Doc. No. HitecVision Presentation_v1 Revision Date: 01.02.2012 Sign: Fra industriselskap til ledende PE-aktør NHH Argentum Centre for Private Equity Bergen, 1. februar 2012
HitecVision har vært i skjæringspunktet mellom industri og finans i over 25 år INDUSTRY PRIVATE EQUITY 1985 Hitec startet 1994 Hitec børsnotert OSE 2000 Hitec salg til National Oilwell. 2002 HV III NOK 690m 2005 Sale of Legacy Portfolio 2006 HVPE IV $300m 2008 HV V $816m 2010 HVAS $420m 2011 HV VI $1500m 1
Fra industriselskap The Hitec Group Hitec ASA Holding Company Products & Technology Engineering & Construction Major shareholdings M ature companies, earners Hitec Drilling & Marine Systems AS Hitec Products AS Hitec Marine AS Hitec Subsea AS Hitec Framnæs AS Karmøy Stål AS Maritime Industry Service AS Framnæs Installasjon AS (40%) 11% 7% Roxar ASA (13 %) DynaSea AS (51%) Navis ASA (18%) Developing com panies Hitec Marine Automation AS International operations Hitec DMS, Inc., Houston Hitec DMS Ltd, Aberdeen Hitec DMS Ltd, Calgary & Edmonton Hitec DMS Ltda., Rio de Janeiro Hitec Far East Co. Ltd, Tokyo Hitec Korea, Koje Hitec s vision 26.01.2012 jon020999e.ppt A decade of growth operating revenues and pre-tax income 1989-1998* MNOK 1600 A leading supplierof high technology solutions to the oil and gas industry Proprietary systems Dynamic technology development A global player in a global industry 1400 1200 1000 800 600 400 200 0-200 1376 803 519 469 238 212 129 92 108 77 88 59 29 5 3 0 6 11 16-15 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 26.01.2012 jon020999e. PPT 26.01.2012 jon020999e.ppt * Adjusted for minority s share of pre-tax income 2
Til private equity forvalter klart definert strategi PROSPEKT ENERGIVEKST 2002 (SENERE HV III) Energivekst - Forretningsidé og målsetning Forretningside Skape verdier til aksjonærene gjennom: Videreutvikle vekstselskaper innen energisektoren gjennom samspill mellom de beste entreprenør-miljøene, teknologiselskapene, forsknings- og utviklingsmiljøene, energi- og oljeservice-selskapene og sterke finansielle partnere Fokus på entreprenørskap; lønnsom drift og strukturell kreativitet i de selskaper en investerer i Målsetning Energivekst smålsetning er å oppnåen gjennomsnittlig årlig avkastning påinvestert kapital påminimum 20 % (etter bonus til management selskapet) Klar industriell og finansiell exit strategi for hver investering CorporateFinance Page7 3
Med fokus på bransje hvor forvalter har lang erfaring PROSPEKT ENERGIVEKST 2002 (SENERE HV III) Bransjefokus Bransjeforståelse og industrielt eierskap er viktig for å være konkurransedyktig i et stadig mer spisset og globalt marked For å være internasjonalt konkurransedyktig måman ha størrelse og fokus Industriell forståelse og aktiv deltakelse i de strukturelle endringer som skjer i markedet vil være kritisk for ålykkes i fremtiden Gjennom å være spisset og stor kan man utnytte industriell forståelse og nettverk som danner grunnlag for forretningsmuligheter på tvers av etablerte verdikjeder Finansiell kompetanse i nær kobling med industriell kunnskap og kompetanse vil derfor få en stadig mer sentral rolle i verdiskapningsprosessen Dette innebærer et behov for spissede og fokuserte industrielle miljøer hvor kapital og industriell kompetanse opptrer i fellesskap. Utviklingen internasjonalt går ogsåi denne retningen CorporateFinance Page9 4
PROSPEKT ENERGIVEKST 2002 (SENERE HV III) Track record som industri selskap Trackrecord: Avkastning på teknologi og innovasjon gjennom operasjonell lønnsomhet og industriell exit Oppstart Utvikling Vekst 13 salg Børsnotering Lønnsom het 24 nyetableringer 11 oppkjøp 3 eksterne fusjoner 4 børsnoteringer Tid Corporate Finance Page 42 5
PROSPEKT ENERGIVEKST 2002 (SENERE HV III) Strukturert som norsk AS Argentum som hjørnesteinsinvestor Energivekst AS - Standard selskapsstruktur ogorganisering Private Investorer (over 50,1%) StatensInvesteringsselskap (inntil 49,9%) Framlegger investeringsforslag Styreti Energivekst AS Vedtar investeringer Velger styre HitecVision AS Managementavtale Energivekst AS Screening, aktiv oppfølging Eier selskap Porteføljeselskap Porteføljeselskap Portefølje- CorporateFinance Page46 6
Til ledende PE aktør 1600 100 % 1400 1200 80 % USD mill 1000 800 600 60 % 40 % 400 200 20 % 0 HV III (2002) HVPE IV (2006) HV V (2008) HVAS (2010) HV VI (2011) 0 % Fonds størrelse ($ mill) andel internasjonal kapital HitecVision har siden 2002 hentet over NOK 18 milliarder fordelt på fem PE fond 7
Hvordan har HitecVision blitt en ledende PE forvalter Strategi Klart definert strategi fra start ledende Olje og Gass PE investor Klar på hva en skal være god ( spesialist innenfor et område ) Den viktigste kunden er våre investorer Team Systematisk bygge team med komplementære ferdigheter dybde og bredde Rekruttere nøkkelpersoner når de er tilgjengelige alltid ligge i forkant av faktiske behov Systematisk tilnærming til deal team sammensetning - HV Academy Utvikle corporate services på lik linje som investerings siden Track Konsistens mellom avkastning og strategi etterprøvbar og vel dokumentert avkastningshistorikk Track bygget på reell verdiskapning og ikke finansiell arbitrasje Compliance Tidlig forståelse for betydning av compliance i alle ledd Bygge rutiner og checks and balances i alle ledd i investeringsprosessen samt mot fond og porteføljebedriften 8
PROSPEKT HITECVISION VI (2011) Klart definert og konsistent investeringstrategi Consistent, highly disciplined investment approach Investment Criteria Investment / Fund Characteristics Middle market services and E&P companies / platform investments in the oil and gas sector Primary focus on Norway, UK and North America Lead investor in control buyout and growth capital transactions Non-core disposals, corporate partnerships and public to private Controlling stakes, typically Equity investments from $50 -$250 million Add-on investments as part of HitecVision s buy-and-build game plan High growth companies with strong management teams and unique technologies, services or assets Platform companies with the potential to develop dominant market segment positions through a buy-and-build strategy A diversified fund portfolio through investing in all segments of the oil and gas value chain, from sub-surface to E&P companies Adequate control mechanisms to secure upside while containing risk Visible and clear exit routes including trade sale, secondaries and IPO Norway UK North America Brazil APAC Services and products Exploration and Production Platform investments Add-on investments 8 9
PROSPEKT HITECVISION VI (2011) Evne til åtilbakebetale investorene kapital Strong investment performance generated over 26 years From 2002 June 30, 2011 (1) NOK 4.7 billion ($795 million) invested in 28 platform investments and over 40 add-on acquisitions Ten companies fully realised, generating an aggregate 5.3x multiple of cost and 218% gross IRR (2) NOK 1.4 billion (over $255 million) of proceeds generated since Q4 2010 No investment realised for less than cost Investment performance (3) Consistently strong realisations (1) (2) (3) Multiple of c ost 7.0x 6.0x 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x 5.9x IRR 49% 5.0x 6.0x 2.5x IRR 1.7x 59% 4.4x 1.3x 1.2x Hitec ASA HitecVision Fund III Fund IV Fund V HVAS AS (4) 1985 (4) 2000 2002 2006 2008 2010 Realised IRR 55% IRR 0% Partially Realised IRR 15% IRR 112% IRR 25% Unrealised IRR 38% % Invested Capital 40% 35% 30% 25% 20% 15% 10% 5% 0% 0% 5% 30% 37% 28% <1.0x 1.0x-1.9x 2.0x-2.9x 3.0x-5.0x >5.0x Realised Multiple of Cost (1) Includes Funds III, IV, V and HVAS. Cash flows converted at relevant daily FX rate. Past performance is not indicative of future results. The figures presented are preliminary and subject to change. (2) Realised returns in NOK. In USD, aggregate realised returns are 5.8x multiple of cost and 230% gross IRR. (3) Please refer to slides 24-28 for detailed notes on track record. Fund IV: DPI of 0.4x and TVPI of 1.5x. Fund V: DPI of 0.4x and TVPI of 1.5x. (4) Hitec ASA and HitecVision AS were corporate structures, not fund structures. The returns displayed for these are net returnsto shareholders. 12 10
PROSPEKT HITECVISION VI (2011) Evne til åskape verdi som aktiv eier Deliver meaningful value creation alongside management Applying operational experience to: Identify trends and structural changes and be an early mover in industry and technology shifts Introduce and build new players in established environments with traditionally high entry barriers Guide and challenge management Combine a process-driven approach with an entrepreneurial spirit Provide companies with strategic direction HitecVision value creation (1) (6%) 38% 50% 18% 100% Employing strategic, transactionaland financial competence to: Execute buy-and-build strategies in portfolio companies, from sourcing of add-on targets to negotiations: 43 add-on acquisitions completed since June 2004 for Fund III, IV and V portfolio companies Provide companies with additional financial competence and guidance in utilising leverage Implement capital structure to maximise upside potential whilst protecting HitecVision s investment Plan and execute exit strategies Utilizing its industry network as a source of: Proprietary deal flow Outstanding management/board resources Complementary knowledge Revenue Generation Margin Increase Debt Reduction MultipleIncrease Total Value Creation HitecVision target investment performance Multiple of Cost Year 2 3 4 5 6 7 8 9 10 1.25x 12 8 6 5 4 3 3 3 2 1.5x 14 11 8 7 6 5 5 4 1.75x 32 21 15 12 10 8 7 6 6 2x 41 26 19 15 12 10 9 8 7 2.5x 58 36 26 20 16 14 12 11 10 Gross IRR 3x 73 44 32 25% 20 17 15 13 12 3.5x 87 52 37 28 23 20 17 15 13 4x 100 59 41 32 26 19 17 15 5x 124 71 50 38 31 26 20 17 6x 145 Note: There can be no assurance that HitecVision will meet thesetarget returns or that it will be able to avoid losses. 82 57 43 35 29 25 20 8x 183 100 68 52 41 35 30 26 23 10x 216 115 78 58 47 39 33 29 26 (1) Calculation of total value creation, determined using all realised investments since 2002, excluding Revus Energy ASA, MTEM Ltd. and Noreco (which were start-up companies and therefore all equity value creation was attributed to growth) and ProSep Inc. (an early stage investment, which therefore had anabnormaly large entry EV/EBITDA). Past performance is n ot in dicative of futur e results. 11 11
PROSPEKT HITECVISION VI (2011) Et investeringsteam med bred og dyp kunnskap innenfor definert strategi Senior team with extensive oil and gas operational and principal investment experience Extensive knowledge and experience Sixteen person senior team (1) with an average of eighteen years of global operational experience and sixteen years of investment experience across the oil and gas value chain Senior Professional Ole Ertvaag Ola Sætre Oil-related experience 32 HitecVision experience * 26 Transaction experience 26 Gunnar Halvorsen 23 14 20 Tied into one cohesive unit Pål M. Reed 9 9 25 Thoughtful team construction to address all aspects of the Egil Stokka 14 11 17 investment life cycle in order to maximise value creation: Atle Eide 4 9 15 Platform leaders Overall investment responsibility / ownership Transaction execution managers Source, structure and negotiate transactions, including add-on acquisitions Pål Reiulf Olsen Tor Espedal Harald Vabø Kjell-Erik Endresen 23 30 25 2 1 1 3 21 15 16 Industry experts Svein Arild Kilingland 28 1 18 Provide operational expertise, project execution, and key insights to management Arne Trondsen Pål Dahlberg n/a 19 5 19 n/a 19 Senior team supported by two Investment Directors, two Senior Associates and eight members of the Corporate Services Team Per Hatlem Jan Erik Rugland Arne Magnus Rise * HitecVision and predecessor companies. 27 18 10 4 7 3 17 7 8 (1) Lars ErlingKrogh will be joining HitecVision in October 2011 as a Partner Industry, thus adding to the experience and expertise of the senior team. 13 12
PROSPEKT HITECVISION VI (2011) Dealflow er viktig, men evnen til åskape egne dealer er minst like viktig Ability to generate differentiated, off-market deal flow HitecVision s competitive advantage in gaining access to high quality investment opportunities: Reputation in the offshore oil and gas industry developed over 26 years Proven track record as an attractive partner that can deliver growth through a highly disciplined investment approach Sixteen person senior investment team with deep operational expertise and industry networks Significant deal flow in target market: Dynamic prospect library which is continually reviewed: Over 1,500 companies continually being monitored by HitecVision Significant potential add-on acquisition targets key to HitecVision game plan HitecVision analyses on average over 200 investment opportunities per annum within its investment scope High degree of proprietary / proactive deal origination: Eleven of twelve total Fund V and HVAS platform investments created or completed on a proprietary basis Sources (1) Geography (2) Segment (2) Limited auction 18% Fulauction 7% Proactive sourcing 50% Europe (ex. UK & Norway) 11% Southeast Asia 3% UK 16% South America 2% RoW 8% Norway 41% Subsea Equipment Subsurface 1% 3% Mid-and Downstream 5% Production Assets 11% Drilling & Downhole 12% Other 4% Maintenance, Modifications, Ops & Decomm (MMOD) 27% HitecVision network 25% NorthAmerica 19% Rig/ Ship Assets 16% Field Development 21% (1) Sources for the 28 platform investments across Fund III, Fund IV, Fund V and HVAS. (2) 436 companies logged in HitecVision database from April 2009to June 2011 13 13
HV VI investor sammensetning 16 % 1 % 7 % 7 % 17 % 43 % North America Europe Nordics Norway RoW 8 % 45 % Pension Fund FoF Foundation/Endowment Family Office SWF/State 33 % 23 % 14
Økt andel internasjonale investorer stiller høyere krav til forvalteren Investor requirements LPA Side letters PPM Taxation issues ILPA: Privat Equity Principles NVCA: Code of Ethics Ethical guidelines SRI/ESG policy Investor expectations Meetings Investor material HitecVision Norwegian tax authorities Investors local tax authorities Portfolio companies local tax authorities EVCA reporting guidelines IPEV valuation guidelines Relevant current and future legislation AIFMD SEC Tax, securities etc. 15
HitecVision den serielle entreprenør Vi mener noe av HV suksess er balansen mellom struktur og entreprenørskap 16