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TTS GROUP ASA
Q1 Results 2015 Oslo, 13 May 2015 Björn Andersson, CEO Henrik Solberg-Johansen, CFO
Photo: Jan Rolf Jacobsen/Norlines
NEWS: New PCTC contract of MNOK120
• Cargo access equipment to two PCTCs (Pure Car Truck Carriers). • Total order value is approx. MNOK 120. • Under construction - Korean Shipyard. • Deliveries completed during 2016.
2
Agenda
• 1st quarter headlines • Strategy and market outlook • 1st quarter consolidated accounts • Segment info • Shareholder structure • Strategy and market outlook • Summary
3
TTS Group ASA
§ Turnover 1Q MNOK 599 – up from MNOK 554 1Q last year
§ EBITDA 1Q of MNOK 1, up from MNOK -28 in 1Q 2014, in line with Q3 2014, but reduced compared to 4Q 2014
§ Order intake 1Q MNOK 301 excl. 50/50 companies. Total order intake 1Q MNOK 590 (incl 100% of 50/50 companies)*
§ Order backlog 1Q 2015 MNOK 4 418, incl. 100% of 50/50 companies
(*)TTS holds 50% of the 50/50 companies
1st quarter 2015 – key figures
4
TTS Group ASA Turnover and EBITDA development
Note: - Restated 2012 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities - EBITDA Q4 2014 of MNOK 36 is excluding positive pension effect of MNOK 101 5
593 554
400
500
600
700
800
Q1 2015 Q1 2014
Turnover
-20 %
-15 %
-10 %
-5 %
0 %
5 %
10 %
-120,0
-100,0
-80,0
-60,0
-40,0
-20,0
0,0
20,0
40,0
60,0
Act Q2 2012
Act Q3 2012
Act Q4 2012
Act Q1 2013
Act Q2 2013
Act Q3 2013
Act Q4 2013
Act Q1 2014
Act Q2 2014
Act Q3 2014
Act Q4 2014
Act Q1 2015
EBITDA
EBITDA EBITDA margin
TTS Group ASA
Order intake per quarter 2013-2015 including 100 % of 50/50’s
Book to bill = Order intake / Revenues
Order intake and order backlog
Order backlog per 31.03.2015 is MNOK 4 417 including 100 % of 50/50
owned companies
Divided per year of delivery;
0500
1 0001 5002 0002 5003 0003 5004 000
2015 2016 2017+
Group ex JVs JV 100 % 6
-‐ 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8
-‐
200
400
600
800
1 000
1 200
1 400
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Book
to bill
MNOK
Order intake (ex JV) Order intake JV (100 %)
Book to bill (incl 100 % JV)
Agenda
• 1st quarter headlines • Strategy and market outlook • 1st quarter consolidated accounts • Segment info • Shareholder structure • Summary
7
Overall vision for TTS Group
Vision
Strategy
The global supplier of handling systems to the maritime and offshore industry with the strongest focus on end user satisfaction
Values that drive us
System & Technology competence
Reliability & Customer
satisfaction
Health Safety &
The Environment
A preferred global supplier means:
§ Be on the makers list and get market share > 30 % in each market segment where we are positioned
§ Product technology among the top 3 in each segment where we compete § Customer oriented solution that support the life cycle of the vessel from new design to
recycling. Wider product offerings to support package sales and reduce sales costs § Profitability on par with industry average
8
Our long-term goal
Building a global BNOK 6 System and Service provider company in the maritime and offshore industry within 2020
§ Grow by internal efficiency and capture market share § Add peripheral products to complement § Product costs on par with the market § Key accounts to support customer relationships § Major focus to penetrate our installed base and third party equipment
9
TTS revenue growth potential Potential for growth towards 2020, goal of BNOK 6 turnover
0
1
2
3
4
5
6
7
2014 revenue Growth in current product sales
Package sales gain
New products Growth in lifecycle services
2020 revenue potential
BNOK
10
Operational Excellence & Synergies
§ Organizational adjustments and merging units
§ Integration of Container/Bulk/Tank business unit initiated.
§ Focus on efficient operation/process § Downsizing in Offshore and
Multipurpose General Cargo finalized and new work process implemented
§ Enhance market focus § Key account structure implemented
§ Corporate driven controller structure implemented.
§ Momentum cost reduction projects § Product development started in all
divisions. § Cost savings operational cost ~
MNOK 70 + sourcing cost ~MNOK 60
§ Customer driven growth § market shares to increase § Ship-type focus § Increase product leverage per
ship
§ Profitability through cost efficiencies
§ substantial lower sourcing costs
§ Closing gaps /product development
§ reinforced competitive position § Lean and mean business
§ substantial better focus on segments where higher productivity are achieved
Phase 1 (2013) Phase 2 (2014)
Phase 3 (2015)
In 2014 MNOK 130 were released in operation & sourcing costs In 2015 we will eliminate another MNOK 100
TTS has a strong position in the biggest global shipbuilding market China and Korea account for ~70% of global shipbuilding TTS China market share Strategy
% of global shipbuilding backlog (CGT) Hatch covers
Hose handling cranes
Cargo cranes
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
China Korea Japan
65 %
55 %
22 %
• Uniquely positioned to capitalize on China partnerships and through BU presence in Korea
• A new Chinese 50/50 owned company is established for Multipurpose & General Cargo
• Increased operational focus on Chinese JVs
12 Source: Clarkson Research Services
Positive underlying market drivers
World economy, seaborne trade and shipbuilding
• The demand for TTS equipment offering is related to the overall activity in shipping markets
• An important driver for shipping and shipbuilding markets is the state of the world economy
– World GDP expected to grow at CAGR 3.8% until 2017, in line with historic growth and a slight increase in growth relative to 2012-2014
– Seaborne trade is highly correlated to growth in world GDP
• Shipbuilding is a cyclical market and experienced a large increase in activity in the mid 2000’s until the financial crisis
• Uptick in contracting and orderbook in 2013/14
• Fleet has consistently grown by more than 2% since 2000
- 6,0%
- 4,0%
- 2,0%
--
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Growth
World seaborne trade (m. tonnes) World GDP World fleet (dwt)
Healthy underlying markets Global economy to remain solid
Source: Clarksons, IMF
World economy – GDP growth Growth in seaborne trade vs world GDP 1990-2014
World seaborne trade by type Comments
2,7%
--
5,4%
4,1%
3,4% 3,3% 3,3% 3,5% 3,7% 4,1%
--
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
• Healthy growth expectations for the world economy
– GDP projected to grow at 3.5-4% towards 2017
• Seaborne trade volumes are highly related to the world economy, and is therefore expected to move in the same direction
• Seaborne trade volumes have shown steady growth for many decades
– Key growth contributors include container and bulk
- 6,0%
- 4,0%
- 2,0%
--
2,0%
4,0%
6,0%
8,0%
10,0%
-- 1,0% 2,0% 3,0% 4,0% 5,0% 6,0%
Seaborne trade growth
GDP growth
--
2,0
4,0
6,0
8,0
10,0
12,0 Other
Gas
Oil products
Crude oil
Container
Minor bulk
Major bulk
bn tonnes
Contracting, fleet growth and new build prices
Contracting by ship type
New build prices
Contracting by region
Fleet growth
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %
--
1 000
2 000
3 000
4 000
5 000
6 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Asia Europe RoW Asia share (%)
0 20 40 60 80
100 120 140 160 180
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
VLCC Aframax Capesize Panamax
CGT
USDm
--
1 000
2 000
3 000
4 000
5 000
6 000
7 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Tankers Bulkers Container Gas MPP & GC Car carriers Passenger & cruise Offshore Other
# of vessels
2,7% 2,1%
2,5% 3,0%
5,7%
6,9% 6,9% 6,9% 7,0% 7,1%
9,5% 8,7%
6,1%
3,7% 3,4%
--
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
10,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Growth (dwt)
TTS currently addressing NOK 28 bn of the global market TTS market by product group Estimated annual market size (NOKbn) • Estimated market
size for marine product categories totalling NOK 15bn
• Largest product types within marine are roro equipment, winches, hatch covers and cranes
• Estimated market size for offshore & heavy lift segments at NOK 13bn
• Largest market for offshore cranes, drillship cranes and offshore winches
1,5
0,7
2,9
6,6
0,4
2,2
0,5
14,7
7,2
1,7
0,8
3,1
0,2
13,0
--
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0 Marine Offshore Solutions
Agenda
• 1st quarter headlines • Strategy and market outlook • 1st quarter consolidated accounts • Segment info • Shareholder structure • Summary
17
TTS Group ASA Profit and loss statement
18
1st quarter Year MNOK 2015 2014 2014
Turnover 593 554 2 454
EBITDA 1 -28 105
Operating profit -8 -38 61
Net financial items -15 -9 -38
Profit/loss before tax -23 -47 23
Net result continued business -28 -47 -22
Net result incl discontinued business -28 -47 18
TTS Group ASA Balance Sheet
Net interest bearing debt / Covenants
§ Net interest bearing debt increased to MNOK 348. § Total cash reserve is MNOK 214 as per 31.03.2015 § Equity ratio including subordinated convertible debt is 26.5 %
at the end of 1Q 2015 § Covenants at 1Q 2015 are met
19
MNOK 31.03.2015 31.03.2014 31.12.2014
Non-current assets 916 931 927 Current assets 1 642 1 161 1 484 TOTAL ASSETS 2 558 2 093 2 411
Equity 584 503 610 Gross interest bearing liabilities 404 372 386 Other liabilities and provisions 1 570 1 218 1 415 TOTAL EQUITY AND LIABILITIES 2 558 2 093 2 411
TTS Group ASA
(*) Convertible loan included at nominal value (**) Negative indicates net asset position § Cash flow from operations MNOK -74, mainly from
increased working capital Offshore and RCN projects
Cash flow Q1 Q1 Year MNOK 2015 2014 2014 Net cash flow from operations -74 -157 -150 Net cash flow from investments -1 -7 27 Net cash flow from financial activities -7 -131 101 Net change in cash -82 -32 -21
Cash and bank deposits at the start of the period 131 156 156
Effect of exchange rate changes in bank/cash 3 -7 -4
Cash and bank deposits at the end of the period 52 117 131
MNOK Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13
Short term interest b. debt 314 297 273 295 187 50
Long term int. bearing debt 0 1 1 1 103 103
Convertible Bond(*) 95 95 95 95 95 95
Total 409 393 369 391 385 248
Cash 52 131 88 88 117 156
NIBD (**) 357 262 281 303 268 92
Cash flow / Working capital / Interest bearing debt
Net working capital
20
TTS Group - Turnover and EBITDA 1Q 2015
TTS Group ASA
Container/Bulk/ Tank Offshore Multi Purpose/
General Cargo Shipyard Solutions Services RoRo/Cruise/Navy
Turnover: MNOK 593 EBITDA: MNOK 1
Turnover: MNOK 160 EBITDA: MNOK 15
Turnover: MNOK 72 EBITDA: MNOK 2 *)
Turnover: MNOK 79 EBITDA: MNOK -24
Turnover: MNOK 94 EBITDA: MNOK -4
Turnover: MNOK 51 EBITDA: MNOK 4
Turnover: MNOK 136 EBITDA: MNOK 13
*) Includes 50 % of JVs
Turnover and EBITDA 1Q 2015
RoRo / Cruise / Navy Cargo handling solutions for car carriers, cruise ships and specialized vessels as well as port handling equipment.
§ Improved turnover and profit for the business unit
§ Market for RoRo, particularly PCTC, is positive
§ Competition is fierce and prices are low in the port segment
§ Cruise business is developing
§ The Navy segment is promising
22
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 160 135 599 EBITDA 15 11 77 Order backlog 707 834 854
Container / Bulk / Tank Cargo handling solutions for container ships, tankers and bulk carriers; including winches, cranes and hatch covers.
§ Profit from 50/50 companies MNOK 8,4 (3,6) in Q1
§ Order backlog driven by strong market positions for the 50/50 companies in China
§ The outlook is strong for container and shows cyclic reduction for tank. The market for big bulk is slow, but emerging in small bulk and special tonnage
§ Moving of business unit head-quarter from Germany to South Korea is completed
*) Includes 50 % of orderbacklog in 50/50 owned companies
23
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 72 112 422 EBITDA 2 1 -5 Order backlog *) 1 601 1 192 1 687
Multipurpose / General Cargo Heavy lift cranes, mooring winches, hatch covers and side loading systems for multipurpose vessels and cargo ships.
§ Improved turnover and EBITDA
§ Continued positive activity in Chinese shipyards - several projects are tendering heavy lift cranes
§ Improved order backlog combined with cost cutting measures, basis for improved EBITDA margins
§ New 50/50 company TTS-SCM approached Chinese market in Q1 and achieved large orders in April 2015
24
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 94 28 138 EBITDA -4 -13 -35 Order backlog 445 281 562
Shipyard Solutions Production lines and systems for cargo handling to shipyards, focusing on transfer systems for docking and launching.
§ Stable activity in the quarter. Several interesting projects may develop in 2015
§ TTS with a strong position in the ship lift market.
25
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 51 37 192 EBITDA 4 -3 32 Order backlog 265 278 271
Offshore Cranes for offshore vessels and offshore installations.
§ Segment strongly affected by downturn in offshore market
§ Cost reduction efforts implemented. Due to long lead time for projects → effect expected gradually during 2015
§ Additional cost reduction efforts initiated in 1Q going forward into 2Q
§ Decrease in order backlog. Low order intake
§ Low utilisation and EBITDA under pressure expected in quarters to come
26
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 79 121 572 EBITDA -24 -26 -50 Order backlog 230 524 254
Services Complete services within maintenance, including spare parts, interval agreements and life time service.
§ Solid activity in the quarter, and stabile margin
§ Market demand in the segment provides basis for increased turnover, and improvement to the overall profit margin
§ Service market remains influenced by low ship charter rates in some segments
27
Q1 Periodic Full Year
MNOK 2015 2014 2014 Turnover 136 120 530 EBITDA 13 7 96
TTS Group ASA Shareholder structure at May 8th 2015: Rasmussengruppen AS 13.29%
Skeie Technology AS 10.31% Lesk AS 6.13%
Stisk AS 6.13%
Skeie Capital Investment AS 4.85%
Barrus Capital AS 4.00%
Skandinaviska Enskilda 3.67%
Skagen Vekst 3.53% Holberg Norge Verdipapirfondet 2.50%
Tamafe Holding AS 2.49%
10 largest shareholders 56.91% Other (1407 shareholders) 43.09%
Total 100,00%
Skeie Technology AS, Skeie Capital Investment AS and members of the Skeie family own in total 32,0 %.
28
Agenda
• 1st quarter headlines • Strategy and market outlook • 1st quarter consolidated accounts • Segment info • Shareholder structure • Strategy and market outlook • Summary
29
Summary § Positive quarter and improved overall turnover ex Offshore
§ Positive 1Q EBITDA for the third quarter after four negative previous quarters § Turnover ex. Offshore continues to improve § EBITDA margin ex. Offshore at industry average level § Offshore affected by downturn in the market
§ Improvement processes on track § We have a road map for the improvement processes going forward in 2015 that has not changed. Up
to now we have: § Finalized the cost cutting programs in MPGC, CBT and Offshore (Offshore continues cost cutting due
to weak market development in 2015) § Value chain development in several product segments (sourcing, product development, sales)
§ Positive view on significant market segments § The marine market remains good § Contracting of new vessels continues to be on a cyclic low level, and the marked is particularly under
pressure in some segments, especially Bulkers § Car carriers continue with several repeats § Container ships grow, especially feeder-size and mega size § Multipurpose/General cargo has improved from 2Q 2014 § Offshore market under heavy pressure
§ TTS continues to explore new strategic opportunities to further strengthen the business, this may include sale of a part of the group, acquisition of new business or strategic cooperation with new partners
30
TTS GROUP ASA
For further information, please visit us at
www.ttsgroup.com
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