Aker — Interim / Quarterly Report 2018

Nov 8, 2018

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Aker ASA Third-quarter results 2018

8 November 2018 | Fornebu

Highlights | Third quarter 2018

• Net asset value: up NOK 6.2 billion (10.8%) to NOK 63.3 billion
• Return: Aker share up 17.8% to NOK 734 vs. OSEBX up 6.7%
• Cash and liquid fund inv.: NOK 1.4 billion, on par with prior quarter. Liquidity reserve of NOK 4.5 billion when including undrawn credit facilities

▪ Main events:

• i. Aker BP: Agreement with Total Norway to acquire portfolio of 11 licenses for USD 205 million, and submittal of plan for development and operation for Phase 2 of Johan Sverdrup
• ii. Akastor: Completed sale of 50% of shares in AKOFS Offshore
• iii. Ocean Yield: Expiry of charter contract for FPSO Dhirubhai-1
• Subsequent events:
• i. Aker BP: Agreement with Equinor to acquire operatorship of King Lear for USD 250 million
• ii. Solstad Offshore: Commenced negotiations with lenders and other stakeholders
• iii. Ocean Yield: Investment in two chemical tankers for USD 51 million
• iv. Kvaerner: Secures NOK 900 million contract for Johan Sverdrup Phase II substructure

Aker ASA and holding companies

Aker BP the main contributor to the value increase in third quarter

Net asset value change in 3Q 2018 NOK billion

8 November 2018 AKER ASA | Third-quarter results 2018

Aker ASA and holding companies

Share price rose 17.8% in the third quarter

NAV per share vs. share price NOK per share

Net asset value composition NOK billion

1) Based on closing prices of Aker's listed holdings as per 7 November 2018, remaining assets and liabilities at reported book values per 30.09.18. Excluding cash movements in the fourth quarter

Aker ASA and holding companies Portfolio composition unchanged

Portfolio composition NOK billion, as per 3Q 2018

						Listed investments Unlisted investments
Industrial Holdings					Financial Investments
	Aker BP	40.0%	49.8	1.2	Cash
	1)) Aker Solutions	34.8%	5.5	0.2	Liquid fund investments
	Akastor 1))	36.7%	1.8	1.2	Listed financial investments
	1) Kvaerner	28.7%	1.2	0.6	Real Estate Investments2)
	Ocean Yield	61.7%	6.5	2.2		Other financial investments2)
	2) Aker BioMarine	100.0%	2.4
	Gross asset value		67.1	5.4
	Net asset value			63.3

Gross asset value distribution Per 3Q 2018 (2Q 2018)

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

Aker ASA and holding companies

Strong growth in upstream cash generation fuelling investment capacity

Investment capacity potential NOK billion

Upstream dividend NOK billion

Industrial Holdings Aker BP

Exploration & Production company on the Norwegian continental shelf

% of gross asset value

(3Q 2018)

Aker's ownership agenda

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

Aker's investment

NOK million Value as per 30.06.18 43 330 Value change in 3Q 6 795 Received dividends (370) Value as per 30.09.18 49 755

USD million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	596	1 000	1 837	2 864
EBITDAX	459	830	1 447	2 352

Industrial Holdings Aker Solutions

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

% of gross asset value

(3Q 2018)

Investment value of NOK 5.5 billion

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

NOK million
Value as per 30.06.18	5 392
Value change in 3Q	83
Value as per 30.09.18	5 475

NOK million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	5 419	6 541	16 017	18 278
EBITDA	401	463	1 062	1 327
Backlog			27 239	36 081

Industrial Holdings

Akastor

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

% of gross asset value

(3Q 2018)

Investment value of NOK 1.8 billion

Aker's ownership agenda

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

Aker's investment

NOK million Value as per 30.06.18 1 800 Value change in 3Q (22) Value as per 30.09.18 1 778

NOK million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	1 249	955	2 711	2 710
EBITDA	1	87	20	228
Backlog			1 515	2 759

Industrial Holdings

Kvaerner

Oil and gas-related EPC company

% of gross asset value

(3Q 2018)

Investment value of NOK 1.2 billion

Aker's ownership agenda

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

Aker's investment

NOK million Value as per 30.06.18 1 327

Value change in 3Q	(164)
Value as per 30.09.18	1 163

NOK million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	1 683	1 764	4 739	5 504
EBITDA	245	76	572	359
Backlog			8 207	10 638

Industrial Holdings Ocean Yield

A maritime assets company with focus on long-term contracts

% of gross asset value

(3Q 2018)

Investment value of NOK 6.5 billion

Aker's ownership agenda

• Growth and diversification through transactions
• Manage and mitigate counterparty risk
• Re-contract FPSO Dhirubhai
• Optimise capital structure, reduce cost of capital and maintain attractive dividend

Aker's investment

NOK million
Value as per 30.06.18 6 985
Value change in 3Q (288)
Received dividends (154)
Value as per 30.09.18 6 543
Key figures
USD million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	89	95	250	279
EBITDA	81	85	226	247
EBITDA backlog			2 900	3 500

Industrial Holdings Aker BioMarine

Integrated biotech company – specialised in krill harvesting and processing

% of gross asset value

(3Q 2018)

Investment value of NOK 2.4 billion

Aker's ownership agenda

• Operational excellence and improve profitability
• Increase sales by entering new products, channels and geographies
• Extract synergies from recent transactions
• New vessel and other investments to fast-track growth

Aker's investment

NOK million
Value as per 30.06.18 (book value)	2 411
Value change in 3Q	-
Value as per 30.09.18 (book value)	2 411

USD million	3Q 17	3Q 18	YTD 17	YTD 18
Revenues	34	40	91	120
EBITDA	8	12	17	31

Key developments in Aker Energy and Cognite

	Key developments Key developments
	▪ Entered into contracts for the drilling of one appraisal well and two optional wells. Maersk Viking to ▪ Agreement to acquire Hess Ghana from Hess Corporation for USD 100 million, of which USD 75 commence operations in Q4 2018
	million payable on approval of PDO ▪ Plan of Development (POD) postponed to end of March 2019 ▪
	Jan Arve Haugan appointed CEO, management in place ▪ Strengthening organization at Fornebu and Accra with new key employees ▪
E&P company in Ghana (50% owned by Aker)	Board recruited and governance model established ▪ Main workstreams includes field development strategy, governmental permits, tender evaluations and ▪ Organization scaled to ~80 skilled employees financing alternatives

Aker Financial Investments

Financial Investments Overview

% of gross asset value (30.09.2018)

NOK billion

Financial Investments

Cash and Liquid fund investments

% of gross asset value

(30.09.2018)

• Cash on par with prior quarter:
• • NOK 538 million in dividends received
• NOK 189 million in loans issued to portfolio companies
• NOK 181 million from purchase of airplane
• NOK 131 million in operating expenses and net interest
• NOK 27 million in net other cash movements
• Liquid fund investments at NOK 177 million.
• Total liquidity reserve of NOK 4.5 billion, including undrawn credit facilities.

Financial Investments Listed financial investments

% of gross asset value (30.09.2018)

• Value decrease of Solstad Offshore and Philly Shipyard with NOK 106 million and NOK 33 million, respectively.
• Philly Shipyard continues to face order backlog challenges.
• The value of the investment in AMSC was up NOK 51 million. In addition, dividend received from AMSC of NOK 20 million.

Aker's investment

NOK million	1Q 18	2Q 18	3Q 18
Philly Shipyard	455	358	326
AMSC (incl. TRS)	335	520	571
Solstad Offshore	316	393	287
Other	23	25	19
Total value	1 128	1 296	1 203

Financial Investments

Real estate and other financial investments

% of gross asset value (30.09.2018)

• Loans issued to portfolio companies of NOK 189 million, mainly Aker BioMarine, Aker Energy and FP Eiendom.
• Purchase of airplane of NOK 181 million.

Aker's investment

NOK million	1Q 18	2Q 18	3Q 18
Real estate	694	538	568
Aker Energy (shares and receivable)	150	260	302
Other financial investments	2 429	1 578	1 886
Total value	3 273	2 376	2 756

Aker Financial Statements

Aker ASA and holding companies Balance sheet at 30.09.2018

Total Assets			Total equity and liabilities
Main changes in third-quarter 2018			Book value	Value-adjusted
• Cash holdings unchanged at NOK 1.2 billion. • Book value of investment slightly down with NOK 103 million, mainly due to value decrease of Solstad Offshore. • Increase in fair value adjustment of investments of NOK 5.9 billion, mainly explained by the Aker BP value increase.		Equity (MNOK) Equity ratio	14 505 61.2%	63 285 87.3%
		Equity per share	NOK 195	NOK 852

Aker ASA and holding companies Interest-bearing items as of 30.09.2018

For details of interest-bearing items and loan guarantees, see: https://www.akerasa.com/Investor/Treasury

Average debt maturity is 2.7 years

Financial Covenants	Limit	Status at 30.09.2018
i Total Debt/Equity - Aker ASA (parent only)	< 80%	37%
ii Group Loans to NAV or Group Loans	< 50% < NOK 10 bn	1.3% NOK 0.8 bn

Aker ASA and holding companies Income statement

Amounts in NOK million	2Q 2018	3Q 2018	YTD 3Q 2017	YTD 3Q 2018	Year 2017
Sales gains	194	-	-	194	-
Operating expenses	(62)	(67)	(168)	(197)	(244)
EBITDA	132	(67)	(168)	(2)	(244)
Depreciation and impairment	(4)	(5)	(11)	(12)	(14)
Value change	526	(102)	(296)	245	(289)
Net other financial items	519	482	1 014	1 517	1 380
Profit before tax	1 173	309	539	1 748	833

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.