (2010): NOK 1 007 million
General contracting and maintenance services for
Power, Steel and Petrochemical Industries
EPC & project management for the oil & gas industry
including offshore topsides, LNG & gas processing,
chemical, petrochemical, refining, power, utilities and
infrastructure
Key current projects include the newly awarded
Vallourec & Mannesman mechanical, equipment and
piping project as well as current pipe mill building;
and First Energy Fremont Generating Station
39
© Kvaerner 2011
17.06.2011
Key current projects include Gulf LNG Energy,
Medicine Bow Fuels Coal-to-Liquids Project (FEED)
E&C Americas
Reference projects – Union Construction
V&M Pipe Mill
Product/Service: Construction of Pipe
Mill
Geography: Youngstown, OH, USA
Size: Approx. 1 000 000 sq.ft
Awarded: 2011
Delivered: Ongoing
Client: Vallourec & Mannesmann
40
© Kvaerner 2011
TransCanada – Generating Station
Product/service: JV EPC Gas Fired
Combined Cycle Power Plant
Geography: Halton Hills, ON, Canada
Size: 683 MW
Awarded: 2007
Delivered: 2010
Client: TransCanada Energy, Ltd.
17.06.2011
First Energy – Generating Station
Product/service: Construction Gas Fired
Combined Cycle Power Plant
Geography: Fremont, OH, USA
Size: 585 MW
Awarded: 2008
Delivered: 2011
Client: First Energy
E&C Americas
Reference projects – Houston EPC Center
Adriatic LNG Terminal
Product/service: Topsides, FEED/EPCM
Geography: Offshore Italy
Size: ~ NOK 6 000 million
Awarded: 2002
Delivered: 1st gas exported in 2009
Client: Adriatic LNG
41
© Kvaerner 2011
Crystal River Electrostatic Prec.
Product/service: Construction
Geography: Florida, USA
Size: ~ NOK 600 million
Awarded: 2009
Delivered: 2010
Client: Progress Energy.
17.06.2011
PEMEX Ultra-low Sulphur Diesel Pr.
Product/service: Project Management
Services
Geography: Mexico
Size: ~ NOK 54 000 million (total
development costs)
Awarded: 2009
Delivered: Ongoing
Client: PEMEX
E&C Americas
Business Area Strategy
Union Construction
Capture
expected
market activity
Maintain position as a leading general
construction and maintenance services
provider to power and steel industries
Maintain and further develop key
relationships with the major oil & gas,
petrochemical companies and
midstream operators
Develop new
products and
market niches
As markets recover, capitalize on
position in power, steel and
petrochemical markets. Cultivate
emerging alternative energy markets
Develop position within natural gas
liquefaction as well as coal/gas-toliquids and leverage Kvaerner Group
competencies as an entry strategy for
the offshore market
3
Refine delivery
model
Develop strategic alliances in core
businesses to secure quality projects
with strong partners. Increased training
to improve execution and commercial
outcome
Develop regional Kvaerner delivery
model and increase focus on and
leveraging of strategic partnerships
such as the LNG partnership with IHI
4
Penetrate new
geographical
markets
Selected expansion of core
competencies in Western United
States and Canada
Selected expansion by following clients
into new markets such as Brazil,
Middle East, China and Mexico
1
2
42
Houston EPC Centre
© Kvaerner 2011
17.06.2011
E&C Americas
Operational structure and delivery model
USA (PA, IN)
Canada (ON)

Kvaerner
USA (Houston)

Kvaerner (EPC Center)
Mexico (Mexico City)

Japan (Tokyo)
Kvaerner

China (Beijing)
India (Mumbai)

Houston EPC Centre
Union Construction
43
© Kvaerner 2011
17.06.2011
Partner (AKSO
Engineering)
Partner (US LNG market
(IHI))


Kvaerner (Sourcing)
Partner (Aker Solutions)
E&C Americas
Market outlook – Union Construction
Strong outlook for gas-fired power
plants
Gas fired power plants to contribute significantly to electricity generation
Electricity generation capacity additions by fuel type, 2010-2035 (gigawatts)
Attractive outlook for USD 1bn
steelworks maintenance market.
Major US steel producers planning
several upgrades
Aging infrastructure and postponed
maintenance creates strong
momentum for the general
maintenance market going forward
Source: IEA, Annual Energy Outlook 2011
44
© Kvaerner 2011
17.06.2011
E&C Americas
Market outlook – Houston EPC Centre
Strong domestic energy demand
outlook and energy price expectations
encouraging investments in oil and
gas sector
Shale gas to potentially create demand for liquefaction capacity
US Dry Gas - trillion cubic feet per year
US shale gas play expected to
increase demand for natural gas
based projects such as liquefaction,
NGL refining, downstream
petrochemical and power
Expected strong demand for
Kvaerner’s offering within coal-toliquids and gas-to-liquids
45
© Kvaerner 2011
17.06.2011
Source: IEA, Annual Energy Outlook 2011
E&C Americas
Prospects
Houston EPC Centre
Project
Operator
Location
Coal to Ammonia/Power
Paradeep Phosphate
India
Gas to Liquids
Cenovus Energy
Canada (Alb)
Waste Oil Recovery/Recycle
Puralube
Mexico
Project Management Services for Refinery Expansion
PEMEX
Chile
Gas to Chemicals
Methanex/Petrobras
USA (Tx)
Alaska Gas Treatment Plant
ExxonMobil/Transcanada
Taiwan / USA (La)
Industrial Gasification and Liquefaction
Medicine Bow Fuels Project
USA (Wy)
Project
Operator
Location
Master Agreement
Ontario Power Gen
Ontario, Canada
Coker Piping Pkg 516
BP
Indiana, USA
Coke Battery
Arcelor Mittal
Indiana, USA
Continuous Annealing Line
U.S.Steel Kobe/Protec
Ohio, USA
Combined Cycle Power Plant
MacQuarie Cook Energy
California, USA
Combined Cycle Power Plant
NRG Energy
California, USA
Flue Gas Desulfurization Units
NIPSCO
Indiana, USA
Union Construction
The list is not exhaustive or indicative of Kvaerner’s priorities.
46
© Kvaerner 2011
17.06.2011
Concrete Business Area
Dag Nikolai Jensen, VP Business Development
Concrete
Overview
World leader for floating and gravitybased concrete substructures for
offshore oil and gas installations
globally
Impressive track record with ~80*
percent market share over 40 years
Approximately 150 employees based
in Oslo
Proven execution model with
experienced Oslo project
management and local delivery model
* Estimate by Kvaerner
48
© Kvaerner 2011
17.06.2011
Concrete
Reference projects
Sakhalin 2 LUN A & PAB
Product/service: Arctic GBS
Geography: Sakhalin/Russia
Size: 63 000m3
Awarded: 2003
Delivered: 2005
Client: SEIC (Shell)
Adriatic LNG
Product/service: LNG Terminal
Geography: Venice/Italy
Size: 95 000 m3
Awarded: 2004
Delivered: 1st gas exported in 2009
Client: Adriatic LNG (ExxonMobil)
Sakhalin 1 A-D
Product/service: Arctic GBS
Geography: Sakhalin/Russia
Size: 50 000m3
Awarded: 2009
Delivered: Ongoing, 2012 est.
Client: ENL (ExxonMobil)
Key customers are ExxonMobil and Shell/SEIC
Key current projects are Sakhalin and the Hebron FEED for ExxonMobil
49
© Kvaerner 2011
17.06.2011
Concrete
An impressive track record
Concrete GBS for offshore platforms
Concrete GBS for LNG facilities
Concrete hulls for floating platforms
50
© Kvaerner 2011
17.06.2011
First EPCI delivery
was Beryl A
Condeep in 1975
40 years of
international
Concrete experience
Lead contractor in
more than 20 major
Concrete projects
worldwide
Pioneered the
development of high
strength concrete for
offshore applications
Introduced skirt
piling for soft soil
conditions
Concrete
The GBS offers many advantages
Integrated oil storage
Significant local content
Robustness to meet
arctic environment
Supports large topside
weight
Minimum maintenance
Low lifecycle cost
Installation independent
of heavy lift vessel
availability
51
© Kvaerner 2011
17.06.2011
Concrete
Business Area Strategy
1
2
Capture expected market activity
Maintain position as #1 provider of concrete substructures for offshore oil and gas
installations by strengthening ability to handle parallel projects
Develop new products and market niches
Further develop GBS concept for LNG liquefaction plants for arctic gas rich areas, such as
North West Russia, and promote minimum arctic wellhead platform concepts
Refine delivery model
3
Establish local presence in key markets such as Canada and potentially Russia. Planned
limited investments to secure relevant construction sites and enhance local execution
capabilities
Penetrate new geographical markets
4
52
Ongoing evaluation of Australia and Southeast Asia as potential future markets on an
opportunistic basis. Develop execution model for GBS deliveries to North West Russia as
well as for arctic Canada – both countries with demands for maximizing local content
© Kvaerner 2011
17.06.2011
Concrete
Operational structure and delivery model
Norway (Oslo)


Kvaerner
Partner (Aker Solutions)
(Local external)
Canada (St. Johns)


Kvaerner project office
(Newfoundland)
JV Partner (Peter Kiewit &
Sons (PKS))
Russia (Sakhalin)

Current markets
Potential markets
53
© Kvaerner 2011
17.06.2011
Kvaerner project office
Concrete
Market outlook
Concrete GBS experiencing a
renaissance due to the structure’s
suitability for Arctic and LNG based
GBS developments
Key markets include arctic
environment areas such as Canada
and Russia
Kvaerner is market leader for
Concrete with a 80%* historical
market share for Condeep and
floating concrete substructures
The developments of Sakhalin 1 and
Hebron GBS (ExxonMobil client for
both) provides the foundation for
developing increased capacity and
growth towards 2020
* Estimate by Kvaerner
54
Concrete Global
USD million
1 000
900
800
700
600
500
400
300
200
100
0
2000
2005
Canada
Source: Dcube April 2011
© Kvaerner 2011
17.06.2011
2010
Russia
2015
RoW
2020
Concrete
Prospects
Project
Operator
Location
Petchora LNG
Alltech
North West Russia
Hebron
ExxonMobil
Eastern Canada/Newfoundland
Piltun South
Gazprom/Shell
Sakhalin
Scarborough
ExxonMobil
Australia
White Rose
Husky
Eastern Canada/Newfoundland
Kammennomyskoye
GazpromdobychaYamburg
North West Russia
Yamal
Novatek
North West Russia
Dolginskoye
Gazpeomneft
North West Russia
Amuligak
ConocoPhillips
North West Canada
Natuna
ExxonMobil
South East Asia
The list is not exhaustive or indicative of Kvaerner’s priorities.
55
© Kvaerner 2011
17.06.2011
Jackets Business Area
Nina Udnes Tronstad, EVP Jackets
Jackets
Overview
North Sea market leader for larger
steel jackets for offshore oil and gas
installations
Yard at Verdal with significant
acreage and approximately 650
permanent employees
Strong track record with 34 oil & gas
jackets delivered since 1975. New
initiative within wind turbine jackets
Strong capabilities on design, soil and
foundation, materials and supply
chain management
In-house and integrated specialized
engineering capacity, providing a truly
seamless solution to the client
57
© Kvaerner 2011
17.06.2011
Jackets
Reference projects – some examples
Grane PDQ
Product/service: Grane PDQ / EPC
Jacket
Geography: Norway
Size: 17,650 t; 150m
Awarded: 2000
Delivered: 2003
Client: Hydro
Valhall redevelopment
Product/service: Valhall Re-Dev/EPC
Jacket
Geography: Norway
Size: 6,700 t; 106m
Awarded: 2007
Delivered: 2009
Client: BP
Buzzard Jackets
Product/service: Buzzard WHP QU & P /
3 EPC jackets
Geography: UK
Size: 4,600 t / 4,000 t / 5,600 t; 121m
Awarded: 2003
Delivered: 2005
Client: Nexen UK
Current jacket projects include Gudrun, two jackets for Ekofisk, two steel jackets for the Clair Ridge
development and a series of 49 wind jackets (Nordsee Ost)
Key customers are Statoil, ConocoPhillips, the Clair Ridge Partnership and RWE Innogy
58
© Kvaerner 2011
17.06.2011
Jackets
Business area strategy
1
2
3
4
59
Capture expected market activity
Retain position as leading provider of large and complex steel substructures for oil and gas
platforms through parallel construction of large steel jackets
Develop new products and market niches
Further strengthen the European wind jacket market position through standardization of
design, competence on foundation and efficient installation concepts
Refine delivery model
Pursue potential European fabrication partnerships to expand fabrication capacity and
where partner locations are closer to the market
Penetrate new geographical markets
Evaluate expansion into new markets through local fabrication partners. Australia and
South East Asia high on agenda
© Kvaerner 2011
17.06.2011
Jackets
Operational structure and delivery model
Norway (Verdal & Oslo)

Kvaerner (~650 FTEs)
UK (London)


Fabrication partner (TBD)
Engineering partner (TBD)
China (Qingdao)

Partner (COOEC yard)
Malaysia (KL)

Partner (Aker Solutions)
Australia (Perth)

Current markets
Potential markets
60
© Kvaerner 2011
17.06.2011
Kvaerner (BD)
Jackets
Market outlook
A local / regional market as
transportation is costly as well as
undesirable
Target markets include North Sea,
Australia and South East Asia,
representing approximately 30 % of
the global market 2011-2020
Solid growth expected in home
market, for which there is a limited
number of suppliers
Kvaerner enjoys a historical market
share of ~70-80%*
Wind substructures provides further
growth opportunity
Jackets for Oil and Gas – North Sea
USD million
1200
1000
800
600
400
200
0
2000
2005
17.06.2011
2020
1600
1400
1200
1000
800
600
400
200
0
2005
2010
North Sea
Australia
Source: Dcube April 2011
© Kvaerner 2011
2015
Jackets for Oil and Gas – Key markets
USD million
2000
61
2010
2015
South East Asia
2020
Jackets
Prospects
Oil & Gas Prospects
Project
Operator
Location
Golden Eagle
Nexen UK
UKCS
Luno
Lundin
NCS
Hejre
Dong DK
DKCS
Hild
Total
NCS
Montrose
Talisman UK
UKCS
Dagny
Statoil
NCS
Draupne
Det Norske
NCS
Mariner
Statoil
UKCS
Bressay
Statoil
UKCS
Australia
TBD
South East Asia
TBD
Wind Prospects
Project
Operator
Location
Nordsee Ost Ext
RWE Innogy
Germany
Nordsee Innogy One
RWE Innogy
Germany
Dogger Bank
Forewind consortium
UK
The list is not exhaustive or indicative of Kvaerner’s priorities.
62
© Kvaerner 2011
17.06.2011
North Sea Business Area
Lars Eide, EVP North Sea
North Sea
Overview
Leading market position for North Sea
topsides and assembly of floating and
fixed offshore platforms
Solid track record of more than 25
major project deliveries over the last
25 years
Leading market position for complete
onshore upstream facilities in Norway
Approximately 1 500 employees at
Stord yard, specialised in project
management, assembly and testing
Close engineering cooperation with
Aker Solutions and other partners
64
© Kvaerner 2011
17.06.2011
North Sea
Reference projects – some examples
Floating facilities
2010: Gjøa
2005: Kristin
2001: Snorre B
2000: Åsgard B
1997: Heidrun
1997: Njord
1992: Snorre A TLP
Topsides*
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
Drlling rigs
Onshore
2009: Aker Barents
2009: Aker Spitsbergen
2011: Kollsnes upgrade
2011: Test Centre
Mongstad
2007: Ormen Lange
onshore terminal
2007: Snøhvit LNG
2005: Kårstø
FPSO
2011: Skarv
1999: Åsgard FPSO
1999: Jotun FPSO
1998: Laminaria
1997: Norne FPSO
Current projects include the recently awarded EPC contract for the topside and bridges for Eldfisk 2/7S
as well as Skarv – final preparation for offshore hook-up
* For fixed platforms
65
© Kvaerner 2011
17.06.2011
North Sea
Business area strategy
1
2
3
4
66
Capture expected market activity
Retain leading position in the North Sea and capture major share of the expected upswing
in the field development market as well as Norwegian onshore market
Develop new products and market niches
Develop products for potentially large new markets, such as wind converter platforms, as
well as prepare for the large decommissioning market to materialize
Refine delivery model
Enter into additional engineering partnerships and further develop fabrication partnerships
to meet low-cost competition
Penetrate new geographical markets
Capture major share of expected Barents Sea development projects
© Kvaerner 2011
17.06.2011
North Sea
Operational structure and delivery model
Norway (Stord & Oslo)
Europe

Engineering Partners


Kvaerner (~1 500 FTEs)
Partner (Aker Solutions)
China (Beijing & Qingdao)


Poland

Current markets, on- and offshore
Potential market entry
67
© Kvaerner 2011
17.06.2011
Partner (Single- and
multidiscipline
construction partners)
Kvaerner (Sourcing)
Partner (COOEC yard)
North Sea
Offshore market outlook
Primary market is defined as offshore
facilities larger than 4 000 tons in the
North Sea, the Norwegian Sea and
Barents region
Kvaerner is the dominant player, but
experiencing increased competition
from far-east yards
Steady flow of offshore new-build
prospects in a five to ten year
perspective is expected
Key projects for topsides in the North
Sea the next years include Ekofisk,
Eldfisk, Hejre, Luno, Mariner and Hild
Key projects for floaters in the North
Sea and Barents Sea going forward
include Luva, Snorre, Ormen Lange
and Skrugard
Topsides
USD million
7000
6000
5000
4000
3000
2000
1000
0
2000
2005
North Sea
2010
Norwegian Sea
5000
4000
3000
2000
1000
0
2000
2005
2010
Norwegian Sea
Source: Dcube April 2011
© Kvaerner 2011
17.06.2011
2020
Floaters
USD million
North Sea
68
2015
Barents Sea
2015
Barents Sea
2020
North Sea
Onshore upstream facilities market outlook
The market is defined by traditional
onshore upstream projects and other
projects in conjunction with existing
plants
The market is a mature market with a
mix of brown- and greenfield projects,
both modifications and some new
builds
Kvaerner is the dominant player in
Norway
Steady flow of medium-sized
modification projects and some largescale projects coming up
Statoil is looking for suppliers that
know their plants, to obtain synergies
across the phases FEED, plant
construction, modification and
maintenance
69
© Kvaerner 2011
17.06.2011
North Sea
Prospects
Prospects offshore North Sea
Project
Operator
Location
Hejre
Dong
Denmark
Hild
Total
North Sea
Luno
Lundin
North Sea
Mariner
Statoil
UK
Bressay
Statoil
UK
Luva
Statoil
Norwegian Sea
Dagny
Statoil
North Sea
Ormen Lange
Shell
Norwegian Sea
Victoria
Total
Norwegian Sea
Snorre
Statoil
North Sea
Skrugard
Statoil
Barents Sea
Project
Operator
Location
Kollsnes
Statoil
Norway
Snøhvit Phase II
Statoil
Norway
Mongstad CO2
Statoil
Norway
Prospects Onshore Norway
The list is not exhaustive or indicative of Kvaerner’s priorities.
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International Business Area
Per Harald Kongelf, Interim CEO
International
Overview
Provides key technologies and
experience to international upstream
EPC projects
Focus on demanding and complex
solutions
Delivery model enables local content
for closed and semi-closed markets
Current focus areas are Australia and
Caspian region
Kashagan HUC is nearing
completion, current key project is the
Browse FEED study for two tension
leg platforms in Australia
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International
Browse Full Field Development Schematic
Two TLPs
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International
Business area strategy
Capture expected market activity
1
2
3
Current focus is on the expected demand for floaters in open markets such as Australia, in
addition to the Caspian yard initiative triggered by the strong outlook for the Caspian field
development market and the local presence required to participate
Develop new products and market niches
Target key markets for which Kvaerner offers unique competencies and capabilities, e.g.
harsh environment and deepwater
Refine delivery model
Increase project delivery capabilities through engineering and yard partnerships
Penetrate new geographical markets
4
74
Current focus areas are the markets in Australia and Caspian region and opportunistically
in GoM, whereas entry strategies for closed markets such as Russia, West-Africa and
Brazil are under consideration
© Kvaerner 2011
17.06.2011
International
Business area strategy
UK (London)


Norway (Oslo)
JV Partner (K-WAC)
BD activities Middle East

Head Office
Kazakhstan (Aktau)
USA (Houston)


Kvaerner (EPC Center)

Kvaerner (Caspian BV)
(Contracting)
Partner (NCE)
China (Beijing,
Shanghai, Qingdao)


Kvaerner (Sourcing)
Partner (COOEC yard)
Saudia Arabia

Kvaerner (repr. office)
Australia (Perth)

Current markets
Potential markets
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Kvaerner (BD, proj. mgmt)
International
Offshore market outlook
Focus areas include the Caspian as
well as floaters for deepwater regions
such as Australia and GoM
The market outlook in the Caspian is
expected to be strong with a booming
market in the years 2015 – 2019
Spending related to Floaters and
Topsides is expected to increase
sharply in the coming years
Floaters and Topsides Global
USD million
60 000
50 000
40 000
30 000
20 000
10 000
0
2000
2005
Floaters
2010
2015
Topsides
2010
2015
2020
Caspian Offshore EPC
USD million
6 000
5 000
4 000
3 000
2 000
1 000
0
2000
Source: Dcube
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2005
2020