WORLD CLASS through people, technology and dedication KONGSBERG September 20, 2006 1
Kongsberg Maritime Offshore & Merchant Marine Focusing on core technologies building strong application knowledge sales and global support Dyn.Pos & Positioning Automation & Controls Hydroacoustics Simulation Navigation 2
Offshore & Merchant Marine Main product lines Dynamic Positioning Systems Navigation Systems Monitoring and Control Systems Process Automation Hydroacoustics 3
...more than 50 years in the Marine business 4
Offshore & Merchant Marine Main product lines Some examples 5
Dynamic Positioning WORLD CLASS through people, technology and dedication ynamic positioning systems automatically manoeuvre and maintain vessels in onstant positions relative to each other, making it possible to perform complex perations regardless of wind, waves and ocean currents. KONGSBERG September 20, 2006 6
Monitoring & Control Cargo Management WORLD CLASS through people, technology and dedication KONGSBERG September 20, 2006 7
Monitoring & Control Machinery & Propulsion WORLD CLASS through people, technology and dedication KONGSBERG September 20, 2006 8
Process Automation 9
Hydro acoustics Application: Fishery/ Research AUV Hydrography UW Nav. Naval Sonars Products: 10
KONGSBERG MARITIME - Global Operation Nova Scotia (Canada) British Columbia (Canada) Norway Scotland Sweden Washington (USA) Texas (USA) Connecticut (USA) England Spain Italy Germany The Netherlands UAE South Korea China Louisiana (USA) Nigeria Singapore Brazil New York (USA) 11
Kongsberg Maritime Regional Support Centres 24h Norway Louisiana (USA) Singapore Brazil 12
Putting our vision to work Maximize marine performance by providing the full picture We shall earn respect and recognition for our dedication to provide innovative and reliable solutions that ensure optimal and safe operation at sea. 13
We shall be recognised by our behaviour Dependable We believe in quality in all aspects of our behaviour, and we will strive to consistently produce reliable solutions Innovative We are always searching for new possibilities, in order to increase value added to our customers Determined We want to be recognized by our drive and persistence, we just never give in! Networking We believe in generous sharing of knowledge and we establish and develop useful networks 14
Offshore & Merchant Marine Business segment description Segments and sub segments Offshore & Merchant Marine Exploration Field Development Offshore Offshore Production Supply & Support 7 % 67 % Tank 26 % Merchant Marine Dry Cargo - Merchant Marine Passenger vessels 15
Offshore & Merchant Marine Performance trend Operating revenues by quarter EBIT by quarter 900 800 700 600 500 400 300 200 100 0 713 865 862 781 789 790 786 725 741 722 Q1 Q2 Q3 Q4 90 80 70 60 50 40 30 20 10 0 35 84 82 67 66 72 72 69 61 47 Q1 Q2 Q3 Q4 2004 2005 2006 2004 2005 2006 Operating revenues MNOK 862 in Q2, up 9.1% from corresponding quarter last year MNOK 1 727 YTD (up 9.9 %) The business area has smooth operations and good capacity utilisation Earnings before tax MNOK 84 in Q2, up MNOK 23 from corresponding quarter last year MNOK 151 YTD, up MNOK 43 compared with last year The figures have been adjusted for the sale of Yachting 16
Performance trend EBIT Margin 12,00 % 10,00 % 8,00 % 6,00 % 4,00 % 11,10 % 9,70 % 9,50 % 8,40 % 7,70 % 7,70 % 6,00 % 4,90 % 10,00 % 9,20 % 2,00 % 0,00 % Q1 Q2 Q3 Q4 Margin 04 Margin 05 Margin 06 9.7 % EBIT margin in 2nd quarter (7.7 %) YTD 8.7 % (6.9 %) 17
Offshore & Merchant Marine New orders and backlog of orders New orders Order backlog 1400 1200 1000 800 600 400 994 1173 909 1068 857 806 3000 2500 2000 1500 1000 1896 2466 1997 2673 2107 2158 200 500 0 Q1 Q2 Q3 Q4 0 Q1 Q2 Q3 Q4 2005 2006 2005 2006 Good influx of new orders in Q2 MNOK 1 068 in new orders (MNOK 2 241 YTD) All-time record high backlog of orders (MNOK 2 673) New orders for rigs came to MNOK 370 in Q2, and MNOK 770 YTD. 18
Offshore & Merchant Marine Market Outlook - Merchant marine Merchant marine market, stable at a good level. LNG/LPG still very active The dominance of Far East shipyards influence this operation No. of Ships 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Merchant Marine Market Development 2002-2009 (31.08.2006) 2002 2003 2004 2005 2006 2007 2008 2009 Tanker Bulker Container PAX 19
Cargo Management Custody Transfer System Reliq. Plant Control Manoeuvring Navigation ESDS Gas Combustion Unit Control Thruster Control Ballast Management Alarm Management Power Management Machinery Management Propulsion Control 20
Merchant marine Integrated vessel control system Cargo management (CTS) and control Machinery automation, incl. PMS and switchboard control Propulsion management and control Integrated bridge control (INS/IBS) Dynamic positioning/manoeuvring Positioning systems (AIS and GNSS) Voyage data recorders (VDR) Onboard and ship-to-shore information management systems 21
Offshore & Merchant Marine Market Outlook - Drilling segment WORLD-WIDE SUBSEA DEVELOPMENT WELLS BY WATER DEPTH Drilling segment is important to KONGSBERG 30% of contracted drilling rigs/vessels have not ordered equipement relevant to KONGSBERG No. of wells 600 500 400 300 200 2500+ m 1800-2499 m 900-1799 m 500-899 m 200-499 m 100-199 m 75-99 m 5-74 m 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Start-up year - Source Infield/ Offshore Research 22
Integrated Automation System Power Management Ballast control Accommodations Auxiliary systems Safety Systems ESD F&G Water tight doors Thruster Control Dynamic Positioning Green DP Reference system Manoeuvreing System RMS 23
Offshore & Merchant Marine Market Outlook Floating Production Deep water and harsh environment is postive to KONGSBERG FLOATING PRODUCTION UNITS PER WATER DEPTH 300 250 Accumulated no. of FPU's 200 150 100 1800 m + 900-1799 m 500-899 m 200-499 m 100-199 m 3-99 m 50 0 1979 1982 1984 1986 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Year installed - Source Infield/ Offshore Research 24
Dynamic Process Simulation Process Control Safety Systems Navigation &Reference Systems Power Management Cargo Level Gauging Marine Control Positioning Systems Subsea Control Riser Management 25
Offshore & Merchant Marine Market Outlook Floating Production KONGSBERG have strenghten its position within Floating Production during 2006 Bluewater Aoka Mizu Marathon Alvheim BP Skarv 26
Offshore & Merchant Marine Market Outlook Subsea activities Growth in subsea activities are positive to KONGSBERG; Dynamic Positioning and Hydroacoustic productlines Accumulated subsea pipelaying (km) 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 1 882 Accumulated 3 627 5 685 9 136 12 412 15 978 18 548 21 575 25 694 Subsea pipeline volume (km) grows by 12%... Market penetration Assumptions: 29 525 33 570 20% 30% CAGR 22.7% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006e 2007e 2008e 2009e 2010e 37 859 42 717 46 810 51 503 57 054 62 072 Pipelaying 1882 1744 2058 3451 3276 3565 2570 3027 4118 3831 4045 4289 4858 4093 4694 5551 5018 and subsea wells grows by 12%... Accumulated number of wells started 6 000 5 000 Accumulated Market penetration Assumptions: 20% 30% CAGR 22.7% 4 384 4 000 3 526 3 952 3 000 2 000 1 000 0 Wells started 3 098 2 700 2 363 2 081 1 857 1 629 1 370 1 134 948 686 513 359 213 105 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006e 2007e 2008e 2009e 2010e 105 108 146 154 173 262 186 236 259 228 224 282 337 399 428 426 432 27
Subsea Hydroacoustic productlines Autonomous underwater vehicles; the HUGIN (AUV) product line Underwater navigation (Hi PAP) Underwater cameras Hydrographical survey instrumentation Acoustic instruments for all types of bottom investigations Naval sonar for submarine and mine identification By transmitting sonar (sound) signals underwater and measuring the strength and direction of the echo, the submersible craft can chart the seabed. 28
Offshore & Merchant Marine Market Outlook Subsea surveying West Africa 36 % HUGIN Survey KM by Area (1997-2004) 70 000 KM Brazil 3 % Gulf of Mexico 43 % Mediterranean 4 % North Sea 14 % Offshore Field Operations 29
Offshore & Merchant Marine Market Outlook - Subsea Vessels KONGSBERG`s ability to maintain its current position will decide future growth in this segment Subsea vessel market per category DP 2 Vessels 250 105 % No. of vessels (365 days) 200 150 100 50 85 % 65 % 45 % 25 % 5 % Utilisation (300/365 days) Idle/maintenance None oil & gas Other oil & gas Transit Decommission Operation (OPEX) Installation (CAPEX) Utilisation (300/365) - 1994 1996 1998 2000 2002 2004 2006 2008 Year -15 % - Source Infield/ Offshore Research 30
Offshore & Merchant Marine Market Outlook - PSV & AHTS Vessels The use og advanced manuvering equipement( DP, Thruster control ) spreads to all PSV and AHTS segments WORLD CLASS through people, technology and dedication KONGSBERG September 20, 2006 31
Kongsberg Maritime Offshore & Merchant Marine KONGSBERG have established a solid plattform for further expansion within Oil & Gas industry 32
Fantoft a new member of the KONGSBERG family KONGSBERG has acquired Fantoft Process Technologies The acquisition is in line with KONGSBERG's strategy for placing more emphasis on the international oil and gas industry Products and services Fantoft Process Technologies has comprehensive expertise within modelling, simulation and control of processes, as well as long experience with consultancy services for engineering communities in the oil and gas industry. Delivered a number of customerspecific training simulators at home and abroad. Oil and Gas (offshore and onshore) LNG and LPG (Liquified gas) Pipelines (single phase and multiphase) Refineries Chemistry and petrochemicals Power plants Market areas 33
WORLD CLASS through people, technology and dedication KONGSBERG September 20, 2006 34