Akastor Asa · OSL:AKAST

Akastor Asa — Q4 2021 Earnings Presentation

41 slides from Akastor Asa's earnings presentation, Feb 9, 2022

  1. Slide 1: 4Q 2021 Quarterly presentation

    4Q 2021 Quarterly presentation February 9, 2022 Akastor © 2021

  2. Slide 2: 4Q 2021 Highlights

    4Q 2021 Highlights ▪ JV between MHWirth and Baker Hughes SDS completed, with NET CAPITAL EMPLOYED Akastor now owning 50% of HMH NOK million, 31 December 2021 ▪ Akastor’s corporate credit facility refinanced Book value per share ▪ Net interest-bearing debt reduced by NOK 831 million in the 9.7 2.8 2.

  3. Slide 3: Agenda

    Agenda HMH Financial update Ownership agenda Q&A Akastor © 2022 2021 Slide 3

  4. Slide 4: Merger created a premier global drilling solution provider

    Merger created a premier global drilling solution provider HMH at a glance Strong global presence Employees by geography Europe Step Oil Tools North America Asia 6% Latin America Middle East & Africa 8% 2% SDS 9% Leading offshore drilling Leading subsea pressure 52% solution provider control provide

  5. Slide 5: Joint presence across all drilling segments

    Joint presence across all drilling segments Akastor © 2022 2021 Slide 5

  6. Slide 6: Young fleet with substantial remaining production life

    Young fleet with substantial remaining production life Total 116 offshore drilling units driving substantial recurring lifecycle revenues Large installed base with recurring lifecycle revenue ~75% of fleet younger than 15 years1) # rigs # rigs 116 116 22 32 4 4 38 64 36 20 12 Fixed Platforms Floater

  7. Slide 7: Likely pick-up in Project sales set to increase aftermarket revenues

    Likely pick-up in Project sales set to increase aftermarket revenues Key win: CGS/GMGS Geological Survey Drillship signed Q3/Q4-21 USD millions ▪ HMH business has been recently driven by service opportunities, supported by delivery of newbuild and upgrade orders secured in ILLUSTRATIVE last upturn (

  8. Slide 8: Q4 2021 Highlights

    Q4 2021 Highlights ▪ Strong orders received leading to a healthy order- REVENUE EBITDA EBITDA MARGIN book driven by USD 78 million project equipment USD millions USD millions % order and ~10% increase QoQ in Aftermarket 168 31 18,5 Services 157 142 143 133 14,8 23 13,0 13,3 ▪ Revenues up 6% YoY, dri

  9. Slide 9: Segments highlights

    Segments highlights Aftermarket Services REVENUE | AFTERMARKET SERVICES USD millions ▪ Short term contracts for rigs continues to affect order intake, but 118 signs of improvement with reactivation activity expected to pick 113 107 108 103 up in 2022 with HMH well positioned to benefit ▪ Share of ac

  10. Slide 10: Net interest-bearing debt

    Net interest-bearing debt ▪ Net debt of USD 124m at end of 4Q 2021 NET INTEREST-BEARING DEBT USD millions ▪ Successfully refinanced bridge loan with new USD 150m bond in January 2022 223 226 ▪ Leverage below targeted capital structure of 2-3x net debt / LTM EBITDA at 1.6x in 4Q 2021 driven by strong

  11. Slide 11: Market fundamentals are improving and expected to increase further

    Market fundamentals are improving and expected to increase further Offshore spending is on the rise… …we see increased rig activity offshore… …as well as onshore Global Offshore Upstream capex Floater demand (left) vs Active utilization (right) North America Rig Count 250 300 90% 2200 2000 80% 250 1

  12. Slide 12: Summary and outlook

    Summary and outlook ▪ Strong project and product orders as a result of the combined commercial strength from the merger ▪ Solid equipment backlog for 2022 ▪ Resilient Aftermarket Services performance throughout the downturn ▪ Solid market tailwinds if rig reactivations pick up as expected in 2022 ▪

  13. Slide 13: Agenda

    Agenda HMH Financial update Ownership agenda Q&A Akastor © 2022 2021 Slide 13

  14. Slide 14: Financials highlights per 4Q 2021

    Financials highlights per 4Q 2021 NOK million 1) Figures on 100% basis Akastor © 2022 2021 Slide 14

  15. Slide 15: Financials highlights per 4Q 2021 (cont.)

    Financials highlights per 4Q 2021 (cont.) COMMENTS ▪ Profit from discontinued operations include financial effects following the completion of the combination between MHWirth and Baker Hughes SDS ▪ Consolidated revenue and other income increase of 59 percent year-on-year, driven by increased activit

  16. Slide 16: Net interest-bearing debt development

    Net interest-bearing debt development Net debt bridge 4Q 2021 highlights NOK million ▪ Net debt decreased by NOK 649 million in quarter, to NOK 1 299 million ▪ “Other” includes proceeds from MPO earn-out settlement of NOK 47 million ▪ Interest-bearing receivables per end of quarter include new share

  17. Slide 17: External financing facilities and liquidity

    External financing facilities and liquidity Overview of financing facilities Cash and undrawn facilities as of 31 December 2021 NOK million 652 Facility Size Maturity Margin 563 89 February Revolving (USD) USD 89 million [1] 4.5% - 5.5% 2023 February Revolving (NOK) NOK 250 million [1] 4.5% - 5.5% 2

  18. Slide 18: Agenda

    Agenda Financial update HMH Ownership agenda Q&A Akastor © 2022 2021 Slide 18

  19. Slide 19: Portfolio overview

    Portfolio overview Industrial investments Financial investments 50%1) ~ 15%3) Global full-service offshore and onshore drilling equipment provider with a Global manpower specialist within Oil & Gas, ICT, Renewables, Chemicals, broad portfolio of products and services Mining, Life Sciences, Automotiv

  20. Slide 20: DRU contracts claim

    DRU contracts claim Background 2012: 7 drilling packages ordered under separate contracts with MHWirth 2016: all contracts suspended by the shipyard 2018: settlement agreement reached on termination fees for three contracts 2020: shipyard enters into termination agreement with its end-client 2021: t

  21. Slide 21: HMH

    HMH Business model REVENUE ▪ Global full-service offshore and onshore drilling USD millions equipment provider with a broad portfolio of 52% Capital Employed 168 products and services 157 NOK 2 650 million 142 143 133 ▪ Large installed base providing firm foundation for strong customer relationship

  22. Slide 22: AKOFS Offshore

    AKOFS Offshore Business model REVENUE ▪ Vessel-based subsea well construction and USD millions intervention services covering all phases from Capital Employed 40 15% conceptual development to project execution 38 37 NOK 759 million and offshore operations 32 31 ▪ Operates two SESV vessels in Brazil

  23. Slide 23: NES Fircroft

    NES Fircroft Business model FINANCIAL DEVELOPMENT1) ▪ NES Fircroft is the world’s leading engineering USD millions staffing provider spanning the Oil & Gas, Capital Employed 12% Power & Renewables, Infrastructure, Life Revenue NIBD NOK 621 million Sciences, Mining, Automotive and Chemicals 2 500 400

  24. Slide 24: AGR

    AGR Business model REVENUE ▪ AGR is a multi-disciplinary engineering NOK millions consultancy and software provider to the 4% Capital Employed 190 energy sector 177 178 177 NOK 192 million ▪ Offers consultancy, asset evaluation, peer 138 study, software and integrated well engineering services Akast

  25. Slide 25: Illustrative roadmap for realizing our investments and capital allocation priorities

    Illustrative roadmap for realizing our investments and capital allocation priorities SEPARATE LISTING STRUCTURAL SOLUTIONS/M&A FINANCIAL INVESTMENTS DEBT REPAYMENT DISTRIBUTION TO SHAREHOLDERS (CASH OR SHARES) Akastor © 2022 2021 Slide 25

  26. Slide 26: Agenda

    Agenda Financial update HMH Ownership agenda Q&A Akastor © 2022 2021 Slide 26

  27. Slide 27: Appendix

    Appendix Akastor © 2021 | 2022 Slide 27

  28. Slide 28: Condensed Consolidated Income Statement

    Condensed Consolidated Income Statement Note: MHWirth is presented as discontinued operations in the income statement from 1Q 2021, comparable figures have been restated Akastor © 2022 2021 Slide 28

  29. Slide 29: Condensed Consolidated Statement of Financial Position

    Condensed Consolidated Statement of Financial Position Akastor © 2022 2021 Slide 29

  30. Slide 30: Condensed Consolidated Statement of Cash flows

    Condensed Consolidated Statement of Cash flows Akastor © 2022 2021 Slide 30

  31. Slide 31: Alternative Performance Measures (1 of 2)

    Alternative Performance Measures (1 of 2) Akastor discloses alternative performance measures as a supplement to the consolidated financial ▪ Gross debt - sum of current and non-current borrowings, which do not include lease liabilities statements prepared in accordance with IFRS. Such performance me

  32. Slide 32: Alternative Performance Measures (2 of 2)

    Alternative Performance Measures (2 of 2) December 31 December 31 December 31 December 31 NOK million 2021 2020 NOK million 2021 2020 Non-current borrowings 1 372 628 Current operating assets 887 2 765 Current borrowings 16 1 119 Less: Gross debt 1 387 1 746 Current operating liabilities 647 2 214 L

  33. Slide 33: Key figures | Group

    Key figures | Group AKASTOR GROUP (continuing operations) Akastor © 2022 2021 Slide 33

  34. Slide 34: Key figures | Split per company (1/4)

    Key figures | Split per company (1/4) HMH Note: HMH figures presented on 100% basis, proforma figures for the periods 4Q 20 – 3Q 21 [1] Revenue (adj) 4Q 21 includes revenue from Step Oiltools [2] EBITDA (adj) 4Q 21 excludes integration costs [3] Equipment backlog defined as Project and Product order

  35. Slide 35: Key figures | Split per company (2/4)

    Key figures | Split per company (2/4) AKOFS OFFSHORE Note: AKOFS Offshore figures presented on 100% basis Akastor © 2022 2021 Slide 35

  36. Slide 36: Key figures | Split per company (3/4)

    Key figures | Split per company (3/4) AGR Akastor © 2022 2021 Slide 36

  37. Slide 37: Key figures | Split per company (4/4)

    Key figures | Split per company (4/4) OTHER HOLDINGS Akastor © 2022 2021 Slide 37

  38. Slide 38: ODL preferred equity and warrant instrument

    ODL preferred equity and warrant instrument Preferred equity structure Warrant structure Instrument description: Instrument description: ▪ 5% cash dividend + 5% PIK per annum (semi-annual payment) ▪ The total warrant issue comprise six tranches with 987,500 warrants per tranche, amounting to a total

  39. Slide 39: Selected transactions since inception in 2014

    Selected transactions since inception in 2014 March 2021 October 2020 September 2020 June 2019 April 2019 September 2018 April 2018 Merged for an economic 100% acquisition of 50% sale to interest stake of 55% Subsea Drilling Systems Restructuring and 50% Merger with Preferred equity 50% JV between a

  40. Slide 40: Copyright and disclaimer

    Copyright and disclaimer Copyright Copyright of all published material including photographs, drawings and images in this document remains vested in Akastor and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor u

  41. Slide 41: AKASTOR ASA

    AKASTOR ASA Oksenøyveien 10, NO-1366 Lysaker, Norway P.O. Box 124, NO-1325 Lysaker, Norway +47 21 52 58 00 www.akastor.com Akastor © 2021

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