Aker Solutions — Earnings Release 2019

Feb 7, 2020

Aker Solutions ASA: Fourth-Quarter Results 2019

Aker Solutions ASA: Fourth-Quarter Results 2019

February 7, 2020 - Aker Solutions increased the 2019 fourth quarter revenue to

NOK 7.3 billion, a rise of 6 percent compared with the fourth quarter 2018, as

the company executed projects according to schedule and won awards in a

competitive market.

4Q 2019 Financial Highlights

· Revenue NOK 7.3 billion

· EBITDA NOK 434 million

· EBITDA margin 5.9%

· EBITDA ex. special items NOK 480 million

· EBITDA margin ex. special items 6.5%

· Earnings per share ex. special items NOK 0.08

· Order intake NOK 5.6 billion

· Order backlog NOK 25.4 billion

With high activity in projects for both Norwegian and international clients

throughout the year, Aker Solutions reported revenue growth in the fourth

quarter as well as for the full year.

Investments in digitalization and low-carbon solutions have proved key

differentiators in securing new orders. The company launched its updated

"20/25/30" strategy in October 2019.

"Delivering cost-efficient, low-carbon solutions is at the heart of our

offerings as our customers are increasingly looking at ways to reduce their

carbon footprint," said Luis Araujo, chief executive officer of Aker Solutions.

"We are already involved in major projects related to carbon capture,

electrification of production assets, subsea gas compression and unmanned

platforms - all part of our portfolio of low-carbon solutions that have the

potential to significantly reduce or remove emissions".

Orders totaled NOK 5.6 billion in the quarter, bringing the backlog to NOK 25.4

billion. Key awards included a contract from Aker BP to deliver a subsea

production system for phase two of the Ærfugl field in the Norwegian Sea. Aker

Solutions also secured a frame agreement for maintenance and modification

services from Vår Energi for its Jotun, Balder and Ringhorne assets, which the

company has serviced for more than 19 years already.

The company experienced another year of record demand for front-end engineering

services. In the fourth quarter Aker Solutions was awarded 40 front-end

contracts. This brings the total for 2019 to a record 151, with overseas

projects accounting for one third of the total.

Aker Solutions continues to pursue energy solutions that minimize the

environmental footprint, with carbon capture and floating wind at the forefront.

During the quarter, the company increased its ownership share to 25 percent in

Principle Power, which is one of only two companies with a proven technology

concept for offshore floating wind.

Revenue and EBITDA

Revenue rose to NOK 7.3 billion in the quarter from NOK 7 billion a year

earlier, supported by progress and deliveries on key projects. The EBITDA was

NOK 434 million, compared with NOK 483 million in the fourth quarter of 2018.

Excluding special items, the EBITDA was NOK 480 million with a margin of 6.5

percent compared 7.1 percent in the same period last year, reflecting a higher

proportion of brownfield work in the revenue mix. EBITDA margins in 2019 include

IFRS 16 effects.

Aker Solutions has two reporting segments: Projects and Services. Revenue in

Projects rose 1 percent to NOK 5.7 billion in the quarter from NOK 5.6 billion a

year earlier, mainly driven by the field design sub-segment. Excluding special

items, EBITDA margin was 6.6 percent in the quarter versus 6.2 percent a year

earlier.

Revenue in Services was NOK 1.6 billion, up 24 percent from NOK 1.3 billion in

the same quarter last year, with the increase driven by international growth in

the company's production asset services sub-segment. The EBITDA margin excluding

special items was 10.3 percent in the quarter, down from 14.6 percent a year

earlier.

With a liquidity buffer of NOK 6.3 billion, the financial position of Aker

Solutions is solid. However, the board has proposed that no dividend payment

should be declared for 2019 - still deeming it prudent to exercise caution and

to position the company to take advantage of the opportunities presented by the

ongoing energy transition.

Outlook

The global markets remain active, but very competitive. Tendering activity

remains high in main markets, and Aker Solutions is currently bidding for

contracts totaling about NOK 60 billion. Projects are being sanctioned, but many

contracts are taking longer to be awarded.

The company expects some key projects to be awarded over the next six to nine

months.

In the longer term, Aker Solutions anticipates an increase in global energy

demand and that investment efforts in sustainable energy solutions will be

rewarded.

After delivering strong top line growth of 16 percent last year, and 30 percent

over the last two years, Aker Solutions expects overall 2020 revenue at around

the 2018 level.

The company expects the 2020 EBITDA margin to remain around underlying 4Q

levels, reflecting delayed project sanctioning, continued progress on our new

backlog - won in a very competitive market - as well as a different revenue mix

with a high share of lower-margin brownfield activity.

ENDS

Media Contact:

Ivar Simensen, mob: +47 464 02 317, email: ivar.simensen@akersolutions.com

Investor Contact:

Fredrik Berge, mob: +47 450 32 090, email: fredrik.berge@akersolutions.com

Aker Solutions helps the world meet its energy needs. We engineer the products,

systems and services required to unlock energy. Our goal is to maximize recovery

and efficiency of oil and gas assets, while using our expertise to develop the

sustainable solutions of the future. Aker Solutions employs approximately 16,000

people in more than 20 countries.

Visit akersolutions.com and connect with us on

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This press release may include forward-looking information or statements and is

subject to our disclaimer, see https://akersolutions.com

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.