Akastor Asa · OSL:AKAST
Akastor Asa — Q3 2021 Earnings Presentation
34 slides from Akastor Asa's earnings presentation, Oct 29, 2021
Slide 1: Third Quarter Results 2021
Third Quarter Results 2021 Karl Erik Kjelstad (CEO) & Øyvind Paaske (CFO) Fornebu | 29 October 2021 Akastor © 2019 Akastor
Slide 2: Presenters and agenda
Presenters and agenda Portfolio highlights Karl Erik Kjelstad Chief Executive Officer Financial update Øyvind Paaske Q&A session Chief Financial Officer Akastor © | 2019 October Akastor 2021 Slide 2
Slide 3: Portfolio Highlights
Portfolio Highlights Akastor © 2019 | October Akastor 2021 Slide 3
Slide 4: Key highlights in the quarter and subsequent events
Key highlights in the quarter and subsequent events ▪ Merger between MHWirth and Baker Hughes’ Subsea Drilling Systems completed on October 1st ▪ Akastor received USD 97m at closing (78m net of cash included in Q3 net debt), adjusted for NWC and specific agreed debt like items ▪ Akastor completed a
Slide 5: Forming a leading drilling equipment and service provider
Forming a leading drilling equipment and service provider ▪ In connection to the closing October 1st, the JV was rebranded to HMH ▪ Executive Management Team in place with Pete Miller as CEO, Tom McGee as CFO, Eirik Bergsvik as President for Topside Drilling Equipment and Chuck Chavier as President
Slide 6: Akastor portfolio composition
Akastor portfolio composition Industrial investments Financial investments 50%1) ~ 15%3) Global full-service offshore and onshore drilling Global manpower specialist within Oil & Gas, ICT, equipment provider with a broad portfolio of products Renewables, Chemicals, Mining, Life Sciences, and service
Slide 7: Drilling activity is picking up and floater demand is on the rise
Drilling activity is picking up and floater demand is on the rise Global number of contracted rigs and marketed utilization Key takeaways Marketed Utilization (RH) Contracted rigs (LH) 430 75% ▪ Utilization recovery presents opportunity for 420 74% improvement in financial performance among 73% dril
Slide 8: Portfolio Highlights 3Q 2021 (1 of 2)
Portfolio Highlights 3Q 2021 (1 of 2) Drilling equipment Lifecycle services, spares and components Projects DLS ▪ Continued low activity in quarter as a result ▪ Positive development within drilling in of ending phase on current projects general, especially within ultra deep-water ▪ Contract signed
Slide 9: Portfolio Highlights 3Q 2021 (2 of 2)
Portfolio Highlights 3Q 2021 (2 of 2) ▪ AKOFS Seafarer with revenue utilization of 91% ▪ Aker Wayfarer and Skandi Santos with revenue utilization of 100% ▪ Final discussions with Petrobras regarding a new 3-year contract for Skandi Santos, process expected to be clarified during fourth quarter Other
Slide 10: Illustrative roadmap for realizing our investments and capital allocation priorities
Illustrative roadmap for realizing our investments and capital allocation priorities FINANCIAL INVESTMENTS STRUCTURAL SOLUTIONS / M&A SEPARATE LISTING DEBT REPAYMENT DISTRIBUTION TO SHAREHOLDERS (CASH OR SHARES) Akastor © | 2019 October Akastor 2021 Slide 10
Slide 11: Financial update
Financial update Akastor © 2019 | October Akastor 2021 Slide 11
Slide 12: Financial highlights 3Q 2021
Financial highlights 3Q 2021 3Q 2021 highlights ▪ Following announced agreement to combine MHWirth with Baker Hughes SDS, MHWirth is presented as discontinued operations in the income statement ▪ Revenue and other income increase of 20 percent year-on-year, driven by increased activity in AGR ▪ EBIT
Slide 13: Key financials reconciliation
Key financials reconciliation ▪ Odfjell Drilling: result of NOK 1 million includes cash interests of NOK 10 million, PIK interests of NOK 10 million and negative valuation effects on the warrant structure of NOK 24 million ▪ AKOFS Offshore: negative result represents 50% of the company’s net loss in
Slide 14: Cash flow and net debt position
Cash flow and net debt position Net debt bridge 3Q 2021 highlights NOK million ▪ Net debt increased by NOK 145 million in quarter, to NOK 1 948 million ▪ DDW Offshore net debt of NOK 434 million per end of quarter ▪ “Other” includes currency effects of NOK 67 million ▪ Liquidity reserve of NOK 1.3 b
Slide 15: Net Capital Employed as per 3Q 2021
Net Capital Employed as per 3Q 2021 NOK million 1) MHWirth NCE here presented excluding book value related to DRU contracts Akastor © | 2019 October Akastor 2021 Slide 15
Slide 16: MHWirth
MHWirth Highlights 3Q 2021 Installed base per 3Q 2021 ▪ Project & Products revenues were NOK 222 million, a decrease of Full package (rigs) Installed base by age 1% compared to last year 0-5 >20 ▪ DLS & DT revenues were NOK 535 million, an increase of 5% Fixed 9 21 18 compared to last year ▪ EBITDA
Slide 17: AKOFS Offshore
AKOFS Offshore Highlights 3Q 2021 Fleet overview Vessels Loc. 2019 2020 2021 2022 2023 2024 2025 ▪ Revenues and EBITDA of NOK 333 million and NOK 98 million, respectively +3 years option ▪ Aker Wayfarer and Skandi Santos with 100% revenue utilization in AKOFS Seafarer quarter ▪ AKOFS Seafarer with 9
Slide 18: NES Fircroft
NES Fircroft Recent development Award winning workforce solution specialist ▪ Good momentum in business with solid increase in number of Global organization contractors since last reporting with local client touch-points through ▪ LTM pro-forma revenues per August 2021 around 20% lower than a networ
Slide 19: Other industrial holdings
Other industrial holdings Highlights 3Q 2021 ▪ Other industrial holdings reported pro-forma consolidated revenue and EBITDA of NOK 200 million and NOK 10 million, respectively ▪ AGR: Revenues and EBITDA of NOK 177 million and NOK 10 million, respectively ▪ Cool Sorption: Revenues and EBITDA of NOK 2
Slide 20: Refinancing of revolving corporate credit facilities completed October 1st 2021
Refinancing of revolving corporate credit facilities completed October 1st 2021 Description Overview of funding per October 2021 ▪ Simultaneous with the completion of the MHWirth transaction Size Maturity Margin October 1st, Akastor completed a refinancing of its existing revolving corporate credit
Slide 21: Appendix
Appendix Akastor © 2019 | October Akastor 2021 Slide 21
Slide 22: Selected transactions since inception in 2014
Selected transactions since inception in 2014 October 2021 October 2020 September 2020 June 2019 April 2019 Merged for an economic 100% acquisition of interest stake of 55% Merger with 50% JV Restructuring and 50% acquisition of shares from DOF ASA Subsea Drilling Systems USD 31.5m September 2018 Ap
Slide 23: 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
Slide 24: 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 © | 2019 October Akastor 2021 Slide 24
Slide 25: Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Financial Position Akastor © | 2019 October Akastor 2021 Slide 25
Slide 26: Condensed Consolidated Statement of Cash flows
Condensed Consolidated Statement of Cash flows Akastor © | 2019 October Akastor 2021 Slide 26
Slide 27: Alternative Performance Measures (1 of 2)
Alternative Performance Measures (1 of 2) Akastor discloses alternative performance measures as a supplement to ▪ Net current operating assets (NCOA) - a measure of working capital. It the consolidated financial statements prepared in accordance with IFRS. is calculated by current operating assets m
Slide 28: Alternative Performance Measures (2 of 2)
Alternative Performance Measures (2 of 2) September 30 December 31 September 30 December 31 NOK million 2021 2020 NOK million 2021 2020 Non-current borrowings 647 628 Current operating assets 832 2 765 Current borrowings 1 521 1 119 Less: Current operating liabilities Gross debt 2 167 1 746 487 2 21
Slide 29: Key figures
Key figures AKASTOR GROUP (continuing operations) Note: MHWirth is presented as discontinued operations from 1Q 2021, historical figures have been restated Akastor © | 2019 October Akastor 2021 Slide 29
Slide 30: Split per Company (1 of 4)
Split per Company (1 of 4) MHWIRTH Akastor © | 2019 October Akastor 2021 Slide 30
Slide 31: Split per Company (2 of 4)
Split per Company (2 of 4) AKOFS OFFSHORE 1) 1) Figures presented on a 100% basis. Akastor’s share of net profit from the joint venture is presented as part of “net financial items” Akastor © | 2019 October Akastor 2021 Slide 31
Slide 32: Split per Company (3 of 4)
Split per Company (3 of 4) AGR Akastor © | 2019 October Akastor 2021 Slide 32
Slide 33: Split per Company (4 of 4)
Split per Company (4 of 4) OTHER HOLDINGS Akastor © | 2019 October Akastor 2021 Slide 33
Slide 34: 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