Disclaimer This presentation should be read in conjunction with Vard - PowerPoint PPT Presentation

Disclaimer This presentation should be read in conjunction with Vard Holdings Limited’s results for the period ended 31 March 2015 in the SGXNet announcement. Financial figures are presented according to SFRS. This presentation may contain forward-looking statements that involve risks and uncertainties. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. As these statements and financial information reflect our current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially from these forward-looking statements and financial information. You are cautioned not to place undue reliance on these forward looking statements, which are based on the Company’s current view of future events. 13.05.2015 | Page 2

t ’Grid and Guides...’ Check ’Display drawing guides on screen’ Select ’OK’ Click ‘Picture Tools’ in t 1Q 2015 Results Presentation Vard Holdings Limited 13 May 2015 European network for Health Technology Assessment | JA2 2012-2015 | www.eunethta.eu

1Q 2015 Highlights  Revenue of NOK 3 063 million, up 14.6% from NOK 2 672 million in 1Q 2014  EBITDA (before restructuring cost) of NOK 65 million, down from NOK 171 million in 1Q 2014  EBITDA margin (EBITDA before restructuring cost to total operating revenues) of 2.1% (1Q 2014: 6.4%)  Significant unrealized foreign exchange losses contributing to net loss for the period  Order intake of NOK 248 million; no new vessel contracts. Order intake may vary significantly on a quarter-by-quarter basis  32 vessels in the order book as at 31 March 2015, of which 18 are VARD designs  Prospects for new orders weak in the short to medium term. Fierce competition for a limited number of projects in the market  Challenging transition from still high workload and delivery of large complex projects, to a situation of lower yard utilization in Europe  Strict cost-cutting program in progress  Brazil still a critical focus area  Organizational changes made to strengthen management follow-up of critical areas 13.05.2015 | Page 4

Changes to the Executive Management Team structure announced  Organizational changes reflecting areas of increased management focus  Brazil: Appointment of a senior Finance Officer reporting directly to the CEO  Equipment and Systems: Further development of «internal suppliers» and strengthening of third-party business, e.g. Vard Electro, Seaonics, and Vard Marine  Corporate Development: Overseeing structural and strategic initiatives to secure short- and long-term competitiveness of the Group  Business Development Asia: Focus on growth opportunities outside VARD’s traditional home markets 13.05.2015 | Page 5

New Executive Management Team structure CEO t Roy Reite Finance Officer Brazil Jan Ivar Nielsen Acting Chief Operations Operations Sales Financial Officer NO, RO, VN Brazil & Marketing Geir Ingebrigtsen Magne Bakke Knut Ola Tverdal Magne Håberg Corporate Equipment IR & Business Development & Systems Development Asia Vittorio Zane Stig Bjørkedal Holger Dilling 13.05.2015 | Page 6

1Q 2015 Business update

Vessel deliveries and new contracts – 1Q 2015 Vessel deliveries New contracts 2 PSVs No new vessel contracts were secured in  1Q 2015 Troms Mira from Vard Vung Tau (Vietnam) to Tidewater  Stril Barents from Vard Aukra (Norway) to Simon Møkster Shipping Two contracts were terminated during the quarter 2 OSCVs  Skandi Africa from Vard Søviknes (Norway) to DOF  Far Sleipner from Vard Langsten (Norway) to Farstad Shipping 1 Other (Research and Surveillance Vessel)  Marjata from Vard Langsten (Norway) to the Norwegian Navy As at 31 March 2015, the Group had 32 vessels in the order book, 18 of which will be of VARD’s own design. 13.05.2015 | Page 8

«Skandi Angra» (Pro31) – delivered from Vard Niterói on 4 May 2015 t 13.05.2015 | Page 9

Order book development New order intake during the period (NOK million) 1) 15 Vessels 27 Vessels 14 174 12 555 28 Vessels 11 117 16 Vessels 16 Vessels 9 501 9 450 0 Vessels 248 2010 2011 2012 2013 2014 1Q 2015 Order book value at the end of the period (NOK million) 1) 19 356 17 743 17 031 16 675 15 630 15 096 2010 2011 2012 2013 2014 1Q 2015 1) Includes firm orders only. Includes variation orders and trading packages 13.05.2015 | Page 10

Order book status Delivery Norway / Brazil Vietnam Total Order book as of 31 March 2015 (# of vessels) year Romania 1 AHTS 2017 3 2017 3 1 OSCV 1 OSCV 1 AHTS 4 PSV 1 PSV 2016 17 2016 17 Delivery year 5 OSCV 1 OSCV 1 OSCV 4 Other 2 AHTS 3 PSV 3 PSV 2015 12 5 2015 17 3 OSCV 2 Other 4 Other 2 AHTS 1 AHTS 5 PSV 1 PSV 1 PSV delivered 2014 18 2014 18 5 OSCV 3 Other 0 5 10 15 20 25 13.05.2015 | Page 11

Order book by region and vessel type Order book Deliveries Order intake Order book By Region 31 Dec 2014 1Q 2015 1Q 2015 31 Mar 2015 Norway / Romania 20 4 - 16 Brazil 12 - - 12 Vietnam 7 1 - 4 1) 32 1) Total 39 5 - Order book Deliveries Order intake Order book By Vessel Type 31 Dec 2014 1Q 2015 1Q 2015 31 Mar 2015 AHTS 4 - - 4 PSV 13 2 - 9 1) OSCV 12 2 - 10 Other 10 1 - 9 Total 39 5 - 32 1) 1) Two terminated vessels excluded from order book until contract with new client is secured 13.05.2015 | Page 12

Operations – Romania and Norway  Still high workload, but yard utilization decreasing in 2H 2015, first in Romania and subsequently in Norway  Production schedules adjusted following extension of delivery dates on several projects, resulting in improved workload balance  Measures put in place to reduce cost related to lower capacity utilization, and increase flexibility as the activity level declines  Reduction of overheads  Reduction of outsourced and subcontracted labour  Temporary and permanent reduction of own work force  Strict cost-cutting program in progress  Improved efficiency and cost control in projects  Work with key suppliers to increase overall competitiveness 13.05.2015 | Page 13

Operations – Vietnam  Stable operations at the yard  One PSV successfully delivered during the first quarter, and another one in April  Work on two terminated vessels continues in anticipation of contracts with a new client  Additional three vessels in the order book, including first-ever OSCV, securing work for the yard well into 2016 13.05.2015 | Page 14

Operations – Brazil (Vard Promar)  Additional cost overruns incurred related to completion phase of first LPG carriers  Efficiency in early production stages has reached an acceptable level, with positive impact on remaining LPG vessel projects  Need for continued development and improvement of operational stability and efficiency at the yard  Special focus on also improving later production stages  Resources from the European yards mobilized to support the development  Progress of PLSV projects according to schedule 13.05.2015 | Page 15

Operations – Brazil (Vard Niterói)  Pro31 – «Skandi Angra» delivered to DOF on 4 May 2015; additional cost overruns incurred during completion phase  Still high activity at the yard; downsizing continues in line with decreasing workload as vessels near completion  Three more vessels in advanced production stages  Final testing and commissioning work ongoing on EP01 (first LPG carrier to Transpetro)  Two more vessels in outfitting stage (Pro33 and EP02) 13.05.2015 | Page 16

1Q 2015 Financial highlights

Revenues and margins Revenues (NOK million) EBITDA 1) (NOK million) and EBITDA Margin (%) 3 500 250 3 063 6.4% 3 000 2 672 200 171 2 500 150 2 000 2.1% 1 500 100 65 1 000 50 500 0 0 1Q 2014 1Q 2015 1Q 2014 1Q 2015 1) EBITDA before restructuring cost 13.05.2015 | Page 18

Statement of income – major items 1Q ended 31 March (NOK million) D( %) 2015 2014 Revenue 3 063 2 672 14.6% Materials, subcontract cost and others (2 189) (1 799) 21.7% Salaries and related costs (663) (552) 20.1% EBITDA before restructuring cost 65 171 (62.0%) EBITDA % 2.1% 6.4% n/m Operating profit 9 123 (92.7%) Net financial income / (cost) (216) (6) n/m Profit before tax (206) 119 n/m Profit for the period (226) 85 n/m 13.05.2015 | Page 19