Beerenberg

Quarterly Report • Nov 19, 2015

Beerenberg Holdco II - Unaudited Financial Report

2014

$Q3$

*includes frame agreements and exercise of options

** Employees end of quarter

2014

$\mathsf{Q}4$

$\mathsf{Q}1$

$Q2$

$\mathrm{Q}3$

$\mathbb{Q}4$

$Q3$

REVENUE

2015

$\mathsf{Q}1$

2015

$Q2$

2015

$Q3$

This Quarter

Operating Revenue EBITDA	612 mNOK 75 mNOK
Cash Flow from Operations Order Intake TRIF Employees*	99 mNOK 340 mNOK 2,8 1575

Headlines

"Extensive tender activity in the market"

Group Overview

Highlights for Beerenberg (Beerenberg Holdco II AS consolidated) in the 3^rd quarter 2015 was

• Revenue of MNOK 612, up 2 % q-o-q.
• EBITDA MNOK 75, up MNOK 1q-o-q
• EBITDA margin was 12,3% compared to 12,4 $%$ q-o-q
• Major awards
• Award of the Gina Krogh hook-up project $\circ$ by Aker Solutions in September

Income Statement

Activity in 3^rd quarter was slightly up from last year. The growing activity on Greenfield projects offset a significant reduction in the Brownfield project portfolio.

The EBITDA was MNOK 75, more or less in line with last year.

Earnings before tax ended in line with last year figures as well.

Balance Sheet

Total assets was MNOK 2 022 at the end of the quarter with an equity ratio of 20%.

Changes in total assets are driven by higher working capital requirements on Greenfield projects. The recent build up of working capital stabilized this quarter, however remains on a relative high level historically.

Net interest bearing debt was MNOK 909 compared to MNOK 988 in 3rd quarter 2014. 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 99 for the 3rd quarter of 2015 including a slight improvement in working capital during the quarter. Net investments during the quarter was MNOK 5,5, mainly related to equipment.

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. However, in 3^rd quarter, the activity on tendering has been historically high. In November a 10 year Maintenance and Modification contract at Statoil Mongstad was awarded. (See note 8)

The vast majority of the ISS contracts on the NCS are in the process of being retendered.

The activity on new build projects are also increasing with high tender activity so far in 2015. A number of the tenders are still to be awarded.

Total order intake of MNOK 340 is recognized in 3^rd quarter 2015 (including uncommitted options and frame agreements).

Estimated order backlog at the end of O3 is based on existing frame agreements and uncommitted options.

HSEQ

At the end of Q3 2015 Beerenberg had 1575 employees, a slight reduction from last quarter.

In October, Beerenberg has initiated a reduction of workforce of approx. 220 employees due to expected lower activity offshore.

During the 3^rd quarter 2015 Beerenberg recorded 5 TRIF incidents compared to 3 same period last year. None of the incidents were according to standard rules and regulations (PTIL/NAV) defined as potentially critical.

Total recordable incident frequency (TRIF) was 2.8 measured on last twelve months basis. Per 3rd quarter 2015 the frequency was 2.9 compared to 6.7 last year.

«Activity in Greenfield projects offset the drop in Brownfield activities»

Business Segments

Services

The Services segment reports an increased revenue q-o-q of 4% to MNOK 566. The increase in revenue relates to new build projects partially offset by reduction in activity in maintenance and modification. EBITDA was MNOK 48, down from MNOK 66 in 3^rd quarter 2014. The reduction in margin relate to delivery mix and somewhat lower margin onnew build projects.

Benarx

The Benarx division (Prefabricated insulation topside and subsea) continues to grow. Revenue was MNOK 153, a qo-q growth of 132 %. EBITDA and EBITDA margin in the quarter was MNOK 27 (17,6 %) compared to MNOK 9 (12,9 %) in 3^rd quarter 2014. The margin improvement reflects the impact of higher volumes.

FIGURES & NOTES

Figures for Beerenberg Holdco II

Condensed Consolidated Income Statement

Group Summary		QЗ	QЗ	YTD	YTD	FY.
Amounts in NOK million	Note	2015	2014	2015	2014	2014
Operating revenues and other income	6	612,4	598,1	1804,7	1742,0	2 3 0 6, 3
Operating Expenses		537,3	523,9	1585,0	1524,0	2026,0
EBITDA	7	75,1	74,2	219,7	218,1	280,4
Depreciation		8,0	7,8	26,6	22,8	31,1
EBITA		67,1	66,4	193,1	195,2	249,3
Amortisation		8,8	10,2	28,1	30,7	41,0
Operating profit (EBIT)		58,4	56,2	164,9	164,5	208,3
Financial expenses	$\overline{4}$	19,4	23,5	56,6	116,8	149,3
Profit before tax (EBT)		39,0	32,7	108,3	47,7	59,0
Estimated tax		10,5	8,8	29,3	12,9	18,0
Net profit		28,5	23,9	79,1	34,8	41,0
Profit for the period is attributable to:
Shareholders of the parent company		28,5	23,9	79,1	34,8	41,0
Basic earnings per share (NOK)		0,11	0,09	0,30	0,13	0, 15
EBITDA margin		12,3%	12,4%	12,2%	12,5%	12,2%
EBITA margin		11,0%	11.1%	10,7%	11,2%	10,8%

Condensed Consolidated Statement of Comprehensive Income

	Q3	QЗ	YTD	YTD	FY.
Amounts in NOK million Note	2015	2014	2015	2014	2014
Net profit for the period	28,5	23.9	79.1	34.8	41,0
Other comprehensive income:
Conversion differences	0,0	0,0	0,0	$-0.2$	$-0.2$
Reclassification related to prior periods	0,0	0,0	0,0	$-1,5$	0,0
Change in value of derivatives	$-7,2$	0,0	$-3,9$	0,5	$-1,1$
Total comprehensive income	21,3	23.9	75.2	33,7	39,8

Condensed Consolidated Balance Sheet

Group Summary
	QЗ	QЗ	FY
Amounts in NOK million Note	30.09.2015	30.09.2014	31.12.2014
Goodwill	883,9	887,0	883,9
Intangible assets	159,0	195,1	187,2
Buildings and other property	12,9	19,5	15.2
Machinery and equipment	171,8	179,7	184,0
Tools, Office machinery and similar assets	8,9	2,2	4,3
Financial Fixed Assets	0,0	0,0	0,0
Total non-current assets	1236,5	1283,5	1274,5
Inventories	64,4	38,1	38,8
Trade Debitors	453,0	243,3	215,0
Earned Not Invoiced Revenue (WIP)	118,3	194,4	238,7
Other Short Term Receivables	27,1	20,6	22,6
Prepayments	1,3	4,7	1,1
Bank Deposit	122,0	101,2	90,6
Total Current Assets	786,1	602,3	606,9
TOTAL ASSETS	2022,6	1885,7	1881,4
Share Capital	26,7	26,7	26,7
Share premium	240,3	240,3	240,3
Retained Earnings	59,2	22,3	22,2
Current year result after est. Tax	79,1	34,8	41,0
Total equity	405,4	324,2	330,2
Deferred tax	68,1	75,8	40,3
Pension Liability	9,7	7,3	7,9
Warranty	5,0	3,8	4,0
Financial Lease Ioan	2,1	11,0	5,7
Bond 4	1028,5	1077,5	1024,0
Derivatives	31,8	15,9	33.0
Total non-current liabilities	1145,2	1191,2	1115,0
Current Liabilities
Overdraft & S/T debt	0,4	0,6	0,4
Trade Creditors	139,3	110,5	137,4
Current Tax Payable	25,5	4,9	38,5
Social Security, VAT and other taxes	87,0	54,0	79,6
Accruals	145,1	121,4	66,1
Deferred Revenue	3,6	0,0	10,5
Other Current Liabilities	71,2	78,9	103,6
Total Current Liabilities	472,0	370,3	436,2
TOTAL EQUITY & LIABILITY	2022,6	1885,7	1881,4

Condensed Consolidated statement of change in equity

			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					79.1	79.1
Other Comprehensive Income			0.C	-39		$-4.0$
Equity as per 30.09.2015	26,7	240.3	0.0	$-5.5$	143.9	405,4

			Conversion	Hedging	Retained
	Share capital	Share premium	reserve	reserve	earnings	Total
01. January 2014	26,7	240.3	$-1.2$	$-0.7$	25.5	290,6
Result					34.8	34,8
Other Comprehensive Income			$-0.2$	0,5		0,3
Correction of classification			$-0.2$	0,2	$-1,5$	$-1,5$
Transactions with shareholders					$-0,1$	$-0,1$
Equity as per 30.09.2014	26,7	240.3	$-1,6$	0,0	58.7	324,2

Condensed Consolidated Statement of Cash Flow

		QЗ	QЗ	YTD	YTD	FY
	Note	2015	2014	2015	2014	2014
EBITDA		75,1	74,2	219,7	218,1	280,4
Taxes paid		0,0	0,0	$-13,0$	$-8,6$	$-13,5$
Change in net working capital		23,9	$-3,2$	$-98,9$	$-61,3$	$-44,1$
Changes to other time restricted items		0,1	1,2	$-3,9$	0,1	$-1,2$
Net Cash flow from operating activites		99,0	72,3	103,9	148,2	221,6
Capex		$-5,5$	$-17,5$	$-16,8$	$-56,0$	-68,7
Net cash flow from investing activities		$-5,5$	$-17,5$	$-16,8$	$-56,0$	$-68,7$
Repayment of interest bearing debt	$\overline{A}$	$-1,0$	$-1, 1$	$-3,6$	$-1094.6$	$-1150,8$
Purchase of shares		0,0	3,1	0,0	3,1	6,2
Net incoming payment from Bond		0,0	0,0	0,0	1078,5	1078,5
Interest paid		$-17,9$	$-20,4$	$-52,1$	$-49,9$	$-68,1$
Net cash flow from financing activities		$-18,9$	$-18,4$	$-55,7$	$-62,9$	$-134,2$
Total cash flow		74,6	36,4	31,4	29,3	18,7
Opening balance net bank deposits		47,4	64,8	90,6	71,9	71,9
Closing balance net bank deposits		122,0	101,2	122,0	101,2	90,6

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 2014 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	$\%$
Segulah IV L.P.	804972		80,5 % 217 052 883	81,6 %	217857855	81,6 %
Alplnvest Partners 2012 B.V.	92 1 2 1	9.2%	24 931 110	9.4%	25 023 231	9,4%
Alplnvest Partners 2012 II B.V.	23319	2.3 %	6310883	2.4%	6 3 3 4 2 0 2	2,4%
Management	79588	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, and should be read in conjunction with the financial statements of the Group for 2014. The accounting policies applied in the interim financial statements is the same as those described in the annual report for 2014. 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 2014 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 2014.

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 30.09.2015.

Note 5 - Related party transactions

No related party transactions were conducted in Q3 2015.

Note 6 - Revenue by Segment

From December 2014 Beerenberg changed its organization to optimize and focus its business. The former Cold Work Concepts and Maintenance and modification division was merged into one segment, Services. Segment figures for Services for O3 2014 and YTD 2014 are for the two previous segments Cold Work Concepts and Maintenance & Modifications combined. The Benarx business segment, which consists of advanced insulation topside and subsea, remains unchanged.

	QЗ	QЗ	YTD	YTD	FY.
Amounts in NOK million	2015	2014	2015	2014	2014
Services	566,3	542,0	1693,1	1595,1	2 1 2 3,0
Benarx	152,5	65,8	377,8	185,5	264,0
Eliminations	$-106.4$	-9.7	$-266,1$	$-38.6$	$-80.8$
Total	612,4	598,1	1804,7	1742.0	2 3 0 6, 3

Note 7 - EBITDA by Segment

	QЗ	QЗ	YTD	YTD	FY.
Amounts in NOK million	2015	2014	2015	2014	2014
Services	48,2	65,8	150,8	200,9	256,1
Benarx	26,9	8,5	69,0	17.0	27,3
Other	O, O	0,0	0,0	0,2	$-3,0$
Total	75,1	74.2	219,7	218,1	280,4

Note 8 - Subsequent events

On the 11^th of November Beerenberg entered into a 10 year frame agreement for maintenance at Mongstad. The contract is expected to give approx. MNOK 200 annual turnover.