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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


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 Brøndby, 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 Brøndby, 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-à-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

• Søren 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 m²

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

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

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, Brazil’s 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 : 2½”ID to 16”ID / -45C to +130C / 0 to 690 bar / 2,000m WD / up to ~2,500m long

Static Flowlines : 2½”ID to 16”ID / -45C to +130C / 0 to 690 bar / 2,000m WD / up to ~15,000m long

Static Jumpers : 2½”ID to 16”ID / -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, 2½” 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 FEED’sSTATOIL, 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 FTE’s 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

ion

Lean Duplex Carcass

IR-cured XLPE applications

FLEXTREME

Monitor Jumper

Super Critical CO2

Pipe Integrity Management

Inno

vati

Cul

ture

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

III P

ipes

1,000 m

1,500 mConventional flexible pipe I

Fam

ily I

,

2,000 m

flexible pipe technology

MEIP

UT

API

API Fam III free hanging

2,500 m

3,000 m

New flexible pipe technology

EX

TR

EMI g g

catenery mark

3,500 m

FLE


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 EBIT

DA

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

Cap

ex1

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

in W

C

50 70

10onwards annual EBITDA of DKK +550m is targetedC

hang

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 São João 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.

• LOI’s and/or PO’s 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 NKT’s 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 6”ID 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


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