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Page 1: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

1

(06.2016)

Page 2: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

2

Important Notice

This presentation of Hyundai Heavy Industries (HHI) contains forward-looking statements relating to HHI’s operations that

are based on management’s current expectations, estimates and projections. Words such as “anticipates”, “expects”,

“intends”, “plans”, “projects”, “schedules”, “estimates” and similar expressions are intended to identify such forward-looking

statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and

other factors including new order flows, FX rates, steel plate prices and so on, some of which are beyond company’s

control and are difficult to predict. Therefore, actual outcomes and actual results may differ materially from what is

expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-

looking statements. HHI undertakes no obligation to update any forward-looking statements to reflect subsequent events.

Page 3: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

3

Contents

HHI at a Glance

Financial Performance

Business Performance

Current Issues

Page 4: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

4

HHI at a Glance

Page 5: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

5

Date of Establishment : 1973. 12. 28

Date of Listing : 1999. 8. 24

No. of issued stocks: 76,000,000 stocks

Paid-in Capital : KRW 380 bil.

Market Value : KRW 6,672 bil. (As of December 30, 2015)

Credit Rating : A (Corporate Bond), A2 (Commercial Paper)

Korea’s large conglomerate ranking : 8th

(Excluding public companies, based on total assets)

No. of employees : 25,236 (Average 16.3 years of continuous service)

No. of dry docks : 10 (Shipbuilding), 1 (Offshore & Engineering)

Business Division : Shipbuilding, Offshore & Engineering, Industrial Plant & Engineering,

Engine & Machinery, Electro Electric Systems, Construction Equipment, Green Energy,

Refinery, Financial Services

Summary

Page 6: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

6

History

1970~2002 2002~2011 2012~2016

12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd.

11. 2000 Selected as a main contractor of the next Korean submarine builder

02. 2009 Completion of ‘H-Dock’, eligible for 1,000K Ton FPSO construction

04. 2011 Completion of World’s largest Saudi MARAFIQ power plant (2,750MW)

02. 2014 Delivery of the world’s first LNG-FSRU

04. 1975 Establishment of Hyundai Mipo Dockyard

05. 2002 Acquisition of Samho Heavy Industries Co., Ltd.

10. 2004 Launch of World’s first ship built on the ground (105K DWT Crude Oil Carrier)

06. 1994 Delivery of Korea’s first LNG Carrier

02. 2015 Completion of the World’s largest cylindrical FPSO

05. 2015 Delivery of 2,000 ships, for the first in the world.

08. 1999 Listed on the Korean Stock Exchange

02. 2001 Completion of the World’s largest deep-sea FPSO (343K Tons)

08. 2010 Acquisition of Hyudai Oilbank Co., Ltd. (70% of ownership and management)

02. 2002 Separation from Hyundai Group and foundation of HHI Group

12. 2015 Produced Eco-friendly ‘Tier-III’ engine for the first in the world

03. 2016 breakthrough the production of accumulating 10,000 HMSEN Engines

01. 2015 Recognition as the World’s Significant Ship for 32 consecutive years

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7

Delivery of 2,000 ships, for the first in the world (May. 2015)

Achievement of the world record in production of 2-stroke marine engines (Sep. 2010)

• 100 million BHP

Delivery of world’s biggest jacket (May. 1989)

• Exxon (USA)

• 40,000 ton

Delivery of Korea’s first LNG Carrier (Jun. 1994)

• 125,000 m3

Delivery of the world’s largest containership (Nov. 2014)

Business Highlights

Completed world’s largest Saudi MARAFIQ power plant (Apr. 2011)

• Power generation of 2,750 MW

• Desalination of 176 MIGD

Achievement of the domestic record in production of transformers (Feb. 2010)

• 600,000 MVA

Completion of world’s largest cylindrical FPSO (Feb. 2015)

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Ownership Structure

Chung Mong-joon

10.15%

Hyundai Mipo

Dockyard 7.98%

KCC 7.01%

National Pension

Service 5.33%

Hyundai Motors 2.88%

Asan Foundation 2.53%

POSCO 1.94%

Asan Nanum

Foundation 0.65% Treasury Shares 13.37%

Others 48.16%

(Foreign Ownership : 9.82%)

* As of Dec. 31, 2015

Page 9: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

9

Business Structures

Shipbuilding

Offshore & Engineering

Industrial Plant &

Engineering

Engine & Machinery

Electro Electric Systems

Green Energy

Construction Equipment

Refinery

Financial Services

Divisions

• VLCCs, Tankers, Product Carriers, Chemical Tankers • Containerships, Bulk Carriers, OBO Carriers • Ro-Pax Ships, Ro-Ro Ships, Pure Car and Truck Carriers • LPG Carriers, LNG Carriers • Drill Ships, Semi-Submersible Rigs • Submarines, Destroyers, Frigates

• Floating Units : FPSO, FLNG, FPU, TLP, Semi Submersible Unit • Fixed Platforms : Topsides Jacket & Pile, Jack-up, : Modules & Quarters • Pipelines & Subsea Facilities, Land-based Modules • Offshore Installations

• Power Plants t : Combined-Cycle, Thermal Power Plants • Process Units t : Oil and Gas Refinery, Tank Farm, GTL and LNG Facilities • Plant Equipment : Industrial Boiler, HRSG, CFBF, Boiler, Regenerator and Reactor

• Marine Engines : 2-Stroke and 4-Stroke(HiMSEN) Engines, Components, Marine Propulsion & Equipment • Industrial Machinery : Pump, Compressor • Robot & Automation : Processor, Conveyor System, Robot

• Transformers, Gas Insulated Switchgear, Switchgear • Low- and Medium-Voltage Circuit Breakers • Rotating Machinery • Power Electronics and Control Systems, Wind Power Systems

• Excavator • Wheel Loader, Skid Loader • Forklift

• Solar Power Systems

• Petroleum : LPG, Gasoline, Kerosene, Jet Fuel • Petrochemicals : Propylene, Alkylate, BTX, Naphtha

• Securities Brokerage • Asset Management, Leasing • Futures • Corporate Finance

Main Products

• Hapag-Lloyd (DEU) • C.P. Offen (DEU) • CMA CGM (FRA) • A.P. Moller (DEN) • Seaspan (CAN) • Enesel S.A. (GRC)

• BP (GBR) • Exxon Mobil (USA) • Shell (USA) • Chevron (USA) • Total (FRA) • ENI Norge (NOR)

• Shell (USA) • MEW (KWT) • SEC (SAU)

• HMD (KOR) • DSME (KOR) • SHI (KOR) • Shanghai (CHN)

• Aramco (SAU) • KEOCI (KOR) • DSME (KOR) • Daelim (KOR)

Main Clients

• DSME (KOR) • SHI (KOR)

• DSME (KOR) • SHI (KOR) • Technip (FRA) • Saipem (ITA) • Mc Dermott (USA)

• Siemens (DEU) • Hyundai E&C (KOR) • Doosan Heavy (KOR) • Samsung C&T Corp. (KOR)

• Doosan (KOR) • STX (KOR) • Mitsui (JPN) • Hudong Dalian (CHN)

• ABB (SWE) • Siemens (DEU) • Hyosung (KOR)

• Komatsu (JPN) • Caterpillar (USA) • Doosan Infracore (KOR)

• LG, Hanwha (KOR) • SolarWorld (GER)

• SK Innovation (KOR) • GS-Caltex (KOR) • S-Oil (KOR)

Competitors Capacity

• 10 mil. GT

• Floaters : 1~2 units • Fixed Platform : 3~4 units • Pipeline Laying : 30km

• Power Plant : 1,000MW (4~5 PJTs)

• Large Engines (500 units) : 18 mil. BHP • Medium (1,800 units) : 5 mil. BHP

• Transformer (620 units) : 121,400 MVA • Wind Turbine : 600MW

• 42,900 units (Excavator 26,200 units)

• Solar Cell/Module : 600MW

• 390,000 B/D

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10

Sales Breakdown

36.1%

9.7%

9.1% 3.8% 5.4%

4.8%

0.7%

27.8%

2.2% 0.4%

Shipbuilding (KRW 16,672.6 bil.)

Offshore & Engineering (KRW 4,466.0 bil.)

Industrial Plant & Engineering (KRW 4,186.4 bil.)

Refinery (KRW 12,831.8 bil.)

Green Energy (KRW 330.3 bil.)

Construction Equipment (KRW 2,225.1 bil.)

Electro Electric Systems (KRW 2,507.3 bil.)

Engine & Machinery (KRW 1,776.6 bil.)

Other (KRW 196.2 bill)

Financial Services (KRW 1,039.4 bil)

* 2015 consolidated basis

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11

Affiliates ▶ 26 affiliated companies in Hyundai Heavy Industries Group (Including HHI, excluding overseas corporations)

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Global Network

▶ Established 15 overseas offices and 28 incorporated firms, a total of 43 global network.

New Jersey

■■ Atlanta

Houston■

Brazil ■

Alabama ■

Hyundai Ideal Electric Co. ■

[America]

London ■

Oslo ■

■Moscow ■VGF

■ Athens

■Germany ■Netherlands

■Bulgaria

■ Belgium

France■ Hungary■

[Europe]

■ India

Nigeria■

Kuwait ■

Riyadh■■Al Khobar ■

■■ Dubai,

Jebel Ali

■Ruwanda

[Middle East / Africa]

M-Agro, K-Agro ■■

■Tokyo ■ Osaka

■ Singapore

■Jakarta

Beijing■

Tai’an, Yantai, Weihai■■■ ■■■ ■■■

[Asia]

■ Oversea Office (15)

■Production

/Sales(14)

■ Sales (4)

■ Construction (4)

■ Agriculture (2)

■ R&D (2)

■ Management (2)

As of the end of 2015

Region Europe America AsiaMid. East

/ AfricaTotal

Oversea Office 4 3 3 5 15

Incorporated Firm 9 4 12 3 28

Total 13 7 15 8 43

Jiangso, Yangzhong, Shangdong

HHI China Investment Co., Ltd. Hyundai Financial Leasing Co., Ltd. HHI Shanghai R&D Co., Ltd.

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Financial Performance

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14

Quarterly Operating Income Margin (Consolidated)

13.47%

7.69%

6.99%

6.05%

7.07%

2.64%

4.55%

0.41%

2.87% 2.21%

1.69% -0.59%

-1.40%

-8.62%

-15.60%

-0.16% -1.57%

-1.43%

-8.22%

-2.51%

3.17%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

▶ Recorded KRW 3.2 tril. of operating loss in 2014 reflecting KRW 1.6 tril. of provision mostly for three semi-submersible

rigs, two power plant projects and offshore production facilities.

▶ Recorded KRW 1.5 tril. of operating loss in 2015 reflecting KRW 396 bil. of loss due to cancellation of two

semi-submersible rigs and 1.3 tril. of loss from offshore production facilities.

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15

Financial Summary (Consolidated)

Operating Profit Sales

Liabilities to Equity Ratio Debt to Equity Ratio

4,561

2,006

802 -3,250

-1,540 325

8.5%

3.6% 1.5%

-6.2% -3.3%

3.2%

-10%

-5%

0%

5%

10%

15%

-4,000

-2,000

0

2,000

4,000

6,000

'11 '12 '13 '14 '15 '16.1Q

Operating Profit(Left) OP Margin(Right)

53,711.7 54,973.7 54,188.1 52,582.4

46,231.7

10,272.8

0

10,000

20,000

30,000

40,000

50,000

60,000

'11 '12 '13 '14 '15 '16.1Q

30,824 30,532 34,175 36,746 34,234 34,370

169.6% 162.9% 179.6%

220.8% 220.9% 218.8%

0%

50%

100%

150%

200%

250%

0

10,000

20,000

30,000

40,000

'11 '12 '13 '14 '15 '16.1Q

Liabilities(Left) Liabilities to Equity(Right)

11,057 14,827 15,843 16,543 16,852 17,200

60.8%

79.1% 83.3% 99.4%

108.7% 109.5%

0%

50%

100%

150%

0

5,000

10,000

15,000

20,000

'11 '12 '13 '14 '15 '16.1Q

Debt(Left) Debt to Equity Ratio(Right)

(Unit : Bil. KRW)

Page 16: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

16

Financial Summary (Consolidated) (Unit: Bil. KRW)

54,973.7 100.0% 54,188.1 100.0% 52,582.4 100.0% 46,231.7 100.0% 10,272.8 100.0%

2,005.5 3.6% 802.0 1.5% (3,249.5) -6.2% (1,540.1) -3.3% 325.2 3.2%

Shipbuilding 1,047.1 5.9% 12.6 0.1% (1,895.9) -11.5% (648.3) -3.9% 191.3 4.6%

Offshore 319.3 7.3% 282.4 5.9% (230.3) -4.9% (1,294.5) -29.0% (71.4) -7.7%

Industrial Plant 106.5 7.4% 61.4 5.0% (1,130.8) -46.9% (76.3) -1.8% (58.5) -6.6%

Engine & Machinery 347.7 17.3% 118.3 6.9% (10.9) -0.7% 66.7 3.8% 67.7 18.7%

Electro Electric

Systems(74.3) -2.6% 90.5 3.3% 86.3 3.7% 143.6 5.7% 50.5 10.1%

Construction Equip. 276.5 7.3% 194.3 5.9% (33.4) -1.2% (116.2) -5.2% 1.6 0.3%

Green Energy (106.3) -31.5% (103.2) -32.8% (16.5) -5.3% 16.3 4.9% 8.3 10.0%

Refinery 308.7 1.4% 404.4 1.8% 228.4 1.1% 628.7 4.9% 202.3 8.1%

Finance 94.9 15.0% 34.5 5.2% 36.3 4.9% 53.3 5.1% 26.7 10.7%

Others (314.6) - (293.2) - (282.7) - (313.4) - (93.3) -

1,029.6 1.9% 146.3 0.3% (2,206.1) -4.2% (1,363.2) -2.9% 244.5 2.4%

2016. 1Q

Operating Profit

Sales

Net Income

2012 20152013 2014

Page 17: (06.2016) · 2016. 6. 20. · 6 History 1970~2002 2002~2011 2012~2016 12. 1973 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd. 11. 2000 Selected as a main contractor

17

Financial Summary (Consolidated)

(Unit: Bil. KRW)

2012 2013 2014 2015 Mar. 31, 2016

49,273.1 53,205.0 53,384.4 49,732.8 50,075.9

Current Assets 25,278.6 29,254.2 29,871.6 27,174.5 27,744.2

Cash & Cash Equivalents 1,107.7 1,336.6 3,229.3 3,105.3 4,596.1

Non-Current Assets 23,994.5 23,950.8 23,512.8 22,558.3 22,331.7

30,531.8 34,175.4 36,745.8 34,233.8 34,369.5

Current Liabilities 22,174.0 26,516.4 27,702.7 23,060.6 23,569.8

Non-Current Liabilities 8,357.8 7,659.0 9,043.1 11,173.2 10,799.7

18,741.3 19,029.6 16,638.6 15,499.0 15,706.4

162.9% 179.6% 220.8% 220.9% 218.8%

Debt-to-Equity Ratio 79.1% 83.3% 99.4% 108.7% 109.5%

Total Debt 14,826.5 15,843.2 16,543.1 16,852.1 17,200.2

※ Debt Status of major consolidated subsidiaries (Unit: Bil KRW)

 As of Mar. 31, 2016 : HHI 8,467(66.3%) / HMD 1,081 (59.2%) / HSHI 1,854 (69.7%)

Total Assets

Total Liabilities

Total Shareholder's Equity

Liabilities-to-Equity Ratio

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Business Performance

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New Order Trend

2,043 2,809

6,792 8,488 8,272

11,470

15,730 13,635

444

4,061

10,905

6,143

9,512

6,192 5,984

8,468 4,357 2,968

3,025

4,917

7,835

7,236

9,290 13,838

10,291

13,147

14,419

13,424

17,851

13,642

8,554

11,027

6,400 5,777

9,817

13,405

16,107

18,706

25,020

27,473

10,735

17,208

25,324

19,567

27,363

19,834

14,538

19,495

0

5,000

10,000

15,000

20,000

25,000

30,000

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Shipbuilding Non-shipbuilding

+34.1% YoY

(Unit: Mil. USD)

(Target)

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20

2016 Orders & Backlog by Division (Non-Consolidated)

(Unit: Mil USD)

Backlog

2016

Target May.Achieve-

mentTarget Annual May. May.

Shipbuilding 8,468 731 8.6% 8,350 5,984 2,283 13,917

Offshore & Engineering 3,200 303 9.5% 5,300 1,572 797 13,109

Industrial Plant &

Engineering1,000 2 0.2% 1,650 1,258 88 10,625

Engine & Machinery 2,407 482 20.0% 2,571 1,860 891 1,988

Electro Electric Systems 2,291 870 38.0% 2,445 1,873 740 2,071

Construction Equipment 1,814 713 39.3% 2,298 1,692 890 -

Green Energy 315 124 39.4% 336 299 118 39

Total 19,495 3,225 16.5% 22,950 14,538 5,807 41,749

(*Backlog above is on delivery basis)

2016

New Orders

2015

▶ Achieved lower new orders than expected in Offshore and Industrial Plant divisions due to low oil price in 2015.

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21

Shipbuilding

Bulker LPGC LNGC Naval Ship Car Carrier Containership Drill ship VLCC Semi-Rig

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World shipbuilding Market share Shipbuilding

<Output in 2015>

(No. of Vessels) (1,000 CGT)

1 Hyundai Heavy Industries(KOR) 64 2,905 7.9%

2 Hyundai Mipo Dockyard(KOR) 81 1,899 5.2%

3 Samsung Heavy Industries(KOR) 32 1,895 5.2%

4 Daewoo Shipbuilding & Marine Engineering(KOR) 30 1,786 4.9%

5 Hyundai Samho Heavy Industries(KOR) 35 1,491 4.1%

6 Dalian Shipbuilding(CHN) 23 890 2.4%

7 Jiangsu New YZJ(CHN) 31 666 1.8%

8 Imabari Shipbuilding(JPN) 47 584 1.6%

9 Shanghai Waigaoqiao(CHN) 16 584 1.6%

10 Japanese Marine United(JPN) 29 512 1.4%

1,454 23,446 64.0%

1,842 36,658 100.0%

HHI Group 180 6,295 17.2%

(Source : Clarkson)

Market Share

(%)

Total

Rest

ShipbuilderRankOutput in 2015

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Demand

1.1

8.3 8.4

1.6

0.4 1.3

5.9

1 0.1 0 0.2

2.7

0

2

4

6

8

10

Bulkers Tankers Containers LNGC's LPGC's Others

New Orders by ship type (Unit: Mil. GT)

May. 2015 May. 2016

177.2

111.4

34.6

95.9

62.8

41.3

117.1

78.9

59.2

21.1 9.9

0.0

50.0

100.0

150.0

200.0

'07 '08 '09 '10 '11 '12 '13 '14 '15 May.

'15

May.

'16

Global Demand (Unit : Mil. GT)

Bulkers Tankers Containers LNGC's LPGC's Others

<Global Demand> (Unit: Mil. GT)

'07 '08 '09 '10 '11 '12 '13 '14 '15 YoY '15.5 '16.5 YoY

Total 177.2 111.4 34.6 95.9 62.8 41.3 117.1 78.9 69.5 -11.9% 21.1 9.9 -53.1%

Bulkers 92.6 57.0 21.1 58.6 23.7 13.8 56.7 34.9 10.0 -71.3% 1.1 5.9 436.4%

Tankers 28.0 29.9 8.6 20.7 6.1 9.1 21.5 15.2 25.8 69.7% 8.3 1.0 -88.0%

Containers 35.0 12.7 1.0 6.6 20.1 4.6 23.1 11.4 22.5 97.4% 8.4 0.1 -98.8%

LNGC 2.5 0.6 0.0 0.5 5.4 4.1 4.1 7.1 3.5 -50.7% 1.6 0.0 -100.0%

LPGC 0.7 0.6 0.1 0.6 0.4 1.1 2.8 3.4 2.3 -32.4% 0.4 0.2 -50.0%

Others 18.4 10.6 3.8 8.9 7.1 8.6 8.9 6.9 5.4 -21.7% 1.3 2.7 107.7%

* Others : Offshore, Cruise vessels, Ro-Ro ferries, MPP, Reefers, PCC (Source : Clarkson)

Shipbuilding

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24

Competition Shipbuilding

* Source : Clarkson

(%) (%) (%) (%) (%) (%)

Korea 26 41.4 13.3 32.2 36.3 31.1 24.1 29.7 23.1 33.7 0.5 5.1

China 23.5 37.4 14.9 36.1 51.7 44.3 33.2 40.9 20.5 29.9 6.5 65.7

Japan 8.1 12.9 8.9 21.5 19.7 16.9 17.3 21.3 19.1 27.9 0.6 6.1

Others 5.2 8.3 4.2 10.2 9.1 7.8 6.5 8.0 5.8 8.5 2.3 23.2

Total 62.8 - 41.3 - 116.8 - 81.1 - 68.5 - 9.9 -

May.

'16Region '11 '12 '13 '14 '15

41.4 37.4

12.9

32.2 36.1

21.5

31.1

44.3

16.9

29.7

40.9

21.3

33.7 29.9 27.9

0.0

10.0

20.0

30.0

40.0

50.0

Korea China Japan

Global Market Share (%)

2011

2012

2013

2014

2015

19.9 16.3 8.5

2.1

39.3

21.1 10.0

1.3

3.5 11.5

13.6

7.9

0.0

50.0

100.0

Korea China Japan

Backlog (May. 2016) (Unit: Mil. GT)

Tanker Bulk LNGC

LPGC Containership Offshore

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Price Trend Shipbuilding

0

50

100

150

200

250

300

0

50

100

150

200

'07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Capesize180K dwt (Left)

VLCC 320K dwt (Left)

Containership 13,000

teu(Left)

LPG carrier 78-84K ㎥

(Left)

LNG carrier 160K ㎥

(Right)

<Price Trend> (Unit: Mil USD)

'07 '08 '09 '10 '11 '12 '13 '14 '15 YoY '16.5Since

15/12/31

Clarkson Index 185.1 177.7 138.0 142.4 139.0 126.3 133.2 137.7 131.0 -4.9% 129.0 -1.5%

Bulker(180K) 97.0 88.0 56.0 57.0 48.5 46.0 53.5 54.0 46.0 -14.8% 44.0 -4.3%

Tanker(320K) 146.0 150.0 101.0 105.0 99.0 93.0 94.0 97.0 93.5 -3.6% 90.0 -3.7%

Containership(13,000TEU)

- 166.0 118.0 129.0 128.0 107.0 113.5 116.0 116.0 0.0% 112.5 -3.0%

LPGC(82K㎥) 93.0 92.0 72.0 72.8 73.0 70.0 74.5 79.0 77.0 -2.5% 74.0 -3.9%

LNGC(160K㎥) 237.0 245.0 211.5 202.0 202.0 199.5 198.0 200.0 199.0 -0.5% 197.0 -1.0%

* Index=100 in year 1988 (Source: Clarkson)

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Annual Sales & New Orders

Sales Breakdown by Product (2015) Sales Contribution(2015)

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

* Non-Consolidated basis

6,443 7,557

9,084 9,003 7,849

9,487 9,766 10,159 9,349 8,736

11,470

15,730

13,635

444

4,061

10,905

6,143

9,512

6,192 5,984

0

5,000

10,000

15,000

20,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales New Orders

19%

14%

4%

19%

25%

5%3%

8%4%

Container

Tanker

Drillship

LNGC

LPGC

Semi-Rig

Bulk Carrier

Naval

Others

* Non-Consolidated basis

Overview Shipbuilding

Main Products

• VLCCs, Tankers, Product Carriers, Chemical Tankers

• Containerships, Bulk Carriers, OBO Carriers

• Ro-Pax Ships, Ro-Ro Ships, Pure Car and Truck Carriers

• LNG Carriers, LPG Carriers

• Drillships, Semi-Submersible Rigs

• Submarines, Destroyers, Frigates

Operational Highlights

Completion of Gunsan Shipyard (Mar. 2010)

Investment & Technical Corporation Agreement with OSX (May 2010)

10% of stake in OSX(USD 61.9 mil.) in exchange for technical advise for

establishment of a shipyard

Delivery of first drillship (Sept. 2010)

Delivery of 1,700th vessel (Jan. 2011)

Recorded delivery of 100 million GT in ships (Mar. 2011)

Delivery of the World’s first LNG-FSRU (Feb. 2014)

Shipbuilding

36%

(Unit : sales - bil. KRW, New order – mil. USD)

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27

• Based on the delivery amount

Performance Shipbuilding

33.0%

29.3%

27.6%

10.1%

New Orders by Shiptype (2015)

Tanker

Containership

Gas Carrier

Others

23.4%

12.3%

41.8%

1.3% 3.7%

17.5%

Backlog by Shiptype (2015)

Tanker

Containership

Gas Carrier

Bulk

Semi-Rig

Naval & Others

• Backlogs as of Dec. 2015(YTD) : 141 vessels, USD 16.8 bil. • Based on the amount

2014 Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total TargetAchieve-

ment

# of

ships60 2 6 0 4 10 8 9 2 7 7 4 1 60 -

Amount 6,192 198 411 27 435 1,212 902 1,083 142 515 519 408 132 5,984 8,350 71.7%

New Orders in 2015 (in million USD)

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2015 Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total TargetAchieve-

ment

# of

ships60 0 1 2 0 4 7 -

Amount 5,984 0 77 157 0 497 731 8,468 8.6%

New Orders in 2016 (in million USD)

25.6%

12.9%

39.3%

1.2% 4.3%

16.7%

Backlog by shiptype (May. 2016)

Tanker

Containership

Gas Carrier

Bulk

Semi-Rig

Naval & Others

Performance Shipbuilding

• Backlog as of May. 2016 (YTD) : 114 vessels, USD 13.9 bil.

• Based on the delivery amount

• Based on the amount

39.5%

59.4%

1.1%

New Orders by Shiptype (May.2016)

Tanker

Gas Carrier

Others

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Annual Delivery (Mil. GT) Annual Delivery (number of vessels)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Ulsan 75 88 80 55 71 69 44 46 50

Offshore

(on-ground

building)

6 14 25 14 13 4 0 0 0

Gunsan - - - 10 9 11 12 10 15

Total

# of Ship81 102 105 79 93 84 56 56 65

Delivery Shipbuilding

5.1

6.4 6.2

4.8

6.2 6.0

3.7 4.6 4.9

0.3

0.8 1.8

0.9

1.1

0.3 0.9

0.8

1.2

1.2

0.7

1.3 5.4

7.2

8.0

6.6

8.1

7.5

4.9 5.3

6.2

0

1

2

3

4

5

6

7

8

9

10

'07 '08 '09 '10 '11 '12 '13 '14 '15

Gunsan

Offshore

Ulsan

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Offshore & Engineering

FPSO Modules Fixed Platform Subsea Pipelines Installation

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Offshore &

Engineering

18%

1,935

2,222

3,095 3,423 3,413

3,729

4,373 4,753 4,653

4,467

1,997

1,102

2,978

2,352

3,069

4,480

2,072

6,503 6,005

1,572

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales New Orders

Sales Contribution (2015)

(Unit : sales - bil. KRW, New order – mil. USD)

Annual Sales & New Orders

• Floating Units: FPSOs, FLNGs, FPUs, TLPs, Semi Submersible Units

• Fixed Platforms: Topsides, Jackets & Piles, Jack-ups, Modules & Quarters

• Pipelines & Subsea Facilities: Subsea Pipelines

• Offshore Installations: Platforms, Pipelines

• Land-Based Modules

Main Products

Operational Highlights

Received USD 1.1 bil. of Goliat FPSO order (Feb. 2010)

Received USD 0.9 bil. of Barzan offshore platform order (Jan. 2011)

Received USD 1.2 bil. of BP Q204 FPSO order (Feb. 2011)

Received USD 0.6 bil. of BP Clair Ridge platform order (Mar. 2011)

Received USD 1.1 bil. of Aasta Hansteen Topside order (Jan. 2013)

Received USD 1.9 bil. of Moho Nord TLP & FPU order (Mar. 2013)

Received USD 1.9 bil. of Rosebank FPSO order (Apr. 2013)

Fixed

Platforms&

Floaters…

Subsea

Pipeline

11%

* Non-Consolidated basis * Non-Consolidated basis

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

Overview Offshore & Engineering

Sales Breakdown by Product (2015)

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New Orders by Type

($ mil.) 2009 2010 2011 2012 2013 2014 2015 May.16

Fixed 2,188 1,501 2,121 1,621 454 4,406 718 153

Floating 47 1,303 1,819 412 5,735 1,470 657 146

Subsea Pipeline 108 252 539 31 292 129 197 4

Others 9 13 1 8 22 0 0 0

Total 2,352 3,069 4,480 2,072 6,503 6,005 1,572 303

Major Projects in 2009/2010 (Delivered)

Gorgon LNG (Oct. 2009)

- LNG processing modules fabrication ($2.1 bil. from Chevron)

Myanmar SHWE Field development project (Feb. 2010) - Installation of gas production & processing platform, pipeline & onshore terminal ($1.4 bil. from Daewoo International Corp.)

Goliat FPSO (Feb. 2010) - Cylindrical Floating Production Storage Offloading unit ($1.1 bil. from ENI Norge AS)

Performance Offshore & Engineering

# of

projectsMajor Projects

Platforms 86· Bonkot 4A Platform (PTTEP, 2011)

· SHWE Platform (Daewoo Intl., 2013)

Onshore Facilities

& Others16

· Gorgon LNG Plant Modules

(Chevron, 2009)

Jack-up Rig 2 · MSC Jack-up Rig (A. P. Moller 2004)

FPSO 12· Goliat FPSO (Eni Norge AS, 2015)

· Quad 204 FPSO (BP, 2015)

FPU 4· Moho Bilondo FPU

(Total E&P Congo, 2008)

TLP 1 · West Seno TLP (Unocal, 2003)

Semi-Submersible

Drilling Rig3 · Deepwater Horizon (R&B Falcon, 2000)

33· Offshore Gas Spur Line

(PTT PCL, 2011)

Fixed

Floating

Subsea Pipelines

Type

Performance Record (1976~Present)

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Major Projects Awarded in 2011

Qatar, Barzan Offshore Project (Delivered)

- Date : Jan. 2011

- Price : USD 860 million

- Owner : RasGas Company

- Details : Fabrication and Installation of

Wellhead Platforms, Living Quarters,

Onshore & Offshore pipeline (EPC)

UK, Q204 FPSO

(Delivered) UK, Clair Ridge Platform (Delivered)

- Date : Feb. 2011

- Price : USD 1.2 billion

- Owner : BP

- Details : Construction of FPSO (EPC),

Processing 0.32 million bpd, storing

0.8 million bbls

- Date : Mar. 2011

- Price : USD 620 million

- Owner : BP

- Details : Fabrication and Installation of

Drilling and Quarters Platforms (EPC)

Performance Offshore & Engineering

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Norway, Aasta Hansteen Spar Topside

- Date : Jan. 2013

- Price : USD 1.1 billion

- Owner : Statoil

- Details : Fabrication and Installation of

Spar Topsides (EPC)

Congo, Moho Nord TLP & FPU UK, Rosebank FPSO

- Date : Mar. 2013

- Price : USD 1.9 billion

- Owner : Total

- Details : Fabrication and Installation of

Tension Leg Platform and

Floating Production Unit (EPC)

- Date : Apr. 2013

- Price : USD 1.9 billion

- Owner : Chevron

- Details : Construction of FPSO (EPC)

Processing 100,000 BOPD (Oil),

190 MMSCFD (Gas),

storing 1.05 million bbls

TLP (Tension Leg Platform)

FPU (Floating Production Unit)

Major Projects Awarded in 2013

Performance Offshore & Engineering

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Indonesia, Jangkrik FPU

- Date : Feb. 2014

- Price : USD 250 million

- Owner : Eni Muara Bakau B.V.

- Details : Hull/LQ (EPC)

Major Projects Awarded in 2014

Abu Dhabi, NASR Package 2

- Date : Jul. 2014

- Price : USD 1.9 billion

- Owner : Abu Dhabi Marine

Operating Company

- Details : Offshore Super Complex

Platforms & Power Distribution

Platform (EPCI)

Nasr Field

Umm Lulu

Russia, Odoptu Stage 2 Project

- Date : Jun. 2014

- Price : USD 270 million

- Owner : Exxon Neftegas Limited

- Details : Onshore Modules (EPC)

- Date : May. 2014

- Price : USD 700 million

- Owner : Hess E&P Malaysia

- Details : Central Processing Platform,

Wellhead Platform, Bridge (EPCIC)

Malaysia, Bergading Project

Performance Offshore & Engineering

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Industrial Plant & Engineering

Combined Cycle Power Plant

Thermal Power Plant

Co-generation Power Plant

RFCC Plant Equipment

Oil & Gas Process Plant

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Industrial Plant

& Engineering

17%

Sales Contribution (2015)

(Unit : sales - bil. KRW, New order – mil. USD)

Annual Sales & New Orders Main Products

Power Plants

Combined-Cycle, Cogeneration, and Thermal Power Plants

• Process Plants

Oil and Gas, Refinery, Tank Farm, GTL, and LNG Facilities

• Plant Equipments

Industrial Boiler, HRSG(Heat Recovery Steam Generator),

CFBC(Circulating Fluidized Bed Combustor) Boiler, Regenerator & Reactor

Operational Highlights

Power Plant

87%

Oil & Gas

8%

Plant

Equipments

6%

602

1,017 1,374

1,898

2,645 2,761

1,480 1,259

2,429

4,174

846

1,544

2,076

2,826

2,010

1,014

4,077 4,396

1,256 1,258

0

1,000

2,000

3,000

4,000

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Sales New Orders

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

* Non-Consolidated basis * Non-Consolidated basis

Overview Industrial Plant & Engineering

• Received a USD 1.0 bil. Das Island order (Jul. 2009)

• Received a USD 2.6 bil. Sabiya order (Sept. 2009)

• Signed an MOU for supplying ITER vacuum vessel (Jan. 2010)

• Received a USD 1.6 bil. Riyadh order (Jun. 2010)

• Received a USD 3.2 bil. Jeddah South order (Oct. 2012)

• Received a USD 3.3 bil. Shuqaiq order (Aug. 2013)

• Received a USD 1.1 bil. NRP order (Oct. 2015)

Sales Breakdown by Product (2015)

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Performance Record (1976~Present) New Orders by Type

Major Projects in 2012/2013/2014 /2015

Jeddah South (Oct. 2012)

- 3.2 bil. USD / Saudi Electricity Company, Saudi Arabia - 2,400MW Oil fired Conventional Power Plant

Shuqaiq Power Plant (Aug. 2013)

- 3.3 bil. USD / Saudi Electricity Company, Saudi Arabia - 2,640MW Oil fired Conventional Power Plant

Clean Fuel Project (Apr. 2014)

- 1.1 bil. USD / Kuwait National Petroleum Company, Kuwait - Upgrade and expansion of Refinery

Performance Industrial Plant & Engineering

(Mil. USD) 2009 2010 2011 2012 2013 2014 2015 May.16

Power Plants 1,412 1,601 9 3,510 4,285 6 5 0

Chemical Plants

/Plant Equip.1,414 409 1,005 567 111 1,250 1,253 2

Total 2,826 2,010 1,014 4,077 4,396 1,256 1,258 2

Project Type Major Projects

Oil &

Gas

Oil & Gas

· Integrated Gas Development (IGD) Project (ADGAS, UAE, 2013)

· Escravos Gas Plant Phase Ⅲ (Chevron Nigeria Ltd., Nigeria, 2010)

· Bonny Terminal Integrated Project (Shell Petroleum Development, Nigeria, 2008)

Tank Farm · KOC Crude Oil Export Facilities Project (Kuwait Oil Company, 2008)

· JPR Zarpa Tank Farm Project (Jordan Petroleum Company, 2000)

Refinery & Petrochemical

· HCP No.2 BTX Project Daesan (HC Petrochem, Korea, 2013)

· Mumbai Diesel Hydro-Desulfurization Project (Hindustan Petroleum Company, India, 2000)

· HPC 2nd Petrochemical Complex Project (Hyundai Oilbank, 1997)

Gas to Liquid · Pearl GTL Feed Gas Preparation Project (Qatar Shell, 2011)

Power Plant

Combined Cycle/

Simple Cycle Power Plant

· Riyadh PP 11 Independent Power Project (Dhuruma Electricity Company, Saudi Arabia, 2013)

· Sabiya Combined Cycle Gas Turbine Project (Ministry of Electricity and Water, Kuwait, 2013)

· Al Dur Independent Water and Power Project (Al Dur Power & Water Co., Bahrain, 2012)

· Marafiq Independent Water and Power Project (Jubail Water and Power Company, Saudi Arabia, 2010)

· Shaybah Power Generation Project (Saudi Aramco, Saudi Arabia, 2008)

Cogeneration Power Plant

· Saudi Aramco 3rd party Cogeneration Program (Tihama Power Company, Saudi Arabia, 2006)

Thermal Power Plant

· Namjeju #3&4 Thermal Power Plant (KEPCO, Korea, 2007)

· Makkah-Taif Thermal Power Plant (Saline Water Conversion Corporation, Saudi Arabia, 1989)

Desalination Plant · Taweelah A1 (ADWEA, UAE, 2002) · Taweelah B (ADWEA, UAE, 1995) · Umm Al Nar West (ADWEA, UAE, 1982) · Al Khobar Phase 2 (SWCC, Saudi Arabia,1981)

Zor Refinery Project (Oct. 2015)

- 1.1 bil. USD / Kuwait National Petroleum Company, Kuwait - Refinery power plant Package 2(Ancillary process), package 3(Utilities & Offsite facilities)

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Engine & Machinery

Marine Engine Power Plant Engine Marine Propeller Robotics Industrial Machinery

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Engine &

Machinery 10%

(Unit : sales - bil. KRW, New order – mil. USD)

Annual Sales & New Orders Main Products & Capacity

Operational Highlights

• Two-Stroke Diesel Engines (500 units, 18 mil. BHP)

• Four-Stroke(HiMSEN) Engines (1,800 units, 5 mil. BHP)

• Diesel and Gas Power Plant Engines

• Propellers and Crankshafts

• Steam Turbines and Turbochargers

• Industrial and Marine Pumps, Industrial Robots, Side Thrusters

• Presses, Conveyor Systems, and Steel Strip Process Lines

Sales Contribution (2015)

Surpassed cumulative four-stroke engine production of 20 mil. bhp (Mar. 2010)

Production of eco-friendly marine engine meeting new IMO standards (Mar. 2010)

• Received a 95MW PPS order from Venezuela (Apr. 2010)

• Received a 75MW diesel power plant order from Bangladesh (Apr. 2010)

• Development of high output eco-friendly gas engine (May 2010)

- 20% reduction of CO2 emission and 97% reduction of NOX emission

Surpassed cumulative two-stroke engine production of 100 mil. bhp (Sept. 2010)

Production of 1,000th Packaged Power Station (Jul. 2012)

Marine

Engine

78%

Power

Plant

Engine 6%

Hydraulic

Machinery

7%

Robotics

9%

1,220

1,646

2,522 2,772 2,835 3,096 2,967

2,313 2,110

2,441

1,880

3,248

4,646

1,452

2,283

3,176

1,858

2,425

1,996 1,860

0

1,000

2,000

3,000

4,000

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales New Orders

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

* Non-Consolidated basis * Non-Consolidated basis

Overview Engine & Machinery

Sales Breakdown by Product (2015)

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Eco-friendly Diesel Engine

- 15% 3eduction of NOx emission meeting new IMO standards

High output Eco-friendly HiMSEN Gas Engine

- 20% reduction of CO2 emission compared to disel engine

- 97% reduction of NOx emission to reach the world’s lowest

level of 50ppm

- 47% improvement in engine performance

- USD 70 mil. order for 70 MW Diesel Power Plants from Bangladesh Power Development Board (BPDB)

Eco-friendly Engine Products

Major Projects

- USD 160 mil. order for 204 MW, 120 Packaged Power Stations from electricity company Electricidad de Caracas, Venezuela

- USD 74 mil. order for 140 MW Diesel Power Plants from Equitatis, Equador

Diesel Power Plants order from Bangladesh (Apr. 2010)

PPS order from Venezuela (Apr. 2010)

Diesel Power Plants order from Ecuador (May 2011)

Performance Engine & Machinery

- USD 32 mil., order for 57MW, 34 Packaged Power Station from JINRO, Panama

PPS order from JINRO, Panama (Jun. 2015)

Large-sized

Marine Engine

Mid-sized

Marine Engine

Diesel Power

Plant

Domestic 67 53 -

Global 35 21 8

Market Share in 2015 (%)

33.2% 35.7% 36.8%

56.7%

10.9% 13.1% 7.9%

15.3%

55.9% 51.2% 55.4%

28.0%

'12 '13 '14 '15

New Orders by Region (%)

Domestic China Others

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Electro Electric Systems

Transformer Switchgear Circuit Breaker Rotating Machinery

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Electro Electric

Systems 10%

Transformer

28%

High

Voltage

Circuit

Breaker

18%

Low Voltage

Circuit

Breaker

6%

Switchgear

17%

Rotating

Machinery

20%

Others 9%

1,057

1,453

1,925

2,712

3,242

2,319

2,843 2,609

2,241 2,354

1,274

1,766

2,281 2,556

3,793

2,625

2,318

1,820 2,006 1,873

0

1,000

2,000

3,000

4,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales New Orders

(Unit : sales - bil. KRW, New order – mil. USD)

Sales Contribution (2015)

Annual Sales & New Orders

Operational Highlights

Main Products

Sales Breakdown by Product (2015)

• Transformers (up to 765kV, 1,300MVA), Gas Insulated switchgear(25.8kV~800kV),

Low voltage Switchgear

• Low and Medium Voltage Circuit Breakers

• Rotating Machinery

• Power Electronics and Control Systems

Awarded Asia-Pacific Power Transmission Equipment Company of the Year

by Frost & Sullivan (Aug. 2009)

Received USD 0.25 bil. transformer order from South Africa (Nov. 2009)

Received USD 0.6 bil. transformer order from the US (May 2010)

Reached the transformer production milestone of 700,000MVA (Dec. 2010)

Received 1,000 GIS order from Russia (Jun. 2011)

* Non-Consolidated basis * Non-Consolidated basis

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

Overview Electro Electric Systems

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• US transformer long-term supply contract (May 2010)

Major performance

- USD 600 mil. Order for supplying transformers ranging from

230kV to 500kV to Southern California Edison(SCE) for 10 years

from 2010 to 2019

- Largest transformer order to date

Performance Electo Electric Systems

Sales by Region (%)

41.5 34.2

50.6 46.4 54.1 58.3 57.4

6.9

3.0

11.4 11.6

9.6 6.8 8.9

4.4

2.9

6.4 9.0 5.3 7.7 6.0

8.7

6.3

4.7 7.0 4.6 6.3 5.4

18.5

7.2

17.8 21.2 22.9 20.6 22.0 20.0

46.5

9.0 4.8 3.5 0.3 0.3

'09 '10 '11 '12 '13 '14 '15

Domestic America Asia Europe Mid. East Others

Project Type

Generator Installation · West Generating Project (USA)

Power Transmission

& Mutation Installation·

British Columbia Hydro & Power Authority

(Canada)

Iron Manufacture

Installation·

Nueva Ventanas 240MW Coal Fired Power

Project (Chile)

Water Treatment, Cement

& Petrochemical Installation· KODECO IKC Project (Indonesia)

Automotive Goods · Seoul Metro (South Korea)

Marine Goods · Royal Nedlloyd Group (Netherlands)

Ocean Installation ·Al-Jubail Saline Water Conversion

(Saudi Arabia)

Marine Steam Turbine ·Hyundai Merchant Marine LNGC 22,000MW

Marine Steam Turbine (South Korea)

Know-how Export ·Gas Insulated Switchgear : Tatung Company

(Taiwan)

Fresh Water Installation · Shuweihat S2 IWPP Project (UAE)

Major Projects

Major Projects

• ’09년 sales is based on K-GAAP. • The sales of Green Energy division is no included since ‘11. • The sales from wind power sales has been included since ’15.

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Construction Equipment

Mid Excavator Forklift Electric Excavator Skid Loader Wheel Loader Small Excavator Roller

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(Unit : sales - bil. KRW)

Annual Sales

Operational Highlights

Main Products

Sales Breakdown by Product (2015)

• Excavators (Local 16,000 units, China 18,874 units, India 1,800 units) • Wheel Loaders (2,900 units) • Forklifts (9,500 units) • Skid Loaders (600 units)

Sales Contribution (2015)

Introduction of Hi-Mate remote management system (May 2009)

9-series excavators recognized at Korea’s Pin-up Design Awards (Dec. 2009)

Introduction of new 9-series wheel loader (May 2010)

Breaking ground for wheel loader factory in China (Jul. 2010)

Introduction of 120-ton excavator (Apr. 2011)

Production of 350,000th construction equipment (Oct. 2011)

Excavator

56%Folk Lift

20%

Wheel

Loader

9%

CKD

6%

Others

10%

Skid Loader

1%

* Non-Consolidated basis * Non-Consolidated basis

• Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP.

Overview Construction Equipment

Construction

Equipment 8%

1,198

1,512 1,769

1,190

2,275

3,052 3,120

2,723

2,215

1,844

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Construction Equipment Sales by Region

Excavators Sales in China Excavator Sales in China

HHI’s Excavator Market Share by Region

※ ‘08 ~ ‘09 sales are based on K-GAAP.

2012 2013 2014 2015

Domestic 27.5% 27.9% 25.1% 21.2%

Global(Excluding Japan)

9.0% 7.8% 6.2% 5.8%

China 8.1% 7.2% 4.4% 3.8%

India 17.7% 19.7% 20.4% 18.1%

(Source: Company data)

Performance Construction Equipment

May. 2015 May. 2016 YoY

Market 29,457 30,066 2.1%

H H I 1,395 1,185 -15.1%

M/S 4.7% 3.9% -0.8%p

(Source: China construction machinery association)

6.1 3.2 4.3 6.6 9.9 10.5 10.2 10.7

29.2

6.0 12.4

19.6 23.5 24.3 23.7 17.7

10.7

25.9

27.4 19.4 4.2 5.4 2.7

1.8

7.8

12.4 6.2 3.6

5.7 8.5 11.9

8.6

8.7

4.3 5.4 11.0

14.4 9.6 12.5

15.6

13.0

8.4 10.8

9.6 7.9 5.1 4.5

6.1

16.7

28.9 23.1 17.3

16.7 18.2 20.1

23.8

7.8 10.9 10.4 12.8 17.7 18.5 14.5 15.7

'08 '09 '10 '11 '12 '13 '14 '15

Others

Domestic

Mid. & South

AmericaMid. East

Africa

China

Europe

North

America

71,767 93,237

162,908 169,182

104,908

162,908

84,573

49,009

30,066

8,377 10,101

18,467 17,294

8,540 7,532

3,743

1,889 1,185

0

5,000

10,000

15,000

20,000

25,000

30,000

0

40,000

80,000

120,000

160,000

200,000

'08 '09 '10 '11 '12 '13 '14 '15 '16.05

Market Size (Left) HHI(Right)

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Green Energy

Solar Power Wind Power

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Solar Cell Solar Module

Picture

Facilities Solar Cell Plant

(Eumseong, Korea)

Solar Module Plant

(Eumseong, Korea)

Annual Capacity (2015) 600MW 600MW

Details - Mono-crystalline, Poly- crystalline solar cells produced

- 54 cell(6X9), 60 cell(6X10), 72 cell(6X12) modules produced

Solar Power 600MW capacity of solar cell & solar modules to provide total solution

Solar cell & solar modules, solar inverter production facility in 2016

Capacity and Sales

2005 2007 2008 2009 2010 2011 2012 2013 2014 2015

Capa-

city

Cell (MW)

30 30 60 370 370 580 600 600 600 600

Module (MW)

20 30 70 170 510 560 600 600 600 600

Sales (KRW bil.)

% of total HHI Sales

50

0.4%

107

0.6%

150

1.3%

591

2.6%

399

1.6%

344

1.4%

312

1.3%

317

1.4%

335

1.4%

Solar Product Certification

- UL (UL 1703/USA, Canada) - VDE (IEC 61215, IEC 61730-1/61730-2/International) - CE Declaration (International) - J-PEC (Japan) - JET (IEC 61215, IEC 61730-1/61730-2/Japan) - JIS Q 8901:2012 (Japan) - KS Q 8003 (Korea) - MCS (IEC 61215, IEC 61730-1/61730-2/UK) - CSTB (France) - INMETRO (IEC 61215/Brazil) - OPGE (IEC 61215/Puerto Rico) - Ammonia resistance (IEC 62716) - Salt mist (IEC 61701) - Sand & Dust (IEC 60068) - PID(IEC TS 62804-1) - Fire test (UN9177/Italy)

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Subsidiaries

Hyundai Oilbank Hyundai Samho

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Hyundai Oilbank

Refining Unit

Upgrading Unit

Crude oil 100%

(390,000 b/d)

LPG, Naphtha, Gasoline 19%

Kerosene, Diesel 37%

Bunker C 44%

Gasoline, LPG 46%

Diesel 37%

Propylene 9%

Others 8%

Total CAPEX : KRW 2.6 tril.

(Jul. 2006~ Feb. 2011)

At a Glance Facilities & Products

• Heavy Oil Upgrading Ratio 39.1% With the completion of #2 HOU plant in Jan. 2011, Hyundai Oilbank achieved a ratio of 39.1% (the highest HOU ratio in the industry)

• Domestic Light Oil Market Share 22.2%

• Production Capacity 390,000B/D #1 : 110,000 B/D, #2 : 280,000 B/D

• HHI’s Management Control 91.1% Acquired by HHI in Aug. 2010

Competitors : SK Innovation, GS Caltex, and S-Oil

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Hyundai Oilbank (Non-Consolidated)

Income Statement (Unit: Bil. KRW)

2011 2012 2013 2014 2015 2016.1Q

Sales 18,958.6 21,523.9 20,295.6 18,258.0 12,106.8 2,365.7

Operating Profit 594.7 308.4 403.3 192.8 575.8 176.9

Margin(%) 3.1% 1.4% 2.0% 1.1% 4.8% 7.5%

Net Income 360.7 156.5 152.4 31.1 433.7 158.1

Margin(%) 1.9% 0.7% 0.8% 0.2% 3.6% 6.7%

Financial Position (Unit: Bil. KRW)

2011 2012 2013 2014 2015 Mar. 31, 2016

Total Assets 8,642.6 8,506.5 8,597.9 7,701.2 7,079.9 7,532.6

Total Liabilities 5,899.5 5,618.8 5,544.5 4,633.1 3,369.1 3,982.1

Total Shareholder's Equity 2,743.1 2,887.7 3,053.4 3,068.1 3,710.8 3,550.5

Liabilities-to-Equity Ratio(%) 215.1% 194.6% 181.6% 151.0% 90.8% 112.2%

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At a Glance

Hyundai Samho

• Backlogs as of May. 2016 on a delivery basis : 72 vessels, USD 7.2 bil.

• The above data is based on the amount

• Production Capacity 3.3 mil. GT - Delivered 36 vessels in 2015 - # of dry docks : 2

• 2016 Order Target

• 2016 Sales Target

4.0 bil. USD

4,083 bil. KRW 44.0%

12.6%

19.7%

11.1%

1.6% 3.8%

7.2%

Backlog by Shiptype (May. 2016)

Tanker

Containership

Gas Carrier

PCTC

Bulker

FPU

Others

2015 Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total TargetAchieve-

ment

# of

ships41 0 2 0 0 0 2 -

Amount 3,643 0 129 0 4 0 133 4,000 3.3%

New Orders in 2016 (in million USD)

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Hyundai Samho (Non-Consolidated)

Income Statement (Unit: Bil. KRW)

2011 2012 2013 2014 2015 2016.1Q

Sales 4,828.7 4,231.8 3,506.2 4,172.1 4,504.0 1,090.1

Operating Profit 804.3 254.0 -35.6 -502.2 -350.0 24.2

Margin(%) 16.7% 6.0% -1.0% -12.0% -7.8% 2.2%

Net Income 551.0 -12.5 -52.1 -215.2 -276.0 -4.7

Margin(%) 11.4% -0.3% -1.5% -5.2% -6.1% -0.4%

Financial Position (Unit: Bil. KRW)

2011 2012 2013 2014 2015 Mar. 31, 2016

Total Assets 6,954.7 6,978.9 6,782.7 7,268.7 7,169.3 65,998.0

Total Liabilities 3,741.7 3,641.1 3,428.9 4,192.4 4,506.7 3,941.0

Total Shareholder's Equity 3,213.0 3,337.8 3,353.8 3,076.3 2,662.6 2,658.8

Liabilities-to-Equity Ratio(%) 116.5% 109.1% 102.2% 136.3% 169.3% 148.2%

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Current Issues

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Semi-Submersible Rigs Status

HSHI

Diamond(U.S.) Fred Olsen Energy(NOR) Seadrill Mira(NOR)

Contract date 25-May-2013 25-May-2012 11-Jun-2011

Contract price USD 629 mil. USD 621 mil. USD 568 mil.

Advance received USD 189 mil. (30%) USD 186 mil. (30%) USD 170 mil. (30%)

Cancellation notice from owner - 27-Oct-2015 14-Sep-2015

Loss incurred on cancellation - KRW 219.2 bil. KRW 177.0 bil.

Current status under consturction Arbitration submitted Arbitration submitted

HHI

The prolonged weak oil prices caused the delay & cancellation of the E&P investment.

Two semi-submersible rigs out of three in the backlog were cancelled and KRW 396 bil. of losses

from the cancellation were incurred in 2015

The last rig in our backlog is scheduled to be delivered within 2Q 2016.

→ Final delivery of the drilling facility will improve margin visibility of Shipbuilding sector

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Offshore Orders and Profit Trend

(Unit: orders, backlog-mil. USD, Sales, OP-bil. KRW)

2008 2009 2010 2011 2012 2013 2014 2015 2016(E)

2,978 2,352 3,069 4,480 2,072 6,503 6,005 1,572 3,200

9,017 6,792 7,027 8,221 7,045 8,557 10,288 7,830 7,697

3,095.1 3,423.5 3,412.8 3,729.3 4,372.7 4,753.0 4,653.1 4,466.5 3,303.0

289.0 462.7 737.8 392.8 319.3 280.0 -230.5 -1,294.7 -

Margin 9.3% 13.5% 21.6% 10.5% 7.3% 5.9% -5.0% -29.0% -

Operating Profit

Sales

Orders

Backlog (Sales Basis)

Orderbook hit the historically high level in 2014 on the back of high oil prices

KRW 1.5 tril. of losses incurred in 2014~2015 due to the cost overruns stemming from i) delayed construction of mega sized projects by frequent specification changes which leads to work overloads ii) delayed cost compensations of owners due to the tight budget

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Offshore Projects in Backlog

(The end of May. 2016, Unit: Mil. USD)

Delivery

Basis

Sales

Basis

Gorgon Chevron

Quad 204 BP (Delivered)

Goliat ENI Norge

Clair Ridge BP

DSO Chevron

Moho Nord TLP Total 81%

Bergading Hess E&P

Moho Nord FPU Total

Baronia Petronas Carigali 56%

Aasta-Hansteen Spar Hull Statoil

Aasta-Hansteen Spar Topside Statoil

NASR 2 ADMA-OPCO 24%

Rosebank Chevron

Others 133

Total (16 projects) 13,109 6,779

Expected

DeliveryCompletion

Backlog

OwnerMajor Project

2015~Jan. 2016

(5 projects)

2017

(5 projects)

2018~

(3 projects)

8,626

2016

(8 projects)4,270

1,2412,814

4,5966,025

809

Major mega projects (Goliat, Gorgon, Q204) are completed and additional eight projects are

scheduled to be delivered timely in 2016

→ Normalized level of workload is expected to lead to a production stability

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Industrial Plant Projects in Backlog

(The end of May. 2016, Unit: Mil. USD)

Delivery

Basis

Sales

Basis

Jeddah South Thermal Power Plant SEC (Saudi) Oct. 20122017

(PAC*)

Shuqaiq Steam Power Plant SEC (Saudi) Aug. 20132017

(PAC*)

Jazan Refinery & Thermal Project** Aramco (Saudi) Dec. 2012 2017

AZ Zour North Phase 1 IWPP MEW (Kuwait) Dec. 2013 2016

Clean Fuel Project KNPC (Kuwait) Apr. 2014 2018

ZOR Refinery Project KNPC (Kuwait) Oct. 2015 2019

707 250

10,625 3,447

* PAC : Preliminary Acceptance Certificate

** Jazan Refinery & Thermal Project : constructed by HHI's overseas Corp.

Total (6 projects)

Others

Completion

Backlog

OwnerProjectContract

Date

Expected

Delivery

1,9823,468

6,450 1,215 81%

43%

Two non profitable mega projects(Jeddah, Shuqaiq) are in the final process and scheduled to be

delivered in 2017

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Thank You http://www.hhiir.com

*For More Information

IR Team

E-mail: [email protected]

Tel: +82-2-746-7568, 7508, 4728

Fax: +82-746-4662

Website: www.hhi.co.kr (Company) /www.hhiir.com (IR)