Good morning, 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 here today is our CEO, Kjetel Digre, and our CFO, Idar Eikrem. They 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 audio cast can submit your questions via the online platform. With that, I leave the word to Kjetel Digre.
Thank you, Preben Ørbeck, and welcome to everyone from me as well. Let me take you through the highlights of the quarter. Firstly, the overall message is that we continue our positive development with increased top and bottom lines in the quarter compared to the same period last year. Our first quarter revenue was NOK 11.4 billion. Our EBITDA was NOK 906 million, with a margin of 7.9%. We delivered NOK 12.5 billion of order intake or 1.1 x book-to-bill, and our backlog ended at close to NOK 100 billion. Our financial position remains highly robust, with a net cash position of NOK 6.6 billion. Secondly, we continue to progress well with our transformation.
The process for establishing the new subsea joint venture with SLB and Subsea 7 is progressing according to plan with expected closing during the second half of 2023, given regulatory approvals. We also continue our recruitment drive. Our ambition is to welcome another 2,000 skilled colleagues during the year across our organization globally. As part of our climate action plan, we have recently joined the First Movers Coalition, supporting the decarbonization of supply chains through purchase of low emission or green steel. The coalition includes more than 60 companies working to build early markets for clean technologies. Thirdly, the outlook for Aker Solutions is positive. The high order backlog, mainly made up of projects to be executed in the well-proven alliance model with Aker BP, with balanced risk/reward profile and upside potential through shared incentives, offers good visibility and on activity levels going forward.
We continue to see high demand for our services, and we have a solid tender pipeline of opportunities across our market segments. Let's now have a look at some operational highlights in the first quarter. Overall, I'm very happy to see that our main ongoing projects are progressing well. We are in the early phase of our Aker BP portfolio of projects awarded in the fourth quarter last year. We are progressing well on the large platform projects with high activity in detail engineering and procurement, as well as preparing the yards for the construction phases. Our EMM business has also started the work for topside modification on existing assets like the Skarv FPSO, to ensure tie-in of new subsea fields. Our subsea deliveries for the Yggdrasil and Skarv satellites projects are also progressing to plan with high activity specifically on procurement at the moment.
On Johan Castberg, we are progressing well with hookup work between hull and topside ongoing at our Stord yard. Together with Equinor, we are also exploring new digital solutions such as 3D printing with more than 1,300 parts printed to date. I also wanted to highlight how we over years have worked to standardize our subsea deliveries together with our customers to reduce costs and improve delivery precision, quality, and installation efficiency. About five years ago, we signed the NCS 2017 contract with Equinor, which has resulted in the deliveries of more than 50 standardized subsea trees to date. The same standard building blocks are being configured for other customers such as Aker BP, Total, and ConocoPhillips. We also bring with us learnings from subsea standardization into our renewables offerings.
In the Jansz subsea gas compression project for Chevron in Australia, we have activity across several locations around the globe. The project is progressing well with expected delivery in 2025. On the back of our experience from Åsgard and Jansz, we continue to see strong customer interest for subsea processing, and we look forward to get back to you on these opportunities as they mature. Lastly, we are also progressing on our renewables project portfolio. We are working together with Aker Carbon Capture for Heidelberg Cement to bring about the world's first full-scale cement plant integrated with carbon capture technology in Brevik, Norway. Once completed, this will reduce CO2 emissions at the plant with 400,000 tons annually. Despite challenges related to the pandemic and the war in Ukraine, the project is now more than 50% completed and is expected to be operational in 2024.
The CO2 captured at Brevik will be stored at the Northern Lights facility at the west coast of Norway before being sent in a pipeline out for permanent subsea storage. Aker Solutions is the main contractor for both the onshore storage and subsea injection scopes. These are both progressing according to plan. We are also executing the Sunrise Wind project for Ørsted. This is the first HVDC converter platform to be installed offshore U.S. Construction of the topside is ongoing at our partner yard in Romania, while the jacket is being assembled at our yard in Verdal. The topside will later this year be transported to our yard at Stord for integration and completion before being shipped across the Atlantic in 2024. Let's now have a look at our main orders during the quarter.
In the renewables and field development segment, we booked an order intake close to NOK 3 billion in the first quarter. This mainly relates to the Rosebank FPSO project for Altera, with Equinor as the end customer. The project will be executed in a joint venture with Drydocks World. In the EMM segment, we recorded strong order intake of NOK 4.8 billion, driven by Draugen electrification and the topside modification scopes on Åsgard for the Berling subsea tie-in. With the Draugen project and the work we are doing on Troll and Njord electrification, we are cementing our leading position within decarbonization of offshore platforms. Electrifying the platform with power from shore will reduce an estimated 200,000 tons of CO2 emissions annually. Our subsea segment also had a positive quarter, reporting an order intake of NOK 4.8 billion.
In January, we were awarded the Lapa South West subsea contract for TotalEnergies in Brazil for the delivery of subsea production system, tools, and all related EPCI interfaces. In February, we were awarded the Agogo subsea umbilical contract for Eni in Angola. Now let's have a look at our tender pipeline. Aker Solutions offerings are in growing demand. Despite our strong intake these last quarters, our tendering pipeline remained strong at almost NOK 80 billion. As I've said many times, we remain highly selective in what projects we take on board, especially within renewables, where the industry is still in early development. We have been clear that we will only focus on projects with satisfactory terms and risk-reward balance, where we can deliver value both for our customers and our shareholders. We continue to see robust multi-year market growth across areas where we are relevant.
A substantial step-up in capital spending is projected in oil and gas in areas where Aker Solutions has a strong position, such as the North Sea, South America, and West Africa. This combined with the ambitions for energy transition and growth in renewable energy production across the globe will lead to high activity levels across the industry in the years to come. We are pleased to see that the Norwegian state has published the criteria and timing for the first round of offshore wind licenses in Norway. This is an important first step in realizing the ambitions of 30 gigawatt of offshore wind in Norway by 2040. To develop a successful offshore wind industry, we need continued collaboration between authorities, developers, and the whole supplier industry. In particular, the frameworks need to be predictable and structured to ensure sustainable margins across the value chain.
This takes me to the general outlook for Aker Solutions. I'm pleased that we continue to deliver on our financial targets while growing the business and developing our organization. Our financial position is solid and will be further strengthened with the closing of the subsea joint venture expected in the second half of 2023. Furthermore, the new entity will be an important contributor to our business through the 20% ownership in a larger and stronger subsea company. Aker Solutions is well-positioned within the businesses we already serve and to seize opportunities in rapidly changing energy markets. With our all-time high order backlog, of which the majority relates to Aker Solutions segments excluding subsea, we have high visibility for our activity levels in the years to come.
We have a strong focus on continuously delivering predictable project execution together with our partners in models with balanced risk-reward profiles that have upside potential through shared incentives. We continue to see volatilities in the geopolitical landscape and in global financial markets, and we actively manage our supply chain. Our tendering activity remains high across segments, which enable us to be highly selective about what opportunities we target. With that, I hand the word over to Idar, who will take you through the numbers in more detail. Thank you.
Thank you, Kjetel. I will now take you through the key financial highlights of the first quarter, our segment performance, and run through our financial guidance. As always, all numbers mentioned are in Norwegian kroner. Let me start with the income statement. The first quarter revenue was NOK 11.4 billion, up from NOK 8.3 billion a year ago. This represent almost 40% growth year-on-year. The underlying EBITDA was NOK 906 million, up from NOK 583 million a year ago, and the margin increased to just below 8%. This was driven by continued good progress on our project portfolio across our segments. The underlying EBIT was NOK 622 million, up from NOK 316 million a year ago, and the net income, excluding special items, increased to NOK 452 million from NOK 200 million a year ago.
Earnings per share was NOK 0.92, up from NOK 0.38 a year ago. In April, we paid out dividend of NOK 1 per share, equal to 40% of net income for the fiscal year 2022, in line with our ordinary dividend policy. Let us look at our financial position. We continue to have a solid net cash position, which increased to NOK 6.6 billion in the quarter. Our total liquidity buffer was NOK 10.1 billion, where NOK 7.1 billion was cash. In the first quarter, we have successfully refinanced our revolving credit facility at attractive terms. It has been reduced from NOK 5 billion to NOK 3 billion, with maturity in 2028. We have also completed a buyback of NOK 476 million of our outstanding bonds. For the first quarter, we delivered strong cash flow from operation of NOK 1.7 billion.
This was mainly driven by solid operating margins, as well as favorable working capital developments. Our working capital improved to -NOK 4.9 billion at the end of the quarter, driven by high activity levels and prepayments on ongoing projects. We expect working capital to remain lower for longer on the back of recent large order intake, this is expected to trend in the range of around -NOK 3.5 billion to -NOK 5.5 billion. Over to the segments. For renewables and field development, the first quarter revenue increased to NOK 4.1 billion, up from NOK 2.8 billion last year. The underlying EBITDA in the quarter was NOK 171 million, up from NOK 102 million a year ago and with a margin of 4.1%. We expect margins to gradually pick up over the next quarters as recently awarded project will start reaching profit recognition phase.
The order intake in the quarter was NOK 2.9 billion, or 0.7 x book-to-bill. This was mainly driven by the Rosebank EPC contract to be executed in a joint venture with Drydocks World, as well as growth in scope on existing projects. The secured backlog remains record high at almost NOK 50 billion. As communicated in the fourth quarter, we continue to expect the revenue in this segment to increase by more than 30% in 2023 from 2022 levels. For the EMM segment, the first quarter revenue was NOK 2.9 billion. This was up from NOK 2.5 billion a year ago, driven by continued good progress on ongoing work. The underlying EBITDA in the quarter was NOK 161 million, up from NOK 140 million last year, and with a margin of 5.5%. The order intake was strong at NOK 4.8 billion, or 1.6 x book-to-bill in the quarter.
The order backlog is very solid at close to NOK 24 billion, which is around 2 x the annual revenue in this segment. As stated in our fourth quarter presentation, we expect the EMM segment to continue at close to 2022 levels in 2023. In the subsea segment, the first quarter revenue was NOK 4.3 billion, up from NOK 3 billion last year, a growth of almost 50% year-on-year. The underlying EBITDA in the quarter was NOK 658 million, with a margin of 15.2%. This is yet another strong quarter with solid underlying performance in our subsea business. The order intake in the quarter was NOK 4.8 billion, or 1.1 x book-to-bill. The backlog in subsea is about NOK 25 billion. As stated in our fourth quarter presentation, we expect the revenue in the subsea to increase by more than 25% in 2023. Now, over to order intake and backlog.
After the record high order intake in the fourth quarter, I am very pleased with the order intake also in the first quarter of NOK 12.5 billion, or 1.1x book-to-bill. Our backlog is now at almost NOK 100 billion, which gives us a very good visibility for activity levels for several years to come. Almost 75% of our backlog is related to Aker Solutions segments excluding subsea. This is a very good position to be in, as Kjetel mentioned, our focus is to continue delivering predictable and solid execution to harvest upside potential and incentives. To sum up. In the first quarter, we continued to deliver strong financial and operational performance, we have a solid financial position. Based on our secured backlog and market activity, 2023 revenues continue to be seen up by more than 15% from 2022.
The underlying EBITDA margin at this early stage of the year continues to be seen up from the 2022 levels. Working capital is expected to remain lower for longer in a range between -NOK 3.5 billion to -NOK 5.5 billion. The outlook for the company and for our industry is very positive. Aker Solutions is in an excellent position to take advantage of the opportunities ahead. Thank you for listening. That was the end of our presentation. We will now open up for questions.
Thank you, Kjetel and Idar. The first question comes from Alexander Lager in Arctic. He asks, "Could you update us on the subsea sale? When will it close? When will you receive cash and shares? Or are there any expected one-off items related to the sale?
First of all, we are right in the middle of all the sort of merger planning. Very good cooperation integrated between SLB, OneS ubsea, and ourselves. The normal antitrust processes are running, and we predict that the closing will happen during the second half of 2023.
Yeah. Yeah, as Kjetel mentioned, this is in line with what we communicated when we announced the deal, so there is no surprises when it comes to timing and it's going according to plan. As previously communicated, that will also free up, some, quite some capital for us, when the transaction will become effective.
The next question comes from Kim Uggedal in SEB on the subsea transaction and whether you made any currency hedges on the NOK 700 million to be received as part of the subsea transaction?
We are monitoring our currency position well. We have done some currency hedges on part of that expected cash that we will free up in the range of $200 million secured at a level of 10.22.
Moving on, the next question from Kim Uggedal, if we add together the specific guidance for each segment, this implies a revenue growth of close to 20%. Can you explain the difference versus the overall guidance of around 15% revenue growth?
I think what we have said is that overall, we believe that in 2023, our revenue is growing by more than 15%, and the variation between the quarters is explained by in the report.
Thank you, Idar. Moving on to Martine Kverne in Nordea. Can you provide some more color on the margin distribution for 2023 and going forward? Are there any planned milestones that we should be aware of, especially considering the renewables and field development segment?
Yeah. In the renewable and field development segment, we have said that the current level that we see today is not something that we are satisfied with. Therefore, we have also said that this will gradually increase over the next quarters to come in line with when we start also profit recognition on some of the newly award projects that we have taken on board.
Next question comes from Victoria McCulloch at RBC. Could you give a bit of color about the tender pipeline and how much of this is renewable versus traditional oil and gas?
Yeah. We have a strategy. You know, the direction is set where we are about to grow in renewables and low carbon, one-third in 25 and two-thirds in 2030. That's the direction. As we also have said, you know, we are really selecting now on which clients to go for and how we build a pipeline of projects in these new renewable sectors. Currently, we are in some leads on the projects that we have already taken on, and these are looking promising. The proportion of it, when you look at the percentages is a bit lower than we originally planned for, and that is because some of them are sliding to the right.
That is just giving us more time to mature them correctly and position ourselves in the right way.
Just to add to that one, when we have established our definition of one-third and two-third, including that is renewables and pure renewables type of project, as well as low carbon solution for oil and gas production. Currently, that is a majority of the order backlog in this area.
That's a good point, Idar, and that speaks to the projects like the ones on the Norwegian shelf around electrification, but also the leads we have, as we mentioned, on the subsea processing sector.
Thank you. Moving on to a question from Nikhil Gupta in Citi. Question relates to the subsea segment. First quarter margins was pretty robust despite the first quarter being seasonally weaker. Just wanted to check if we can assume margins in second and third quarter to be solid?
We, when it comes to margins development, there could be some quarterly fluctuations of course, but I think when you see our subsea segment, we have had some very good quarters with the higher margins than the current one, and that is also linked up to special activities and one-offs. So 15% in that between 5% and 6% in the EMM segment and gradually increasing margins in the Renewable and Field Development segment is what you should expect.
A follow-up, one other question also, related to the subsea market from James Winchester in Bank of America. If you can talk about the subsea market tightness and pricing and margins for projects you are tendering outside of Norway?
The subsea. I think if that speaks to the capacity, you know, I think we are in a good place. We have the right kind of activity level for our organization, both on the engineering side in our global collaboration model and also on the different assets and factories in the global delivery model. Learnings from peak periods before shows us how we should then stay below the absolute capacities, and currently we are so. The pricing, margins, as we've said, not only for subsea, but generally is that we are working with the clients that are willing to discuss healthy terms and conditions.
We are also then obviously through project execution, excellence and others, making sure that, you know, the margins are at the right side.
Moving on to a few questions from Christopher Møllerløkken in SpareBank 1 Markets on. In Norway, pay increases in Norway has been around 5% in 2023. Would this negatively impact your realized 2023 margins, or do you expect higher efficiency to offset increased pay? I guess we can also include the second question that was posed on the Norwegian krone if you, of the weakness, if you could remind us how you hedge foreign exchange exposure on the existing contracts.
Yeah, I can start with that one. When it comes to salary increases, et cetera, most of our contracts have clauses and for adjustment of salary increases, where we will be compensated linked up to indexes that is relevant for the various countries and the salary developments in the various countries. When it comes to the Norwegian kroner and the currency exposure, normally every project that we take on board, we look at the currency exposure and are offsetting that currency exposure. Most of that contract, we are organizing it such a way that we push the currency exposure over to the client and get our billings in the various currency that we have the cost based on.
I just want to add some words to the second part of the first question which I really like. You know, you ask about our own efficiency and how that sort of compensate for the salary topic. Yes, we are working intensely to upskill our people. We are working with digital improvement agendas to make sure that we are running things even more efficient and to a better cost level and also working integrated in alliances. Yes, the efficiency does absolutely play an increased role going forward.
Thank you. We move on to a question from Erik Aspen Fosså from Carnegie. Other EBITDA was a bit lower in the quarter compared to the fourth quarter and your guidance of NOK 125 million per quarter. Should we still expect 125 million per quarter in other EBITDA?
We have not adjusted our guidance, and the quarterly fluctuation is to be expected.
Thank you, Idar and Kjetel. I think that concludes the presentation of our first quarter results. Thank you all for listening in, and we wish you all a good day. Thank you.
Thank you.