the americas - aggreko

The Americas

Analyst Visit - June 2014

Contents

1. Americas Introduction Asterios Satrazemis, President Americas

Derek Foster, VP Finance

2. North America (NAM) Bruce Pool, MD North America

3. Spanish Americas (SAM) András Mesics, MD Spanish Americas

4. Brazil Pablo Varela, MD Brazil

5. Power Projects Ana Amicarella, MD Americas Power Projects

6. Innovative Power Management David Dickert, Area Sales Manager Oil & Gas

2

Financial Review Angus Cockburn, CFO

3

The Americas Asterios Satrazemis, President

Derek Foster, VP Finance

Americas Overview

4

Project Revenues ($m) FY13

Latin America 251

Military 63

Americas Revenue ($m) FY13

Local Business 708

Power Projects 314

Total 1,022

Spanish Americas FY13

Revenue ($m) 78

Average MW on rent 178

Service Centres and Offices 19

North America FY13

Revenue ($m) 514



Brazil FY13

Revenue ($m) 116



Americas Organization

Asterios Satrazemis President – Aggreko Americas

6 years with Aggreko Derek Foster VP Finance

14 years with Aggreko

Kate Sberna VP HR


Diego Andrade VP Commercial Risk

1 year with Aggreko

Gordy Broussard VP Sales & Marketing


Ana Amicarella MD – APP


Bruce Pool MD – NAM


Andras Mesics MD – SAM


Pablo Varela MD – Brazil


5

The Americas Timeline

6

• Opening of

project hub in

Panama

• Large scale

power outage in

Venezuela

• Launch of

Orange

Excellence

• Successful

Vancouver

Winter Olympics

• Acquisition of

Northland Power

Services

• Natural Gas

generators

introduced to NA

market

• Acquisition of

Poit Energia

• Successful

Ryder Cup

executed in

Chicago

• Emergency

response for

Hurricane Sandy

• Market entries

into Colombia &

Peru

• Opening of new

depots focused

on Shale

markets

• Pan American

Games in

Mexico

• First Americas

Natural Gas

Power Project

• Supported

Pope‟s visit to

Brazil

• Heat driven

Power outages

in Buenos Aires

Americas Revenue ($m)

0

200

400

600

800

1,000

1,200

2012 2011 2010 2009 2013

The Americas Local businesses

• A network of 96 service centres in 10 countries

– 44 new service centres opened or acquired in past

five years

• Wide range of customers and requirements

– Process solutions

– Major events (Superbowl, Rock „n Rio & US Open

Golf)

– Emergency response

• Wide range of contract durations and values

– 1 day to multi months

– 30kw to multi mw mini-projects

• Americas is the largest Local business in the Group

– 49% of Group Local business in 2013

• Growth in 2013 in both North and Latin America

– 7% and 23% respectively1

7

FY13 Local Business Revenue by sector

6%

8%

7%

1. Excluding currency translation and Poit acquisition

Oil and Gas 26%

Petrochemical and refining

20%

Manufacturing 10%

Utilities 8%

Events 7%

Services 7%

Other 6%

Construction 6%

Contracting 5%

Mining 5%

The Americas Power Projects

business

• Fleet and technical hub located in Panama

• Utilities remain cornerstone of Americas Power

Project business

– Largest customers are Argentina, Venezuela and

Brazil

• Declining Military revenues as US troop

withdrawal continues

• Focus on developing other sector opportunities

in Mining and Oil & Gas

8

FY13 Power Projects Revenue by sector

20%

77%

20%

77% Utilities

77%

Military 20%

Mining and Oil & Gas 2%

Other 1%

Key Strategy Initiatives

9

• Superior Customer Service

• Driving Efficiency

• Projects - Positioned for Growth

• Local - Growth of at least 2 x GDP

• Employee engagement

Superior Customer Service

• Addressing regular customer feedback

− 88% of customers score us 8 or better out of 10

• Product development and investment

• Focused service initiatives

0%

20%

40%

60%

80%

100%

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Net Promoter Score

10

Operational Efficiency

11 11

1 Equipment Monitoring

2 Remote Diagnostics !

3 Personal Attention

4 Issue Resolution

Employee Engagement – Global Opinion

Survey

12 12

Strong culture demonstrated by

89% found Aggreko an exciting place to work

88% were proud to work for Aggreko

89% understood how the work they do

contributes to the achievement of Aggreko‟s

strategic goals and objectives

Orange Rules

13 13

• An initiative as part of Aggreko‟s

Safety for Life program.

• The purpose is to focus everyone on

the Key Safety Hazards in our

business (hazards that can result in

serious injury or death).

• This initiative reinforces the controls

already defined and implemented in

our Best Operating Practices.

Orange Excellence

• Making it easier to do the business and easier to do business with us

• Global Service Center Standards

14

North America Bruce Pool, MD North America

Region at a glance

16 Source: www.economist.com

Canada Statistics

Population (million) 35.0

GDP (US$bn) 1,860

GDP per head (US$) 53,160

2014 GDP Growth Forecast 2.6%

US Statistics


GDP (US$bn) 16,333



Service Centre Locations

Key Performance Measures

17

• Compound revenue growth of 13% since 2009

• Introduction of Natural Gas fleet to complement diesel offering

• Geographic infill through new service center openings in Oil & Gas markets

Revenue ($m)

0

100

200

300

400

500

600

2013 2009

Fleet (MW)

1,000

800

600

400

200

0

2013 2009

Employees

1,200

1,000

800

600

400

200

0

2013 2009

Service Centres

0

10

20

30

40

50

60

2013 2009

Key Sector Portfolio

18

Petrochem • Refineries

• Chemicals and plants

• Industrial gas plants

25% of

revenue

Oil & Gas

• Production and site facilities

• Testing and commissioning

• Procurement / construction

• Camps

• Pipeline

30% of

revenue

Manufacturing

• Metal production

• Metal products / equipment

• Plastic / rubber products

• Pulp / paper products

9% of

revenue

Services

• Retail and commercial

• Hospitals

• Industrial services FM

• Commercial and domestic FM

• Storage / warehouse

7% of

revenue


19



• Growth of at least 2 x GDP


Case study: Upstream Oil & Gas

20

• Shale plays, including dry gas, wet gas and tight oil, are spread across the US

• Aggreko is active in 8 of the 11 major shale basins

• Shale importance highlighted by US crude oil imports declining 17% since 2010

• Our services range from single pump jack power to micro grids

• Strategic differentiator for Aggreko is our “Power Management Model”

• Natural Gas units becoming the norm -range from 95kW to 1.3MW

Case Study: ROC Oil & Gas

Situation

• Uptime of Wells = On Going Production = Revenue

• C. 60 MW on hire in the state of Oklahoma

• Many well sites are in remote locations - limited access to utility

and long distances away from a Service Centre

Aggreko Solution

• Through the ROC, we monitor all generators in the oil field

• Send daily uptime reports with critical information

• In case of potential failures, alarms or other maintenance activities,

we quickly notify the customer and dispatch a technician to

troubleshoot prior to engine failure

Aggreko Value

• Aggreko maintains, on average, a 97% uptime

• Assure a higher level of reliability which our competitors don‟t offer

• Oil & Gas production, and revenue, is not interrupted

21

Case Study: Hydro Processing

Reactor Cooling

Problem

• Refinery needed to replace its hydro-treating catalyst

• Required 3m lbs. of reactor metal and catalyst to be

cooled from >600°F to c. 80°F

• The last cooling step (from >200°F to 80°F) takes

several days and is normally done with liquid nitrogen

discharged to the plant‟s flare system

Solution: Aggreko Process Services (APS)

• Developed a process design package (patent

pending)

− No interruption in normal cool-down operations

− Temporary heat exchangers, chillers, pumps,

and process vessel used to cool the reactor

22

Result

• Reactor temperature reduced from 200°F to 80°F within 11 hours, compared to several days

• A rate of cooling that exceeded client expectations

• Safer, more economical, and faster than the previous nitrogen cooling procedure

Case Study: Hydro processing

Reactor Cooling

Value to customer

• Safety – Reduced flare

loading, and the need for

expensive nitrogen trucks in

the plant

• Profit – Shaved over 2 days

from turnaround, allowing

production to resume sooner

• Cost – Eliminated need for

purchased liquid nitrogen

23

Spanish Americas András Mesics, MD Spanish Americas

SAM Region at a glance


Colombia Statistics


GDP (US$bn) 388



Argentina Statistics


GDP (US$bn) 521



Mexico Statistics


GDP (US$bn) 1,208



Peru Statistics


GDP (US$bn) 216



Chile Statistics


GDP (US$bn) 288





26


• Positioned well for continued growth after investments in equipment, people

and infrastructure

• New market entries to Colombia, Peru, Panama and most recently Bolivia

Revenue ($m)

0

20

40

60

80

2009 2013

Fleet (MW)

0

100

200

300

400

2009 2013

Employees

0

50

100

150

200

250

300

2009 2013

Service Centres

0

5

10

15

20

2009 2013


27

Quarrying & Mining

• Construction and commissioning

• Mine expansion

• Early production

• Maintenance shutdown

23% of

revenue

Oil & Gas • Power for early production

• Load testing for main generation

• Mobilisation following main generation failure

11% of

revenue

Utilities • Power for periods of exceptional demand

• Power during unplanned outages

• Power during the overhaul or repair of permanent generators

11% of

revenue


28





Case study: Orange Rules Argentina performance improvement

29

• QHSE performance significantly improved in Argentina with the implementation of a focused incident reduction plan in Q1 2013

• The processed implemented included:

– Regular leadership visits to every location

– Launching Orange Rules

– Manage “Journey” process

– Upgrading QHSE support

• Target Zero

0.0

1.0

2.0

3.0

4.0

5.0

6.0

FAR VAR29

Case Study: Mining

30

5 MW Project (Chile)

• Mini Project at 440 volts

• Back up power for unplanned grid outages

• 24 / 7 Service

• 100% availability

Total 6 MW Gaby Mine (Chile)

• 4MW Mini Project at 23 kV / 50 Hz

• Island mode with 24/7 service

• 2MW in canopy sets in spread at mine

• Turn key solution for mine expansion

31

Brazil Pablo Varela, MD Brazil

Region at a glance


Brazil Statistics


GDP (US$bn) 2,499





33


• Step change in business scale with Poit acquisition in 2012

Revenue ($m)

0

20

40

60

80

100

120

2009 2013

Fleet (MW)

0

100

200

300

400

500

600

2009 2013

Employees

0

100

200

300

400

500

600

2009 2013

Service Centres

0

5

10

15

20

2009 2013


34

Oil & Gas • Offshore power support

• Load test for platform construction

• Main power on onshore rigs

17% of

revenue

Utilities • Isolated areas of power supply

• Load testing on wind farms

29% of

revenue

Mining

• Construction power

• Main power in isolated areas

• Backup contingency power

• Planned maintenance

10% of

revenue

Events • Temporary power solutions

• Temperature control for comfort cooling

5% of

revenue


35





Case study: FPSO Load Testing

36

32 MW Loadbank testing

• 32 MW of Loadbanks + transformers & cables

• 1 to 3 months projects

• 3 to 4 tests per year up to 2020

• 4 different ports within Brazil

• FPSO* Construction begins in Asia and

Finishes in Brazil

* FPSO – Floating, Production, Storage & Offloading

Case study: FIFA World Cup

37

Equipment

• Project has 50MW of power plus accessories

and 2,000 tons of TC equipment distributed at

12 stadiums and IBC. Power is for TV and video

boards on pitch

• 83 containers shipped from various parts of

the world

Specialized Personnel

• A total Aggreko workforce of 100 people from

26 different locations from around the world

Power Projects Ana Amicarella, MD Americas Power Projects

Power Projects in the Region


Power Project Locations

39

Electricity Shortfall

40

Population without

electricity in Latin

America has been

estimated at more

than 30 million

Source: Oxford Economics, Strategic Analytics, International Energy Agency

Projected growth in electricity supply-demand shortfall (GW)

0

5

10

15

20

25

30

35

40

2015 2020 2005 2010 2000

North America Central/South America

What drives our demand?

41

Argentina • Peaking to support growth and seasonal needs

Aruba • Supplementary power for a large oil refinery

Brazil • Base load power for isolated non-interconnected areas and to support

growth in electrical demand

Colombia • Base load power generation solution for the isolated off-grid oil fields

Curacao • Supplemental power generation during construction of a new power

generation facility

Panama • Congestion on transmission network, growing power demand and

construction of Panama canal

Peru • Base load power during maintenance of hydro power station and

peaking to support transmission line delays

Uruguay • Standby generation to provide grid support after record drought and low

hydro reserves

Venezuela • Base load power to support growth and for primary oil and gas refinery


42

Oil & Gas • Stranded gas

• Remote drill sites

• Midstream power support

2% of

revenue

Utilities • Nodal / transmission congestion

• Insufficient installed capacity

• Outage / disaster recover

77% of

revenue

Military • Camp support

• Military facilities

20% of

revenue


43

• Headline revenue growth of 10.6% per annum since 2009, or 28.8% when

adjusted for decline in Military work

Revenue ($m)

0

50

100

150

200

250

300

350

2013 2009

Military Revenue ($m)

0

20

40

60

80

100

120

2009 2013

Employees

0

200

400

600

800

1,000

2013 2009

MW on Rent

800

400

600

1,000

0

200

2013 2009


44


• Positioned for Growth



Case Study: Panama Hub

45

• Geographically, Panama is strategically

located with varied maritime routes, and is a

free zone

• Ease of import / export

• Labor and immigration incentives

• Politically stable and an open democracy

Case Study – Panama:

Participation in the Open Market

46

2010 - 100MW

Situation:

After the privatization of the power sector in

Panama, a need arose for a temporary

power supply until more permanent power

stations could be brought online

Solution:

• Approximately 15 month duration

• Direct RFP process via EGESA

(Government‟s generation company)

46

Case Study – Panama:

Participation in the Open Market

47

2014 - 80MW Situation: To avoid an energy shortage in 2014 the

Energy Secretariat of Panama made public

a resolution that instructed many public

companies and authorities to work together

on securing reliable and economical

additional power for the start of 2014. The

Panamanian government needed an

alternative that could help with a rapid, on-

time delivery of temporary power.

Main contributors:

• Hydro concerns

• Late generation & transmission projects

• Grid constraints from hydro‟s to load

center

• Transmission line construction:

scheduled completion 2016

Solution: • Will provide capacity directly to distribution

companies

• Energy production requested based on system/grid

needs

• First temporary power producer to participate openly

in the market

Innovative Power Management David Dickert, Area Sales Manager Oil & Gas

A “Power Management Company” to

Producers & Midstream companies operating

throughout the Americas and the rest of the

World.

We offer unique, scalable applications to

economically deliver reliable “temporary” power.

Who We Are in Oil & Gas

49

Aggreko‟s Power Management Model

Total Power Management

2. Scalability

1. Reliability Aggreko Micro Grid Concept

Aggreko Natural Gas Generator operating on LPG

• Engineered Solutions (Tier 1 and 2)

• Variety of Offerings

• Business Partner

• Comparable to or better than utility

• ARM – Aggreko Remote Monitoring

• Dedicated technical coverage / resources

• Daily / Weekly / Monthly Reporting

• Revenue creation

• Cost savings

• Capacity management 50

Defining Power Management

− Tier 1: Turn-Key Deployment

− We act as your internal power manager.

− Reliability - Fleet management, fleet maintenance, fleet deployment, site safety, economical scaling, future planning, remote monitoring, quarterly reporting, ...

− Let your field management focus on

Oil & Gas Production.

− Tier 2: Project Focused

− We act as your internal consultant group.

− Revenue Generation & Cost Savings by reviewing your temporary power deployment models. We have alternative fuel, micro grid and stranded gas clean up applications that are easily scaled into your existing operation.

51

Reliability through Power Manager

Aggreko offers Reliability through:

• Reliability %’s

• Fleet management

• Fleet maintenance

• Fleet deployment

• Remote monitoring

• Site safety

• Economical scaling

• Future planning

• Daily, Weekly, Monthly, & Quarterly usage reporting

Scalability through Power Management

Aggreko Micro Grid Concept

Aggreko Natural Gas Generator running on LPG

Aggreko offers Revenue Generation & Cost Savings through Scalability:

• Match Customer‟s Power Requirements to Power Management Solution

• Small (Single Unit) to Large Power (Micro Grid) Management Solutions

• Alternative fuels including LPG, LNG and CNG

• Stranded gas clean up

53

54

Oil Field Challenges with Power

Operators are looking for ways to reliably and efficiently overcome the

following challenges when deploying temporary power in the oilfield:

• Natural Gas vs. Diesel

• Utilizing Stranded Gas

• Scalability

• Remote Monitoring

55

Challenge: NG vs. Diesel

Overcoming the “key” challenges

Deliverables = Emissions, Efficiency, Economics

56

The Power of remote monitoring

The next step in the evolution of Aggreko‟s equipment diagnostic services,

Aggreko Remote Monitoring (ARM) improves uptime and helps our customers keep operations

running at peak efficiency.

ARM Benefits

• Avoid Preventable Failures

• Right-Size Equipment

• Maximize Uptime

• Accelerate Troubleshooting

1 Equipment Monitoring

3 Personal Attention 4 Issue Resolution

2 Remote Diagnostics !

57

Challenge: Utilising Stranded Gas

Power from Stranded Gas

Producer in West Texas was utility limited. As a result, 16+ wells were under producing or shut in.

− Diesel, LPG, LNG or CNG was not an economical option.

− The only field gas available was nasty wet-sour gas. >300 PPM of H2S.

− Permanent solution to clean the gas was not economical - utility upgrade was expected in the next 6 months.

Challenge: Utilising Stranded Gas

A “temporary solution” was engineered to

clean up the wet-sour gas to power a NG

generation station that would parallel with the

utility grid.

• Reduced H2S levels to 0 PPM via SulfaBate

tower.

• Reduced liquids content of the gas via

multiple gas liquid separators.

• Utilized a temporary flare to purge/test gas

prior to being placed into application.

• 2 x 1 MW NG generators paralleled and

base loading with the utility grid @ 12.4 kV.

• Deployed and operational in less than one

week.

58

59

Challenge: Scalability

Scaling with Microgrids

Producer in North Oklahoma was utility limited. As a result, they were deploying diesel generators at each well site.

− Large HP water transfer and ESP systems are used for artificial lift.

− Each site was oversized to accommodate for starting of transfer and ESP systems.

− Individual lease and fuel cost were heavily cutting into the profitability of well production. 25 wells and growing.

Challenge: Scalability

• A “Micro Grid” solution was engineered to utilize

field gas.

• This eliminated the need for generators at individual

well sites.

• Allowed producer to begin installation of their over-

head distribution system in anticipation of utility‟s

arrival.

• System utilized a wet gas clean up system.

• 4 x 1 MW NG generators paralleled and load

sharing on a 24.9 kV over-head distribution system.

• Deployed and operational in 5 days.

• System is currently operating at a 99.8% reliability

• System has growth options with no interruption to

the grid

60

61

Innovative power management

• Reliable

• Flexible

• Scalable

• Utilizing Stranded Gas

• Utilizing Varying BTU of field Gas

• Utilizing back up fuel source like LPG

• Remotely monitored for efficiency

Unconventional ways to bring reliability and efficiency to

deploying temporary power in the oilfield.

the americas - aggreko

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