Third quarter results 2012

(1)

(2)

© Kvaerner 2012

31.10.2012

Highlights

2

Sakhalin-1 GBS completed

Technology Center Mongstad

project completed

Edvard Grieg hook-up and

commissioning assistance awarded

High tendering activity – several

tenders submitted

Dividend of NOK 0.53 per share

approved by EGM

(3)

-1 028

-1 235

-717

-432

-840

-1 400

-1 200

-1 000

-800

-600

-400

-200

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12

Key financials

169

249

159

85

67

42

0

50

100

150

200

250

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12

Revenues

NOK Million

EBITDA

NOK Million

Net current operating assets

NOK Million

2 623

3 004

2 388

3 000

2 430

500

1 000

1 500

2 000

2 500

3 000

3 500

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12

6.4% 8.3% 6.7% 2.8% 2.8%²

EBITDA

margin

¹ Net positive effect from divestment of EPC Center Houston.

¹

(4)

31.10.2012

Solid order backlog

4

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Order intake

NOK million

0

5 000

10 000

15 000

20 000

25 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Order backlog

NOK million

For execution in 2012

For execution in 2013

For execution in 2014

Upstream

Downstream & Industrials

For execution in 2015 and later

21 788

1 240

~10%

~40%

~25%

(5)

Third quarter operations

(6)

31.10.2012

Health, safety and environment

6

0,0

1,0

2,0

3,0

4,0

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

LTIF

TRIF

Lost time incident frequency (LTIF) and Total recorded incident frequency (TRIF)

Per million work hours and 12 months rolling averages

Received “Best

contractor award”

for the Sakhalin-1

project

Enforced

pro-activeness

throughout the

organisation

Highlights

Three lost time injuries and nine other injuries resulting in 12 recordable

injuries in the quarter

Two serious near miss incidents (no injuries)

3.2

(7)

Operations

NORTH SEA

INTERNATIONAL

JACKETS

E&C AMERICAS

CONCRETE

UPSTREAM

DOWNSTREAM &

INDUSTRIALS

Eldfisk assembly

phase started

E. Grieg topside

project placing

purchase orders

Positioning for the

Browse project

Kashagan

Hook-up project close

down

Nordsee Ost: 29

jackets completed

Securing major

sub-contracts for

Grieg and Linge

Demobilising V&M

MEP project

Steel maintenance

projects on plan

Sakhalin-1 GBS

successfully

completed

Hebron preparing

for start of

construction

(8)

Third quarter financials

Eiliv Gjesdal, Chief Financial Officer

(9)

Income statement

¹ Figures include net positive effect of NOK 42 million from divestment of EPC Center Houston operations.

Historical figures include EPC Center Houston.

¹

Amounts in NOK million

Q3 2012

Q3 2011

YTD 2012

YTD 2011

Full year

2011

Operating revenue

2 430 2 623 7 818 10 292 13 295

EBITDA

109 169 354 825 1 073

Depreciation and amortisation

(17) (12) (47) (36) (54)

EBIT

93 157 306 789 1 019

Net financial items, including result

from associated companies and JVs

(11) 0 (15) (4) (116)

Profit before tax

82 157 292 785 903

Income tax expense

(33) (22) (110) (307) (344)

Net profit

48 135 182 478 559

EBITDA margin

4.5 %

6.4 %

4.5 %

8.0 %

8.1 %

(10)

31.10.2012

Q3 2012: Downstream & Industrials review

10

Order backlog and order intake

NOK million

Revenues, EBITDA and EBITDA margin

NOK million

Revenues

EBITDA

Financials

 Limited results expected until Longview

arbitration is concluded

 EPC Center divested in July resulting in a net

positive effect of NOK 42 million

Orders

 Growth in existing contracts

 New awards tend to be somewhat delayed

549

850

496

689

442

-39

-15

3

6

46

-100

400

900

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

1 376

1 287

1 130

702

358

298

716

381

234

148

0

500

1 000

1 500

2 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

EBITDA-%

(7.1)%

(1.8)%

0.5%

0.9%

10.4%

Order backlog at the end of the quarter

Order intake in the quarter

¹ Figures include net positive effect of NOK 42 million from divestment of EPC Center Houston operations.

Historical figures include EPC Center Houston.

(11)

Q3 2012: Upstream review

2 052

2 176

1 891

2 317

1 992

253

287

196

119

100

0

1 000

2 000

3 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

10 482

8 758

9 683

22 318

21 433

789

446

2 817

14 959

1 097

0

5 000

10 000

15 000

20 000

25 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Order backlog and order intake

NOK million

Revenues, EBITDA and EBITDA margin

NOK million

Revenues

EBITDA

Financials

 Activity level increasing in North Sea

 EBITDA margin expected within normalised

range of 5-10% for 2012

 Commercial challenges on Nordsee Ost

project

Orders

 Edvard Grieg hook-up and commissioning

assistance contract of NOK 525 million

(12)

31.10.2012

Cash flow and working capital development

12

Amounts in NOK million

Q3 2012

Q3 2011

YTD 2012

YTD 2011

Full year

2011

Cash flow from operating activities

317 (49) (455) 747 1 069

Cash flow from investing activities

(10) (48) (68) (154) (231)

Cash flow from financing activities

3 425 (292) (1 104) (1 105)

Translation adjustments

(4) 15 46 (47) 8

Net increase/(decrease) in cash and

bank deposits

306 343 (769) (558) (259)

The EPC business is

cash positive through

negative working

capital:

 Customer

pre-payments¹ of

NOK 242 million

 Downstream &

Industrials: Capital

tied up in the

Longview project

-2 000

-1 500

-1 000

-500

0

500

1 000

Q2'10

Q3'10

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Net current operating assets (NCOA)

NOK million

Downstream

& Industrials

Upstream

Group

(13)

Balance sheet

YTD 2012

YTD 2011

Full year

2011

Assets

Total non-current assets

2 150 1 821 1 954

Prepaid company tax

173 111 169

Current operating assets

2 498 2 771 2 256

Other current assets

20 - 25

Total cash and bank

1 649 2 118 2 418

Total assets

6 491 6 822 6 823

Total equity

2 321 2 271 2 445

Non-current interest bearing liabilities

467 457 460

Other non-current liabilities

218 259 161

Current operating liabilities

3 338 3 799 3 491

Current tax liabilities

147 33 257

Other current liabilities

0 2 8

Total liabilities

4 170 4 551 4 378

Total equity and liabilities

6 491 6 822 6 823

Equtiy ratio

36 %

33 %

36 %

Net cash

1 253 1 678 2 012

(14)

31.10.2012

Summary and closing remarks

(15)

Strong market in all business areas

North Sea

•

High activity

•

Several tenders

submitted

•

New contracts

expected within next

quarters

Arctic Russia

•

Strong future market in

Kara Sea and Sakhalin

•

Studies awarded and

on-going

Caspian

•

Strong future market,

uncertain timing

•

Development of

delivery model

Asia Pacific

•

Browse FID expected

1H 2013

•

Multiple opportunities

within next 24 months

•

Delivery model

established

North America

•

Gas fired power plant

market positive

•

Healthy US steel

market

•

Contract awards

somewhat delayed

Atlantic Canada

•

Operators increasing

Arctic activities

•

Long term

opportunities

•

Office in St. John’s

established

(16)

31.10.2012

Summary and closing remarks

16

Backlog with good basis for

future earnings

Solid market calls for selective

tendering approach

Contract awards expected within

the next quarters

Predictable dividend policy

HSE – core value and licence

to operate

Maintain and develop home

markets

International expansion

(17)

(18)

31.10.2012

18

(19)

Downstream & Industrials –

historical data for Union Construction

Order backlog and order intake

NOK million

Revenues, EBITDA and EBITDA margin

NOK million

Revenues

EBITDA

364

566

419

608

362

12

6

5

14

5

-100

100

300

500

700

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

EBITDA-%

3.3%

1.0%

1.3%

2.4%

1.3%

1 158

1 153

951

598

358

195

515

260

229

148

0

500

1 000

1 500

2 000

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

(20)

31.10.2012

Revenue distribution

20

Share of revenues 2010

Percent

Share of revenues 2011

Percent

Share of revenues last 12 months

Percent

NOK

13.2

billion

NOK

13.3

billion

NOK

11.0

billion

(21)

The current EPC project portfolio

2009 2010 2011 2012 2013 2014

Mongstad TCM

Eldfisk topside

Nyhamna onshore

Edvard Grieg topside

Ekofisk jacket

Nordsee Ost wind jackets

Clair Ridge jackets

Edvard Grieg jacket

Martin Linge jacket

Sakhalin-1

Kashagan HUC

V&M Star (MEP)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

(22)

31.10.2012

EPC prospects

22

Martin Linge

Mariner

Bressay

Aasta Hansteen

Dagny

Ivar Aasen

Victoria

Tommeliten

Snorre

Skrugard

Johan Sverdrup

Havis

Ormen Lange

compression platform

Existing and prioritised markets

North Sea

Jackets

International

Concrete

E&C Americas

Browse

Other international

prospects on a case

by case basis

Gas processing

Chemical

Refining

Steel

Pipe manufacturing

industry

Gas fired power plants

Plant maintenance and

services

Power plants

environmental compliance

projects

White Rose EPC

Piltun South

Amuligak

Pechora LNG

Kammennomyskoye

Dolginskoe

Natuna

Note: The list is not exhaustive or indicative of Kvaerner’s priorities.

Montrose/Arbroath

Dagny

Ivar Aasen

Mariner

Bressay

Peregrino

Jackdaw

Hod

Auk

Tor

Tommeliten

Utsira high

Greater Clair

Development

Snorre

Johan Sverdrup

(23)

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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.