Q3 Third quarter results 2012 Fornebu, Øyvind Eriksen and Leif Borge 2012 Aker Solutions Slide 1
Agenda Q3 2012 Introduction Øyvind Eriksen Executive chairman Financials Leif Borge President & CFO Q&A Q&A session Øyvind Eriksen Leif Borge 2012 Aker Solutions Slide 2
Active markets, operational improvements Q3 2012 Controlled growth Operational stability Active market. Breakthrough contracts Bringing product offering into new markets Our commitment: Double in size from 2010 to 2015 2012 Aker Solutions Slide 3
Q3 2012 Key figures Revenues and EBITDA NOK billion Order intake and backlog NOK billion 14 Revenues EBITDA Intake Backlog 3,5 30 60 12 3 25 50 59.7 10 11.2 2,5 20 40 8 2 6 1,5 15 16.9 30 4 2 1 0,5 1.1 10 5 20 10 0 0 0 0 Q2 3 4 1 2 3 Q2 3 4 1 2 3 Q2 3 4 1 2 3 Q2 3 4 1 2 3 2011 2012 2011 2012 2011 2012 2011 2012 Slide 4
Q3 2012 Some highlights by region Brazil Drilling packages for 6 drillships for Jurong Angola Skandi Aker contract for vesselbased intervention services in deep waters Brunei Maintenance, modifications and operations business expanding from home market Norway Visund and Troll subsea contract awards Slide 5
Q3 2012 By business area Profitability Percentage EBITDA margin Growth Percentage growth versus Q3 2011 WIS 17 % 23 % Revenue growth Backlog growth MLS DRT ENG 16 % 14 % 15 % 13 % 14 % 13 % OMA 68 % NA SUB 50 % -15 % ENG 46 % -28 % DRT 35 % 77 % OMA MMO SUB PRS UMB -23% -19 % 12 % 9 % 8 % 9 % 9 % 5 % 2,1 % 1,5 % Q3 2011 Q3 2012 MMO 29 % 10 % UMB 23 % -8 % PRS 20 % 24 % WIS 7 % -5 % MLS -9 % -21 % Total 30 % 33 % Slide 6
Strategically optimising asset base Lewek Connector sold Acquisition of Subsea House/SSH Acquisition of facility in Sandnessjøen Opening new subsea service base in Malaysia Buy-back of manufacturing and service facilities in Norway Slide 7
Selected market trends and recent events Legend Trends Aker Solutions events North America Race for the unconventional Deep sea picking up Strengthened regional presence Brasil High activity, capacity issues in sector Investments in capacity expansion North Sea Discoveries in new horizons Drive towards field life extension Record-high tender activity Cat B contract award M East, N Africa Prolific region, with unrest Acquisition paves way for expanded sales in region West Africa Pre-salt opportunities Local contents a challenge Skandi Aker well intervention charter Asian yards Ruling the market for rigs and FPSOs Break-through with Hyundai for drilling package for Seadrill Asia Pacific Strong gas focus driven by energy needs in region High tender activity and order intake Building capacity in SUB and UMB Slide 8
Agenda Q3 2012 Introduction Øyvind Eriksen Executive chairman Financials Leif Borge President & CFO Q&A Q&A session Øyvind Eriksen Leif Borge Slide 9
Consolidated income statement 1 (NOK million) Q3 12 Q3 11 YTD 2012 YTD 2011 2011 Operating revenues and other income 11 158 8 561 32 888 24 874 36 474 EBITDA 1 122 322 3 519 2 398 3 445 Of which related to non-recurring items - - 165 1 757 2 757 2 Of which related to hedging (2) 40 61 46 44 Depreciation and amortisation (288) (193) (821) (599) (876) EBIT 834 129 2 698 1 799 2 569 Net financial items (116) (345) (325) (543) (531) FX on disqualified hedging instruments 16 2 (51) (6) 35 Profit before tax 734 (214) 2 322 1 250 2 073 Tax (182) 5 (566) (343) (482) Net profit 552 (209) 1 756 907 1 591 Profit from discontinued operations 0 1 345 0 3 663 3 663 Profit for the period 552 1 136 1 756 4 570 5 254 EBITDA margin (excl. non-recurring items) 10.1 % 3.8 % 10.2 % 6.8 % 7.5 % Basic earnings per share (NOK) 2.04 (0.83) 6.47 3.26 5.77 1 NOK 165 million in gain from the sale of real estate in Q2 2012. 2 NOK 757 million in gain from the sale of Aker Marine Contractors in Q1 2011. Slide 10
Q3 2012 Consolidated cash flow, capex and NCOA Cash flow from operations negative NOK 50 million in the quarter Group NCOA of NOK 3.5 billion (Q2: NOK 2.7 billion) Main reason for growth in NCOA is phasing of DRT projects Expecting NCOA level to drop to a more normalized level of 5 %-6 % of revenues in Q4 2012 Cash flow NOK million Net current operating assets (NCOA) NOK million 5 300 50 750 100 6 000 4 000 3 000 2 000 1 000 0 Net debt Q2 12 Cash from operations (negative) Capex Other Net debt Q3 12-1 000 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Slide 11
Q3 2012 Financial position Q3 2012 net debt of NOK 6.0 billion (Q2: net debt of NOK 5.3 billion) In October 2012 NOK 345 million was released in connection with the sale of Lewek Connector to OceanYield AS. The vessel was sold for a total consideration of USD 315 million 27 September 2012 successfully completed the issue of NOK 1.0 billion bond with maturity in October 2019 Debt maturity profile NOK million Note: Revolving credit facility of NOK 6 billion, drawn approx. NOK 3.0 billion, maturing in 2016 LTM EBITDA, NIBD and NIBD/LTM EBITDA NOK million Note: NIBD and LTM EBITDA as reported. NIBD NIBD/EBITDA 6000 5000 4000 3000 2000 1000 0 2013 2014 2015 2016 2017 2018 2019 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0-1 000-2 000 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 2 1,8 1,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0-0,2-0,4 Slide 12
Engineering Engineering Revenue growth 46 % compared to Q3 2011 Another quarter with strong results Strong performance from the North Sea and Malaysia Low activity in the downstream market in India Product Solutions Process Systems Strong order intake in the quarter Bidding activity remained high for all process system technologies Strong result contribution from Norway Brazil and Canada contributed negatively to the results due to execution challenges Revenues, EBITDA and EBITDA margin NOK million 766 1 170 995 1 229 1117 Revenues, EBITDA and EBITDA margin NOK million 358 410 293 336 428 EBITDA margin 109 145 109 129 142 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 32 18 25 23-13 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 14.2 % 12.4 % 11.0 % 10.5 % 12,7 % EBITDA 8.9 % 4.4 % -4.4 % 7.4 % 5,4 % margin Slide 13
Product Solutions Subsea Revenue growth 50 % compared to Q3 2011 Better execution drives margin improvements New wave of projects coming up in 2013 Focus on quality performance and supply chain initiatives Brazil turnaround progressing well Revenues, EBITDA and EBITDA margin NOK million 3 401 Umbilicals Revenue growth 23 % compared to Q3 2011 High tender activity and positive market outlook in all regions Limited progress on new projects as awards have been delayed Very high utilisation in Moss, Mobile plant not fully utilised Revenues, EBITDA and EBITDA margin NOK million 685 1 927 2 638 2 445 2 899 420 413 506 518-445 143 203 268 252 9 64 21 26 8 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 EBITDA margin -23.1 % 5.4 % 8.3 % 7.9 % 8,7 % EBITDA 2.1 % 9.3 % 5.1 % 5.1 % margin 1.5 % Slide 14
Product Solutions Drilling Technologies Revenue growth 35 % compared to Q3 2011 Projects execution continues to be solid High activity in the drilling equipment market Drilling packages for 6 drillships for Jurong Mooring and Loading Systems Main deliveries on schedule Lifecycle services with stable contribution Positive offshore market, high tender activity Marine market challenging Revenues, EBITDA and EBITDA margin NOK million Revenues, EBITDA and EBITDA margin NOK million 2 408 1 595 1 974 2 146 2 156 251 313 292 279 228 246 289 243 260 273 41 49 47 40 32 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 EBITDA 15.4 % 12.0 % 12.3 % 12.1 % 12.7 % EBITDA 16.3 % 15.7 % 16.1 % 14.3 % 14.0 % margin margin Slide 15
Field-Life Solutions MMO Revenue growth of 29 % compared to Q3-11 Strong growth in existing project portfolio Generally high activity levels in all regions Award of offshore contract by Brunei Shell Petroleum Well Intervention Services High activity level and good performance in the North Sea Margins negatively effected by low activity in West Africa, Middle East and Asia Pacific General market outlook for well intervention services remains strong Revenues, EBITDA and EBITDA margin NOK million 2 235 2 910 2 504 2 782 2 877 Revenues, EBITDA and EBITDA margin NOK million 551 624 569 560 587 204 243 268 244 232 125 114 104 109 101 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 EBITDA 9.1 % 8.4 % 10.7 % 8.8 % 8.1 % EBITDA 22.7 % 18.3 % 18.3 % 19.5 % 17.2 % margin margin Slide 16
Field-Life Solutions Oilfield Services and Marine Assets Key priorities Skandi Santos (Petrobras) Maintain operational excellence Skandi Aker (Total) Start up of operation in Angola and demonstrate operational stability Cat-B (Statoil) Conclude the technical specifications, place construction contracts and safeguard the capex budget Revenues, EBITDA NOK million Asset values Total NOK 5.2 bn 390 450 350 138 199 203 96 232 700 3700 Aker Oildfield Services Ezra Aker DOF Deepwater AMC Connector -26-23 5 28 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Slide 17
Order backlog and order intake Order backlog by execution date NOK million Order intake NOK 17 bn NOK million 22 500 26 000 OMA 1 532 10 500 WIS 332 MMO 3 695 2012 2013 Later MLS 299 All time high backlog of NOK 60 bn NOK million PRS 718 70 000 ENG DRT SUB MMO Other DRT 7 262 60 000 50 000 UMB 500 40 000 30 000 SUB 1 908 20 000 10 000 - Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 ENG 560 Slide 18
Agenda Q3 2012 Introduction Øyvind Eriksen Executive chairman Financials Leif Borge President & CFO Q&A Q&A session Øyvind Eriksen Leif Borge Slide 19
Q&A Third quarter results 2012 Fornebu, Øyvind Eriksen and Leif Borge 2012 Aker Solutions Slide 20
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Additional information Slide 22
Consolidated cash flow (NOK million) Q3 11 Q4 11 Q1 12 Q2 2012 Q3 2012 Net cash flow from operating activities 1 227 1 182 (122) (487) (51) Net cash flow from investing activities (1 058) (2 223) (708) 461 (774) Net cash flow from financial activities (27) 939 698 (441) 1 551 Translation adjustment (243) 53 (34) (53) (35) Net +/- in cash and bank deposits (101) (49) (166) (520) 691 Cash and bank deposits as at start of period 3 663 1 357 1 308 1 142 622 Cash and cash equivalents in Kvaerner at demerger Cash and bank deposits as at end of period (2 205) 1 357 1 308 1 142 622 1 313 Note: The figures are available in Excel on the Aker Solutions website. Slide 23
Consolidated assets (NOK million) Q3 11 Q4 11 Q1 12 Q2 12 Q3 2012 Property, plant and equipment 7 343 7 409 7 732 8 179 8 518 Intangible assets 6 409 6 843 6 776 7 040 7 162 Financial assets (non-current) 859 856 1 000 1 208 1 260 IB receivables (non-current) 673 704 702 767 757 IB receivables (current) 525 534 492 683 665 Other current assets 13 184 14 525 16 159 19 391 19 323 Cash and bank deposits 1 357 1 308 1 091 622 1 313 Non-current assets classified as held for - 1 831 1 891 - - sale / distribution to owners Total assets 30 350 34 010 35 843 37 890 38 998 Note: The figures are available in Excel on the Aker Solutions website. Slide 24
Consolidated debt and equity (NOK million) Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Shareholders' equity 10 201 10 797 11 360 10 790 11 363 Minority interests 181 169 173 159 170 Non IB liabilities (non-current) 2 764 2 797 2 660 2 756 2 844 Interest bearing debt (non-current) 4 506 5 371 6 044 6 561 8 628 Non IB liabilities (current) 12 252 14 202 14 882 16 780 15 932 Interest bearing current liabilities 446 629 675 844 61 Liabilities held for sale / distribution to - 45 49 - - owners Total liabilities and Shareholders equity 30 350 34 010 35 843 37 890 38 998 Total net current operating assets 911 306 1 273 2 719 3 488 continuing operations Net interest bearing items 2 397 3 454 4 434 5 332 5 954 Equity 10 382 10 966 11 533 10 949 11 533 Equity ratio (%) 34.2 32.2 32.2 28.9 29.6 Note: The figures are available in Excel on the Aker Solutions website. Slide 25
Split per business segment in Aker Solutions Revenues Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Product Solutions 4 345 4 306 4 514 6 541 19 706 5 394 6 620 6 198 Field Life Solutions 2 643 2 899 2 920 3 716 12 178 3 261 3 709 3 673 Engineering Solutions 625 692 766 1 170 3 253 995 1 229 1 117 Corporate 1 973 1 082 1 153 1 251 5 459 1 310 1 511 1 431 Eliminations (1 082) (1 170) (792) (1 078) (4 122) (1 123) (1 176) (1 261) Revenues 8 504 7 809 8 561 11 600 36 474 9 837 11 893 11 158 EBITDA Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Product Solutions 414 276 (117) 563 1 136 501 619 588 Field Life Solutions 140 248 303 334 1 025 377 449 361 Engineering Solutions 67 53 109 145 374 109 129 142 Corporate 819 59 27 5 910 53 160 31 EBITDA 1 440 636 322 1 047 3 445 1 040 1 357 1 122 Order intake Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Product Solutions 4 377 10 509 5 682 5 272 25 840 6 374 6 456 10 718 Field Life Solutions 4 195 2 630 1 338 2 069 10 232 4 221 15 578 5 535 Engineering Solutions 2 144 1 057 722 592 4 515 670 1 632 560 Corporate 1 432 1 058 1 037 1 205 4 732 1 118 1 403 1 423 Eliminations (999) (952) (803) (1 238) (3 992) (1 076) (2 087) (1 330) Order intake 11 149 14 302 7 976 7 900 41 327 11 307 22 982 16 906 Order backlog Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Product Solutions 17 147 22 671 23 282 22 098 22 949 22 653 26 933 Field Life Solutions 19 632 19 328 17 722 16 185 17 154 29 022 30 896 Engineering Solutions 4 007 4 351 4 297 3 703 3 160 3 624 3 075 Corporate 11 11 7 3 (99) 3 2 Eliminations (380) (410) (422) (540) (274) (1 179) (1 251) Order backlog 40 417 45 951 44 886 41 449 42 890 54 123 59 655 Slide 26
Split per business segment in Aker Solutions Revenues Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Subsea 1 657 1 782 1 927 2 638 8 004 2 445 3 401 2 899 Umbilicals 435 506 420 685 2 046 413 506 518 Drilling Technologies 1 614 1 471 1 595 2 408 7 088 1 974 2 146 2 156 Process Systems 408 293 358 410 1 469 293 336 428 Mooring and Loading Systems 283 301 251 313 1 148 292 279 228 Eliminations (52) (47) (37) 87 (49) (23) (48) (31) Product Solutions 4 345 4 306 4 514 6 541 19 706 5 394 6 620 6198 Maintenance, Modifications and Operations 2 139 2 263 2 235 2 910 9 547 2 504 2 782 2 877 Well Intervention Services 430 497 551 624 2 102 569 560 587 Oilfield Services and Marine Assets 101 143 138 199 581 203 390 232 Eliminations (27) (4) (4) (17) (52) (15) (23) (23) Field Life Solutions 2 643 2 899 2 920 3 716 12 178 3 261 3 709 3 673 Engineering 625 692 766 1 170 3 253 995 1 229 1 117 EBITDA Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Subsea 139 25 (445) 143 (138) 203 268 252 Umbilicals 46 75 9 64 194 21 26 8 Drilling Technologies 170 173 246 289 878 243 260 273 Process Systems 24 (37) 32 18 37 (13) 25 23 Mooring and Loading Systems 35 40 41 49 165 47 40 32 Product Solutions 414 276 (117) 563 1 136 501 619 588 Maintenance, Modifications and Operations 195 191 204 243 833 268 244 232 Well Intervention Services 77 88 125 114 404 104 109 101 Oilfield Services and Marine Assets (132) (31) (26) (23) (212) 5 96 28 Field Life Solutions 140 248 303 334 1 025 377 449 361 Engineering 67 53 109 145 374 109 129 142 Slide 27
Split per business segment in Aker Solutions Order intake Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Subsea 2 555 4 415 2 473 1 991 11 434 2 423 3 203 1 908 Umbilicals 419 1 080 283 524 2 306 297 790 500 Drilling Technologies 1 012 4 427 2 259 2 073 9 771 2 927 2 157 7 262 Process Systems 223 324 390 532 1 469 535 199 718 Mooring and Loading Systems 194 273 293 245 1 005 205 175 299 Eliminations (26) (10) (16) (93) (145) (13) (68) 31 Product Solutions 4 377 10 509 5 682 5 272 25 840 6 374 6 456 10 718 Maintenance, Modifications and Operations 3 724 2 338 1 060 1 418 8 540 3 843 3 434 3 695 Well Intervention Services 762 7 252 472 1 493 373 967 332 Oilfield Services and Marine Assets (9) 34 30 196 251 20 11 319 1 532 Eliminations (282) 251 (4) (17) (52) (15) (142) (24) Field Life Solutions 4 195 2 630 1 338 2 069 10 232 4 221 15 578 5 535 Engineering 2 144 1 057 722 592 4 515 670 1 632 560 Order backlog Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Subsea 9 636 12 277 12 243 11 887 11 887 11 802 11 473 10 395 Umbilicals 1 189 1 747 1 790 1 522 1 522 1 385 1 682 1 647 Drilling Technologies 4 459 6 742 7 268 6 939 6 939 7 862 7 874 12 847 Process Systems 1 074 1 107 1 122 1 029 1 029 1 254 1 104 1 388 Mooring and Loading Systems 884 856 897 831 831 743 640 711 Eliminations (95) (58) (38) (110) (110) (97) (120) (55) Product Solutions 17 147 22 671 23 282 22 098 22 098 22 949 22 653 26 933 Maintenance, Modifications and Operations 15 140 15 192 14 033 12 583 12 583 13 932 14 577 15 400 Well Intervention Services 3 042 2 528 2 253 2 141 2 141 1 949 2 391 2 144 Oilfield Services and Marine Assets 1 704 1 610 1 438 1 463 1 463 1 275 12 177 13 474 Eliminations (254) (2) (2) (2) (2) (2) (123) (122) Field Life Solutions 19 632 19 328 17 722 16 185 16 185 17 154 29 022 30 896 Engineering 4 007 4 351 4 297 3 703 3 703 3 160 3 624 3 075 Slide 28
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Copyright and disclaimer Copyright Copyright of all published material including photographs, drawings and images in this document remains vested in Aker Solutions 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 Aker Solutions ASA and Aker Solutions 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 Aker Solutions 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 Aker Solutions 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. Aker Solutions ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Aker Solutions ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. Aker Solutions consists of many legally independent entities, constituting their own separate identities. Aker Solutions is used as the common brand or trade mark for most of these entities. In this presentation we may sometimes use Aker Solutions, we or us when we refer to Aker Solutions companies in general or where no useful purpose is served by identifying any particular Aker Solutions company. Slide 30