Good morning, and welcome to Aker Solutions presentation of our first quarter results. My name is Preben Ørbeck, and I am the Head of Investor Relations. With me today is our CEO, Kjetel Digre, and our CFO, Idar Eikrem. They will take you through the main developments of the quarter. Following the presentation, we will open 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 usual, let me start the presentation with the main messages for today. Firstly, we continue to deliver solid financial results as our revenues normalize from peak levels in 2025. A key priority in 2026 is to secure new orders, and I'm happy to report that Aker Solutions was awarded several important long-term frame agreements in the first quarter, and our financial position remains highly robust. Mid-April, the annual general meeting approved the payment of NOK 8.6 per share of ordinary and extraordinary dividends, which was distributed to shareholders earlier this week. Our mantra in Aker Solutions is always home safely. Sadly, during Easter, we lost a colleague in a fatal accident at our decommissioning site at Stord.
This loss is a stark reminder of why our focus on safety is so important every day in every task. To fully understand what happened and to prevent it from happening again, Aker Solutions has established our own internal investigation, and we are collaborating with the police and authorities in their investigations. Moving on to our project portfolio, where we are making good progress with several milestones met on the Aker BP projects. This includes stacking complete for Huginn A and Valhall PWP, as well as the sail away of both the Fenris topside and Huginn B jacket in early April. The geopolitical situation in the Middle East is monitored closely. Shortly after the outbreak of the war, we decided to evacuate non-critical personnel from Dubai. At the same time, our ongoing projects executed with our partner in Dubai are continuing as planned.
Lastly, based on our secured backlog and the high tendering activity, we are upping our guidance for the full year, expecting revenues to be around NOK 50 billion with stable underlying margins. I'm also encouraged to see the steps we are taking to position our company in emerging markets, such as data centers and small modular reactors. I'll talk more about this later. First, I will take you through some of the operational highlights of the quarter. As mentioned, the Aker BP portfolio is progressing according to schedule, with several milestones met in the first months of 2026. In February, our yard at Stord celebrated the completion of the so-called stacking program on Huginn A. This means that all the key modules and preassembled units have been lifted into place on the platform.
On Valhall PWP, a similar milestone was achieved in the beginning of April with a successful lift of the 1,081 ton MEG module from our subcontractor, Nymo. In April, both the Fenris topside and the Huginn B jackets sailed away from our Verdal yard and were successfully installed offshore. What does it take to deliver such projects? The photo you see on the upper right corner is from town hall held at Stord earlier this year. To me, it gives a good picture of the current activity level at the yard. As we speak, we have more than 10,000 hire ins on rotation at the yard in addition to our own employees. This also highlights our flexible model using hire ins and subcontractors during peak activity periods.
All in all, I'm very proud that Alliance continues to deliver on its promise to radically change how to deliver capital projects. In short, we are building faster, and we are building better. Moving over to our Life Cycle segment. In the first quarter, we were awarded new long-term frame agreements for maintenance and modification services for both Equinor and Aker BP in Norway. In both these contracts, Aker Solutions scope increased, taking responsibility for several new assets, both offshore and onshore. One example is Aker BP's new Yggdrasil development, which will set a new benchmark for remote operations and the use of new technology to enhance efficiency. The frame agreements are also important to position us for future modification projects. Equinor alone has announced targets of bringing more than 75 subsea projects on stream over the next decade, which will require topside modifications.
Increased subsea tieback activity will also open opportunities for fabrication of subsea equipment from our Egersund yard to clients such as SLB OneSubsea. We are also actively engaging with clients to position for future opportunities across a range of markets. Within oil and gas, we are in the pre-FEED phase for several FPSO projects that we expect will move into the next phases of development over the next 12 months. This includes both greenfield developments and lifetime extensions of existing assets. Within offshore wind, we are working directly with transmission system operators and equipment partners to design the next generation of offshore HVDC converter platforms. A key focus is to optimize the design to reduce weight and standardize equipment to reduce cost. On CCS, we were recently awarded the FEED study for the Klaipeda CO2 storage terminal in Lithuania. A project co-funded by the European Union.
The planned facility will have storage capacity of about 2.8 million tons of CO2, which will be captured from industrial sources across the Baltic region. The FEED study began in the first quarter with a team of more than 100 experienced engineers from our hubs in Oslo and India. We are also taking important steps into adjacent markets, such as data centers. According to McKinsey, more than $7 trillion will be invested in data centers by 2030 to meet the growing demand. We are still in an early phase, already we are seeing that our capabilities for advisory services, electrical system design, and project management services are in demand by developers. Speaking of important steps, small modular reactors, or SMRs for short, are moving from concept to reality.
Yesterday, we announced the signing of an MOU with Rolls-Royce SMR, a leading player in this market. Through this partnership, Aker Solutions will apply our expertise in design, project management, and modular construction for the development of non-nuclear parts of these power plants. The partnership will initially focus on ongoing developments in the U.K. and the Czech Republic, where Rolls-Royce have been selected as the main contractor and technology provider for upcoming SMR projects. As part of the MOU, Aker Solutions will work closely with Rolls-Royce SMR to mature the modular scope with the aim of finalizing the first binding contracts. I believe this MOU represents a great opportunity for our company in a potential significant market. As Europe accelerates its energy transition, SMRs are emerging as a key technology to meet growing energy demands while reducing carbon emissions.
I also think the fact that Rolls-Royce SMR selected Aker Solutions for this partnership is a good example of how we are drawing on decades of oil and gas experience to unlock new opportunities and reinforcing our role in the broader energy transition. As mentioned, a key priority in 2026 is to secure new orders. Tendering activity is high, and our tender pipeline grew about 10% in the quarter to almost NOK 90 billion. Growth has mainly come from Asia, Pacific, and Australia. Here, we are tendering for several FPSO opportunities, and we are also in the process of renegotiating frame agreements for maintenance and modification services in the region. Just as a reminder, the tender figures do not include the SLB OneSubsea, where Aker Solutions holds a 20% ownership. Tendering activity in SLB OneSubsea is also high.
Supported by strong underlying market, SLB OneSubsea targets cumulative bookings exceeding $9 billion over the next two years. So far in 2026, SLB OneSubsea has announced several new orders in different geographical regions. Within Subsea Production Systems, or SPS, SLB OneSubsea was awarded both the 20 well Kaiping project in China and the deep water Kikeh project in Malaysia in the quarter. In April, SLB OneSubsea, together with its partner, Subsea7, signed a strategic collaboration agreement with PETRONAS for future SPS and SURF deliveries to Suriname. Within Subsea Processing, SLB OneSubsea has a dominant market position, leveraging decades of technical innovation in both Aker Solutions and in SLB.
So far this year, the company has been awarded both the upgrade of the Gullfaks compression system in Norway and the delivery of high pressure, high temperature multiphase boosting for Beacon Offshore Energy in the Gulf. All in all, we are pleased to see that SLB OneSubsea is on track to deliver on its ambitious order intake targets, which will lead to growth from 2027 and onwards. The valuations of Subsea technology companies shows that the strong and sustained momentum across the Subsea market is increasingly being recognized by investors. As a committed co-owner of SLB OneSubsea, we believe the company is well-positioned to capture this momentum and support value creation over time. In our view, this ownership represent an important underlying value that is not fully reflected in Aker Solutions' current valuation.
With that, I leave the word to Idar, who will take you through the financials of the quarter.
Thank you, Kjetel. I will now take you through the key financial highlights of the quarter. As always, all numbers mentioned are in Norwegian kroner. Let me start with the income statement. The first quarter revenue was NOK 13.4 billion, down 7% from the same period last year. This is an expected normalization of activity levels in line with our guiding for the full year. The underlying EBITA was NOK 1.2 billion with a margin of 8.6%. Our underlying margin, excluding the net income from SLB OneSubsea, was 7.6% in the quarter. The underlying EBIT was NOK 780 million in the quarter with a margin of 5.8%.
Net income, excluding special item, was NOK 634 million, representing earnings per share of NOK 1.31 . During the quarter, Aker Solutions recorded a gain from the sale of SLB shares of NOK 544 million . This was treated as a special item in our reporting. As Kjetel mentioned earlier this month, the annual general meeting approved a total dividend of NOK 8.60 per share, which was paid out in full on the 27th of April. This include the ordinary dividend for the fiscal year of 2025 of NOK 3.60 and extraordinary dividend of NOK 5 relating to the sale of SLB shares. Let us now take a look at the segments. For Renewables and Field Development, the first quarter revenue fell to NOK 9.6 billion , mainly reflecting lower subcontracting volumes on ongoing projects.
The underlying EBITDA in the quarter was NOK 721 million with a margin of 7.5%. The order intake in the quarter was NOK 5.5 billion, and the secured backlog was NOK 36.1 billion at the end of the quarter. Based on the secured backlog and market activity, we currently expect revenue in this segment to be around NOK 35 billion in 2026. For the Lifecycle segment, the first quarter revenue was NOK 3.3 billion. This was impacted by the lower offshore activity in the North Sea during the winter months, as well as somewhat lower activity at some of our international hubs. The underlying EBITDA in the quarter was NOK 238 million with a margin of 7.2%. This correspond to a margin increase of more than 50 basis point compared to the same period last year.
Order intake in the period was record high at NOK 23 billion or 6.9 x book-to-bill. This was mainly driven by the new long-term frame agreements with Aker BP and Equinor for both onshore and offshore facilities in Norway. The backlog increased almost twofold in the period to NOK 42.5 billion, providing good visibility on activity levels for several years ahead. If you also include the estimated value of the option periods for our frame agreements, the backlog will increase to about NOK 80 billion. Based on the secured backlog and market activity, we continue to expect revenue in this segment to be around NOK 15 billion for 2026. Moving over to the financial performance of SLB OneSubsea, here shown on 100% basis translated into Norwegian kroner. In the first quarter, SLB OneSubsea delivered revenues of NOK 8.4 billion.
This was impacted by wind down of several large projects and lower service activity in the winter months in Norway. In Norwegian kroner, the result were also impacted by the lower exchange rate versus the U.S. dollar. EBITDA in the quarter was NOK 1.4 billion with a margin of 16.8%. This was negatively impacted by high startup cost on some new projects. The company expect the margins will improve during the year. Net income for the entity was NOK 807 million before PPA adjustments. After these adjustments, Aker Solutions recognized NOK 143 million for our 20% share. The backlog for the company was NOK 46.6 billion at the end of the quarter. As Kjetel mentioned, the company has announced several new orders so far this year and is on track to deliver on its growth ambitions from 2027 onwards.
Aker Solutions received quarterly dividend of NOK 137 million in the first quarter. After the distribution of dividend, the company continued to have a very robust financial position with a net cash position of more than $600 million at the quarter end. We will look at our cash flow development in the quarter. Operational cash flow in the period was NOK 2.7 billion. This was driven firstly by EBITDA contribution from our operating segments. Working capital improved by about NOK 1.8 billion to negative NOK 8.3 billion. This was driven by favorable cut-off effects and is expected to normalize over the next quarters. CapEx in the period was only NOK 57 million or 0.4% of revenues.
As mentioned, we also received NOK 137 million in dividend from SLB OneSubsea, in line with distribution in the same period last year. During the quarter, we sold our share in SLB for NOK 2.5 billion. The shares was received in October 2023 as part of the Subsea transaction. The proceeds from the sale were later distributed to our shareholder as extraordinary dividend. At the end of the quarter, our net cash position stood about NOK 8.7 billion, including investment in liquid funds. Next, I wanted to say a few words about our capital allocation strategy. Since the merger between Aker Solutions and Kværner, a key priority has been to build financial robustness while investing into profitable growth initiatives, such as digitalization and robotization, and generating solid shareholder returns.
With the recent dividend paid earlier this week, Aker Solutions has in total distributed more than NOK 35 to shareholders since 2020. Our focus is to continue generating shareholder value in the years to come. I will now hand the presentation back to Kjetel to summarize the key developments of the first quarter and present our guiding for 2026.
Thank you, Idar. To summarize, I am pleased to see that we continue to deliver solid financial performance as our revenues normalize from peak levels in 2025. We are not resting. During the quarter, our backlog increased to NOK 80.2 billion, and our tender pipeline grew to almost NOK 90 billion. I am also encouraged by the steps we are taking to position our company in emerging markets such as data centers and small modular reactors. Next, over to our guiding for 2026. Based on secure backlog and market activity, we expect revenues to be around NOK 50 billion. EBITA margins, excluding net income from SLB OneSubsea, are expected to be in the range of 7%-7.5% for the full year, in line with previous guiding. CapEx is expected to be around 1% of revenue in 2026 and onwards.
Despite the developments in this quarter, we continue to expect working capital to normalize over time to a level of between NOK -4 billion and NOK -6 billion. Finally, we have a robust financial position. This enables us to both develop the company for the future and to serve our shareholders. Thank you for listening. That was the end of our presentation. In a few minutes, we will open for questions.
We will start with a few questions from Sindre Smedgård through in Nordea, on Life Cycle. Margins in Life Cycle, is there anything specific affecting this quarter? Does this reflect the overall margin? The second question on Life Cycle, we've had a solid order intake and expanding backlog. How should we think about the run rate for the margin for the volumes going forward?
Well, just start by just saying that we are super happy with having key clients that are renewing all of the important frame agreements. You know, that is giving us an excellent horizon to work with. There's a known activity level in all of those contracts. We know the installations as well. Then in addition to that, the known scope, we know that there will be a lot of modification work for these clients based on the need for energy security, triggering lifetime extension projects, and also the huge subsea tieback scope, which also triggers then topside modification. In that frame there, it's an excellent opportunity to work on both improvements and have ambitions for growth. You know?
Yes, and just want to double up what you said, Kjetel. Happy that we got those contracts in place and not only that it's renewed by the customers that we're having, it's also a bigger volume over time. However, it will take some time during the year, then the new contracts will kick in. Our best estimate for the current year, 2026, is that our overall revenue will be in line with last year. Based on what I said, of course there is a clear ambition to grow both top line and margin over time and a lot of the margins in Life Cycle is actually performance-based, incentive-based.
We have demonstrated that we over time are able to deliver well, and I think the new contracts is just a indication of that the customers are also happy with that and that we can continue that journey, working very close with the key customers in order to improve performance over time and through that also cash in on incentive mechanism.
Thank you. We will move over to a question on the legacy projects. When are they expected to be completed, and what was the impact of the quarter?
On completion, you know, this project have been constructed, completed, installed offshore, and we are now together with our clients testing the functionality, and are going to complete them during the second half of this year.
Yeah, the impact on the quarter is not any significant. There are some revenue of course, without any margin recognition in the quarter. It's still a drag on the margins. We will continue our commercial dialogue in the months to come.
Moving over to a question about working capital. Do you have any view on where we land at year-end?
We had a favorable close in the first quarter so our working capital ended up at minus NOK 8.6 billion. Our guidance for the working capital is the same as last time. We expect that the working capital is going to be adjusted or reversed to a level of minus NOK 4 billion to minus NOK 6 billion over the next quarters to come into and including into 2027.
Yeah. Maybe move over to a question on the CapEx guidance and the low spending in the first quarter. How should we expect facing of CapEx for the remainder of the year?
First of all, there is a clear signal that the capital discipline is very strong in the company. We don't invest more than what we need to. We need to have good business cases in order to go over and above our guidance. Where we are now, we capitalized on the investments that we have done so far. In the quarter it's only 0.4% of the revenues. Our guidance is still maintained at 1% of revenue and you should view that as a guidance over time, not necessarily for 2026 only.
Moving over to a question from Victoria McCulloch in RBC. Can you remind us of the milestones for the remainder of the year on the Aker BP projects?
Yeah, just to remind us what that is all about for us, you know, we are doing a lot of offshore work obviously, but we have four platforms to be completed with jackets and, two big ones and two smaller ones. One of the small ones, Fenris, is already installed offshore and we are starting the offshore completion of that. One more is coming from our Verdal yard later this summer. The two big ones coming from Stord, this is planned to be installed during the second half of this year.
Moving over to a question on the tender pipeline. If you can give some color on the NOK 40 billion, around NOK 40 billion of projects in Europe and also in Asia-Pacific, which grew in the tender pipeline in this quarter.
Yeah. In Europe we have a very clear position within oil and gas, with already mentioned Life Cycle, and there's a lot of work that has to be done within the operational part for these projects. There's modification work in that pipeline. They're also looking at greenfield developments. One very known one where we are involved is the Wisting project, potentially being installed in the Barents Sea in some years. We are involved in many parts of offshore wind, you know, components like foundations and also marine services, but particularly on the substation side. There are multiple HVDC opportunities.
We are, as announced, broadening our role within the carbon capture and storage and there are targets there. Also as we have announced, you know, the SMR business and also data centers are opportunities that we are moving into. APAC, you know, that's, if you look at who we are in APAC, we can start with our India office in Mumbai. We are around 1,000 engineers there. We do use them to support the global operations. They also are engaging in local, regional tasks both onshore and offshore. We have our MMO business giving us a presence in Far East Asia, where we are looking at renewing contracts, but also potentially growing into new areas there.
From both our head office and also at large, you know, we are also looking at FPSO opportunities. FPSO opportunities in Asia for us will be then to use our project management skills and competence and also the whole sort of engineering muscle, I would say.
Thank you, Kjetel. Moving on to a question about OneSubsea. Do we have any expectation on dividend levels for the rest of the year?
Yeah. As you probably know that, we receive a dividend from OneSubsea on a quarterly basis, and in the first quarter we received NOK 137 million, in line with where we were last year. In totality for last year, we received NOK 841 million in dividends from OneSubsea, consisting of quarterly dividends plus an extraordinary dividend at the end of the year. The most important one is that the dividend policy is clear and attractive. All excess cash is going to be distributed to the three shareholders. More importantly is that the business is continuing its development and able to generate more cash as we speak.
Including in first quarter, you see that the cash, net cash position has increased, even after the payout of the dividend. They are in position to pay out dividend quarter by quarter, and then we will see what the end result will be at the year-end. They are in a position to pay out a solid dividend.
Yes. Moving to a question from Russell in Upstream. Can you give a bit of detail on the Dubai projects and if there are any expected disruptions?
Yeah. We've had quite a lot of projects with our partner in Dubai, Drydocks World Dubai. Just to mention them, you know, we had substantial modules coming from Dubai into the Aker BP projects. They have been transported to Norway and are now part of the bigger topsides at Stord. We also had the Rosebank project for Altera and Equinor, and now Adura. That actually left Dubai just a few days before the war was initiated. Now we have two HVDC projects, the Norfolk Vanguard East and West, which is running according to plan. We have had to sort of create some alternative supply chain routes, that is one of the clearest consequences.
All in all these projects are on schedule. Currently we don't have any new projects that will be triggered in Dubai in the near future. We are working on the opportunities.
Moving on to a question from Martin Huseby Karlsen in DNB. If you can shed some light on the SMR agreement, your partner Rolls-Royce has said that the first SMR unit in the U.K. could generate power around 2035. How should we think about timing of Aker Solutions activity?
First of all, we are in a phase now where we are during or under the MoU, is working on maturing both the design and the role setup, execution models, etc . That is going on now and that is quite a substantial organization in Aker Solutions that are working on that now from both London and Oslo and Stord. If we then sign a contract and enter into the next phase, these are undertakings and projects that requires a lot of people in the engineering organization and planning and procurement. That will then sort of build up towards a construction start, which is then to be able to deliver in 2035, we need to start around 2029, 2030, I would estimate.
One other comment is obviously that we're not talking about one SMR project with our partner Rolls-Royce. The idea is to actually execute a sequence of projects that are coming in a natural order. In the period that I just described, we will probably initiate more than one SMR. Again, a huge undertaking that we're really looking forward to be part of.
Thank you, Kjetel and Idar. That concludes our Q&A session for today. From all of us here, I would like to thank you for listening in.