Aker — Interim / Quarterly Report 2020

Nov 5, 2020

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Q3 2020

Aker ASA Third quarter results 2020

5 November 2020

Highlights

• Net asset value: Decreased by 9.6 per cent to NOK 31.0 billion in the quarter. Per-share NAV amounted to NOK 417, down from NOK 461 as per 30 June 2020
• Return: Aker share price increased 18.3 per cent, adjusted for dividend, to NOK 402.8 vs. OSEBX up 7.7 per cent and the Brent price up 1.20 per cent
• Liquidity reserve: NOK 5.4 billion, cash amounted to NOK 2.4 billion
• Equity ratio: Value adjusted equity ratio was 73 per cent, compared to 75 per cent as per 30 June 2020, prior to dividend allocation for the second quarter
• Aker Solutions announced merger with Kvaerner and spun off offshore wind and carbon capture business. Spin-offs, Aker Carbon Capture (ACC) and Aker Offshore Wind (AOW), were listed on Merkur Market following successful private placements in both companies
• Aker Horizons: established as holding company dedicated to drive value creation in renewables and green technology. 51 per cent ownership in ACC and AOW, respectively, forms the basis for the portfolio. Additional opportunities are being explored, incl. within onshore wind and hydrogen
• Aker Solutions sold all ix3 shares to Aize: new Aker company established to digitalize the EPC value chain in capital-intensive projects
• Aker BP issued USD 1.3 billion in new long-dated bonds: initiated early redemption of USD 400 million Senior Notes due 2022, strengthening its liquidity and extending maturity profile
• Akastor: assumed full ownership of DOF Deepwater following debt restructuring
• After quarter end, Cognite entered partnership with global venture capital firm, Accel. Accel to become minority shareholder through Series A growth round, giving Cognite a post-money valuation of USD 550 million

Aker ASA and holding companies -38% on NAV YTD, -10% return in 3Q

Net asset value change YTD 2020 NOK billion

Net asset value change in 3Q 2020 NOK billion

Aker ASA and holding companies Share price up 18% in the quarter, value adjusted equity 73%

NAV per share vs. share price NOK per share

Dividend

NAV per share Share price

Net asset value composition NOK billion, per 3Q 2020

Aker ASA and holding companies Portfolio composition

Net asset value 31.0

1) Owned partly through Aker Kvaerner Holding, in which Aker had a 70% ownership interest prior to its dissolvement. Additionally, Aker has a direct ownership interest in Aker Solutions and Akastor

2) Reflected as listed asset as the portfolio mainly consists of listed entities, ACC and AOW 3) Reflected at book value

5 November 2020 AKER ASA | Third quarter results 2020

Listed Industrial Holdings

Aker's portfolio of listed Industrial Holdings

- Share of Aker's GAV in circle colour – return in the quarter (incl. received dividend) inside the circle - and key highlights

• Total income increased to MUSD 684, positively impacted by higher oil and gas prices
• On track to deliver on 2020 production guidance
• All field developments progressing according to plan
• Issued USD 1.3 billion in long-dated bonds, strengthening financial flexibility

• Dividend of 0.1967 USD/share

• Company listed on the Merkur Market on July 6. Private placement of MUSD 225

• Net sales of MUSD 70.2, net profit of MUSD 2.4
• Maintains adjusted EBITDA target of USD 80-90 million for full year 2020, but with current forecast in low end of the range

• Successful launch of Kori brand

• Delivery of newcastlemax dry bulk vessel Mineral Qingdao

• Navgi8 Amessi redelivered to Navig8 Chemical Tankers following exercise of 5-yr option
• Sold 75% equity in JV owning SBM Installer vessel
• Recorded impairments of MUSD 95 related to DB-1 and MUSD 35 related to Connector

• Dividend of 0.05 USD/share

• MHWirth maintained EBITDA margin of ~10% despite drop in revenues following lower activity

• NES Global Talent combined w/ Fircroft Group, creating leading technical workforce provider
• After quarter end, Akastor assumed 100% ownership of a restructured DDW Offshore

• After quarter end, AKOFS Seafarer commenced five-year contract with Equinor

• Announced merger with Kvaerner to create a stronger, more robust supplier company

• Spun-off offshore wind and carbon capture businesses
• NOK 7.1 bn. order intake, backlog NOK 29.2 bn
• New orders included contract with ConocoPhillips for the Tommeliten Alpha development

• Sold subsidiary ix3 to Aize

• Increased EBITDA, order intake and backlog

• Order intake includes revised scope in existing contracts and some new contracts, including upgrade of Kollsnes onshore gas facility

• Announced merger with Aker Solutions was approved by an EGM on 25 September, first day of trading for merged entity expected on 11 November

• Focused portfolio within renewables and green technologies. Aker Offshore Wind and Aker Carbon Capture, both listed on Merkur Market, form the basis of the portfolio

• Currently exploring other opportunities, including within onshore wind and hydrogen

Non-listed Industrial Holdings

Aker's portfolio of non-listed Industrial Holdings

– These companies are at book value in Aker's accounts – key highlights shown below

EXPLORATION & PRODUCTION COMPANY IN GHANA

• Project put on hold due to COVID-19, in line with postponements in the general global O&G industry
• Organization reduced to small core team
• Strategy shifted from centralized FPSO to a phased development with more than one FPSO
• FPSOs will be redeployed units
• Focus on reducing the break even costs to proceed in a lower and more uncertain oil price environment

INDUSTRIAL SOFTWARE AND DIGITALIZATION COMPANY

• Revenue growth supported by fast-growing customer base and international presence
• Several new commercial engagements with some of the world's leading industrial companies
• Added 60 employees in the quarter
• Entered partnership with leading global venture capital firm, Accel. Accel to become minority shareholder through Series A investment round that raises Cognite's valuation to USD 550 million. Parties to work together to accelerate Cognite's growth initiatives and global presence

Aker Financial Investments

Financial Investments Overview

% of gross asset value (30.09.2020)

NOK billion

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

Financial Investments Cash

% of gross asset value (30.09.2020)

• Cash down NOK 0.4 billion in the quarter to NOK 2.4 billion:
• • NOK 324 million in dividend received in cash
• • NOK 1112 million in repayment of receivables from Aker BioMarine
• • NOK 175 million in proceeds from sale of an airplane
• NOK 873 million in dividend paid
• NOK 772 million cash investment in Aker Horizons
• NOK 172 million in increased receivables from portfolio companies
• NOK 163 million in operating expenses and net interest
• NOK 56 million in net other cash movements
• Total liquidity reserve of NOK 5.4 billion, including undrawn credit facilities.

Financial Investments Listed financial investments

% of gross asset value (30.09.2020)

• NOK 85 million value decrease of Philly Shipyard in the quarter.
• Value increase of AMSC of NOK 36 million in the quarter. In addition, positive value development of AMSC TRS agreements of NOK 62 million. Dividend income from AMSC of NOK 27 million (shares and TRS).
• Value increase of REC Silicon of NOK 65 million in third quarter. Substantial positive value development subsequent to the quarter.
• Financial restructuring of Solstad Offshore competed subsequent to the quarter.

Aker's investment

NOK million	1Q 20	2Q 20	3Q 20
Philly Shipyard	304	528	443
AMSC (excl. TRS)	223	296	333
Solstad Offshore	30	31	29
REC Silicon	183	182	248
Total value	739	1 038	1 053
AMSC TRS*	(292)	(171)	(108)

*) Included in interest-free liabilities.

Financial Investments

Real estate and other financial investments

% of gross asset value (30.09.2020)

• Other financial investments mainly consist of receivables, an airplane, and unlisted share investments.
• NOK 1.1 billion in debt repayments (incl. accrued interest) received from Aker BioMarine in the quarter.
• Divestment of an airplane with proceeds approximately at book value.

Aker's investment

NOK million	1Q 20	2Q 20	3Q 20
Real estate	703	703	703
Other financial investments	2 871	2 932	1730
Total value	3 574	3 635	2 433

Aker Financial Statements

Aker ASA and holding companies Balance sheet at 30.09.2020

Main changes in third-quarter 2020

• Cash holdings decreased to NOK 2.4 billion.
• Book value of investments increased by NOK 2.1 billion, mainly due to establishment of Aker Horizons, including the spin-off, private placement and listing of Aker Carbon Capture and Aker Offshore Wind and the participation in the equity issues in the said companies. In addition, there was a positive impact from the reversal of impairments for investments in Aker Solutions, Akastor, Kvaerner and Ocean Yield.
• Decrease in fair value adjustment of NOK 4.1 billion, mainly explained by lower share prices for Aker BP and Aker BioMarine. This was partly offset by value increases of Aker Carbon Capture and Aker Offshore Wind subsequent to listing.

	Book value Value-adjusted
Equity (MNOK)	15 282	30 985
Equity ratio	58%	73%
Equity per share	NOK 206	NOK 417

Aker ASA and holding companies Interest-bearing items as of 30.09.2020

Interest-bearing receivables Net interest-bearing debt

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

Average debt maturity is 3.0 years

Financial Covenants	Limit	Status at 30.09.2020
i Total Debt/Equity - Aker ASA (parent only)	< 80%	28%
ii Group Loans to NAV or Group Loans	< 50% < NOK 10 bn	2.5% NOK 0.8 bn

Aker ASA and holding companies Income statement

Amounts in NOK million	3Q 2019	2Q 2020	3Q 2020	YTD 3Q 2019	YTD 3Q 2020	Year 2019
Operating expenses	(67)	(79)	(49)	(202)	(190)	(267)
EBITDA	(67)	(79)	(49)	(202)	(190)	(267)
Depreciation and impairment	(6)	(8)	(8)	(17)	(24)	(25)
Value change	(233)	191	1 249	(372)	763	(435)
Net other financial items	410	754	451	2 038	906	2 886
Profit before tax	104	858	1 643	1 448	1 455	2 159

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.