Akastor — Investor Presentation 2015

Mar 17, 2015

Creating value through active ownership

London | 17 March 2015 Frank O. Reite and Leif Borge

Agenda

THIS IS AKASTOR

Frank O. Reite CEO

FINANCIALS Leif Borge CFO

Akastor is set up to create value through active ownership

Our mandate	Oilfield services investment company with a flexible mandate for long-term value creation
Our portfolio	Portfolio companies with multiple levers for growth and improvements
Our approach	Value creation through active ownership combining a range of strategic, operational and financial measures

Akastor - the investment portfolio

*2014 numbers

© 2015 Akastor

March 17, 2015 Slide 4

Our investments – eight stand-alone companies

MHWIRTH Global provider of drilling systems, products and services

KOP SURFACE PRODUCTS

Provider of surface wellheads and trees in APAC and MENA

AKOFS OFFSHORE

Well construction and intervention services to the oil and gas industry

FIRST GEO

Petroleum sub-surface consultancy

FRONTICA BUSINESS SOLUTIONS

Global provider of business and corporate services

STEP OILTOOLS

Provider of Drilling Waste Management products and services

FJORDS PROCESSING

Global provider of process systems and services for oil, gas and water treatment

REAL ESTATE AND FINANCIAL HOLDINGS

The Akastor portfolio of investments

NET CAPITAL EMPLOYED 13 Billion NOK (2014)

REVENUE 21.4 Billion NOK (2014)

Systematic value creation "the Akastor way"

ASSESS SITUATION

• Dialogue with stakeholders
• Financial and operational benchmarking
• Assessment of historic performance and strategy

• Identify areas for improvement, short-, mid- and long term

• Decide on time horizon and actions

• Define metrics and milestones

EXECUTE, ADJUST AND FOLLOW-UP 3

• Close interaction with management
• Frequent reporting
• Corrective actions
• Focus on speed in execution and simplicity (80/20)

1

Corporate governance established: A set of tools and reports developed to support execution and measurability

• Tool-box of reporting standards giving…

…a continuous detailed understanding of the development of the investment

…a defined system of authority between management and the owner / the Board

• Reporting procedures allowing us to: …closely monitor each company
• The current market environment puts pressure on terms and financing
• … Net current operating assets
• … Cash generation
• … Net interesting bearing debt

For illustrative purposes only. Not Akastor data

Experienced teams with track record of execution

23

PROFESSIONALS: INVESTMENT TEAM CFO & SUPPORT FUNCTIONS

A TRACK RECORD OF VALUE CREATION

CEOS, HEADING EACH PORTFOLIO COMPANY 8

CAPABLE MANAGEMENT WITH INDUSTRIAL EXPERIENCE

MHWirth

941 Million NOK EBITDA in 2014

Million NOK Revenue in 2014

Employees

4,237

MHWirth is a leading global provider of first-class drilling solutions, equipment and services. One of only two providers of complete topside packages and riser systems for floaters.

10,681

Installed base supports long term life cycle business

30

Europe

8

Africa

CURRENT INSTALLED BASE BY REGION PER END 2014

INSTALLED BASE BY AGE AND TYPE By type By age

9

Asia/ MENA

78 in total

ACTIVE SUPPLY AND REGIONAL DEMAND

FLOATERS SCRAPPED (2005-2015)

Source: RS Platou Rig Monthly, 17 February 2015

RIG UTILIZATION

• Steep drop in utilization due to oversupply
• Currently a total of 394 floaters in service and on book (278 active, 31 passive fleet, 84 on order)
• Demand recovery estimated at 280-290 units
• As per 17.2.2015 owners have announced intent to remove/scrap 23 floaters

NEAR TERM

• Very challenging market with a low activity level resulting in capacity costs and pressure on margins
• Cost base and capital discipline
• Initiated capacity reduction process aiming to reduce 500-750 personnel
• Estimated NOK 500-600 million annual cost reduction
• Managing Brazilian exposure

ROADMAP FOR VALUE CREATION

• Protect DLS business
• Standardization and streamlining
• Strengthening customer relations
• Organizational effectiveness
• Challenging markets may create interesting opportunities

AKOFS Offshore

© 2015 Akastor

AKOFS Offshore is a global provider of vessel based subsea well construction and intervention services to the oil and gas industry.

AKOFS Offshore

STRONG PERFORMANCE IN SUBSEA INSTALLATION

• Skandi Santos secured 5yr contract (98% utilization in 2014 – currently docking)
• Aker Wayfarer secured 5+5yr contract (89% utilization in 2014, 100% YTD2015) (current work extended through July 2015)
• Focus on operational excellence and re-building of Aker Wayfarer

AKOFS SEAFARER: TOP PRIORITY TO SECURE WORK

• Purchase of hull completed in February for MUSD 122.5, all financed with new bank debt
• Significantly reduced OPEX level
• All opportunities to secure work being pursued

ROADMAP FOR VALUE CREATION

• Capitalize on Brazilian business
• Fix Skandi Aker

Frontica Business Solutions

315 Million NOK EBITDA in 2014 5,753

Million NOK Revenue in 2014 1,356 Employees

Frontica Business Solutions provides cost efficient corporate services that enable companies to become faster and more efficient.

© 2015 Akastor March 17, 2015 Slide 16

Frontica Business Solutions

COMPETITIVE POSITION

• Manpower, and Service provider to the Oil & Gas industry
• Portfolio of 3 000 highly skilled engineering consultants
• Managing 30 000 IT users
• Global delivery model, local presence

ROADMAP FOR VALUE CREATION

• Leverage current platform
• Cost optimisation
• Gradually broaden customer base

Fjords Processing

52 Million NOK EBITDA in 2014

© 2015 Akastor

2,322 Million NOK

Revenue in 2014

617 Employees

Fjords Processing provides well stream processing technology, systems, and services to the upstream oil and gas industry

Fjords Processing

COMPETITIVE POSITION

• Provider of complete processing systems, both onshore and offshore
• Comprehensive product portfolio
• World leading processing technologies within defined niches

ROADMAP FOR VALUE CREATION

• Increase profitability through improving and streamlining operations
• Grow Lifecycle Services
• Secure technology differentiation

KOP Surface Products

156 Million NOK EBITDA in 2014

© 2015 Akastor

1,119

Million NOK Revenue in 2014 854

Employees

KOP Surface Products is a provider of surface-installed wellheads, Xmas trees, valves and actuators for offshore and land-based oil and gas production

KOP Surface Products

COMPETITIVE POSITION

• Reliable products
• Competitive manufacturing capabilities
• Strong foothold in APAC

ROADMAP FOR VALUE CREATION

• Expand manufacturing capacity with minimal capex
• Increase profitability through identified cost potential
• Enter and grow in the Middle-East

A REMARKABLE GROWTH STORY

Real Estate and other holdings

FIRST GEO

Leading provider of operations and wellsite geology services in Norway with activities within geophysical interpretation, geological modelling, petrophysics and reservoir engineering.

REAL ESTATE

Includes a portfolio of 8 real estate assets in Norway

Real Estate

STEP OILTOOLS

Step Oiltools is an independent provider of quality Drilling Waste Management products and services.

OTHER HOLDINGS

DOF Deepwater, Ezra Holdings, Aker Pension Fund Company and Aker Insurance Company.

Agenda

THIS IS AKASTOR

Frank O. Reite CEO

FINANCIALS Leif Borge CFO

The Akastor portfolio

NET CAPITAL EMPLOYED NOK 13 BILLION PER 4Q 2014

NOK million

¹⁾ Including leased asset of NOK 1 500 million

Capital structure

NET INTEREST BEARING DEBT NOK 3.6 BILLION PER 4Q 2014

NOK million

FUNDING

	Term loan	Revolving credit facility	AKOFS Seafarer facility*	Brazil facility
Size	NOK 2.5 billion	NOK 2.0 billion	USD 125m	BRL 129m
Maturity	September 2017	September 2019	February 2017	December 2021
Margin	1.4%-2.3%	1.3%-2.2%	1.4%-1.8%	6.1% average total cost

COMMENTS

• Disposal of MHWirth triggers repayment of Term loan and Revolving credit facility
• Disposal of other assets triggers repayment of Term loan with 50% of proceeds
• Separate financing of other assets triggers repayment of Term loan with financed amount
• Aker Wayfarer financial lease: Financial costs of NOK 205m in 2015

*Loan to Akastor ASA with same terms and conditions as term loan

www.akastor.com

© 2015 Akastor March 17, 2015 Slide 26

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.