Akastor — Investor Presentation 2021

Jul 15, 2021

Second Quarter Results 2021 Akastor ASA

Karl Erik Kjelstad (CEO) & Øyvind Paaske (CFO)

Fornebu | 15 July 2021

Presenters and agenda

Portfolio highlights

Financial update

Q&A session

Portfolio Highlights

Akastor portfolio composition

Industrial investments Financial investments

100% Leading global provider of first-class drilling systems, products and services
50% Global provider of subsea well construction and intervention services
64%1) Global provider of well design and drilling project management, HSEQ, reservoir and field management services
100% Supplier of vapour recovery technology, systems and services to O&G installations

Global manpower specialist within Oil & Gas, ICT, Renewables, Chemicals, Mining, Life Sciences, Automotive and Construction sectors ~ 15%2)

USD 75m preferred equity

International drilling, well service and engineering company

Company owning 5 mid-sized AHTS vessels

North Sea Drilling Contractor

1) Economic interest | 100% legal ownership

2) Economic interest

5.6%

100%

Joint venture between Akastor and Baker Hughes on track

• Comprehensive integration planning work with close to 1 000 actions to be completed prior to closing
• Ongoing verification of potential synergies including development of detailed plans for realization
• Competition fillings close to be completed
• Documentation regarding new financing agreements for both the joint venture and Akastor ongoing and on track
• Closing of transaction expected to take place in the second half of 2021

Portfolio Highlights 2Q 2021 (1 of 2)

Projects

• Cont. low activity in quarter as a result of phase of ongoing projects
• Keppel FELS unit #2 re-activated in period
• Continued negotiations re. drilling equipment package to to Guangzhou Marine Geological Survey (GMGS) awarded to MHWirth in December last year. Contract now expected to be signed in 3Q (project not included as order intake in 2Q)
• Newbuild market continues to be muted and is expected to remain challenging going forward

Products

• Good order intake in quarter, driven by the non-oil segment
• Low revenue in quarter as a result of low backlog per start of period
• Increased activity expected in second half of the year, driven by order intake and opportunities in non-oil markets, both for slurry pumps and PBA's (pile top drillers for construction)
• Offshore market continue to be affected by low investment levels among clients

Drilling equipment Lifecycle services, spares and components

DLS

• 48 active rigs in quarter, up from 45 per 1Q. Further grow expected in H2 based on contract schedule of fleet
• Scrapping of four Seadrill units confirmed in Q2. Units were cold stacked, and thus no direct effect for MHWirth.
• Increased activity in quarter, driven by offshore segment

Digital Technology

• Continued high activity in quarter, with delivery of several new systems
• One DEAL system and three CADS system (Configurable Automatic Drilling System) delivered in 2Q
• Backlog consists of six control system upgrades, one DEAL system and one CADS system, as well as several smaller development projects
• Continued good dialogue with clients regarding new developments, including customer funded projects

Portfolio Highlights 2Q 2021 (2 of 2)

Key value drivers for our main portfolio assets

Illustrative roadmap for realizing our investments and capital allocation priorities

DISTRIBUTION TO SHAREHOLDERS (CASH OR SHARES)

Financial update

Financial highlights 2Q 2021

NOK million	2Q 21	2Q 20	YTD FY21	YTD FY20
Revenue and other income	275	202	477	472
EBITDA	45	-39	25	$-38$
EBIT	26	$-51$	$-11$	-62
Net financials	12	36	$-16$	$-359$
Profit (loss) before tax	39	-15	$-27$	-421
Tax income (expense)	-0	$-16$	$\circ$	38
Profit (loss) from continuing operations	38	$-31$	$-27$	$-383$
Net profit (loss) from disc. operations	-9	46	$-48$	-8
Profit (loss) for the period	30	16	$-75$	$-391$
Order intake	1 1 2 9	1 1 6 5	2078	2 3 0 2
Order backlog	2741	2838	2 741	2838
NCOA	612	1 1 1 4	612	1 1 1 4
Net Capital Employed	5 2 3 4	5626	5 2 3 4	5626

2Q 2021 highlights

• Following announced agreement to combine MHWirth with Baker Hughes SDS, MHWirth is presented as discontinued operations in the income statement
• Revenue and other income increase of 36 percent year-on-year, driven by gain from finance lease agreements in DDW Offshore and increased activity in AGR
• EBITDA NOK 45 million in quarter
• Net financial items of NOK 12 million, including noncash items from financial investments of NOK 22 million
• Order intake, backlog and Net Current Operating Assets (NCOA) include MHWirth
• NCOA continues to be significantly lower than last year, driven by project activity in MHWirth

Note: MHWirth is presented as discontinued operations in the income statement from 1Q 2021, with comparable figures having been restated

Key financials reconciliation

Revenue (NOK million)	20 2021	20 2020	YTD 2021	YTD 2020
AGR	178	157	355	374
Cool Sorption	21	33	33	76
Other	75	14	88	24
Reported Group revenue	275	202	477	472
MHWirth	685	1052	1 2 7 6	2 2 0 6
AKOFS Offshore (100%)	341	201	611	505

EBITDA (NOK million)	20 2021	20 2020	YTD 2021	YTD 2020
AGR	8	5	19	23
Cool Sorption	1	$\overline{2}$	$-1$	3
Other	35	$-47$	7	$-63$
Reported Group EBITDA	45	$-39$	25	$-38$
MHWirth	51	110	63	245
AKOFS Offshore (100%)	120	83	162	259

Net financial items (NOK million)	20 2021	20 2020	YTD 2021	YTD 2020
Odfjell Drilling	34	31	67	$-21$
Awilco Drilling	$-2$	$-4$	-3	$-36$
NES Global Talent	19	17	42	-87
DDW Offshore	0	-4	$\Omega$	$-75$
AKOFS Offshore	$-19$	$-23$	$-77$	$-19$
Contribution from financial investments	31	16	29	-239
Net interest exp. on external borrowings	-24	$-13$	-46	$-29$
Net interest exp. on lease liabilities	$-1$	-3	$-3$	-6
Net foreign exchange gain (loss)	13	43	18	-75
Other financial income (expenses)	$-7$	$-7$	$-14$	$-11$
Net financial items	12	36	-16	-359

▪ Odfjell Drilling: result of NOK 34 million includes cash interests of NOK 9 million, PIK interests of NOK 9 million and positive valuation effects on the warrant structure of NOK 11 million

• AKOFS Offshore: negative result represents 50% of the company's net loss in period
• DDW Offshore: No longer booked as financial investment following consolidation in 4Q 2020

Cash flow and net debt position

• Net debt increased by NOK 80 million in quarter, to NOK 1 803 million
• DDW Offshore net debt of NOK 415 million per end of quarter
• "Other" includes lease payments, currency effects and payment of deferred settlement obligations related to AKOFS Seafarer
• Liquidity reserve of NOK 1.4 billion per end of quarter

NOK million	20 20 21
Non-current bank debt	450
Current bank debt	1431
Non-recourse AGR debt	179
Cash and cash equivalents	$-258$
Net debt	1803
AKOFS receivable	$-108$
Other receivables	$-22$
Net interest-bearing debt (NIBD)	1 673

Net Capital Employed as per 2Q 2021

NOK million

MHWirth

• Project & Products revenues were NOK 134 million, a decrease of 73% compared to last year
• DLS & DT revenues were NOK 551 million, a decrease of 2% compared to last year
• EBITDA of NOK 51 million, giving a margin of 7.4%. Margin still affected by relatively low revenue in period.
• Order intake for the period amounted NOK 0.9 billion, a book-to-bill of 1.4x in quarter, giving a total order backlog of NOK 2.2 billion per end of 2Q

Highlights 2Q 2021 Installed base per 2Q 2021

Quarterly development in revenues and EBITDA margin NOK million

AKOFS Offshore

Highlights 2Q 2021 Fleet overview

• Revenues and EBITDA of NOK 341 million and NOK 120 million, respectively
• Revenue utilization for Aker Wayfarer 85% in quarter, explained by a COVID-19 outbreak resulting in 13 days of downtime in period
• Skandi Santos with 100% revenue utilization in quarter
• AKOFS Seafarer with 94% revenue utilization in quarter

Akastor © 2019 Akastor | July 2021 Slide 16

NES Fircroft

• Continued increase in activity and uptick in number of contractors seen in the quarter
• LTM pro-forma revenues per May 2021 around 30% lower than one year ago, however with continued good momentum in business and increasing revenue run-rate
• Slight increase in net debt seen over last months driven by NWC movement as a result of higher activity in the business
• Akastor holds ~15% economic interest in the combined NES Fircroft

1) FY end 31st October. Figures presented on 100% basis. Revenue figures in graph pro-forma adjusted to include Fircroft

Recent development Award winning workforce solution specialist

Akastor © 2019 Akastor | July 2021 Slide 18

Quarterly development in revenues and EBITDA-margin1)

EBITDA:

1) Figures for Other industrial holdings include AGR and Cool Sorption

▪ AGR: Revenues and EBITDA of NOK 178 million and NOK 8 million, respectively

▪ Other industrial holdings reported pro-forma consolidated revenue and EBITDA of NOK 200 million and NOK 10 million, respectively

Highlights 2Q 2021

Appendix

Selected transactions since inception in 2014

1) Pref shares USD 75m + warrants 2) cash gain 3) Plus earnout of max USD 65m

ODL preferred equity and warrant instrument

Preferred equity structure Warrant structure

Instrument description:

• 5% cash dividend + 5% PIK per annum (semi-annual payment)
• Call price: 125% year 2, 120% year 3, 115% year 4, 110% year 5, 105% year 6, 100% thereafter
• Cash dividend step-up: 8.0% p.a. from year 7 and an additional 1.0% step-up per year until a maximum cash dividend of 10.0% p.a.
• Commitment fee of USD 5.75 million paid in 2Q 2019
• Certain rights and covenants1) in favor of Akastor

Instrument payment profile:

USDm					2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e
Cash Dividend	2.2	3.9	4.1	4.3	4.5	4.8	8.0	9.5	11.0
Acc. PIK	77.2	81.1	85.2	89.5	94.1	98.8	103.8	109.1	114.6
Call price incl. PIK		99.9	100.2	100.8	101.6	102.6	103.8	109.1	114.6
Dividend	5 %	5 %	5 %	5 %	5 %	5 %	8 %	9 %	10 %
PIK interest	5 %	5 %	5 %	5 %	5 %	5 %	5 %	5 %	5 %
Call price					n.a. 125 % 120 % 115 % 110 % 105 % 100 % 100 % 100 %

1) The agreement contain several covenants, including but not limited to an obligation not to pay dividends or other distributions exceeding 50% of the net profit from the preceding year (unless a similar portion of the preference capital is repaid prior to the distribution), and in any case not pay dividends or make distributions after year 6. Also the agreement includes a change of control covenant pertaining to restructurings with the effect that Odfjell Partner's shareholding falls below 25%

Instrument description:

▪ The total warrant issue comprise six tranches with 987,500 warrants per tranche, amounting to a total 5,925,000 warrants. Furthermore, one warrant can be exercised for one share (1-to-1 ratio) for a price of USD 0.01 per share. Maximum number of share allocation if share price in ODL has increased with 20% p.a.

▪ Schedule 4.2: If any warrants remain unexercised at the ultimate exercise date in 2024, the holder will receive a number of shares determined linearly according to:

× [ ℎ @ 31 2024 − 36] (107.5 − 36)

Key figures

AKASTOR GROUP (continuing operations)

NOK million	2020	30 20	4Q 20	1021	2021	YTD 2021
Revenue and other income	202	192	155	201	275	477
EBITDA	$-39$	$-5$	$-28$	$-19$	45	25
EBIT	$-51$	$-17$	$-53$	$-37$	26	$-11$
CAPEX and R&D capitalization	17	46	23	5	35	41
NCOA	1 1 1 4	1031	527	617	612	612
Net capital employed	5626	5529	5 0 0 2	5095	5 2 3 4	5 2 3 4
Order intake	1 1 6 5	643	844	949	1 1 2 9	2078
Order backlog	2838	2540	2 3 7 5	2523	2741	2741
Employees	2 1 1 3	1939	1947	2013	1988	1988

Note: MHWirth is presented as discontinued operations from 1Q 2021, historical figures have been restated

Split per Company (1 of 4)

MHWIRTH

NOK million	2020	3Q 20	4Q 20	1021	2021	YTD 2021
Revenue and other income	1052	735	818	591	685	1 2 7 6
EBITDA	110	71	85	12	51	63
EBIT	53	20	30	$-32$	6	$-26$
CAPEX and R&D capitalization	14	44	20	$\overline{2}$	10	12
NCOA	1275	1 1 7 5	692	712	702	702
Net capital employed	3443	3 3 3 3	2801	2766	2760	2 7 6 0
Order intake	1037	504	556	736	942	1678
Order backlog	2 3 8 4	2 140	1849	1987	2 2 4 3	2 2 4 3
Employees	1691	1587	1581	1568	1533	1533

Split per Company (2 of 4)

AKOFS OFFSHORE 1)

NOK million	2020	30 20	4Q 20	1Q 21	2021	YTD 2021
Revenue and other income	201	209	286	269	341	611
EBITDA	83	90	66	42	120	162
EBIT	1	13	$-243$	$-43$	36	$-7$
CAPEX and R&D capitalization	90	24	27	59	11	71
NCOA	166	346	344	294	269	269
Net capital employed	4 0 8 3	4 1 9 9	3744	3726	3580	3580
Order intake	0	0	89	$\overline{0}$	$\mathbf 0$	$\mathbf 0$
Order backlog	4 7 8 3	4514	3827	3576	3 2 5 8	3 2 5 8
Employees	299	301	294	297	296	296

1) Figures presented on a 100% basis. Akastor's share of net profit from the joint venture is presented as part of "net financial items"

Split per Company (3 of 4)

AGR

NOK million	2Q 20	30 20	4Q 20	1Q21	2021	YTD 2021
Revenue and other income	157	125	138	177	178	355
EBITDA	5	4	4	10	8	19
EBIT	1	1	$-2$	7	$\overline{4}$	11
CAPEX and R&D capitalization	$\overline{2}$	$\overline{2}$	3	3	6	9
NCOA	$-7$	$-12$	$-7$	$-4$	$-6$	-6
Net capital employed	152	147	148	151	173	173
Order intake	91	73	258	194	132	326
Order backlog	415	362	483	500	454	454
Employees	362	297	319	399	410	410

Split per Company (4 of 4)

OTHER HOLDINGS

NOK million	2Q 20	3Q 20	4Q 20	1Q 21	2021	YTD 2021
Revenue and other income	47	67	19	24	97	121
EBITDA	$-45$	$-10$	$-32$	$-30$	36	$7^{\circ}$
EBIT	$-53$	$-18$	$-50$	$-44$	22	$-22$
CAPEX and R&D capitalization	0	0	$\mathbf 0$	$\circ$	20	20
NCOA	$-154$	$-131$	$-158$	$-91$	-84	-84
Net capital employed	852	876	990	1 1 4 2	1 3 0 0	1 3 0 0
Order intake	37	65	30	18	55	74
Order backlog	38	38	43	36	44	44
Employees	60	55	47	46	45	45

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.