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31 October 2012 - Kvaerner ASA's 3rd quarter results presentation, Oslo, Norway

31 October 2012 - Kvaerner ASA's 3rd quarter results presentation, Oslo, Norway

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Q3 Presentation Q3 Presentation Presentation Transcript

  • Third quarter results 2012 © Kvaerner 2012 31.10.2012
  • Highlights 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 EGM2 © Kvaerner 2012 31.10.2012
  • Key financialsRevenues EBITDA Net current operating assetsNOK Million NOK Million NOK Million 3,500 250 -432 3,000 -200 200 -717 -840 2,500 -400 -1,028 -1,235 150 2,000 -600 249 3,004 3,000 109 1,500 -800 2,623 100 2,430 42 ¹ 2,388 169 159 1,000 -1,000 50 85 500 -1,200 0 67 -1,400 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312 EBITDA 6.4% 8.3% 6.7% 2.8% 2.8%² margin ¹ Net positive effect from divestment of EPC Center Houston.3 © Kvaerner 2012 31.10.2012 ² EBITDA margin excluding net effect from divestment.
  • Solid order backlogOrder intake Order backlogNOK million NOK million 16,000 25,000 14,000 21 788 20,000 12,000 ~25% 10,000 15,000 ~25% 8,000 10,000 6,000 4,000 ~40% 5,000 2,000 1 240 ~10% 0 0 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312 For execution in 2012 Upstream For execution in 2013 Downstream & Industrials For execution in 2014 For execution in 2015 and later4 © Kvaerner 2012 31.10.2012
  • Third quarter operationsThe Bull Arm site being prepared for Hebron outside St.John’s, Newfoundland. 5 © Kvaerner 2012 31.10.2012
  • Health, safety and environment Three lost time injuries and nine other injuries resulting in 12 recordable injuries in the quarter Two serious near miss incidents (no injuries) Lost time incident frequency (LTIF) and Total recorded incident frequency (TRIF) Per million work hours and 12 months rolling averages 4.0 LTIF TRIF Highlights 3.2 Received “Best 3.0 contractor award” for the Sakhalin-1 project 2.0 Enforced pro- activeness throughout the 1.0 organisation 0.6 0.0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept6 © Kvaerner 2012 31.10.2012
  • Operations DOWNSTREAM & UPSTREAM INDUSTRIALS CONCRETE JACKETS NORTH SEA INTERNATIONAL E&C AMERICAS Sakhalin-1 GBS Nordsee Ost: 29 Eldfisk assembly Positioning for the Demobilising V&M successfully jackets completed phase started Browse project MEP project completed Securing major Kashagan Hook- E. Grieg topside Steel maintenance Hebron preparing sub-contracts for project placing up project close for start of Grieg and Linge down projects on plan purchase orders construction7 © Kvaerner 2012 31.10.2012
  • Third quarter financialsEiliv Gjesdal, Chief Financial Officer
  • Income statement Full yearAmounts in NOK million Q3 2012¹ ¹ Q3 2011 YTD 2012¹ ¹ YTD 2011 2011Operating revenue 2 430 2 623 7 818 10 292 13 295EBITDA 109 169 354 825 1 073Depreciation and amortisation (17) (12) (47) (36) (54)EBIT 93 157 306 789 1 019Net financial items, including result (11) 0 (15) (4) (116)from associated companies and JVsProfit before tax 82 157 292 785 903Income tax expense (33) (22) (110) (307) (344)Net profit 48 135 182 478 559EBITDA margin 4.5 % 6.4 % 4.5 % 8.0 % 8.1 %¹ Figures include net positive effect of NOK 42 million from divestment of EPC Center Houston operations.Historical figures include EPC Center Houston.9 © Kvaerner 2012 31.10.2012
  • Q3 2012: Downstream & Industrials review Financials Orders  Limited results expected until Longview  Growth in existing contracts arbitration is concluded  New awards tend to be somewhat delayed  EPC Center divested in July resulting in a net positive effect of NOK 42 million Revenues, EBITDA and EBITDA margin Order backlog and order intake NOK million NOK million 900 850 2,000 689 549 1,500 1,376 496 1,287 442 1,130 400 1,000 702 716 46 500 358 3 6 298 381 234 148 -39 -15 -100 0 Q311 Q411 Q112 Q212 Q312¹ Q311 Q411 Q112 Q212 Q312EBITDA-% (7.1)% (1.8)% 0.5% 0.9% 10.4% Revenues EBITDA Order backlog at the end of the quarter Order intake in the quarter¹ Figures include net positive effect of NOK 42 million from divestment of EPC Center Houston operations.Historical figures include EPC Center Houston.10 © Kvaerner 2012 31.10.2012
  • Q3 2012: Upstream review Financials Orders  Activity level increasing in North Sea  Edvard Grieg hook-up and commissioning  EBITDA margin expected within normalised assistance contract of NOK 525 million range of 5-10% for 2012  Commercial challenges on Nordsee Ost project Revenues, EBITDA and EBITDA margin Order backlog and order intake NOK million NOK million 3,000 25,000 22,318 21,433 2,317 2,176 20,000 2,052 1,992 1,891 2,000 14,959 15,000 10,482 9,683 10,000 8,758 1,000 253 287 5,000 2,817 196 119 100 789 1,097 446 0 0 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312EBITDA-% 12.3% 13.2% 10.4% 5.1% 5.0% Revenues EBITDA Order backlog at the end of the quarter Order intake in the quarter11 © Kvaerner 2012 31.10.2012
  • Cash flow and working capital development Full yearAmounts in NOK million Q3 2012 Q3 2011 YTD 2012 YTD 2011 2011Cash flow from operating activities 317 (49) (455) 747 1 069Cash 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) 8Net increase/(decrease) in cash and 306 343 (769) (558) (259)bank deposits The EPC business is Net current operating assets (NCOA) cash positive through NOK million negative working 1,000 Downstream capital: 500 & Industrials  Customer pre- 0 payments¹ of NOK 242 million -500 Group  Downstream & -1,000 Industrials: Capital Upstream -1,500 tied up in the -2,000 Longview project Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312¹ Invoicing in excess of cost and estimated earnings less amounts billed in advance but not received (on a project by project basis).12 © Kvaerner 2012 31.10.2012
  • Balance sheet Full yearAmounts in NOK million YTD 2012 YTD 2011 2011AssetsTotal non-current assets 2 150 1 821 1 954Prepaid company tax 173 111 169Current operating assets 2 498 2 771 2 256Other current assets 20 - 25Total cash and bank 1 649 2 118 2 418Total assets 6 491 6 822 6 823Total equity 2 321 2 271 2 445Non-current interest bearing liabilities 467 457 460Other non-current liabilities 218 259 161Current operating liabilities 3 338 3 799 3 491Current tax liabilities 147 33 257Other current liabilities 0 2 8Total liabilities 4 170 4 551 4 378Total equity and liabilities 6 491 6 822 6 823Equtiy ratio 36 % 33 % 36 %Net cash 1 253 1 678 2 01213 © Kvaerner 2012 31.10.2012
  • Summary and closing remarks14 © Kvaerner 2012 31.10.2012
  • Strong market in all business areas Atlantic Canada Arctic Russia • Operators increasing North Sea • Strong future market in Arctic activities Kara Sea and Sakhalin • Long term • High activity • Several tenders • Studies awarded and opportunities on-going • Office in St. John’s submitted established • New contracts expected within next quarters North America Caspian • Gas fired power plant • Strong future market positive market, uncertain • Healthy US steel timing market • Development of • Contract awards delivery model somewhat delayed Asia Pacific • Browse FID expected 1H 2013 • Multiple opportunities within next 24 months • Delivery model established STRATEGIC AND SELECTIVE APPROACH REQUIRED15 © Kvaerner 2012 31.10.2012
  • Summary and closing remarks Backlog with good basis for HSE – core value and licence future earnings to operate Solid market calls for selective Maintain and develop home tendering approach markets Contract awards expected within International expansion the next quarters Hands-on management Predictable dividend policy16 © Kvaerner 2012 31.10.2012
  • APPENDIX18 © Kvaerner 2012 31.10.2012
  • Downstream & Industrials –historical data for Union Construction Revenues, EBITDA and EBITDA margin Order backlog and order intake NOK million NOK million 700 2,000 608 566 500 419 1,500 364 362 1,158 1,153 300 951 1,000 598 100 500 358 12 14 5 515 6 5 195 260 229 148 -100 0 Q311 Q411 Q112 Q212 Q312 Q311 Q411 Q112 Q212 Q312EBITDA-% 3.3% 1.0% 1.3% 2.4% 1.3% Revenues EBITDA Order backlog at the end of the quarter Order intake in the quarter19 © Kvaerner 2012 31.10.2012
  • Revenue distribution Share of revenues 2010 Share of revenues 2011 Share of revenues last 12 months Percent Percent Percent NOK NOK NOK 13.2 13.3 11.0 billion billion billion International EC Americas Concrete Jackets North Sea20 © Kvaerner 2012 31.10.2012
  • The current EPC project portfolio 2009 2010 2011 2012 2013 2014Mongstad TCMEldfisk topsideNyhamna onshoreEdvard Grieg topsideEkofisk jacketNordsee Ost windjacketsClair Ridge jacketsEdvard Grieg jacketMartin Linge jacketSakhalin-1Kashagan HUCV&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 International E&C Americas Concrete Solutions Jackets North Sea 21 © Kvaerner 2012 31.10.2012
  • EPC prospectsNorth Sea Jackets International Concrete E&C AmericasMartin Linge Montrose/Arbroath Browse White Rose EPC Gas processingMariner Dagny Other international Piltun South ChemicalBressay Ivar Aasen prospects on a case Amuligak RefiningAasta Hansteen Mariner by case basis Pechora LNG SteelDagny Bressay Kammennomyskoye Pipe manufacturingIvar Aasen Peregrino Dolginskoe industryVictoria Jackdaw Natuna Gas fired power plantsTommeliten Hod Plant maintenance andSnorre Auk servicesSkrugard Tor Power plantsJohan Sverdrup Tommeliten environmental complianceHavis Utsira high projectsOrmen Lange Greater Claircompression platform Development Snorre Johan Sverdrup Existing and prioritised marketsNote: The list is not exhaustive or indicative of Kvaerner’s priorities. 22 © Kvaerner 2012 31.10.2012
  • Copyright and disclaimerCopyrightCopyright 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 applicableacknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction.DisclaimerThis 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 todiffer. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of theregions and industries that are major markets for Kværner ASA and Kværner ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates andprojections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actualresults 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 marketsfor Kvaerner’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchangerates 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 basedupon 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 ismaking 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.23 © Kvaerner 2012 31.10.2012