Beerenberg

Quarterly Report • May 13, 2016

«Activity level down – Order intake

This Quarter
Operating Revenue EBITDA	430 mNOK 41 mNOK
Cash Flow from Operations Order Intake* TRIF	-18 mNOK 8 BNOK 2,1
Employees**	1521

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2015 2015 2015 2016 Q1 Q2 Q3 Q4 Q1

Group Overview

Highlights for Beerenberg (Beerenberg Holdco II AS consolidated) in the 1^st quarter of 2016 was

• Revenue was MNOK 430, down 23 % compared to Q12015.
• EBITDA of MNOK 41, down MNOK 21 compared to Q1 2015
• EBITDA margin was 9,5 % compared to 11,1% in Q1 2015
• Order intake in the quarter was estimated to BNOK 8.1, due to the award of a 15 year maintenance and modification contract.
• Estimated order backlog at the end of the quarter was BNOK 13.

Income Statement

The activity in Q1 2016 was relatively low. The combination of low activity on Offshore MMO contracts and lower activity on new build projects explains the drop in activity level in the first quarter.

EBITDA was MNOK 41, down from MNOK 62 in Q1 2015. The lower EBITDA is mainly related to the lower activity although additional, non recurring costs relating to the transfer of production of insulation material to Poland has been recorded in the quarter. The margin was 9,5%, down from 11,1% in Q1 2015.

Profit before tax was MNOK 5, down from MNOK 27 in Q1 2015.

Balance Sheet

Total assets was MNOK 1974 at the end of the quarter with an equity ratio of 21%.

Working capital increased with MNOK 35 during the quarter from a relatively low level at year end.

Net interest bearing debt was MNOK 818 compared to MNOK 965 in 1^st quarter 2015.

Most of Beerenberg debt is long term as a result of the issuing of a senior secured bond in 2^nd quarter 2014.

Cash Flow

Cash flow from operations was MNOK -17,5 mainly due to payment of tax and increased working capital.

Net investment in the quarter was MNOK 11 mainly related to investments in production equipment and investments in equipment related to new contracts.

Order Backlog & Market

The market outlook for Beerenberg remains mixed. The drop in oil-price has re-enforced a number of cut backs related to running Maintenance & Modification contracts which has impacted the activity level.

Most of the ISS contracts on Maintenance and Modification have been or are in the process of being retendered.

The tender activity has been relatively high in the period relating both to greenfield and brownfield contracts.

In January 2016 Beerenberg was awarded a 15 year offshore maintenance and modification contract (estimated value BNOK 8).

Total order intake of BNOK 8 is recognized in Q1 2016 (including uncommitted options and frame agreements).

Total estimated order backlog at the end of the quarter was BNOK 13 including uncommitted options and frame agreements.

HSEQ

At the end of Q1 2016 Beerenberg had 1521 employees, a reduction of 83 from year end 2015.

During the 1st quarter of 2016 Beerenberg recorded no incidents compared to 4 same period last year.

Total recordable incident frequency (TRIF) was 2,1 measured on last twelve months basis (LTM), compared to 4,2 YTD at the end of 1st quarter 2015.

«Decreasing activity level partly driven by cyclic new-build movements »

Business Segments

Services

The service segment reports a drop in revenue of 30% qo-q. The EBITDA was MNOK 24 in the first quarter. The reduction in margin is mainly activity driven.

Benarx

The Benarx division (Prefabricated insulation topside and subsea) reports lower activity in Q1 2016. The EBITDA in the quarter was MNOK 17(15,7%), also influenced by non-recurring costs related to the establishment of production facilities inPoland.

Figures for Beerenberg Holdco II

Condensed Consolidated Income Statement

Group Summary		Q1	Q1	YTD	YTD	FY
Amounts in NOK million	Note	2016	2015	2016	2015	2015
Operating revenues and other income	6	430,3	560,3	430,3	560,3	2363,2
Operating Expenses		389,6	498,0	389,6	498,0	2087,5
EBITDA	$\overline{7}$	40,7	62,3	40.7	62,3	275,7
Depreciation		8,1	7,8	8,1	7,8	45,3
EBITA		32,6	54,5	32,6	54,5	230,4
Amortisation		8,3	10,2	8,3	10,2	36,5
Operating profit (EBIT)		24,4	44,3	24,4	44,3	194,0
Financial expenses		19,5	17,5	19,5	17,5	75,1
Profit before tax (EBT)		4,9	26,7	4,9	26,7	118,9
Estimated tax		1,2	7,2	1,2	7,2	30,5
Net profit		3,7	19,5	3,7	19,5	88,4
Profit for the period is attributable to:
Shareholders of the parent company		3,7	19,5	3,7	19,5	88,4
Basic earnings per share (NOK) Diluted earnings per share are identical as there are no dilutive effect		0,01	0,07	0,01	0,07	0,33
EBITDA margin		9,5%	11.1%	9,5%	11.1%	11,7%
EBITA margin		7,6%	9,7%	7,6%	9,7%	9,8%

Condensed Consolidated Statement of Comprehensive Income

	Q1	Q1	YTD	YTD	FY.
Amounts in NOK million	2016 Note	2015	2016	2015	2015
Net profit for the period	3,7	19,5	3,7	19.5	88,4
Other comprehensive income:
Conversion differences	$-0.3$	0,0	$-0,3$	0,0	0,4
Change in value of derivatives	$-1,8$	1,3	$-1,8$	1,3	$-4.4$
Total comprehensive income	1,5	20.8	1,5	20,8	84,4

$\sim$

Condensed Consolidated Balance Sheet

Group Summary
	Q1	Q1	FY.
Amounts in NOK million Note	31.03.2016	31.03.2015	31.12.2015
Goodwill	883,9	883,9	883,9
Intangible assets	145,4	176,9	153,6
Property, plant and equipment	185,7	203,3	183,1
Financial Fixed Assets	0,6	0,1	0,6
Total non-current assets	1215,5	1264,2	1221,2
Inventories	56,2	50,3	53.4
Trade Debitors	363,2	333,3	386,6
Earned Not Invoiced Revenue (WIP)	94,5	168,5	112,4
Other Short Term Receivables	26,1	29,3	17,9
Prepayments	2,4	2,8	0,7
Bank Deposit	215,8	65.1	264,8
Total Current Assets	758,1	649,2	835,8
TOTAL ASSETS	1973,6	1913,4	2057,0
Share Capital	26,7	26,7	26,7
Share premium	240,3	240,3	240,3
Retained Earnings	145,5	64,5	147,6
Current year result after est. Tax	3,7	19.5	0,0
Total equity	416,2	351,0	414,7
Deferred tax	36,1	48,0	35,4
Pension Liability	7,1	7,7	6,5
Warranty	9,4	4,0	9,4
Financial Lease Ioan	1,5	4,5	1,8
Bond	$\overline{4}$ 1031,5	1025,5	1030,0
Derivatives	30,2	29,0	30,0
Total non-current liabilities	1115,8	1118,7	1113,1
Overdraft & S/T debt	0,5	0,4	3,1
Trade Creditors	84,7	131,7	123,0
Current Tax Payable	14,7	32,0	33,9
Social Security, VAT and other taxes	87,7	80,2	108,8
Accruals	114,9	72,2	117,8
Deferred Revenue	30,8	0,0	47,7
Other Current Liabilities	108,3	127,2	94,9
Total Current Liabilities	441,6	443,7	529,2
TOTAL EQUITY & LIABILITY	1973,6	1913,4	2057,0

Condensed Consolidated statement of change in equity

			Conversion	Hedging	Retained
	Share capital	Share premium	reserve	reserve	earnings	Total
01. January 2016	26.7	240.3	0.4	$-6.0$	153,2	414,7
Profit for the year					3,7	3,7
Other Comprehensive Income			-0.3	-1.8		$-2,1$
Equity as per 31.03.2016	26.7	240.3	0,1	$-7.8$	156.9	416.2

			Conversion	Hedging	Retained
	Share capital	Share premium	reserve	reserve	earnings	Total
01. January 2015	26.7	240.3	0.C	$-1.6$	64.8	330,2
Profit for the year					19.5	19,5
Other Comprehensive Income				1.3		1,3
Equity as per 31.03.2015	26.7	240.3	0.0	$-0.3$	84.3	351,0

Condensed Consolidated Statement of Cash Flow

	Q1	Q1	YTD	YTD	FY
Note	2016	2015	2016	2015	2015
EBITDA	40,7	62,3	40,7	62,3	275,7
Taxes paid	$-19,3$	$-6,5$	$-19,3$	$-6,5$	$-38,5$
Change in net working capital	$-35,9$	$-53.8$	$-35.9$	$-53.8$	39,6
Changes to other time restricted items	$-3,0$	$-2,5$	$-3,0$	$-2,5$	-4,5
Net Cash flow from operating activites	$-17,5$	$-0,6$	$-17,5$	$-0,6$	272,3
Capex	$-10,7$	-7,7	$-10,7$	-7,7	-27,8
Net cash flow from investing activities	$-10,7$	$-7,7$	$-10,7$	$-7,7$	$-27,8$
Repayment of interest bearing debt	$-0,3$	$-1,3$	$-0,3$	$-1,3$	-3,9
Interest paid 4	$-20,5$	$-16,0$	$-20,5$	$-16,0$	$-66,3$
Net cash flow from financing activities	$-20,8$	$-17,3$	$-20.8$	$-17,3$	$-70,3$
Total cash flow	$-49,0$	$-25,5$	$-49,0$	$-25,5$	174,2
Opening balance net bank deposits	264,8	90,6	264,8	90,6	90,6
Closing balance net bank deposits	215,8	65,1	215,8	65,1	264,8

Notes

Note 1 - General

Beerenberg Holdco II AS is a company domiciled in Norway. The consolidated financial statements of Beerenberg Holdco II comprise the company and its subsidiaries, together referred to as the Group. The Beerenberg Holdco II Group was established 01. March 2013, as a result of the Beerenberg Holdco II AS acquisition of all shares in Beerenberg Holding AS.

Beerenberg is delivering products and services to its customer in complex environments implying substantial operational risk with regards to quality, cost, time and not at least to injuries and accidents (HSE). Beerenberg works systematically to mitigate and manage risk on all levels. The annual report for 2015 provides further information on risks and uncertainties applicable to Beerenberg.

Beerenberg Holdco II AS is wholly owned by Beerenberg Holdco I AS which is wholly owned by Beerenberg Invest AS. Shareholders in Beerenberg Invest are specified in table below.

Shareholders Beerenberg Invest	A-Shares	%	B-Shares	$\%$	Total Shares	$\%$
Seaulah IV L.P.	804972		80.5 % 217 052 883	81.6 %	217857855	81,6 %
Alpinvest Partners 2012 I B.V.	92 1 21	92%	24 931 110	9.4%	25 023 231	9,4 %
Alplnvest Partners 2012 II B.V.	23.319	23%	6310883	2.4%	6334202	2.4 %
Management	79.588	8.0 %	17 705 124	6.7 %	17 784 712	6.7 %
Total	1 000 000		100.0 % 266 000 000		100.0 % 267 000 000	100.0%

Note 2 - Basis for preparation

The interim financial statements for the Group are prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the European Union and their interpretations adopted by the International Accounting Standards Board (IASB).

The interim report does not include all the information required for full annual consolidated financial statements in an Annual Report, and should be read in conjunction with the Annual Report of the Group for 2015. The accounting policies applied in the interim financial statements are the same as those described in the Annual Report for 2015. The condensed consolidated interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements are unaudited.

The Annual Report for 2015 is available at www.Beerenberg.com

Note 3 - Judgments, estimates and assumptions

In applying the accounting policies, management makes judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these interim financial statement, the significant judgments made by management in applying the Group's accounting policies and the key sources of uncertainty in the estimates were consistent with those applied to the consolidated financial statements as at and for the period ended 31. December 2015.

Note 4 - Bond and covenants

A bond of MNOK 1100 was issued in Q2 2014. In the same quarter long term loans to financial institutions and long term Ioan from the parent company Beerenberg Holdco I AS was fully repaid. In Q4 2014 the Group repurchased own Bonds with face value totaling MNOK 55.

The Bond implies covenants related to Incurrence testing, and quarterly Net Total Leverage ratio test (below 9.0). The Group is in compliance with covenants as of 31.03.2016.

Note 5 - Related party transactions

No related party transactions were conducted in Q1 2016.

Note 6 - Revenue by Segment

Beerenberg is organized in two operating segments in order to optimize and focus its business. The Services segment includes business related to the traditional ISS-activity in the Group which is mainly related to major framework agreements, and the Benarx segment which consists of advanced insulation topside and subsea.

	Q1	Q1	YTD	YTD	FY
Amounts in NOK million	2016	2015	2016	2015	2015
Services	367,4	523,8	367,4	523,8	2 1 8 4, 8
Benarx	106,0	96,3	106,0	96,3	535,7
Eliminations	$-43.1$	$-59.8$	$-43.1$	$-59.8$	$-357,3$
Total	430,3	560,3	430,3	560,3	2 3 6 3 , 2

Note 7 - EBITDA by Segment

	Q1	Q1	YTD	YTD	FY
Amounts in NOK million	2016	2015	2016	2015	2015
Services	24,1	44,4	24,1	44,4	194,5
Benarx	16,6	17,9	16,6	17,9	81,2
Other	O, O	0,0	0,0	0,0	0,0
Total	40,7	62,3	40,7	62,3	275,7

Note 8 - Subsequent events

No events have occurred after the reporting date that are of significant impact when considering the financial position or result in the Group as of 31.03.2016.