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NKT flexible riser
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NKT FlexiblesHighly Engineered Subsea Solutions
Agenda
Global Energy OutlookNKT Fl ibl t l NKT Flexibles at a glance
Products & Solutions Financial Review New flexible pipe plant in BrazilNew flexible pipe plant in Brazil
2Proprietary information by NKT Flexibles I/S
Global Energy Outlook
Oil and gas a primary future energy source
4Proprietary information by NKT Flexibles I/S
Growth driven by non-OECD countries
5Proprietary information by NKT Flexibles I/S
Long term demand for oil and gas
6Proprietary information by NKT Flexibles I/S
Conventional Petroleum remains dominant
7Proprietary information by NKT Flexibles I/S
Oil price forecasts
Source: Bloomberg, BofAML Global Commodity Research (February 2010) Source: Short-Term Energy Outlook, August 2011
8Proprietary information by NKT Flexibles I/S
Market Dynamics Support Healthy Growth
A Few Facts about the Global Flexible Pipe MarketTh fl ibl i k hi h f f h l b l SURF k i i d 1 200k d i The flexible pipe market, which forms part of the global SURF market, is estimated at ~1,200km per annum measured in theoretical length of standard 8 pipe
In value terms, this corresponds to approx. DKK 8.0bn (USD ~1.5bn) per annum Brazil is the single-largest market with Petrobras accounting for ~50% of global consumption Other important markets are North Sea, West Africa and the Far East including India and Australia
Long-term Demand Drivers The investment input that drives the SURF market is strongly dependent on the anticipations of the future oil pricep g y p p p
Traditionally, the number of viable projects depends very much on the expected oil price A majority of future SURF projects are planned with break-even oil prices of some USD 30-50 per bbl.
While the short term oil price is difficult to predict, the longer-term outlook appear positive Increasing world demand for energy driven by non-OECD countries and general economic recovery in
Western Economies General consensus in the oil industry that we are in the midst of the Peak Oil supply period
If sustained, the current oil price of USD +100 per bbl. should support a flow of new projects for the coming years, p p pp p j g y
9Proprietary information by NKT Flexibles I/S
NKT Flexibles at a glance
NKT Flexibles I/S
NKT Flexibles I/S was t bli h d i 1999 d h
NKT Flexibles Headquarters in Brndby, Denmark.
established in 1999 and has today some 650 devoted employees.
The plant is situated in Kalundborg, Denmark.Rio officeRio office.
11Proprietary information by NKT Flexibles I/S
Introduction to NKT Flexibles
Legal Structure and OwnershipIntroduction Since 1968 NKT Flexibles has supplied flexible pipe systems
to the global market Today NKT Flexibles offers total riser and flowline system
design, engineering, procurement, manufacture, testing, documentation and delivery
NKT Holding A/S Subsea 7
100% 100%
documentation and delivery The Company is the third largest player in the market for
flexible pipe systems estimated at DKK 8bn (USD 1.5bn) annually with a global market share of app. 15%
The production facility in Kalundborg Denmark is well-
SubSeaFlex Holding A/S Danco AS
51% 49%
The production facility in Kalundborg, Denmark is wellestablished and has a yearly capacity of close to 175 km of pipes depending on size and design
The HQ and the main R&D facility is located in Brndby, DK
NKT Flexibles also has an R&D facility in Aalborg DK and a
Customer mix
NKT Flexibles I/S
Pipes product mix
Jumpers NKT Flexibles also has an R&D facility in Aalborg, DK and a sales representation in Rio de Janeiro, Brazil (Houston & Perth in progress)
Total employee base of app. 650 primarily based in Denmark
I M 2011 NKT Fl ibl DKK 9 7b (USD 1 9b )
Petrobras50%
Others40%Risers
17%
Jumpers3%
In May 2011, NKT Flexibles won a DKK 9.7bn (USD 1.9bn) four-year framework agreement with Petrobras covering the supply of flexible pipes during 2012-2015 Subsea 7
10%
Static Flowlines
80%
12Proprietary information by NKT Flexibles I/S
Stand-alone Organisation Operating Independently
Organisational StructureNKT Flexibles Organisation NKT Flexibles is run as a stand alone
company with its own management team, production and R&D facilities
Separate IT and reporting structure
CEOMichael C. Hjorth
COOReidar Kleven
CFOKeld Ringgaard13 employees
No overlapping functions or employees with NKT Holding or other companies in NKT Holding or Subsea 7 Group
Projects are run by one of NKT Flexibles Ri k A tS l
Legal4 employees
HR14 employees
HSEQ31 employees
LEAN4 employees
E i iPl t
13 employees
four project units which have a combined capacity of up to approx. 40 simultaneous projects
R&D65 employees
Risk Assessment1 employees
Sales18 employees
Engineering93 employees
Purchase22 employees
Projects45 employees
Plant340 employees
Corporate governance
NKT Flexibles was spun-off from NKT Cables in 1999 and has since then operated as a JV
Board of directors
Thomas Hofman-Bang, CoB (CEO - NKT Holding)
Stephen G. Wisely (EVP Commercial - Subsea 7) A shareholder agreement governs the relationship between NKT Holding and
Subsea 7 vis--vis NKT Flexibles
From a shareholder perspective the JV is governed at the board of directors level where both NKT Holding and Subsea 7 participates
Sren Isaksen (CTO - NKT Holding)
Jan W. van der Graaf (VP Strategy - Subsea 7)
13Proprietary information by NKT Flexibles I/S
Knowledge and Services
NKT Flexibles Integrity Management and Services is based on more than four decades of expertise working with NKT Flexibles Integrity Management and Services is based on more than four decades of expertise working with design, development and production of flexible pipe solutions
Within this field NKT Flexibles deliver a variety of consultancy services as listed below
Engineering Services Pre Installation Services Post Installation Services FEED studies Flow assurance studies Upheaval buckling analysis
Flow rate test to verify venting system Outer sheath leak test to demonstrate
intact outer sheath sealing mechanism
Flow rate test to verify the venting system
Offshore annulus vacuum test
g g
Input to Design Competitions Delivery of software monitoring and
analysis systems Preparation of input for Client specs
Annulus vacuum test to confirm no outer sheath damage and to estimate volume
Samples of polymer/carcass coupons for referencing
Calibration of fiber-optic monitoring systems
Retrofitting of gas analysis equipment on any flexibles including umbilical'sp p p
Re-evaluation of flexible pipe service life Assessment effects of change in
operational parameters Evaluation of data collected from
Mounting of fiber-optic monitoring system for fatigue life assessment
Mounting of fiber optic monitoring system for temperature measurement
Ad-hoc repair work
Evaluation of data collected from monitoring systems
Prepare, review and assessment of regular integrity reports
Mounting of annulus gas monitoring systems
14Proprietary information by NKT Flexibles I/S
State of The Art and Flexible Production Facility
Kalundborg Site Key Facts Located at the harbour of Kalundborg (~100km west of Copenhagen) Employs around 370 people Manufacturing facilities occupy a total site of 150,000 m
Capacit e pansion / technolog impro ement program completed end Capacity expansion / technology improvement program completed end 2010:
Total Capex expenditure of DKK 300m Increased capacity from 120km to 175km of pipes p.a. (increase of p y p p p (
+40%) Completed within budget Production capacity can be increased by add. 20-25% at modest
costcost Factory equipped with dual production lines allowing the simultaneous
manufacture of both long continuous lengths and shorter reel based products
Own quayside with water depths ranging from 7 m to 10 m allowing virtually any installation vessel or heavy lifter access to handle all sizes and lengths of flexible pipe
15Proprietary information by NKT Flexibles I/S
NKT Flexibles Markets for Flexible Pipes
NKT Fl ibl h l d 200
Project characteristicsOffshore Oil & Gas Reference Projects
NKT Flexibles has completed +200 projects worldwide since 2000
Current average project size is approximately DKK 55m, on par with recent years
1
3
3
recent years This represents a mix of a few large
projects and a wide range of medium and small project sizes
3
32
1
Average size of projects2
21
3NKT expected to be shared #2 after establishment of 68
Main markets
3
establishment of Brazilian facility
1026
3723
13 15 17
51 47
6856 49 56
Main markets
Water & Chemical
Oil & Gas
x NKTF regional market positions
0
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
B
16Proprietary information by NKT Flexibles I/S
Customer Base Reflecting Global Market Structure NKT Flexibles is a project-oriented company whose
business is based on bidding for customer tenders Directly to the global offshore oil and gas
Average Customer Mix 2009-2011ES l t d thDirectly to the global offshore oil and gas
industry Through partnership with Subsea 7
Petrobras, Brazils largest oil company, is the largest Petrobras50%
Others40%
Selected others:
, g p y, gcustomer accounting for approx. 50% of revenues
The current frame agreement will expire by end-2011
Has been replaced by a new larger frame
50%
Subsea 710%
Petrobras
Has been replaced by a new larger frame agreement to 2015 entered into earlier this year
The share of revenue generated through Subsea 7 has gradually decreased over the years
Deepwater capex by operator 2010-20 (USDbn)10%
ShellStatoil
BPTotal In the beginning of the JV, Subsea 7 (formally
Acergy) accounted for as much as 60% of revenues
By comparison for the period 2009 2011B the
0 20 40 60 80 100
ConocoPhilipsChevron
ExxonMobilBy comparison for the period 2009 2011B the average share of revenue from Subsea 7 is approx. 10%
Today, NKT Flexibles is considered a fully independent
Current NKT Flexibles customers
0 20 40 60 80 100solutions provider in the market
17Proprietary information by NKT Flexibles I/S
Petrobras - a dominant source of future demand
Comments Petrobras Capex 2011-2015 (USDbn)
Petrobras represents a unique anchor customer: Unmatched investment profile going forward
Shown strong sign of confidence in NKT Flexibles offering Provides access to decisive Brazilian market
45.4%
54.6%Pre salt
Post salt
9.8
70.6
13.213.4
150
200
250
Provides access to decisive Brazilian market
Attractive downside demand protection in coming years
Investment profile expected to drive demand going forward
Lever for deep water technology development
18%17%Exploration
Development
Inf rastructure
117.7
9.8
0
50
100
B il E&P I tl E&P RTM
Petrobras production (000 boe/day)
6 0307,000
65%InfrastructureBrazil E&P Intl. E&P RTM
G&P Other
E&P equipment and services demand estimates
Current Delivery Plan (to be contracted)
4,910435
618
1,120
2,535
3,688
6,030
3,0004,0005,0006,000,
P lt
By 2013 By 2015 By 2020
Drilling rigs water depth above 2km 15 39 37 65
S l d i l l 287 423 479 568
Critical resourcesCurrent
situation(Dec/10)
Delivery Plan (to be contracted)Accumulated value
2,1003,070435
01,0002,000
2011 2015 2020Oil production Gas production
543 1,148
Pre-salt Supply and special vessel 287 423 479 568
Production platforms SS & FPSO 44 54 61 94
Others (Jacket and TLWP) 78 80 81 83p p
Source: Petrobras
18Proprietary information by NKT Flexibles I/S
New DKK 9.7bn Petrobras Frame Agreement
On 30 May 2011 NKT Flexibles signed a DKK 9.7bn four year frame agreement with Petrobras (FA-II) covering supply On 30 May 2011 NKT Flexibles signed a DKK 9.7bn four year frame agreement with Petrobras ( FA II ) covering supply of flexible pipes during 2012 2015
Covers pipes at water depths of 1,500m to 2,000m Includes up to 694km of flexible pipe structures with a total potential value of DKK 9.7bn
Mi i bli ti f 12 5% f th t t l l di t 86k f i d DKK 1 2b i Minimum obligation of 12.5% of the total value per annum corresponding to 86km of pipes and DKK 1.2bn in value per annum
The agreement marks a significant expansion of the existing three-year frame agreement to 2011 (FA-I), which has a total value of up to DKK 1.4bn and will be fully utilized end-2011total value of up to DKK 1.4bn and will be fully utilized end 2011
FA-II has an assumed EBITDA margin that is supportive of the target 20-25% EBITDA margin by 2015
An input price inflation indexation mechanism is built into the agreement which should serve to protect the margins
As part of FA-II, NKT Flexibles will establish a new dedicated flexible pipes plant in Brazil expected to come into operation by mid-2013
In the period 2012 first half 2013 flexible pipes related to the agreement will be manufactured at the plant in Kalundborg hi h ill hi h it tili ti t th l twhich will ensure high capacity utilization at the plant
19Proprietary information by NKT Flexibles I/S
Competitor Overview
Competitor OverviewCompetitive Landscape
Factories in France, Brazil, Malaysia Focus on large/complex all-in-one solutions Main geographic focus: Global
The flexible pipes market is split between 3 players Key competitive advantages are related to:
R&D and innovation capabilitiesLocal presence in the important Brazilian market Product offering: 2 19
Listed on Euronext Paris
Factories in the UK and Brazil
Local presence in the important Brazilian market Quality Partnering strategy
NKT Flexibles is strong in RoW and will compete for 2nd Factories in the UK and Brazil Focus on projects with standard products Main geographic focus: Brazil & Australia Product offering: 2 16
NKT Flexibles is strong in RoW and will compete for 2nd position when the new factory in Brazil is ready
Market Shares Based on Capacity (km)
Building a factory in Brazil Focus on production of smaller pipes
Acquired by General Electric in Dec 20102010
12%41%26%
5% Technip
Wellstream
2010PF
Focus on production of smaller pipes Main geographic focus: Brazil Listed on Milan Stock Exchange
52%36%28%
NKT Flexibles
Prysmian
20Proprietary information by NKT Flexibles I/S
P d t d S l tiProducts and Solutions
Product portfolio
Dynamic Risers : 2ID to 16ID / -45C to +130C / 0 to 690 bar / 2,000m WD / up to ~2,500m long
Static Flowlines : 2ID to 16ID / -45C to +130C / 0 to 690 bar / 2,000m WD / up to ~15,000m long
Static Jumpers : 2ID to 16ID / -45C to +130C / 0 to 690 bar / 2,000m WD / up to ~500m long
FPSO
Ri
Fl Li
Risers
JumpersFlow Lines
J p
22Proprietary information by NKT Flexibles I/S
Pipe Design for Every API 17J Application
GAS, OIL, WATER, CHEMICALS, 2 to 16 ID down to 2000m water depth depending on size
The main design is divided into three families:Family 1 Smooth Bore smooth bore (liner), pressure + tensile armour, outer sheathFamily 2 Rough Bore carcass, liner, special tensile armour, outer sheathFamily 3 Rough Bore Reinforced carcass, liner, pressure + tensile armour, outer sheathEach family may include special purpose layers such as anti wear and insulation layers.
FAMILY 1 FAMILY 2
Each family may include special purpose layers such as anti wear and insulation layers.
FAMILY 1 FAMILY 2FAMILY 3
23Proprietary information by NKT Flexibles I/S
Engineering Capacity
More than 190 Engineers+90 i P j t E i i+90 in Project Engineering
(Pipe + System + Structural + End fitting)+60 in Research & Development
+20 in Project Management and Sales+20 in Manufacturing Operations
24Proprietary information by NKT Flexibles I/S
Project Management and HSEQ
IPMA Certified Project ManagersIPMA Certified Project ManagersCertification is performed according to procedures developed and validated by the International Project Management Association (IPMA). j g ( )
15 Project Managers30 Project Assistants & Document Controllers30 Project Assistants & Document ControllersDivided into 4 Project Management Units (PMU) each dedicated to certain Clients or regions
+20 HSEQ Personnel
25Proprietary information by NKT Flexibles I/S
Intense Focus on Safety and High Quality
Health, Safety, Environment and Quality (HSE&Q) Quality Assurance Explicit HSE&Q policy implemented 20 HSE&Q personnel Policy in full compliance with the Danish Occupational
Health & Safety Act and the Danish Working
Robust quality system in accordance with the require-ments of ISD 9001:2000, ISO 14001, OHSAS 18001, API Q1 Monogram License
NKT Flexibles participated in the development of API ifi ti d thi ifi ti d i dHealth & Safety Act and the Danish Working
Environment Act NKT Flexibles in close cooperation with clients regarding
HSE&Q improvements, e.g.:Statoil Kollega Program
specification and we use this specification as design code for all flexible pipes
Quality system focused on entire value chain including: Contract review
Statoil Kollega Program Be a professional campaign partners include:
Project management Design & Engineering review Procurement Manufacturingg Testing As-built documentation
Aim to maintain a dynamic quality system ensures continuous improvement in all parts of the operationcontinuous improvement in all parts of the operation
26Proprietary information by NKT Flexibles I/S
Temperature and Fatigue Monitoring
Detection/Monitoring of:
Outer Sheath Breach
Polymer Overheating
Temperature During Shut-DownTemperature During Shut Down
Accumulated Fatigue Damage
Tensile Wire Break
PETROBRAS, Monitored JumperT il Wi B k D t ti- Tensile Wire Break Detection
- Outer Sheath Breach Detection
STATOIL Visund FutureSTATOIL, Visund Future- Accumulated Fatigue Damage
27Proprietary information by NKT Flexibles I/S
Engineering Services Extended Service Life
FEEDs Reassesment studies:
- Fatigue Life Studies- Polymer Coupon Analysis
Flow Assurance Studies- Flow Assurance Studies- Temperature Studies- Change of Service
STATOIL Frame Agreement Engineering Services including FEEDsSTATOIL, Frame Agreement Engineering Services including FEED sGDF Norway, Frame Agreement Engineering and Offshore Services
28Proprietary information by NKT Flexibles I/S
Product Development
Innovative technical solutions form the platform for NKT Flexibles product portfolio
Development in R&D Costs 2006 2011E
4.9%
Flexibles product portfolio
R&D spending comprise approx. 5% of revenues with current activities targeted towards areas such as:
Extremely high temperature applications
76
3.0%
3.9%y g p pp
(>130C) Product improvement through deep immersion
performance (DIP) test Ultra deep water applications at +2 500m
38 37
50
2.0%
2.6%
1.7%
Ultra deep water applications at +2,500m Improved condition monitoring through real-time
sensing of pressure and gas composition Lateral buckling (tensile wire instability) testing
1822
% Qualification of PVDF grade for commercial use
NKT Flexibles has highly modern R&D facilities at the headquarters in Copenhagen and has more than 60 FTEs working with R&D related activities
2006A 2007A 2008A 2009A 2010PF 2011E
FTE s working with R&D related activities
Innovation is supported by an active patent strategy
29Proprietary information by NKT Flexibles I/S
R&D pipeline
R&D, InnovationGrowth Maturity Stagnation
Conventional Riser System Concepts
Lean Duplex Carcass
K-armour
IPUT
FA II Project
ID12 HPHT
i
o
n
Lean Duplex Carcass
IR-cured XLPE applications
FLEXTREME
Monitor Jumper
Super Critical CO2
Pipe Integrity Management
I
n
n
o
v
a
t
i
C
u
l
t
u
r
e
Demand
Un-plasticized PVDF
Strip-armoured Flowlines
Fibre Re-inforced Technology
Management Service
Shallow Water SystemsDemand
Profit
Time
y
30Proprietary information by NKT Flexibles I/S
Free Hanging Catenery ConceptsFree Hanging Catenery Concepts
Water DepthDepth
500 m
I
I
I
P
i
p
e
s
1,000 m
1,500 mConventional flexible pipe I
F
a
m
i
l
y
I
,
2,000 m
flexible pipe technology
M
E
I
P
U
T
A
P
I
API Fam III free hanging
2,500 m
3,000 m
New flexible pipe technology
E
X
T
R
E
M
I
g gcatenery mark
3,500 m
F
L
E
31Proprietary information by NKT Flexibles I/S
Ultra DeepwaterUltra Deepwater
200 mTop Jumper
Proof-of-Concept program for 2250
Top Sectionmeter water depth completed successfully
ID6 / ID8 free hanging catenary t
900 m
system Optimized sections Novel structures
C fil
Mid Section
Carcass profile Wet insulation Supported pressure armor
1800 m1800 m
Bottom Section
Water depth 2250 m
32Proprietary information by NKT Flexibles I/S
Financial Review
Track Record of High Double-Digit Growth
2000-05: 18% CAGR 2005-10: 26% CAGR 2010-15: 22% CAGR
3,52758.0% 54 0%
63.5%
53 9% 55 7% 3,527
47.0%54.0%
48.0%44.0%
47.6%53.9% 55.7%
46.4%
15 6%21.4%
33.1%
23.2% 23.5%15 3%
27.8%
215 266 305 197491
884
1,2551,399 1,313 1,279
1,546
-6% -7.2%-1.8%
-17.2%
10.8%15.6% 15.3%
215 266 223305 197
2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010PF 2011E 2015F
Revenue Gross margin % EBITDA %
Phase I: Beginning (99-05) Initial penetration into the
off-shore sector Revenue driven by Acergy
orders
Phase II: Growth (06-08)
Large order inflow directly from oil companies in order to secure supply of critical
Phase III: Slowdown (09-11)
Oil companies investment and new projects impacted by financial crisis
Phase IV: Return to growth
New projects expected as oil prices and drilling activity remain highorders
Improving profitability
pp yequipment
High prices and capacity utilisation drives profitability
y
Low capacity utilisation and eroding margins
g
Improved profitability from better market conditions and capacity utilisation
* Note: 2010 and 2011 revenue gross margin and EBITDA has been adjusted with DKK 77m and DKK 70m respectively to reflect the price adjustment mechanism in the Petrobras
34Proprietary information by NKT Flexibles I/S
Note: 2010 and 2011 revenue, gross margin and EBITDA has been adjusted with DKK 77m and DKK 70m respectively to reflect the price adjustment mechanism in the Petrobras FA-I agreement.
Backlog development
Other FA-II
4,850
1,305 1,241 1,068 1,231 1,088 1,001
2006 2007 2008 2009 2010 Current
General pipeline FA-II Pre-backlog expected to grow due to improving market
activity reflecting a continued solid oil price Expect more flowline work in North Sea associated with tie-
back projects
p p Material part of work for 2012 secured with the award of FA-II
FA-II a significant element in ensuring visibility of future activity from 2012 - 2015p j
Expect increased demand for flexible riser systems due to influx of new FPSO / FPU projects globally
The contract stipulates that Petrobras shall on an annual basis award call-off order(s) amounting to 86km of products representing around 12.5% of the overall FA-II contract value
35Proprietary information by NKT Flexibles I/S
NKT Flexibles Strategy
2008 2011YTD AchievementsN DKK 9 7b f f k
Key Industry Drivers 2011 2015 Strategic Goals1 B i t l l ith i l New DKK 9.7bn four year framework
agreement (FA-II) signed with Petrobas (7x larger than the previous agreement FA-I )Development and commercialization of 6
1. Bring company to a new level with special focus on capitalising on the Petrobrasagreement in Brazil
2. Ensure annual capacity load of +150km/year
Development in oil prices Exploitation of deep
water reservoirs Use of floating and Development and commercialization of 6
and 8 flexible pipes for 2,000 metres depth
Expansion of annual production capacity at Kalundborg factory from 125 km to 175
at the Kalundborg factory3. Develop the overall market position through
human capital, escalating technologies and sustainable processes
Use of floating and subsea developments
Replacement of existing offshore installations
at Kalundborg factory from 125 km to 175 km
p4. Commercialize solutions for +2,500m depths
VisionB ll t f t b th f d li f hi h litBy excellent performance to become the preferred supplier of high quality
flexible pipe systems based on best-in-class technology
Financial Goals Realized 2010 Goal 2015Financial Goals Realized 2010 Goal 2015Revenue (DKK) 1.2bn ~3.5bnEBITDA margin 23.5%* ~25%
* Note: 2010 revenue, gross margin and EBITDA has been adjusted with DKK 77m to reflect the price adjustment mechanism in the Petrobras FA-I agreement.
36Proprietary information by NKT Flexibles I/S
New flexible pipe plant in Brazil from end Q2 2013
1. New Plant in Brazil on schedule
Establish plant for commercial production by end Q2 2013Pre requisite for FA II number one priority
Key Figures for the Brazil Business Case Pre-requisite for FA-II number one priority Recent ramp-up of Kalundborg provides useful
experience
The new facility will more than double current capacity
E
B
I
T
D
A
125
568 575
The new facility will more than double current capacity Capacity to produce 225km standardized 6 pipe Corresponds to 25% - 30% of the capacity
available in Brazil based on current capacitiesD i d f ti fl f P t b t
E
-17 -117
696 Designed for optimum flow of Petrobras type standardized flexible pipe in the 2.5-12 ID range
The initial investment costs will amount to approx. DKK 1.1bn of which approx. DKK 700 will fall in 2012
C
a
p
e
x
1
196
696
18250 37
pp
In addition there will be a working capital tie-up of DKK 400 600m in the first 2 years of operation
With the facility assumed approx. 75% utilized from 2014 d l EBITDA f DKK 0 i d
i
n
W
C
50 70
10onwards annual EBITDA of DKK +550m is targetedC
h
a
n
g
e
-365-248
-10
2011E 2012E 2013E 2014E 2015E
Note 1: Capex includes R&D expenditure
Brazilian site for new flexible pipe plant
Perfectly located in front of Brazils main offshore oil & gas development areas
39Proprietary information by NKT Flexibles I/S
On Schedule with site for new flexible pipe plant
LLX Terminal Sul offshore facility which will become part of the Port Acu industrial condominium in So Joo da Barra.
40Proprietary information by NKT Flexibles I/S
On Schedule with Factory lay-out
41Proprietary information by NKT Flexibles I/S
On Schedule with Machinery and Equipment
The technical, legal and commercial clarifications for all main process lines have been completed by end of July 2011by end of July 2011.
LOIs and/or POs for the following main equipment have been issued: 2 @ Carcass lines July 2011 2 @ Carcass lines July 2011 2 @ Extruder lines July 2011 1 @ Pressure Armouring line (similar to the new in KAL) July 2011 1 @ Tensile Armouring line (similar to the new in KAL) May 2011 1 @ Tensile Armouring line (similar to the new in KAL) May 2011 6 @ Rewind Lines July 2011 1 @ Insulation Tape Wrapper July 2011
2 @ Jumbos (Load capacity 400 T / 11 4 m reels hub drive) June 2011 2 @ Jumbos (Load capacity 400 T / 11.4 m reels, hub drive) June 2011 29 @ Powered Under Rollers July 2011
all of which confirm delivery within NKTs perceived project schedule. All th i i t ill b ifi d d d d ithi Q2 2012All other main equipment will be specified and ordered within Q2 2012
Annual theoretical capacity of ~225km 6ID flexible pipe and prepared for IPUT type products
42Proprietary information by NKT Flexibles I/S
2. Capacity Load of >150 km/year at Kalundborg
FA-II work will provide significant visibility to Kalundborg backlog for 2012 with some 86km of flexible pipe to be executed for the Brazilian market with transition of production to Brazil plant planned for end of Q2 2013executed for the Brazilian market with transition of production to Brazil plant planned for end of Q2 2013
Continued focus on selected niches is to ensure near-full capacity load at the Kalundborg factory beyond 2012:1. Mutually beneficial partnering type arrangements
Key focus is to evolve around strong existing relationships with strategic major clients such as Statoil, ONGC d f k i d d t il iONGC and a range of key independent oil companies
Strong historical link to Subsea 7 Strong position with FPSO contractors
2. Improved competitiveness through technology and cost base2. Improved competitiveness through technology and cost base Selection and maturing of incremental technology improvements to create new safe havens over time,
e.g. XLPE/PEX, etc. Strong day-to-day focus on operational efficiency to spur a continued lowering of production unit costs
3 Add d i3. Added services Focus on utilization and commercialization of internal know-how and/or resources Creation of new market opportunities inside existing core area as well as outside the current frame
4. Aggressive market positioninggg p g Focused effort on aggressive positioning for selected larger strategically important projects Increased production capacity allows to some extent for a trade of margin for volume
Based on a full factory corresponding to a ~75% utilization factor the factory has estimated annual revenue potential of approx DKK 1 9bn from 2014 onwards based on current price and margin levelsapprox. DKK 1.9bn from 2014 onwards based on current price and margin levels
43Proprietary information by NKT Flexibles I/S
44Proprietary information by NKT Flexibles I/S