Vow ASA — Investor Presentation 2016

Aug 31, 2016

Second Quarter 2016 Presentation

Scanship Holding ASA

August 31, 2016

Henrik Badin – CEO Christian Fr. Thyholdt - CFO

This presentation (the "Presentation") has been produced by Scanship Holding ASA ("Scanship" or the "Company") exclusively for information purposes.

This Presentation includes forward-looking statements regarding Scanship, including projections and expectations, which involve risk and uncertainty. Such statements are included without any guarantee as to their future realization. Although Scanship currently believes that the expectations regarding the Company reflected in such forward-looking statements are based on reasonable assumptions, no assurance can be given that such projections will be fulfilled. Any such forward-looking statement must be considered a long with the knowledge that actual events or results may vary materially from such predictions due to, among other things, political, economic, financial or legal changes in the markets in which Scanship does business, and competitive developments or risks inherent to the Company's business plans. Many of these factors are beyond Scanship's ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Accordingly, the Company does not accept any responsibility for the future accuracy of the forward-looking statements expressed in this Presentation or the actual occurrence of the forecasted developments. The Company does not intend, and does not assume any obligation, to update any such forward-looking statements as of any date subsequent to the date hereof.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including, without limitation, projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, the Company does not accept any liability whatsoever arising directly or indirectly from the use of this Presentation.

By receiving this Presentation, the recipient acknowledges that he will be solely responsible for its own assessment of the market and the market position of the Company and that he will conduct his own analysis and be solely responsible for forming his own view of the potential future performance of the businesses of the Company. This Presentation must be read in conjunction with the recent financial information, as well as other publicly disclosed information.

Nothing in this Presentation, nor any other information provided to the recipient by the Company or any of its advisers constitutes, or may be relied upon as constituting, investment advice or any financial, tax or legal advice by such persons or anybody else.

About Scanship

• Green technology company designing and delivering systems for managing wastewater, solid waste, food waste and bio-residue on ships
• Headquartered in Norway with subsidiaries in USA, Italy and Canada for sales and service; and in Poland for production
• Market leader with type approved Advanced Wastewater Purification (AWP) system with nutrient removal approved under IMO MEPC 227(64) chapter 4.2. First supplier with MED-B, MED-D and MED-F certificates
• New technology under development to increase offering

marketing

Engineering &

In brief Company structure

Company offering

Business model scope of services

R&D Sales &

Financial highlights 2Q16

• Revenue for 2Q16 ended at NOK 45.0m
• Positive development in aftersales segment with 38% increase from 2Q15
• Lower project revenues:
• resources allocated for tendering and R&D activities
• delays in contract awards
• Revenue for YTD 2016 ended at NOK 84.8m, down 12% from 2015
• EBITDA in 2Q16 was NOK 0.3m, down from NOK 3.4m in 2Q15

Operational highlights 2Q16

• During 2Q16 Scanship delivered equipment to Meyer Werft for the second newbuild construction for Dream Cruises, a subsidiary of Genting Group
• Completed the retrofit installation aboard Oceania Sirena, a subsidiary of NCL Holding.
• Commissioning of the systems aboard Harmony of the Sea, Ovation of the Seas, Carnival Vista, Viking Sea and Mein Schiff 5, resulting in an all-time high activity at shipyards
• Awarded contracts for delivery of total clean ship systems for two cruise vessels at an Italian shipyard. The main delivery of equipment will take place in 2017 and in 2018

Completed the commissioning on Harmony of the Seas during 2Q16

Newbuild for Dream Cruises

Order backlog

• Contract backlog reduced due to few new contracts in the quarter
• In June 2016, Scanship was awarded two contracts with an Italian shipyard. Due to a clause in the contracts only one of the vessels are included in the 2Q16 Order Backlog.
• High newbuild tender activity in 2Q16, but delays in contract award.

Scanship ongoing newbuild contracts

Scanship newbuild contract overview

Year of Ship delivery
Yard	Owner	Class	Scope of Supply	2016	2017	2018	2019	2020
		RCCL Quantum Class	AWP Grey & Black MEPC 227(64) incl. Chapter 4.2	Ovation of the Seas Project 1105 Equipment Delivery: Q1-2015			Ovation II Project 1215 Equipment Delivery: Q3-2017	Ovation III Project 1216 Equipment Delivery: Q1-2019
		Norwegian Cruise Line Breakaway Plus	AWP Grey & Black MEPC 227(64) incl. Chapter 4.2		Norwegian Joy Project 1101 Equipment Delivery: Q3-2015	Breakaway Plus (707) Project 1147 Equipment Delivery: Q3-2016	708 Project 1148 Equipment Delivery: Q1-2018
		Dream Cruises	AWP Grey & Black MEPC 227(64) incl. Chapter 4.2	Genting Dream Project 1122 Equipment Delivery: Q2-2015	World Dream Project 1125 Equipment Delivery: Q2-2015
		TUI - RCCL Mein Schiff	AWP Grey & Black MEPC 227(64) - prepared for chapter 4.2	Mein Schiff 5 Project 1138 Equipment Delivery: Q1-2015	Mein Schiff 6 Project 1139 Equipment Delivery: Q1-2016	Mein Schiff 1 Project 1187 Equipment Delivery: Q3-2016	Mein Schiff 2 Project 1188 Equipment Delivery: Q2-2018
		RCCL Oasis Class	AWP Grey & Black MEPC 227(64) excl. Chapter 4.2	Harmony of the Seas Project 1104 Equipment Delivery: Q1-2014		Oasis 4 Project 1149 Equipment Delivery: Q3-2015
		MSC Meraviglia Class	Total Clean Ship= Waste Mgmt + AWP Grey & Black MEPC 227(64) excl. Chapter 4.2		MSC Meraviglia Project 1127 / 1135 Equipment Delivery: Q4-2015		MSC Meraviglia II Project 1156 / 1157 Equipment Delivery: Q2-2017
		Viking Ocean Cruises	Total Clean Ship= Waste Mgmt + AWP Grey & Black MEPC 227(64) incl. Chapter 4.2	Viking Sea Project 1102 Equipment Delivery: Q3-2014	Viking Sky Project 1136 Equipment Delivery: Q4-2014	Viking Sun Viking Spirit Project 1163 / 1164 Project 1165 / 1172 Equipment Delivery: Q1-2016 Equipment Delivery: Q4-2016
		Carnival Cruise Line	AWP Grey & Black MEPC 227(64) incl. Chapter 4.2	Carnival Vista Project 1107 Equipment Delivery: Q3-2014		Carnival Horizon Project 1155 Equipment Delivery: Q4-2015
		SilverSea Cruises	Total Clean Ship= Waste Mgmt + AWP Grey & Black MEPC 227(64) excl. Chapter 4.2		Silver Muse Project 1133 / 1142 Equipment Delivery: Q3-2015

Vessel equiped with AWP and Waste Mgmt

Status retrofit – strong and unchanged potential

• High tendering activity expected to bring orders - higher industry focus
• IMO decision on Helcom implementation is expected to re-boost demand
• Scanship will complete the retrofit for a Helcom compliant AWP-system on the Oceania Sirena in 3Q16
• AWP retrofit cruise market size is estimated to be ~ NOK 2.3bn

Oceania Sirena is being retrofitted with Scanship AWP, the new system will meet IMO Marpol MEPC 227(64)

AWP retrofit potential (# of vessels)

Condensed consolidated income statement

(NOK 1 mill)	Unaudited 2Q16	Unaudited 2Q15	Unaudited YDT2016	Unaudited YTD2015	Audited FY 2015
Total operating revenue	45.0	50.3	84.8	95.9	200.3
Cost of goods sold	31.5	34.6	58.5	68.1	136.4
Gross Margin	13.5	15.7	26.3	27.8	63.9
Gross Margin %	30%	31%	31%	29%	32%
OPEX	13.2	12.3	25.8	24.5	52.6
EBITDA	0.3	3.4	0.5	3.3	11.3
Operating profit (EBIT)	-0.2	2.9	-0.6	2.5	8.6
Net finance	0.5	-1.4	0.8	5.1	-1.6
Profit before tax	0.2	1.5	0.3	7.6	7.0

• The capacity reflected in OPEX is higher than current project activity level

• The capacity has been utilised on activities within tendering and R&D, awaiting contract awards in the near future

• The company will closely monitor forward activity level and seek to optimise OPEX accordingly

• Scanship's hedging strategy is to secure all EUR-revenues from projects, that are not directly related to EUR-purchases

• Forward share of hedging on contracts is reduced from 70% to 60% since 4Q15 to adapt to larger share of purchases in EUR

Currency effects on financial items in 2Q 2016

(NOK million)	Realized	Unrealized	Total
Agio	0.5	0.0	0.5
Disagio	-0.5	- 0.1	-0.6
Financial Instruments	- 0.7	1.6	0.9
Sum	- 0.7	1.5	0.8

Financial Instruments at end 2Q 2016

		Maturity
(EUR million)	2016	2017	Total
Amount secured through FI	€ 0.7	€ 4.3	€ 4.9
Average EUR/NOK Rate	8.43	8.78	8.73
% of estimated EUR-payments	69%	84%	60%

Consolidated condensed cash flow statement

• Late payments from yard of approx. NOK 7m has reduced cash and reduced net cash flow from operating activities. Payment on overdue invoices have been received in 3Q16
• Outstanding German VAT of NOK 4.0m, paid in 1Q16 is expected repaid in 4Q16
• Investing activities mainly from product development
• Net cash flow from financing activities due to reduced utilisation of overdraft facility

(NOK million)	Unaudited 2Q16
Profit before income tax	0.2
Net cash flow from operating activities	2.8
Net cash flow from investing activities	-2.2
Net cash flow from financing activities	-3.0
Net change in cash and cash equivalents	-2.4
Cash and cash equivalents ingoing balance	4.4
Cash and cash equivalents at end of period	2.0

	Unaudited	Unaudited	Audited
(NOK 1 000)	30.6.2016	30.6.2015	31.12.2015
ASSETS:
Total non-current assets	31.5	24.5	27.5
Current Assets:
Inventories	7.1	5.9	5.7
Trade receivables	53.1	35.3	61.2
Contracts in progress	29.0	84.9	42.4
Other receivables	15.5	6.0	12.2
Cash and cash equivalents	2.0	4.3	19.5
Total current assets	106.8	136.4	140.9
Total assets	138.3	160.9	168.4

• Increase in non-current assets mainly due to product development activities
• Increase in trade receivables and trade creditors mainly due to equipment delivery activity late in 2Q16, in addition to late payments from customers

(NOK 1 000)	Unaudited 30.6.2016	Unaudited 30.6.2015	Audited 31.12.2015
EQUITY AND LIABILITIES
Total equity	50.1	50.9	50.0
Total non-current liabilities	5.1	4.1	4.3
Current liabilities:
Trade creditors	28.9	13.2	36.7
Contract accruals	13.5	54.1	27.7
Financial instruments	4.9	4.5	9.4
Income tax payable	0.3	0.0	0.5
Bank overdraft	24.1	27.0	27.3
Other current liabilities	11.3	7.1	12.5
Total current liabilities	83,1	105.9	114.1
Total liabilities	88.2	110.0	118.4
Total equity and liabilities	138.3	160.9	168.4

• Other receivables include NOK 6.0m in provisions for German VAT
• Other Current liabilities include NOK 1.0m in provisions for German VAT

Scanship Holding ASA

Lysaker Torg 12 P.O. Box 465 1327 Lysaker Norway

Phone: +47 67 200 300 E-mail: mail@scanship.no

www.scanship.no