Akastor — Interim / Quarterly Report 2017

May 3, 2017

Kristian Røkke and Leif H. Borge

First Quarter Results 2017

Kristian Røkke and Leif Borge Oslo | May 3, 2017

Agenda

HIGHLIGHTS Kristian Røkke CEO

FINANCIALS Leif Borge CFO

Q & A Kristian Røkke and Leif Borge

Condensed Consolidated Income Statement

		First Quarter	Full Year
NOK million	2017	2016	2016
Operating revenues and other income	1 018	1 353	5 310
Operating expenses	(958)	(1 400)	(5 241)
Operating profit before depreciation, amortization
and impairment (EBITDA)	59	(48)	69
Depreciation and amortization	(161)	(184)	(746)
Impairment	-	(32)	(473)
Operating profit (loss)	(102)	(264)	(1 151)
Net financial items	(135)	(192)	(1 174)
Profit (loss) before tax	(237)	(456)	(2 324)
Tax income (expense)	43	110	307
Profit (loss) from continuing operations	(193)	(346)	(2 017)
Net profit from discontinued operations	382	(20)	734
Profit (loss) for the period	189	(366)	(1 282)

The Akastor Portfolio

NET CAPITAL EMPLOYED OF NOK 8.7 BILLION

1) Equity excludes cash flow hedge reserve

© 2016 Akastor First Quarter Results 2017 3 May 2017 Slide 5

NET CAPITAL EMPLOYED OF NOK 8.7 billion

Capital Structure

• Net Interest bearing debt of NOK 3 bn as of Q1
• ― Gross Debt of NOK 3 351 million, of which financial lease NOK 1 590 million and bank debt NOK 1 762 million
• ― Cash of NOK 315 million
• ― Interest bearing assets of NOK 67 million
• Liquidity reserve of NOK 1.8 bn
• ― Undrawn credit facilities of NOK 1.5 bn
• ― Max limits of Revolving facilities reduced by NOK 0.7 bn
• Waiver agreed with bank syndicate in January 2017:
• ― The ICR Ratio (financial covenant) replaced by nominal EBITDA covenant throughout Q2 2018
• ― The revolving facilities reduced by another NOK 717 million, of which NOK 600 million was originally planned for Q1 2018
• ― Relaxation on restrictions on acquisitions for up to NOK 1.0 bn

FUNDING

	SIZE	MATURITY	MARGIN
REVOLVING	USD 241 million	July 2019	1.65%–4.5%
REVOLVING	NOK 1 005 million	July 2019	1.65%–4.5%
BRAZIL FACILITY	BRL 130 million	May 2022	8.5% average cost

MINIMUM EBITDA COVENANT*

2017		2018
Q1	150	Q1	325
Q2	150	Q2	425
Q3	175
Q4	225

* last twelve months EBITDA, adjusted for non-recurring items like restructuring costs and sales gains

MHWirth

• Q1 2017 revenues down 31 % compared with Q1 2016
• EBITDA of NOK 55 million in the quarter, EBITDA margin of 8.8 %
• Order intake of NOK 471 million
• NCOA up NOK 159 million to NOK 1.25 billion

Revenue and EBITDA

NOK million

© 2016 Akastor

AKOFS Offshore

• Skandi Santos with somewhat lower utilization during Q1
• EBITDA of NOK 33 million in Q1
• AKOFS Seafarer remains cold stacked. Opex below USD 10 000 per day.
• Aker Wayfarer on stand-by in Norway, awaiting start-up of the 5+5 year contract with Petrobras

Revenue and EBITDA

NOK million

KOP Surface Products Other Holdings

• Revenues of NOK 76 million in the quarter, EBITDA of NOK 6 million
• Still challenging market conditions
• Order intake of NOK 69 million in Q1

66 65

• Step Oiltools, Cool Sorption and First Geo: EBITDA of NOK -5 million
• Effect from hedges not qualifying for hedge accounting of NOK -2 million

Revenue and EBITDA NOK million

^{81 76}

Revenue and EBITDA

123 NOK million

Additional information

Condensed Consolidated Income Statement

		First Quarter	Full Year
NOK million	2017	2016	2016
Operating revenues and other income	1 018	1 353	5 310
Operating expenses	(958)	(1 400)	(5 241)
Operating profit before depreciation, amortization and impairment (EBITDA)
	59	(48)	69
Depreciation and amortization	(161)	(184)	(746)
Impairment	-	(32)	(473)
Operating profit (loss)	(102)	(264)	(1 151)
Net financial items	(135)	(192)	(1 174)
Profit (loss) before tax	(237)	(456)	(2 324)
Tax income (expense)	43	110	307
Profit (loss) from continuing operations	(193)	(346)	(2 017)
Net profit from discontinued operations	382	(20)	734
Profit (loss) for the period	189	(366)	(1 282)

Condensed Consolidated Statement of Financial Position

NOK million	31.03.2017	31.12.2016
Deferred tax asset	635	600
Intangible assets	1 702	1 731
Property, plant and equipment	5 035	5 198
Other non-current assets	153	104
Equity accounted investees and other Investments	615	213
Non-current interest-bearing receivables	51	51
Total non-current assets	8 191	7 897
Current operating assets	4 223	4 250
Current interest-bearing receivables	16	15
Cash and cash equivalents	315	487
Assets classified as held for sale	-	212
Total current assets	4 553	4 964
Total assets	12 744	12 861
Equity attributable to equity holders of Akastor ASA	5 762	5 580
Total equity	5 762	5 580
Deferred tax liabilities	15	15
Employee benefit obligations	374	380
Other non-current liabilities and provisions	418	445
Non-current borrowings	2 997	1 494
Total non-current liabilities	3803	2 334
Current operating liabilities and provisions	2825	3 209
Short borrowings	355	1 560
Liabilities classified as held for sale	-	177
Total current liabilities	3 180	4 947
Total liabilities and equity	12 744	12 861

Key Figures

AKASTOR GROUP (continuing operations)

Amounts in NOK million	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17	2016
Operating revenue and other income	1 353	1 392	1 196	1 370	1 018	5 310
EBITDA	(48)	(140)	91	166	59	69
EBIT	(264)	(355)	(108)	(424)	(102)	(1 151)
CAPEX and R&D capitalization	65	43	37	17	16	162
NCOA	2 031	2 114	1 700	1 072	1 392	1 072
Net capital employed	10 211	10 207	9 569	8 078	8 726	8 078
Order intake	932	1 137	814	1 024	712	3 907
Order backlog	12 078	8 323	7 583	7 753	7 394	7 753
Employees	3 504	3 009	2 859	2 702	2 628	2 702

Split per Company MHWIRTH

Amounts in NOK million	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17	2016
Operating revenue and other income	907	1 010	831	800	627	3 548
EBITDA	(63)	(16)	91	59	55	71
EBIT	(163)	(119)	23	(293)	9	(552)
CAPEX and R&D capitalization	11	14	3	8	3	36
NCOA	1 811	1 683	1 393	1 091	1 250	1 091
Net capital employed	3 909	4 032	3 846	3 200	3 338	3 200
Order intake	631	912	604	789	471	2 936
Order backlog	5 363	1 668	1 490	1 481	1 325	1 481
Employees	2 477	2 059	1 849	1 738	1 648	1 738

Split per Company AKOFS OFFSHORE

Amounts in NOK million	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17	2016
Operating revenue and other income	159	142	190	344	186	835
EBITDA	38	32	49	196	33	316
EBIT	(41)	(45)	(45)	(3)	(48)	(134)
CAPEX and R&D capitalization	48	25	28	7	12	108
NCOA	103	256	150	121	192	121
Net capital employed	5 142	5 264	4 880	4 378	4 372	4 378
Order intake	23	7	48	28	6	106
Order backlog	6 145	6 160	5 719	5 900	5 672	5 900
Employees	93	93	167	113	106	113
KOP SURFACE PRODUCTS
Amounts in NOK million	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17	2016
Operating revenue and other income	123	66	65	81	76	335
EBITDA	14	(5)	(5)	(27)	6	(22)
EBIT	(1)	(19)	(18)	(42)	(5)	(80)
CAPEX and R&D capitalization	3	2	5	2	1	13
NCOA	187	163	148	119	125	119
Net capital employed	490	461	425	396	393	396
Order intake	115	71	48	87	69	321
Order backlog	138	144	120	133	124	133
Employees	549	502	494	488	481	488

Split per Company OTHER HOLDINGS

Amounts in NOK million	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17	2016
Operating revenue and other income	194	189	137	155	143	674
EBITDA	(37)	(151)	(45)	(63)	(35)	(296)
EBIT	(59)	(172)	(68)	(86)	(58)	(385)
CAPEX and R&D capitalization	3	2	-	1	-	5
NCOA	(68)	12	10	(258)	(175)	(258)
Net capital employed	670	451	419	104	624	104
Order intake	204	149	139	129	173	621
Order backlog	415	312	228	224	272	224
Employees	385	355	349	363	393	363

Copyright and disclaimer

Copyright

Copyright of all published material including photographs, drawings and images in this document remains vested in Akastor 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 Akastor ASA and Akastor 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 Akastor ASA. 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 Akastor 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. Akastor ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Akastor ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.