Nekkar — Investor Presentation 2015

Feb 18, 2016

Q4 Results 2015 18 February 2016 Björn Andersson, CEO Henrik Solberg-Johansen, CFO

Agenda

• 4 th quarter headlines and market outlook
• 4 th quarter consolidated accounts
• Segment info
• Shareholder structure
• Summary

4 th quarter 2015 – headlines

• Strong 4Q order intake (MNOK 937) and order backlog of NOK 4 billion
• Turnover Q4 MNOK 842 up from MNOK 734 in Q4 last year
• EBITDA Q4 MNOK 50 before negative effect from Offshore MNOK -22
• Marine EBITDA 2015 MNOK 153
• Consolidated cash flow from operation positive MNOK 30 in Q4
• Offshore cost base down from restructuring and downsizing 2014-2015
• Offshore personnel (FTE) reduced with 70%. Future risk significantly reduced

Order intake and order backlog

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

Book to bill = Order intake / Revenues

* From 2Q2015 THH is consolidated into Group. Order intake 2013-1Q2014: THH + TBH; from 2Q2014: TBH only

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

• EBITDA Q3 2015 of MNOK 8 is excl. one off Offshore inventory write down of MNOK 20, of total EBITDA MNOK-12

• EBITDA Q4 2015 of MNOK 50 is excl. negative effect from Offshore restructuring cost of MNOK 18, of total EBITDA -22 5

Marine segments performing well

* Adjusted for pension effect of NOK 101m (37m in Offshore) and STX settlement (NOK 23m in Offshore)

** Adjusted for one-off from consolidation of THH (NOK 104m)

*** Offshore adjusted for NOK 20m inventory write down

**** Offshore adjusted for NOK 18m China restructuring

Gross margin development per business unit

Offshore personnel reduced heavily

• TTS has had a strong focus on scaling the Offshore cost base to the current market
• Cost base has now come significantly down
• This can be illustrated by Offshore personnel reductions (reduced ~70% in Norway from Q3 2014 to current level)

Restructuring from product to ship-type focus

Current TTS product portfolio (Q42015 YTD turn over and EBITDA) Product expansion opportunities

Key advantages of the ship type focus

• Key account 20% of ship owners owns 80% of the global fleet
• One face to the market
• More value per sale, packaged deliveries
• Broader service offering per ship type -> Leading to TTS as total service provider

Product platform to support life time services -> TTS a total Service provider

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

2016 financial projection

Revenues for TTS Group excluding Offshore expected to grow to NOK 3,0-3,2 bn in 2016

EBITDA margin for TTS Group excluded Offshore expected to reach 4-6%, in line with 2015. 2016 earnings profile expected to be back-loaded

TTS expect a modest growth in revenues for the Group excluding Offshore into 2017 with ambition for margins to approach industry average levels

Offshore excluded as it is currently exposed to a weaker market sentiment, and has a different risk profile compared to the other parts of the Group

Key financials - TTS Group excluding Offshore

High visibility on 2016 revenue

Order backlog for delivery 2016 – TTS Group excl Offshore

• Bulk market depressed except for upside in mega-size tonnage
• Car carriers continues, but stronger focus on Ropax and liner RoRo
• Mega container saturating. Shift to feeder +4000 TEU
• High activity on cruise building in Europe and China
• High expectation on near shore work boat heavy lift
• Tank and Gas peak is over

Agenda

• 4 th quarter headlines and market outlook
• 4 th quarter consolidated accounts
• Segment info
• Shareholder structure
• Summary

Profit and loss statement

	4th quarter		Full year
MNOK	2015	2014	2015	2014	2013
Turnover	842	734	3 051	2 454	2 693
EBITDA *	2 9	142	155	105	-130
Operating profit	-55	128	3 2	6 1	-164
Net financial items	-39	-7	-47	1	-37
Profit/loss before tax	-94	121	-15	6 3	-201
Net result continued business	-96	8 9	-40	1 8	-227
Net result incl discontinued business	-96	8 9	-40	1 8	-204
of which attributable to equity holders	-93	8 9	-49	1 8
of which attributable to non-controlling interest	-3	-	9	-
herof MNOK 18 in 4th quarter. Q2/2015 included one time THH consolidation effect of MNOK 104. 2015 EBITDA reduced by MNOK 38 related to restructuring and impairment cost in Offshore Segment, w Q4/2014 included one time pension effect of MNOK 101

Balance Sheet

MNOK	31.12.2015	30.09.2015	30.06.2015	31.12.2014
Non-current assets	1 106	1 136	1 196	927
Current assets	1 920	2 014	1 999	1 484
TOTAL ASSETS	3 026	3 150	3 195	2 411
Equity	855	883	966	610
Gross interest bearing liabilities	523	509	479	385
Other liabilities and provisions	1 648	1 758	1 750	1 416
TOTAL EQUITY AND LIABILITIES	3 026	3 150	3 195	2 411

 Net interest bearing debt decreased to MNOK 108  Total consolidated cash MNOK 414 per 31.12.2015, of which MNOK 336 is in 50/50 owned companies  Unutilized credit facilities MNOK 82  Group equity ratio including subordinated convertible debt is 31.4 % at the end of Q4 2015  Covenants at Q4 2015 are met	Net interest bearing debt / Covenants:	Equity, of which:

	31.12.2015	31.12.2014
Equity holders	635	610
Non-controlling interest	220	0
Total	855	610

Cash flow / Working capital / Interest bearing debt

2015	2014
124	-150
-133	27
274	101
266	-21
131	156
17	-4
414	131

Net interest bearing debt

MNOK	Q4/15	Q3/15	Q2/15	Q1/15	Q4/14	Q3/14	Q2/14	Q1/14
Short term interest b. debt		427 384	417	314	297	273	295	187
Long term int.bearing debt	0	0	0	0	1	1	1	103
Convertible bond (*)	95	95	95	95	95	95	95	95
Total		522 479	512	409	393	369	391	385
Cash		414 349	331	52	131	88	88	117
NIBD (**)	108	130	181	357	262	281	303	268

* Convertible loan included at nominal value (**) Negative indicates net asset position

TTS Group - Turnover and EBITDA Q4 2015

RoRo / Cruise / Navy

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

	Q4		Full Year
MNOK	2015	2014	2015	2014
Turnover	176	157	641	599
EBITDA	12,8	21,4	62,3	77,3
Order backlog	941	854	941	854

• Strong position in a slightly softer PCTC-market, but with higher activity for Ropax and RoRo (Trailer)
• Increased activity within the cruise sector
• Solid order book based on proven solutions, and repeat orders from key customers within the RoRo market gives basis for expected high activity

Container / Bulk / Tank

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

	Q4		Full Year
MNOK	2015	2014	2015	2014
Turnover	298	105	973	422
EBITDA	24,2	-7,5	140,8	-4,8
Order backlog *)	2 090	1 687	2 090	1 687

(*) Order backlog includes 50% of backlog from JV companies in China

• In general long term positive trend on newbuilding
• Increased demand for capsize-plus bulk, but medium sized bulk remains challenging
• Saturation of mega container ship market replaced by container feeder vessels
• Good tanker new build activity
• South Korea regains market position in merchant shipbuilding at the cost of heavy price pressure

Offshore

Cranes for offshore vessels and offshore installations.

	Q4			Full Year
MNOK	2015	2014	2015	2014
Turnover	90	210	359	572
EBITDA	-21,8	32,5	-101,7	-50,0
Order backlog	219	254	219	254
*One time pension effect of MNOK 37 included in Q414 EBITDA. Full year effect 2014 w as MNOK 35.

• Cost base significantly reduced to meet extremely slow market
• Restructuring cost MNOK 18 included in 4Q2015 EBITDA
• Risk and exposure at a controllable level

Multipurpose / General Cargo

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

		Q4	Full Year
MNOK	2015	2014	2015	2014
Turnover	50	47	259	138
EBITDA	-6,2	-1,1	-13,0	-32,0
Order backlog	573	562	573	562

• 2015 turnover and EBITDA improved from 2014
• Solid order back log for 2016 activity
• Improving market in all heavy lift segments

Shipyard Solutions

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

	Q4		Full Year
MNOK	2015	2014	2015	2014
Turnover	79	53	216	192
EBITDA	12,5	27,1	17,5	32,5
Order backlog	204	271	204	271
*One time pension effect of MNOK 20 included in Q414 EBITDA. Full year effect 2014 w as MNOK 18.

• Stable activity and acceptable margins
• Promising market prospects for ship-lifts and other shipyard systems, where TTS has a strong market position
• Reappraisal of the market situation for TTS Liftec

Services

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

	Q4			Full Year
MNOK	2015	2014	2015	2014
Turnover	147	162	591	530
EBITDA	21,2	64,0	75,6	96,4
*One time pension effect of MNOK 40 included in Q414 EBITDA. Full year effect 2014 w as MNOK 38.

• 2015 turnover increased compared to 2014
• 2015 EBITDA margin significantly improved from underlying 2014 figures
• Current installed base of approximately 23 000 units of equipment on approximately 8000 vessels is a good basis for further services business development

Shareholder structure at Feb 16th 2016:

Skeie Technology AS	26,16 %
Rasmussengruppen AS	13,29 %
Skeie Capital Investment AS	4,58 %
Barrus Capital AS	4,00 %
Skagen Vekst	3,51 %
Pima AS	2,77 %
Cipi Lamp Ucits Swed	2,58 %
Holberg Norge Verdipapirfondet	2,38 %
Mertoun Capital AS	2,04 %
Holberg Norden Verdipapirfondet	1,96 %
10 largest shareholders	63,54 %
Other	36,46 %
Total	100,00 %

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

Agenda

• 4 th quarter headlines and market outlook
• 4 th quarter consolidated accounts
• Segment info
• Shareholder structure
• Summary

Summary

• Strong order book covering ~90% of 2016 new build activity prognosis
• Positive quarter EBITDA
• Operational improvement processes on track
• Positive view on significant market segments
• Offshore market expected to remain slow
• Process initiated in February 2015 to explore strategic opportunities is still ongoing