Presentation - Aker Solutions

Preferred partner
Investor Day 2015
London, March 17, 2015
Luis Araujo, CEO | Svein Stoknes, CFO
© 2015 Aker Solutions
Slide 1
March 17, 2015
Investor Day 2015
Preferred partner
Forward-Looking Statements and Copyright
This Presentation 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 Presentation 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 Solutions ASA and Aker Solutions 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 Solutions’ 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
Presentation. Although Aker Solutions ASA believes that its expectations and the Presentation 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
Presentation. Aker Solutions ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or
completeness of the Presentation, and neither Aker Solutions ASA nor any of its directors, officers or employees will have any
liability to you or any other persons resulting from your use.
Aker Solutions consists of many legally independent entities, constituting their own separate identities. Aker Solutions is used as
the common brand or trade mark for most of these entities. In this presentation we may sometimes use “Aker Solutions”, “we” or
“us” when we refer to Aker Solutions companies in general or where no useful purpose is served by identifying any particular Aker
Solutions company.
Copyright
Copyright of all published material including photographs, drawings and images in this document remains vested in Aker Solutions
and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any
form nor used in any manner without express prior permission and applicable acknowledgements. No trademark, copyright or
other notice shall be altered or removed from any reproduction.
© 2015 Aker Solutions
Slide 2
March 17, 2015
Investor Day 2015
Preferred partner
Positioned to Capture Growth
Subsea
© 2015 Aker Solutions
Field Design
Slide 3
March 17, 2015
Investor Day 2015
Preferred partner
Strategic Objectives
1.
Be the preferred partner, with an
unparalleled level of safety and
performance
2.
Capture growth in offshore
deepwater, subsea and harsh
environment markets
3.
Maintain and expand a global
presence through disciplined,
organic growth
4.
Further develop portfolio with a
diversity of customers, regions
and strong contract mix
5.
Deliver operational excellence,
realize synergies, strengthen cost
control and capital discipline
© 2015 Aker Solutions
Slide 4
March 17, 2015
Investor Day 2015
Preferred partner
Creating Value Through Subsea
Strongly positioned to develop advanced subsea systems
– from design to construction, maintenance and upgrades
© 2015 Aker Solutions
Slide 5
March 17, 2015
Investor Day 2015
Preferred partner
Ability to influence cost
Creating Value at the Front End
Project cost
Front End
Spectrum
Time
Front
end
E
FEED
P
C
I
C
Operation
■ Current market fuels interest in feasibility, concept studies
■ Early involvement to boost overall economics, value of field developments
■ Front-end spectrum teams use expertise across Subsea, Engineering,
MMO
© 2015 Aker Solutions
Slide 6
March 17, 2015
Investor Day 2015
Preferred partner
Creating Value Through Technology Development
■ R&D focus on developing cost-effective
solutions to solve industry challenges
■
■
■
■
Aging fields
Complex reservoirs
Stricter regulation
Higher costs
■ Four main R&D areas
■ Advanced subsea production products
and solutions
■ New generation subsea controls and
automation systems
■ Offshore greenfield concepts
■ Offshore brownfield modifications
■ Subsea Production Alliance
■ Develops solutions to boost output and
recovery, reduce costs at subsea fields
■ Introducing cost-effective, fast-track
POWERJump boosting system
© 2015 Aker Solutions
Slide 7
March 17, 2015
Investor Day 2015
Preferred partner
Improvement Agenda | Internally at Aker Solutions
■ Cost-savings programs in all
■ Major push to improve quality
business segments and corporate
functions
■
■ Renegotiated contract terms with
suppliers and contractors
■
■ Adjusted workforce capacity
© 2015 Aker Solutions
Slide 8
March 17, 2015
Investor Day 2015
and efficiency in execution
Focus on simplifying and
standardizing work processes
Reorganized functions to better
use expertise across business
Preferred partner
Improvement Agenda | Externally With Our Customers
■ Collaboration with clients to
achieve operational, costsavings improvements
on subsea tree refurbishment to
17 weeks from 1 year
■ Utilize know-how and technology
to find effective development
solutions
© 2015 Aker Solutions
Slide 9
March 17, 2015
■ Pit Stop project cut time spent
Investor Day 2015
■ Committed to STEP program
with Statoil
Preferred partner
Key Figures | 2014
Revenue and EBIT
Order intake & backlog
NOK billion
NOK billion
Revenue
EBIT
60
2,5
35
30
33.0
Intake
Backlog
50
2
48.3
2.0
25
40
1,5
20
37.1
30
15
1
20
10
0,5
10
5
0
0
2011
© 2015 Aker Solutions
2012
2013
2014
Slide 10
0
2011
March 17, 2015
2012
2013
Investor Day 2015
2014
2011
2012
2013
2014
Preferred partner
Good Visibility From Strong Order Backlog1
End 2014 order backlog by execution date
Order intake and backlog
NOK billion
NOK billion
Intake
Potential additional revenue from existing agreements
2016
2017
2018
3Q 13
4Q 13
1Q 14
2Q 14
3Q 14
4Q 14
End 2014 order backlog by region1
NOK billion
NOK billion
SUB
MMO
ENG
12%
UMB
50
37%
13%
40
North America
Norway
20
United Kingdom
10
South America
30%
-
1
Africa
Asia Pacific
30
2Q 13
48.3
49.0
53.9
21.4
39.6
39.5
2Q 13
Order backlog by business area1
60
Backlog
6.2
2015
5.9
6.4
0
9.2
7.5
5.2
10.6
5
6.3
23.8
10
40.9
60
50
40
30
20
10
0
15
41.2
Firm backlog
3.6
20
3Q 13
4Q 13
1Q 14
2Q 14
3Q 14
4Q 14
4%
5%
Firm backlog only, excludes majority of service business and potential additional revenue from existing agreements
© 2015 Aker Solutions
Slide 11
March 17, 2015
Investor Day 2015
Preferred partner
Financial Guidance
Revenue
Balance sheet
 Positive long-term offshore, deepwater
outlook
 Maintenance capex / R&D ≈ 3% of revenue
 Current major capex expansion plans to be
finished in 2015
 Near-term uncertainty on award timings
 Aim to at least maintain market share in
main subsea, field design markets
 Working capital: likely to fluctuate around
large project work but on average will be
≈ 5 - 7% of group revenue
Margins and returns
Financial policy
 We aim to gradually move toward peer
group margin levels in Subsea
 Gearing target: Net interest bearing debt /
EBITDA ≈ 1
 We expect continued robust margins in
Engineering, gradual recovery in MMO
 Gearing policy: Net interest bearing debt /
Equity < 0.5
 We aim for Subsea ROACE of 20 - 25%
over medium term
 Dividend payments should over time
amount to 30 - 50% of net profit
© 2015 Aker Solutions
Slide 12
March 17, 2015
Investor Day 2015
Preferred partner
Outlook
■ Increased short-term market
uncertainty amid concern over capital
constraints, oil price drop
■ Steady tendering in main markets,
though risk of project delays
■ North Sea activity seen sluggish next
1-2 years even as projects like Johan
Sverdrup support industry
■ Aker Solutions well placed to capture
deepwater, subsea growth globally
■ Revenue generated outside Norway
set to overtake NCS sales
■ Robust order intake provides position
of strength in current market
environment
■ Company to be vigilant about costs,
workforce capacity in all areas
© 2015 Aker Solutions
Slide 13
March 17, 2015
Investor Day 2015
Preferred partner
Q&A
Q&A
© 2015 Aker Solutions
Slide 14
March 17, 2015
Investor Day 2015
Preferred partner