Disclaimer This presentation should be read in conjunction with Vard Holdings Limited’s results for the period ended 31 March 2013 in the S GXNet announcement. Financial figures are presented according to S FRS . This presentation may contain forward-looking statements that involve risks and uncertainties. S uch 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. S uch 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. Y ou are cautioned not to place undue reliance on these forward looking statements, which are based on the Company’s current view of future events. 14.05.2013 | Page 2
1Q 2013 Results Presentation Vard Holdings Limited 14 May 2013 European network for Health Technology Assessment | JA2 2012-2015 | www.eunethta.eu
Key messages � Revenue of NOK 2 747 million for 1Q 2013, down 2% from NOK 2 811 million in 1Q 2012 � EBITDA of NOK 304 million for 1Q 2013, down 23% from NOK 393 million in 1Q 2012 � EBITDA margin , representing EBITDA to total operating revenues, of 11.1% for 1Q 2013, down from 14.0% in 1Q 2012 � Order intake of NOK 2 782 million in 1Q 2013. Contracts with key clients for three large and complex projects secured. Order intake may vary significantly on a quarter- by-quarter basis � 46 vessels in the order book as at 31 March 2013, of which 26 of own design � M ajor investments in Romania to secure long-term competitiveness in Europe, and in Vietnam to expand shipyard capabilities � Brazil operations expected to stabilize by end 2013, but affecting group performance until delivery of last vessel in current order book � New shipyard in Brazil starting production in end June � Optimistic outlook for subsea support and construction vessel market and overall new order intake 14.05.2013 | Page 4
1Q 2013 Business update
Vessel deliveries and new contracts – 1Q 2013 Vessel deliveries New contracts 3 PSV Three new vessel contracts secured in 1Q � Lundstrom Tide from Vard Søviknes (Norway) to 2013 � Tidewater 1 OSCV for S olstad Offshore � � Far Spica from Vard Langsten (Norway) to 1 OSCV for Farstad Shipping � Farstad Shipping 1 OSCV for DOF Subsea � Far Sitella from Vard Vung T au (Vietnam) to Farstad Shipping Three new contracts secured since the end of the quarter 1 MRV (Multi Role Vessel) � 1 PSV for Simon Møkster Rederi � Skandi Hugen from Vard Aukra (Norway) to DOF � 1 Offshore Tug for Buksér og Berging � 1 Offshore support vessel for Island Offshore 1 AHTS � Far Senator from Vard Langsten (Norway) to Farstad Shipping As of 31 March 2013, the Group had 46 vessels in the order book, 26 of which will be of VARD’s own design. 14.05.2013 | Page 6
Order book development New order intake during the period (NOK million) 1) 27 Vessels 12 555 28 Vessels 16 Vessels 11 117 9 501 4 Vessels 5 692 8 Vessels 4 458 3 Vessels 2 782 2008 2009 2010 2011 2012 1Q 2013 Order book value at the end of the period (NOK million) 1) 22 389 17 031 16 675 16 411 15 450 15 096 2008 2009 2010 2011 2012 1Q 2013 1) Includes firm orders only. Includes variation orders and trading packages 14.05.2013 | Page 7
Order book status Delivery Norway / Brazil Vietnam Total Order book as of 31 Mar. 2013 (# of vessels) year Romania 2016 3 2016 3 3 Other 2015 6 2015 6 2 OSCV 4 Other 2 AHTS 2 AHTS Delivery year 3 PSV 1 PSV 1 PSV 2014 18 2014 18 5 OSCV 3 Other 1 Other 3 AHTS 1 AHTS 10 PSV 1 PSV 2 PSV 2013 19 5 2013 24 3 OSCV 4 Other 1 AHTS 1 AHTS 15 PSV 1 PSV 1 PSV 2012 22 delivered 2012 22 1 OSCV 2 Other 0 10 20 30 14.05.2013 | Page 8
Order book by region and vessel type Order book Deliveries Order intake Order book By Region 31 Dec. 2012 1Q 2013 1Q 2013 31 Mar. 2013 Norway / Romania 32 4 3 31 Brazil 13 - - 13 Vietnam 3 1 - 2 Total 48 5 3 46 Order book Deliveries Order intake Order book By Vessel Type 31 Dec. 2012 1Q 2013 1Q 2013 31 Mar. 2013 AHTS 8 1 - 7 PSV (incl. MRV) 18 4 - 14 OS CV 7 - 3 10 Other 15 - - 15 Total 48 5 3 46 14.05.2013 | Page 9
Operations update – Norway � Four vessels successfully delivered during the quarter � Stable operations and good utilization of all yard facilities � Completed implementation of common work processes based on best practices at all yards � ISO 9001 certification received as part of ongoing efficiency improvement program Vard Brattvaag Vard Søviknes 14.05.2013 | Page 10
Operations update – Romania � Very high workload in steel hull production at Vard Tulcea � Investment program being implemented in Tulcea for continuous improvement of productivity, quality and throughput � New blasting and painting facilities � Robots in the production line � New piping prefabrication facilities including state of the art bending technology � New contract signed for smaller vessel to be fully outfitted and delivered from Vard Braila 14.05.2013 | Page 11
Major investments in Romania (Vard Tulcea) New blasting and Robots in the New piping painting facilities production line prefabrication facilities 14.05.2013 | Page 12
Operations update – Vietnam (Vard Vung Tau) � Low utilization of the yard, with only two vessels still in the order book � One of which to be delivered in 2Q 2013 � Investment program ongoing for the yard to accommodate larger vessel types � Extension of the floating dock � Improved flow of steel cutting, and logistics for handling of larger units � High priority to secure new orders 14.05.2013 | Page 13
Operations update – Brazil (Vard Niterói) � Challenges � High cost level in Brazil in general and especially in Rio/ Niterói area � High personnel turnover and very high pressure on qualified resources � Productivity – lower than anticipated � Very high pressure in the subcontracting market resulting in fewer alternative subcontractors, higher prices, and delays � Delays – knock-on effect and delays on the next deliveries � Actions taken � New yard manager and increased number of expats � Reorganized production; more project oriented organization � Focus on responsibility for each person in the organization, and commitment to improvements � Reduced indirect cost in all departments – downsizing, reorganization and stronger cost focus � Reduced number of subcontractors and building up of longer-term partners going forward 14.05.2013 | Page 14
Operations update – Brazil (Vard Niterói) (cont’d) � Outlook � Revised delivery schedule agreed with clients; taking into account challenging operational environment � Strain on organization will be reduced as improvement measures take effect, and vessels are being delivered � Operations expected to stabilize by end 2013 � But Vard Niterói still affecting group performance until delivery of last vessel in current order book 14.05.2013 | Page 15
Vard Niterói: Vessels under construction Pro30 Pro29 Pro32 Pro31 2013.05.14 | Page 16
Vard Niterói: Revised delivery schedule 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 Pro29 Pro30 Pro31 Pro32 Pro33 mar-13 jun-13 sep-13 dec-13 mar-14 jun-14 sep-14 Note: Delivery dates rounded to end of quarter 14.05.2013 | Page 17
Operations update – Brazil (Vard Promar) � Overall progress of yard construction is over 85%, and over 95% in areas vital for commencing operations � Dredging completed in April � Start of steel cutting/ production planned for end June � Preparations for production start ongoing � Installation of equipment � Detail planning of production, workflow, logistics, etc. � Recruitment and training ongoing � About 190 people employed; about 60 of these currently working at Niterói � Training program for blue collars started and with good experience so far � Recruitment of key personnel like managers, specialists, etc. in progress 14.05.2013 | Page 18
Vard Promar: Greenfield development in less than 18 months 14.05.2013 | Page 19
Vard Promar: Construction over 85% complete
Vard Promar: Delivery schedule 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 LPG 1 (hull under construction at CGU – Rio Nave) LPG 2 (hull under construction at CGU – Rio Nave) LPG 3 LPG 4 LPG 5 LPG 6 LPG 7 LPG 8 mar-13 jun-13 sep-13 dec-13 mar-14 jun-14 sep-14 dec-14 mar-15 jun-15 sep-15 dec-15 mar-16 jun-16 sep-16 dec-16 Note: Delivery dates rounded to end of quarter 14.05.2013 | Page 21
1Q 2013 Financial highlights
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