ABL Group — Investor Presentation 2016

Feb 18, 2016

Aqualis ASA FOURTH QUARTER RESULTS 2015

Oslo, 18 February 2016

aqualis.no

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Agenda

1. Highlights David Wells CEO

1. Financial review Kim Boman CFO

2. Outlook David Wells CEO

Q4 2015 highlights

• Completing the acquisition of a 49.9% stake in ADLER Solar, a engineering consultancy and testing services for all lifecycle phases of solar power plants and PV modules, creating a diversified energy consulting company
• Lower activity level in the oil and gas market
• Relative high activity level in the Middle East region with weaker markets especially in Europe and the Americas
• Marine activity remain relative strong while demand for engineering services reduced
• Healthy offshore wind market despite withdrawal of some government subsidies
• Rationalisation of engineering departments in Dubai, Houston and the office in Brazil to align capacity to changes in market conditions
• Continued solid HSE performance: no lost time incidents (LTIs) during the quarter

Financial summary Q4 2015

• Total operating revenue of USD 8.8 million
• Reduction due to softer market conditions, strengthening USD and early termination of some contracts
• Regional differences in activity level with increased activity in the Middle East region and lower in the Americas
• Operating loss (EBIT) of USD 1.1 million
• Adjusted operating loss of USD 0.6 million¹
• Cash balance of USD 14.9 million
• 220 employees² at year end, down from 236 at end of Q3 2015

Notes:

(1) Excluding goodwill impairment

(2) Includes contractors on 100% utilisation equivalent basis

Q4 2015 – main new contract wins

Order backlog – quarterly development

Highlights Q4 2015

• Backlog level decreased from Q3 2015
• Early termination of some contracts
• Backlog affected by re-focused strategy of supporting clients on day-to-day service operations which are typically call-out contracts that do not get included in backlog figures
• Pipeline of work expected from call out contracts continues to look solid

Notes:

(1) Tristein AS included from May 2014; OWC Ltd from July 2014

(2) Figures excluding ADLER Solar

Recruitment – quarterly development

Highlights Q4 2015

• The decrease mainly related to release of site teams in China and Singapore
• Rationalisation of the office in Brazil and the engineering departments in Dubai and Houston in Q4 will have effect from Q1 2016

Notes:

(1) Numbers include contractors on 100% utilization equivalent basis

(2) Tristein AS included from May 2014; OWC Ltd from July 2014

(3) Figures excluding ADLER Solar

Creation of a diversified energy consulting group - Acquisition of 49.9% of ADLER Solar completed in Q4 2015

Creation of a diversified energy consulting group

• ADLER Solar is a full service and solutions provider for the PV industry

History / background

Year	Event
2008	Founding of ADLER Solar, HQ in Bremen
2008-2011	Concentration on large scale projects and recall campaigns
2011	Establishment of engineering consultancy
2012	EMEA service partner for First Solar, setting up ADLER Solar Trading
2014	Opening of the office and service center near Munich
2015	Founding of pvXchange and ADLER Solar Works. JV with YKD in Japan
2016	Full-service and solutions provider for the PV industry

• … for:
• Manufacturers, wholesales/owners and utilities
• Banks and funds, Insurance companies
• EPC companies / installers
• Plant managers / operators
• Engineering offices and PV experts

Creation of a diversified energy consulting group - ADLER Solar has a strong market position servicing from Germany

Agenda

1. Highlights David Wells CEO

2. Financial review Kim Boman CFO

1. Outlook David Wells CEO

Revenue and adjusted EBIT trend

1) Tristein AS included from May 2014; OWC Ltd from July 2014

2) Adjusted EBIT figures exclude corporate restructuring and IPO costs in Q3 2014 and goodwill impairment in Q4 2015

Business geographical review

• Several entities impacted by lower activity level in the oil and gas market
• Regional differences y-o-y with UAE -6%, SGP -31%, Norway -21%, UK +10%, USA -40%, Brazil -73%,
• Singapore particularly impacted by early termination of some contracts

1) After allocation of group costs to entities. Corporate HQ costs not allocated to entities

• 2) Includes other entities in the group, share of net income from associates, eliminations and corporate HQ costs
• 3) Tristein AS included from May 2014; OWC Ltd from July 2014

Creation of a diversified energy consulting group - ADLER Solar Financial summary

EUR million	2012	2013	2014	2015
Revenue	8.634	11.368	11.061	9.470
EBITDA	0.488	1.307	2.115	-0.680
Net profit	0.240	0.298	1.231	-1.205
No of employees*	119	104	94	95

Figures for 2012 - 2014 (proforma). Figures have not been audited

Note: 1) Average number of employees for period 2012 – 2014. Year end figures for 2015

Income statement

Amounts in USD thousands	Q415	Q414	FY2015	FY2014*
Total operating income	8 755	10 613	40 998	33 303
Payroll and payroll related costs	4 903	6 206	22 695	18 563
Depreciation, amort. and impairment	622	268	1 148	900	USD 0.6 million
Other operating costs	4 144	4 880	19 007	15 788
Total operating expenses	9 669	11 354	42 850	35 251
Share of net income from associates	-197	0	-197	0	by;
Operating profit (EBIT)	-1 110	-791	-2 048	-1 948
Finance income	-2	-13	92	120
Finance costs	52	82	45	205
Net currency gains/losses	738	2 124	1 355	1 994
Profit before taxes	-426	1 238	-647	-39
Taxes	443	-19	692	211	0.5 million
Profit after taxes	-870	1 257	-1 339	-250
Financial ratios					contracts
Operating margin (EBIT), %	-12,7	-7,5	-5,0	-5,8
Profit after tax, %	-9,9	11,8	-3,3	-0,8

• Revenues down 18% y-o-y
• Adjusted operating loss of USD 0.6 million
• Q4 2015 results impacted by;
• Reversal of bonus accruals of USD 1.0 million and bad debt provision of USD 0.3 million
• Goodwill impairment of USD 0.5 million
• Early termination of some contracts

Balance sheet

Amounts in USD thousands	31.12.2015	31.12.2014
Equipment	371	629
Investment in associates	3 283	0
Intangible assets	17 208	20 710
Trade receivables	7 667	5 229
Other receivables	2 890	2 990
Cash and cash equivalents	14 864	21 790
Total assets	46 282	51 348
Total equity	37 731	44 447
Non current liabilities	587	0
Trade payables	1 128	1 227
Tax payable	586	0
Other current liabilities	6 251	5 674
Total equity and liabilities	46 282	51 348
Financial ratios
Net debt, USD thousands	-14 864	-21 790
Equity/Assets rato, %	82 %	87 %

• Strong financial position, cash of USD 14.9 million
• No interest bearing debt

Cash flow

Amounts in USD thousands	Q415	Q414	FY2015	FY2014
Operating cashflow	-382	661	-3 503	208
Investing cash flow	-3 486	-182	-3 773	1 306
Financing cash flow	0	0	289	19 499
Net change in cash and cash equivalents	-3 868	479	-6 987	21 014
Cash and cash equivalents beginning period	18 611	21 365	21 790	838
Net change in cash and cash equivalents	-3 868	479	-6 987	21 014
Net foreign exchange difference	121	-54	61	-62
Cash and cash equivalents end period	14 864	21 790	14 864	21 790

• Net operating cash flow of negative USD 0.4 million
• Investing cash flow of USD 3.5 million related to the acquisition of ADLER Solar

Agenda

1. Operational highlights David Wells CEO

1. Financial highlights Kim Boman CFO

3. Outlook David Wells

CEO

Outlook

• The overall oil and gas market for Aqualis is expected to be challenging
• The negative sentiment appears to be escalating in some regions at the start of 2016
• Outlook for the Americas and Europe is weak and we expect these regions to be challenging while the Middle East region is expected to remain active, especially within marine related business.
• Oil service industry is becoming increasingly competitive
• The offshore wind market in Northern Europe is expected to remain active with a reasonable project pipeline
• Industry analysts expect global PV demand to grow from 54 GW in 2015 to 66 W in 2016. ADLER Solar, the market leader in its niche in the German PV market, is well positioned to capitalize on the growth of the solar industry
• Aqualis will continue to focus on further improving staff utilization, increasing efficiencies and aligning the cost base with the weakened market conditions
• Monitor possible structural/add-on opportunities to enhance shareholder value