First quarter 2012 presentation
28
08.05.2012 © Kvaerner 2012 First quarter results 2012 1
-
Upload
kvaerner-slides -
Category
Investor Relations
-
view
883 -
download
10
description
Presentation given in Oslo 09MAY2012 regarding Kvaerner's 1st quarter results.
Transcript of First quarter 2012 presentation
08.05.2012 © Kvaerner 2012
First quarter results 2012
1
08.05.2012 © Kvaerner 2012 © Kvaerner 2011
Our strategic pillars
HSE – CORE VALUE
AND LICENCE TO
OPERATE
Findings and improvements from Verdal accident
Key criteria for being awarded Nyhmna contract
MAINTAIN AND
DEVELOP HOME
MARKETS
Several important contract awards: Two jackets, an
onshore EPCM contract and a topside
Continued high tendering activity
INTERNATIONAL
EXPANSION
Detailed engineering and EPC related services for
Hebron GBS
Browse TLP tender submitted with partner COOEC
HANDS-ON
MANAGEMENT
Ekofisk jacket and bridge support delivered
Strategic and selective approach to prospects
2
08.05.2012 © Kvaerner 2012
STRONG MARKET
Recap from previous quarters
3
HIGH TENDERING ACTIVITY
UNCERTAIN 2012 CHALLENGING PROJECTS
UNCERTAIN 2012
JACKET CAPACITY
08.05.2012 © Kvaerner 2012 4
Key financials
Revenues
NOK million
EBITDA
NOK million
3 7
22
3 9
47
2 6
23
3 0
04
2 3
88
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Q1
'11
Q2
'11
Q3
'11
Q4
'11
Q1
'12
46
4
19
2
16
9 2
49
15
9
50
100
150
200
250
300
350
400
450
500
Q1'1
1
Q2
'11
Q3'1
1
Q4
'11
Q1
'12
Net current operating assets
NOK million
-1 3
36
-1 2
64
-1 0
28
-1 2
80
-71
7
-1 600
-1 400
-1 200
-1 000
-800
-600
-400
-200
Q1'1
1
Q2
'11
Q3
'11
Q4'1
1
Q1
'12
08.05.2012 © Kvaerner 2012 5
Order intake and backlog
Order intake
NOK million
Order backlog
NOK million
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
3 197
Upstream Downstream & Industrials
10 813
For execution in 2012
For execution in 2013
For execution in 2014
08.05.2012 © Kvaerner 2012
First quarter operations
6
08.05.2012 © Kvaerner 2012
Health, Safety and Environment
- keystone in our strive towards operational excellence
HSE status:
7 incidents with 9 injuries
Verdal accident
Pro-active approach to improve
7
Total recorded incident frequency (TRIF)
Per million work hours and 12 months rolling averages
Lagging indicators:
Lost time incident frequency (LTIF)
Per million work hours and 12 months rolling averages
0
0,5
1
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar
0,0
0,5
1,0
1,5
2,0
2,5
3,0
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar
08.05.2012 © Kvaerner 2012 8 8
CONCRETE JACKETS NORTH SEA
8
Operations and market
UPSTREAM DOWNSTREAM &
INDUSTRIALS
E&C AMERICAS INTERNATIONAL
STRONG MARKET IN ALL BUSINESS AREAS.
STRATEGIC AND SELECTIVE APPROACH REQUIRED
Sakhalin-1 project:
nearing completion
New milestone,
Hebron GBS
Ekofisk jackets
delivered
Nordsee Ost: 15
jackets completed
Clair Ridge nearing
halfway mark
Martin Linge and
Edvard Grieg projects
in engineering
Eldfisk topside
fabrication started
Investment in
facilities at Stord
Official inaguration of
carbon capture test
center (TCM)
Kashagan Hook-up
close down until
summer 2012
Browse tender
submitted
V&M MEP project
progressing per
acceleration plan
FEEDs and studies
on going
08.05.2012 © Kvaerner 2012
New contracts in April and May
9
EPC contract for Lundin’s Edvard Grieg topside of
NOK 8 billion.
Ormen Lange delivered with Kvaerner as
main contractor in 2007.
08.05.2012 © Kvaerner 2012
High number of EPC prospects
10
From the Q3 presentation in November 2011.
Hejre
Edvard Grieg Martin Linge
Mariner
Bressay
Aasta Hansteen
Dagny
Draupne
Victoria
Tommeliten
Snorre
Skrugard
Johan Sverdrup
Havis
Ormen Lange
Kollsnes
Snøhvit Phase II
Nyhamna
expansion
North Sea
08.05.2012 © Kvaerner 2012
Future NCS topside demand of 37’ tonnes per year
11
0
10000
20000
30000
40000
50000
60000
1980 1985 1990 1995 2000 2005 2010 2015 2020
Kvaerner Other Future
Topside tonnes delivered historically and forecasted demand Metric tonnes
Future NCS topside
demand ~37’
tonnes per year
High share
concrete
developments
Future peak NCS
topside demand ~45’
tonnes per year
Source: Rystad Energy team research and analysis, Kvaerner data
08.05.2012 © Kvaerner 2012
Topside capacity gap on the NCS
NCS Demand and current estimated Norwegian yard capacity
for greenfield topside construction
Annual thousand tonnes
12 -15
~15 ~30
35-40
Stord Others Total capacityin Norway
Averagedemand
2012-2020
Demand/
capacity gap
12
08.05.2012 © Kvaerner 2012
Delivering of 20’ tonnes of integrated topsides
annually from 2014
E Engineering
P Procurement
C Construction Commissioning
Studies
Concept
FEED
Project Management
In house
Subcontracting
13
08.05.2012 © Kvaerner 2012
Kvaerner’s market position
Solid track record in strong home market
Preparing for further growth
Facing tough global competition
14
First quarter financials Eiliv Gjesdal, Chief Financial Officer
08.05.2012 © Kvaerner 2012
Income statement
16
Amounts in NOK million Q1 2012 Q1 2011
Full year
2011
Operating revenue 2 388 3 722 13 295
EBITDA 159 464 1 073
Depreciation and amortisation (15) (12) (54)
EBIT 144 452 1 019
Net financial items, including result from
associated companies and JVs (2) (1) (116)
Profit before tax 142 451 903
Income tax expense (50) (130) (344)
Net profit 92 321 559
EBITDA margin 6.7% 12.5% 8.1%
08.05.2012 © Kvaerner 2012
Revenue distribution
17
Share of revenues 2010
Percent
Share of revenues 2011
Percent
Important projects in 2010
Sakhalin-1
Gjøa delivered
Kollsnes onshore
Mongstad Test Centre
Kashagan HUC
Cameron LNG delivered
Longview
Gulf LNG
Important projects in 2011
Sakhalin-1
Gudrun jacket delivered
Clair Ridge jackets
Nordsee Ost wind jackets
Skarv FPSO delivered
Kollsnes onshore delivered
Eldfisk
Kashagan HUC delivered
Longview delivered
Gulf LNG delivered
North
Sea
NOK 13.2
billion Jackets NOK 13.3
billion
Important projects
Sakhalin-1
Gudrun and Ekofisk jackets delivered
Clair Ridge jackets
Nordsee Ost wind jackets
Skarv FPSO delivered
Kollsnes onshore delivered
Eldfisk
Kashagan HUC delivered
Longview delivered
Gulf LNG delivered
Share of revenues last 12 months
Percent
Jackets
NOK 12.1
billion
08.05.2012 © Kvaerner 2012 18
Increased visibility
Order intake
NOK million
Order backlog
NOK million
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12
0
5 000
10 000
15 000
20 000
25 000
30 000
Q4'11 Q1'12 Q1'12*
3 197
Upstream Downstream & Industrials
* Including announced order intake in Q2,
but excluding revenues for Q2.
2012
*
* Contracts announced from 1 April to 8 May 2012
2012 2012
2013 2013
2013
2014
2014 2014
2015 &
later
08.05.2012 © Kvaerner 2012
Q1 2012: Downstream & Industrials review
1 404 1 558
1 376 1 287 1 130
104
537 298
716 381
0
500
1 000
1 500
2 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
19
Order backlog and order intake
NOK million
Revenues, EBITDA and EBITDA margin
NOK million
673
345
549
850
496
3
-300
-39 -15
3
-500
0
500
1000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
EBITDA
margin
0.4% (86.7)% (7.1)% (1.8)% 0.5%
Order backlog Order intake Revenues EBITDA
Financials
Low activity level for Houston EPC centre until
new EPC projects awarded
Union Construction around break even level
until Longview is concluded
Orders
Growth in existing contracts
Various growth in steel industry services
08.05.2012 © Kvaerner 2012
Q1 2012: Upstream review
14 273 11 738
10 482 8 834
9 683
6 955
1 068 789 573
2 817
0
5 000
10 000
15 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
20
3 058
3 600
2 052 2 176 1 891
477 554 253 287 196
0
1 000
2 000
3 000
4 000
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12
Order backlog and order intake
NOK million
Revenues, EBITDA and EBITDA margin
NOK million
EBITDA
margin 15.6% 15.4% 12.3% 13.2% 10.4%
Financials
Activity level reflecting projects in an early
phase
EBITDA positively affected by release of
contingencies
Order backlog Order intake Revenues EBITDA
Orders
Edvard Grieg jacket of NOK 1.1 billion
Martin Linge jacket of NOK 1.2 billion
08.05.2012 © Kvaerner 2012
The current EPC project portfolio
21
2011 2012 2013 2014 Value
at award
Kashagan HUC USD 1.6B
Mongstad TCM NOK 525M
Sakhalin-1 USD 600M
Ekofisk jacket Undiscl.
Nordsee Ost EUR 115M
Clair Ridge NOK 1.7B
Eldfisk NOK 5.5B
V&M Star (MEP) Undiscl.
Edvard Grieg
jacket NOK 1.1B
Martin Linge
jacket NOK 1.2B
Nyhamna onshore NOK 6B
Edvard Grieg
topside NOK 8B
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
North Sea International Jackets Concrete E&C Americas
08.05.2012 © Kvaerner 2012
-2 000
-1 500
-1 000
-500
0
500
1 000
Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'11
22
Cash flow and working capital
22
Net current operating assets (NCOA)
NOK million
Downstream &
Industrials
Upstream
Kvaerner Group
The EPC business is cash positive
through negative working capital:
Customer pre-payments¹ of NOK
248 million
Downstream & Industrials: Capital
tied up in the Longview project
¹ Invoicing in excess of cost and estimated earnings less amounts billed in advanced but not received (on a project by project basis).
Amounts in NOK million Q1 2012 Q1 2011
Full year
2011
Cash flow from operating activities (385) 831 1 069
Cash flow from investing activities (39) (42) (231)
Cash flow from financing activities 0 4 (1 105)
Translation adjustments 47 58 8
Net increase/(decrease) in cash and
bank deposits (376) 851 (259)
08.05.2012 © Kvaerner 2012
Balance sheet
Access to liquidity totalling NOK 4.1 billion
23
Amounts in NOK million Q1 2012 Q1 2011
Full year
2011
Assets
Total non-current assets 1 980 1 728 1 954
Prepaid company tax 184 93 169
Current operating assets 2 651 4 402 2 256
Other current assets 20 2 026 25
Total cash and bank 2 043 3 528 2 418
Total assets 6 878 11 778 6 823
Total equity 2 582 2 857 2 445
Non-current interest bearing liabilities 462 509 460
Other non-current liabilities 174 223 161
Current operating liabilities 3 368 5 740 3 491
Current tax liabilities 292 0 257
Other current liabilities (0) 2 449 8
Total liabilities 4 296 8 920 4 378
Total equity and liabilities 6 878 11 778 6 823
Equtiy ratio 38 % 24 % 36 %
Net cash 1 642 3 903 2 012
08.05.2012 © Kvaerner 2012
Summary and closing remarks
24
08.05.2012 © Kvaerner 2012
Number of EPC prospects higher than in decades
25
Hejre
Edvard Grieg Martin Linge
Mariner
Bressay
Aasta Hansteen
Dagny
Draupne
Victoria
Tommeliten
Snorre
Skrugard
Johan Sverdrup
Havis
Ormen Lange
Kollsnes
Snøhvit Phase II
Nyhamna
expansion
Existing and prioritised markets
North Sea Jackets International Concrete E&C Americas
Browse
Other international
prospects on a case
by case basis
LNG-Liquefaction
Gas processing/syngas
Chemical/phosphates
Heavy oil
Refining
Steel
Pipe manufacturing
industry
Gas fired power plants
Plant maintenance and
services
Power plant
environmental compliance
projects
White Rose
Hebron GBS EPC-
phase
Piltun South
Petchora LNG
Kammennomyskoye
Yamal
Dolginskoye
Amuligak
Note: The list is not exhaustive or indicative of Kvaerner’s priorities.
Edvard Grieg Hejre
Martin Linge Montrose/Arbroath
Dagny
Draupne
Mariner
Bressay
Johan Sverdrup
Peregrino
Jackdaw
Nordsee Ost
extension
08.05.2012 © Kvaerner 2012
Summary and closing remarks
Highlights
Substantial increase in order backlog
Uncertain 2012 financial results
Market opportunities requires selective approach
26
HSE – core value and licence
to operate
Maintain and develop home
markets
International expansion
Hands-on management
08.05.2012 © Kvaerner 2012 27
08.05.2012 © Kvaerner 2012
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.
28
