January 2015

IR Presentation Dec 2015

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Revenue & Operating Profit

Quarterly Earnings (recent 4Q)

Annual Earnings (past five years)

(KRWb)

- 3 -

0.0

2.0

4.0

6.0

8.0

10.0

12.0

-

5.0

10.0

15.0

20.0

2010 2011 2012 2013 2014

Revenue(Shipbuilding&Offshore)

Revenue(Others)

OP margin

13.1 13.4

14.5 14.8

12.9

10.8

8.7

8.3

6.2

1.4

(KRWt) (%)

2014 2015

4Q 1Q 2Q 3Q

Revenue 3,078 2,610 1,439 2,436

Operating Profit 101 26 -1,548 -10

OP Margin 3.3% 1.0% Losses 적자

Profit before income tax 46 33 -1,498 -34

Net Profit 41 11 -1,155 -25

▶ 3Q 2015 earnings

▷ Revenue: Weaker than the guidance

- Due to less working days, and the delay in installation of

high-value equipment for major offshore projects

▷ Operating Profit: Losses of KRW 10bn

- One-off losses of KRW 54bn

∙ Provisioning of KRW 95bn for the drillship contract termination

∙ Profits of KRW 41bn from change orders for Ichthys and others

- Excluding One-offs, operating profits were KRW 44bn

Financial Summary

Consolidated Statements of Income

(KRWb)

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2010 2011 2012 2013 2014 2015 1Q 2Q 3Q

Revenue 13,146 13,392 14,490 14,835 12,879 2,610 1,439 2,436 6,485

Operating Profit 1,432 1,160 1,206 914 183 26 -1,548 -10 -1,532

OP Margin 10.8% 8.7% 8.3% 6.2% 1.4% 1.0% Losses 적자 적자

Income Before Tax

1,298 1,150 1,045 819 190 33 -1,498 -34 -1,499

Net Profit 1,000 851 796 632 147 12 -1,155 -25 -1,169

Financial Summary

Consolidated Statements of Financial Position

(KRWb)

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2010 2011 2012 2013 2014 2015.3Q

Total Assets 18,850 16,414 16,635 17,427 17,122 18,257

Cash & Cash Equiv. 1,255 1,289 1,164 1,140 893 2,077

Inventories 607 540 699 842 1,169 1,412

Accounts Receivable 5,449 4,078 5,091 5,935 6,400 4,782

Advanced Payments 1,638 1,675 1,501 1,354 1,204 998

Hedge Related 3,370 2,592 2,064 2,035 1,113 1,898

Total Liabilities 14,718 11,770 11,352 11,581 11,549 13,890

Advanced Receipts 5,431 5,602 3,967 3,885 3,799 4,364

Interest Bearing Debt 2,838 1,784 3,193 2,937 3,827 5,034

Hedge Related 3,578 2,452 1,458 1,725 1,093 2,020

Total Equity 4,132 4,644 5,283 5,846 5,573 4,367

Paid in Capital 1,155 1,155 1,155 1,155 1,155 1,155

Treasury Stock -662 -659 -657 -656 -970 -970

Debt/Equity Ratio 356% 253% 215% 198% 207% 318%

Risk Management

Improvement on Risk management before/after the contract

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Pre-contract At execution

Risk assessment before participating bid

Prospect Selection Committee (ITT review incl.)

Cost Review Committee (Quantity review incl.)

Risk Review Committee

Contract terms Review Committee

Bid Review Committee

Bidding

only for risk hedging available projects

Contract Signing

Intensive risk analysis

& mitigation planning

Risk Workshop

Continuous Risk verification & assessment

Setting up specific action plans

+3 months

of contract

Regular

Process

ITT issue

Award winning

KPI management

Factors to drive cost increase and construction delay

Regular KPI check and feedback

Lessons Learned System

To prevent from repetitive troubles,

lessons learned and improvements we’re making for current projects are systematically

recorded and applied to future projects

* Invitation to tender

Risk Hedging Policy

SHI Focuses on minimizing profit volatility

Building Event

Time Gap (months) 12 5 3 10

Currency

Receivable

Payable

Raw Material

Main Engine

Machinery

Steel Plate

Bulk Part

Contract Steel Cutting Keel Laying Launching Delivery

: Hedging, Order : Execution, Delivery

Foreign currency exposure is fully covered through forward transaction at the stage of shipbuilding contract

Main engine and machinery are ordered within 1~2 months after contract signing

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CONTENTS

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Ⅱ. New order & Backlog

New Order

November 2015

Trend

(USDb)

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Facility

61%

16%

Tanker

16% Production

LNG Carrier 7%

Container - ship

Unit USDb

Containership 10 1.6

LNG Carrier 3 0.7

Tanker 30 1.6

Production Facility 6 6.1

Total 49 10.0

$10.0 billion (49 Units)

-

2

4

6

8

10

12

14

16

2011 2012 2013 2014 2015.Nov

Containership LNG Carrier

Tanker Drilling Rig

Production Facility Others(WTIV etc.)

10.0

14.9

9.6

13.3

7.3

Order Backlog

November 2015

Trend

LNG Carrier

13%

Tanker 8%

Drilling Rig

17%

Production

Facility

51%

(USDb)

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Unit USDb

Containership 25 3.4

LNG Carrier 22 4.7

Tanker 41 2.7

Drilling Rig 10 5.9

Production Facility 14 18.4

Others 6 0.7

Total 118 35.8

$35.8 billion (118 Units)

Containership 9%

0

5

10

15

20

25

30

35

40

45

2011 2012 2013 2014 2015.Nov

Container Ship LNG Carrier

Tanker Drilling Rig

Production Facility Others

38.3 37.2 37.5

35.8 34.8

Others 2%

CONTENTS

Ⅱ. New order & Backlog

Ⅰ. Financial Highlights

Ⅲ. Products & Market Situation

Sustainable order flows for mega containership is expected

- By global alliances to achieve operational efficiency and cost competitiveness among peers

- Supply shortage from 2018 to generate new orders

Containership

Supply & Demand Balance Global order trend & SHI market share

(Source: Clarksons, SHI assumption)

72

10

62

29

10 8

14%

28%

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

70

80

'11 '12 '13 '14

Global Order (Over 10kTEU) SHI M/S

(Source: SHI)

1,200 1,222

761

143

6.6% 6.3%

3.7%

0.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

200

400

600

800

1,000

1,200

1,400

'16(e) '17(e) '18(e) '19(e)

Delivery Fleet Growth Trade Growth

Trade growth to be stable above 6%

(unit) (,000TEU)

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(M/S)

Short term demand is weak, but long term outlook is solid due to

stable LNG trade growth(CAGR 5%) and longer distances with US exports

LNG Carrier

Long term outlook of LNG trading & Fleets

= approximately 120 vessels needed

Global order trend & SHI market share

48

32

39

59

18

4

14

5

38%

13%

36%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

10

20

30

40

50

60

70

'11 '12 '13 '14

Global Order SHI M/S

(Source: SHI)

(unit)

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(M/S)

(Source: Gaslog, BP, Earnst&Young, Wood Mackenzie Jan 2015 )

2014 trading : approx 240mtpa

Current fleet

: approx 430 ships

(1.8ships/1mtpa)

~2030 trading(e) : approx 500mtpa Fleet outlook

: approx 900 ships

(= 30 ships to be

ordered a year

in avg )

< World LNG trading outlook>

CAGR 5%

2014 main routes New supply ~2030

Limited demand for high specification drillship is expected

while downturn continues due to shrinking investment in exploration

Drillship

Next generation: 20K BOP drillship

New demand for 20K BOP drillship is expected

- For safe and efficient operation in high-pressure

and high-temperature deep water reservoirs

Global order trend & SHI market share

(Source: SHI)

25

19

12

4

10 9

5

2

40%

47%

42%

50%

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

'11 '12 '13 '14

Global Order SHI M/S

(unit)

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(M/S)

• BP-Maersk “Project 20K”

Jointly developing next generation drillship

using 20K BOP for Gulf of Mexico since

year 2013

Seeking both growth and profitability in offshore EPC market through

enhancement of EPC execution capability with ongoing projects

Production Facility

What we do for strengthening competitiveness Key projects under construction

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Ichthys CPF(Gas), Austrailia

Egina Oil FPSO, Nigeria

Lessons Learned Program

- Accumulating and systemizing knowledge learned from current projects to execute following better

Reinforcement of engineering capacity

- New R&D center established only for FEED, FEED verification, detailed design etc.

- Recruiting experienced engineers and project managers

Organizational improvement

- Risk management team and offshore package procurement team established

SHI’s new growth engine

- Market to expand due to its cost advantages and environmental benefits

FLNG

Concept & Advantage

Production, treatment, liquefaction and offloading

of natural gas to be carried out on a vessel

- No need for extensive pipe lines and onshore

processing facilities

Less CAPEX required

Natural Gas

Pretreatment

Liquefaction

FLNG projects under consideration

Number Projects

Under construction

3 Prelude(Shell)

Kanowit, Rotan (Petronas)

Active 10 Browse1,2,3(Shell)

Mozmbique(ENI), etc.

Potential 38 Scarborough, Sunrise, etc.

Total 51

(Source: Clarkson World Offshore Register )

3 Projects will be complete during year '15~'18,

and 10 projects are actively considered.

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SHI leads the market with accumulated experiences in a solid relationship

with its strategic partners

FLNG

Long term relationship with the leading companies

(Source: SHI, Shell)

Prelude Browse

Region Austrailia Austrailia

LNG Capacity 3.5mpta 12.0mtpa

Contract amount 6 USDb under negotiation

FID 2011 2016

Delivery 2016 2021~2023

2 major projects are underway based on long term agreement with Royal Dutch Shell and Technip

that are leaders of FLNG market.

FEED & EPC contract for Browse project made in June 2015

- EPC contract amount ($4.7b) includes hulls of three FLNGs

and top side value will be added when the FEED is complete.

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* To commence with NTP issuance in 2016

Appendix- Global Network

Oslo

London

Athens Tokyo

Dubai

Rongcheng

Ningbo

Singapore

Houston

Kuala Lumpur

Houston

Deli

Rio De Janeiro

Lagos

Shipyard Block Factory Engineering Center Branch Office

Global production and engineering bases enable SHI to meet various needs of customers

Block Factories in China (2) Ningbo (Since 1997) , Rongcheng (Since 2007)

Offshore Engineering Centers (2) Houston [ASOG (J/V with AMEC)], Deli (Noida)

Branch Office (10) London, Oslo, Athens, Lagos, Dubai, Kuala Lumpur, Singapore, Tokyo, Huston, Rio De Janeiro

Geoje Shipyard

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Appendix- Shipyard View

Site : 4.0million ㎡

Quay Wall Length : 7.9Km (24 vessels)

3 Floating Cranes : 3,000 / 3,600 / 8,000ton

8 Docks (3 Dry Docks & 5 Floating Docks) ▪ No. 1 : 283m × 46m ▪ NO. 2 : 390m × 65m ▪ No. 3 : 640m × 98m ▪ G1 : 270m × 52m ▪ G2 : 400m × 55m ▪ G3 : 400m × 70m ▪ G4 : 420m × 70m ▪ G5 : 157m × 131m (only for Offshore)

SHI Focuses on minimizing profit volatility

Offshore Facilities

Dry Dock No.2

Floating Dock 3

Dry Dock No.3

Floating Dock 2

Floating Dock 4

Main Building

Dry Dock No. 1

ShinHanne Factory

Floating Dock 1

Floating Dock 5

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Disclaimer

This presentation has been prepared by Samsung Heavy Industries Co., Ltd. and contains forward-looking

statements that are subject to risks, uncertainties, and assumptions.

The presentation is solely for your information, subject to change without notice, and makes no

representation or warranty, expressed or implied and no reliability should be placed on the accuracy,

fairness, or completeness of the information presented herein.

The Company, its affiliates, or representatives accept no liability for any losses arising from any information

contained in the presentation.

The contents of this presentation may not be reproduced, redistributed or circulated, directly or Indirectly,

to any other person or organization, or published, in whole or in part, for any purpose.

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