Eqva ASA

Quarterly Report • May 29, 2018

HAVYARD GROUP ASA IR summary Q1 2018 - 29.05.18

Headlines/Milestones Q1 2018

Project execution for main projects according plan, but result is lagging due to lower total activity in Q1.

• EBIT of NOK -4.4 million and EBIT-margin of 0.94 % in first quarter of 2018.
• The Group's operating profit in Q1 was slightly weaker than expected and the target of positive operating profit for the Group was not achieved. The main reason is lower activity than expected in several of the segments, especially in NES and MMCFP. First ferry from HST is due for delivery on time, cost and quality, which is a good guideline for the next 12 ferries in the order backlog.
• Based on the merger last year between MMC and First Process, Q1 figures are motivated by the results of a turn-around to new segments and with new products in other business areas.
• New contracts in first quarter
• Shipbuilding Technology:
  • 5 x 50 car ferries to Fjord 1 including Electro/Hybrid
• Ship Design & Solutions:
  • Design for 5 x 50 car ferries to Fjord 1 build at Havyard Ship Technology
  • Design for 2 x 80 car ferries to Fjord 1 build at Cemre Shipyard (Turkey)
• Fish Handling:
  • Freezing system to 5 trawlers for the Russian Market

Outlook

• Havyard's strategy is to continue to develop the company as a maritime technology group with unique expertise and products throughout the value chain. Our focus areas are Energy, Fish and Transport, where we have established a strong market position in segments with good activity.
• Focus is to take synergies out for the 100% ownership in NES, continue the positive development on time, quality and cost in all projects and successful turn around in MMC FP
• We experience increased market activity in all focus areas Energy, Fish and Transport. New orders expected in Q2 with margins reflecting the improved market.
• Historical high order backlog with profitable activity for the coming years.

Status and Outlook per Segments

Group Key Figures

MNOK	2018 Q1	2017 Q1	2017
EBIT-margin	$-0.94%$	1.17%	$-2.05%$
Earnings per share	$-0.17$	0.21	$-2.41$
Net interest bearing debt	143	111	92
Working Capital	107	161	102
Assets	1,610	1,343	1,337
Equity	491	490	481
Equity ratio	30.5%	36.5 %	36.0%

Order backlog

• External order backlog of approx. MNOK 3,558 (Q4 2017: 2,845)

• 2018 MNOK 1,480
• 2019 MNOK 2,029
• 2020 MNOK 48

Figures per segment

(NOK million)	Ship building Technology	Ship Design & Solutions	Power & Control	Fish Handling	Production & Services	Other	Havyard Group
Operating revenues, External	248.5	15.9	36.1	91.2	29.0	46.4	467.2
Operating revenues, Internal	0.0	27.9	51.8	8.6	17.3	$-105.6$	0.0
Total operating revenue	248.5	43.8	87.9	99.8	46.3	$-59.2$	467.2
Operating profit / loss EBITDA	$-4.1$	16.2	1.3	$-3.8$	$-1.4$	$-6.8$	1.3
Depreciation	1.7	1.1	0.4	2.0	0.4	0.1	5.7
Operating profit/(loss) (EBIT)	$-5.8$	15.1	0.8	$-5.9$	$-1.7$	$-6.9$	$-4.4$
Net financial items	0.7	1.8	0.2	$-1.4$	$-0.3$	$-2.6$	$-.17$
Profit/(loss) from associate	-	۰	٠	-		$-2.3$	$-4.1$
Profit/(Loss) before tax	$-5.1$	16.8	1.0	$-7.3$	$-2.1$	$-11.9$	$-8.4$
Income tax expense	$-1.2$	3.8	0.2	$-1.7$	$-0.4$	$-2.2$	$-1.4$
Profit/(Loss)	$-3.9$	13.0	0.8	$-5.6$	1.6	$-9.7$	$-7.0$

Balance sheet

	Note	2018 Q1	2017 Q1	2017
		unaudited urevidert
Non-current assets
Goodwill	4	141 003	103 045	141003
Licenses, patents and R&D		110 519	91 205	107 144
Property, plant and equipment		231 273	239 140	233 440
Investment in associates		20 058	27 557	22,407
Loan to associates		18 645	23 080	12746
Investment in financial assets	6	27 597	19 12 9	27 603
Other non-current receivable		22 507	25 760	22 370
Total non-current assets		571 602	528 916	566 713
Current Assets
Inventory		189 619	114 911	115 184
Accounts receivables		169 258	159 274	136 077
Other receivables	5	114 200	48 289	104 923
Customer contracts, assets	10	408 066	307 355	208 355
Cash and cash equivalents		157 614	184 533	206 068
Total current assets		1038757	814 362	770 608
TOTAL ASSETS	3	1610360	1343277	1 3 3 7 3 2 1

QUITY AND LIABILITIES
	Note	2018 Q1	2017 Q1	2017
		unaudited urevidert
quity
hare capital	8	1239	1239	1239
hare premium reserve		22 5 35	22 535	22 535
reasury shares		$-5$	$-5$	$-5$
letained earnings		370 446	413 396	356 930
lon-controlling interest	$^{11}$	97 226	52 961	100 246
otal equity	3	491 442	490 126	480 945
lon-current liabilities
eferred tax liability	7	15 021	36779	10999
Jerivatives	5	38	$\Omega$	667
lond loan	Q	84738	93 24 8	86 885
oans and borrowings, non-current	g	62 014	67 144	63 366
iabilities to parent company	9.10	23715	o	23 419
ther long-term liabilities	g	1882	2777	2 2 5 0
otal non-current liabilities		187 408	199 948	187 585
urrent liabilities
iccounts payables		156 056	103 742	143 466
axes payable	7	8 1 9 6	4949	8 196
ublic duties payables		30 885	19 14 5	34.643
Construction loans	g	210 600	149 163	$\Omega$
lond loan (installments next period)	Q	10 000	33 914	10 000
oans and borrowings, current	g	38 535	24 201	23 196
Customer contracts, liabilities	10 10	150 502	105 286	175 943
ther current liabilities	5	326 734	185 804	273 346
otal current liabilities		931 509	653 204	668790
otal liabilities	з	1 118 917	853 152	856 375
OTAL COULTY AND LIABILITIES		1,610,360	1242277	1227221

• Net interest bearing debt: MNOK 143
• Working capital: MNOK 107
• Equity ratio: 30.5 %

Cash Flow

Negative CF from operations in 2018:

• Deficit
• Change in construction loans
• Changes in construction WIP
• Prepayments from customers
• Change in Inventory

Negative CF from Investments in 2018:

New investments

Negative CF from financing 2018:

• Instalments on debt
• Interest costs

(NOK 1,000)	2018 Q1	2017 Q1	2017
	unqualited urgvidert
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax	$-8440$	3765	$-71794$
Taxes paid		$-969$	$-6824$
Depreciation	5725	7 149	29 178
Net interest	3.037	2.716	12 114
Change in value financial derivatives	$-1944$	$-548$	28 806
Change in bond loan (amortization)	353	436	1573
Impairment		٠	5 681
Share of (profit)/loss from associates	2 3 4 8	$-2474$	2677
Changes in inventory	$-74435$	$-7$	m
Net changes in construction loans	210 600	$\overline{a}$	$-149$ 163
Changes in accounts receivables	$-33181$	$-1978$	26 148
Changes in accounts payable	12 5 9 0	9 2 5 5	20 20 4
Changes in customer contracts, asset	$-172169$	$-83326$	15 674
Changes in customer contracts, liability	$-25440$	$-11181$	59 475
Changes in other current receivables/liabilities	52 3 52	10533	11571
Net cash flow from/(to) operating activities	$-28604$	$-66629$	$-14568$
CASH FLOW FROM INVESTMENTS
Investments in property, plant and equipment	$-1732$	$-9809$	$-17312$
Disposal of property, plant and equipment
Investment in intangible assets	$-5201$	$-3834$	$-24670$
Investment in financial assets			$-18.310$
Disposal of financial assets			3 iii
Dividends received			507
Interest income	211	1189	2 2 10
Changes in long term receivables	$-6.029$	$-1137$	17640
Net cash flow used in investing activities	$-12751$	$-13591$	$-36823$
CASH FLOW FROM FINANCING ACTIVITIES
New long term debt		7036	35 596
Repayment non-current debt	$-3835$	$-2795$	$-45519$
Cost renegotiation bond loan	÷.	$-1643$	$-1643$
Interest payment	$-32AB$	$-3.905$	$-14.324$
Purchase/sale of treasury shares			270
Net cash flow from/ (used in) financing activities	$-7099$	$-1306$	$-25619$
Net change in cash and cash equivalents	$-48455$	$-81525$	$-77.012$
Cash and cash equivalents at start of the year	206 069	266 057	266 057
Cash and cash equivalents from merger in subsidiary			17 023
Cash and cash equivalents at end of the period	157 615	184533	206,069
Restricted bank deposits at the end of the period	79 880	74 166	89 402
Available cash and cash equivalents at the end of the period	77 734	110,366	116,667

HSE / QA

An extensive plan is implemented to reduce injuries and absence including subcontractors

Average sick leave

• Last 15 months sick leave on 3.58 %
• In 2018 sick leave on 4.02 %

Injuries resulting in absence from work

• 0 injuries last 12 months

HSE / QA

• Strong focus on Quality in the Group
• Quality deviations are measured, documented in action lists and handled effectively
• Internal audits in accordance with ISO 9001 and ISO 14001
• Supplier audits
• Audits from customers