Aker Solutions Asa · OSL:AKSO
Aker Solutions Asa — Investor Day (December 2012)
55 slides from Aker Solutions Asa's investor day presentation, Dec 5, 2012
Slide 1: Capital markets day 2012
Preferred partner CMD 2012 Capital markets day 5 December 2012 © 2012 Aker Solutions www.akersolutions.com
Slide 2: Agenda | Capital markets day 2012
Preferred partner Capital markets day 2012 Oslo | 5 December 2012 © 2012 Aker Solutions Slide 1 5 Dec 2012 Capital markets day Preferred partner Agenda | Capital markets day 2012 Time Presentation Speaker 08:30 Status and way forward Øyvind Eriksen 09:15 Financials Leif Borge 09:45 Q&A Break 10:20 M
Slide 3: Status and way forward
Preferred partner Status and way forward Capital Markets Day, 5 December 2012 Øyvind Eriksen | Executive Chairman © 2012 Aker Solutions Slide 3 5 Dec 2012 Capital markets day Preferred partner Agenda Status 1 ■ Update on 2015 targets ■ Current status Market 2 ■ Outlook for our key markets ■ Aker Sol
Slide 4: On track to meet 2015 targets
On track to meet 2015 targets Revenue EBITDA NOK billion NOK billion 50 5 14 % 12 40 4 10 30 3 8 20 6 2 4 10 1 2 0 0 0 2010 2012* 2015 2010 2012* 2015 *2012: Last four quarters = CAGR = EBITDA margin © 2012 Aker Solutions Slide 5 5 Dec 2012 Capital markets day Preferred partner Business area perform
Slide 5: Growth per business area 2010-2012
Growth per business area 2010-2012 Revenue ROCE Cash flow Percentage growth 2010-2012* % 2010-2012* NOK million 2010-2012* OMA OMA OMA SUB UMB SUB UMB WIS DRT WIS PRS UMB ENG SUB MLS MMO MLS PRS PRS DRT WIS DRT ENG ENG MLS MMO MMO 100% 100% -500 500 1 500 2010 2012* *12 months to 30 Sept 2012 © 2012
Slide 6: Growth in regions; Four group priorities
Growth in regions Norway World’s largest offshore market N America 53% 46% Deep-water Share Share of picking up. Europe & of empl revenues 5% 7% Africa Share Share of Deepwater fields. of empl revenues 16% 17% Share Share of Asia Pacific of empl revenues Gas demand drive our markets. 18% 22% Share S
Slide 7: Record high order backlog
Record high order backlog Order backlog NOK billion 60 Skandi Aker Vessel-based intervention services in Angola 50 MMO Offshore services for BSP in Brunei 40 Edvard Grieg Detail engineering of topside 30 Jurong Drilling packages for 6 drillships in Brazil 20 Cat B Well intervention services and dril
Slide 8: E&P spending – growth strengthens
E&P spending – growth strengthens Global E&P CAPEX spend Rebounded in 2011, expected to be 644bn USD in 2013, up from 604bn USD in 2012 Exploration at the forefront of spending growth Growth for next 5 years 10-15% Source: Barclays Capital Equity Research, Global E&P Spending Update, 4 Decembe
Slide 9: Majors dominate offshore spending
Majors dominate offshore spending Petrobras Statoil Shell Chevron Global offshore spend 2013 - 2017 ExxonMobil BP Total Pemex Eni Saudi Aramco 600 000 Million USD Abu Dhabi NOC 500 000 Woodside 400 000 ConocoPhillips 300 000 CNOOC 200 000 Inpex 100 000 ONGC (India) 0 Noble Energy 2005 2007 2009 2011
Slide 10: EBITDA margin to gradually increase to 15%
Growth and portfolio management © 2012 Aker Solutions Slide 17 5 Dec 2012 Capital markets day Preferred partner EBITDA margin to gradually increase to 15% EBITDA margin Percentage Portfolio mix Better pricing improvement Quality cost power Improved reduction efficiency 15% 2012 2017 © 2012 Aker Solu
Slide 11: Actions to improve profitability
Actions to improve profitability Improve efficiency Reduce cost of Innovation processes quality Global sourcing Tender process discipline Lean manufacturing Project management excellence (PEM) Remove internal barriers Upfront technology qualification Portfolio mix Pricing power improvements Market s
Slide 12: Conclusion: Continued growth
Conclusion Continued growth ■ On track to reach 5-year target to double in size from 2010 to 2015 ■ Expect continued growth beyond 2015 ■ Potential to double revenues and increase EBITDA margin to 15 per cent in 2017 ■ Prioritise resources ■ Improve efficiency, customer relations and pricing ■ Be th
Slide 13: Financial overview
Preferred partner Financial overview Capital Markets Day, 5 December 2012 Leif Borge | CFO © 2012 Aker Solutions Slide 22 5 Dec 2012 Capital markets day Preferred partner Financial guiding unchanged from last year Revenues to double from 2010 to 2015 EBITDA margin1: improve with 3-4 % points NOK bil
Slide 14: Shareholder value created by more stable earnings
Shareholders value created by more stable earnings EBITDA (recurring) Current EV/EBITDA 2012 trading1 NOK million Peers 13,6x 1 192 1 122 1 047 1 040 10,4x 808 9,4x 8,8x 8,7x 683 636 7,2x 7,0x 5,4x 322 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 FTI CAM WG SLB AMEC AKSO NOV HAL Share price performance against
Slide 15: Margin improvements to be driven by efficiency
Margin improvements to be driven by improved efficiency and reduced quality cost ■ Global sourcing & supply chain management ■ Lean manufacturing ■ Benchmarking & KPIs ■ Quality in tender process ■ Technology development programs ■ Economy of scale ■ Capacity utilization ■ O/H cost structure ■ Centr
Slide 16: Financial assets and capital base
Current capital base of NOK 21 billion Financial Fixed assets assets 2,2 5,5 3,7 Aker Oilfield Capital Services Employed NOK 21 bn Intangible 3,5 6,1 assets NCOA NOK billion © 2012 Aker Solutions Slide 28 5 Dec 2012 Capital markets day Preferred partner We will invest to grow Fixed assets ■ Maintena
Slide 17: Releasing non-core assets to finance investments
Releasing non-core assets to finance investments Financial Financial assets assets ■ Ezra shares & convertible Aker ■ Aker Dof Deepwater Oilfield Services ■ Real Estate Assets NCOA Preparing Aker Oilfield Services for spin-off Contract phase | Construction phase | Operational phase Skandi Santos Ska
Slide 18: The working capital level will fluctuate
Gradually improving return on capital Return on capital employed (%) Return on equity (%) ROCE after tax ROE after tax 24 21 21 19 20 16 17 16 13 10 11 11 2010 2011 2012* 2010 2011 2012* Actual Excl. OMA *2012: YTD © 2012 Aker Solutions Slide 32 5 Dec 2012 Capital markets day Preferred partner Concl
Slide 19: Gradually improving return on capital
Preferred partner Markets and Regions Capital Markets Day, 5 December 2012 Mark Riding | Chief Strategic Marketing Public © 2012 Aker Solutions Slide 34 5 Dec 2012 Capital markets day Preferred partner The main trends in oil and gas – our priorities Trends Priorities Business Areas Increased demand
Slide 20: Markets and Regions: main trends and priorities
Offshore oil & gas markets Expected total E&P spending 2013-2017 per country Brazil Norway USA Australia UK Angola M’sia India MZ Global 8-10 % CAGR over the period 250bn 220bn 190bn 150 150 100bn 75bn 40bn 25bn bn bn ■ Offshore focus, deepwater priority ■ Balance growth between North Sea and Intern
Slide 21: Offshore oil & gas markets
Discoveries of today are the developments of tomorrow ■ GoM deepwater returns to exploration ■ Arctic exploration continues Early engagement pre-FEED, ■ East Africa arrives Technology development centers ■ Australia, expands to feed LNG © 2012 Aker Solutions Slide 38 5 Dec 2012 Capital markets day P
Slide 22: Discoveries of today are the developments of tomorrow
Regional structure is the key growth vehicle Proximity 1 Better knowledge about and proximity to customers and markets Coordination 2 Improved coordination between Business Areas and achieving critical mass on a joint basis Matrix view 3 Extension of corporate into regions increased effectiveness an
Slide 23: Regional structure is the key growth vehicle
Value delivered through a regional approach What we said… What we have achieved… ■ Positive feedback from customers after establishment of the first regional structures ■ Regional strategies have been developed and are under implementation ■ Seeing the benefits of more co-location and sharing of res
Slide 24: Value delivered through a regional approach
Preferred partner Norwegian continental shelf “Take advantage of home market position Capital Markets Day, 5 December 2012 in international growth Per Harald Kongelf | Chief Operating Officer and strengthen the no. 1 position in Norway” © 2012 Aker Solutions Slide 44 5 Dec 2012 Capital markets day P
Slide 25: Norwegian continental shelf
Aker Solutions aims at being Statoil’s preferred partner ■ Top 20 96% of total spending ■ Top 15 93% ■ Top 10 86% ■ Top 5 73% One dominant player – Statoil – with > 55% of spend NB: Shows operator field’s total future expected E&P spending – not only the operator’s share Source: Rystad Energ
Slide 26: Aker Solutions aims at being Statoil's preferred partner
A “trend setter” for the international offshore markets ■ NCS is a front runner – prompting the world to ask for what we’ve developed over the last 40 years: ■ offshore ■ subsea ■ complex ■ harsh ■ remote ■ high end ■ technology driven ■ HSE focus ■ Highest global recovery rate (47 % vs 35 %) with f
Slide 27: Why regional approach?
Unbeatable “local - local content” delivery model Locations: ~ 25 Offices: ~ 37 Employees: ~ 11 470 Growing to: ~ 15 000 in 2017 8 000 permanent office 2 200 permanent non-office 1 270 temporary 52% of total Aker Solutions employees 46% of Aker Solutions’ 2012 revenue is from the NCS 1 A
Slide 28: Unbeatable local-local content delivery model
The crown jewels of Aker Solutions World class engineering and execution, unique experience, capability and offering – something to build the future on Troll Skarv at home and internationally With 40 years experience in major Aker Solutions’ offshore oil and gas Project Execution Model (PEM™) indust
Slide 29: The crown jewels of Aker Solutions
Aker Solutions, Kvaerner and Statoil Åsgard subsea Field developed or operated with significant supplies from Aker Solutions and Kvaerner Statoil operated fields or Exploration licenses © 2012 Aker Solutions Slide 54 5 Dec 2012 Capital markets day Preferred partner Cat B – Increased recovery from su
Slide 30: Aker Solutions, Kvaerner and Statoil
In Summary a strong starting point Market and customer Value Brand relationships proposition ■ Impressive reference list ■ Largest offshore market ■ Strong well connected ■ High exploration activity, world company in the region class discoveries ■ Leading provider of life cycle ■ Pipeline of field d
Slide 31: In Summary a strong starting point
Preferred partner Reliable subsea production solutions Subsea Capital Markets Day, 5 December 2012 Alan Brunnen | Head of Subsea © 2012 Aker Solutions Slide 58 5 Dec 2012 Capital markets day Preferred partner Subsea Products and systems ■ Standard products ■ Subsea production systems ■ Subsea proces
Slide 32: Subsea
Improved subsea momentum and high order activity Global subsea CAPEX spend by region, on-stream year 2004-2017, million USD 20 000 South America North America North Sea Asia Pacific/Middle East 15 000 Africa/Medit.0 10 000 5 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e 2016e
Slide 33: Improved subsea momentum and high order activity
Solid revenue development Subsea tree awards: 2010-2012 YTD Percentage 1,3 1,3 6,9 23 19,3 33,3 Revenue development 14 (indexed: 2010 = 100) 19,5 Aker Solutions 59,4 180 53 35,6 160 140 13 10 10,3 Peer 120 analysis* 2010 2011 2012 YTD 100 Subsea controls awards: 2010-2012 YTD Percentage 80 1 1 60 2
Slide 34: Solid revenue development
Subsea gas compression: the market Wide usage potential Europe Asia ■ Transportation of gas North America Middle East ■ Injection of gas C.America/ ■ Hydrate prevention Caribbean Africa South America ■ Shallow and deep waters Australia/ Oceania Good business case for most gas fields ■ Lower capex ■
Slide 35: Subsea gas compression: the market
Solutions for every field will evolve Past Present Future High end: longer step-outs, higher duty, deeper water, higher pressure Åsgard subsea compression System system optimisation: modularisation and standardisation Booster Smaller: station (KBS) compact, simplified, lower duty and lower cost Orme
Slide 36: Solutions for every field will evolve
The 2012-2017 strategy is based on four pillars Offering/technology Customers People/organisation Operations Foundation: Managing growth within our ability and capacity to execute © 2012 Aker Solutions Slide 68 5 Dec 2012 Capital markets day Preferred partner
Slide 37: The 2012-2017 strategy is based on four pillars
Preferred partner Efficient drilling technologies Drilling Technologies Capital Markets Day, 5 December 2012 Thor A. Håverstad | Head of Drilling Technologies © 2012 Aker Solutions Slide 69 5 Dec 2012 Capital markets day Preferred partner Drilling technologies Drilling equipment and solutions ■ Comp
Slide 38: Drilling Technologies
Market opportunities and trends Onshore single equipment Fixed platforms Jack-ups Floaters © 2012 Aker Solutions Slide 71 5 Dec 2012 Capital markets day Preferred partner Positive market outlook for all drilling segments Floaters Jack-ups Fixed installations Yearly number of newbuilds, Number of new
Slide 39: Market opportunities and trends
Four main market focus areas Floaters Shallow water and Integrated drilling equip-ment onshore packages with risers Integrated topside drilling Key yards: DSME, Cosco, equipment packages to Hyundai and Jurong. high-end jack ups. Present customers: Present customers: Seadrill, Transocean, Vantage, CI
Slide 40: Four main market focus areas
Customer dynamics © 2012 Aker Solutions Slide 75 5 Dec 2012 Capital markets day Preferred partner Customer focus across three main players End user | Efficiency, new technologies Oil company Owner of unit | Equipment reliability, Drilling standardisation and service contractor Builder and direct cus
Slide 41: Customer dynamics
Technology trends New mid-water efficient rigs Ultra deepwater higher capacity © 2012 Aker Solutions Slide 77 5 Dec 2012 Capital markets day Preferred partner Technology trends Efficient midwater rigs ■ Category rigs combining several modes ■ Rig efficiency combining drilling and well intervention o
Slide 42: Technology trends
Brazil – a growth area © 2012 Aker Solutions Slide 79 5 Dec 2012 Capital markets day Preferred partner Building on strong presence 19 12 7 Rigs with complete topside Rigs with topside equipment Rigs with CLIP riser™ Installed Aker Solutions base per November 2012 ■ Significant installed base in Braz
Slide 43: Brazil – a growth area
Our differentiators ■ We will build, deliver and play on our competitive advantages and market differentiators: ■ Engineering solutions and capacity ■ Aker Solutions’ history and offering ■ Ability to deliver on local content ■ Future ambition of best performing core products and systems ■ Develop s
Slide 44: Our differentiators
Preferred partner Extending the life of the fields Maintenance, Modifications and Operations Capital Markets Day, 5 December 2012 Tore Sjursen | Head of MMO © 2012 Aker Solutions Slide 83 5 Dec 2012 Capital markets day Preferred partner Maintenance, modifications and operations (MMO) Key services ■
Slide 45: Maintenance, Modifications and Operations
MMO market CAGR in our regions of interest: 5-8% Atlantic ~6% Norway ~6% Canada 25 19 1,6 2,1 2012 2017 United ~5% 2012 2017 Malaysia ~8% Kingdom 22 17 9 6 Gulf of ~5% Mexico 2012 2017 2012 2017 1,4 1,7 Brunei Australia ■ Aims to double their ■ Large upcoming LNG 2012 2017 production capacity develo
Slide 46: MMO market CAGR in our regions of interest
Northern ambitions and strong coastal presence ■ Engineering hub in Tromsø Tromsø established earlier this year ■ More than 60 employees today – between 200-300 in 2015 Sandnessjøen ■ Will be important for arctic developments ■ Engineering and fabrication capabilities in Sandnessjøen ■ New office op
Slide 47: Northern ambitions and strong coastal presence
Brunei contract overview ■ Management contractor for Brunei BSP overview: Shell Petroleum Co Sdn Bhd's (BSP) ■ Dominant E&P in Brunei Darussalam offshore construction and maintenance ■ 244 offshore structures services ■ 817 producing wells, 2 200km pipelines ■ Five year contract (+ two year option)
Slide 48: Brunei contract overview
Next Step | Australia? “The FLNG facility itself will be 488m long and 74m wide, and when fully loaded will weigh around 600 000 tonnes - roughly six times as much as the Prelude FLNG largest aircraft carrier. Some 260 000 tonnes of that weight will consist of steel - around five times more than was
Slide 49: Next Step | Australia?
Preferred partner Value creation through innovation Engineering Capital Markets Day, 5 December 2012 Valborg Lundegaard | Head of Engineering © 2012 Aker Solutions Slide 93 5 Dec 2012 Capital markets day Preferred partner Global opportunities for a new generation A new generation of engineers enteri
Slide 50: Engineering
Engineering Holistic development solutions Project management Front end FEED E&P C Specialist competence ■ Deep water, harsh- and arctic environment ■ Complex and long field life developments ■ Seamless and competitive global delivery model Revenues: 4.5 bn Resources ■ Currently 3 800 resources EBIT
Slide 51: Engineering: holistic development solutions
Major on-going projects Åsgard Subsea Compression EPC Edvard Grieg EP Martin Linge BE Mariner FEED Strong project Ekofisk 2/4 Z EPC Eldfisk 2/7 S EP portfolio Bressay pre-FEED Nyhamna EP Kebabangan E Ivar Aasen FEED Hadrian FEED © 2012 Aker Solutions Slide 97 5 Dec 2012 Capital markets day Preferred
Slide 52: Major on-going projects
Engineering global market outlook Global engineering offshore CAPEX Key highlights MNOK/year 70 000 ■ High activity in FEED, study and detailed engineering markets 60 000 North Sea ■ Global CAGR 2012-2017 of 12.2 % (NCS, UKCS) ■ About 50-50% spending split on fixed and 50 000 Brazil floating facilit
Slide 53: Engineering global market outlook
Aker Solutions now combines, into one comprehensive offering: ■ our in-depth technical experience of the entire spectre of field development aspects ■ our entire life cycle knowledge ■ our global presence Front End Spectrum Feasibility and concept engineering by Aker Solutions © 2012 Aker Solutions
Slide 54: Front End Spectrum
Global market available for front end services ■ The current global market is estimated to NOK 6 bn ■ The market is expected to grow 33% over the next 5 years ■ This is a “local” market requiring local presence ■ close dialogue and cooperation with the customers ■ use of global competence and delive
Slide 55: Global market available for front end services
Value to Aker Solutions ■ Knowledge sharing and experience transfer ■ A breeding environment for new technical ideas and solutions ■ Attract more people ■ Early prioritisation and positioning to optimise project portfolio ■ Safeguard Aker Solutions’ revenue growth ambitions Pull through effect © 201