Wilh. Wilhelmsen ASA

Earnings Release • Aug 22, 2019

Wilh. Wilhelmsen Holding ASA Second quarter 2019

Thomas Wilhelmsen, group CEO

August 2019

Highlights – Wilhelmsen group Second quarter 2019

USD 89 million

Positive net profit underlying development for all main activities

Sales gain in maritime services

Strong increase in Hyundai Glovis value

Write down of Survitec investment

	Maritime services	Supply services	Holding/ Investm	Elim / discont	Group
USD mill
- unless otherwise indicated	Q2'19	Q2'19	Q2'19	Q2'19	Q2'19
income Total	146	60	3	-2	208
which - of operating revenue	138	60	3	-2	200
- of which gain/(loss) on sale of assets	8	0	0	0	8
EBITDA	29	14	-1	0	42
Operating profit/EBIT	22	6	-3	0	25
Share of profits from associates	1	2	1	0	3
Change in fair value financial assets	-27	0	126	0	99
Other financial income/(expenses)	-4	-4	1	0	-7
Tax income/(expenses)	4	-1	1	0	2
Profit/(loss) from continued operations	-5	3	125	0	123
Discontinued operations	0	0	0	0	0
Profit/(loss) for period the	-5	3	125	0	123
Profit/(loss) owners of the to parent	-5	2	93	0	89
EPS (USD)					1 92 ,
Other comprehensive income					2
comprehensive income Total					125
comprehensive income owners of Total parent					91
Total assets	867	734	1 811	-22	3 390
Equity parent	202	161	1 573	0	1 936
equity Total	201	217	1 741	0	2 159
Equity ratio	23 %	30 %	96 %	0 %	64 %

USD 89 million net profit in Q2'19

Positive development in EBITDA and a net gain from financial investments

Total income up 5% from previous quarter

USD 42 million EBITDA

• Lifted by operating improvements and sales gain

USD 3 million share of profit from associates

USD 92 million net financial gain

• Significant increase in Hyundai Glovis value
• Write down of Survitec investment

USD 1.92 EPS

Maritime services - total income and adjusted EBITDA margin *)

• Total income - discontinued operation and gain/(loss) on sale of assets
• Total income - continued operation
• Adj EBITDA margin
• Adj EBITDA margin - excl. IFRS 16 (from Q1'19)

Improved operating performance for maritime services USD 29 million EBITDA including sales gain in Q2'19

*) Margin adjusted for main non-recurring items: Q4'16: Sales gain and transaction/restructuring cost Q1'17-Q2'18: Drew acquisition cost Q2'19 Property sales gain

Stable total income

• Mixed revenue development for ships service's activities
• Ship management income lifted by increase in vessels on full technical management
• USD 6 million gain from sale of property

Underlying EBITDA up 13% q-on-q

• EBITDA margin excluding sales gain of 16%

Survitec investment under review USD 27 million reduction in fair value in Q2'19

2015

• Review of maritime services portfolio strategy

June 2016

• Agreement to merge safety activities and assets with Survitec Group

November 2016

• Transaction completed
• Net cash proceeds and 20% ownership
• USD 71 million net gain

Survitec investment fair value

• Q2 2019: Nil

Source: Wilhelmsen Capital Markets Day on 15 September 2016

Supply services - total income and adjusted EBITDA margin * )

Seasonal upswing for supply services USD 14 million EBITDA in Q2'19

Income up 10% q-o-q

• Income up 25% when excluding Q1 sales gain
• Increased activity at Norwegian supply bases

Underlying EBITDA up 33% q-o-q

USD 2 million share of profit from associates

Continued positive development for Wallenius Wilhelmsen

Net profit hit by unrealised financial cost – Wilhelmsen share of profit USD 1 million

Strong increase in Hyundai Glovis value

Hyundai Glovis share price up 25%

Sale of 10 million shares in Qube Holdings

• Remaining balance 40 million shares

Several minor investments during the quarter

Cash balance lifted by upstream cash

USD 151 million increase in holding and investments' financial assets value in Q2'19

Financial assets in holding and investments segment

Solid balance sheet Equity ratio of 64%

Wilhelmsen group total assets and equity ratio *)

Key figures

Q3'17: Consolidation of NorSea Group

Healthy liquidity and debt repayment profile

Maturity profile – outstanding debt (USD million)

Leasing (IFRS 16) Maritime services (ex. lease) Holding and investments (ex lease) Supply services (ex.lease)

• 1) Cash and cash equivalents and current financial investments
• 2) Excluding intercompany debt

USD 562 million in group NIBD (net interest-bearing debt)

First dividend of NOK 2.50 per share paid 15 May

Dividend payments Upstream cash 1) 2)

1) Dividend from WALWIL/WWASA; net contribution from maritime services; dividend, interest/repayment and net gain from Treasure ASA, NorSea Group, Qube, other available for sale financial assets and financial investment portfolio 2) Yield calculated based on previous year median closing price for WWI and WWIB share

Potential second dividend of up to NOK 2.50 per share

The board expects a stable development of underlying operating performance for the combined group activities, but with normal seasonal variations.

Wilhelmsen is exposed towards global trade. Potential introduction of further tariffs and restrictions continues to create uncertainties. Wilhelmsen retains its robustness to meet such eventualities.

Supplementary slides – Second quarter 2019

Maritime services

Ships service Ship management

Supply services NorSea Group

Holding and investments

WalleniusWilhelmsen ASA Treasure ASA Financial investments

Ships service

Wilhelmsen Ships Service is a global provider of standardised product brands and service solutions to the maritime industry, focusing on marine products, marine chemicals, maritime logistics and ships agency Ships service is fully owned by Wilhelmsen

• Total income was down 3% from the first quarter due to reduced non-marine sale. Income from agency services improved.
• Improved EBITDA supported by improved operating margin for all marine activities.

Q2'19 highlights

Mill. USD		Q2'19	Q1'19	Q2'19
Total income	Mill. USD	130	133	138

Key figures

Ship management

Wilhelmsen Ship Management provides full technical management, crewing and related services for all major vessel types Ship management is fully owned by Wilhelmsen

Key figures

• Operating revenue lifted by an increase in ships on full technical management
• USD 6 million gain from sale of property
• EBITDA up due to increased operating activity and sales gain

Q2'19 highlights

Mill. USD		Q2'19	Q1'19	Q2'18
Total income		16	10	10
Vessels served	Vessels	~370	~370	~360
Of which:
- Full technical management	%	~45	~40	~37
- Layup management	%	~5	~5	~8
- Crew management	%	~50	~55	~55

• Income up 25% from previous quarter adjusting for Q1 sales gain
• Strong increase in activity level at Norwegian supply bases
• EBITDA reflecting increased operating activity but no sales gain

Q2'19 highlights

NorSea Group

NorSea Group provides supply bases and integrated logistics solution to the offshore industry Wilhelmsen owns ~75,2% of NorSea Group (as per 30 June 2019)

Mill. USD	Q2'19	Q1'19	Q2'18
Total income	59	54	70
- of which sales gain	0	6	4
Share of profit from associates	2	6	4

Key figures

• Income 1% down from the first quarter and down 4% from the corresponding period last year.
• EBITDA down 3% from the first quarter, but up approximately 10% from the corresponding period last year when adjusting for the IFRS 16 effect.
• EBITDA up year-over-year due to higher net freight, more efficient operation and lower bunker cost within the ocean segment.

Q2'19 highlights Wilhelmsen's investment in Wallenius Wilhelmsen ASA

Wallenius Wilhelmsen ASA

Wallenius Wilhelmsen ASA is a global provider of shipping and logistics services towards car and ro-ro customers, and is listed on Oslo Børs Wilhelmsen owns ~37,8% of Wallenius Wilhelmsen ASA (as per 31 March 2019)

Key figures

Mill. USD	Q2'19	Q1'19	Q2'18
Total income 1)	1 005	1 018	1 044
EBITDA 1)	211	218	156
Net profit 1)	3	22	23
majority 1) Net profit -	-1	20	19
profit 2) Wilhelmsen share of	1	8	6
Book value of Wilhelmsen investment	845	855	839
Market value of Wilhelmsen investment	475	560	745

Photo: Wallenius Wilhelmsen

1) Wallenius Wilhelmsen ASA (100%)

2) Wallenius Wilhelmsen accounts for 2018 restated to include EUKOR put/call split on quarter; Wilhelmsen accounts including net accumulated effect in Q4'18

• USD 119 million gain from change in fair value of Hyundai Glovis
• Liquidation of 2.2 million own shares owned by Treasure ASA completed, reducing outstanding shares to 217.8 million. Wilhelmsen maintained a holding of 160 million shares in Treasure ASA.

Q2'19 highlights Wilhelmsen's investment in Treasure ASA

(market value - mill. USD)

Key figures

1) Wilhelmsen group accounts (consolidated figures including non-controlling interests)

2) Treasure ASA investment

3) Increased from 72,7% to 73,5% through liquidation of 2.2 mill. own shares owned by Treasure ASA

Treasure ASA

Treasure ASA holds a 12.04% ownership interest in Hyundai Glovis, and is listed on Oslo Børs Wilhelmsen owns 73.5% of Treasure ASA (as per 30 June 2019)

Mill. USD		Q2'19	Q1'19	Q2'18
Total income 1)	100%	nil	nil	nil
Change in fair value financial assets 1)	100%	119	-12	-250
1) Dividend from Hyundai Glovis	100%	nil	13	nil
Net profit after tax 1)	100%	118	-1	-250
value Hyundai Glovis 2) Book/market	100%	629	510	469
Market value of Wilhelmsen investment in Treasure ASA	73.5%3)	252	222	331

Financial investments

Financial investments include cash and cash equivalents, current financial investments and financial assets held by the parent and fully owned subsidiaries reported under the holding and investments segment

• Reduced investment in Qube Holdings from 50 to 40 million shares, increased investment in other financial assets with USD 7 million
• USD 9 million in fair value gain from financial assets
• USD 2 million gain from investment management

Q2'19 highlights Financial assets, investment portfolio and cash (Mill. USD)

Key figures

Mill. USD	Q2'19	Q1'19	Q2'18
1) Change in fair value financial assets	7	9	15
Investment management 2)	2	6	-2
Other financial income/(expenses)	Nil	-1	-5
1) Non-current financial assets	105	112	101
Current financial investments 2)	102	89	91
Cash and cash equivalents 3)	40	18	49

1) Include Qube Holdings Limited and certain other investments. Income excludes currency and mark-to-market revaluation

2) Financial income/(expense) from investment portfolio in parent company

3) Cash and cash equivalents in parent company and fully owned subsidiaries reported under the holding and investments segment

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