Aker Solutions Q2 2026 Earnings Call | Revenue Hits NOK 13.1B as Full-Year Guidance Is Raised

Good morning and welcome to Aker Solutions' presentation of our second quarter and half year results. My name is Prenbek and I'm the head of investor relations. With me today is our CEO Kjetil Løgre and our CFO Idar Eikrem. They will take you through the main developments of the quarter and the first half of 2026. 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 give the floor to Kjetil.

Thank you, Prenbek, and welcome to everyone tuning in this morning. As always, let me start the presentation with the main messages for today. First and foremost, I'm pleased to see that we continue to deliver solid financial results following the peak activity period in 2025. The second quarter revenue was 13.1 billion kroner with an EBIT margin of 9.2%, or 7.9% excluding net profit from SLB1 subse. Strong results over time also mean that we can serve our shareholders well. During the second quarter, we paid cash dividends of 4.2 billion, or 8.6 kroner per share.

Operationally, we are making good progress on our project portfolio, meeting 10 milestones in the Aker BP projects. On the tender side, we secured another long-term frame agreement for our life cycle segment, this time with Cenovus in Canada. There are also maturing opportunities across other industry verticals such as carbon capture and storage, hydropower, and small modular reactors. Finally, we are revising our guidance for the full year. We now expect revenue to be between 50 and 55 billion with EBIT margins of around 7.5%, excluding net profit from SLB1 subse. And as SLB1 subse is an important contributor to value creation in Aker Solutions, we expect dividends from SLB1 subse to increase in the second half of 2026, supporting full year distributions broadly in line with 2025 levels.

Next, let's go deeper into some of the operational highlights of the quarter. A natural place to start is the Aker BP portfolio. We are currently in the final period of assembly and storage for the two large topsides, Hugin A and Valhall PWP. Both smaller platforms, topsides Hugin B and Yen, have now left our yard in Verdal for offshore installation and commissioning phase. The same yard has also delivered all four substructures for the Aker BP portfolio. In total, more than 3,500 man-hours have been involved in these projects at Verdal. This includes 130 apprentices, something we are particularly proud of as they represent the future of our industry. Another project I'd like to highlight is the Skarv satellites. This project comprises three separate subsea fields that will be tied back to the Skarv FSO. SLB1 subsea has delivered the subsea production systems for these developments, while our responsibility has been to modify the FPSO to enable the tiebacks. Supported by strong overall performance, the projects are on track to deliver first gas in the second half of 2026.

Now, I think an important part of the story is not just what we deliver, but how. Because together with Aker BP and the other alliance partners, we set out to radically change how to deliver capital projects, and the achievements in these projects are proof that we are doing just that. The drive for change is also highly relevant in our life cycle segment, where we continued on our winning streak in the second quarter with the award of the five-year frame agreement with Cenovus Energy in Canada. The scope includes engineering, maintenance, and operation support for the new West White Rose platform as well as the CO2 FPSO. With this award, we have successfully renewed all five frame agreements that we have tendered for over the past 12 months. And not only have we won, but our scope has increased and we are now taking responsibility for several new assets, both onshore and offshore. So what is the winning ingredient? When you break it down, I believe it's a combination of our deep technical expertise, our cultural collaboration, as well as our improvement mindset that sets us apart.

In our solutions, we focus on developing next-level solutions, and this is next-level life cycle where our ambition is clear: a 50% improvement in costs and delivery times. So how do we achieve it? We do it through three main levers: co-creation, increased efficiency, and reducing costs. Firstly, for us, co-creation means making an early impact. We start early and work closer with our customers to shape better concepts from the beginning. We simplify the solutions, define the right level of standardization, and we reduce complexity before the project enters execution. This has a significant impact further down the line. Next, we increase efficiency in execution. We challenge requirements, digitalize and automate our processes, and adopt more agile ways of working supported by artificial intelligence. And lastly, we reduce costs. We remove what does not add value, standardize how and what we buy, and we reuse solutions that work rather than reinventing the wheel. At the same time, we leverage new technology to improve information flow and enable more remote and autonomous operations. All of this is not about doing more. It's about doing things smarter, simpler, and together, and proving the value for our customers every step of the way.

Next, I wanted to say a few words about how we are maturing the different versions of ourselves in other industry verticals. Carbon capture and storage is a market where Aker Solutions has been present since the early 1990s. Norway is one of the front runners in this market, supporting the development of a complete CCS value chain through the Longship project. Here, Aker Solutions has been the main contractor for delivering both the carbon capture facility at Heidelberg Cement plant in Brevik and the Northern Lights storage facility on the west coast of Norway. Now we are executing the second generation of CCS projects in Norway, and in the second quarter we celebrated construction start twice at Stord. One was for the modules to the carbon capture and storage project at Hasselund Celsius waste energy plant in Oslo, and the other for the capacity expansion of the Northern Lights storage terminal. We believe the market outlook for CCS is positive, and we are positioning for several upcoming opportunities in different geographies, both through ongoing tenders, early phase services, and strategic alliances. Another example is hydropower. Hydropower is the backbone of the energy system in Norway, representing about 90% of electricity supply, and its importance is growing both due to rising energy demand and through its role in balancing variable energy sources such as wind and solar. Now, hydropower is not something new to Aker Solutions. In fact, we trace our history in this market back to the 1850s, when the Norwegian hydropower competence was developed by our predecessor Kværner. With the acquisition of Rainpower in 2022, hydropower was again a part of our energy offering, and since the acquisition, we have transformed the entity into a robust growth business with solid underlying margins. Recently, we were awarded a contract to supply all electromechanical equipment for the Tussa hydropower plant in Norway. What is special about this project is that we have been able to bring an alliance-inspired model into hydropower. This means working closely together with Tussa Energy from the early phase of the project. Through this collaboration, we've been able to develop smarter and more efficient solutions, something we hope will set a new benchmark for hydropower going forward.

Strategic collaboration also plays an important role in our engagement into the emerging market for small modular reactors, or SMR for short. In late April, Aker Solutions signed a memorandum of understanding with Rolls-Royce SMR, a leading player in this market. Through this partnership, we will apply our expertise in design, project management, and modular construction to develop non-nuclear parts for these power plants. Rolls-Royce SMR has now been selected for several projects in the United Kingdom, the Czech Republic, and most recently in Sweden. All projects are backed by state governments. And in Sweden, the government recently acquired 60% of Vidirkraft, which will be the developer and operator of three SMR units with a total capacity of 1.5 gigawatts. The active involvement of governments in Sweden, the UK, and the Czech Republic highlights the growing confidence in SMR technology and its role in Europe's future energy mix. In fact, these three countries have publicly announced ambitions of building more than 15 SMR units. Meeting these ambitions will require a coordinated effort by the European industrial base. And we are quite proud of being selected by Rolls-Royce alongside other robust partners to deliver on these ambitions. So where are we now? As part of the MOU, we are working closely with Rolls-Royce SMR to mature the module scope to finalize the first binding contracts for engineering and design services. And a bit further down the line, we expect startup of larger construction scopes by early 2029. This takes me to the tender pipeline, which is currently at about 77 billion kroner. The reduction from the first quarter mainly relates to the loss of an offer win project in Europe where the developers selected a local competitor for execution. However, we continue to see a good mix of opportunities across oil and gas, renewables, and adjacent markets, which we believe will create activity in the years to come. And with that, I leave the word to Idar, who will take you through the financials of the quarter.

Thank you. So to summarise, I'm pleased to see that we continue to deliver solid financial performance following peak activity levels in 2025. I'm also encouraged to see that we continue meeting critical milestones in ongoing projects and that we are maturing future opportunities together with our strategic partners. Next, to our revised guidance for 2026. Based on secured backlog and market activity, we now expect revenue to be between 50 and 55 billion. EBIT margins excluding net profit from SLB1 subse are now expected to be around 7.5% for the full year. Capex is currently expected to be between 0.5 and 1% of revenue in 2026, and we continue to expect working capital to normalize over time to a level of between minus 4 and minus 6 billion. Finally, SLB1 subse is an important contributor to value creation in Aker Solutions, and as mentioned, we expect dividends from SLB1 subse to increase in the second half of 2026, supporting full year distributions broadly in line with 2025 levels. Thank you for listening.

Okay, the first question comes from Victoria McK in RBC. In terms of renewable field development, can you give any color on the trajectory in the second half of the acceleration of the Aker BP projects?

In general, we have high activity level in all segments, and year-round activities that will continue. But the dominant activities are obviously the huge projects that are currently at Stord. The way we are handling them means that the second half will be as high activity as the first half, but we will see a shift from onshore to offshore. The first projects have already been installed offshore, and we are following them and completing them out at sea. Both Valhall and then eventually Hugin will also follow. So throughout the second half of 2026, we will move from onshore to offshore. It's also very clear, I'd say, a Norwegian way of handling this project, that we are focused on being predictable on the startup part of this. So we will, in the alliance with Aker BP, make sure that these projects start up as planned in 2027. In terms of numbers, as you probably have seen from our report, we have guidance for 2026 full year and increased revenue guidance and also margins for the renewable and field development segment. We have said that the revenue will be in a range of 35 to 40 billion kroner. That should indicate a similar level in the second half of 2026 as in the first half.

Following up from Victoria on the year ahead projection with a lower backlog. How much should we extrapolate our expectation, and are there any awards in the second half that could move the needle in 2027?

Ja, too early to come with updated guidance, but we are working on several projects that could have impact both in 2027 and 2028, providing that we are successful on the bidding.

Moving to a question from Lucas Daulin. If you can provide an update on the legacy projects and the provisions taken so far.

Moving then to a question from Mick Pickup in Barclays. He says that there's a big focus on renewables and clean energy, and if we can talk a bit about the first generation to the second generation, especially in CCS, and what the main differences are.

CCS is a change journey, a transformation journey for the whole industry. Both on the operator side and us as main contractor, we need to understand how to create a new version of ourselves, to be precise and lean enough to make sure that these business cases are flying, that we all create win-win situations and earn money. I think it's slightly polluted by the oil and gas tradition we know on specifications and the way of collaborating. Now in this second generation, it's really remarkable to see how we are working in a way challenging and positively cannibalizing the way that we are handling this. In my mind, we are really moving the needle, particularly on the CCS side, where we see that we are creating new versions of ourselves that in one end can then serve this leaner, different kind of industrial market, but also up the game when we are looking at the likes of SMR and defense.

Following up to Idar, what is the opportunity set in terms of revenues and margins in these markets: CCS, hydropower, SMR?

As recently announced, more color on the alliance-inspired execution model and what Aker Solutions' competitive advantage is in this market.

Hydropower has been key to energy provision in so many different regions of the world, and we have been part of it for hundreds of years if you look at the old Kvaerner history. It hasn't been renewed or modernized over the years in perhaps the same way that oil and gas and other areas have evolved. What we see now is that the players in that energy market are curious about what we bring to the table when it comes to different ways of both early involvement to define how things can be done technically, and also how we can link up through the actual terms and conditions to actually create common drivers in execution. It's also good to see that they are curious on how we also collaborate around developing technology, which is obviously a big lift and shift that could provide a next level on the hydropower side.

Then I think we move over to a few questions on the guidance. We start with a question from Lucas Da. Your 2026 revenue guidance is up 7.5 billion at the midpoint since the first issued in November. What factors and projects have contributed to the increase? Are you surprised by how big the deviation is versus your original forecast? Maybe to Idar.

Then moving on to a question from M. Pickup on life cycle. The top has been around 7 billion in the first half, and 15 billion is the guidance. Is this the run rate with all the new contracts that we also now expect to be operational through 2027?

Moving on to a question from Erik Aspen Foso in Sparebank 1. Can you give a split on the tender value in terms of how much oil and gas, renewables, and also if you've included any of the SMR opportunities in the tender pipeline?

Qualitatively speaking, we have some huge oil and gas posts in the tender pipeline, both in Norway and abroad. But there is a lot of initiatives both in offshore wind, CCS, and hydropower that are ongoing and I would say growing and looking very good. But the numbers, this will vary from quarter to quarter depending on the portfolio under the tender phase. Right now it's dominated by oil and gas in totality, but as we know, it's fluctuating from quarter to quarter.

That takes me to Martin Husby Karlsen from DNB. Question based on this comment about construction start in 2029, what type of revenues should we expect before this? Can you help quantify?

Ja, we have this partnership with Rolls-Royce SMR because we see how we in a partnership can handle that kind of task together. The task is large and complex. That means that construction start is not the only big milestone. Ahead of that, we will be in design, where we are developing the concepts and methodology. We will be in a detail engineering phase, which is where we are talking about hundreds of engineers being involved. And then also start a procurement plan, where we are placing orders out to equipment providers. So construction start is speaking to our own physical activity on our yard, but before that we will have a lot of activity to make sure that these projects are on track.

Thank you. A lot of interesting things. Last question coming from Edgar. If you can share your vision for the organization going forward, the key changes that you believe will be necessary.

Our mission and purpose is solving global energy challenges for future generations. I think now, throughout the years that we've been here, we are really focused on making this happen, and we are still in that whole energy mix and broadening it as well. What is important then is to understand what are the true capacities and capabilities in the totality of Aker Solutions, and are we good enough to make sure that they are groomed skills in the company. That is a super important part of the communication going forward, that everybody understands the importance but also the relevance of the totality of solutions going forward.

Idar, that was all we had time for today. From all of us, thank you so much for listening and goodbye.