Akastor — Investor Presentation 2017

Jul 13, 2017

Kristian Røkke and Leif H. Borge

Second Quarter Results 2017

Leif Borge, CFO Oslo | July 13, 2017

Highlights

Condensed Consolidated Income Statement

	Second Quarter			First half
NOK million	2017	2016	2017	2016	2016
Operating revenues and other income	873	1 326	1 816	2 556	4 975
Operating expenses	(855)	(1 461)	(1 745)	(2 753)	(4 884)
Operating profit before depreciation, amortization and impairment (EBITDA)	18	(135)	71	(197)	91
Depreciation and amortization	(153)	(166)	(302)	(336)	(688)
Impairment	(24)	(35)	(24)	(66)	(473)
Operating profit (loss)	(159)	(336)	(255)	(599)	(1 071)
Net financial items	(258)	(374)	(393)	(566)	(1 174)
Profit (loss) before tax	(416)	(710)	(648)	(1 166)	(2 245)
Tax income (expense)	96	135	138	248	293
Profit (loss) from continuing operations	(321)	(575)	(510)	(918)	(1 953)
Net profit (loss) from discontinued operations	-	(257)	378	(281)	670
Profit (loss) for the period	(321)	(832)	(132)	(1 198)	(1 282)

Slide 3

The Akastor Portfolio

NET CAPITAL EMPLOYED OF NOK 8.7 BILLION NOK million NIBD NCOA Intangible assets Investments 2216 1225 3230

Funding Market Cap as of

11.07.17

NET CAPITAL EMPLOYED OF NOK 8.7 billion

1) Equity excludes cash flow hedge reserve

Net Capital Employed

Fixed assets

Other

© 2017 Akastor Slide 4 Second Quarter Results 2017 13 July 2017

Capital Structure

Net Interest bearing debt of NOK 3 230 million as of Q2

• − Gross Debt of NOK 3 450 million, financial lease NOK 1 570 million and bank debt NOK 1 880 million
• − Cash of NOK 189 million
• − Interest bearing assets of NOK 31 million
• Liquidity reserve of NOK 1.6 billion of which undrawn credit facilities NOK 1.4 billion

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

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

MHWirth

• Revenues of NOK 550 million in the quarter, of which 78% from services
• EBITDA of NOK 0 million in the quarter including;
• ⁻ Restructuring costs of NOK 52 million
• Order intake of NOK 614 million
• NCOA down NOK 131 million to NOK 1 119 million

Revenue and EBITDA

NOK million

AKOFS Offshore

• EBITDA of NOK 37 million in Q2
• AKOFS Seafarer remains cold stacked
• Aker Wayfarer on stand-by in Norway, awaiting start-up of the 5+5 year contract with Petrobras in the fourth quarter ¹⁴²

Revenue and EBITDA

VESSEL PROGRAM

Second Quarter Results 2017 13 July 2017

Other Holdings

• Step Oiltools, Cool Sorption and First Geo: Total EBITDA of NOK 0 million
• Effect from hedges not qualifying for hedge accounting of NOK -1 million

Revenue and EBITDA

NOK million

Agreement to sell KOP Surface Products

• Entered definitive agreement to sell KOP Surface Products to The Weir Group PLC for USD 114 million on a cash- and debtfree basis
• Accounting gain of approximately NOK 700 million to be realized
• Transaction closing expected in Q3 2017

Additional information

Condensed Consolidated Income Statement

	Second Quarter			First half
NOK million	2017	2016	2017	2016	2016
Operating revenues and other income	873	1 326	1 816	2 556	4 975
Operating expenses	(855)	(1 461)	(1 745)	(2 753)	(4 884)
Operating profit before depreciation, amortization and impairment (EBITDA)	18	(135)	71	(197)	91
Depreciation and amortization	(153)	(166)	(302)	(336)	(688)
Impairment	(24)	(35)	(24)	(66)	(473)
Operating profit (loss)	(159)	(336)	(255)	(599)	(1 071)
Net financial items	(258)	(374)	(393)	(566)	(1 174)
Profit (loss) before tax	(416)	(710)	(648)	(1 166)	(2 245)
Tax income (expense)	96	135	138	248	293
Profit (loss) from continuing operations	(321)	(575)	(510)	(918)	(1 953)
Net profit (loss) from discontinued operations	-	(257)	378	(281)	670
Profit (loss) for the period	(321)	(832)	(132)	(1 198)	(1 282)

Slide 11

Condensed Consolidated Statement of Financial Position

NOK million	30.06.2017	31.12.2016
Deferred tax asset	700	600
Intangible assets	1 517	1 731
Property, plant and equipment	4 790	5 198
Other non-current assets	149	104
Equity accounted investees and other Investments	604	213
Non-current interest-bearing receivables	22	51
Total non-current assets	7 781	7 897
Current operating assets	3 507	4 250
Current interest-bearing receivables	9	15
Cash and cash equivalents	189	487
Assets classified as held for sale	533	212
Total current assets	4 239	4 964
Total assets	12 020	12 861
Equity attributable to equity holders of Akastor ASA	5 395	5 580
Total equity	5 395	5 580
Deferred tax liabilities	7	15
Employee benefit obligations	348	380
Other non-current liabilities and provisions	382	445
Non-current borrowings	3 038	1 494
Total non-current liabilities	3 775	2 334
Current operating liabilities and provisions	2 318	3 209
Current borrowings	412	1 560
Liabilities classified as held for sale	120	177
Total current liabilities	2 850	4 947
Total liabilities and equity	12 020	12 861

Key Figures

AKASTOR GROUP (continuing operations)

Amounts in NOK million	Q2 16	Q3 16	Q4 16	Q1 17	Q2 17	YTD 2017
Operating revenue and other income	1 326	1 130	1 288	943	873	1 816
EBITDA	(135)	95	193	53	18	71
EBIT	(336)	(90)	(382)	(96)	(159)	(255)
CAPEX and R&D capitalization	41	31	15	15	15	30
NCOA	1 951	1 552	954	1 268	1 228	1 228
Net capital employed	9 746	9 144	7 682	8 333	8 250	8 250
Order intake	1 066	766	937	643	746	1 389
Order backlog	8 182	7 466	7 624	7 295	7 112	7 112
Employees	2 539	2 386	2 244	2 178	2 067	2 067

Split per Company MHWIRTH

Amounts in NOK million	Q2 16	Q3 16	Q4 16	Q1 17	Q2 17	YTD 2017
Operating revenue and other income	1 010	831	800	627	550	1 177
EBITDA	(16)	91	59	55	-	55
EBIT	(119)	23	(293)	9	(71)	(62)
CAPEX and R&D capitalization	14	3	8	3	8	11
NCOA	1 683	1 393	1 091	1 250	1 119	1 119
Net capital employed	4 032	3 846	3 200	3 338	3 200	3 200
Order intake	912	604	789	471	614	1 085
Order backlog	1 668	1 490	1 481	1 325	1 409	1 409
Employees	2 059	1 849	1 738	1 648	1 535	1 535

Split per Company AKOFS OFFSHORE

Amounts in NOK million	Q2 16	Q3 16	Q4 16	Q1 17	Q2 17	YTD 2017
Operating revenue and other income	142	190	344	186	187	373
EBITDA	32	49	196	33	37	70
EBIT	(45)	(45)	(3)	(48)	(46)	(94)
CAPEX and R&D capitalization	25	28	7	12	7	18
NCOA	256	150	121	192	221	221
Net capital employed	5 264	4 880	4 378	4 372	4 307	4 307
Order intake	7	48	28	6	(4)	2
Order backlog	6 160	5 719	5 900	5 672	5 439	5 439
Employees	93	167	113	106	113	113

Split per Company OTHER HOLDINGS

Amounts in NOK million	Q2 16	Q3 16	Q4 16	Q1 17	Q2 17	YTD 2017
Operating revenue and other income	189	137	155	143	151	294
EBITDA	(151)	(45)	(63)	(35)	(19)	(55)
EBIT	(172)	(68)	(86)	(58)	(41)	(99)
CAPEX and R&D capitalization	2	-	1	-	-	-
NCOA	12	10	(258)	(175)	(112)	(112)
Net capital employed	451	419	104	624	744	744
Order intake	149	139	129	173	143	316
Order backlog	312	228	224	272	269	269
Employees	387	380	393	424	420	420

© 2017 Akastor Second Quarter Results 2017 13 July 2017 Slide 17

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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.