Nekkar — Investor Presentation 2015

Aug 19, 2015

Q2 Results 2015 Oslo, 19 August 2015 Björn Andersson, CEO Henrik Solberg-Johansen, CFO

Agenda

• 2 nd quarter headlines

• 2 nd quarter consolidated accounts
• Segment info
• Shareholder structure
• Strategy and market outlook
• Summary

2 nd quarter 2015 – key figures

• Turnover 2Q MNOK 816 up from MNOK 617 in 2Q 2014
• EBITDA 2Q MNOK 138 (included one-off effect of MNOK 104), up from MNOK -10 in 2Q 2014. Improvement in all segments.
• Order intake 2Q MNOK 868 up from 598 in 2Q 2014
• Order backlog 2Q MNOK 4 004 up from 3 377 in 2Q 2014

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Turnover and EBITDA Development

Note: - EBITDA Q4 2014 of MNOK 36 is excl. positive pension effect of MNOK 101, of total EBITDA MNOK 137 - EBITDA Q2 2015 of MNOK 34 is excl. one-off THH adjustment effects of MNOK 104, of total EBITDA MNOK 138 ⁴

Order intake and order backlog

Order intake per quarter 2013-2015 including 100% of JV's

Book to bill = Order intake / Revenues

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Agenda

• 2 nd quarter headlines
• 2 nd quarter consolidated accounts
• Segment info
• Shareholder structure
• Strategy and market outlook
• Summary

Profit and loss statement

	2nd quarter		2nd quarter - YTD		Full year
MNOK	2015	2014	2015	2014	2014
Turnover	816	617	1 404	1 170	2 454
EBITDA	138	-10	138	-39	105
Operating profit	117	-20	109	-58	6 1
Net financial items	2	-10	-14	-18	-38
Profit/loss before tax	118	-30	9 5	-77	2 3
Net result continued business	109	-35	8 1	-82	-22
Net result incl discontinued business	109	-35	8 1	-82	1 8
of which attributable to equity holders	101	-	7 3	-	-
of which attributable to non-controlling interest	8	-	8	-	-

2Q/2015 included one time effect of MNOK 104

Balance Sheet

MNOK	30.06.2015	30.06.2014	31.12.2014
Non-current assets	1 136	927	927
Current assets	2 014	1 179	1 484
TOTAL ASSETS	3 150	2 107	2 411
Equity	883	473	610
Gross interest bearing liabilities	509	380	385
Other liabilities and provisions	1 758	1 254	1 416
TOTAL EQUITY AND LIABILITIES	3 150	2 107	2 411

Net interest bearing debt / Covenants:

• Net interest bearing debt decreased to MNOK 181.
• Total cash reserve is MNOK 388 as per 30.6.2015, of which MNOK 279 is restricted in 50/50 companies
• Group equity ratio including subordinated convertible debt is 31.0 % at the end of 2Q 2015
• Covenants at 2Q 2015 are met 8

Equity, of which:

	30.06.2015	30.06.2014	31.12.2014
Equity holders	687	473	610
Non-controlling
interest	196	0	0
Total	883	473	610

Cash flow / Working capital / Interest bearing debt

Cash flow	YTD	YTD	Year
MNOK	2015	2014	2014
Net cash flow from operations	18	-170	-150
Net cash flow from investments	-136	-12	27
Net cash flow from financial activities	313	127	101
Net change in cash	195	-55	-21
Cash and bank deposits at the start of the period	131	156	156
Effect of exchange rate changes in bank/cash	6	-12	-4
Cash and bank deposits at the end of the period	332	88	131

Cash flow from operations, investment and financial affected by THH consolidation. Cash flow from operation ex. consolidation effects is –154.

Net interest bearing debt

MNOK	Q2/15	Q1/15	Q4/14	Q3/14	Q2/14	Q1/14
Short term interest b. debt	417	314	297	273	295	187
Long term int.bearing debt	0	0	1	1	1	103
Convertible bond (*)	95	95	95	95	95	95
Total	512	409	393	369	391	385
Cash	331	52	131	88	88	117
NIBD (**)	181	357	262	281	303	268

(*) Convertible loan included at nominal value

(**) Negative indicates net asset position

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TTS Group - Turnover and EBITDA 2Q 2015

RoRo / Cruise / Navy

Cargo handling solutions for car carriers, cruise ships and specialized vessels as well as port handling equipment.

	Q2		Q2 YTD		Full Year
MNOK	2015	2014	2015	2014	2014
Turnover	160	154	319	288	599
EBITDA	16	19	31	30	77
Order backlog	785	867	785	867	854

• Profit margin improving
• Market for RoRo, particularly PCTC, is positive
• Strong order intake in the quarter; MNOK 207
• High activity in all segments
• Cruise and navy prospects develop stronger than expected

Container / Bulk / Tank

Cargo handling solutions for container ships, tankers and bulk carriers; including winches, cranes and hatch covers.

		Q2		Q2 YTD
MNOK	2015	2014	2015	2014	2014
Turnover	318	112	385	225	422
EBITDA	111	1	113	4	-5
Order backlog *)	2 075	1 396	2 075	1 396	1 687

*) Includes 50 % of order backlog in JV company

• Periodic EBITDA reflects one-off change related to change of control in THH, MNOK 104
• Market development in China in line with current upward cycle
• Our China platform supports expansion in the Korean market
• Korean market refocus from offshore to marine
• Mega container positive
• LNG and VLCC stable with expected reduction,
• Early signs of improvement in bulk

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Multipurpose / General Cargo

Heavy lift cranes, mooring winches, hatch covers and side loading systems for multipurpose vessels and cargo ships.

		Q2		Q2 YTD
MNOK	2015	2014	2015	2014	2014
Turnover	38	35	132	63	138
EBITDA	1	-12	-3	-25	-35
Order backlog	637	379	637	379	562

• Improved turnover and EBITDA compared to Q2/14
• Continued positive activity in Chinese shipyards several projects are tendering heavy lift cranes
• TTS SCM, a TTS controlled, 50/50 owned company in China, has started it's operation in Q2.

Shipyard Solutions

Production lines and systems for cargo handling to shipyards, focusing on transfer systems for docking and launching.

	Q2			Q2 YTD	Full Year
MNOK	2015	2014	2015	2014	2014
Turnover	43	43	93	80	192
EBITDA	0	1	4	-2	32
Order backlog	251	245	251	245	271

• Small delays of project deliveries but expected to pick up in Q3-Q4.
• TTS with a strong position in the ship lift market.
• Reappraisal of the market situation for TTS Liftec
• Shiplift market is reinforced by the TTS acquisition of Syncrolift

Offshore

Cranes for offshore vessels and offshore installations.

		Q2	Q2 YTD		Full Year
MNOK	2015	2014	2015	2014	2014
Turnover	92	130	171	251	572
EBITDA	-8	-30	-32	-56	-50
Order backlog	273	490	273	490	254

• Segment strongly affected by downturn in offshore market
• Cost reduction efforts continues. Due to long lead time for projects → effect expected gradually during 2015
• Additional cost reduction efforts have been initiated in Q2
• Decrease in order backlog. Low order intake, but opportunities exist in niche segments in South East Asia and China

Services

Complete services within maintenance, including spare parts, interval agreements and life time service.

	Q2			Q2 YTD
MNOK	2015	2014	2015	2014	2014
Turnover	161	142	298	263	530
EBITDA	20	13	33	19	96

• Solid activity and margin in the quarter
• Market demand in the segment provides basis for increased turnover, and improvement to the overall profit margin
• Service market remains influenced by low ship charter rates in some vessel-segments
• Scrapping is on a high level

Shareholder structure at Aug 18th 2015:

Rasmussengruppen AS	13.29%
Skeie Technology AS	10.31%
Lesk AS	6.13%
Stisk AS	6.13%
Skeie Capital Investment AS	4.85%
Barrus Capital AS	4.00%
Skandinaviska Enskilda	3.67%
Skagen Vekst	3.53%
Tamafe Holding AS	2.49%
Odim Maritime	2.49%
10 largest shareholders	56.90%
Other (1385 shareholders)	43.10%
Total	100,00%

Skeie Technology AS, Skeie Capital Investment AS and members of the Skeie family hold in total 32,0 %.

Agenda

• 2 nd quarter headlines
• 2 nd quarter consolidated accounts
• Segment info
• Shareholder structure
• Strategy and market outlook
• Summary

Overall vision for TTS Group and Our Long term goal with 6 BNOK in 2020

Vision	The global supplier of handling systems to the maritime and offshore industry with the strongest focus on end user satisfaction
Values that drive us	System & Reliability & Health Technology Customer Safety & competence satisfaction The Environment
Strategy	A preferred global supplier  Be on the makers list and are positioned  Product technology among  Customer oriented solution recycling. Wider product  Profitability on par with	means: get market share > 30 % in the top 3 in each segment where that support the life cycle of offerings to support package industry average	each market segment where we we compete the vessel from new design to sales and reduce sales costs

TTS currently addressing NOK 28 bn of the global market

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TTS is already on the vessel – ambition to increase value per contract

Contracting, fleet growth and new build prices

Contracting by region

Contracting by ship type

Operational Excellence & Synergies

In 2014 MNOK 130 were released in operation & sourcing costs In 2015 we will eliminate another MNOK 100

Agenda

• 2 nd quarter headlines
• 2 nd quarter consolidated accounts
• Segment info
• Shareholder structure
• Strategy and market outlook
• Summary

Summary

• Positive quarter results
• Strong order intake in the quarter
• Improvement processes on track
• Positive view on significant market segments
• Offshore market under heavy pressure
• In order to position the TTS Group for this growth, the Board of Directors of TTS Group continues the strategic process initiated in February 2015 to explore opportunities for both acquisitions and partnerships.

For further information, please visit www.ttsgroup.com

TTS GROUP ASA