Emergency exits 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. 2
Second quarter results 2013 Photo: Trønder-Avisa, Marius Langfjord 3
Highlights 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 High activity on the Hebron project. * Including incorporated joint ventures. 4
Key financials Revenues NOK million EBITDA NOK million Net current operating assets NOK million 4 000 200-85 3 500-100 3 000 2 500 150-200 -300-432 -514-579 2 000 1 500 1 000 3 000 2 430 2 930 2 907 3 616 100 50 85 42 125 103 163-400 -500-600 -700-840 67 0 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13-800 -900 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 500 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 ¹ EBITDA margin 2.8% 2.8%² 4.3% 3.5% 4.5% 5 ¹ Gain on sale of EPC Center Houston. ² EBITDA margin excluding sales gain.
Order intake and -backlog Order intake NOK million Order backlog NOK million 16000 35 000 14000 30 000 29 637 12000 25 000 ~30% 10000 20 000 8000 6000 15 000 ~40% 4000 10 000 2000 2 305 5 000 ~30% 0 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Upstream Downstream & Industrials Note: All figures include incorporated joint ventures. 0 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Estimated scheduling as of 30 June 2013: For execution in 2013 For execution in 2014 For execution in 2015 and later 6
Second quarter operations 7
Health, safety, security and environment 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 4.0 LTIF TRIF Highlights 3.0 Focus on risk observations 2.5 2.0 1.0 0.4 0.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 8
Operational highlights Overall high activity level CLAIR RIDGE JACKETS ELDFISK TOPSIDE Optimising resources in Contractors Norway and International Nytt bilde New gantry crane being installed at Stord Both jackets successfully delivered to BP Final assembly activities on-going GARRISON ENERGY CENTER HEBRON GBS Construction team mobilised on site Slip forming of shafts on-going 9
Second quarter financials Eiliv Gjesdal, Chief Financial Officer
Income statement Amounts in NOK million Q2 2013 Q1 2013 Q2 2012 YTD 2013 YTD 2012 ¹ FY 2012 Restated Total 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 % Note: Restated figures for previous periods are reflecting impacts from implementing IAS 19R Employee Benefits. Revenues excluding incorporated joint ventures. 11
Q2 2013: Upstream review Financials Activity level in Norway increasing Early cycle projects with limited contribution Orders Growth in existing contracts, especially within procurement Revenues, EBITDA and EBITDA margin NOK million Order backlog and order intake NOK million 4 000 3 000 2 000 2 554 2 191 3 054 3 411 3 914 30 000 25 000 20 000 15 000 22 318 21 433 15 196 20 226 29 844 12 805 28 153 1 000 118 100 137 131 183 0 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 EBITDA-% 4.6% 4.6% 4.5% 3.8% 4.7% 10 000 5 000 0 1 296 1 848 2 329 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Revenues EBITDA Order backlog at the end of the quarter Order intake in the quarter Note: All figures include incorporated joint ventures. 12
Q2 2013: Downstream & Industrials review Financials Lower activity level than historically expected for 2013 Negative results in the range of NOK 20-30 million expected for 2013 Revenues, EBITDA and EBITDA margin NOK million Orders Net order intake nil due to scope reduction in a contract for US Steel corp. Order backlog and order intake NOK million 700 689 2 000 1 799 442 1 500 1 489 300 261 244 338 1 000 702 1 039 981 933 6 46 7-100 -8-2 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 EBITDA-% 0.9% 10.4% 2.7% (3.1)% (0.7)% 500 0 234 358 148 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Revenues EBITDA 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 in Q4 12. Historical figures include EPC Center Houston. 13
Strong revenue visibility Order backlog estimation by execution year (as of 30 June 2013) NOK million 30 000 29 637 Revenues in excess of NOK 16 billion estimated for 2013 25 000 20 000 15 000 10 000 5 000 2013 & later 2012 2011 2014 & later 2013 2012 2015 & later 2014 2013 Q2 2011 Q2 2012 Q2 2013 Note: All figures include incorporated joint ventures. Booked 2012-13 Booked 2010-11 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 14
Cash flow and working capital development Amounts in NOK million Q2 2013 Q1 2013 Q2 2012 YTD 2013 YTD 2012 FY 2012 Cash 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 million Downstream & Industrials: Capital tied up in the Longview project Upstream: 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 1 000 500 0-500 -1 000-1 500-2 000 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Downstream & Industrials Group Upstream ¹ Invoicing in excess of cost and estimated earnings less amounts billed in advance but not received (on a project by project basis). 15
Balance sheet 30.06.2012 Restated FY 2012 Restated Amounts in NOK million 30.06.2013 31.03.2013 Assets Total 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 16
Closing remarks The Stord yard with the Eldfisk topside in front and the crane installation on-going. 17
On-going improvement initiatives to strengthen competitiveness New operating model implemented Corporate staff reduced by 35 percent Assessing options for the future of the Verdal yard 18
Opportunities in all target markets Alaska & Canada Activities on-going to position concrete sub-structures High potential in Newfoundland and Labrador North America Certain wards for gas fired power plants seems to be sliding Steel maintenance market see some reduction in spending North Sea Johan Sverdrup key target Opportunities for completion and hookup projects Caspian Strong future market, uncertain timing Development of delivery model on-going Kashagan expected on-stream in 2013 Arctic Russia Strong future market Studies on-going in in several areas Kara Sea field seismic surveys started Asia Pacific Multiple opportunities within next 24 months Robust delivery model established High activity on studies for Arctic areas Positive medium- and long-term market prospects 19
Summary 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 20
APPENDIX 22
The current EPC project portfolio 2011 2012 2013 2014 2015 Value at award Mongstad TCM NOK 525M Eldfisk topside NOK 5.5B Nyhamna onshore Edvard Grieg topside Nordsee Ost wind jackets NOK 11B NOK 8B 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 Norway Jackets Concrete Solutions Contractors International Onshore Americas 23
Revenue distribution Share of revenues 2011 Percent Share of revenues 2012 Percent Share of revenues last 12 months Percent NOK 13.3 billion NOK 10.7 billion NOK 11.9 billion Contractors International Onshore Americas Concrete Solutions Jackets Contractors Norway 24
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. 25