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Aker Interim / Quarterly Report 2017

Nov 23, 2017

3526_rns_2017-11-23_2cd5ed1c-041e-4c2f-a694-f7cced75561b.pdf

Interim / Quarterly Report

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Aker ASA Third-quarter results 2017

23 November 2017 | Fornebu

Highlights | Third-quarter 2017

  • ▪Net asset value: up 20.4% to NOK 34.7 billion (NOK 28.8 billion)
  • ▪Return: Aker share up 19.3% to NOK 327 vs. OSEBX up 12.1%
  • ▪ Cash and liquid fund inv.: NOK 1.6 billion, down from NOK 2.1 billion in the second quarter. Liquidity reserve of NOK 3.4 billion when including undrawn credit facilities

▪Aker transactions:

  • i.Cognite: NOK 44 million equity investment for a 72 per cent stake
  • ii. Fornebuporten: NOK 490 million acquisition of land area at Fornebu, partly financed by a NOK 120 million share issue in Fornebuporten

▪Portfolio transactions:

i. Aker BioMarine: Closed the USD 34 million transaction to acquire Neptune Technologies and Bioressources' krill business

Subsequent events:

  • i. Akastor: MoU between Akastor and Mitsui for sale of 50 per cent of the shares in AKOFS Offshore, expected to give a net cash release of USD 142 million
  • ii. AkerBP: Agreement to acquire Hess Norway for USD 2.0 billion. Aker subscribed for 40 per cent of the NOK 4.1 billion equity issue

NAV increased 20.4% in 3Q 2017, all portfolio companies in Industrial Holdings delivered positive returns in the quarter

Net asset value change in 3Q 2017 NOK billion

Share price up 19.3% in the quarter, continued positive value development in the fourth quarter

Gross asset value Liabilities NAV per share vs. share price NOK per share 40146243938846755701002003004005006003Q16 4Q16 1Q17 2Q17 3Q 17 Per 22.11.17DividendNAV per share 41.610%86% 34.7bn 83%Other Financial InvestmentsIndustrial Holdings Cash and liquid fund investments 36.04.01.66.9Net asset value composition NOK billion1)

Share price (adjusted for dividends paid in Q2 2017)

1) Based on closing prices of Aker's listed holdings as per 22 November 2017, remaining assets and liabilities at reported book values per 30.09.17. Excluding cash movements in the fourth quarter

23 November 2017

AKER ASA | Third-quarter results 2017

Oil and gas accounting for 2/3 of Aker's gross asset values

Gross asset value distributionPer 3Q 2017 (2Q 2017)

1)Owned partly through Aker Kvaerner Holding, in which Aker has a 70% ownership interest. Additionally, Aker has a direct ownership interest in Aker Solutions and Akastor 2)Reflected at book value

23 November 2017

AKER ASA | Third-quarter results 2017

Strong liquidity reserve and upstream cash generation

Industrial Holdings Aker BP

Exploration & Production company on the Norwegian continental shelf

% of gross asset value

(3Q 2017)

Aker's ownership agenda

  • Growth; organic (greenfield projects, IOR and exploration) and through M&A
  • Quarterly dividend payments
  • Operational excellence and efficiency improvements through new business models and technologies, including digitalisation

Aker's investment

NO
K m
illio
n
Va
lue
3
0.
0
6.
as
p
er		 1
7		 1
6
6
8
5
Va
lue
ha
in
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c
ng
e		 Q 4
3
2
0
(
Re
ive
d
d
iv
i
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ds
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9
ce
n		 )
9
Va
lue
3
0.
0
9.
1
7
2
0
8
0
as
p
er		 5
f
i
K
e
g
r
e
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y
u
USD
mi
llion		 3
Q
1
6		 3
Q
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 2
4
8		 9
6
5		 0
9
7		 1
8
3
7

23 November 2017

Aker BP to acquire Hess Norway - Aker instrumental in turning Aker BP into a leading offshore E&P company

1) Including Aker's NOK 1.6 billion participation in Aker BP's NOK 4.1 billion equity issue in November 2017; 2) Based on Aker BP's closing price as per 22 November 2017, dividends included

Aker Solutions

Global oil services company providing services, technologies, and product solutions within subsea and field design

% of gross asset value

(3Q 2017)

Aker's ownership agenda

  • Increase competitiveness reach cost-efficiency target of 50 per cent by 2021
  • Win new contracts
  • Partnerships, alliances and M&A

Aker's investment

NO
K m
illio
n
Va
lue
3
0.
0
6.
1
7
as
p
er		 3
6
6
5
Q
Va
lue
ha
in
3
c
ng
e		 4
1
9
Va
lue
3
0.
0
9.
1
7
as
p
er		 3
9
8
5

Key figures

NO
K m
illio
n		 Q
3
1
6		 Q
3
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 5
9
8
7		 5
4
1
9		 1
9
4
1
9		 1
6
0
1
7
E
B
I
T
D
A		 4
7
7		 4
0
1		 1
5
4
9		 1
0
6
2
Ba
k
log
c		 3
1
6
1
7		 2
2
3
9
7

Akastor

Oilfield services investment company with a flexible mandate for longterm value creation

% of gross asset value

(3Q 2017)

Aker's ownership agenda

  • Operational excellence, cost reductions
  • Win new contracts
  • Transactions

Aker's investment

NO
K m
illio
n
Va
lue
3
0.
0
6.
1
7
as
p
er		 1
3
8
3
Va
lue
ha
in
3
Q
c
ng
e		 3
6
7
Va
lue
3
0.
0
9.
1
7
as
p
er		 1
7
5
0

Key figures

NO
K m
illio
n		 3
Q
1
6		 3
Q
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 1
1
3
0		 1
4
3
3		 3
6
8
6		 3
2
4
9
E
B
I
T
D
A		 9
5		 5
4		 (
)
1
0
2		 1
2
6
Ba
k
log
c		 7
4
6
6		 6
3
7
3

Oil and gas-related EPC company Kvaerner

% of gross asset value

(3Q 2017)

Investment value of NOK 1.0 billion

Aker's ownership agenda

  • Enhance competitiveness through operational excellence and cost reductions
  • Win new contracts
  • Maintain strong balance sheet

Aker's investment

NO
K m
illio
n
Va
lue
3
0.
0
6.
1
7
as
p
er		 8
8
7
Q
Va
lue
ha
in
3
c
ng
e		 2
0
1
Va
lue
3
0.
0
9.
1
7
as
p
er		 9
8
9

Key figures

NO
K m
illio
n		 3
Q
1
6		 3
Q
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 1
9
7
5		 1
6
8
3		 6
0
6
2		 4
3
9
7
E
B
I
T
D
A		 2
2
3		 2
4
5		 4
0
0		 5
7
2
Ba
k
log
c		 8
3
9
7		 8
2
0
7

Ocean Yield

A maritime assets company with focus on long-term contracts

% of gross asset value

(3Q 2017)

Aker's ownership agenda

  • Growth by new investments and M&A
  • Further diversify portfolio, both counterparty and segmentwise
  • Optimise capital structure and reduce cost of capital
  • Manage and mitigate counterparty risk

Aker's investment

NO
K m
illio
n
Va
lue
3
0.
0
6.
as
p
er		 1
7		 6
4
1
0
Va
lue
ha
in
3
Q
c
ng
e		 7
6
2
Re
ive
d
d
iv
i
de
ds
ce
n		 (
1
4
8
)
Va
lue
3
0.
0
9.
as
p
er		 1
7		 7
0
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4
K
f
i
e
y
g
u
r
e
s
USD
mi
llion		 3
Q
1
6		 3
Q
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 7
6		 8
9		 2
1
2		 2
5
0
E
B
I
T
D
A		 6
9		 8
1		 1
9
1		 2
2
6
E
B
I
T
D
A
ba
k
log
c		 3
2
0
0		 2
9
0
0

23 November 2017

Industrial Holdings Aker BioMarine

Integrated biotech company – specialised in krill harvesting and processing

% of gross asset value

(3Q 2017)

Investment value of NOK 1.4 billion

Aker's ownership agenda

  • Operational excellence
  • Increase sales by entering new products, channels and geographies
  • New vessel and other investments to fast-track growth

Aker's investment

NO
K m
illio
n
3
0.
0
6.
1
(
)
Va
lue
7
bo
k v
lue
as
p
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a		 1
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Va
lue
3
0.
0
9.
1
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(
bo
k
lue
)
as
p
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va		 1
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1
1

Key figures

USD
mi
llion		 3
Q
1
6		 3
Q
1
7		 Y
T
D
1
6		 Y
T
D
1
7
Re
ve
nu
es		 3
3		 3
4		 8
5		 9
1
E
B
I
T
D
A		 1
2
*		 8 3
0
*		 1
7

23 November 2017

AKER ASA | Third-quarter results 2017 *Excluding Neptune net settlement of USD 6 million, expensed as other expenses in 3Q16

Cognite – digitalization of Aker's oil and gas companies

Clear strategy

Develop world-class horizontal IoT data platform making data a strategic asset for industrial companies

Solving real business problems

Cognite IoT Data Platform developed by solving real business problems based on real data

Uniquely talented team

Combining founders of several companies, world-class tech and business talent

Solid owners providing industrial backing Owned 72% by Aker ASA and 10% Aker BP – industrial credibility, access to global network and funding

Aker to support building Cognite's position in oil and gas and scaling to other industrial verticals

23 November 2017

AKER ASA | Third-quarter results 2017 14

AkerFinancial Investments

Financial InvestmentsOverview

% of gross asset value NOK billion (30.09.2017)

  • Liquidity reserve of NOK 3.4 billion
  • Cash and liquid fund investments at NOK 1.6 billion
  • Fornebuporten acquired residential land plot at Fornebu
  • Investment in Cognite
  • Debt repayments of NOK 0.2 billion

Financial Investments

Real estate

  • Listed financialinvestments
  • Liquid fund investments
  • Cash

Financial InvestmentsCash and Liquid fund investments

% of gross asset value

(30.09.2017)

  • Cash decreased to NOK 1.2 billion:
    • NOK 360 million in dividends received
  • NOK 199 million in debt repayments
  • NOK 333 million loan issued to Aker BioMarine
  • NOK 166 million in misc. investments
  • NOK 124 million in operating expenses and net interest paid
  • Liquid fund investments at NOK 426 million
  • Total liquidity reserve of NOK 3.4 billion, including undrawn credit facilities

Total cash movements YTD 2017 and liquidity reserve at 30.09.2017 NOK billion

Financial InvestmentsListed financial investments

  • Value of Philly Shipyard increased by NOK 47 million
  • Total value of AMSC exposure decreased by NOK 54 million
  • Dividends received of NOK 19 million
  • Value of Solstad Farstad decreased by NOK 159 million

Aker's investment

NO
K m
illio
n		 Q
1
1
7		 Q
2
1
7		 Q
3
1
7
P
h
i
l
ly
S
h
ip
d
y
ar		 4
1
4		 5
9
7		 6
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4
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M
S
C
(
inc
l.
T
R
S
)		 4
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2		 3
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7
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Cx
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So
ls
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ta
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rs		 4
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6
2		 4
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3
To
l v
lue
ta
a		 1
3
5
3		 1
5
2
0		 1
3
3
8

Financial InvestmentsReal estate and other financial investments

% of gross asset value (30.09.2017)

  • Increased loan to Aker BioMarine of USD 42 million mainly related to financing of Neptune agreement
  • NOK 44 million invested in Cognite, providing Aker with a 72% direct ownership interest
  • Increased real estate exposure:
  • Fornebu residential land plot acquired for NOK 490 million, partly financed by a seller's credit.
  • Late-stage residential project
  • Establishment of residential JV with OBOS in November

Aker's investment

NO
K m
illio
n		 1
Q
1
7		 2
Q
1
7		 3
Q
1
7
Re
l e
ta
te
(
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8
To
l v
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a		 1
8
9
3		 2
2
5
1		 2
6
8
7

AKER ASA | Third-quarter results 2017 19

Financial InvestmentsFornebuporten – current asset/project portfolio

Land bank, residential and commercial: Ongoing residential development

m2
(
BR
A )		 Fo
rint
otp
Fo
bu
ten
rne
p
or
(pr
ior
OB
OS
JV
)
to		 3
3
8
0
0
Fo
bu
Se
tru
rne
n
m		 4
0
0
0
0
A
be
de
r
en		 6
5
0
0
0
    • 10,700 m2 (BRA-S) / 189 units
  • Sales ratio: 99%. Completion 2018
  • One commercial real estate building at Fornebuporten (9,500m2)

23 November 2017

AkerFinancial Statements

Aker ASA and holding companies Balance sheet at 30.09.2017

Aker ASA and holding companies Interest-bearing items as of 30.09.2017

Average debt maturity is 2.5 years For details of interest-bearing items and loan guarantees, see: https://www.akerasa.com/Investor/Treasury

Fin
cia
l C
ts
an
ov
en
an		 Lim
it		 Sta
at 30
tus
.09
.20
17
i
To
tal
De
bt/
Eq
uity
Ak
AS
A (
nly
)
t o
er
pa
ren
-		 80
%
<		 35
%
Gr
ii
Lo
s to
NA
V
ou
p
an
Gr
Lo
or
ou
p
an
s		 %
50
<
< N
OK
10
bn		 %
2.9
NO
K 1
.0
bn

Aker ASA and holding companies Income statement

O
A
i
N
K
i
l
l
i
t
m
o
n
s
n
m
o
n
u		 2
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s		 (
5
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1
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*		 (
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1
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)
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4		 (
)
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1		 1
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)
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c
a
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a
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m
p
a
r
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e
n		 (
4
)		 (
4
)		 (
3
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)		 (
1
1
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3
2
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V
l
h
a
u
e
c
a
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g
e		 (
3
9
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3
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7		 (
2
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)		 (
8
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f
N
t
t
h
i
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r
n
a
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s		 2
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9		 3
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P
f
i
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f
t
t
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o
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e
a
x		 (
)
2
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1		 2
2
9		 5
2
3
1		 5
3
9		 2
6
1
7

*) Included a one-off reduction in pension liabilities of approximately NOK 30 million.

Disclaimer

  • This Document 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 Document 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 Aker ASA and Aker 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 Aker's businesses, 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 Document. Although Aker ASA believes that its expectations and the Document 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 Document. Aker ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Document, and neither Aker ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
  • ▪ The Aker group consists of many legally independent entities, constituting their own separate identities. Aker is used as the common brand or trade mark for most of this entities. In this document we may sometimes use "Aker", "Group, "we" or "us" when we refer to Aker companies in general or where no useful purpose is served by identifying any particular Aker company.

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