Good morning and welcome to Aker Solutions' presentation of our third quarter results. My name is Preben Ørbeck, and I'm the Head of Investor Relations. As usual, I'm joined by our CEO, Kjetel Digre, and our CFO, Idar Eikrem, who will take you through the main developments of the quarter. After the presentation, we have time for questions. Those of you who are following the webcast can submit your questions via the online platform. With that, I leave the floor to Kjetel Digre.
Thank you, Preben, and welcome to everyone tuning in. As always, let me start the presentation with the main messages for today. First and foremost, I'm pleased to report that we continue to deliver solid financial results in a period of high activity. Our third quarter revenues were NOK 17 billion, which is an increase of almost 30% from the same period last year. We delivered an EBITDA margin of 8.8% in the quarter, or 7.2% if we exclude net income from SLB OneSubsea. In Aker Solutions, our core focus is to deliver predictable project execution. During the quarter, I'm pleased to report that we met all key milestones on the Aker BP portfolio and celebrated the official opening of the record-breaking Ormen Lange Phase 3 project at Nyhamna.
Speaking of high activity, based on our secured backlog, we now expect revenues for the full year of 2025 to exceed NOK 60 billion. To put this into perspective, this represents more than three times our revenues in 2020 and 2021 when excluding the Subsea division. However, as we mentioned in our second quarter presentation, we expect activity levels to come down in 2026. Market conditions are changing, and we need to adapt. Fortunately, that is how we have always operated. First of all, we have a scalable business model that is designed to respond to cycles. We are also improving efficiency throughout our organization and in our projects, implementing new digital solutions and robotics to reduce cost and time to first energy. I'll talk more about this later, but first, I will take you through some of the operational highlights of the quarter.
Let me start again with the Aker BP portfolio. I'm encouraged to report that the projects are progressing according to plan. As you saw from the introduction video, several important milestones were met during the third quarter. Let's start with three highlights from the Huginn Ei project. In July, we celebrated the sail away of the massive 22,000-tonne jacket substructure from our yard in Verdal. The jacket was later successfully installed at the Yggdrasil area in the North Sea. At Egersund, the utility module was successfully loaded out and transported to Stord for final assembly. In late September, another critical milestone was met when this well-bay module arrived at Stord from our partner yard in Dubai. Progress was also good on the Valhall PWP and the smaller Hugin B and Fenris projects in the period.
In addition, our Life Cycle segment is actively engaged in modifying existing infrastructure on the Valhall central complex and on the Skarv FPSO. Across the Aker BP portfolio, I continue to be impressed by how teams across Aker Solutions and the Alliance partners are working together to deliver these complex projects. Some projects are also leaving our yards to start the offshore installation and commissioning phases. One example is the Jackdaw project, where the topside was successfully loaded out from Verdal and installed offshore in the U.K. This is a so-called not permanently attended installation, enabling lower manning and cost-efficient production from the gas reservoir. Moving over to Ormen Lange. In August, we celebrated the official opening of the Ormen Lange phase III project together with SLB OneSubsea, Subsea 7, and Shell.
Aker Solutions has been responsible for the integration of the subsea compression system with the Nyhamna onshore gas plant. This includes the delivery of a 500-tonne module providing power, cooling, heating, and ventilation for the offshore project. SLB OneSubsea has been responsible for the subsea compression system, which enables increased recovery from the Shell-operated Ormen Lange field. I think it's worth mentioning that the project has set a few records when it comes to subsea work. One is for the deepest installation of a subsea compression system in water depths of more than 900 meters. It also set a new record for the longest subsea step-out, delivering gas to the Nyhamna plant more than 120 km away. We are also working together with SLB OneSubsea and Subsea7 on the Jansz-Io subsea compression project for Chevron in Western Australia.
Aker Solutions is responsible for the delivery of about 30 modules to what will become part of the world's largest subsea compressor system, weighing approximately 6,500 tons. Deliveries of modules from our Egersund yard started in early October this year, with the final transport to the field planned in the fall of 2026. Next, I wanted to highlight our progress on what we have called the second-generation renewables projects. These are projects we have taken on with balanced risk-reward profiles and a joint focus on standardization to drive down project costs. On Norfolk, we are progressing as planned on the two HVDC platforms executed in our joint venture with our partner Drydocks World, seeing significant benefits in copying effects from the first to the second topside. We have also started work on the jackets for these platforms, taking advantage of our state-of-the-art robotic production line at Verdal.
Lastly, I wanted to touch upon our hydropower business. Personally, I'm very happy to see that hydropower, which is a growing market, is back as a key offering to our energy clients. I don't know of many companies that can brag about having 150 years' experience in this market, but we do. From our state-of-the-art facilities at Randi, featuring Europe's largest mill-turn machine, we are supporting hydropower's new role in the energy mix, providing flexible and reliable power when society needs it. One example is the Svean project for Statkraft, where Aker Solutions is delivering all electromechanical equipment. This delivery is key to modernizing the Svean plant, with a target of providing 10% more electricity through higher efficiency using the same resources.
All in all, I'm pleased to see that we continue to deliver predictable project execution across our portfolio, and I would like to recognize the contribution of our 12,000 employees, as well as the thousands of subcontractors and hired ins who make this possible through their expertise, dedication, and teamwork. Next, I will talk about our tender pipeline and market outlook. At the end of the third quarter, our active tender pipeline stood at about NOK 75 billion. This was a slight reduction from the second quarter, mainly driven by the announced cancellation of Equinor's electrification projects in Norway. In the current environment, the market conditions are getting tougher, especially for new investments within renewables and transitional energy solutions. A key part of our response is to work closely with both developers and our delivery partners to mature commercially viable projects.
This relates both to the adoption of new tools and technologies such as AI and robotics, but also how we work together to come up with innovative concepts and designs that enhance efficiency, reduce costs, and reduce delivery times. This joint improvement agenda is also highly relevant within oil and gas, where we are currently in the process of renegotiating several important long-term frame agreements for maintenance and modification services. We are also working with clients to mature several greenfield oil and gas opportunities with the aim of turning them into future projects. To summarize. The last five years have been a remarkable growth and transition journey for Aker Solutions. I'm very proud of the fact that we continue to deliver solid financial results with such a high workload across our locations.
This is a true testament to the capabilities of our 12,000 employees and the culture that we have developed together. At the same time, we recognize that the market is changing around us and that our activity levels will go down in 2026. That said, adapting to change is not something new in Aker Solutions' 180-year history. As mentioned, we have a scalable business model, enabling us to ramp up and down activity. Furthermore, we are working closely with our clients to mature new opportunities, both in traditional oil and gas and within renewables and transitional energy solutions. Finally, our financial position remains robust. This gives us a strong foundation to continue developing the company and generate solid returns for our shareholders over time. Now I will pass the word to Idar, who will go over the numbers in more detail.
Thank you, Kjetel. I will now take you through the key financial highlights for the third quarter, our segment performance, and run through our financial guidance. As always, all numbers mentioned are in Norwegian kroner unless otherwise stated. Let me start with the income statement. The third quarter revenue was NOK 17 billion, up 29% from the same period last year. The underlying EBITDA was NOK 1.5 billion, with a margin of 8.8%. If we exclude the net income from OneSubsea, our underlying margin was 7.2%, in line with our guidance for the full year. The underlying EBIT was NOK 1.1 billion, with a margin of 6.6%. The underlying net income was NOK 863 million, representing an earnings per share of NOK 1.79 in the quarter. Now let's take a look at the cash flow.
Our financial position remains robust, with our net cash position that increased to NOK 2.5 billion in the quarter. Operational cash flow in the period was around NOK 400 million. This was mainly driven by EBITDA contribution from our operating segments, as well as reversal of working capital of about NOK 550 million. CapEx in the period was NOK 94 million, representing about 0.6% of revenues in the quarter. Lastly, the quarterly dividends received from our 20% stake in SLB OneSubsea was NOK 142 million. Now let's take a closer look at our segments. For Renewables and Field Development, the third quarter revenue increased to NOK 12.5 billion, representing a year-on-year growth of 36%. The underlying EBITDA in the quarter was around NOK 1 billion, with a margin of 8%. The legacy lump -sum project continued to be a drag on the margins in the period.
However, I would also like to mention that margins on the second-generation renewable projects are healthy. The order intake in the period was NOK 7.1 billion, leading to a secured backlog of NOK 41 billion at the end of the quarter. Based on the secured revenues and backlog, we now expect the revenues in this segment to be around NOK 45 billion for the full year of 2025, representing a growth of about 20% from 2024. For the Life Cycle segment, the third quarter revenue came in at NOK 3.8 billion. This is a 10% increase from the same period last year. The underlying EBITDA was NOK 275 million, with a margin of 7.2%. Order intake was NOK 2.6 billion, or 0.7 times book to bill. The backlog was NOK 19.1 billion, dominated by long-term frame agreements and reimbursable modification projects with long-term customers.
Based on the secured backlog and market activity, we expect revenue in Life Cycle to be around NOK 15 billion for the full year of 2025, representing a growth of about 15% from 2024. Moving to our financial performance of the SLB OneSubsea, here shown as 100% basis translated into Norwegian kroners. You will also see that we have added some more detailed financial information about SLB OneSubsea in the appendix to this presentation. In the third quarter, OneSubsea reported revenues of NOK 9.9 billion. For the first three quarters of 2025, revenues for the company were about NOK 30 billion. The EBITDA in the quarter was about NOK 1.8 billion, with a margin of 18.4%. The margin in this quarter was negatively affected by change in revenue mix and one-off cost on our legacy project. Underlying execution, however, remained strong.
So far in 2025, the company has delivered an EBITDA margin of 20%. Net income for the entity was around NOK 1.1 billion before PPIA adjustments. After this adjustment, Aker Solutions recognized NOK 295 million for our 20% share. I should mention that these figures include a NOK 95 million catch-up effect from our second quarter reporting, as actual performance was better than forecasted. In the first three quarters of 2025, Aker Solutions has recognized about NOK 670 million in net income from OneSubsea into our financial figures. The backlog for the company was NOK 47.3 billion at the end of the quarter. Order intake in the period was about NOK 11.5 billion, or 1.2 times book to bill. This includes the award of a 12-well all-electric subsea production system for the Fram Sør field for Equinor.
The company expects order intake to increase towards the latter part of the year, positioning the company for growth in 2027 and onwards. As you can see, SLB OneSubsea is an important contributor to Aker Solutions' financial performance and value creation. Since the closing of the merger, SLB OneSubsea has built up a solid net cash position of about $440 million. The company has an attractive dividend policy, with a target to distribute about $280 million to its shareholders in 2025. For Aker Solutions, this represents a dividend at current exchange rate of between NOK 550 million and NOK 600 million this year. Now to sum up, in the third quarter, we continue to deliver solid financial and operational performance. As we have said before, the legacy lump-sum projects have been both operational and commercially challenging.
Commercial discussions are still ongoing with both clients and subcontractors to solve these commercial challenges. Based on our secured backlog and market activity, 2025 revenues are now expected to exceed NOK 60 billion, with an EBITDA margin in the range of 7% - 7.5%. As mentioned, at this early stage, we expect activity levels to come down in 2026, with revenue forecasted to be around NOK 45 billion. SLB OneSubsea is an important contributor to the financial performance of Aker Solutions. The company has built up a solid net cash position and is on track to distribute about $280 million to its shareholders in 2025. At current exchange rate, this implies a dividend to Aker Solutions of about NOK 550 million-NOK 600 million this year. CapEx for 2025 is estimated to be around 1% of revenue.
Lastly, working capital is expected to normalize to between negative NOK 4 billion and negative NOK 6 billion over time. That was the end of our presentation, so thank you for listening. In a few moments, we will open up for questions.
The first question comes from Erik Fosso in Sparebank En Markets. Can you talk about the disappointing AR7 budget and how it affects your business, particularly looking at the Vanguard East and the Vanguard West projects?
Yeah, that's first of all, you know, a comment on the U.K. You know, if you look at the regions where we are involved in energy transition efforts and renewables, you know, one of the places that are really both predictable and forward-leaning with ambitions is the U.K. That's one comment. I think this will develop, and Offshore Wind is going to be a key to the U.K. going forward. To this specific question, you know, we have our relation with our client, RWE. In those projects that are mentioned, the Norfolk HVDC platform projects, Vanguard East, and West, we have milestones to reach, and the projects are progressing very well, as seen in the video here. The things are puzzling together in a predictable way, and we will just continue to deliver that in good, sort of coordinated fashion together with our client.
No big issues there, and we are pushing on the OneSubsea.
There is a follow-up from Erik Fosso on if you can give some indication on what to expect in SLB OneSubsea in 2026.
Just to start off, just with the OneSubsea part of it, we are closely coordinated, obviously, through our ownership there. What we see in different regions, for instance, in the NCS, is that the subsea is a solid and healthy brick in the puzzle for energy projects. For instance, the Norwegian continental shelf is going into an area where lifetime extensions, subsea tiebacks, and also bigger greenfield subsea projects, and also more complex technology elements like the compression projects, that is going to be stable/increase. That's what we see in our OneSubsea sphere.
Yeah, just to add to this, you will also see in this quarter that we have provided some additional information of the historical performance of OneSubsea since the establishment. That should help you. With the combination of market information, you should be able to sort of make some assessment of what 2026 could bring.
Moving on to a question from [Lukas Dahl] in Arctic. What are the main factors that can impact your preliminary 2026 guidance?
Yeah, our preliminary guidance for 2026, as you can see, we have come out with a top-line guidance, and that we have put NOK 45 billion in top-line, which is a reduction from current level of NOK 60 plus. That was expected due to the high activity level that we are currently doing.
Moving on then to a few questions from Njål Kleiven in ABG. I can start with the first. Aker BP has increased the CapEx guidance on the key development projects. How does this affect Aker Solutions as an alliance partner?
First of all, I guess information about projects and the status in them is something that you really get from Aker BP. Our part of it is that we are engaged as an alliance partner in big projects, many of them, in different parts of the asset setup of Aker BP. The projects are on track, both when it comes to progress, when it comes to quality, safety, and also the sort of main prognosis of reaching the startups as planned. CapEx is then always a combination of potential new scope, which we know is part of some of these projects, and also how we, along the way, are taking actions to make sure that we are delivering within Aker BP's sort of frames and budgets.
As an alliance partner, we are in a peak activity, and many of us, including myself, are spending a large and a major portion of our time, actually, to safeguard these projects in a good sort of collaborative way in these alliances.
Next question from Njål: When do you expect the conclusion of the multi-year life cycle frame agreements that are currently on tender?
Yeah, I would say it's quite a sort of special timing now, because many of them, almost all of them, have been up for renewal. I think that sort of coming in this, firstly, what is really a great opportunity is that all our clients on these contracts are inviting for a common improvement push. That's what we are right in the middle of now. These things will then, it's back to the client's sort of decisions to when they are ready. It will be in the months to come that these things will be clarified, both in Norway, but also in, for instance, Canada. Anything to add, Idar?
Yeah.
The third question from Njål: Did you make any loss provisions related to the legacy projects in the third quarter?
Yeah, that also covers another question that we have got on this provision line that you can see in the balance sheet. There is a reduction of $100 million, roughly, from second quarter to third quarter. In that provision line, you will have three elements. One is honorary contracts, loss-making contracts, which is going down in the provision. You have warranty provision on ongoing projects, and those have increased during the quarter of natural reason of progress. The last element that goes into that line is all other provisions that we have in addition to the two first ones.
Thank you.
Next question from Jarle Haugnes: Whether it's sustainable with a CapEx of only 1% in Aker Solutions?
Perhaps I can start just on referring back to the activity package. That's what we are right in the middle of now to deliver on. When launched, pointing at all these oil and gas opportunities that we are now realizing, it came with an expectation and pointing at opportunities to both sort of modernizing the industry engaged in oil and gas, and then also gradually make sure that we are ready to take on tasks and responsibilities in the new energy verticals. That's what's been happening now for three to four years. We have been investing billions in our yards to upgrade, to be more efficient, to be safer. We also invested in the competence of our people. All in all, this was necessary to be able to push through the activity level that we're actually engaged in just now. Historically, Idar, perhaps you can comment?
Yeah, it's correct what you are saying. We are in a phase where we actually are capitalizing on the investment that we have done over the last few years. We have enlarged our capacity quite significantly. Revenues for next year are forecasted to be NOK 45 billion and 1% is sort of the CapEx guidance for that year, due to the fact we can capitalize on the investment that we have done. Any sort of CapEx over and above that needs to be sort of separate business cases that would be good for us and the shareholders to do. We will announce that separately as a special case.
Excellent. There seem to be no further questions from the audience. With that, thank you all for listening in, and from everyone here, goodbye.