Disclaimer Page 2

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2 Disclaimer This presentation should be read in conjunction with Vard Holdings Limited s results for the period ended 30 September 2016 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 Page 2

3 3Q 2016 Results Presentation Vard Holdings Limited 11 November 2016

4 3Q 2016 key messages Revenue of NOK million, down from NOK million in 3Q 2015 EBITDA (before restructuring cost) of NOK 33 million, up from NOK -467 million in 3Q 2015 EBITDA margin (EBITDA before restructuring cost to total operating revenues) of 2.2%, up from -20.6% in 3Q 2015 Order intake of NOK million; 7 new vessel contracts secured 1) 45 vessels in the order book as at 30 September 2016, of which 37 are VARD designs Diversification strategy yields strong order intake; confirmation of four cruise vessel orders and signing of two new ones during the quarter; Module Carrier Vessel (MCV) project expanded with five vessels to 20 Investments in Romania under way to support the new business plan Completion of large OSCV projects in Norway resulting in reduced offshore exposure Normand Maximus Offshore Subsea Construction and Pipelay Vessel for Solstad 1) Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q Page 4

5 3Q 2016 Business update Page 5

6 Vessel deliveries One vessel delivered in 3Q 2016 Lucio Costa From Vard Promar (Brazil) to Transpetro Design: WBDC 7000 m 3 LPG Carrier Page 6

7 New contracts 7 new contracts secured in 3Q Module Carrier Vessels (MCV) for Kazmortransflot 2 Luxury Expedition Cruise Vessels 1) for Hapag-Lloyd Cruises 2 Module Carrier Vessels (MCV) for Topaz Energy and Marine Design: VARD 9 28 Delivery: 3Q Q 2018 Aggregate contract value: Approx. USD 70 million Design: VARD 6 07 Delivery: 1Q 2019 and 4Q 2019 Contract value: Undisclosed Design: VARD 9 21 Delivery: 2Q 2018 Aggregate contract value: Approx. USD 40 million 1) Contracts signed in 3Q 2016 and confirmed in 4Q Included in 3Q 2016 new order intake Page 7

8 Order book development New order intake during the period (NOK million) Order book value at the end of the period (NOK million) vessels vessels vessels 16 vessels vessels vessels Q 2016: 3 293million 1H 2016: million M M 2016 As at 30 September 2016, the Group had 45 vessels in the order book, 37 of which will be of VARD s own design. Note: Includes variation orders, repair and conversion, and equipment sales. Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q Page 8

9 Order book status Order book as of 30 September 2016 (# of vessels) Type Norway Romania Vietnam Brazil Total Under construction Delivered Offshore MCV 1) Cruise 4 4 Other Offshore MCV 9 3 Cruise 2 17 Other 1 Offshore MCV 4 4 Cruise 17 Other 2 Offshore MCV Cruise 7+9 Other Offshore MCV Cruise 12 Other ) Module Carrier Vessels Note: Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q Page 9

10 Order book by region and vessel type By region By vessel type Region Order book 30 Jun 2016 Deliveries 3Q 2016 Order intake 3Q 2016 Order book 30 Sep 2016 Vessel type Order book 30 Jun 2016 Deliveries 3Q 2016 Order intake 3Q 2016 Order book 30 Sep 2016 Norway Romania Vietnam Brazil Total AHTS PSV OSCV MCV 1) Cruise Other Total ) Module Carrier Vessels Note: Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q Page 10

11 Operations Norway Several large OSCV projects delivered or in final stages of outfitting at the Norwegian yards «Normand Maximus» Offshore Subsea Construction and Pipelay Vessel for Solstad delivered in October from Vard Brattvaag; largest vessel ever built by VARD «Skandi Buzios» Offshore Subsea Construction and Pipelay Vessel for Techdof Brasil delivered from Vard Søviknes; now undergoing installation of the pipelay tower in the Netherlands «Deep Explorer» Diving Support Vessel for Technip completed at Vard Langsten; currently undergoing final testing of diving equipment Skandi Buzios Offshore Subsea Construction and Pipelay Vessel for Techdof Brasil Generally low yard utilization Repair, conversion and upgrade work taken on to support activity level at the yards Temporary layoffs to buffer effects of low and volatile workload Page 11

12 Operations Romania Yards well utilized with Module Carrier Vessel (MCV) project, cruise vessel hull sections under construction for Fincantieri, and VARD cruise vessel projects MCV project progressing as planned; first steel cut for all vessels, and keel laid for several Investments in increased capacity and capabilities in Tulcea under way to support the new business plan New gantry crane Second panel line Expansion of building berth Extension of the launching barge to accommodate vessels up to 210 x 49 meters Both Tulcea and Braila yards hiring again Vard Tulcea view of the fabrication hall Page 12

13 Operations Vietnam Stable operations OSCV for Farstad soon ready for delivery Investment in extension of hull factory completed during period of lower activity Yard well utilized with MCV project; number of vessels to be built in Vietnam increased to seven Close cooperation with Vard Tulcea and Vard Braila through joint project management on MCV project, leveraging on exchange of experience and best practice Vard Vung Tau extension of the hull factory Page 13

14 Operations Brazil Niterói yard closed down; key resources relocated to Vard Promar Ownership stake in Vard Promar increased to 95.15% through conversion of shareholder loans, resulting in more balanced financial structure and greater strategic flexibility Major rightsizing process ongoing; strong focus on cost reduction and organizational development Fourth LPG carrier for Transpetro delivered; two more under construction for delivery in 2017 PLSV project for DOF and Technip progressing; both vessels launched Vard Promar two PLSVs under construction for Dofcon Navegação Page 14

15 Equipment & Solutions business Important order wins for Vard Electro Engineering and electrical installation package for the UK s new polar research vessel, under construction at Cammell Laird shipyard in the UK Equipment and electrical installation package for a vessel for the Government of India, under construction at Cochin shipyard in India Breakthrough design contract for Vard Marine Design developed by Vard Marine selected for the US Coast Guard s new Offshore Patrol Cutter (OPC) program, to be built at Eastern Shipbuilding in the US VARD US Coast Guard Offshore Patrol Cutter Page 15

16 Aquaculture business Fish feeding and live fish treatment barges delivered from Vard Aukra to clients in Norway, and new orders secured Equipment supplier to the aquaculture industry, Storvik Aqua, acquired Feeding, measurement and control solutions to the aquaculture industry Production facility in Norway and subsidiaries in Chile and Scotland Enabling Vard Aukra to deliver specialized vessels for fish farming with innovative integrated solutions, and broaden its client base Storvik Aqua leading equipment supplier to the aquaculture industry Page 16

17 3Q 2016 Key financials Page 17

18 Revenues, EBITDA and net income Revenues (NOK million) EBITDA (NOK million) % 1.8% (200) 0 9M M 2016 (400) 1H Q H Q 2016 Profit (loss) for the period (NOK million) Profit (loss) attributable to equity holders of the Company (NOK million) 0 (200) (400) (600) (800) -845 (200) (400) -486 (1 000) (1 200) 1H Q H Q 2016 (600) 1H Q H Q Page 18

19 Income statement (NOK million) 3Q ended 30 September 9M ended 30 September Revenue EBITDA before restructuring cost 33 (467) 101 (356) EBITDA margin (%) 2.2% -20.6% 1.8% -4.6% Restructuring cost (27) (36) (76) (56) Depreciation, impairment and amortization (51) (51) (153) (154) Operating profit (loss) (45) (554) (128) (566) Net financial income / (cost) (29) (258) 44 (479) Profit (loss) before tax (83) (812) (102) (1 041) Profit (loss) for the period (104) (845) (128) (1 122) Non-controlling interest (24) (359) (32) (602) Profit (loss) attributable to equity holders of the Company (80) (486) (96) (520) Page 19

20 Cash and cash equivalents, and loans and borrowings Net cash (NOK million) Dec Sep 2016 (1) Cash and cash equivalents less sum of shortterm and longterm interest bearing liabilities, excluding construction financing Construction loans (NOK million) Dec Sep 2016 Cash and cash equivalents (NOK million) Loans and borrowings, non-current (NOK million) Sep Dec Sep 2016 Non-restricted Cash Restricted Cash 0 31 Dec Sep Page 20

21 Balance sheet (NOK million) As at: 30 September December 2015 Non-current assets Cash and cash equivalents Other current assets Total assets Total equity Loans and borrowings, non-current Other non-current liabilities Construction loans Other current liabilities Total liabilities Total equity and liabilities Page 21

22 Cash flow statement (NOK million) 3Q ended 30 September 9M ended 30 September Cash flows from / (used in) operating activities (221) (96) 144 (1 133) Cash flows from / (used in) investing activities (59) (72) (157) (245) Cash flows from / (used in) financing activities (106) 200 (299) 227 Net change in cash and cash equivalents (386) 32 (312) (1 151) Effects of currency translation differences on cash and cash equivalents (15) (62) 13 (50) Cash and cash equivalents excluding restricted cash at the beginning of the financial period Restricted cash at the end of the financial period Cash and cash equivalents at the end of the financial period Page 22

23 Earnings per share 3Q ended 30 September 9M ended 30 September Earnings for the period (NOK million) (80) (486) (96) (520) Earnings for the period (SGD million) (14) (81) (16) (87) Weighted average number of shares (million) Earnings per share (NOK) (0.07) (0.41) (0.08) (0.44) Earnings per share (SGD cents) (1.19) (6.86) (1.36) (7.37) Exchange rates (SGD/NOK) Note: Earnings per ordinary share for the financial period attributable to equity holders of the Company SGD amounts are translated from NOK based on the exchange rates prevailing at the reporting dates Page 23

24 Net assets value per share As at: 30 September December 2015 Net assets value at the end of the period (NOK million) Net assets value at the end of the period (SGD million) Number of shares (million) Net assets value per ordinary share (NOK) Net assets value per ordinary share (SGD) Exchange rate (SGD/NOK) Note: Net assets value for the Group per ordinary share based on issued share capital of the issuer SGD amounts are translated from NOK based on the exchange rates prevailing at the reporting dates Page 24

25 3Q 2016 Outlook Page 25

26 Outlook Continued focus on diversification strategy Expedition cruise vessel market Leads in fishery, offshore wind and OPV markets Opportunities for design, electrical engineering and installation, and equipment businesses Growth in aquaculture business on the back of Storvik Aqua acquisition Good yard utilization in Romania and Vietnam Investments in Romania to be accelerated to realize full potential of the new business plan Cooperation across yards and focus on operational excellence Norway still experiencing low utilization in the near term, but gearing up for outfitting of cruise vessels Arrival of the first cruise vessel hull in Norway scheduled for 2H 2017 Brazil operations now concentrated on Promar yard and stabilizing, but operational risk remains elevated Offshore oil & gas market continously monitored, but no significant rebound in demand expected in the near term Working with clients on cost-effective solutions to address industry challenges without compromising innovation, performance, quality and safety Page 26

27 Page 27 3Q 2016 Q&A