Eqva ASA — Interim / Quarterly Report 2018

Nov 30, 2018

HAVYARD GROUP ASA IR summary Q3 2018 - 29.11.18

Headlines/Milestones Q3 2018

• The Group's operating result (EBIT) in third quarter was lower than expected. The main reasons is agreed postponed activity on a major ship building project and postponed delivery of charging equipment. There has also been non-recurring expenses associated with closing down the activity at MMC FP Tromsø.
• EBIT of NOK 0.7 million and EBIT-margin of 0.13% in third quarter of 2018 and EBIT of NOK 1.4 million year to date in 2018 and EBIT-margin of 0.09 %
• Loss for the period for Q3 of NOK -2,1 million and margin -0,41% and loss of period of first half of NOK -29,3 million and margin -1,88%.
• Through the ferry projects that have been delivered, we have received verified calculus assumptions that support expectations of good profitability and activity for 2019.
• Considerable new contracts in third quarter

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.
• Historical high order backlog with profitable activity for the coming years.

Status and Outlook per Segments

Group Key Figures

$-2,05%$
$-2,10$
92
102
1337
481
36,0 %

Order backlog

• External order backlog of approx. MNOK 5.062 (Q4 2017: 2.845)
• 2018 MNOK 812
• 2019 MNOK 3.049
• 2020 MNOK 1.074

Figures per segment

(NOK million)	Ship building Technology	Ship Design & Solutions	Power & Control	Fish Handling	Production & Services	Other	Havyard Group
Operating revenues, External	911,2	125,3	70,00	256,7	79,5	118,6	1 561,3
Operating revenues, Internal	0,79	73,0	214,89	20,8	76,3	-385,9	0,0
Total operating revenue	911,97	198,3	284,89	277,5	155,8	$-267,2$	1 561,3
Operating profit /loss EBITDA	$-13,78$	59,3	$-8,74$	$-2,6$	$-3,5$	$-8,6$	21,9
Depreciation	9,06	3,5	1,05	5,6	1,1	0,3	20,5
Operating profit/(loss) (EBIT)	$-22,84$	55,8	$-9,78$	$-8,2$	$-4,6$	$-8,9$	1,4
Net financial items	$-5,36$	2,2	2,46	$-3,1$	$-0,9$	$-14,9$	$-38,2$
Profit/(loss) from associate	0,00	0,0	0,00	0,0	0,0	$-5,3$	$-5,3$
Profit/(Loss) before tax	$-28,20$	58,0	$-7,32$	$-11,2$	$-5,5$	$-23,8$	$-36,8$
Income tax expense	$-6,49$	13,2	$-1,59$	$-3,3$	$-1,3$	$-4,2$	$-7,4$
Profit/(Loss)	$-21,72$	44,8	$-5,73$	$-8,0$	$-4,2$	$-19,6$	$-29,3$

Balance sheet

	2018 Q3	2017 Q3	2017
	unaudited urevidert
Non-current assets
Goodwill	141 003	103 045	141003
Licenses, patents and R&D	114 355	95 138	107 144
Property, plant and equipment	200 638	235 273	233 440
Investment in associates	16 989	15 3 45	22 407
Loan to associates	$\circ$	27 7 21	12746
Investment in financial assets	27 187	27 091	27 603
Other non-current receivable	22 57 5	9744	22 370
Total non-current assets	522747	513 356	566 713
Current Assets
Inventory	136 144	118 056	115 184
Accounts receivables	168 374	123 266	136 077
Other receivables	144 822	105 235	104 923
Customer contracts, assets	831323	136 502	208 355
Cash and cash equivalents	207 447	273 967	206 068

TOTAL ASSETS	2 010 857	1 270 382	1 3 3 7 3 2 1

• Net interest bearing debt: MNOK 160
• Working capital: MNOK 127
• Equity ratio: 22.5 %

unaudited urevidert 1239 1239 22 535 22 535 -3 $-5$ 347 545 362 920 81830 52 008 453 146 438 698 9 2 0 8 24 900	1239 22 535 $-5$ 356 930 100 246 480 945 10 999
O $\Omega$	667
80 440 89 042	86 885
102 666 64 041	63 366
$\Omega$ $\Omega$	23 419
4572 2 4 3 5	2 2 5 0
196885 180 418	187 585
248 180 151 485	143 466
8 2 1 3 3 8 1 2	8 1 9 6
42 846 18 088	34 643
	O
$\Omega$	10 000
7500	23 196
11 223
253750	175943
201744 205 409	273 346
1360826 651 267	668790
1557711 831 684	856375
547 338 10 000 91 191	211 314

Cash Flow

(NOK 1,000)	2018 YTD	2017 YTD	2017
	unaudited urevidert
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax	$-36781$	$-5855$	$-71794$
Taxes paid		$-2106$	$-6824$
Depreciation	20 544	21 3 3 9	29 178
Net interest	6035	7006	12 114
Change in value financial derivatives	$-2473$		28 806
Change in bond loan (amortization)	$-141$	1230	1573
Profit/loss disposals property, plant and equipment	$-1445$
Impairment financial assets	18 645		5 6 8 1
Share of (profit)/loss from associates	5 3 4 4	9739	2677
Changes in inventory	$-20959$	$-3152$	111
Net changes in construction loans	547 338	$-149$ 163	$-149163$
Changes in accounts receivables	$-32297$	121 557	26 14 8
Changes in accounts payable	$-595427$	29 998	20 20 4
Changes in customer contracts, asset	104 713	137 282	15 674
Changes in customer contracts, liability	35 371		59 475
Changes in other current receivables/liabilities	$-39885$	$-41619$	11 571
Net cash flow from/(to) operating activities	8562	73 527	$-14568$

	Positive CF from operations in 2018:
▪	Deficit
▪	Impairment of financial assets
▪	Accruals regarding projects
	Negative CF from Investments in 2018:
▪	Positive effect from sale of property
▪	Negative effect from purchase of
	shares in subsidiary

Positive CF from financing 2018:

• New long term debt
• New loan in subsidiary, presented as equity based on agreement.

	2018 YTD	2017 YTD	2017
CASH FLOW FROM INVESTMENTS
Investments in property, plant and equipment	$-4941$	$-14758$	$-17.312$
Disposal of property, plant and equipment	24 000
Investment in intanaible assets	$-13200$	$-13141$	$-24670$
Investment in financial assets	$-225$	$-11,579$	$-18.310$
Disposal of financial assets	$-55000$	3 6 19	3 111
Purchase of shares in subsidiaries (see note 4)		4 1 2 2
Dividends received			507
Interest income			2 2 1 0
Changes in long term receivables	$-6103$	10 238	17 640
Net cash flow used in investing activities	$-55469$	$-21499$	$-36823$

Available cash and cash equivalents at the end of the period	129 123	146 065	116 667
Restricted bank deposits at the end of the period	78 323	127 902	89 40 2
Cash and cash equivalents at end of the period	207 447	273 967	206 069
Cash and cash equivalents from merger in subsidiary			17 0 23
Cash and cash equivalents at start of the year	206 068	266 057	266 057
Net change in cash and cash equivalents	$-1378$	17 909	$-77012$
Net cash flow from/ (used in) financing activities	48 265	$-44119$	$-25619$
Purchase/sale of treasury shares		270	270
Interest payment	$-6.035$	$-11128$	$-14.324$
Cost renegotiation bond loan		$-1643$	$-1643$
Payment of loan in subsidiary (see note 10)	20 000
Repayment non-current debt	$-20,700$	$-42640$	$-45.519$
New long term debt	55 000	11 0 2 3	35 596

HSE / QA

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

Average sick leave

• Last 18 months sick leave on 3.30 %
• In 2018 sick leave on 3.26 %

Injuries resulting in absence from work

• 1 injurie 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