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 30 September 2013 in the SGXNet announcement. Financial figures are presented according to SFRS. 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. 6.11.2013 | Page 2

3Q 2013 Results Presentation Vard Holdings Limited 6 November 2013 European network for Health Technology Assessment | JA2 2012-2015 | www.eunethta.eu

Key messages � Revenue of NOK 2 370 million for 3Q 2013, down from NOK 2 457 million in 3Q 2012 � EBITDA of NOK 103 million for 3Q 2013, down from NOK 332 million in 3Q 2012 � EBITDA margin , representing EBITDA to total operating revenues, of 4.4% for 3Q 2013, down from 13.5% in 3Q 2012 � Record order intake of NOK 7 950 million in 3Q 2013. Order intake may vary significantly on a quarter-by-quarter basis � 43 vessels in the order book as at 30 Sept. 2013, of which 26 of own design � New shipyard in Brazil, Vard Promar, ramping up production; first blocks produced � Niterói yard in Brazil still a drag on margins � Mitigating actions taking longer than expected to show effect � Further delays in the remaining order book � Notwithstanding a highly competitive market, positive outlook for new order wins for the remainder of 2013 and going into 2014 6.11.2013 | Page 4

3Q 2013 Business update

Vessel deliveries and new contracts – 3Q 2013 Vessel deliveries New contracts 1 PSV Six new vessel contracts secured in 3Q 2013 � Island Duke from Vard Brevik (Norway) to Island � 4 OSCVs for DOF Subsea & T echnip (Doftech) Offshore � 1 OSCV for Farstad Shipping 1 OSCV � 1 PSV for Carlotta Offshore � Siem Dyna from Vard Brattvaag (Norway) to Siem Offshore 2 Other � Gadus Poseidon (Fishing Vessel) from Vard Brattvaag (Norway) to Havfisk � Hopen (Stern Trawler) from Vard Langsten (Norway) to Remøy Fiskeriselskap As at 30 September 2013, the Group had 43 vessels in the order book, 26 of which will be of VARD’s own design. 6.11.2013 | Page 6

Largest order in the Group’s history secured during 3Q 2013 � Aggregate order value approx. USD 1.1 billion (NOK 6.5 billion) � Extending the order book to 2016-17 in both Europe and Brazil, and reversing a long downward order book trend � Reinforcing key client relationships with DOF and T echnip, and securing a leading position in global OSCV market for VARD 05.11.2013 | Page 7

Order book development New order intake during the period (NOK million) 1) 27 Vessels 12 Vessels 12 555 28 Vessels 11 941 11 117 16 Vessels 9 501 4 Vessels 8 Vessels 5 692 4 458 3Q 2013: NOK 7 950 million 1H 2013: NOK 3 991 million 2008 2009 2010 2011 2012 9M 2013 Order book value at the end of the period (NOK million) 1) 22 389 19 553 17 031 16 675 16 411 15 096 2008 2009 2010 2011 2012 9M 2013 1) Includes firm orders only. Includes variation orders and trading packages 6.11.2013 | Page 8

Order book status Delivery Norway / Brazil Vietnam T otal Order book as of 30 September 2013 (# of vessels) year Romania 2017 1 2017 1 1 OSCV 2016 6 2016 6 2 OSCV 1 OSCV 3 Other 1 AHTS 1 PSV Delivery year 2015 9 9 2015 3 OSCV 1 Other 3 Other 2 AHTS 2 AHTS 4 PSV 1 PSV 2 PSV 2014 21 2014 21 5 OSCV 3 Other 2 Other 3 AHTS 10 PSV 1 PSV 2 PSV 2013 6 17 2013 23 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 6.11.2013 | Page 9

Order book by region and vessel type Order book Deliveries Order intake Order book By Region 30 June 2013 3Q 2013 3Q 2013 30 Sep 2013 Norway / Romania 28 4 3 27 Brazil 12 - 2 14 Vietnam 1 - 1 2 Total 41 4 6 43 Order book Deliveries Order intake Order book By Vessel Type 30 June 2013 3Q 2013 3Q 2013 30 Sep 2013 AHTS 6 - - 6 PSV 11 1 1 11 OS CV 9 1 5 13 Other 15 2 - 13 Total 41 4 6 43 6.11.2013 | Page 10

Operations – Norway, Romania & Vietnam � Operations in European shipyards generally stable � Gradually reverting to normal load situation in Romania � Effective cooperation in the Romania-Norway value chain, utilizing flexibility in the production system � Commissioning of new piping pre-fabrication factory in Tulcea ongoing � Comprehensive program initiated to further improve efficiency and enhance competitiveness in Romania � Complementary to recent investments in physical assets � Successful delivery of four projects from Norwegian yards � Including two complex projects for non-offshore related vessels (fishing trawlers) � Load situation in Vietnam improved as a result of new contract � Extension of floating dock in Vietnam about to be completed, � Extending launching capacity from 100m to 120m long vessels 6.11.2013 | Page 11

Operations update – Brazil (Vard Niterói) � Vard Niterói still suffering from overload situation; further delays and cost overruns incurred � Mitigating actions in progress, but taking longer time to show effect � Organizational changes introduced � Strengthening of project organization and reorganization in production � All time high manning at the yard; approx. 1,250 own employees and 750 subcontractors � But still a shortfall of qualified personnel � Project Pro30 (AHTS for DOF) more than 95% complete and ready for sea trials shortly 6.11.2013 | Page 12

Vard Niterói: Revised delivery schedule 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 Pro30 Pro31 Pro32 Pro33 EP01 (outfitting only) EP02 (outfitting only) jun-13 sep-13 dec-13 mar-14 jun-14 sep-14 dec-14 mar-15 6.11.2013 | Page 13

Operations update – Brazil (Vard Promar) � Key shipyard infrastructure completed within 3Q 2013 � Shipbuilding works in progress on LPG carrier number 3 for Transpetro; pending start-up for vessel number 4 � First blocks produced � Productivity in hull production for LPG carriers number 1 and 2 built at external yard still not satisfactory � Rapid ramp-up of capacity to accommodate ambitious order book � T otal number of employees currently around 600 � Need to recruit, train and integrate approximately 80 new employees per month � All new employees undergoing training and qualification program � Foundations in place for sustainable operations and future growth in Brazil 6.11.2013 | Page 14

Vard Promar – Key yard infrastructure completed Outfitting quay Floating dock 05.11.2013 | Page 15

Vard Promar - Production at new yard ramping up Production halls Production of ring blocks 6.11.2013 | Page 16

Q3 2013 Financial highlights

Revenues and margins Revenues (NOK million) EBITDA (NOK million) and EBITDA Margin (%) 10 000 1 400 8 605 13.8% 9 000 8 062 1 200 8 000 1 000 7 000 332 2 457 2 370 6 000 800 6 148 5 000 854 5 692 6.6% 600 4 000 103 3 000 400 2 000 425 200 1 000 0 0 9M 2012 9M 2013 9M 2012 9M 2013 6.11.2013 | Page 18

Statement of income – major items 3Q ended 30 September 9M ended 30 September D( %) D( %) (NOK million) 2013 2012 2013 2012 Revenue 2 370 2 457 -3.5% 8 062 8 605 -6.3% Materials, subcontract cost and others (1 627) (1 594) 2.1% (5 613) (5 696) -1.5% Salaries and related costs (527) (429) 22.8% (1 530) (1 386) 10.4% EBITDA 103 332 -69.0% 528 1 186 -55.5% EBITDA % 4.4% 13.5% 6.6 % 13.8% NA NA Operating profit 72 301 -76.1% 367 1 095 -66.5% Net financial income / (cost) 35 13 169.2% 39 35 11.4% Profit before tax 111 314 -64.6% 410 1 132 -63.8% Profit for the period 58 228 -74.6% 194 778 -75.1% 6.11.2013 | Page 19

Cash and cash equivalents, and construction loans Net Cash (NOK million) 1 Construction Loans (NOK million) 1 858 4 199 2 000 4 500 4 000 3 351 3 500 1 500 3 000 2 500 864 1 000 2 000 1 500 500 1 000 500 0 0 31 Dec 2012 30 Sept 2013 31 Dec 2012 30 Sept 2013 (1) Cash and cash equivalentsless sum of short-term and long-term Cash and Cash Equivalents (NOK million) interest bearing liabilities, excluding construction financing 2 437 2 500 2 347 19 15 2 000 1 803 56 1 500 2 418 2 332 1 000 1 747 500 0 30 Sept 2012 31 Dec 2012 30 Sept 2013 Restricted Cash Non-restricted Cash 6.11.2013 | Page 20