Vow ASA — Investor Presentation 2018

Aug 28, 2018

Scanship Holding ASA 1H 2018 Presentation

28 .August 2018 Henrik Badin, CEO Erik Magelssen, CFO

carbon capture technology we will create clean energy from waste for immediate use on board cruiseships advancing SDG 7

processing and waste to energy, we help to improve the sustainability of sea traffic will reduce the use of fossil fuels and CO2 emissions we are advancing SDG 13

wastewater purification, foodwaste and garbage handling onboard cruiseships along with our solutions for the aquaculture industry, we will be advancing SDG 14

• we are improving our clients sustainability impact with technology for cleaner oceans
• headquartered in Norway with subsidiaries in US for life cycle services and Poland for production follow up
• well positioned in cruise industry on 100 ships
• building aquaculture presence with 7 projects
• project based business with substantial revenues from repeatable aftersales

Waste Management Systems

Advanced Wastewater Purification Systems

Advanced Wastewater Purification Systems

Aquaculture systems

Aquaculture systems

1H 2018 Highlights

Vitamin Sea in Genoa July 20, 2018

growth in Revenues & EBITDA

• increased demand in cruise newbuilds drives growth
• high focus on operational efficiency
• strengthening commercial team
• improving scalability in delivery model
• streamlining supply chain

The 2018 figures are based on IFRS 15, while the 2017 figures are based on IAS 18

strong backlog provides good visibility

• 1H 2018 project order intake of MNOK 143
• Fincantieri for Viking Ocean Cruises and Silversea newbuilds
• AWP Retrofit NCL Holding for Oceania Insignia and MV Corinthian
• Aquaculture contracts AkvaFuture, Billund Aquaculture & Salmar
• contract portfolio with additional MNOK 200 in newbuild options of which MNOK 140 have been called by owners

growth in both projects & aftersales

• project revenues continues at 2/3rds of total
• main revenues from cruise newbuild supply but expects retrofits and aquaculture to increase
• increase in gross margin in both business areas
• increase of installed base and new initiatives on existing ships will grow aftersales further

P&L statement 1H 2018

	Unaudited	Unaudited	Audited
(MNOK)	1H 18	1H 17	2017
Revenue	146.5	117.2	247.0
Total operating revenue	146.5	117.2	247.0
Cost of goods sold	-101.2	-82.7	-171.2
Gross Profit	45.3	34.6	75.9
- Gross Margin	30.9 %	29.4 %	30.7 %
Employee expenses	-17.7	-13.3	-29.0
Other operating expenses	-11.3	-10.8	-21.8
EBITDA	16.3	10.5	25.1
- EBITDA margin	11.1 %	9.0 %	10.2 %
Depreciation and amortisation	-1.2	-1.2	-3.2
Operating result (EBIT)	15.0	9.3	21.9
Net Financial items	0.8	-1.1	-4.0
Result before tax	15.8	8.2	17.9

The 2018 figures are based on IFRS 15, while the 2017 figures are based on IAS 18

• strong first half year with significant improvements
• revenue increase
• operating expenses increasing according to plan
• improved EBITDA margin
• net financial items includes positive market valuation of Euro currency contracts

	Unaudited	Unaudited	Audited
(MNOK)	30.06.18	30.06.17	31.12.17
ASSETS:
Total non-current assets	37.2	33.8	33.7
Current assets:
Inventories	4.2	4.9	3.9
Trade receivables	47.9	66.9	58.8
Contracts in progress	10.4	25.0	43.3
Financial instruments	0.6	-	-
Other Receivables	11.2	16.5	10.1
Cash and cash equivalents	6.3	2.8	5.6
Total current assets	80.6	116.1	121.6
Total assets	117.8	149.9	155.3
EQUITY AND LIABILITIES
Total equity	77.1	51.1	57.9
Total non-current liabilities	11.9	6.0	8.3
Current liabilities
Trade creditors	26.1	27.2	47.6
Contract accruals	-0.6	17.6	10.6
Financial instruments	-	3.5	1.5
Income tax payable	-0.1	0.9	1.4
Bank overdraft	1.9	31.7	20.8
Other Current liabilities	1.4	11.9	7.1
Total Current Liabilities	28.7	92.9	89.0
Total liabilities	40.6	98.9	97.4
Total equity and liabilities	117.8	149.9	155.3

• non-current assets includes MNOK 35.1 in intangible assets in which the MAP system is the most significant.
• non-current liabilities primarily consist of deferred tax liability of MNOK 10.9
• improved cash flow from operations has reduced bank overdraft to MNOK 1.9
• significant increase in equity ratio

cash flow statement

	Unaudited	Unaudited	Unaudited
(MNOK)	1H 18	1H 17	2017
Result before tax	15.8	8.2	17.9
Net cash flow from operating activities	25.1	-6.1	10.1
Net cash flow from investing activities	-5.5	-2.5	-4.8
Net cash flow from financing activities	-18.7	7.8	-3.3
Net change in cash and cash equivalents	0.9	-0.8	2.0
Effect of exchange rate changes on cash	-0.2		-0.2
Cash and cash equivalents at start of period	5.6	3.6	3.8
Cash and cash equivalents at end of period	6.3	2.8	5.6

• strong cash flow from operations
• significant improvements in the net working capital in the group, and increased EBITDA level
• cash flow from financing activities includes the reduction bank overdraft

robust cruise market main driver

• strong underlying market tripled last twenty years with target to grow 50 percent next 10 years
• high focus on environmental sustainability major driver
• industry orderbook with 104 new ships on order
• ≈ 450 MNOK per year newbuild market for AWP & Waste
• ≈ 4 billion NOK untapped AWP retrofit market "moving"

multiple Aquaculture opportunities

• positioned on well recognized industry projects
• Norwegian aquaculture market for salmon to exceed 3 million tons of salmon by 2030 from current 1.2 million tons
• robust market that needs to bridge environmental sustainability challenges to reach growth target
• wins first in world systems on seabased closed cage
• expects growth in all three segments; smolt, seabased closed cage and landbased farms

MAP waste to energy technology

• unique technology producing low carbon energy from waste with substantial carbon capture
• ongoing promising full-scale testing in Norway
• ongoing tendering for newbuild projects
• multiple addressable markets for emission reduction, energy production and activated carbon

Seasoned management team

Henrik Badin Chief Executive Officer CEO

After joining Scanship in 2001 and serving various management positions in Scanship Environmental, Mr. Badin was appointed CEO of Scanship in 2008. Mr. Badin has 20 years of experience related to environmental engineering onshore and in the maritime industries. He holds a Master of Science degree in Civil engineering from NTH (NTNU).

Erik Magelssen Chief Financial Officer CFO

Before joining Scanship in 2017, Mr. Magelssen was CFO in Pm Retail, VIA Travel Group ASA and Kongsberg Automotive ASA. He also held the position of Group Finance Manager in Wilh. Wilhelmsen ASA. Mr. Magelssen has a BA degree from Heriot Watt University in Edinburgh, and has attended the Norwegian School of Economics, NHH (CPA, "Statsautorisert revisor") and the Executive education program at Harvard Business School.

Jonny Hansen Chief Operating Officer COO

Mr. Hansen joined Scanship in 2006 and became COO in 2007 until the end of 2012. Coming out of employment as COO in Vissim and VP Supply Chain in OceanSaver, he rejoined Scanship in 2017 as responsible for strategic initiatives. In April 2018 he returned to the COO position. Mr. Hansen holds a mini MBA DIP from Probana Business School.

Bjørn Abraham Bache Chief Commercial Officer CCO

Mr. Bache joined Scanship February 2018. He has more than twenty-five years of experience from international business, serving in leading positions in companies like Unitor/Wilhelmsen, Mettler-Toledo, Jotun and Elkem. During his career, he has lived 13 years outside Norway. Mr. Bache holds a Master of Science degree in Mechanical Engineering from Glasgow University.

Asgeir Wien Chief Development Officer CDO

Mr. Wien has held technical and R&D positions with Scanship since 2002. He has more than 25 years' experience within advanced tertiary waste water treatment, potable water production, bio-residue treatment, garbage handling and R&D studies. Mr. Wien holds a Master of Science degree in Civil engineering from NTH (NTNU) and an engineering degree in Aquaculture.

Henning Mohn Chief Technical Officer CTO

Before being appointed as CTO in Scanship in 2016, Mr. Mohn held other manager roles in Scanship and positions with DNVGL, NIVA Norwegian Institute for Water Research and Eurofins laboratory. He has 22 years of experience related to environmental engineering and from the international maritime industry. Mr. Mohn holds a Master of Science degree in Civil engineering from NTH (NTNU) and a Master of Science degree from the University of Washington in Environmental engineering.

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