NKT Flexibles

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


Growth driven by non-OECD countries


Long term demand for oil and gas


Conventional Petroleum remains dominant


Oil price forecasts

Source: Bloomberg, BofAML Global Commodity Research (February 2010) Source: Short-Term Energy Outlook, August 2011


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


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.


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%


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)


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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.


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


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.


On Schedule with Factory lay-out


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


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


Documents

NKT Flexibles