Eqva ASA — Investor Presentation 2015

May 22, 2015

Presentation Q1 201522.05.15Geir Johan BakkeCEO

Agenda

• Headlines/ milestones Q1
• Outlook
• Main figures
• Detailed figures
• HES/ QA
• Questions

Headlines/Milestones Q1

• EBIT of NOK 6 million and EBIT-margin of 1.1 % in first quarter of 2015
• The EBIT-margin in Q1 are negatively influenced by lower capacity utilization
• Good control of projects
• Loss provisions made in fourth quarter of 2014 are sufficient
• Zero result in these projects in 2015 are reducing margins compared to the first quarter of 2014
• Purchase up to majority share in Norwegian Electric Systems
• Delivery of newbuild no. 118 and 119
• Havyard 832 SOV Windmill Service Vessel

Outlook

• Offshore market in general effected by declining investments
• Decisions are postponed and few new projects in the market
• Use the opportunity for increasing cost-efficiency and continuing the long term diversification strategy
• Havyard are prepared to meet the challenges in the offshore market
• Established and proven design in the windmill service vessel market
• Leading provider of ICE-breaker vessels
• Established position in the aquaculture market
  • A market in growth and not correlated with oil price
• Repeat contracts on new design are signed and repeat effect give increased profitability
• The Group depends on new order intake to fill capacity for the coming periods

Main Figures

Group Key Figures

	Q 1 1 5	Q 1 1 4	2 0 1 4
O i t p e r a n g r e v e n u e	6 3 5	4 3 0	2 4 1 1
E B I T D A	1 2	3 3	6 6
E B I T	6	2 8	4 5
i E B I T- m a r g n	% 1. 1	% 6. 5	% 1. 9
f b f i P t t r o e o r e a x	2 8	2 8	3 9
h i E a r n n g s p e r s a r e	1, 1 7	0. 8 8	2 1, 4
N I B D	1 1 7	7 4	1 6 7
k l W i C i t o r n g a p a	1 9 2	1 2 4	1 6 4

• • Order backlog of approx. MNOK 2.415
• •MNOK 1.215 in 2015
• •MNOK 1.200 in 2016
• • Gives visibility in production at the shipyard in Leirvi k

DetailedFigures

Ship Technology

• Delivered in 2015
• 832 SOV windmill service, NB 118
• 832 SOV windmill service, NB 119
• Outfitting in Leirvik at 31.03.15
• 535 Fishing vessel, NB 121
• Loss provisions made in fourth quarter of 2014 are sufficient
• Zero result in these projects in 2015 are reducing margins compared to the first quarter of 2014
• Order backlog of MNOK 2.120
• 1 PSV, 1 SOV, 3 AHTS ICE, 1 Fishing vessel, 1 Live fish carrier

DetailedFigures (cont.)

Design & Solutions

• Lower capacity utilization reduces margins in the first quarter of 2015 compared with first quarter of 2014
• Order backlog of MNOK 140
• External: MNOK 115
• Internal: MNOK 25

DetailedFigures (cont.)

Power & Systems

Restructuring

• Havyard Production & Service incorporated in Ship Technology
• Norwegian Electric Systems incorporated in Power & Systems from February 2015
• Lower capacity utilization and work on projects where loss provisions were set in earlier periods gives reduced margins in first quarter of 2015
• Order backlog of NOK 215 million
• External: NOK 85 million
• Internal: NOK 130 million

DetailedFigures (cont.)

MMC

• Lower capacity utilization and continued work on projects where loss provisions were made in 2014 reduces margins in the first quarter of 2015 compared with the first quarter of 2014
• Order backlog of NOK 130 million
• External: NOK 95 million
• Internal: NOK 35 million

BALANCE SHEET

	20 15 Q 1	20 14
	(u ud d) ite na
AS SE TS
No nt ts n c ur re as se
od ll Go wi	60 09 4	23 91 8
nd Lic R& D te nt en se s, pa s a	65 95 0	59 91 2
lan Pro nd uip rty t a nt pe , p eq me	26 2 1 74	26 3 5 49
Inv t i cia tm te es en n a sso s	76 95 0	88 19 0
Lo cia to te an as so s	15 19 4	14 81 7
Inv t i n f ina ial tm ts es en nc as se	17 2 0 71	17 2 0 71
Ot he iva ble nt r n on cu rre re ce	69 20 0	68 82 7
To l n ta nt ts on cu rre as se	72 1 6 33	69 1 2 84
Cu As nt ts rre se
Inv to en ry	44 98 5	40 67 3
Ac iva ble ts co un re ce s	93 92 8	79 12 3
Ot he eiv ab les r r ec	97 62 7	88 27 4
Co cti W IP in of tru nt ns on ex ce ss pr ep ay me s	35 6 4 55	64 2 4 64
Ca sh d c h e iva len ts an as qu	22 0 9 16	19 4 5 62
l C To ta nt As ts ur re se	81 3 9 11	1 0 09 6 45
TO SS S TA L A ET	1 5 35 54 4	1 7 36 38 0
OK 10 00
(N )
EQ S UI TY A ND LI AB ILI TIE	20 15 Q 1 (u ud d) ite	20 14
uit Eq	na
y Sh al pit are ca	1 1	1 1 26
Sh ium are em re se rve	26 5 4 62	5 4 62
pr sh Tr ea su are s		-7
ry d e Re ine ing ta arn s	-7 59 9 9 74	58 3 7 50
llin No g i nt nt t n- co ro er es	23 15 4	6 0 09
l e To ity ta qu	62 9 7	59 6 3 40
	09
Lo lia bil iti te ng rm es
De fe d t lia bil ity rre ax	58 95 5	48 44 7
Bo nd lo an	14 7 2 19	14 6 9 41
nd bo wi Lo nt an s a rro ng s, no n- cu rre	75 39 4	61 57 4
Ot he r lo lia bil iti -te ng rm es	1 9 26	2 1 91
l lo lia bil iti To ta te ng rm es	28 3 4 94	25 9 1 53
Cu lia bil iti nt rre es
Ac ble ts co un pa ya s	10 3 8 45	14 9 2 67
Ta ab le xe s p ay	3 4 28	3 9 25
vis ion fo r d ivi de nd Pro	-	-
bli c d ies ble Pu ut pa ya s	10 05 6	19 31 0
lo Co tru cti ns on an s	13 4 4 93	51 5 5 40
nd bo wi Lo nt an s a rro ng s, cu rre	27 60 5	38 23 0
of Pre in cti W IP ts tru pa ym en ex ce ss co ns on	14 4 6 20	53 16 4
he lia bil Ot iti nt r c ur re es	19 8 2 94	10 1 4 51
l c lia bil To iti ta nt ur re es	62 2 3 41	88 0 8 87
l li ab ilit To ies ta	90 5 8 35	1 1 40 04 0
TO TA L E QU ITY A ND LI AB ILI TIE S	1 5 35 54 4	1 7 36 38 0

• Purchase of Norwegian Electric Systems
• Increases goodwill MNOK 36
• Reduces investment in associates MNOK 12
• Increases non-controlling interest MNOK 17
• Increases retained earnings MNOK 22
• Increases working capital MNOK 36
• Lower activity at the balance date
• Net interest bearing debt: MNOK 117
• Working capital: MNOK 192
• Equity ratio: 41 %

CASH FLOW

( ) NO K 1 000	201 5 Q 1	201 4 Q 1	201 4
	(Un aud ited )
CA SH FL OW FR OM OP ERA TIO NS
fit/ ( s) bef Pro los ta ore x	27 806	28 077	39 100
Tax id es pa	-1 807	-22 82 4	-57 90 3
cia tio De pre n	6 2 77	5 1 12	21 064
fit of rch in oci Pro ate pu ase ass s	-22 60 3	-	-
Im irm t pa en	-	-	-
Sh of (p rof it) / los s fr iat are om as soc es	-94 9	-1 908	-6 0 36
Ch in i nto ang es nve ry	973	5 4 65	-1 801
t ch in c ion lo Ne str uct ang es on ans	-38 1 0 47	182 21 3	380 2 75
s/c Ch ble in a iva ion W IP ts r str uct ang es cco un ece on	299 83 8	-20 6 4 37	-37 7 8 93
Ch ble in a ts p ang es cco un aya	-52 50 6	-55 44 9	20 989
Ch fro in nts ust ang es pre pay me m c om ers	72 369	-1 981	-17 9 6 38
Ch the ab les / liab ilit in o eiv ies nt ang es r cu rre rec	47 375	23 352	15 233
/ (to ) o Ne sh flo w f ing tiv itie t ca rat rom pe ac s	-4 274	-44 38 0	-14 6 1 33
CA SH FL OW FR OM IN VE STM EN TS
lan nd Inv in uip est nts rty t a nt me pro pe , p eq me	-2 304	-4 898	-42 58 5
ibl Inv in i est nt nta ts me ng e a sse	-1 702	-1 767	-20 29 0
in/ sal of fin ial Inv dis est nt ets me po anc ass	-	-	136 82 4
rch of bsi dia rie Pu ase su s	-18 27 0	-
st i Int ere nco me	1 7 27	2 6 56	12 626
ide nd d Div cei s re ve			1 9 90
Ch lon vab les in cei g t ang es erm re	-75 0	-1 642	-4 968
sh flo sed Ne in inv ing tiv itie t ca est w u ac s	-21 29 9	-5 651	83 597
CA SH FL OW FR OM FI NA NC ING AC TIV ITIE S
w l de bt Ne g t on erm	15 994	-	146 40 0
lon de bt Re nt g t pay me erm	-2 4 39	-5 755	-43 02 0
rch of sh rd Pu ino rity s in Ha MM C ase m are vya	-	-	-25 19 1
Int st c ost ere s	-4 132	-1 869	-13 47 5
/sa rch le o f tr sh Pu ase eas ury are s			5 9 99
Div ide nd s	-10 07 3	-20 83 3	-94 99 6
/ sh flo w f (us ed in ) fin ing tiv itie Ne t ca rom anc ac s	-65 0	-28 45 7	-24 28 3
t ch ash d c ash ale Ne e i uiv nts ang n c an eq	-26 22 3	-78 48 8	-86 81 9
Cas h a nd h e iva len of th eri od ts a t st art cas qu e p	194 56 2	281 38 1	281 38 1
h a nd h e iva len ts f rch of bsi dia rie Cas cas qu rom pu ase su s	52 783
h a nd h e len nd of the d Cas iva rio ts a t e cas qu pe	1 221 22	202 89 3	194 56 2
d b k d t th nd of the d Re icte osi rio str ts a an ep e e pe	86 89 1	147 23 5	114 37 7
aila ble sh d c ash uiv ale the d o f th eri od Av nts at ca an eq en e p	1 134 23	658 55	80 185

Low EBIT gives low cash flow from operations in first quarter of 2015

Cost price for 12.6 % of share in Norwegian Electric Systems MNOK 18,3

Received MNOK 16 in long-term loan in connection with the completion of the administration building at the end of 2014

Paid dividends on MNOK 10 in 2015

Acquisition of subsidiary provides the group with MNOK 53 in 2015

HES/ QA

• • Sick leave gradually reduced during 2013 and stable around 3.5 % in 2014
• • An extensive plan is implemented to reduce injuries and absence, and it includes subcontractors
• • First quarter of 2015 the sick leave is 4.4 %
• •The increase is considered to be of temporary character

HES/ QA

H-value

Number of work relatedinjuries with absence pr. million working hours

HES/ QA

• Quality
• 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 costumers