Credit presentation Aker ASA - May 2018
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Proud ownership Aker ASA Credit presentation May 2018
Aker ASA – an industrial investment company
Long history of value creation: Founded in 1841, Aker ASA is an industrial
investment company that creates shareholder value through active ownership. Sector view & expertise
Aker is owned 68% by TRG, a company controlled by Chairman Kjell Inge
Røkke
Maritime assets Seafood & Marine Real estate &
E&P Oil services
& leasing Biotech finance
Attractive portfolio: Net Asset Value of NOK 56.8 billion1) with portfolio
companies positioned for growth and increasing upstream cash generation
Creating value for shareholders: Delivered 29% annual total return to
shareholders since 2004; policy to pay 2-4% of Net Asset Value in dividends to
shareholders, 12% investment return target per annum over the cycle
Value creation plan
Active approach: Through participation on the board of directors, Aker drives
operational and strategic improvement, assists in financing structures and
assesses and evaluates M&A and restructuring cases
Deep industry perspective: Concentrated on industries where we have in- Active ownership
depth knowledge and can add substantial value
Financial strength and flexibility: Strong balance sheet with ample Capital
Strategic Restructuring Org. & human Operational
structures &
investment capacity, conservative leverage and growing upstream cash flow direction and M&A
financing
capital improvement
1) Based on closing prices of Aker’s listed holdings as per 23 May 2018, remaining assets and liabilities at reported book values per 31.03.18. NAV adjusted for NOK 1.3bn dividend paid in early May, but excluding other cash movements in the
second quarter. AMSC TRS not adjusted
May 2018 AKER ASA | Credit presentation 2
Aker has a history that dates back to 1841
1841 1967 1991 2002 2009 2016
Aker is founded Delivered Ocean Troll platform Aker and Kværner Aker focus as an AkerBP is created
Viking – the rig that merge - now Aker industrial Investment
discovered Norway’s Solutions Company
first oil field
1841 1900 1970 1990 2000 2010 Today
1873 1973 1996 2004 2012
First turbine Ekofisk tank Røkke largest Aker Aker is relisted Ocean Yield is
owner, RGI merge created
w/ Aker in 1997
May 2018 AKER ASA | Credit presentation 3Liquid and diversified portfolio weighted towards oil and gas
Portfolio composition1) Gross asset value distribution
Values per 23.05.2018 and Q1 2018, Aker % ownership Per 1Q 2018 (4Q 2017)
Listed investments Other 2% (2%)
Cash and liquid Real estate investments 1% (1%)
Unlisted investments
fund investments 6% (3%)
Industrial Holdings Financial Investments Seafood & Marine
Biotech 6% (5%) E&P 59% (58%)
Aker BP 40.0% 43.9 1.2 Cash2)
Aker Solutions1)) 34.8% 5.2 0.4 Liquid fund investments
Akastor) 36.7% 1.9 1.1 Listed financial investments Maritime
assets 13% (14%) NOK Listed: 85%
Kvaerner 28.7% 1.5 0.7 Real Estate Investments3) Cash/LFI: 6%
Ocean Yield 61.7% 6.8 2.6 Other financial investments3)
52.2bn Non-listed: 9%
Oil
Aker BioMarine3) 100.0% 1.4
services 13% (15%)
Gross asset value 60.7 5.9
Net asset value 56.8
1) Based on closing prices of Aker’s listed holdings as per 23 May 2018, remaining assets and liabilities at reported book values per 31.03.18, AMSC TRS not adjusted
2) Cash adjusted for NOK 1.3bn dividend paid in early May, but excluding other cash movements in the second quarter
3) Reflected at book value per 31.03.18
May 2018 AKER ASA | Credit presentation 4A growing and evolving portfolio
2% 1%
6%
E&P
3% 3%
6%
7% 8% Oil services
14% 23%
13% Seafoods & Marine Biotech
13%
Real estate investments
NOK 8% NOK NOK 59%
10% Maritime assets
22.9bn 26.8bn 52.2bn
52% Cash and liquid fund inv.
10% 10% Other
13%
39%
2009 2012 1Q 2018
Main contributors to gross asset value: Main contributors to gross asset value: Main contributors to gross asset value:
Cash Cash
May 2018 AKER ASA | Credit presentation 5Value creation through M&A: Aker Group executing transactions for over NOK 50
billion last two years
AKER ASA 2016 2017 2018
Divestment Divestment Acquisition
Investment Acquisition Acquisition Acquisition Aker Energy
of real Investment of Havfisk of shares in
in Solstad of shares in of shares in of shares in to acquire
estate in Cxense and Norway Farstad
Offshore Aker BP Cognite Aker BP Hess Ghana
property Seafoods Shipping
Portfolio companies 2016 2017 2018
Merger Acquisition Acquisitions Investment
Acquisition of Merger
Acquisition Acquisition Acquisition of between of two Sale of of four in perpetual
6 container Divestment between Acquisition Acquisition
of Centrica of Noreco BP Divestment of Acquisition of Deep Sea PSVs and KOP Acquisition VLCCs and preferred
vessels and 2 of Fjords Frontica of of Hess
Norway Norwegian Norwegian Frontica IT 70% of C.S.E Supply, four Surface of Neptune seven dry equity in
chemical Processing Advantage Reinertsen Norway
licenses portfolio subsidiary Farstad and Suezmax Products bulk Odfjell
tankers and NES
Solstad tankers vessels Drilling Ltd.
May 2018 AKER ASA | Credit presentation 6Steady development towards a more transparent and liquid portfolio
Gross asset value composition
NOK billion and percentage distribution
Listed assets Cash and liquid fund investments Unlisted assets
20.7 22.9 21.4 22.7 26.8 29.8 24.9 27.9 43.1 50.4 52.2
8% 9% 9%
20% 19% 18% 20% 3%
23% 11% 6%
43% 7%
11% 13%
58% 56% 14%
20%
15%
88% 85%
81%
13% 73%
66% 70% 69%
24% 57%
42%
31%
18%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q 2018
May 2018 AKER ASA | Credit presentation 7Strong liquidity reserve and upstream cash generation
Liquidity position Upstream dividend
NOK billion NOK billion
Havfisk
Kvaerner
1.6
Increased gearing 1.4 Aker
1.4 Solutions/Akastor
Increased dividends
6.0
Divestments Aker BioMarine
1.0
0.9 Financial
1.3 Investments
2.3
2.9 Aker BP
0.5
0.2 Ocean Yield
Received 1Q
Cash (incl. Undrawn Dividend Additional
2011 2012 2013 2014 2015 2016 2017 2018
liquid fund inv.) credit facilities (May’18) potential sources
1) Solid upstream dividend of
Solid liquidity position of NOK 3.8bn
NOK ~1.6bn in 2017 and expected to grow in 2018
1) Liquidity reserve as of 31.03.2018, adjusted for Aker’s NOK 1.3bn dividend paid early May, but excluding other cash movements in the second quarter
May 2018 AKER ASA | Credit presentation 8Balance sheet at 31.03.2018
(after dividend allocation of NOK 18 per share)
Value-adjusted (MNOK)
47 605 52 220
Book value (MNOK)
9,794
41 088
1 337
28,047
28,047
19,559
2,495 13,042
1,721 126
273
Tangible and non- Interest Non-interest Cash and cash Investments Liabilities Dividend Shareholders
tangible fixed assets bearing assets bearing receivables equivalents allocated equity
Total Assets Total equity and liabilities
Main changes in first-quarter 2018 Book value Value-adjusted
• Cash increased to 2.5 billion kroner.
• Increase in fair value of investments of 0.4 billion kroner. This was mainly from Aker BP Equity (MNOK) 13 042 41 088
fair value increase partly offset by value decreases of AKSO, OCY, KVAER and AKA.
Equity ratio 54.0% 78.7%
• 150 million kroner investment in Aker Energy AS.
• Issue of the 1.5 billion kroner AKER14 bond.
Equity per share NOK 176 NOK 553
May 2018 AKER ASA | Credit presentation 9Interest-bearing items and loan guarantees as of 31.03.2018
Loan amount Outstanding 1)
Interest-bearing debt Maturity NOK million
(MNOK) (MNOK)
Bond AKER 11 1 300 1 206 2018 5000
Bond AKER 12 2)
1 407 1 407 2019 4500
Bond AKER 13 1 000 1 000 2020 4000 Bank loans
Bond AKER 10 700 700 2020 3500
Bond AKER 09 1 000 1 000 2022 3000 Bonds
Bond AKER 14 (to refinance AKER11) 1 500 1 500 2023 2500
Bank RCF 4) 1 500 0 2021-23 2000 AKER 10
6)
Capitalised loan fees etc. (26) (26) 1500
Total Aker ASA 8 381 6 787
AKER 10
1000
Aker Capital bank loan 1 3) 2 722 1 944 2020-22 500 AKER 11 AKER
AKER11
12 AKER
AKER1213 AKER 13 AKER 09 AKER
AKER0914
5) 778 778 2018-20
Aker Capital bank loan 2 0
Capitalised loan fees etc. 6) (10) (10) 2018 2019 2020 2021 2022 2023
Total Aker ASA and holding companies 11 871 9 500
Loan guarantees 4Q 2017 1Q 2018
Aker BioMarine 305 305 Average debt maturity 2.6 years
Other (external) 49 44
Total 354 349 Status at
Financial Covenants Limit
31.03.2018
For further details and financial reports, see www.akerasa.com/investor
i Total Debt/Equity - Aker ASA (parent only) < 80% 38%
1) Loan amount drawn, less own bonds
2) MSEK 1 500 issue
3) MUSD 350 term loan (maturity in 2020 with two one-year uncommitted extension options), redrawable up to the original ii Group Loans to NAV < 50% 3.2%
amount or Group Loans
4) Revolving credit facility (RCF) of MNOK 1 500 (maturity in 2021 with a two times one-year uncommitted extension option) < NOK 10 bn NOK 1.4 bn
5) MUSD 100 3 years Master Term Loan Agreement (SMTLA) with up to twelve months rolling tranches
6) Capitalised loan fees and internal items
May 2018 AKER ASA | Credit presentation 10Aker companies frequent issuers in the bond markets
Total outstanding bond volume of NOK ~23bn
9.2
(figures in
BNOK)
MUSD 500
US HY 6.8
bond
(4.1) AKER14
(1.5)
AKER09
(1.0)
AKER10
MUSD 400 (0.7)
US HY AKER13
bond 2.5
(3.3)
(1.0) 2.5
AKER12 OCY05
AKSO03
1.8
(1.4) (0.75)
OCY04 (1.5)
DETNOR02 (0.75) AMTI01
(1.9) AKER11
OCY03 AKSO02 (1.8)
(1.2)
(1.0) (1.0)
Aker BP Aker ASA Ocean Yield 1) Aker Solutions American Shipping Company
Assumed USDNOK 8.12
1) OCY02 excluded, Ocean Yield announced 25.05.18 to exercise call option on OCY02 (settlement date expected 06.07.18)
May 2018 AKER ASA | Credit presentation 11NAV development compared to oil price
1)
Aker’s NAV vs. oil price Key financials
Development 2009 – 23.05.2018 Figures per 23.05.2018 and Q1 2018
Oil price $/barrel) NAV (NOK/share)
140 800 NAV @ 1) NAV of BNOK 56.8 / 765 per share
765/share
700
120
600
Net LTV ~12.7%
100
500 2)
Liquidity reserves of BNOK 3.8
80 400
Brent @
$79.8/barrel
300 Covenant - Total Debt/Equity 38% (as of 31.03.18)
60
200
40
100
20 0
Jul-09
Jul-10
Jul-11
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
1) Based on closing prices of Aker’s listed holdings as per 23 May 2018, remaining assets and liabilities at reported book values per 31.03.18, AMSC TRS not adjusted
2) Liquidity reserve as of 31.03.2018, adjusted for Aker’s NOK 1.3bn dividend paid early May, but excluding other cash movements in the second quarter
May 2018 AKER ASA | Credit presentation 12A conservative debt strategy ensures balance sheet flexibility and continued
access to capital
Aker’s credit framework Debt strategy
Financial guidelines
PERFORMANCE Financial metrics at investment grade level
PERFORMANCE
Grow upstream cash flow
Net LTV within investment grade
to maintain flexibility and
sustainable dividend Balancing cash inflow and cash outflow at Aker ASA and holding companies
Solid liquidity reserves to cover debt
Parameters may fluctuate over time, but remain long term targets over
LIQUIDITY SOLIDITY business cycles
PERFORMANCE
Manage periods where PERFORMANCE
Low gearing at Aker ASA
external financing is not to withstand adverse
available or too expensive value changes in portfolio General guidelines
Long-term funding profile
Financial flexibility to optimize timing of refinancing activities
CAPACITY
Open dialogue with bond and bank market
PERFORMANCE
Ability to pursue
attractive investments Subsidiaries financed independently
swiftly
May 2018 AKER ASA | Credit presentation 13Solid financial position with low gearing level and financial flexibility
2) 3) 4)
Net LTV Cash in- and outflow Liquidity reserves and debt coverage
Aker ASA,1) per cent Aker ASA,1) ratio NOK billion
35% 1.6 12 Bond debt Bank debt
LTV 25-35%
~Baa rating
1.4
30% Targeted range 10
1.2 1.2x
25%
LTV 15-25% 8
~A rating 1.0
20% 0.9x 0.9x
0.8 6
15% 0.7x
0.6
LTV 10-15% 4
10% ~Aa rating Liquidity reserves after NOK
0.4
1.3bn dividend paid in May
LTVAker ASA - A solid credit
1 A solid balance sheet with low LTV
2 Strong upstream dividend and liquid assets
A portfolio of quality companies with robust capital
3 structures
4 Transparent conservative debt strategy
5 A proven track record of creating value through M&A
May 2018 AKER ASA | Credit presentation 15Appendix May 2018 AKER ASA | Credit presentation 16
Income statement per 31.03.2018 Amounts in NOK million 1Q 2017 4Q 2017 1Q 2018 Year 2017 Sales gains - - - - Operating expenses (63) (76) (68) (244) EBITDA (63) (76) (68) (244) Depreciation and impairment (4) (4) (4) (14) Value change 134 7 (179) (289) Net other financial items 444 365 516 1 380 Profit before tax 511 294 266 833 May 2018 AKER ASA | Credit presentation 17
Proud ownership
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. May 2018 AKER ASA | Credit presentation 19
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