Creating value through active ownership. Frank O. Reite and Leif Borge London 17 March 2015

Transcription

1 Creating value through active ownership Frank O. Reite and Leif Borge London 17 March 2015

2 Agenda THIS IS AKASTOR Frank O. Reite CEO FINANCIALS Leif Borge CFO March 17, 2015 Slide 2

3 Akastor is set up to create value through active ownership Our mandate Oilfield services investment company with a flexible mandate for long-term value creation Our portfolio Portfolio companies with multiple levers for growth and improvements Our approach Value creation through active ownership combining a range of strategic, operational and financial measures March 17, 2015 Slide 3

4 Akastor - the investment portfolio 8 Portfolio companies 13.0 Billion NOK net capital employed* 7,600 Employees worldwide 21.4 Billion NOK revenue* *2014 numbers March 17, 2015 Slide 4

5 Our investments eight stand-alone companies MHWIRTH Global provider of drilling systems, products and services KOP SURFACE PRODUCTS Provider of surface wellheads and trees in APAC and MENA AKOFS OFFSHORE Well construction and intervention services to the oil and gas industry FIRST GEO Petroleum sub-surface consultancy FRONTICA BUSINESS SOLUTIONS Global provider of business and corporate services STEP OILTOOLS Provider of Drilling Waste Management products and services FJORDS PROCESSING Global provider of process systems and services for oil, gas and water treatment REAL ESTATE AND FINANCIAL HOLDINGS March 17, 2015 Slide 5

6 The Akastor portfolio of investments NET CAPITAL EMPLOYED 13 Billion NOK (2014) REVENUE 21.4 Billion NOK (2014) Fjords Processing Real Estate and other KOP Frontica MHWirth Frontica MHWirth Fjords Processing AKOFS AKOFS KOP Real Estate and other March 17, 2015 Slide 6

7 Systematic value creation the Akastor way 3 EXECUTE, ADJUST AND FOLLOW-UP 1 ASSESS SITUATION Dialogue with stakeholders Financial and operational benchmarking Assessment of historic performance and strategy Identify areas for improvement, short-, mid- and long term 2 DEFINE VALUE CREATION PLAN Decide on time horizon and actions Define metrics and milestones Close interaction with management Frequent reporting Corrective actions Focus on speed in execution and simplicity (80/20) March 17, 2015 Slide 7

8 Corporate governance established: A set of tools and reports developed to support execution and measurability Tool-box of reporting standards giving a continuous detailed understanding of the development of the investment a defined system of authority between management and the owner / the Board Reporting procedures allowing us to: closely monitor each company The current market environment puts pressure on terms and financing Net current operating assets Cash generation Net interesting bearing debt For illustrative purposes only. Not Akastor data March 17, 2015 Slide 8

9 Experienced teams with track record of execution 23 PROFESSIONALS: INVESTMENT TEAM CFO & SUPPORT FUNCTIONS A TRACK RECORD OF VALUE CREATION 8 CEOS, HEADING EACH PORTFOLIO COMPANY CAPABLE MANAGEMENT WITH INDUSTRIAL EXPERIENCE March 17, 2015 Slide 9

10 Real Estate MHWirth 941 Million NOK EBITDA in ,681 Million NOK Revenue in ,237 Employees MHWirth is a leading global provider of first-class drilling solutions, equipment and services. One of only two providers of complete topside packages and riser systems for floaters.

11 Real Estate Installed base supports long term life cycle business CURRENT INSTALLED BASE BY REGION PER END in total US Europe 8 9 Asia/ MENA 18 Africa Brazil INSTALLED BASE DEVELOPMENT Number of drilling packages INSTALLED BASE BY AGE AND TYPE By type By age % Drillship JU Semi > Fixed platforms 5-10 March 17, 2015 Slide 11

12 Floaters Real Estate Substantial oversupply in floater market ACTIVE SUPPLY AND REGIONAL DEMAND Floaters No. of rigs No. of rigs RIG UTILIZATION Active Supply FLOATERS SCRAPPED ( ) Source: RS Platou Rig Monthly, 17 February 2015 Steep drop in utilization due to oversupply Currently a total of 394 floaters in service and on book (278 active, 31 passive fleet, 84 on order) Demand recovery estimated at units As per owners have announced intent to remove/scrap 23 floaters March 17, 2015 Slide 12

13 Real Estate MHWirth: Focusing on the core NEAR TERM Very challenging market with a low activity level resulting in capacity costs and pressure on margins Cost base and capital discipline Initiated capacity reduction process aiming to reduce personnel Estimated NOK million annual cost reduction Managing Brazilian exposure ROADMAP FOR VALUE CREATION Protect DLS business Standardization and streamlining Strengthening customer relations Organizational effectiveness Challenging markets may create interesting opportunities March 17, 2015 Slide 13

14 Real Estate AKOFS Offshore 175 Million NOK EBITDA in ,542 Million NOK Revenue in Employees AKOFS Offshore is a global provider of vessel based subsea well construction and intervention services to the oil and gas industry.

15 Real Estate AKOFS Offshore STRONG PERFORMANCE IN SUBSEA INSTALLATION Skandi Santos secured 5yr contract (98% utilization in 2014 currently docking) Aker Wayfarer secured 5+5yr contract (89% utilization in 2014, 100% YTD2015) (current work extended through July 2015) Focus on operational excellence and re-building of Aker Wayfarer AKOFS SEAFARER: TOP PRIORITY TO SECURE WORK Purchase of hull completed in February for MUSD 122.5, all financed with new bank debt Significantly reduced OPEX level All opportunities to secure work being pursued ROADMAP FOR VALUE CREATION Capitalize on Brazilian business Fix AKOFS Seafarer March 17, 2015 Slide 15

16 Real Estate Frontica Business Solutions 315 Million NOK EBITDA in ,753 Million NOK Revenue in ,356 Employees Frontica Business Solutions provides cost efficient corporate services that enable companies to become faster and more efficient. March 17, 2015 Slide 16

17 Real Estate Frontica Business Solutions COMPETITIVE POSITION Manpower, and Service provider to the Oil & Gas industry Portfolio of highly skilled engineering consultants Managing IT users Global delivery model, local presence ROADMAP FOR VALUE CREATION Leverage current platform Cost optimisation Gradually broaden customer base March 17, 2015 Slide 17

18 Real Estate Fjords Processing 52 Million NOK EBITDA in ,322 Million NOK Revenue in Employees Fjords Processing provides well stream processing technology, systems, and services to the upstream oil and gas industry

19 Real Estate Fjords Processing COMPETITIVE POSITION Provider of complete processing systems, both onshore and offshore Comprehensive product portfolio World leading processing technologies within defined niches ROADMAP FOR VALUE CREATION Increase profitability through improving and streamlining operations Grow Lifecycle Services Secure technology differentiation March 17, 2015 Slide 19

20 Real Estate KOP Surface Products 156 Million NOK EBITDA in ,119 Million NOK Revenue in Employees KOP Surface Products is a provider of surface-installed wellheads, Xmas trees, valves and actuators for offshore and land-based oil and gas production

21 Real Estate KOP Surface Products COMPETITIVE POSITION Reliable products Competitive manufacturing capabilities Strong foothold in APAC ROADMAP FOR VALUE CREATION Expand manufacturing capacity with minimal capex Increase profitability through identified cost potential Enter and grow in the Middle-East A REMARKABLE GROWTH STORY MUSD +26% % EBITDA% SLS revenues Hardware revenues March 17, 2015 Slide 21

22 Real Estate Real Estate and other holdings FIRST GEO Leading provider of operations and wellsite geology services in Norway with activities within geophysical interpretation, geological modelling, petrophysics and reservoir engineering. REAL ESTATE Includes a portfolio of 8 real estate assets in Norway STEP OILTOOLS Step Oiltools is an independent provider of quality Drilling Waste Management products and services. OTHER HOLDINGS DOF Deepwater, Ezra Holdings, Aker Pension Fund Company and Aker Insurance Company. March 17, 2015 Slide 22

23 Agenda THIS IS AKASTOR Frank O. Reite CEO FINANCIALS Leif Borge CFO March 17, 2015 Slide 23

24 The Akastor portfolio NET CAPITAL EMPLOYED NOK 13 BILLION PER 4Q 2014 NOK million Fjords Processing 436 Frontica 374 Other KOP Surface 674 Real Estate 541 NCOA NIBD Other 1,127 Fixed assets 1,572 Intangible assets AKOFS 4,239 MHWirth 5,603 Intangible assets 2,163 NCOA 2,573 Other -705 Net capital employed 5,603 Equity Fixed assets AKOFS Seafarer 2, AKOFS Wayfarer 1,397 Skandi Santos 337 Net capital employed Funding Market cap AKA Other 252 1) Including leased asset of NOK million March 17, 2015 Slide 24

25 Capital structure NET INTEREST BEARING DEBT NOK 3.6 BILLION PER 4Q 2014 NOK million Other 1, FUNDING Term loan Size NOK 2.5 billion Maturity September 2017 Revolving credit facility NOK 2.0 billion September 2019 AKOFS Seafarer facility* USD 125m February 2017 Brazil facility BRL 129m December 2021 Margin 1.4%-2.3% 1.3%-2.2% 1.4%-1.8% 6.1% average total cost Term loan Brazil Aker Wayfarer financial lease 2, ,376 Gross debt Cash Interest bearing assets Net interest bearing debt COMMENTS Disposal of MHWirth triggers repayment of Term loan and Revolving credit facility Disposal of other assets triggers repayment of Term loan with 50% of proceeds Separate financing of other assets triggers repayment of Term loan with financed amount Aker Wayfarer financial lease: Financial costs of NOK 205m in 2015 *Loan to Akastor ASA with same terms and conditions as term loan March 17, 2015 Slide 25

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27 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 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. Disclaimer 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 Akastor ASA and Akastor 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 Akastor ASA. 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 Akastor 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. Akastor ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Akastor ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. March 17, 2015 Slide 27