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© Kvaerner 2013 16.08.2013
Emergency exits
2
If the alarm goes off, please leave the auditorium as guided by this map and go to the muster area. No drills planned for today.
© Kvaerner 2013 16.08.2013
Second quarter results 2013
3
Photo: Trønder-Avisa, Marius Langfjord
© Kvaerner 2013 16.08.2013
Highlights
4
Continued focus on competitiveness and delivery models
High activity
Delivered Clair Ridge jackets
Order backlog of NOK 29.6 billion*
Proposed semi-annual dividend of NOK 0.58 per share
* Including incorporated joint ventures.
High activity on the Hebron project.
© Kvaerner 2013 16.08.2013
Key financials
5
85
67
125
103
16342
0
50
100
150
200
Q2'
12
Q3'
12
Q4'
12
Q1'
13
Q2'
13
RevenuesNOK million
-432
-840
-514
-85
-579
-900
-800
-700
-600
-500
-400
-300
-200
-100
Q2'
12
Q3'
12
Q4'
12
Q1'
13
Q2'
13
EBITDANOK million
Net current operating assetsNOK million
3 00
0
2 43
0 2 93
0
2 90
7 3 61
6
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Q2'
12
Q3'
12
Q4'
12
Q1'
13
Q2'
13
2.8% 2.8%² 4.3% 3.5% 4.5%EBITDA margin
¹ Gain on sale of EPC Center Houston.² EBITDA margin excluding sales gain.
¹
© Kvaerner 2013 16.08.2013
Order intake and -backlog
6
0
2000
4000
6000
8000
10000
12000
14000
16000
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Order intakeNOK million
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Order backlogNOK million
For execution in 2013For execution in 2014
UpstreamDownstream & Industrials
For execution in 2015 and later
29 637
~30%
~40%
~30%
2 305
Note: All figures include incorporated joint ventures.
Estimated scheduling as of 30 June 2013:
© Kvaerner 2013 16.08.2013
Second quarter operations
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© Kvaerner 2013 16.08.2013
0.0
1.0
2.0
3.0
4.0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
LTIF TRIF
Health, safety, security and environment
8
No lost time injuries No serious incidents No serious near miss
Lost time incident frequency (LTIF) and Total recorded incident frequency (TRIF)Per million work hours and 12 months rolling averages
Focus on risk observations
Highlights
2.5
0.4
© Kvaerner 2013 16.08.2013
Operational highlights
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Overall high activity level
Optimising resources in Contractors Norway and International
New gantry crane being installed at Stord
CLAIR RIDGE JACKETS ELDFISK TOPSIDE
GARRISON ENERGY CENTER HEBRON GBS
Both jackets successfully delivered to BP
Final assembly activities on-going
Construction team mobilised on site
Slip forming of shafts on-going
Nytt bilde
Second quarter financialsEiliv Gjesdal, Chief Financial Officer
© Kvaerner 2013 16.08.2013
Income statement
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¹
Note: Restated figures for previous periods are reflecting impacts from implementing IAS 19R Employee Benefits.Revenues excluding incorporated joint ventures.
Amounts in NOK million Q2 2013 Q1 2013 Q2 2012 YTD 2013 YTD 2012FY 2012
RestatedTotal revenue and other income 3 616 2 907 3 000 6 523 5 388 10 748 EBITDA 163 103 85 266 244 479 Depreciation and amortisation (17) (16) (15) (33) (31) (66)EBIT 146 87 70 233 214 413 Net financial income/(expense) (7) (21) (2) (28) (3) (39)Profit from associated companies and JVs (18) (3) 0 (22) (0) (7)Profit before tax 120 62 68 183 210 367 Income tax expense (45) (25) (26) (70) (76) (130)Net profit 75 37 42 112 134 237 EBITDA margin 4.5 % 3.5 % 2.8 % 4.1 % 4.5 % 4.5 %
© Kvaerner 2013 16.08.2013
Q2 2013: Upstream review
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Financials Activity level in Norway increasing Early cycle projects with limited contribution
Orders Growth in existing contracts, especially within
procurement
Revenues, EBITDA and EBITDA marginNOK million
Order backlog and order intakeNOK million
2 5542 191
3 0543 411
3 914
118 100 137 131 1830
1 000
2 000
3 000
4 000
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13EBITDA-% 4.6% 4.6% 4.5% 3.8% 4.7%
Revenues EBITDA
Note: All figures include incorporated joint ventures.
22 318 21 433 20 226
29 844 28 153
15 196
1 296 1 848
12 805
2 329
0
5 000
10 000
15 000
20 000
25 000
30 000
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Order backlog at the end of the quarter Order intake in the quarter
© Kvaerner 2013 16.08.2013
Q2 2013: Downstream & Industrials review
13
Financials Lower activity level than historically expected
for 2013 Negative results in the range of NOK 20-30
million expected for 2013
Orders Net order intake nil due to scope reduction in
a contract for US Steel corp.
Revenues, EBITDA and EBITDA marginNOK million
689
442
261 244338
6 46 7-8 -2-100
300
700
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13EBITDA-% 0.9% 10.4% 2.7% (3.1)% (0.7)%
Revenues EBITDA
¹ Figures include net positive effect of NOK 42 million from divestment of EPC Center Houston operations in Q4’12. Historical figures include EPC Center Houston.
Order backlog and order intakeNOK million
702
358
1 039
1 799
1 489
234148
981933
0
500
1 000
1 500
2 000
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Order backlog at the end of the quarter Order intake in the quarter
© Kvaerner 2013 16.08.2013
Strong revenue visibility
5 000
10 000
15 000
20 000
25 000
30 000
Q2 2011 Q2 2012 Q2 2013
2013 & later
Order backlog estimation by execution year (as of 30 June 2013)NOK million
29 637
2013
2014
2015 & later
2012
2014 & later
20132012
2011
14
Note: All figures include incorporated joint ventures.
Booked2012-13
Booked 2010-11
Revenues in excess of NOK 16 billion estimated for 2013
EBITDA assumptions 2013: Upstream margins
impacted by projects from 2010-2011 Downstream & Industrials
impacted by increased legal costs Corporate costs reduced by
NOK 30 million
© Kvaerner 2013 16.08.2013
-2 000
-1 500
-1 000
-500
0
500
1 000
Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Cash flow and working capital development
15
Amounts in NOK million Q2 2013 Q1 2013 Q2 2012 YTD 2013 YTD 2012 FY 2012Cash flow from operating activities 655 (357) (387) 298 (772) (748)Cash flow from investing activities (40) (21) (19) (61) (58) (91)Cash flow from financing activities (176) (5) (294) (181) (294) (481)Translation adjustments 1 20 2 21 49 (29)Net increase/(decrease) in cash and bank deposits 441 (364) (699) 77 (1 075) (1 349)
Customer pre-payments¹ of NOK 188 millionDownstream & Industrials: Capital tied up in the Longview projectUpstream: Capital tied up in the
Nordsee Ost project Increase in working capital
expected during second half of 2013
Net current operating assets (NCOA)NOK million
Downstream & Industrials
Upstream
Group
¹ Invoicing in excess of cost and estimated earnings less amounts billed in advance but not received (on a project by project basis).
© Kvaerner 2013 16.08.2013
Balance sheet
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30.06.2013 31.03.201330.06.2012
RestatedFY 2012
RestatedAssetsTotal non-current assets 2 232 2 293 2 017 2 218 Prepaid company tax 133 93 189 91 Current operating assets 2 874 2 965 2 737 2 660 Other current assets - - 20 - Total cash and bank 1 146 705 1 344 1 069 Total assets 6 385 6 057 6 306 6 039
Total equity 2 267 2 308 2 256 2 195
Non-current interest bearing liabilities 474 471 464 469 Other non-current liabilities 189 175 237 172 Current operating liabilities 3 452 3 050 3 168 3 175 Current tax liabilities 4 52 180 28 Other current liabilities (0) (0) 0 (0)Total liabilities 4 119 3 748 4 050 3 844 Total equity and liabilities 6 385 6 057 6 306 6 039
Equtiy ratio 35 % 38 % 36 % 36 %Net cash 723 284 942 650
Amounts in NOK million
© Kvaerner 2013 16.08.2013
Closing remarks
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The Stord yard with the Eldfisk topside in front and the crane installation on-going.
© Kvaerner 2013 16.08.2013
On-going improvement initiatives to strengthen competitiveness
18
New operating model implemented
Corporate staff reduced by 35 percent
Assessing options for the future of the Verdal yard
© Kvaerner 2013 16.08.2013
Opportunities in all target markets
19
North Sea• Johan Sverdrup key
target• Opportunities for
completion and hook-up projects
Arctic Russia• Strong future market• Studies on-going in in
several areas• Kara Sea field seismic
surveys started
Caspian• Strong future market,
uncertain timing• Development of delivery
model on-going• Kashagan expected
on-stream in 2013
Asia Pacific• Multiple opportunities
within next 24 months• Robust delivery model
established
North America• Certain wards for gas
fired power plants seems to be sliding
• Steel maintenance market see some reduction in spending
Alaska & Canada
• Activities on-going to position concrete sub-structures
• High potential in Newfoundland and Labrador
High activity on studies for Arctic areasPositive medium- and long-term market prospects
© Kvaerner 2013 16.08.2013
Summary
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Strong order backlog
High activity – project execution focus
Improving competitiveness and delivery models
Predictable dividend policy
HSSE – core value and licence to operate
Maintain and develop home markets
International expansion
Hands-on management
© Kvaerner 2013 16.08.201322
APPENDIX
© Kvaerner 2013 16.08.2013
The current EPC project portfolio
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2011 2012 2013 2014 2015 Value at award
Mongstad TCM NOK 525M
Eldfisk topside NOK 5.5B
Nyhamna onshore NOK 11B
Edvard Grieg topside NOK 8B
Nordsee Ost wind jackets EUR 115M
Clair Ridge jackets NOK 1.7B
Edvard Grieg jacket NOK 1.1B
Martin Linge jacket NOK 1.2B
Sakhalin-1 USD 600M
Hebron USD 1.5B
Kashagan HUC USD 1.6B
V&M Star (MEP) Undisclosed
Calpine Garrison USD 100-120M
Contractors International Onshore AmericasConcrete SolutionsJacketsContractors Norway
© Kvaerner 2013 16.08.2013
Revenue distribution
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Share of revenues 2011Percent
Share of revenues 2012Percent
NOK
13.3 billion
NOK
10.7 billion
Contractors International Onshore Americas Concrete Solutions Jackets Contractors Norway
Share of revenues last 12 monthsPercent
NOK
11.9 billion
© Kvaerner 2013 16.08.2013
CopyrightCopyright 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.
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 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.
Copyright and disclaimer
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