1st quarter 2005: Status and outlook Leif-Arne Langøy, President & CEO Bengt A Rem, CFO Oslo, 28
Agenda Group update Details 1Q05 performance Closing remarks Q&A Leif-Arne Langøy Bengt A Rem Leif-Arne Langøy The accounts in this presentation have been prepared in accordance with the International Financial Reporting Standard (IFRS). Historical numbers have been recalculated according to the same principles. Aker 1Q05 presentation 2
Recap Group structure Ownership Parent and holding companies 50.01% 55.6% 100% 100% Illustration Aker Kværner Aker Yards Aker Seafoods Aker Material Handling Other Numbers in this presentation are for Aker Seafoods before proposed merger with West Fish-Aarsæther/Nordic Sea Holding Aker 1Q05 presentation 3
First quarter 2005 Group highlights Record order backlog: NOK 70 billion Up NOK 20 billion (40 %) from 1Q04 Improved margins Strong balance sheet Net interest bearing receivables NOK 0.3 billion Cash and current assets NOK 1.3 billion Operations continue to improve Higher than expected EBITDA Strategic milestones Aker Seafoods merger and listing Kværner restructuring Aker 1Q05 presentation 4
First quarter 2005 Key indicators 70 Backlog (NOK bn) 18 Revenues (NOK bn) 700 EBITDA (NOK million) 60 50 40 30 20 10 16 14 12 10 8 6 4 2 600 500 400 300 200 100 0 Other Aker Material Handling Aker Seafoods Aker Yards Aker Kværner 0 1Q 04 2Q 04 3Q 4Q 1Q 04 04 05 0 1Q 04 2Q 04 3Q 4Q 1Q 04 04 05-100 1Q 04 2Q3Q4Q1Q 04 04 04 05 Aker 1Q05 presentation 5
and holding companies Strong balance sheet Aker Seafoods** Kværner Aker Yards 9.5 bn 7.2 bn = NOK 124 per Aker share* = NOK 94 per Aker share* Aker Kværner Market value listed shares (27 ) Book value listed and unlisted investments Ext debt Int l debt 1.4 bn 0.8 bn Gross debt 2.5 bn Cash and IB assets 0.3 bn Net IB assets = NOK 4 per Aker share* * Adjusted for shares owned by Aker ** Listing plannned Aker 1Q05 presentation 6
Status first quarter 2005 Aker Yards Strong order intake, backlog NOK 31 billion Revenues increasing and under-allocation reduced Guidance maintained EBITDA somewhat above 2004 Key figures 1Q 1Q Year (in NOK million) 2004 2005 2004 Freedom Class cruise ship BALTIC CS 2500 P&O Nedlloyd Savannah Revenues 2 645 3 438 12 514 EBITDA 222 159 791 Order intake 3 104 11 445 17 283 Order backlog* 18 282 31 487 23 366 Employees* 13 007 13 069 * At end of period Aker 1Q05 presentation 7 Olympic Provider
The road ahead Aker Brattvaag Aker Yards Aker Brattvaag Aker Langsten Aker Brattvaag Aker Finnyards Aker Finnyards Brattvaag S.V. Rauma Improve margins in existing contracts Focused sale of new ships Continue to harvest synergies between yards Increase capacity Søviknes Verft Turku Aker Finnyards Aker Brattvaag Helsinki Aker Aukra Aker Brattvaag Aker Brevik Aker Ostsee Aker Tulcea Brevik Constr. Wismar Aker Ostsee Aker Brevik Warnemunde Aker Braila in new markets in low-cost regions Aker Brattvaag Aker 1Q05 presentation 8 Aker Promar
Status first quarter 2005 Aker Seafoods Strong quarter in Europe, Deepwater break even Political framework in Norway improved Merger and listing of European white fish major Key figures 1Q 1Q Year (in NOK million) 2004 2005 2004 Revenues 511 456 1 834 EBITDA 24 40 108 Employees* 1 197 1 208 * At end of period Aker 1Q05 presentation 9
The road ahead Merger with West Fish-Aarsæther Aker Seafoods Holding AS (ex Aker Seafoods AS) 88.5% 100% (Current NWS activities) Aker Seafoods ASA West Fish Aarsæther (100%) Nordic Sea Holding (65,1%) P/f Næraberg 1 factory trawler Harvesting 18.5 licenses 11 trawlers 7.1 licenses 3 trawlers 3.4 licenses 2 trawlers Aker Seafoods U.S 2 factory trawlers Processing 8 processing plants 3 processing plants 0 processing plants ASC South America 2 factory trawlers 3 long-liners Sales & distribution Pan-European network Pan-European network Nordic Group Sales Europe/US Aker 1Q05 presentation 10
Aker Seafoods ASA Status listing Merger sanctioned by authorities The Directorate of Fisheries OK No intervention from Competition authorities OK Final Ministry approval In process Listing approved by Oslo Stock Exchange On 27 IPO planned NOK 100 million equity offering Secondary offering of shares up to 49 % free float Listing anticipated mid-may 2005 Aker 1Q05 presentation 11
Status first quarter 2005 Aker Material Handling Positive market in Scandinavia Fabrication investment in Germany ahead of schedule EBITDA slightly down, in line with expectations Outlook for full year maintained Operations improve Key figures 1Q 1Q Year (in NOK million) 2004 2005 2004 Revenues 263 295 1 226 EBITDA -11-3 12 Order intake 328 304 1 297 Order backlog* 275 272 265 Employees* 697 710 * At end of period Aker 1Q05 presentation 12
Aker Material Handling The road ahead Continue to grow existing strong brands 4,000 2,000 LTM EBITDA Streamline production - Sep 03 Oct 03 Nov 03 Dec 03 Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04 Jul 04 Aug 04 Sep 04 Oct 04 Nov 04 Dec 04 Jan 05 Feb 05 Mar 05 Continue to improve cashflow M ill. EUR (2,000) (4,000) (6,000) (8,000) (10,000) Aker 1Q05 presentation 13
Status first quarter 2005 Aker Kværner Record order backlog NOK 38 billion EBITDA 1.5 billion target achieved ahead of time Still strong cash position, debt reduced Ill: Skoghall Key figures 1Q 1Q Year (in NOK million) 2004 2005 2004 Revenues 7 715 8 407 35 553 EBITDA 314 376 1 362 Order intake 7 323 9 676 41 582 Order backlog* 31 105 37 716 35 920 Employees* 19 663 20 667 * At end of period Aker 1Q05 presentation 14 Ill: SEIC Ill: Statoil
The road ahead Aker Kværner Deepwater, floaters Refining & Chemicals Predictable project execution Improved operations Strong markets, focused growth technology geography customer relations Open to structural opportunities Subsea Onshore O&G plants Fixed platforms Power Generation Pulp & Paper Pharma & Biotech Aker 1Q05 presentation 15
Kværner ASA Restructuring nearly completed Kværner ASA Sea Launch Kvaerner Philadelphia Kvaerner (UK) Ltd B shares in US based rocket launch company 20 % ownership interest US Jones Act shipbuilder To be part of American Shipping Corp UK resource companies Sheffield Heavy Engineering Kvaerner IMGB Ellayess Inc Eurobond Other, including legacy issues 49 per cent of total Aker equity Non-voting stock Sold to management Aker 1Q05 presentation 16
ASC Company structure KPSI ASC Lease Co Lease Co will enter into bareboat charters with independent management company(s) Shipyard PT construction Part of Aker Yards global network PT #1 PT #2 PT #3 PT #10 B/B T/C CoA Spot Overseas Rate Shipholding Rate Oil co 1 Group Oil co 2 Aker 1Q05 presentation 17
Agenda Group update Details 1Q05 performance Concluding remarks Q&A session Leif-Arne Langøy Bengt A Rem Leif-Arne Langøy Aker 1Q05 presentation 18
Aker group consolidated EBITDA by main business 1Q 1Q Year (in NOK million) 2004 2005 2004 Revenues 11 426 12 666 51 692 EBITDA 602 556 2 315 Aker Kværner 314 376 1 362 Aker Yards 222 159 791 Aker Seafoods 24 40 108 Aker Material Handling -11-3 12 Other activities, eliminations 53-16 42 Aker 1Q05 presentation 19
Aker group consolidated Income statement 1Q 1Q Year (in NOK million) 2004 2005 2004 Operating revenues 11 426 12 666 51 692 Operating profit (EBITDA) 602 556 2 315 Depreciation (186) (189) (776) Impairment changes (26) - (35) Operating profit (EBIT) 390 367 1 504 Net financial items (139) (100) (757) Non recurring items - - (231) Profit before tax 251 267 516 Tax (97) (118) (496) Profit after tax 154 149 20 Aker 1Q05 presentation 20
Aker group consolidated Balance sheet 31.12 31.03 (in NOK million) 2004 2005 Tangible and non-tangible fixed assets 14 619 14 488 Other fixed assets 1 270 1 487 Cash and interest bearing receivables 9 013 7 806 Other current assets 14 529 16 778 Total assets 39 431 40 559 Shareholders equity 6 158 6 485 Minority interests 3 159 4 635 Subordinated liabilities 2 726 2 860 Interest-bearing debt 8 575 7 961 Interest-free debt 18 813 18 618 Equity and liabilities 39 431 40 559 Net interest bearing debt(-)/assets(+) 438-155 Equity ratio (%) 24% 27% Aker 1Q05 presentation 21
and holding companies Balance sheet 31.12 31.03 (in NOK million) 2004 2005 Tangible and non-tangible fixed assets 773 837 Long-term interest bearing items 1 236 1 186 Long-term financial assets 8 304 7 165 Other current assets 384 376 Cash and interest bearing receivables 474 1 344 Total assets 11 171 10 908 Shareholders equity 7 618 7 851 Non-interest bearing liabilities 763 800 Interest bearing liabilities (internal) 888 881 Interest bearing liabilities (external) 1 902 1 376 Equity and liabilities 11 171 10 908 Net interest bearing debt(-)/assets(+) - 1 080 + 273 Equity ratio 68 % 72 % Aker 1Q05 presentation 22
Aker Seafoods Key financials 1Q 1Q Year (in NOK million) 2004 2005 2004 Op revenues 511 456 1 834 EBITDA 24 40 108 Profit before tax 9-1 -123 Comments year to date Net interesting-bearing debt was NOK 338 million at end of March, increased from NOK 320 million three months earlier Cash was NOK 72 million at end of March, down from NOK 93 million at the end of December Aker 1Q05 presentation 23
Aker Material Handling Key financials 1Q 1Q Year (in NOK million) 2004 2005 2004 Op revenues 263 295 1 226 EBITDA -11-3 12 Profit before tax -21-16 -60 Order intake 328 304 1 297 Order backlog 275 272 265 Aker 1Q05 presentation 24 * At end of period
and other activities Key financials 1Q 1Q Year (in NOK million) 2004 2005 2004 Op revenues 292 70 565 EBITDA 53-16 42 Profit before tax -57-14 -254 Comments year to date Includes parent companies costs NOK 17 million This segment includes Atlas Stord Geco Triton NorSea Group (33.5%) and other companies in holding company structure Aker 1Q05 presentation 25
Transition to IFRS STATEMENT OF CHANGES IN EQUITY Amounts in NOK million Proforma N GAAP 01.01.2004 Effects of transition to IFRS Proforma IFRS 01.01.2004 As of beginning of period 6 732 6 732 IFRS transition 2004: Pension fund 0 139 139 Pension liabilities 0-465 -465 Restructuring provision 0 2 2 Negativ goodwill excess in profit and loss 0 966 966 Change in reserve in Aker Insurance 0-45 -45 Adjusted goodwill establishment of Group 0-413 -413 Translation differences 0 2 2 Equity 6 732 186 6 918 Effect on profit before tax for year 2004 75 441 516 Aker 1Q05 presentation 26
Agenda Group update Details 1Q05 performance Concluding remarks Q&A session Leif-Arne Langøy Bengt A Rem Leif-Arne Langøy Aker 1Q05 presentation 27
Aker strategy Macro economic conclusions Source: Global growth will continue at an average rate around 3¼ per cent annually the next 10-15 years Strong growth in business investments in China, India and probably Russia Energy demand will continue to increase at current level (2% p.a.) Massive need for energy import infrastructure into the US, China and European energy markets Global trade will continue to increase, 6-7 per cent per annum Container transport is estimated to increase in the range of 6-8 per cent annually Aker 1Q05 presentation 28
Container transport Global container transport Annual per cent change 16,0 Annual growth in container transport 6-8 % per year until 2015 Estimate future growth based on historical experience 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Source: Aker 1Q05 presentation 29
Oil production capacity vs oil demand 2500 2000 2003 Persian Gulf Forecast: US DOE s 2004 International energy outlook 2025 1500 1000 500 Siberia & Caspian Sea Colombia, Mexico & Venezuela MTOE 0-500 Angola & Nigeria -1000 Source: -1500 United States Canada Eastern Europe FSU OECD Asia-Pacific China India Other Asia Middle East Africa Brazil Other Latin America Norway Other Western Europe Aker 1Q05 presentation 30
Expanding Global LNG trade 61 66 +26 +23 136 +47 25 11 Existing trade New trade Source: Figures in BCM for 2010 Aker 1Q05 presentation 31
Global LNG tanker fleet (2003 vs 2025) 60 50 Additional requirement Under construction Existing LNG fleet millions tonnes 40 30 20 10 Source: 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Aker 1Q05 presentation 32
Record order backlog Strong balance sheet Steady improvement in operations Aker 1Q05 presentation 33
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 and 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 Aker's businesses, 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 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. is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. The Aker group consists of many legally independent entities, constituting their own separate identities. Aker is used as the common brand or trade mark for most of this entities. In this presentation we may sometimes use Aker", "Group, "we" or "us" when we refer to Aker companies in general or where no useful purpose is served by identifying any particular Aker company. Aker 1Q05 presentation 34