NORDEN RESULTS. Annual Report Copenhagen, Denmark. 1 March 2017 NORDEN ANNUAL REPORT 2016 RESULTS 1. Custodians of smarter global trade

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1 NORDEN RESULTS Annual Report 216 Copenhagen, Denmark 1 March 217 NORDEN ANNUAL REPORT 216 RESULTS 1

2 AGENDA Group highlights Financials Dry Cargo Tankers 217 expectations Q & A NORDEN ANNUAL REPORT 216 RESULTS 2

3 216 HIGHLIGHTS USD million Adjusted net result Significant exposure to improvement in Dry Cargo market USD/day Guidance Supramax FFA rates 21/2-217 Supramax FFA rates 1/ , open ship daysin Dry Cargo Supramax FFA rate 21/2-217 Supramax FFA rate 1/ Key messages Adjusted net result USD -35 million which is within guidance Dry Cargo Low but improving rates in 216 Continued gradual recovery in 217 Tankers Gradually declining rates in 216 Continued cyclical downturn in 217 Net commitments reduced by 37% No dividends 217 Guidance: Adjusted net result USD -2 to 4 million NORDEN ANNUAL REPORT 216 RESULTS 3

4 FINANCIALS IMPROVEMENTS IN DRY CARGO AND DETERIORATION IN TANKERS Adjusted result Dry Cargo Adjusted result Tankers USD million Q4: -355 (incl. write downs and provisions) Q4 215 Q1 216 Q2 216 Q3 216 Q USD million Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 EBIT Dry Cargo (excl. impairment and provisions Q4 215) EBIT - Tankers USD million Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 USD million Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 NORDEN ANNUAL REPORT 216 RESULTS 4

5 HIGHLIGHTS 216 EXECUTING THE STRATEGY Continued implementation of Focus & Simplicity No ownership in Cape and Post-Panamax Operator activities in Dry Cargo increased 31 changes to the core fleet Sales TC-in restructuring Prepayments Postponements 4 long-running COAs entered Average number of non-core vessels in Dry Cargo Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Net commitments (ultimo) Cost project reached USD 15 million in annual savings Exposure to tanker market reduced 21% coverage in % fewer open days in 217 than at the start of 216 Sold 3 Handysize vessels UDS million 1,4 1,2 1, % -37% NORDEN ANNUAL REPORT 216 RESULTS 5

6 FINANCIALS CONTINUED REDUCTION OF NET COMMITMENTS Equity share of 52%, which is considered an appropriate capital structure Net commitments lowered by USD 369 million in 216 Reduction of USD 137 million during Q4 216 partly due to new COA (cargo) contracts Combined undrawn credit facilities, cash and securities at USD 514 million versus USD 244 million in outstanding yard payments Cover for yard payments Capital structure incl. items outside balance sheet 6 5 USD million % 48% Undrawn credit facilities Cash and securities Outstanding yard payments* *Future payments to NORDEN from assets held for sale: USD 67 million not included in above Net Commitments Market Cap NORDEN ANNUAL REPORT 216 RESULTS 6

7 ASSET VALUES ASSET VALUES GOING IN OPPOSITE DIRECTIONS Upward pressure on asset values for Dry Cargo Tankers asset values have continued to decline on back of poor spot rates Value of owned fleet is 55/45 split between Dry Cargo and Tankers 5-year secondhand prices Broker assessed asset values end 216 USD million Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Tankers USD 418 million Dry Cargo USD 476 million Source: Baltic Exchange MR Panamax Dry Cargo Tankers NORDEN ANNUAL REPORT 216 RESULTS 7

8 DRY CARGO 216 IMPROVEMENT IN SECOND HALF OF 216 Baltic Dry Index improved in 2H 216 after historical low levels in 1H Structural oversupply of ships continues to limit rate levels but strong Chinese activity lifted imports in the second half of developments Demand increased ~3.5% Supply increased ~2.5% Panamax spot rate Supramax spot rate BDI since January , 12, 1,4 12, 1, 1,2 USD/day 1, 8, 6, 4, 2, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec USD/day 8, 6, 4, 2, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1, Source: Clarksons Source: Clarksons Source: Clarksons NORDEN ANNUAL REPORT 216 RESULTS 8

9 DRY CARGO 216 HIGHER CHINESE IMPORTS DROVE DEMAND INCREASE Significant improvements in Chinese activity levels initiated through government led stimulus Chinese imports increased by 8% in 216 Iron ore imports increased by 8% Strong rebound in Chinese coal imports which increased by 18% Very strong North American grain season up 23% in 2H 216 compared to 2H 215 Change in China imports 216 vs215 Apparent steel demand (3 month Y/Y) Million tonnes % 1% 8% 6% 4% 2% % -2% -4% -6% -8% -1% Iron ore Coal Minor Bulk* Total * Minor bulk is among others bauxite, nickel, grain etc Source: China Customs and NORDEN Source: Bloomberg and NORDEN China World ex China NORDEN ANNUAL REPORT 216 RESULTS 9

10 DRY CARGO OUTLOOK CONTINUED GRADUAL RECOVERY Gradual removal of overcapacity in Demand improvement in 217 based on cyclical Chinese economic improvement and global economic growth Very low supply growth in fleet growth expected to be ~2% and no new orders are being placed Key uncertainties are scrapping levels, Chinese coal imports, effect of elevated Chinese iron ore stocks Contracting (million dwt) Dry Cargo supply (million dwt) Jan 21-May 21-Sep 211-Jan 211-May 211-Sep 212-Jan 212-May 212-Sep 213-Jan 213-May 213-Sep 214-Jan 214-May 214-Sep 215-Jan 215-May 215-Sep 216-Jan 216-May 216-Sep 217-Jan Source: Clarksons e 218e Deliveries Scrapping Expected deliveries Expected scrapping Growth (%) Source: Clarksons and NORDEN 6% 5% 4% 3% 2% 1% % -1% -2% -3% -4% NORDEN ANNUAL REPORT 216 RESULTS 1

11 TANKERS OVERALL DEMAND FUNDAMENTALS DID NOT SUPPORT TRADE Slight seasonal improvement in Q4, but overall market levels still significantly lower than 215 Lower oil demand growth The global tanker fleet continued to expand with high level of deliveries and only few scrappings Crude and product stocks remain elevated thus still affecting import needs Market development for CPP trade (Clarksons) 25, IEA -YoY growth in oil demand & 217 forecast 3.% 2, 2.5% 2.2% 15, 2.% 1.9% 1, 5, 1.5% 1.%.6% 1.5% 1.% 1.4% 1.4% -.5% H1212 H2212 H1213 H2213 H1214 H2214 H1215 H2215 H1216 H2216.% Est. Source: International Energy Agency NORDEN ANNUAL REPORT 216 RESULTS 11

12 TANKERS OUTLOOK CONTINUED CYCLICAL DOWNTURN THROUGH 217 Market levels not expected to recover in 217 High fleet growth again in 217 -total tanker fleet growth of 4-5% Net growth for 217 expected drop to 2-3% in product tankers Lower oil demand growth and high inventories limit tanker demand growth Contracting remains well below historical figures Yearly net fleet growth and forecast 217 (%, dwt) Contracting (million dwt) 8% 12 Yearly net growth (%) 7% 6% 5% 4% 3% 2% % % (F) Product Crude Total Tank Source: SSY, Clarksons, NORDEN 214-Sep 214-May 214-Jan 213-Sep 213-May 213-Jan Source: Clarksons Platou, all tankers +1k dwt 215-Jan 215-May 215-Sep 216-Jan 216-May 216-Sep NORDEN ANNUAL REPORT 216 RESULTS 12

13 217 FULL YEAR GUIDANCE Outlook Comments USDm Dry Cargo Tankers Total Adjusted resultsfor the year -15 to to 15-2 to 4 Adjusted net result USD -2 to 4 million Corresponds to EBIT of USD -5 to 55 million Improving market conditions in dry cargo Continued poor tanker market NORDEN ANNUAL REPORT 216 RESULTS 13

14 This presentation contains certain forward-looking statements reflecting the management s present judgment of future events and financial results. Statements relating to the remainder of 217 and subsequent years are subject to uncertainty, and NORDEN s actual results may therefore differ from the projections. Factors that may cause such variance include, but are not limited to, changes in macro-economic and political conditions, particularly in the Company s principal markets; changes to the Company s rate assumptions and operating costs; volatility in rates and tonnage prices; regulatory changes; any disruptions to traffic and operations as a result of external events, etc. FORWARD LOOKING STATEMENTS NORDEN ANNUAL REPORT 216 RESULTS 14

15 Thank you for your attention Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-29 Hellerup Denmark Phone: NORDEN ANNUAL REPORT 216 RESULTS 15

16 FORWARD BACK UP SLIDES LOOKING STATEMENTS NORDEN ANNUAL REPORT 216 RESULTS 16

17 PERFORMANCE CONTINUOUSLY OUTPERFORMING THE MARKETS Tankers - 4 quarter rolling NORDEN TCE over benchmark 6, 5, 4, USD/day 3, 2, 1, -1, Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Handy MR Dry Cargo - 4 quarter rolling NORDEN TCE over benchmark Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Panamax Supramax NORDEN ANNUAL REPORT 216 RESULTS 17

18 WHAT MAKES NORDEN DIFFERENT? 2 Segments -focus on vessel types where we can make a difference Dry Cargo Tankers Full scale operational setup - Direct customer contact Portfolio of time charter-in contracts and earnings coverage Long track record of overperformance in Dry Cargo and Tankers Healthy balance sheet Transparency and clear Corporate Governance NORDEN ANNUAL REPORT 216 RESULTS 18

19 A LEADING GLOBAL TRAMP OPERATOR 9 DRY CARGO VESSELS(CORE FLEET) PANAMAX (24.5) SUPRAMAX (43.5) CAPESIZE (1) POST-PANAMAX (4) HANDYSIZE (17) Modern fleet Global network of offices and port captains Pools in Dry cargo (Handysize& Post-Panamax) and Tankers (MR & Handysize) Tankers MR (26) HANDYSIZE (15) 43 TANKER VESSELS NORDEN ANNUAL REPORT 216 RESULTS 19

20 DEVELOPMENT HIGHLIGHTS 215- Strategy: Focus & Simplicity Offices in Melbourne and Santiago Mads C. Holm foundsnorden; firstvesseldelivered in Norient Product Pool 28 Financial crisis begins First vessel calls China & Japan of 14 vessels layed up Offices in Singapore, Annapolis, Shanghai, Rio de Janeiro and Mumbai New growth strategy chartered vessels with purchase options Number of active vessels 1884 Mads C. Holm co-founds Danish Shipowners Association vesselssunk4 vessels layed up 1973 Firstof 5 standard bulk 199 carriersdelivered from Tanker Mitsui Department is established NORDEN ANNUAL REPORT 216 RESULTS 2

21 ASSET LIGHT BUSINESS MODEL Active fleet can quickly be adjusted to demand and market conditions Fleet employment based on portfolio view Flexible fleet Coverage and customer focus Capacity Employment CORE FLEET Sale and purchase Technical competencies inhouse Owned(47.5) Contracts of affreightment Customer relations Logistical efficiencies Option-based flexibility Some with purchase options Chartered> 13 months(81.5) TC out FFA market 2-1 year firm periods Quick and easy cover Flexibility and scale Arbitrage Single-trip charters * Active fleet per 31 December 216 Chartered< 13 months(132) Spot market Leverage of scale Operator profit PEOPLE BRAND SYSTEMS * Active fleet per 3 June 211 NORDEN ANNUAL REPORT 216 RESULTS 21

22 ENABLINGVALUECREATIONBASEDON THE CYCLEAND THROUGHOUT THE CYCLE Exploiting the cycle Taking a view on the fundamental market and adjusting our exposure Levers: Owned vessels Long-term T/C in Creating value throughout the cycle Creating value above industry level irrespective of market conditions Levers: Commercial operations: -Optimisation around cargo contracts (Dry Cargo) - Short-term T/C in/out - Optimisation of trade composition and positioning - Exploitation of seasonality and volatility - Vessel selection Long-term coverage Voyage execution incl. fuel optimisation Financial gearing Cost efficiency Why we succeed Fast and consistent decision making Relationships with tonnage providers Long-term player Financial strength Execution skills Skilled and experienced staff Close customer relationships Economies of scale Optimised systems and processes Strong brand NORDEN ANNUAL REPORT 216 RESULTS 22

23 OVERALL RESULTS USD million Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Total 216 EBITDA- Dry Cargo EBITDA- Tankers EBITDA- Group Depreciation EBIT Group Result for the period Adjusted result for the period Cash flow from operations Net cash flow Cash and securities NORDEN ANNUAL REPORT 216 RESULTS 23

24 NEWBUILDING PRICES Panamax(Dry) MR (Tank) Source: Clarksons NORDEN ANNUAL REPORT 216 RESULTS 24

25 CLASSIC TCE DRY CARGO Q1 Q2 Q3 Q4 Total Cape Fleet days Cape TCE ,16 6,774 12,231 4,329 Post-Panamax Fleet days ,58 Post-Panamax TCE 4,881 4,79 7,731 8,465 6,19 Panamax Fleet days 5,873 7,433 7,45 7,86 28,517 Panamax TCE 5,325 6,353 6,918 7,824 6,69 Supramax Fleet days 5,548 6,238 6,83 6,368 24,238 Supramax TCE 6,416 7,154 7,94 8,775 7,68 Handysize Fleet days 2,173 2,265 1,982 2,17 8,436 Handysize TCE 6,234 4,394 6,41 6,614 5,87 Total Fleet days 14,539 16,773 16,22 16,68 64,212 Total TCE 5,784 6,296 7,27 8,8 6,889 NORDEN ANNUAL REPORT 216 RESULTS 25

26 FINANCIAL STRENGTH Capital structure Cash in low-risk deposit accounts and securities Outstandingyard payments(incl. joint ventures (5%)) Net committed cash (ultimo) USDm Adjustednet interest bearing assets* Q4 216 Q3 216 Q2 216 Q1 216 Q T/C obligations** -1,143-1,21-1,287-1,371-1, : USD 65 million 218: USD 98 million 219: USD 44 million 22: USD 37 million Total: USD 244 million Payments for newbuilding less proceedsfrom vessel sales** Revenuefrom coverage** Net commitments Payments to NORDEN for assets held for sale: USD 67 million * Adjusted for prepayments on vessel sales and currency swaps. ** Present values NORDEN ANNUAL REPORT 216 RESULTS 26

27 FLEET VALUES Fleet values at 31 December 216 USD Number Average dwt. Carrying amount/cost Broker estimated value of owned vessels* Broker estimated value of charter party Added value Dry Cargo Panamax 5. 62, Supramax , Handysize 8. 37, Tankers MR 9. 5, Handysize , Total , NORDEN ANNUAL REPORT 216 RESULTS 27

28 DRY CARGO FLEET OVERVIEW NORDEN s Dry Cargo fleet and values at 31 December 216 Vessel type Capesize Post-Panamax Panamax Supramax Handysize Total Vessels in operation Owned vessels Chartered vessels with a duration of more than 13 months Total active core fleet Vessels to be delivered Owned vessels Chartered vessels with a duration of more than 13 months Total delivery to core fleet Dry Cargo fleet values at 31 December 216 (USD million) Market value of owned vessels and newbuildings* Theoretical value of purchase and extension options 52 * Active vessels and newbuildings including joint ventures, assets held for sale and charterparties, if any. NORDEN ANNUAL REPORT 216 RESULTS 28

29 PRODUCT TANKER FLEET OVERVIEW NORDEN s Tanker fleet and values at 31 December 216 Vessel type LR1 MR Handysize Total Vessels in operation Owned vessels Chartered vessels with a duration of more than 13 months Total active core fleet Chartered vessels with a duration of less than 13 months 4 4 Total active fleet Vessels to be delivered Owned vessels Chartered vessels with a duration of more than 13 months Total delivery to core fleet Tanker fleet values at 3 September 216 (USD million) Market value of owned vessels and newbuildings* Theoretical value of purchase and extension options 1.4 * Active vessels and newbuildings including joint ventures, assets held for sale and charter parties, if any. NORDEN ANNUAL REPORT 216 RESULTS 29

30 DRY CARGO CAPACITY NORDEN ANNUAL REPORT 216 RESULTS 3

31 DRY CARGO COVERAGE NORDEN ANNUAL REPORT 216 RESULTS 31

32 TANKERS NORDEN ANNUAL REPORT 216 RESULTS 32

33 THE SHARE (DNORD) Master data Shareholder capital DKK 42,2, Numberof shares and denomination 42,2, shares of DKK 1 Composition of shareholders 15,895 registered shareholders owning 88.3% Approx. 3.5% international ownership Classes of shares 1 Voting and ownership restrictions None 1.6% A/S Motortramp, Stensved, Denmark Stock exchange NASDAQ Copenhagen 28.1% RASMUSSENGRUPPEN AS, Kristiansand, Norway NORDEN (treasury shares) Ticker symbol DNORD 27.7% Other top 2 shareholders ISIN code DK % Other registered Bloomberg code DNORD.DC 17.9% 4.1% Non-registered Reuters code DNORD.CO NORDEN ANNUAL REPORT 216 RESULTS 33