DNV GL 2014 first half year report

FINANCIALREPORTHALF YEARJUNE 2014

2 HALF YEAR FINANCIAL REPORT 2014

AT A GLANCE

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DEFINITIONS

» EBITA: earnings before interest, tax and amortisation.

» Organic growth (proforma figures 2013): Growth adjusted for acquisitions and exchange rate effects.

We also provide certification services to customers across a wide range of industries.

Combining leading technical and operational expertise, risk methodology and in- depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence.

We continuously invest in research and collaborative innovation to provide customers and society with operational and technological foresight.

With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000 pro- fessionals are dedicated to helping customers make the world safer, smarter and greener.

Driven by our purpose of safe-guarding life, property and the environment, DNV GL enables organizations to advance the safety and sustainability of their business.

We provide classification and technical assurance along with software and independent expert advisory services to the maritime, oil & gas, and energy industries.

10,625

16,062 863

11% 59%4%2013: 6,665 (2013 proforma: 9,556)

2013: 10,200 2013: 682

NOMINAL 2013: 52%ORGANIC

REVENUE (MILLION NOK) (1.1–30.6)

NUMBER OF EMPLOYEES (30.6) EBITA (MILLION NOK) (1.1–30.6)

GROWTH EQUITY RATIO (30.6)

3HALF YEAR FINANCIAL REPORT 2014

ORGANIZATION

In the reporting period, DNV GL was structured into four business areas and one independent business unit. Following an acquisition, a second independent business unit, Marine Cybernetics, was formed at the end of the period.

MARITIME

ENERGYOIL & GAS

SOFTWARE (INDEPENDENT BUSINESS UNIT)BUSINESS ASSURANCE

We help shipowners, yards, authorities and other maritime players to manage risks in all phases of a ship’s life.

We support our customers across the energy value chain in ensuring reliable, efficient and sustainable energy supply.

We help oil and gas companies manage technical and business risks, safety and environmental performance across the entire value chain.

Our software supports design and engi- neering, risk assessment, asset integrity and optimisation, QHSE, and ship management.

We help create trust and confidence and assure sustainable performance for companies across a variety of industry sectors.


PRESIDENT & CEO’S MESSAGE

TThe first half of this year has been both exciting and challenging for the newly formed DNV GL Group. We have continued to grow our business organically and through acquisitions, even as the inte-gration process has continued apace. Our business areas have delivered strong results and we have strengthened our global position in all key areas.

he half-year report gives an over-view of our main external activ-ities, and our performance as DNV GL for the first six months

of 2014. Our sustained growth and value creation to our customers and stakehold- ers relies on us providing quality services with the highest standards of integrity.

STRONGER PLATFORM. Bringing together DNV and GL was about creating a stronger platform for growth and a broader and better service offering for our customers. Integrating two global companies has demanded an extraordinary effort, and the integration is progressing according to plan. I am particularly pleased that we have managed to keep our focus on delivering value for our customers in this period, which is demonstrated by a strong first half-year market and financial performance. Operating Revenue of NOK 10 625 million is up 11% from first half 2013 (proforma figures), and EBITA of NOK 863 million has been achieved after deducting inte-gration cost of NOK 422 million. We have also won important new contracts in the first half of the year that can be attributed to our combined expertise and wider service

offering as a result of the merger. We are now in a position to create even more value for our customers in the whole shipping, oil & gas and energy value chain. Parallel to maintaining our focus on delivering high quality services to our customers, significant effort has been put into bringing more than 6 000 previous GL and 10 000 previous DNV employees together in a new organizational structure sharing a common vision, common values, systems and processes.

INCREASING EXPECTATIONS. I believe that the increasingly complex risk and sustainability-focused environment for our customers will lead to increasing expecta-tions and requirements to their suppliers and partners. Industry consolidation is a natural response to this, but so is foresight on new developments and the ability to acquire new skills and drive change. This spring, DNV GL acquired a 70% majority share in Marine Cybernetics, the leading company for third-party testing of computer control systems in the maritime and offshore industries. The primary decision to invest in Marine Cybernetics was driven by the increasing importance of software-dependent systems in ensur-

STRONG HALF-YEAR PERFORMANCE


chosen to mark this year’s 150th anni-versary of DNV and year one of DNV GL by engaging in dialogue with our stake-holders on what we expect to be a period of significant change ahead. Some of the sharpest minds in our organization have looked at expected future developments in sustainability, transformative technologies, shipping, electrification, the risks in exploring the Arctic, and tactics for climate change adaptation. These topics have been chosen because they represent areas where we can make a difference, they are important for our customers , but also because safe and sustainable solutions will benefit society as a whole.

As we embark on this endeavor we will maintain our focus on helping our customers to become safer, smarter and greener.

Henrik O. MadsenPresident & CEODNV GL Group

ing safe, reliable and efficient operations and is an example of our approach to better serving the industry.

HSE PERFORMANCE AND MANNING DEVELOPMENT. Health, Safety and Envir- onment performance is now monitored for the integrated DNV GL organization, and we have continued to prioritize the management attention towards mitiga-tions addressing Lost Time Accidents (LTA) and absence due to sickness. The LTA level has stabilized, and ended at 1.9. The sickness absence rate has also been stable at 2%. Total manning of permanent employees has been fairly stable in the period, and with a marginally decrease of 45 to 16 062. Hence, the overall growth in business volume has been handled by increased operational efficiency.

INNOVATIVE SOLUTIONS. Looking ahead, as DNV GL changes and grows, we will be guided by our vision of having global impact for a safe and sustainable future. We believe that new innovative solutions and knowledge sharing through standards, recommended practices and new insights are key elements for reaching this ambitious goal. That is also why we have


So far, 2014 has been a solid year for DNV GL. Overall, we have performed well and our solid performance shows that we have been able to maintain focus on operations while at the same time drive the merger process between DNV and GL.

The external revenue for the first half of 2014 amounted to NOK 10 625 million, producing an EBITA of NOK 863 million after integration cost. The nominal growth rate (based on proforma figures 2013) was 11%, while the organic and currency adjusted growth rate was 4% and the EBITA margin was 8%.

KEY OBSERVATIONS:

DNV GL – Maritime continues to deliver strong financial results. It has achieved solid financial performance across loca- tions and services, with classification being particularly strong.

While the industries served by DNV GL experience cyclical markets and are sensitive to global economic developments, DNV GL’s financial performance remains robust.

DNV GL – Oil & Gas has shown an improved performance during the half year with verification and marine assurance services being particularly strong.

DNV GL – Energy reports solid perfor-mance for laboratory testing and certifi-cation services, while a slowdown compared with 2013 due to the continued restruc-turing in the Energy advisory market, results in an overall revenue contraction.

DNV GL – Business Assurance shows a strong revenue growth compared with 2013 coming from a full spectre of assurance services.

DNV GL – Software shows a healthy revenue growth, while overall financial performance is weaker than expected.

The Group’s financial performance is projected to be solid also for the second half-year.

DNV GL Group has a strong balance sheet with a total equity of NOK 15 846 million after NOK 336 million dividend payment in June 2014. The equity ratio is 59%. The investment activities in 2014 relates primarily to acquisitions, lab investments and settlement of the minority share-holders in NV KEMA, and have been partly funded by cash and partly by NOK 1 100 million in external loans. Cash deposits amount to NOK 3 632 million.

With effect from 2014, including compa-rable figures from 2013, DNV GL Group has transitioned to International Financial Reporting Standards (IFRS) from Norwegian Accounting Standards (NGAAP). The interim financial statements have been prepared in accordance with IFRS. The transitional effects are shown in note 2.

The management regards DNV GL’s market positions as satisfactory and financial status as strong. Both give the company a robust platform from which to achieve its strategic growth and maintain its independence as a financially strong and trusted company.

GROUP PERFORMANCE

SEGMENTS

DESPITE CHALLENGES relating to ton- nage overcapacity and continuous weak developments in the global economy and trade, DNV GL’s maritime-related services performed well throughout the period. The classification services delivered strong performance, from ship in operation and offshore class to ship newbuilding. On the other hand, the market for maritime advisory is more mixed and advisory services show a weaker overall performance.

Overall, the efficiency programmes intro- duced in 2013 has continued to deliver positive effect also this year while at the same time we are progressing well with the integration process. The shipping industry is still suffering from overcapacity and weak trade developments. This is likely to affect the shipping market for another one or two years, and we expect the competition to continue to be fierce also for classification societies. DNV GL will continue to focus on tech-nology innovation, efficient energy use and LNG as shipping fuel to help its customers address current challenges.

HALF-YEAR PERFORMANCE

MARITIME

Maritime delivered strong financial results for the first half-year period. Year-to-date external revenue of NOK 4 352 million represents an organic, currency-adjusted growth rate of 8%.


A REVENUE GROWTH of 8% compared to same period 2013 is considered to be strong in the current market.

The verification services continued on a strong note also for this period, and the Marine Assurance & Advisory services also performed well. The market for our Inspection services is satisfactory, but our business performance is requiring a constant focus on efficiency in the oper-ation. For our Risk Management services the demand in the North Sea area has softened somewhat compared to last year.

Overall, the oil & gas market for our services is positive with several opportunities within reach, and we have demonstrated our ability to win larger contracts linked to our customers’ most challenging projects.

The offshore market continues to be characterised by relatively high activity, but with a high focus on cost reduction and efficiency in operation of the assets. The onshore market, particularly in North America is strong.

THE OVERALL PERFORMANCE is lower than expected for the first half-year, but with a continuous improvement during the second quarter. The negative growth in external revenue of 12% compared to last

year is partly result of the ‘Focus to Grow’ strategy we have followed for more than year, but also reflecting the challenging market for Energy Advisory services and partly also the Renewable Advisory and Certification services. Allowing for transfers to other business areas and divestments, the actual growth is a negative 4%. How- ever, the increased attention to the sales process and key customer management has started to give positive effect in the order book, and we expect the revenue to develop more positively in third and fourth quarter.

For our testing services on the other hand, we have experienced strong growth. Hence, the investment in the high voltage laboratory in Arnhem is expected to further strengthen the leading position we have in this market. Our energy efficiency business in the US is performing well.

In total, we remain confident in the energy markets in which we operate as the demand for energy continues to grow. The supply will continue to rely primarily on fossil fuels during the years to come. However, a major transition towards cleaner energy is needed to meet tomor-row’s energy demand while addressing climate change, energy security, the depletion of resources and the ageing infrastructure.

WHILE SEVERAL of Business Assurance’s target industries experience cyclical markets and are sensitive to global economic developments, the Business Assurance entity has shown strong development. Increasing demand for companies to demonstrate sustainable business prac-tices beyond compliance has contributed to this positive development.

The external revenue for the first half-year amounted to NOK 1 199 million, growing at a healthy rate of 7% year on year. The core Management System Certification service, which represents more than 70% of Business Assurance’s total revenue, showed revenue growth of 5% while other assurance services experienced even stronger growth. The demand for assurance services focusing on sustainable business performance and supply chain management is increasing.

Our focus industry sectors; food, health- care, automotive and aviation industry sectors achieved very good results.

Looking ahead, we believe worldwide trends such as population growth, globalization, consumption patterns and urbanization, coupled with the challenging financial situation, will continue to drive the need for assurance services.

THE REVENUE GROWTH of 18% is demon-strating a healthy overall demand for licence sales and implementation services for most of our software product lines. The market position is strengthened within shipbuilding, ship management and operation, offshore oil & gas and process industries.

In particular the products for Process Risk & Reliability, Quality & SHE Risk Management and Ship Classification have demonstrated robust performance. On the other hand, the market for Asset Integrity and Simulation software has been more challenging and will need further attention to improve performance.

OIL & GAS

ENERGY

BUSINESS ASSURANCE

SOFTWARE

Oil & Gas improved the business performance during the period, and ended the half year with external revenue of NOK 3 119 million.

Energy is operating in a challenging market and performed below expectations with external revenue of NOK 1 498 million.

Business Assurance revenue volume shows solid development compared to last year growing with 7% for the period.

In DNV GL we have organized our software services as an inde-pendent business unit, and external revenue for the period ended at NOK 377 million.


AMOUNTS IN NOK MILLION NOTE 1 JAN.–30 JUNE 2014 1 JAN.–30 JUNE 2013 1 JAN.–31 DEC. 2013

Total operating revenue 2 10 624.8 6 665.2 15 234.1

Operating expenses

Payroll expenses 5 883.1 3 801.6 1 8 446.3

Depreciation 164.7 104.6 271.4

Amortisation and impairment 263.3 26.4 203.1

Other operating expenses 3 714.1 2 077.4 4 980.9

Operating profit 599.5 655.2 1 332.5

Net financial income (12.2) 21.1 1 (14.1)

Profit before tax 587.3 676.3 1 318.4

Tax expense (176.2) (208.7) (491.9)

Profit for the period 411.1 467.6 826.5

Other comprehensive income

Other comprehensive income not to be reclassified

to profit or loss in subsequent periods:

Actuarial gains / (losses) on defined benefit pension plans 0.0 0.0 99.4

Other comprehensive income to be reclassified

to profit or loss in subsequent periods:

Currency translation differences /

translation differences foreign operations 183.2 246.9 1 075.8

Gain / loss on hedge of net investments in foreign operations 0.0 (267.0) (198.2)

Other comprehensive income for the period, net of tax 183.2 (20.1) 977.0

Total comprehensive income for the period 594.3 447.5 1 803.4

Profit for the period attributable to:

Non-controlling interest 1.7 1.4 2.6

Equity holders of the parent 409.4 466.2 823.9

Total 411.1 467.6 826.5

Total comprehensive income attributable to:


Equity holders of the parent 592.6 446.1 1 800.8

Total 594.3 447.5 1 803.4

INTERIM CONDENSED CONSOLIDATED (UNAUDITED) DNV GL GROUP AS

1 Payroll expenses and net financial income 1.1-30.06 2013 have been restated to reflect NOK 5.4 mill (income) in net of return on plan assets and interest expense on pension liabilities reclassified from payroll expenses to financial items. Ref note 7, Annual financial accounts 2013, DNV GL Group.

STATEMENT OF COMPREHENSIVE INCOME



AMOUNTS IN NOK MILLION 30 JUNE 2014 30 JUNE 2013 1 JAN. 2014

ASSETS

Intangible assets 11 758.2 1 944.5 11 526.0

Tangible fixed assets 2 035.7 1 322.2 1 847.2

Non-current financial assets 910.0 511.6 783.2

Total non-current assets 14 704.0 3 778.4 14 156.3

Current assets

Trade debtors, work in progress and other receivables 8 444.5 4 922.0 7 520.2

Cash and bank deposits 3 632.2 2 025.2 3 874.7

Total current assets 12 076.7 6 947.2 11 394.9

TOTAL ASSETS 26 780.7 10 725.6 25 551.2

EQUITY AND LIABILITIES

Share capital and other equity 15 822.1 5 520.9 15 565.0


Total equity 15 845.9 5 525.9 15 582.5

Liabilities

Provisions 3 616.9 1 370.3 4 232.5

Bank loans 1 100.0 0.0 0.0

Current liabilities 6 217.9 3 829.4 5 736.3

Total liabilities 10 934.8 5 199.7 9 968.8

TOTAL EQUITY AND LIABILITIES 26 780.7 10 725.6 25 551.2

BALANCE SHEET


AMOUNTS IN NOK MILLIONSHARE

CAPITALOTHER

EQUITYTRANSLATIONDIFFERENCES

NON- CONTROLLING

INTERESTTOTAL

EQUITY

Equity as at 1 January 2013 - NGAAP 9.0 4 923.7 - 4.5 4 937.2

Effect of transition to IFRS 116.5 116.5

Equity as at 1 January 2013 – IFRS 9.0 5 040.2 - 4.5 5 053.7


Dividend (661.7) (661.7)

Contribution in kind GL SE Group 36.5 9 323.5 9 360.0

Share capital fund issue 54.5 (54.5) 0.0

Actuarial gains / (losses) on defined benefit pension plans 99.4 99.4

Exchange differences 877.6 877.6

Other equity changes 16.6 10.4 27.0

Equity as at 1 January 2014 – IFRS 100.0 14 587.4 877.6 17.5 15 582.5


Dividend (335.5 ) (335.5)

Exchange differences 183.2 183.2

Other equity changes 4.6 4.6

Equity as at 30 June 2014 – IFRS 100.0 14 661.3 1 060.8 23.8 15 845.9


STATEMENT OF CHANGES IN EQUITY


AMOUNTS IN NOK MILLION 1 JAN.–30 JUNE 2014 1 JAN.–30 JUNE 2013 1 JAN.–31 DEC. 2013

CASH FLOW FROM OPERATIONS

Profit before tax 587.3 676.3 1 318.4

Gain / loss on disposal of tangible fixed assets 0.0 0.0 (0.1)

Gain on divestments (1.6) 0.0 (12.0)

Depreciation, amortisation and impairment 428.0 131.0 474.4

Tax payable (176.2) (208.7) (570.0)

Change in work in progress, trade debtors and trade creditors (628.4) (571.2) (731.0)

Change in accruals, provisions and other 266.0 401.9 95.6

Net cash flow from operations 475.1 429.3 575.2

CASH FLOW FROM INVESTMENTS

Net investments tangible and intangible assets (475.5) (213.1) (471.4)

Net acquisitions / divestments (237.7) 35.1 (12.1)

Settlement of minority shareholders KEMA (670.0) 0.0 0.0

Change in other investments (98.9) 0.0 0.0

Net cash flow from investments (1 482.1) (178.0) (483.5)

CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (335.5) 0.0 (661.7)

Multi currency revolving credit facility drawn / borrowings 1 100.0 0.0 0.0

Net cash flow from financing activities 764.5 0.0 (661.7)

Net increase / (decrease) in cash and bank deposits (242.5) 251.3 (570.0)

Liquidity at beginning of period 3 874.7 1 773.9 1 946.1

Demerger 1 January 2013 cash transferred 0.0 0.0 (172.2)

Cash in acquired companies 0.0 0.0 2 670.8

Liquidity at end of period 3 632.2 2 025.2 3 874.7


STATEMENT OF CASH FLOW

01

02

BASIS FOR PREPARATION AND SIGNIFICANT ACCOUNTING PRINCIPLES

TRANSITION TO IFRS


The condensed consolidated interim financial statements for the first six months of 2014 comprise DNV GL Group AS and its subsidiaries.

With effect from 2014, including comparable figures from 2013, DNV GL Group has transitioned to International Financial Reporting Standards (IFRS) from Norwegian Accounting Standards (NGAAP).

The condensed consolidated interim financial statements for DNV GL Group AS have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial statements for the year ending 31 December 2014 will be the DNV GL Group AS’ first IFRS financial statements (DNV GL will follow a simplified IFRS solu- tion, which is an option under the Norwegian Accounting Act). Prior to adoption of IFRS, including the year ended 31 December 2013, the group’s primary financial statements were prepared in accordance with accounting principles generally accepted

DNV GL Group have applied the following exemptions from retrospective application of certain IFRSs.

Cumulative currency translation differences for all foreign operations are deemed to be zero as of 1 January 2013.

With the exception of the acquisition of N.V. KEMA end of February 2012 and the business combination with GL SE Group in September 2013, the classification of former business combinations under previous NGAAP is maintained, and the carrying amount of goodwill recognized under NGAAP has not been adjusted.

Under previous NGAAP DNV GL Group did not capitalise or measure development expenditures as assumed by IAS 38, and consequently no reliable estimate for development cost to be capitalised existed at 1 January 2013. Based on this, development costs are only recognized as an intangible asset subsequent to the transition to IFRS.

The main effects of transition to IFRS 1 January 2013 are:

A Acquisition related costs incurred in the acquisition of N.V. KEMA and in the Business Combination with

GL have under NGAAP been considered part of the acquisition cost, these costs have in line with IFRS, been expensed in the period the costs were incurred.

B Goodwill related to the acquisition of N.V. KEMA and the Business Combination with GL have under NGAAP been

amortised over the expected economic lifetime. These goodwill amortisations have been reversed to comply with IFRS. No impairment of Goodwill in excess of impairments reflected under NGAAP has been deemed necessary at 1 January 2013.

C Periodic maintenance / overhaul related to the laboratories in Energy have under NGAAP been built up as

provisions for expected maintenance cost. In the transition to IFRS, the periodic maintenance / overhaul has been recognized when the costs are incurred and amortised over its useful life.

in Norway (NGAAP). DNV GL Group AS has prepared an IFRS opening balance sheet as of 1 January 2013, see note 2 Transition to IFRS. The IFRS implementation effects identified are few and mainly related to amortisation of goodwill not allowed under IFRS and accounting for periodical maintenance for the Energy laboratories. The same principles used in the opening balance are used throughout the periods presented, therefore there are no changes in accounting principles in these interim condensed consolidated financial statements. A summary of significant accounting policies applied (IFRS) will be published together with the financial statements for the year ending 31 December 2014.

The interim accounts do not include all of the information and disclosures required for the annual accounts, and these interim accounts should be read in conjunction with the consolidated financial statements of the Group for the year ended 2013, prepared under NGAAP.

The interim accounts have not been audited.

TO THE INTERIM ACCOUNTS FIRST SIX MONTHS OF 2014 DNV GL GROUP AS

NOTES


1 JAN. 2013 30 JUNE 2013 1 JAN. 2014

AMOUNTS IN NOK MILLION REF. NGAAP

EFFECT OF TRANSITION

TO IFRS IFRS NGAAP


TO IFRS IFRS NGAAP


TO IFRS IFRS

Intangible assets A, B 1 823.7 48.5 1 872.1 1 840.1 104.4 1 944.5 11 309.2 216.8 11 526.0

Tangible fixed assets C 1 164.8 56.0 1 220.8 1 239.9 82.3 1 322.2 1 762.2 85.0 1 847.2

Non-current financial assets 473.8 473.8 511.6 511.6 783.2 783.2

Trade debtors, work in progress

and other receivables 4 386.0 4 386.0 4 922.0 4 922.0 7 520.2 7 520.2

Cash and bank deposits 1 773.9 1 773.9 2 025.2 2 025.2 3 874.7 3 874.7

TOTAL ASSETS 9 622.2 104.5 9 726.7 10 538.9 186.7 10 725.6 25 249.4 301.8 25 551.2

Equity A, B, C 4 937.2 116.5 5 053.7 5 331.5 194.3 5 525.9 15 269.7 312.8 15 582.5

Provisions 1 333.1 (12.0) 1 321.1 1 377.9 (7.6) 1 370.3 4 243.4 (11.0) 4 232.5

Current liabilities 3 351.9 3 351.9 3 829.4 3 829.4 5 736.3 5 736.3

TOTAL EQUITY AND LIABILITIES 9 622.2 104.5 9 726.7 10 538.9 186.7 10 725.6 25 249.4 301.8 25 551.2

1 JAN.–30 JUNE 2013 1 JAN.–31 DEC. 2013

AMOUNTS IN NOK MILLION REF. NGAAP


TO IFRS IFRS NGAAP


TO IFRS IFRS

Total operating revenue 6 665.2 6 665.2 15 234.1 15 234.1

Payroll expenses 3 796.2 3 796.2 8 446.3 8 446.3

Depreciation C 102.8 1.8 104.6 267.7 3.7 271.4

Amortisation and impairment B 76.0 (49.5) 26.4 455.6 (252.6) 203.1

Other operating expenses A, C 2 080.0 (2.6) 2 077.4 4 887.4 93.5 4 980.9

Operating profit 610.2 50.4 660.6 1 177.1 155.4 1 332.5

Net financial income 15.7 15.7 (14.1) (14.1)

Tax expense (208.7) (208.7) (491.9) (491.9)

Profit for the period 417.2 50.4 467.6 671.1 155.4 826.5

STATEMENT OF INCOME

BALANCE SHEET


NOTES

RECONCILIATION OF TRANSITIONAL EFFECTS:

04 OPERATING REVENUE PER BUSINESS AREA

03 SIGNIFICANT CHANGES IN GROUP STRUCTURE


AMOUNTS IN NOK MILLION 1 JAN.–30 JUNE 2014 1 JAN.–30 JUNE 2013 1 JAN.–31 DEC. 2013

Business area:

Maritime 4 352.0 2 741.4 5 700.3

Oil & Gas 3 119.2 1 467.7 4 218.7

Energy 1 498.2 1 188.6 2 612.3

Business Assurance 1 199.4 1 020.8 2 217.2

Software 377.2 187.0 445.0

Other 78.8 59.8 40.6

Total operating revenue 10 624.8 6 665.2 15 234.1

The following acquisitions have been made since 1 January 2014:

6 May 2014: DNV GL AS acquired 70% of the shares in Marine Cybernetics AS. In addition, DNV GL AS has entered

into an agreement with the owners of the remaining 30% of the shares, where DNV GL AS has an obligation to acquire the remaining shares after three years at an agreed price. 100% of Marine Cybernetics AS has been included in the DNV GL Group AS consolidated accounts from 1 May 2014 with no minority interest. The expected payment for the remaining shares has been reflected as a liability under other provisions. A purchase price allocation (PPA) for the acquisition will be included in the 2014 annual financial accounts of DNV GL Group AS.

9 May 2014: DNV GL Group AS acquired the remaining 25.7% of the shares in the NV. KEMA Group. As part of the acquisition

agreement from December 2011, DNV GL Group AS had an agreement with the minority share owners, where DNV GL Group AS

had a call option on acquiring the remaining shares after two years. The option structure was such that it was unlikely at time of acquisition that an acquisition of the remaining 25.7% of the shares would not take place after two years. 100% of NV. KEMA has been included in the DNV GL Group AS consolidated accounts from 1 March 2012 with no minority interest and the net present value of the expected payment for the remaining shares has been reflected as a liability under other provisions. This liability was settled 9 May 2014.

In January 2014, NOK 47 million convertible loan to StormGeo Holding AS, including interest, was converted to equity.

In addition, a capital contribution/share issue of NOK 99 million has been made. After these transactions, DNV GL Group AS’ ownership (through DNV GL AS) in StormGeo Holding AS is 27%. The investment is recognized in accordance with the equity method in the accounts of DNV GL Group AS.


NOTES

05 PROFORMA CONSOLIDATED REVENUE


OPERATING REVENUE 1 JAN.–30 JUNE 2013 OPERATING REVENUE 2013

AMOUNTS IN NOK MILLION

HALF-YEARACCOUNTS

1 JAN.–30 JUNEADJ GL SE

1 JAN.–30 JUNEPROFORMA

1 JAN.–30 JUNE

AUDITED ACCOUNTS

1 JAN.–31 DEC.ADJ GL SE

1 JAN.–30 SEPT.PROFORMA

1 JAN.–31 DEC.

Business area:

Maritime 2 741.4 1 063.9 3 805.3 5 700.3 1 606.9 7 307.2

Oil & Gas 1 467.7 1 289.3 2 756.9 4 218.7 1 965.9 6 184.6

Energy 1 188.6 384.1 1 572.6 2 612.3 600.5 3 212.8

Business Assurance 1 020.8 35.2 1 056.1 2 217.2 67.4 2 284.6

Software 187.0 111.9 298.9 445.0 174.7 619.8

Other 59.8 5.9 65.7 40.6 3.6 44.2

Total operating revenue 6 665.2 2 890.3 9 555.5 15 234.1 4 419.1 19 653.2

As described in the Annual Financial Accounts of DNV GL Group 2013, note 2, the business combination with GL SE Group was completed 11 September 2013. 100% of GL SE Group was included in DNV GL Group AS consolidated accounts from 1 October 2013.

The proforma consolidated revenue reflects the group as if the business combination with GL SE Group was completed 1 January 2013; i.e. revenue figures for GL SE Group are included full year.


NOTES

SAFER, SMARTER, GREENER

©DNV GL 08/2014 Design: Fasett

HEADQUARTERS:

DNV GL ASVeritasveien 1NO-1322 Høvik, NorwayTel: +47 67 57 99 00www.dnvgl.com

Documents

DNV GL 2014 first half year report