Goodtech — Investor Presentation 2014

May 14, 2014

Presentation first quarter 2014

Goodtech ASA, 14 May 2014

Agenda

Highlights Financial reviewOrder bookGoodtech – in brief Outlook

Highlights, first quarter 2014

• Turnover of MNOK 558,4 in Q1 2014 compared with MNOK 575,6 as in Q1 2013. Acceptable due to lower activity in our project portfolio in Q1.
• EBITDA of MNOK 8,2 in Q1 2014, compared with MNOK 22 in Q1 2013.
• Weaker EBITDA than planned due to postponed and lower progress in some larger project and temporarily lower activities in our markets.
• Positive progress in Solutions business unit.
• Order backlog of MNOK 1.243 at the end of Q1, compared with MNOK 1.306 at the end of 2013.

Positive outlook in our markets

Highlights, first quarter 2014

• All business units focus on optimizing their operations
• •Project operations
• •Strategic Market and Sale
• •Cost control
• •Human resources, continue training activities
• Continue with action plan in Solutions to improve earnings. EBITDA loss in previous quarters turned to profit in Q1.
• Environment turnover increased with 24,3% in Q1 compared to Q1 2013.
• Infra and Products – weak performance in the quarter
• Installation and testing of Energy Recovery System ongoing.

Highlights, first quarter 2014, Market

Order backlog continue on a high level, MNOK 1.243.

Some of the contracts in Q1:

• • MNOK 40 Contract for delivery biogas treatment plant to Tønsberg - Vestfold Biogass (not in orderstock)
• • MNOK 35 Contract for delivery of control systems and panels to Hydro Aluminum, Karmøy Plant.
• • MSEK 25,8 LKAB, Power and installation, Svappavaara
• • MSEK 12NCC, Power and installation contract
• •MSEK 11,6 Jämtnät AB, power contract
• •MSEK 7,8 Scania, production line solution

Highlights, first quarter 2014, Market

• Significant contracts won after Q1
• • MSEK 25,6 contract for power transformation and distribution station for Älvsjö plant for Fortum Distribution in Stockholm
• • Renewal of frame agreement for Integrated Operations(IO) with Statoil
• • Delivery of Manufacturing Execution System (MES) to Hydal, Raufoss
• High level activities in the market. Promising outlook.

Financial Review

Main figures

( N O K 1. 0 0 0 )	Q 1 1 4	Q 1 1 3	2 0 1 3
Re ve nu es	8 4 0 1 5 5	2 5 7 5 5 7	2 4 3 3 6 7 7
Pro du t e c xp en se s	2 4 5 9 1 4	2 8 0 3 9 0	1 1 9 7 5 3 5
Sa lar ex p en se s y	2 3 5 0 7 4	2 1 5 3 0 8	9 0 5 0 1 1
O he ing t t r o p era ex p en se s	6 9 1 6 6	8 0 5 7 7	2 4 0 1 2 5
E B I T D A	8 2 4 7	2 2 0 0 5	8 6 2 1 8
E B I T D A %	1, % 5	3, 8 %	3, % 5
De ia ion t p re c	6 4 8 8	5 7 5 6	2 4 0 2 1
No ing i te n r ec ur r m s	0	0	3 0 8 7
E B I T	1 7 5 9	1 6 2 4 9	5 9 1 1 0
Ne f ina ia l i t te nc m s	-1 8 9 7	8 9 3 -	8 4 0 6 -
S ha f Pr f i fro As ia d c t te re o o m so c om p.	0	0	3 9 1 7
Pr f i be fo t tax o re es	1 3 8 -	1 5 3 5 6	5 4 6 2 1
Ta xe s	6 1 7 -	3 4 7 8	1 3 1 3 2
Ne l fro inu ing ion t r t t t es m co n o p er a s u	4 8 0	1 1 8 7 9	4 1 4 8 9
Ne l t r t es u	4 8 0	1 1 8 7 9	4 1 4 8 9
A i bu b le t tr ta to:
Ow f he t t ne rs o p are n	3 1 1	1 1 6 2 3	4 1 1 7 1
No l l ing in tro ter ts n-c on es	1 6 9	2 5 5	3 1 8
Su m	4 8 0	1 1 8 7 9	4 1 4 8 9
fro Ea ing ha inu ing ion t t rn s p er s re m co n op era s	0, 0 1	0, 3 7	1, 2 8
De lu d e ing ha te ar n s p er s re	0, 0 1	0, 3 7	1, 2 8

Quarterly revenues and earnings - historical

Financial highlights – Balance sheet

N O K m i l l ion	3 1. 0 3. 1 4	3 1. 0 3. 1 3	3 1. 1 2. 1 3
F ixe d i b le tan ts g as se	3 7 3,	1 4 7,	6 7, 5
In i b le tan ts g as se	9 6 9 6,	6 6 6 4,	6 9 6, 8
To l f ixe d a ta ts ss e	3 7 7 0,	7 7 1 1,	7 6 4, 2
Ca h s	3 1 7,	5 2 0,	3 3, 4
O he t t a ts r c ur ren ss e	1 6 9 9,	6 6 3 0,	3 9, 2 7
To l c ta t a ts ur re n ss e	7 1 6, 4	6 5 1, 1	7 7 2, 6
To l a ta ts ss e	1 4 8 6, 7	1 3 6 2, 8	5 1 3 6, 8
	-	-	-
To l e i ta ty q u	9 7 1 3,	2 7 1 6,	7 2 5, 2
No bo ing t n-c ur ren rro s w	7 1 0 9,	4 5 0,	1 1 8, 3
O he l ia b i l i ies t t t r n on -c ur ren	9 1 2,	9 1 4,	1 1, 5
To l n l ia b i l i ies ta t t on -c ur re n	6 1 2 2,	3 6 5,	1 2 9, 9
Cu bo ing t rre n rro w s	5 8 8,	5 2 6,	7 7, 2
O he l ia b i l i ies t t t r c ur ren	5 6 1, 7	5 5 4, 8	6 0 4, 6
To l c l ia b i l i ta t te ur re n s	2 6 5 0,	3 5 8 1,	6 8 1, 8
To ta l e i ty d l ia b i l i t ies q u an	7 1 4 8 6,	8 1 3 6 2,	1 5 3 6, 8
Ne h a d bo ing t c as n rro w s	- 9 1 8 0, ,	- 4 5 6, ,	- 1 6 2, 2 ,
( ) Eq i Ra io % ty t u	4 8, 0 %	5 2, 6 %	4 7, 2 %
Ne Ge ing ( % ) t ar	2 3 % 5,	9 % 7,	2 2, 4 %
L iq i d i Ra io ty t u	1, 1	1, 1	1, 1

Definitions:

Net Gearing (%): Net interest Bearing Debt/Total equity Liquidity Ratio : Current Assets/Current Liabilities

Financial highlights – Cash flow

N O K 1. 0 0 0	Q 1 1 4	Q 1 1 3	2 0 1 3
Ca h f low fro ion t s m op er a s	2 7 7 1 -	5 0 2 6	8 7 3 4 -
Ca f fro **) h low inv tm ts s m es en	1 9 8 7 7 -	1 7 9 9	3 9 1 8 7 -
Ca f fro f h low ina ia ls s m nc	7 0 0 1 -	7 1 1 0 8 -	8 6 7 8 8 -
Ne ha in h fr io d t c ng e s c a s o m p e r	-2 9 6 5 0	6 4 2 8 4 -	1 3 4 7 0 9 -
Ca Ne h fu ds be inn ing f p io d t t s n a g o er	4 5 8 8 6 -	8 2 8 5 7	8 2 8 5 7
E f fe f e ha f luc ion h he l d ts te tu t c o xc ng e ra a o n ca s	2 3 2 1	1 8 8 7	9 6 5 5
C *) Ne h fu d d f p io d t t e a s n s a n o e r	7 3 2 1 5 -	2 0 4 6 0	4 5 8 8 6 -
*) Co is ing f t ns o
Ca h a d h iva len ba lan he ts t s n ca s eq ce s e u -	1 7 2 7 6	2 0 4 6 0	3 3 3 6 5
Ov dr f fa i l i t ty er a c	9 0 4 9 1 -	0	7 9 2 5 1 -
Ne C h fu d d f p io d t t e a s n s a n o e r	5 7 3 2 1 -	2 0 4 6 1	5 4 8 8 6 -

Undraw n credit facilities amounts to MNOK 106,0 at the end of Q1

**) Includes investment in Energy Recovery Pilot

Cash flow from operations and EBITDA

Development in Cash flow from operations and EBITDA on 12 months rolling basis

Employees per business area

Total no. of employees by 31.03.2014: 1.467

Order backlog

Business areas – figures and facts

Business unit: Projects & Services (P&S)

N O K 1 .00 0	Q 1 1 4	Q 1 1 3	20 13
Re ve nu e	37 7 1 59	38 0 2 55	1 5 76 98 2
EB ITD A	13 55 8	20 77 0	79 80 0
EB ITD A in % ma rg	3, 6 %	5, 5 %	5, 1 %
Or de r b klo ac g	81 4 8 04	60 6 9 98	81 3 4 76
No f e loy . o mp ee s	1 1 49	1 1 28	1 1 62

Highlights

• • P&S business unit has performed well in the quarter. Some projects postponed in start-up and finalization phase
• •Turnover on same level as Q1 2013.
• • EBITDA lower than Q1 2013. Focus on activities for improving profitability going forward
• • Order backlog stable compared to end of 2013 and increased compared to Q1 2013.
• • Won several contracts confirming our position as one of the leading suppliers, LKAB, Statoil, Hydro, Fortum.
• •Strategic focusing in our business

MNOK

MNOK

Business unit: Infra

N O K 1 .00 0	Q 1 1 4	Q 1 1 3	20 13
Re ve nu e	44 54 2	59 41 4	29 4 4 12
EB ITD A	-1 44 0	81 3	10 62 1
EB ITD A in % ma rg	-3, 2 %	1, 4 %	3, 6 %
Or de r b klo ac g	25 9 2 54	40 4 8 58	28 5 7 36
No f e loy . o mp ee s	64	62	66

Highlights

• •Turnover 25% lower than Q1 2013.
• • Low activity in the larger projects in Q1 gives low utilization of workforce and low progress in the projects. Activity will vary from quarter to quarter.
• •Negative EBITDA as consequence of turnover reduction.
• •Order backlog is still on a high level.
• • Market look promising in the longer perspective, both in Sweden and Norway.
• •Won first smaller contract in Norway after Q1

Business unit: Solutions

Q 1 1 4	Q 1 1 3	20 13
52	58	19
18	28	9 3
3	0	01
69	-1 97 4	-10 28 2
0,	-3,	-5,
1 %	4 %	2 %
65	63	73
25	30	18
8	4	4
13	14	13
0	1	3

Highlights

• •Turnover in Q1 on same level as in Q1 2013
• • Improvement plan in Solutions gives positive effects on EBITDA. Improvement work will continue
• •Order backlog on acceptable level.
• • Large prospect portfolio. Focus on strategic sale and market.

Business unit: Environment

N O K 1 .00 0	Q 1 1 4	Q 1 1 3	20 13
Re ve nu e	73 80 3	59 39 3	29 6 5 66
EB ITD A	1 3 32	1 5 56	8 0 16
EB ITD A in % ma rg	1, 8 %	2, 6 %	2, 7 %
Or de r b klo ac g	98 85 9	16 5 3 84	12 9 8 35
No f e loy . o mp ee s	79	74	78

Highlights

19

• •Significant turnover increase in Q1 2014 compared to Q1 2013.
• •High level of project activity in Q1
• • EBITDA in Q1 on typical Q1 level. However loss in one project had negative effect on margin
• • Order backlog is varying. Backlog is on acceptable level taken into account contracts included in order backlog after Q1.
• • Won MNOK 40 Contract for delivery biogas treatment plant to Tønsberg - Vestfold Biogass
• • Activity in the Norwegian SBR / Biovac® market has increased in 2014, both in the Norwegian and especially in the Swedish market.
• •Market survey confirms positive market expectations for 2014

Business unit: Products

O N K 1 .00 0	Q 1 1 4	Q 1 1 3	20 13
Re ve nu e	19 91 2	27 00 9	92 71 6
EB ITD A	-79 1	2 9 78	7 0 92
EB ITD A in % ma rg	-4, 0 %	11 0 % ,	6 % 7,
Or de r b klo ac g	4 3 27	11 16 7	4 2 35
f e No loy . o mp ee s	26	23	24

Highlights

• • Weak turnover in Q1 compared with Q1 2013 mainly due to a temporal weak market for Products in beginning of 2014.
• • New sales personnel in end 2013 and in beginning of 2014. Increased sales activities in the quarter.
• • EBITDA is weak due to low turnover and increased investment in salesforce.
• •Increased number of prospects and leads in the period.
• • P&S contract for Norsk Hydro will also give large sales volume for Products.
• •Market outlook is positive

Goodtech – in brief

A considerable technology group - background

Turnover increased from MNOK 130 in 2005 to MNOK 2.434 in 2013

Goodtech in brief

• Approx 1.500 employees, with a revenue of NOK 2,4 billion
• Strong local presence with almost 40 offices in Sweden, Norway and Åland
• Headoffice in Oslo and listedon Oslo Stock Exchange

Sweden

• Approx 1.150 employees
• 27 offices, from Kiruna in the north to Malmö in south

Norway

• Approx 290 employees
• 10 offices, with headoffice in Oslo

Åland

23

• Approx 40 employees
• Office in Mariehamn

Market drivers

Organisation

• Goodtech is organised into five business areas
• •Projects & Services
• •Infra
• •Solutions
• •Environment
• •Products

Solid service and product portfolio

Automation

technology

Industry Power Installation

technology

Environment technology

• •Innovative technologies and solutions
• •Turn-key projects
• •Broad specter of services and competence

Market segments

Highlights – Technology development

• Technology agreement with Dubal for Energy Recovery signed. Investment in pilot.
• • Installation and start up of test in progress.
• • Technology has high potential when successfully tested
• Dedicated technology development activities in Solutions
  • • Technology is platform for winning contracts
• Develop technology and standardized solutions to stimulate to repeat business in all business units

Commercial and financial risks for Goodtech

Commercial and market risk

• •Market for Industry projects and solutions – some risk
• •Market for Infrastructure projects and solutions – some risk

Financial risks

• •In general small currency exposure
• •In general small risk for contract cancellation
• •In general small risk for loss on receivables
• •In general some risk related to projects
• Turn-key projects and deliveries
• • Some risk related to project execution
  • •Various complexity, size and duration of projects
  • •Shortage of Project Managers
• • Reducing risk:
  • MQSP (Method, Quality, Safety and Procurement) department focus on training, improvement of methods and quality
  • Training Project managers and employments ongoing
• Technology and product development
• •Some risk related to technical issues and market positioning

Outlook 2014

Outlook - Market

• Expect continuous upgrade and large investments within infrastructure, energy and oil & gas
• In general, promising markets for Goodtechs services, solutions and products basis for organic growth
• The uncertainty in some markets due to uncertainty in the global economy seems to decrease. However still unpredictable

Brief market analysis:

• •Power and Energy market
• •Infrastructure, railway/subway
• •Industry, mines
• •Industry, manufacturing
• •Industry, paper
• •Oil & Gas Industry
• •Environment
• •Public buildings

Summary / Outlook 2014

Growth strategy

• • Organic growth in business areas where Goodtech has strong position and positive market expectations
• • Expect strong market drivers within some market segments which is basis for three separate strategic initiatives
• •Energy / Power
• •Oil & Gas
• •Aquaculture
• •Improve and maintain strong margins

Summary / Outlook 2014

• In 2014 Goodtech shall buildstronger positions
• •Continue to build the Goodtech brand
• • Use customer focus and well establishedmarket position to increase business
• • Use of own product technology and technical competence
• • Open for non-organic growth within certain areas, consolidation possibilities in the market

Maintain active dividend policy

The Goodtech way

A better world through the integration of sustainable solutions