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Aker Investor Presentation 2010
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Investor Presentation
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The preferred partner
AKER
AKER ASA
Aker Status and Outlook
Q2 2010
Øyvind Eriksen, President & CEO
Trond Brandsrud, CFO
Oslo, 13 August 2010
Aker ASA
Agenda 2Q Presentation
- Status and outlook
- Øyvind Eriksen, President and CEO
- Financials 2Q10
- Trond Brandsrud, CFO
- Q&A
1
Active-industrial ownership
Made by Norway
2Q2010 | Status and outlook | 2
© Aker ASA | August 2010
2
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 3
© Aker ASA | August 2010
2Q Highlights
Further develops portfolio companies
Strategic
- Continued focus on development of portfolio companies
- Reduced portfolio risk and reinforced foundation for value creation
- New asset management company in Stockholm (Norron)
Financial key figures
- NOK 18.5 bn net asset value
- Book equity ratio: 86 percent.
- NOK 2.1 bn gross interesting-bearing debts
- NOK 6.5 bn net interest-bearing receivables
- NOK 2.5 bn cash and cash equivalents
Aker ASA and holding companies
Key indicators
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 4
© Aker ASA | August 2010
3
This is Aker
Treasury
incl corporate
finance etc
Ownership as of 30.06.10
1 Listed on Oslo Stock Exchange
2 Managed by Converto Cap Mgmt
3 Managed by Aker Asset Management
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 5
© Aker ASA | August 2010
This is Aker
Distribution of assets
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 5
© Aker ASA | August 2010
4
Overview of Aker assets
Industrial holdings
- Aker Solutions:
- Adjusted for put/call option – net 0.9 bn
- Aker Drilling
- Book value
- Aker BioMarine
- Refinancing completed, new share issue
- Aker Clean Carbon
- Subscription new shares – NOK 52 million
31.12.09
31.03.10
30.06.10
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 7
© Aker ASA | August 2010
Overview of Aker assets
Financial holdings
31.12.09
31.03.10
30.06.10
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 8
© Aker ASA | August 2010
5
Overview of Aker assets
Treasury
[Image: Aker Assets Map with 30.06.10 and 31.12.09, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, showing Aker Estate, Land, and Land Reuse, 30.06.10. Aker Assets Map with 30.06.10. Aker Assets Map, 31.03.10. Aker Assets Map, 31.06.10. Aker Assets Map, 31.12.09. Aker Assets Map, 31.03.10.]
- Strong liquidity position
-
NOK 2.5 bn in cash
-
Q2 Changes to Treasury
- AKBM refinancing -0.9 bn
- Paid dividend -0.6 bn
- Paid Sea Launch debt -0.3 bn
- Received dividend 0.2 bn
- Forex gain 0.3 bn
- Navigator Marine 0.2 bn
The preferred partner
Aker
Industrial holdings
6
Industrial holdings
Aker Solutions
Global engineering & construction services, technology products and integrated solutions
NOK bn
Equity 4.1
Receivables 0.1
% of gross asset value (30.06.10)
Key events Q2
- Key contracts awarded in all business areas
- Strategic opportunities identified for all business areas
- Øyvind Eriksen Executive Chairman
- Planned separation of P&C from AKSO
- Ambition for Field Development to become global EPC supplier
Successful delivery of Open to Stable the most modern platform on the NCV
Aker's agenda
- Contribute to strategy development for business activities
- Identify and develop structural opportunities (M&A)
- Identify opportunities for operational improvements
- Simplify structure – increase transparency
| Key figures * | 2Q09 | 2Q10 | 2009 |
|---|---|---|---|
| Revenues | 14 324 | 11 904 | 54 077 |
| EBITDA | 1 192 | 951 | 4 368 |
| Backlog | 61 924 | 60 344 | 56 276 |
- At NOV million
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 11
© Aker ASA | August 2010
Aker Solutions
Ownership structure and organisational principles
Field development
Global EPC supplier
- Seeking partnerships, co-ownership
Subsea
MMO
Products & Technologies
Continue as operative business areas under corporate center, owned 100 per cent by Aker Solutions
- Growth both organically and through transactions financed by divestments of business units and share sales
- Eliminating overlapping functional activities, enabling cost reductions
Process & Construction
Separation from AKSO
- New company, new brand
Active industrial ownership
Made by Norway
2Q10 | Status and outlook | 12
© Aker ASA | August 2010
7
Industrial holdings
Aker Drilling
Owns and operates two highly sophisticated drilling rigs for deep water and harsh environment operations
NOK bn
Equity 3.5
Receivables 3.5
% of gross asset value (30.06.10)
Key events Q2
- Aker Barents commenced its first deep water drilling for Shell at Haltenbanken and achieved over 90% utilization in Q2
- Aker Spitsbergen modifications completed according to plan; on time and on budget. Operations resumed on 2 August
- Deferred deadline for Aker Barents contract extension with Det norske. To be concluded shortly.
- Refinancing completed
Aker's Agenda
- Sustain stable and efficient operations for both rigs
- Evaluate strategic alternatives
| Key figures* | 2Q09 | 2Q10 | 2009 |
|---|---|---|---|
| Revenues | - | 469 | 764 |
| EBITDA | (150) | 195 | (115) |
*In NOK million
2Q2010 | Status and outlook | 13
© Aker ASA | August 2010
Industrial holdings
Det norske
Second largest oil company on Norwegian continental shelf in terms of exploration acreage and drilling
NOK bn
Equity 0.9
% of gross asset value (30.06.10)
Key events Q2
- Production test of Draupne find positive
- Oil discovery at Storklakken near Frøy field
- Disappointing exploration results, 3 dry wells in Q2
- Investment decision for Frøy later this year
Aker's agenda
- Focus on production growth
- Reach investment decision for the Frøy development which meets Aker's criteria
- Maintain high level of exploration activity
2Q 2010 figures to be published on 18 August
Active-industrial ownership
Made by Norway
2Q2010 | Status and outlook | 14
© Aker ASA | August 2010
8
Industrial holdings
Aker BioMarine
Integrated biotech company – uniquely positioned for krill harvesting and processing
Equity
NOK bn
0.9
% of gross asset value (30.06.10)
Key events Q2
- Aker BioMarine's krill harvesting receives MSC certification
- Increased production capacity for Superba™ krill
- Strong Superba™ krill sales growth
- Newly developed technology for omega-3 concentration to be commercialized
- Refinancing completed as planned
Aker's agenda
- Efficient operations and organic growth
- Important value drivers:
- Increased sales
- New geographic markets (USA, EU, Asia)
- Develop pharmaceutical ingredients
| Key figures* | 2Q09 | 2Q10 | 2009 |
|---|---|---|---|
| Revenues | 34 | 79 | 145 |
| EBITDA | (22) | 1 | (147) |
- in NOK million
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 10
© Aker ASA | August 2010
Industrial holdings
Aker Clean Carbon
Global provider of cost-effective CO₂ capture technology and solutions
Equity
NOK bn
0.1
% of gross asset value (30.06.10)
Key events Q2
- TCM and Longannet FEED progress according to plan
- Pre-qualification for full scale CO₂ capture unit at Mongstad well under way
NTU at Longannet Power Station Scotland
Aker's agenda
- Further develop business model
- Identify strategic partners
- Win FEED contracts
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 10
© Aker ASA | August 2010
The preferred partner
AKER
AKER ASA
Aker Financial holdings
Financial holdings Company overview
Converto Capital Management
- Aker owns 99.8 percent
- Established in 2009 to manage Converto Capital Fund
- Team of dedicated investment professionals located in Oslo
Converto Capital Fund
- Equity under management NOK 1.2 bn
- 6 larger + 4 smaller portfolio companies within seafood, offshore & US Jones Act shipping and shipbuilding
Oslo Asset Management*
- Aker owns 51 percent
- Specialized global long/short equity fund
- Team of dedicated professionals located in Oslo
- Capital under management NOK 6.8 bn
AAM Absolute Return Fund
- Hedge fund
- Total equity under management NOK 2.46 bn (per 30.06.10)
- Aker owns 13 percent (NOK 312 million)
Norron Asset Management
- To be established in 2H 2010
- Aker will own 51 percent
- Team of experienced partners with proven track records
- Located in Stockholm
Funds
- To be launched late 2010/early 2011
*Name change to Oslo Asset Management in 2H 2010
Active-industrial ownership
Made by Norway
2Q10 | Status and outlook | 18
© Aker ASA | August 2010
10
Financial holdings
Converto Capital Management
- Returns YTD: -5.5 percent
- Returns 2Q: 1.5 percent
Investments updates:
- Aker Seafoods restructured into two separate companies; harvesting and marketing/processing
- Order situation critical at Aker Philadelphia Shipyard
- 99.5 percent uptime on Dhirubhai-1
Active industrial ownership
Made by Norway
2Q10 | Status and outlook | 19
© Aker ASA | August 2010
Financial holdings
Oslo Asset Management
- Returns YTD 1.4 percent NOK tranche/0.5 percent USD tranche.
- Name change to Oslo Asset Management to be completed in 2H 2010
Strategy: Specialized global long/short equity fund dedicated to exploiting fundamental inefficiencies in publicly traded securities within Energy and Natural Resources
Edge: Combining industrial knowledge, in-depth fundamental research and capital market expertise in order to consistently exploit absolute or relative valuation inefficiencies
INVESTMENT PERFORMANCE
| AAM* | MSCI** | |
|---|---|---|
| 2010: | 1,37% | -6,98% |
| 2009: | 7,36% | 26,58% |
| 2008: | 15,03% | -38,95% |
| 2007: | 20,73% | 4,56% |
| 2006*: | 13,66% | 15,27% |
- Net performance for class B NOKs shares as of 30 June 2010
** Net performance for MSCI NOKs2 (NOK) index of 30 June 2010
10
Active Industrial ownership
Made by Norway
2Q10 | Status and outlook | 20
© Aker ASA | August 2010
The preferred partner
AKER
Aker
Financials
2Q2010
Aker ASA and holding companies
Balance sheet
| (in NOK million) | 31.12 | 31.03 | 30.06 |
|---|---|---|---|
| 2009 | 2010 | 2010 | |
| Tangible and non-tangible fixed asset | 905 | 884 | 627 |
| Long-term interest bearing items | 7 051 | 6 304 | 6 114 |
| Long-term financial assets | 9 426 | 8 903 | 9 111 |
| Other current assets | 209 | 335 | 191 |
| Short-term interest bearing items | 104 | 623 | 16 |
| Cash and cash equivalents | 2 694 | 2 692 | 2 531 |
| Total assets | 20 389 | 19 741 | 18 590 |
| Shareholder's equity | 16 377 | 15 926 | 15 987 |
| Non-interest bearing liabilities | 1 113 | 1 109 | 468 |
| Interest bearing liabilities (internal) | 373 | 375 | 22 |
| Interest bearing liabilities (external) | 2 526 | 2 331 | 2 114 |
| Equity and liabilities | 20 389 | 19 741 | 18 590 |
| Net interest bearing debt(-)/receivables(+) | 6 950 | 6 913 | 6 525 |
| Equity ratio | 80 % | 81 % | 86 % |
11
Active industrial ownership
Made by Norway
2Q10 | Status and outlook | 22
© Aker ASA | August 2010
12
Aker ASA and holding companies
Interest-bearing items
Interest bearing debt
| NOK mill | Maturity | |
|---|---|---|
| Bond AKER 02 | 410 | 2012 |
| Bond AKER 04 | 500 | 2012 |
| Sea Launch (guarantee) | 269 | 2010 |
| Bank debt | 850 | 2014 |
| Other | 85 | |
| Total external | 2 114 | |
| Internal debt | 22 | |
| Total | 2 136 |
Interest bearing assets
| NOK mill | |
|---|---|
| Short-term int-bear. | 16 |
| Cash + cash equiv. | 2 531 |
| Interest-bearing fixed assets | 6 114 |
| Total | 8 661 |
| Net int-bearing items | 6 525 |
Active industrial ownership
Made by Norway
2Q10 | Status and outlook | 23
© Aker ASA | August 2010
Aker ASA and holding companies
Profit and loss statements
| (in NOK million) | 2Q 2009 | 1H 2009 | Year 2009 | 1Q 2010 | 2Q 2010 | 1H 2010 |
|---|---|---|---|---|---|---|
| Sales gains | 391 | 391 | 391 | - | - | - |
| Operating expenses | (43) | (102) | (229) | (49) | (51) | (100) |
| EBITDA | 348 | 289 | 162 | (49) | (51) | (100) |
| Depreciation | (5) | (9) | (17) | (4) | (4) | (8) |
| Exceptional op. items | - | 0 | (447) | - | - | - |
| Value change | (266) | (81) | 103 | (587) | (446) | (1033) |
| Sea Launch guarantee liab. | (776) | (776) | (776) | - | - | - |
| Net other financial items | 303 | 265 | (35) | 233 | 632 | 865 |
| Profit before tax | 137 | (312) | (1 010) | (407) | 131 | (276) |
Active industrial ownership
Made by Norway
2Q10 | Status and outlook | 24
© Aker ASA | August 2010
13
Industrial Holdings
Treasury
Financial Holdings
- Continued focus on development of portfolio companies
- New asset management company in Stockholm
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 25
© Aker ASA | August 2010
Q&A
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 26
© Aker ASA | August 2010
14
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.
Active industrial ownership
Made by Norway
2Q2010 | Status and outlook | 28
© Aker ASA | August 2010