Aker Solutions Hldg Asa

Good morning and welcome to Rock Solutions' presentation of our fourth quarter and full year results. My name is Preben Nørbeck and I'm the head of investor relations. With me today is our CEO Kjetil Digre and our CFO Idar Eikrem. They will take you through the main developments of the quarter and the full year. After the presentation, we have time for questions. Those of you who are following the webcast can submit your questions via the online platform. And with that, I leave the floor to Kjetil Didre.

Thank you, Preben, and welcome to everyone tuning in. As usual, let me start the presentation with the main messages for today. First and foremost, I am once again pleased to report that we continue to deliver solid financial results in a period of high activity. Our fourth quarter revenues were 16.7 billion kroner, which takes our full-year revenues to more than 63 billion, the highest in Aker Solutions' recent history. Our EBITDA margin for the quarter was 7.9%, or 7.5% if you exclude the net income from SLB 170. Our net cash position increased to 3.7 billion kroner at the end of the year. This was fueled by strong cash generation in our segments and substantial dividends from our 20% ownership in SLB 170. Looking at 2025 as a whole, we have made good progress on our project portfolio and on our strategy. The RKBP portfolio is progressing well with all key milestones met during the year. And I'm also encouraged to see high demand for our engineering and consultancy services, leveraging our 5,000 strong engineering muscle to solve energy challenges for a wide range of customers across the globe. Our lifecycle business is well positioned to continue its strong development, underpinned by long-term frame agreements with strategic clients. And lastly, I also want to highlight our ownership in SLB1 Subsea, a leading player in the growing Subsea market. The company is delivering strong cash generation, enabling solid dividends to Akka Solutions. So, as you can see, 2025 has been a very important year for Akka Solutions. Going forward, we continue to expect revenues to decline from peak levels in 2025, and we are taking steps to adjust capacity and costs accordingly. Our financial position is robust, and the Board of Directors has decided to propose a dividend of 3.6 kroner per share for 2025, up from 3.3 kroner per share in 2024. I'll talk more about how we are positioning the company to continue delivering shareholder value, but first I wanted to take a step back to reflect on our journey since 2020. When we merged Aker Solutions and Kverner back in 2020, we set ambitious targets for the period ending in 2025. As you can see from the graphs, I think it's safe to say that we have delivered successfully. Since 2020, our revenues have grown from about 20 billion to more than 60 billion. And equally important, our margins have also improved significantly over the period. In 2025, we delivered an EBITDA margin of 8.4%, or 7.3%, excluding net income from one subsidy. This is an increase of about 500 basis points from 2020. We also secured several important new orders in 2025, with an order intake of about 66 billion during the year. Our order backlog was about 65 billion at year end, dominated by projects under the ARCA BP Alliance model and reimbursable contracts. And it's great to see that these results have generated solid returns to our shareholders. Since the announcement in July 2020, the value of Aker Solutions has increased sevenfold. This includes about 13.7 billion in dividends and share buybacks distributed to our shareholders during the last five years. So, how are we creating value? Well, since 2020, we have delivered strong operational and financial performance across our business segments. In renewables and field development, we have seen the top line grow more than four times since the merger. And going forward, we are broadening our customer base and geographical exposure. We do this mainly through our engineering and consultancy business, as well as selectively targeting the renewables opportunities with balanced risk-reward profiles. Our second segment, lifecycle, has also had an impressive journey. delivering double-digit revenue growth with improved margins. With an asset-light business model characterized by reimbursable contracts with low investments, Lifecycle is an important contributor to Arca Solutions' performance and cash generation. Going forward, the segment is well positioned in a growing brownfield oil and gas market, with a strong backlog dominated by long-term frame agreements with strategic customers. Lastly, I wanted to touch upon our ownership in SLB One Subsea. In late 2023, we announced the closing of the transaction to create the leading global Subsea player. Since then, SLB One Subsea has delivered strong financial performance and cash generation. The company has an attractive dividend policy where all excess cash is distributed to shareholders. And as I will come back to, this is just the starting point. Supported by a strong subsidy market, the company is well positioned for growth and value creation in the years to come. So let's go deeper into some of these important browser drivers. A key element in our strategy is to safeguard the delivery of our projects. So how are we doing this? An excellent example is the Aker BP projects we are executing in the Alliance model. There are several benefits working in this model. By aligning our incentives, sharing risk and rewards, we create win-win situations that drive innovation and efficiency. This way of working closely together with our strategic partners helps us deliver high-quality projects faster, which in turn means more energy to the markets quickly and responsibly. The RKBP project portfolio consists of four new platforms with a combined weight of about 90,000 tonnes. This includes Hugin A, the largest topside ever assembled at Sløyd. And we are also delivering the Valldal PWP platform, and the smaller Hugin B and Fenlis platforms from our yards. In addition, we are involved in several projects within modification of existing assets, such as Skarv, as well as being delivery partner for On Subsea for the fabrication of Subsea equipment. I am very pleased to report that all critical milestones on these projects were met during 2025. This includes the delivery and sale away of the jacket substructures for both Hugeney and Valval PWP in the summer, and the arrival of several large topside modules to Stord for final assembly. At Stord, we are progressing as planned, with the stacking program preparing the topside for sale away during 2026. In order to safeguard the delivery of these and other projects, Aker Solutions is applying new ways of working enabled by automation and digital solutions. These are not ends in themselves, but rather means of improving efficiency and safety in execution. One example is the use of augmented reality, or AR for short. By overlaying the technical drawings with real-world construction, inspectors can spot issues earlier when it is easier and less costly to mitigate them. Another example is the use of virtual reality or VR, where engineers from our different locations around the world can meet virtually inside the digital model they are working on to collaborate and identify the best solutions. The technology has multiple use cases, including replacing offshore surveys in a range of operations. This frees up man hours otherwise spent on transport, reduces personnel on board and saves costly helicopter transport. These are just a couple of examples of how we turn digital ambitions into practical applications that can save both time and cost for our customers. As for the Alliance model, I believe that the achievements for the Alliance are a clear testament to the value of working closely together with Alliance incentives. This in turn enables us to deliver quality projects with faster time to first energy. Another key pillar of our strategy is to grow our engineering and consulting business. At Akka Solutions, we are currently having more than 5,000 engineers with unique competencies across market segments, covering all phases of the asset life. Our spearhead in emerging markets and client relationships is Enter, our consultancy arm. The core team at Enter currently consists of about 350 people, but draws on the competencies and capacity of the entire organization. A unique selling point for our engineering and consultancy services is how we are pioneering new digital solutions and data analytics powered by AI, artificial intelligence. By shifting from manual to automated processes, we can make better use of historical data and scenarios to design innovative solutions that unlock value for our customers. One example is a recent FPSO concept study Here our engineers were able to identify more than 200 potential improvements, significantly reducing both weight, costs and delivery times. From our key engineering hubs in Norway, UK, US, Canada, India and Malaysia, we deliver consulting and engineering projects to a wide range of customers across the globe. Within oil and gas, we are actively engaged in several FPSO projects that we believe will move into next phases of development over the next one to two years. We are also seeing strong demand for our onshore, midstream and downstream capabilities. In these markets, we benefit from the experience and track record from our Indian office, where we have more than 1,000 engineers delivering projects across the globe. Likewise, we see that our track record in both CCS and offshore wind enables us to engage early with new clients in different geographical regions. In both offshore wind and CCS, we are now engaged in the second generation of projects. Compared to the first generation, which have been both operationally and commercially challenging, the new generation is progressing well, delivering healthy margins. So, what has changed? Firstly, we have managed to negotiate commercial terms with balanced risk-reward profiles and joint incentives for successful project deliveries. This means that we have moved away from traditional lump sum models to a model where both risks and upsides are much closer tied to our own performance. Secondly, we have managed to move away from customised one-off projects to leveraging standardisation across several projects. One example is the Norfolk portfolio, where we are seeing the benefit of designing one and building several. For instance, both engineering and fabrication hours are significantly reduced on the second topside compared to the first. The same applies for our CCS portfolio. where learnings from the first wave of capture and storage projects are now being implemented at the Northern Lights Phase 2 and the Hafslen Celsius carbon capture and storage projects. All in all, I am pleased to see that our focused approach is yielding positive results, positioning us in a market with significant growth potential in the years to come. Moving over to our lifecycle business. The segment has since 2020 delivered double-digit revenue growth with improved profitability and strong cash generation. At year end, the backlog stood at about 23 billion, dominated by long-term frame agreements and reimbursable modification projects on existing onshore and offshore assets. The segment also delivers hookup and commissioning services to ensure efficient and safe startup of new oil and gas facilities and offshore wind components. Our long-term engagements on these critical assets enable us to expand our capabilities, offering unique technology-enabled services. This includes autonomous drone inspection, remote operations, and AI-powered analytics. And talking about long-term engagements. I'm happy to report that we have secured several new long-term frame agreements for maintenance and modification services over the past months. Why is this important for Akka Solutions? For one, it creates transparency on activity levels for several years to come. As you can see on this slide, the recently awarded agreements in Norway have a duration of more than 10 years including options. We are also working side by side with key international clients such as Exxon, Shell and BP to maintain and modify their critical infrastructure in Canada, UK, Angola and Brunei. I believe one of the main reasons we've been awarded these contracts is our demonstrated ability to drive improvement. And we are not just talking about doing the same things we did yesterday, only faster. We are talking about fundamentally challenging what we do and how we do it. That means not just applying new technology, but applying the right technology and digital solutions, where we truly move the needle and deliver measurable results. It is also about understanding our clients, how they think, how they prioritize, and what matters most to them. Our deep understanding of the assets also positions us for modification projects, for instance related to subsidy tieback or decarbonization through electrification. In Norway alone, Eknor expects to develop more than 75 subsidy projects over the next decades. So to summarize, I'm impressed by how Lifecycle has developed over the last five years and believe that the segment is well positioned to continue its transformation journey in the years to come. Moving over to SLB One Subsea. As mentioned, the company was established through the merger between SLB and Arca Solutions Subsea Divisions with the ambition to create the leading subsea company in the world. The financial performance of the company speaks for itself, delivering strong margins and solid cash flows. The company has a very attractive dividends policy, and during 2025, SLB On Subsea had paid out more than $400 million in dividends to its shareholders. After these payments, the company still has a robust financial position, with net cash of more than half a billion dollars. And the outlook for the company is strong. with global subsea spending expected to increase by around 25% over the next five years. Tendering activity is high both within subsea production systems, subsea processing solutions, and umbilical and cable systems. SLB-1 Subsea also has a highly resilient life of field service offering, enabled by the largest install base of subsea equipment in the industry. The company recently announced targets of cumulative bookings exceeding $9 billion over the next two years, positioning the company for growth from 2027 and onwards. So, as both a proud co-owner and delivery partner for OneSubsea, Aker Solutions sees great opportunities for continued strong value creation in the company going forward. And talking about shareholder value. As you can see from the graph on the left-hand side, share prices among players with exposure to the subsidy equipment market have increased markedly during the last 6-12 months. If one uses such peer-trading multiples, one may argue that our 20% ownership represents a significant upside to Arcus Solutions' current trading. In addition, Aker Solutions currently holds more than 5 million shares in SLB, which were used as considerations for the subsidy transaction. Since the closing of the fourth quarter, we have seen a substantial increase in the value of these shares. So, to summarize, I am pleased to see that we continue delivering strong financial results, that we have a solid backlog of healthy projects, and that we continue positioning the company for the future. Finally, our financial situation is robust. This gives us a strong foundation to continue developing the company while generating solid returns to our shareholders. And with that, I leave the word to Ida, who will take you through the financials of the quarter and for the full year.

Thank you, Ketel. I will now take you through the key financial highlights of the fourth quarter. The full year is figures our segment performance and run through our financial guidance as always all numbers mentioned are in norwegian corner so let me start with the income statement the fourth quarter revenue was 16.7 billion full year revenue were 63.2 billion a 19 increase from 2024. The underlying EBITDA in the quarter was 1.3 billion with a margin of 7.9%. During the quarter, Arca Solutions have taken provisions for restructuring cost of 194 million kroner in relation to the announced capacity adjustments. This is treated as a special item. The net income from One subsea was only 80 million in the quarter. This was affected by one-off costs related to integration and restructuring. If adjusting for these one-off costs, the net income from the entity was in line with previous quarters. Full year EBITDA for the group was 5.3 billion with a margin of 8.4% or 7.3% if you exclude the net income from SLB 1 subsea. The underlying EBIT in the quarter was 940 million up from 888 million a year ago with a margin of 5.6%. The full year EBIT was 3.8 billion, with a margin of 6.1%. For the full year, net income excluding special items was 2.9 billion, representing an earnings per share of 6.1 kroner. This is somewhat lower than in 2024, mainly driven by lower interest income after the sale of liquid funds used for the payment of extraordinary dividend in 2024. As Chetil mentioned, the Board of Directors will propose an ordinary dividend of 3.6 kroner per share for 2025, pending approval in our Annual General Meeting in April. This represents approximately 60% of net income, excluding special items. Moving to our segment performance. For renewables and field development, the fourth quarter revenue was 12.4 billion. Full year revenues was 46.1 billion, representing a year-on-year growth of 21%. The underlying EBITDA in the quarter was around 1 billion, with a margin of 8.1%. EBITDA for the full year was 3.7 billion, representing a margin also of 8.1%. The legacy Lamsan projects continue to be a drag on the margins throughout 2025. These projects are now in the offshore commissioning phase and commercial discussions are ongoing. And, as previously mentioned, the second generation renewable projects contribute with healthy margins in the period. The order intake in the period was 11.6 billion, leading to a secured backlog of more than 40 billion at year end. Based on the secured backlog, we expect the revenues in this segment to be between 30 and 35 billion in 2026. For the lifecycle segment, revenues in the fourth quarter was 3.8 billion. Full year revenues was 15 billion, an increase of about 13% from 2024. The underlying EBITDA was 293 million in the quarter, representing a margin of 7.7%. This was enabled by continued solid performance on ongoing modification projects and long-term frame agreements. EBITDA for the full year was 1.1 billion, with a margin of 7.2%. The order intake in the quarter was 7.7 billion, representing a book to bill of about two times. During the quarter, Lifecycle was awarded long-term frame agreements with both ConocoPhillips in Norway and ExxonMobil in Canada. The secured backlog at the end of the year was 23 billion, providing a good visibility for future activity levels. This, however, does not include the announced long-term frame agreement with Equinor awarded in the first quarter of 2026, representing additional intake of more than 10 billion kroners. Based on the secured revenues and backlog, we expect lifecycle revenues to remain relatively stable in 2026 at around 15 billion. Moving to our financial performance of SLB 1 SEBSI. In the fourth quarter, SLB 1 SEBSI delivered revenues of about 10.5 billion. For the full year, revenues were about 40 billion kroners. EBITDA in the quarter was about 1.9 billion, representing a margin of about 18%. For the full year of 2025, the company delivered an EBITDA margin of 19.4%. Net income before PP&A adjustment was 527 million in the quarter. This was negatively affected by the mentioning provisions for one-off costs. After PP&A adjustment, Arca Solutions recognized 80 million for our 20% share. The backlog for the entity is currently at 47 billion kroners. As mentioned, tendering activity is high and the company has an ambition to exceed 9 billion dollars in new orders over the next two years. In the fourth quarter, Arca Solutions received dividends of more than 400 million kroners. This was significantly above previous quarters, reflecting the solid financial position and performance of the entity. This takes me to our cash flow for the full year. Cash flow from operation was 2.6 billion, mainly driven by EBITDA contribution from our operational segments, offset by a reversal of working capital of about 1.3 billion. CapEx for the full year was about 500 million, or 0.8% of revenues. For the full year, Arca Solutions received $841 million in dividends from our 20% ownership in SLB 1 Subsea, significantly above previous guiding from the company. Lastly, we have distributed about $1.6 billion to our shareholders in 2025 in line with our ordinary dividend policy. The financial position remained robust, with a net cash position that increased to 3.7 billion during 2025. So, to sum up, in 2025, Arca Solutions delivered record high revenues with solid margins and strong cash generation. As Chetel mentioned, we continue to expect activity levels to come down in 2026, forecasting revenues between 45 and 50 billion for the full year. At this early stage, we expect the EBITDA margin to be in the range of 7 and 7.5% for the full year, excluding net income from SLB 1 services. CapEx is expected to be around 1% of revenues, while working capital is expected to continue its normalization to a level between negative 4 and negative 6 billion over time. Based on our robust financial position, the Board will propose a cash dividend of 3.6 kroner per share for 2025, pending approval in the annual general meeting to be held in April. Thank you for listening. That was the end of our presentation. In a few moments, we will open up for questions.