Aker — Interim / Quarterly Report 2019

Nov 1, 2019

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Q3

2019

Aker ASA Third-quarter results 2019

1 November 2019

Highlights

Third quarter:

• Net asset value: NOK 43.1 billion, down from NOK 44.8 billion in second quarter
• Return: Aker share down 1.4 per cent to NOK 484
• Liquidity reserve: NOK 5.2 billion, cash amounted to NOK 2.7 billion

Key events:

• Kværner: Established two new business areas; FPSO and Renewables, to grow operations
• Ocean Yield: Successfully completed a perpetual hybrid bond issue of USD 125 million, carrying coupon of 3-month LIBOR + 6.50 per cent p.a.
• Aker: Launched the Centre for the Fourth Industrial Revolution (C4IR) Norway together with the World Economic Forum
• Aker BP: In October, the Johan Sverdrup field came on stream more than two months ahead of schedule and NOK 40 billion below budget
• Aker Solutions: In October, launched its "20-25-30" strategy whereby revenue from renewables is targeted to represent as much as 20 per cent of revenues, and low-carbon solutions as much as 25 per cent of revenues by 2030
• Aker: In October, signed a Memorandum of Understanding with Saudi Aramco for a strategic partnership on industrial digitalization and sustainability initiatives
• Aker Energy: In October, changed its strategy in Ghana to de-risk the Pecan development within the frames of the current petroleum agreement and only with tie-ins already identified

Net asset value change YTD 2019 NOK billion

Net asset value change in 3Q 2019 NOK billion

1 November 2019 AKER ASA | Third-quarter results 2019 3

Aker ASA and holding companies

Share price up 9.6% Q3-YTD dividend adjusted - strong balance sheet

NAV per share vs. share price NOK per share

Net asset value composition NOK billion, per 3Q 2019

Aker ASA and holding companies Portfolio composition

Portfolio composition NOK billion, per 3Q 2019

					Listed investments
Industrial Holdings				Financial Investments
	Aker BP	40.0%	35.1	2.7	Cash
	Aker Solutions 1))	34.8%	2.3	0.7	Listed financial investments
	1)) Akastor	36.7%	1.1	0.6	Real Estate Investments2)
	1) Kvaerner	28.7%	0.9
	Ocean Yield	61.7%	5.0
	2) Aker BioMarine	98.0%	2.4
	2) Aker Energy	49.2%	0.9
	2) Cognite	64.6%	<0.1
Gross asset value		47.7	6.4
	Net asset value		43.1

Gross asset value distribution Per 3Q 2019 (2Q 2019)

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 liquidity position - upstream cash of BNOK 3.5 in 2019

Investment capacity potential NOK billion

Upstream dividend NOK billion

Aker BP

Exploration & Production company on the Norwegian continental shelf

% of gross asset value

(3Q 2019)

Investment value of NOK 35.1 billion

Aker's ownership agenda

• Organic and structural growth
• Dividend growth
• Operational excellence and efficiency improvements through new business models and technologies, including digitalisation

Aker's investment

NOK million
Value as per 30.06.19	35 234
Value change in 3Q	494
Dividend income	(667)
Value as per 30.09.19	35 062

USD million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	966	723	2 835	2 344
EBITDAX	791	550	2 310	1 762

Aker Energy

Exploration & Production company in Ghana

% of gross asset value (3Q 2019)

Aker's ownership agenda

• Approval of Plan for Development and Operations
• Financing of Pecan field development
• Establish and build local content strategy around Aker Ghana Industrial Corporation
• Explore M&A opportunities

Aker's investment

NOK million
Value as per 30.06.19	860
Value change in 3Q	-
Net investments	65
Value as per 30.09.19 (book	925
Key figures
USD million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	0	2	0	4
EBITDA	(11)	(27)	(22)	(99)

Aker Solutions

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

% of gross asset value

(3Q 2019)

Investment value of NOK 2.3 billion

Aker's ownership agenda

• Continue to improve competitiveness, reach costefficiency target of 50 per cent by 2021
• Organic growth by winning new contracts
• Strategic growth through alliances and M&A

Aker's investment

NOK million
Value as per 30.06.19	3 298
Value change in 3Q	(974)
Value as per 30.09.19	2 324

NOK million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	6 541	7 134	18 278	21 915
EBITDA	463	553	1 327	1 810
Backlog			36 081	27 393

Akastor

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

% of gross asset value

(3Q 2019)

Investment value of NOK 1.1 billion

Aker's ownership agenda

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

Aker's investment

NOK million
Value as per 30.06.19	1 171
Value change in 3Q	(80)
Value as per 30.09.19	1 090

NOK million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	955	1 430	2 710	3 804
EBITDA	87	133	228	339
Backlog			2 759	3 274

Kvaerner

Oil and gas-related EPC company

% of gross asset value (3Q 2019)

Investment value of NOK 0.9 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 30.06.19	1 059
Value change in 3Q	(159)
Value as per 30.09.19	900

NOK million	3Q 18	3Q 19	YTD 18	YDT 19
Revenues	1 764	2 450	5 504	6 445
EBITDA	76	138	359	399
Backlog			10 638	8 337

Ocean Yield

A maritime assets company with focus on long-term contracts

% of gross asset value

(3Q 2019)

Investment value of NOK 5.0 billion

Aker's ownership agenda

• Growth and diversification through transactions
• Manage and mitigate counterparty risk
• Re-contract FPSO Dhirubhai-1
• Optimise capital structure, reduce cost of capital and maintain attractive dividend

Aker's investment

NOK million
Value as per 30.06.19				5 619
Value change in 3Q			(428)
Dividend income			(161)
Value as per 30.09.19			5 030
Key figures
USD million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	95	66	279	191
EBITDA	85	57	247	166
EBITDA backlog			3 500	3 200

Industrial Holdings Aker BioMarine

Integrated biotech company – specialised in krill harvesting and processing

% of gross asset value

(3Q 2019)

Book 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 transactions
• Investments to fast-track growth

Aker's investment

NOK million
Value as per 30.06.19 (book value)	2 363
Value change in 3Q	-
Value as per 30.09.19 (book value)	2 363

USD million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	40	69	119	175
EBITDA	12	21	31	40

Cognite

Software & digitalisation company

% of gross asset value (3Q 2019)

Book value < NOK 0.1 billion

Aker's ownership agenda

• Expand customer base in oil and gas and other assetintensive industry verticals
• Continue to recruit top talent
• International expansion
• Pursue strategic partnerships
• Long-term plan for IPO

Aker's investment

NOK million
Value as per 30.06.19 (book value)	42
Value change in 3Q	-
Value as per 30.09.19 (book value)	42

NOK million	3Q 18	3Q 19	YTD 18	YTD 19
Revenues	52	90	108	234
EBITDA	8	(13)	14	(23)

Aker Financial Investments

Financial Investments Overview

% of gross asset value (30.09.2019)

NOK billion

• Other financial investments
• Real estate
• Listed financial investments
• Cash

Financial Investments Cash

% of gross asset value (30.09.2019)

• Cash down NOK 0.8 billion in the quarter to NOK 2.7 billion:
  • • NOK 843 million in dividend received in cash
  • NOK 1 373 million in repayment of AKER12 bond at maturity
  • NOK 64 million in investment in Aker Energy
  • NOK 48 million in net increased receivables from portfolio companies
  • NOK 162 million in operating expenses and net interest
  • • NOK 18 million in net other cash movements and f/x adjustments
• Total liquidity reserve of NOK 5.2 billion, including undrawn credit facilities.

4.5

Financial Investments Listed financial investments

% of gross asset value (30.09.2019)

• Value decrease of American Shipping Company shares with NOK 24 million. In addition, a negative value change on AMSC TRS exposure of NOK 36 million. Dividend income from AMSC of NOK 22 million (shares and TRS).
• Value decrease of Solstad Offshore of NOK 50 million.
• Offer accepted to sell all Cxense shares for NOK 16 per share. Total cash proceeds of NOK 20 million received in October.

Aker's investment

NOK million	1Q 19	2Q 19	3Q 19
Philly Shipyard	279	267	280
AMSC (excl. TRS)	369	406	383
Solstad Offshore	92	91	41
Other	9	6	20
Total value	749	770	723
AMSC TRS*	(55)	8	(28)
*) Included in «interest-free liabilities» if negative value and in «other financial investments» if positive value.

Financial Investments

Real estate and other financial investments

% of gross asset value (30.09.2019)

• No major changes in the quarter.
• Other financial investments mainly consist of receivables against Aker BioMarine and Ocean Harvest Invest, airplanes, and unlisted share investments.

Aker's investment

NOK million	1Q 19	2Q 19	3Q 19
Real estate	568	568	568
Other financial investments	1 997	2 346	2 437
Total value	2 565	2 914	3 005

Aker Financial Statements

Aker ASA and holding companies Balance sheet at 30.09.2019

Aker ASA and holding companies Interest-bearing items as of 30.09.2019

Interest-bearing receivables Interest-bearing debt Net interest-bearing debt of NOK 6.8 billion

Average debt maturity is 2.8 years For details on interest-bearing items and loan guarantees, see: https://www.akerasa.com/Investor/Treasury

Financial Covenants	Limit	Status at 30.09.2019
i Total Debt/Equity - Aker ASA (parent only)	< 80%	42%
ii Group Loans to NAV or Group Loans	< 50% < NOK 10 bn	2.5% NOK 1.1 bn

Aker ASA and holding companies Income statement

Amounts in NOK million	2Q 2019	3Q 2019	YTD 3Q 2018	YTD 3Q 2019	Year 2018
Sales gains	-	-	194	-	194
Operating expenses	(69)	(67)	(197)	(202)	(254)
EBITDA	(69)	(67)	(2)	(202)	(60)
Depreciation and impairment	(6)	(6)	(12)	(17)	(18)
Value change	(190)	(233)	245	(372)	(383)
Net other financial items	831	410	1 517	2 038	1 927
Profit before tax	566	104	1 748	1 448	1 467

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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.