Aker Solutions Asa · OSL:AKSO
Aker Solutions Asa — Investor Day (December 2008)
51 slides from Aker Solutions Asa's investor day presentation, Dec 9, 2008
Slide 1: Capital markets day
part of Aker Capital markets day 09 December 2008
Slide 2: Agenda Capital Markets Day 2008
Agenda Capital Markets Day 2008 Time Presentation Speaker 0800 Registration and coffee 0830 Welcome and practical details Lasse Torkildsen 0835 Long term steady strategy Simen Lieungh 0900 Sound financial position Leif Borge 0930 Q&A 0945 Coffee break 1000 The preferred subsea lifecycle partner Mads
Slide 3: Long term steady strategy / HSE performance
part of Aker Capital markets day 2008 – Long term steady strategy Simen Lieungh President & CEO Capital Markets Day 9 December 2008 © 2008 Aker Solutions Health, Safety and Environment: injury rates and sick leave remain low HSE performance 8 7 6 5 4 3.5 3 2.2 2 1 0.9 0 2003 2004 2005 2006 2007 YTD
Slide 4: Achievements last 12 months
Achievements last 12 months ■ Performance (Q407-Q308) ● EBITDA NOK 4.4 billion ● EBITDA margin 7.5% ■ Projects ● 9 drilling equipment packages to be delivered 2008 ● 4 production facilities delivered to ENI for Kashagan ● 5 metals EPCM projects in South America – undisputed market leader ● Adriatic
Slide 5: Short term, companies reviewing investment plans
Short term, companies reviewing investment plans… Capex scenarios (USD billions) 8.0 Business plan 2009-13, under revision: 6.0 “Need to evaluate impact of financial 3.0 crisis” Oil USD 80 USD 65 USD 45 price Capital Markets Day 9 December 2008 Slide 5 © 2008 Aker Solutions part of Aker …however, lo
Slide 6: Aker Solutions long-term strategy steady
Aker Solutions long-term strategy steady ■ Cold climate, harsh environment and deeper waters ■ Closer to customer core, move towards the well stream and reservoir ● Subsea solutions for flexible production from long step-outs & higher recovery rates ● Strengthen well intervention services ■ Grow ser
Slide 7: High share of large customers with strong balance sheets
High share of large customers with strong balance sheets Estimated share of total revenue 100 % Others 75 % Independents NOCs Majors 50 % (metals & construction) 25 % Majors/ IOCs 0% By customer type Capital Markets Day 9 December 2008 Slide 9 © 2008 Aker Solutions part of Aker Service highest growt
Slide 8: Financial outlook
Financial outlook EBITDA 1400 (NOK million) 1200 1 151 ■ Nominal EBITDA expected to grow in 2009; 1000 operating revenues 2009 likely to be reduced 800 ■ Strong order backlog, high- 600 quality orders, margins expected to grow 400 ■ Long-term market fundamentals attractive, 200 short-term activity l
Slide 9: Copyright and disclaimer
Copyright and disclaimer 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
Slide 10: Sound financial position
part of Aker Sound financial position Leif Borge CFO & EVP Capital Markets Day 9 December 2008 © 2008 Aker Solutions Consolidating after strong growth Operating revenues EBITDA margin Earnings per share2) (NOK Million) (bars: NOK Million) (line: %) (NOK) 60 000 9.46 58 130 4 370 4 000 8% 50 000 8 40
Slide 11: Solid return on capital
Solid return on capital Return on capital employed Return on equity (ROCE, %) (ROE, %) 30 40 26 33 24 32 30 20 20 21 20 10 10 0 0 2006 2007 2008 1) 2006 2007 2008 1) Note: ROCE and ROE after tax; 1) 2008 = YTD Q3 annualised Capital Markets Day 9 December 2008 Slide 3 © 2008 Aker Solutions part of Ak
Slide 12: 54% of EBITDA last 12 months from Subsea and P&T
54% of EBITDA last 12 months from Subsea and P&T Operating revenues by business area (NOK Million, CAGR) 30000 23 514 20000 +18% +31% +8% +0% 13 828 10 508 10 283 10000 '05 '06 '07 L12M '05 '06 '07 L12M '05 '06 '07 L12M '05 '06 '07 L12M 0 Subsea P&T ED&S P&C EBITDA by business area (NOK Million, CAG
Slide 13: Net current operating assets by business area
Long term financing plan based on a normalised working capital (NCOA) level of around NOK 1B, with quarterly fluctuations Net current operating assets (NOK million) 2000 1500 ~NOK 1 billion 1000 500 0 -500 -1000 -1500 -2000 -2500 -3000 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Note: Not
Slide 14: No major refinancing next years
No major refinancing next years External debt and available lines (NOK million) Debt maturity dates: 8000 ■ NOK 500 million bond 7000 01.12.2009 6000 ■ NOK 650 million bond 5000 01.12.2011 4000 ■ EUR 750 million RCF¹) 25.10.2012 3000 ■ NOK 300 million bond 2000 01.12.2013 1000 ■ NOK 150 million bond
Slide 15: Currency exposure fully hedged, non-qualifying hedges
All currency exposure from contracts fully hedged, but ~20% of hedges do not qualify for hedge accounting Qualifying hedge Non-qualifying hedge Contract Contract Contract Contract Contract Aker Solutions treasury Sell Buy netting position USD NOK Sell Buy USD NOK Bank Bank Capital Markets Day 9 Dece
Slide 16: Adjusted EBITDA and EPS effects
Adjusted EBITDA and EPS effects EBITDA margin Earnings per share (%) (NOK) 10 3 Adj. for 9 non- Reported qualif. hedges 8 Adj. for 2 non- 7 qualif. hedges Reported 6 5 1 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Reported: 6.0 6.8 7.0 7.2 7.1 7.5 8.5 Reported
Slide 17: Translation effects mainly from US and UK subsidiaries
Translation effects mainly from US and UK subsidiaries Share of total 100 % Other AUD BRL EUR ■ Net profit sensitive to 80 % GBP (9%) NOK, USD and GBP fluctuations USD (18%) 60 % ■ 10% NOK/USD increase = NOK ~70 million EBITDA increase 40 % ■ 10% NOK/GBP NOK (58%) increase = 20 % NOK ~40 million EBI
Slide 18: Financial outlook
Financial outlook EBITDA 1400 (NOK million) 1200 1 151 ■ Nominal EBITDA expected to grow in 2009; 1000 operating revenues 2009 likely to be reduced 800 ■ Strong order backlog, high- 600 quality orders, margins expected to grow 400 ■ Long-term market fundamentals attractive, 200 short-term activity l
Slide 19: Capital Markets Day 9 December 2008 Slide 19 © 2008 Aker Solutions
Capital Markets Day 9 December 2008 Slide 19 © 2008 Aker Solutions part of Aker
Slide 20: The preferred subsea lifecycle partner
part of Aker The preferred subsea lifecycle partner Mads Andersen EVP Subsea Capital Markets Day 9 December 2008 © 2008 Aker Solutions Reinforcing our position as the preferred lifecycle partner Aker Solutions Energy Development Products & Process & Subsea & Services Technologies Construction Trees,
Slide 21: Offshore products and technologies
Offshore products and technologies “ New Products & Drilling equipment & Technologies” technology Upstream process technology Drilling risers Mooring technology & systems Crude loading & offloading technology Marine operations & subsea installation Steel tube umbilicals Aker Oilfield Services Light
Slide 22: Creating the preferred subsea lifecycle partner
Creating the preferred subsea lifecycle partner ■ Profitable growth strategy ■ Technology leadership in business segments, focus on deep water ■ Combine offerings to create new business opportunities CAPEX OPEX Subsea FEED and Well intervention technology SURF Aftermarket exploration & oilfield serv
Slide 23: Manufacturing in key locations
Manufacturing in key locations Mobile, US Moss, Norway Aberdeen, UK Umbilicals Umbilicals Port Klang, Malaysia Controls Houston, US Tranby, Norway Trees, controls, manifolds, structures Controls Trees, processing, boosting Batam, Indonesia Curitiba, Brazil Surface wellheads, subsea wellheads Trees,
Slide 24: Recent achievements and global subsea market
Recent achievements and milestones North Sea: strong position in home market GoM: gaining stronger presence Asia Pacific: established in growth region Africa: targeting Brazil: steady selected projects growth Capital Markets Day 9 December 2008 Slide 9 © 2008 Aker Solutions part of Aker The global s
Slide 25: Aftermarket is key to further earnings growth
Aftermarket is key to further earnings growth Aker Solutions subsea trees installed Aftermarket revenue Aftermarket EBITDA 6-7x 4-5x 2-3x 2004 2008 2012 2004 2008 2012 2004 2008 2012 Installed base more than More installation work and Higher margin services, doubled from 2004 to 2012 larger in
Slide 26: Major potential for subsea processing and boosting
Major potential for subsea processing and boosting Subsea processing and boosting market forecast (USD million, DW1) base case scenario) 2 776 ■ Proven track-record for deepwater 2 368 multiphase pumps ● Deepest pump installed ● Longest step-out ~250% ■ Heavy duty raw seawater injection system to be
Slide 27: Copyright & disclaimer
Copyright & disclaimer 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 i
Slide 28: Start harvesting from the aftermarket
part of Aker Start harvesting from the aftermarket Per Harald Kongelf EVP Products & Technologies Capital Markets Day 9 December 2008 © 2008 Aker Solutions Products & Technologies ■ Specialised products and services to the upstream oil and gas industry ■ Deliveries to main oil companies, contractors
Slide 29: Business driven by two main segments
Business driven by two main segments 1 Deepwater drilling ■ Topside drilling equipment and systems ■ Drilling risers ■ Mooring systems 2 Floating production ■ Mooring and offloading equipment ■ Upstream process technologies Capital Markets Day 9 December 2008 Slide 3 © 2008 Aker Solutions part of Ak
Slide 30: Drilling rig market provides business opportunities
The drilling rig market provides significant business opportunities for Aker Solutions Key products & Advanced drilling systems Turnkey delivery of 6th technologies ■ Turnkey deliveries of generation semis ■ Topside single equipment complete high-end drilling ■ Turnkey delivery of two ■ CLIP riser t
Slide 31: Total market expected to be relatively stable
Total market expected to be relatively stable, but revenue mix will change Expected market development Main observations Service & training ■ Continuously growing installed base drives Service and training service and aftermarket growth ■ Increasing customer demand for (simulator) training Upgrades
Slide 32: Growing installed base provides aftermarket potential
Our growing installed base provides a substantial aftermarket potential Installed base complete topside drilling equipment packages1) Aftermarket potential per rig 30+ 70+ Cumulative aftermarket business ■ Ad-hoc service and 40+ maintenance ■ Sales of “wear & tear” parts ■ Major overhauls ■ Equipmen
Slide 33: Technology offering to floating production
Technology offering to floating production ■ World class delivery of process solutions to Reliance/ Aker Floating Production ■ Record high uptime since first oil in September Riser balcony ■ Uptime of 99.8% was logged in October - ie producing 718.5 of the month’s 720 hours! Flare knockout drum Offl
Slide 34: Summary
Summary ■ 17 equipment packages delivered to site ■ 9 complete drilling packages will be in operation by year end 2008 ■ Record high drilling-related order intake in excess of NOK 12 billion ■ High quality order backlog until 2011 ■ Technology development on track ■ Installed base ramping up – fuell
Slide 35: Copyright & disclaimer
Ee AkerSolutions
Slide 36: Partnerships, local know-how and technology
part of Aker Partnerships, local know-how and technology Nils Arne Hatleskog EVP Energy Development & Services Capital Markets Day 9 December 2008 © 2008 Aker Solutions Energy Development & Services ■ Delivers new-build and brown field engineering and construction services to the upstream oil and ga
Slide 37: Project execution highlights and market focus
Project execution highlights Aker H6-e Adriatic LNG Tampen ■ Tailored to drill in harsh ■ First offshore receiving and ■ Maintenance and modifications environments and ultra deep re-gasification terminal contract for StatoilHydro waters ■ Installed off Italian coast ■ Project initiated 2001 ■ Drilli
Slide 38: Post-merger Field Development and MMO
Post-merger Field Development and MMO Executive Vice President Nils Arne Hatleskog Maintenance, Russia & Caspian modifications and New build North Sea International Sea operations North Sea Engineering & technology Fabrication & installation Business function Business stream Capital Markets Day 9 De
Slide 39: Well positioned for major upcoming projects
Well positioned for major upcoming projects 600 km Hebron Shtokman South Green Canyon 2/4 2/4 E K (Tor) 2/4 B Ekofisk 2/4 J 2/4 X 2/4 2/4 M 2/4 Z C (40 wells) 2/4 T 2/4 New H Accomodation & Field Centre SSWI (15 wells) Goliat Greater Ekofisk Area Kashagan Sakhalin 1 Capital Markets Day 9 December 20
Slide 40: FEED contract for Greater Ekofisk Area
FEED contract for Greater Ekofisk Area Ekofisk 2/4 Z: Bridge and support structures Ekofisk 2/4 L: Jacket, bridges and support structures Eldfisk 2/7 S and 2/7 N: platforms Capital Markets Day 9 December 2008 Slide 9 © 2008 Aker Solutions part of Aker Maintenance and modifications portfolio in the N
Slide 41: Increased activity on maintenance and modification projects
Increased activity on maintenance and modification projects ■ Aker Solutions aims to keep the market share on Norwegian Continental Shelf ■ Significant market, long term ■ Modifications projects increasing due to: ● Ageing facilities ● Mature shelf ● Change in reservoir output from oil to gas ● Shor
Slide 42: Building local know-how
Building local know-how - a key success factor ■ Most governments demand: ● Local content in terms of man hours and supplies ● Development of local capacity and capability ● Technology transfer Long-term goal: be self-sufficient Capital Markets Day 9 December 2008 Slide 13 © 2008 Aker Solutions part
Slide 43: Technology development: unbroken chain of innovation
Technology development: an unbroken chain of innovation 2010 Next? 2008 2008 2007 2008 2007 2007 2006 Condeep 2005 Aker H-6e Gjøa Monofloater Snøhvit Aker Clean Blind Faith Adriatic Carbon Ormen Lange White Rose Sakhalin 2005 2003 2000 Kristin 1997 1996 1995 Grane 1991 Snorre Steel TLP Åsgard B Norn
Slide 44: Copyright & disclaimer
Copyright & disclaimer 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 i
Slide 45: Robust and sustainable performance
part of Aker Robust and sustainable performance Jarle Tautra EVP Process & Construction Capital Markets Day 9 December 2008 © 2008 Aker Solutions Process & Construction ■ Niche process house providing services from inception through completion ● Metals and mining ● Chemicals, polymers, syngas and re
Slide 46: Global business with flexible resources
Global business: 5 600 employees1), 11 000 with flexible resources PROCESS CONSTRUCTION Zoetermeer Shanghai Houston Global integration: Mumbai Global Key Accounts Construction and Project Management Sourcing from China Engineering in India Santiago Melbourne METALS Regional HQ’s Engineering centres/
Slide 47: Planned expansion in niches with sustainable growth
Our strategy confirmed: planned expansion in niches with sustainable growth and high margin potential China: From 200 to Delivering on strategy 500 engineers ■ Strong local market ■ Technology projects for western clients ■ Global sourcing pool Growth in South America: Entry into Africa: India: From
Slide 48: Strong position in largest copper region South America
P&C with very strong position in largest copper region South America South America: Peru and Chile: # of new copper projects market share by production capacity 26 5% 19 34% Hatch 10 13% Fluor 7 Bechtel 3 2 Aker Solutions 1 1 48% or le a la l ru o a i az in m ic i ue Pe d Ch ex nt na ua Br z ge M ne
Slide 49: China: strong track record with key accounts
China: strong track record with Western key accounts as well as local Chinese customers Following Western Key accounts to China 10 8 Number of 6 6 5 P&C projects 4 last 8 years: 2 Dow/ Dupont Invista BP Bayer Sinopec Petrochina Univation ■ Following technology partners and long term western clients
Slide 50: India: strong track record, positioned for growth
India: strong track record – well positioned for further growth India chemicals investment plans Aker Powergas Pvt Ltd historical 2007 – 2012 (BNOK)1) market share in India2) 26 117 39 Others 100% 52 65% 60% 55% 40% 40% 34% Powergas Ethylene and Downstream Synthetic fibre/ Total PTFE PP Polyester PT
Slide 51: Copyright & disclaimer
Copyright & disclaimer 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 i