DNB s oil and offshore conference Idar Eikrem, CFO
Well positioned for future market opportunities 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 2
Leading contractor in four segments CONCRETE SOLUTIONS JACKETS TOPSIDES ONSHORE Global leader in marine concrete structures Substructures CONDEEP TM 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 3
Kvaerner s core expertise FEED E P C HUC & I DECOM Concept development / FEED Engineering management Procurement Project Management Project management Fabrication Assembly Assembly 4 Hook-up and commissioning Tow-out, installation, production start
Ongoing projects progressing well Johan Sverdrup: EPC contracts for the Riser, Drilling and Process platform steel jackets Johan Sverdrup: EPC for the utility and living quarters topside in JV with KBR Nyhamna Expansion: EPCM onshore contract Hebron: Detailed engineering, procurement, construction and installation (EPCI) of GBS Marine installation Njord A: Frame agreement for upgrading of the semi-submersible platform Aasta Hansteen: Sub-contract to provide services for inshore and offshore hook-up and commissioning assistance for the topsides 5
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 417 636 574 741 8 759 6 459 10 887 9 819 10 364 828 16 091 14 917 17 531 1 424 20 223 16 451 14 346 22 809 Key financials Field Development segment Revenues NOK million 18 000 15 000 12 000 Adjusted EBITDA NOK million 1 600 1 400 1 200 1 000 Order backlog NOK million 24 000 20 000 16 000 9 000 800 12 000 6 000 600 8 000 3 000 400 200 4 000 - EBITDA margin % 14.4 5.6 4.4 5.2 4.1 7.1 6
Balance sheet Cash flow Revenues & EBITDA Solid financial platform 2016 revenues of NOK 10.4 billion Improved project portfolio Reduced admin costs / improved competitiveness 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 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 7
Cost level in new projects Cost base reduction ~20 25 % On track for harvesting improvement effects Cost base for new projects reduced ~15 20 % 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 2013 2016 2017 8
Pursuing selected prospects Concrete solutions Steel jacket substructures Platform topsides Onshore oil and gas plants Market leader globally Market leader, Europe Leading position Market leader, Norway 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 9
Based on core competence, solid financial platform and credibility in the market Strategic development Leading EPC & HUC contractor 10
Concluding remarks 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 11
Topsides, floaters & onshore facilities Jackets Concrete solutions 12
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