Eqva ASA — Interim / Quarterly Report 2017

May 29, 2017

HAVYARD GROUP ASA

IR summary Q1 2017 - 29.05.17

Headlines/Milestones Q1 2017

• EBIT of NOK 4.3 million and EBIT-margin of 1.17 % in first quarter of 2017.
• Project execution according plans.
• New contracts in first Quarter
• Havyard Ship Technology AS
  • Declaration of option on a workboat for fish farming
• Havyard MMC AS
  • Declaration of option on a complete fish handling system to Artic Aqua
• Norwegian Electric Systems AS
  • New contract for delivery of hybrid electric systems to ferries
• Havyard Production SP Zoo
  • Electrical work for STX France
• New contracts after end of first Quarter
• Havyard Ship Technology AS
  • Contract for one pelagic trawler to France Pélagique (Delivery December 2018)
  • Contract for delivery of the worlds largest wellboat to Sølvtrans (Delivery June 2019)

Outlook

• Havyard has succeeded in its differentiation strategy, where we have developed and delivered products within the Energy, Fish and Transport Market. We have a strong market position in segments with good activity and are in close dialogue with customers in terms of new contracts.
• After restructuring, the organization is more scalable and market-oriented, where we can quickly focus on areas where we are experiencing increasing needs. All business areas balance their activity between internal and external deliveries, where there is a requirement for profitability on a stand-alone basis.
• Of the group's companies there will in 2017 be good activity in HPR and MMC FP, and increasing activity in HDS and NES. For HST, however, it will be low activity in 2017. The order backlog is increasing with profitable activity for the coming years and has good expectations for 2018 and especially 2019.

Outlook - segments

Group Key Figures

(MNOK)	2017 Q1	2016 Q1	2016
Operating revenue	363	460	2003
EBITDA	11	25	132
EBIT	4	19	104
EBIT-margin	1.17%	4.06%	5.17 %
Profit before tax	4	20	$-30$
Earnings per share	0.23	0.66	$-1.58$
NIBD	111	120	15
Working Capital	161	141	174

Order backlog

• External order backlog of approx. MNOK 1.058 (Q4 1.170)
• MNOK 519 in 2017
• MNOK 539 in 2018
• New contracts after end of first Quarter > MNOK 1000 (per 29th of May)

Figures per segment

(NOK million)	Ship	Design &	Power &	MMC	Havyard	Other	Havyard
	Technology	Solutions	Systems		Production		Group
Operating revenues, External	140.5	60.1	12.8	107.8	11.0	30.9	363.3
Operating revenues, Internal	0.1	2.0	10.9	13.4	37.9	$-64.3$	$\Omega$
Total operating revenue	140.6	62.2	23.7	121.1	48.9	$-33.4$	363.3
Operating profit / loss EBITDA	0.6	2.5	$-1.9$	9.1	1.3	$-0.2$	11.4
Depreciation	3.1	0.9	1.2	1.7	0.2	0.1	7.1
Operating profit/(loss) (EBIT)	$-2.5$	1.6	$-3.0$	7.4	1.1	$-0.3$	4.3
Net financial items	$-0.5$	0.5	0.0	$-0.9$	$-0.2$	$-1.9$	$-3.0$
Profit/(loss) from associate	0	0	$\mathbf 0$	0	0	2.5	2.5
Profit/(Loss) before tax	$-3.0$	2.1	$-3.0$	6.5	1.0	0.2	3.8
Income tax expense	$-0.7$	0.5	$-0.7$	1.5	0.2	$-0.5$	0.2
Profit/(Loss)	$-2.3$	1.6	$-2.3$	5.0	0.7	0.7	3.5

Balance sheet

	2017 Q1	2016 Q1	201
	(unaudited / urevidert)
Non current assets
Goodwill	103 045	100 527	103 04
Licenses, patents and R&D	91 205	79 858	89 23
Property, plant and equipment	239 140	248 716	234 61
Investment in associates	27 557	77 359	25 08
Loan to associates	23 080	19 470	22 09
Investment in financial assets	19 12 9	63 884	19 19
Other non current receivable	25760	59774	25 61
Total non current assets	528 916	649 588	518 87
Current Assets
Inventory	114 911	54 157	114 90
Accounts receivables	159 274	298 200	157 29
Other receivables	48 289	109 876	53 91
Construction WIP	307 355	345 053	224 02
Cash and cash equivalents	184 533	227708	266 05
Total Current Assets	814 362	1034993	816 20
TOTAL ASSETS	1343277	1684 581	133507

848 886
641833
167 406
116 467
6993
24 640
149 163
49 759
5 919
121 487
207 052
3 4 3 4
63 246
103728
36 645
486 192
54 502
407 921
$-5$
22 535
1239
2016

• Net interest bearing debt: MNOK 111
• Working capital: MNOK 161
• Equity ratio: 36,5 %

Cash Flow

Negative CF from operations in Q1:

Changes in construction WIP (Use of own cash in construction process)

Negative CF from Investments Q1:

• New minor investments
• Changes in long term receivables

Negative CF from financing Q1:

• Instalments on debt
• Interest costs

(NOK 1,000)	2017 OI	2016 Of	2016
	(unqual to d ' uroviden'i
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax	3765	20,339	$-30.103$
Taxes paid	$-969$	$-721$	$-3U3$
Depreciation	7149	6.313	28.425
Not into rosts	2716	II3	8 29 9
Profit/loss disposals property, plant and equipment	٠		484
Change in bond loan (amortization)	435	400	667
Impairment of financial assets	$\sim$		77 356
Share of (profit)/loss from associates	$-2.474$	$-1668$	50 614
Changes in inventory	$\overline{J}$	$-4082$	$-2124$
Net changes in construction loans	$\overline{\phantom{a}}$	74.077	61.876
Changes in accounts receivables/construction WIP	$-86304$	$-325157$	$-126.934$
Changes in accounts payable	9 2 5 5	205, 324	$-36,122$
Changes in prepayments from customers	$-11181$	53 242	15 684
Changes in other current reasivables/liabilities	9985	$-16.311$	46 607
Not cash flow from/(to) operating activities	$-66629$	11868	93 556

New long term debt	7 0 3 6	623
Repayment long term debt	$-2796$	$-3$ 113	$-14388$
Cast renegotiation bond loan	$-1643$	$\overline{\phantom{a}}$	$-2610$
Cost convertion of bond loan	$\sim$	$\sim$	$-1.401$
Inforcet costs	$-3.905$	$-1.449$	$-16049$
Dividends	$\overline{\phantom{a}}$		$-251$
Net cash flow from/ (used in) financing activities	$-1306$	$-3939$	$-34699$
Net change in cash and cash equivalents	$-81525$	3.079	41,427

Cash and cash equivalents at start of the period	266 057	224 629	224 62
Cash and cash equivalents at end of the period	184 533	227 708	266 057
Restricted bank deposits at the end of the period	74 166	85904	79 135
Available cash and cash equivalents at the end of the neriod	110 366	141 804	186 923

HSE / QA

Sick leave gradually reduced last years. An extensive plan is implemented to reduce injuries and absence including subcontractors

Average sick leave

Last 15 months sick leave on 3.86 %

So far in 2017 sick leave on 4.08 %

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