TTS GROUP ASA

Q1 Results 2014 Oslo, 15 May 2014

Björn Andersson, CEO

Arild Apelthun, CFO

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

• Market development

• 1st quarter consolidated

accounts

• Shareholder structure

• The way ahead and summary

Agenda

• 1st quarter headlines

TTS Group ASA

EPS for the quarter was NOK -0,54

Turnover in the quarter was MNOK 554. This is 24 % lower than last year mainly due

to lower activity within Offshore and Heavy lift division.

EBITDA in the quarter was MNOK -28, mainly due to low utilization in the Offshore &

Heavy Lift division.

Order intake was MNOK 645 excluding joint ventures, a 30% increase from same

quarter last year. The largest orders are relating to car carriers, port equipment and

side loading systems. Gross order intake in the joint venture companies reached the

same level and is mainly related to hatch covers, cargo and marine cranes for China.

Order backlog at the end of 1st quarter 2014 was MNOK 3 109. Cancellations in the

quarter were MNOK 47 relating to the heavy lift cranes.

1st quarter 2014 Summary

TTS Group ASA

Turnover and EBITDA – 1st quarter

Turnover EBITDA

EBITDA margin -5,1% 3,4%

* Restated 2012 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

MNOK MNOK

554

732

0

100

200

300

400

500

600

700

800

Q1 2014 Q1 2013

-28,4

25,1

-40

-30

-20

-10

0

10

20

30

Q1 2014 Q1 2013

TTS Group ASA

EBITDA development

-28,4

-20%

-15%

-10%

-5%

0%

5%

10%

-120

-100

-80

-60

-40

-20

0

20

40

60

Act Q2 2012 Act Q3 2012 Act Q4 2012 Act Q1 2013 Act Q2 2013 Act Q3 2013 Act Q4 2013 Act Q1 2014

EBITDA EBITDA margin

Notes

1) Restated 2012 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

TTS Group ASA

Historical turnover development 2000-2013 MNOK

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Marine Offshore & Heavy Lift Services Total

Agenda

• 1st quarter headlines

• Order intake and order backlog

TTS Group ASA

Order intake MNOK

664

485 501

635

492

755

890

775

645

0

100

200

300

400

500

600

700

800

900

1 000

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

TTS Group ASA

Order backlog Q1 2014

Order intake and backlog Q1 2014

Order backlog per Q1 2014

By year of delivery.

Cancellation of order in Offshore

& Heavy Lift relates to heavy lift

cranes.

MNOK

MNOK

Order-intake Cancelled Q1 2014 Q1 2013

Marine 364 0 2 304 1 544

Offshore & Heavy Lift 160 47 804 944

Services 120 0 0 0

Total 645 47 3 109 2 488

*Order reserve includes 50% of Joint Ventures.

Q1 2014 Backlog*

1 956

1 011

142

0

500

1 000

1 500

2 000

2 500

2014 2015 2016+

TTS Group ASA

Order cancellation Q4 2011 – Q1 2014 MNOK

8,5 5,7

225

43

10

21

68

116

47

0

50

100

150

200

250

Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Q4 2013 consists of termination of the STX drillship contract.

TTS Group ASA

Order backlog* - per 31.03.2014 MNOK

*Order reserve includes 50% of Joint Ventures.

2 304

1 544

804944

0 0

3 109

2 488

0

500

1 000

1 500

2 000

2 500

3 000

3 500

31.03.2014 31.03.2013

Marine

Offshore & Heavy Lift

Services

TTS Group

TTS Group ASA

Order backlog* by division Q4 2011 – Q1 2014 MNOK

*Order reserve includes 50% of Joint Ventures.

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Marine

Offshore & Heavy Lift

Services

Total

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

Turnover: 554 MNOK

EBITDA: MNOK -28.4

Offshore

handling

Heavy Lift

Offshore

Cargo Access

Deck

Equipment

Shipyards

Heavy Handling

New group structure - division and business

units

Turnover: 149 MNOK

EBITDA: MNOK -39.1

Turnover: 284 MNOK

EBITDA: MNOK 9.5

Turnover: 120 MNOK

EBITDA: MNOK 6.5

TTS Group ASA

Marine Offshore & Heavy Lift Services

Joint Ventures

Marine RoRo equipment, Hatch covers, Side doors, Cruise and Mega Yachts,

Winches and Deck equipment, Cranes and Davits for ships, shiplift and equipment for port terminals

High activity in car carriers during the period

and additional options on similar vessels are

secured.

Somewhat lower activity and margin within

deck equipment, but the order intake has

been positive for this quarter. Cost cutting

measures are being implemented.

Low activity and profitability within port

business for the first quarter. Structural

changes initiated in Sweden.

Market outlook for the marine division is

positive with high activity.

TTS Joint Venture operations in China

Numbers are on a 100% basis and in MNOK.

Joint Ventures are recognized in the

financial statements according to the equity

method. TTS Group includes only its share

(50%) of profit after tax in financial reports.

The increased contracting, especially in the

bulk and container segment, results in

improved order intake during the period both

for cranes and hatch covers.

Order intake in the joint ventures in Q1 was

MNOK 605 (100% basis).

The joint ventures are seeing a strong

market for its products. The market share is

in a positive development.

Numbers are on a 100% basis and in MNOK.

Offshore & Heavy Lift

Offshore and Heavy lift cranes, Hangar and watertight doors

The division reports again weak results in the

1st quarter with a loss of MNOK 39.

The main reason for the losses are weak

margins on ongoing work (provisions for loss

making projects cover project costs but not

overhead) and low utilization of our

operations in Norway, China and Germany

due to cancellations (STX) and delays.

Cost reduction efforts have been

implemented, resulting in a reduction of

workforce of approx. 100 persons. This effort

is expected to be finalized in Q2.

Order intake for the quarter was MNOK160.

Low activity in the market, specially for

offshore cranes in the quarter. However there

are signs of increased activity in both heavy

lift and offshore and 2 pipe handler cranes

was signed in May.

Services

Spare parts, Service and Maintenance

Services reports a quarter in line with last

year.

The earnings are still influenced by the

market where low volume per order is

affecting profitability.

Services base establishment in Brazil and

Houston is well underway and expected to be

finalized in Q2.

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

• Market development

Outlook Offshore Vessels & Drill ship Global market 2005-2015

Source: DNB

For OSV we have seen a weaker market over the last 6 months but there are signs of increased

activity.

For Drillship the mid term prospect looks to be weaker due to oversupply, however the longer term

still looks promising.

Still optimistic with regards to Chinese ship yard market share.

Source: Pareto

Ship newbuilding prices are on the move Shipbuilding prices are trending upwards for all segments, impact on equipment prices likely to follow

in 6- 9 months.

Source: DNB

0

20

40

60

80

100

120

140

160

180

Suezmax Tanker 156-158K DWT Capesize 176-180K DWT

VLCC 315-320K DWT Panamax 91-93k dwt Bulkcarrier

Outlook World Fleet

Number of new Ship Orders

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Tanker Bulker

General cargo/Reefer Container

Car Carriers/RoRo/RoPax Cruise

Source: Maritime Strategies International

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Contracting Deliveries Scrapping

No of ships

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

• Market development

• 1st quarter consolidated

accounts

TTS Group ASA

Profit and loss statement

MNOK 2014 2013 2013

Turnover 554 732 2 693

EBITDA -28 25 -130

Operating profit -38 18 -164

Net financial items -9 -4 -37

Profit/loss before tax -47 14 -201

Net result -47 9 -227

1st quarter Year

TTS Group ASA

Turnover as per 31.03.2014 MNOK

284338

149

278

120 116

554

732

0

100

200

300

400

500

600

700

800

Q1 14 YTD Q1 13 YTD

Marine

Offshore & Heavy Lift

Services

TTS Group

TTS Group ASA

EBITDA as per 31.03.2014

MNOK

9,5

15,8

-39,1

5,96,5 7,4

-28,4

25,1

-50,0

-40,0

-30,0

-20,0

-10,0

0,0

10,0

20,0

30,0

Q1 14 YTD Q1 13 YTD

Marine

Offshore & Heavy Lift

Services

TTS Group

TTS Group ASA

Balance Sheet

There have been no conversions of convertible bond during Q1 2014.

Equity ratio at end of 1st quarter 2014 is 24.0%.

MNOK 31.03.2014 31.03.2013

Non-current assets 931 925

Current assets 1 161 1 259

TOTAL ASSETS 2 092 2 184

Equity 503 836

Interest bearing liabilities 372 114

Other liabilities and provisions 1 217 1 233

TOTAL EQUITY AND LIABILITIES 2 092 2 184

TTS Group ASA

Equity share development

* Restated from Q4 2011 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

Percent

22,4 22,9

44,8 44,8

33,8

38,3

33,5 32,8

25,524,0

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

TTS Group ASA

Net working capital development

Working capital is influenced by the

significant provisions made in Q4.

Overall the Marine Division has

negative working capital while the

offshore and especially heavy lift

projects ties up working capital.

-15,0 %

-10,0 %

-5,0 %

0,0 %

5,0 %

10,0 %

15,0 %

-500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

Net working capital

Total asset

NWC % of total assets

TTS Group ASA Consolidated cash flow and net interest bearing debt

(*) Convertible loan included at nominal value

(**) Negative indicates net asset position

Cash flow from operations was

negative with MNOK 157, due to

increased working capital related

to ongoing offshore and deck

equipment projects.

Net interest bearing debt

increased to MNOK 268.

TTS is not in breach of its

covenants at end of Q1.

TTS has started discussions with

the banks regarding its longer

term financing following the

significant losses over the last 6

months.

YTD YTD

MNOK 2014 2013

Net cash flow from operations -157 -94

Net cash flow from investments -7 -7

Net cash flow from financial activities 132 -1

Net change in cash -32 -102

Cash and bank deposits at the start of the period 155 227

Effect of exchange rate changes in bank/cash -6 23

Cash and bank deposits at the end of the period 117 148

Net cash continued business 117 148

MNOK Q1 14 Q4 13 Q3 13 Q2 13 Q1 13

Short term interest b. debt 187 50 150 32 32

Long term int. bearing debt 103 103 0 106 6

Convertible Bond(*) 95 95 95 95 95

Total 385 248 245 233 133

Cash 117 156 65 147 148

NIBD (**) 268 92 180 86 -15

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

• Market development

• 1st quarter consolidated

accounts

• Shareholder structure

TTS Group ASA

10 largest shareholders at May 5th 2014

Rasmussengruppen AS 13.29%

Skeie Technology AS 10.31%

Lesk AS 6.13%

Stisk AS 6.13%

Skandinaviska Enskilda 5.66%

Barrus Capital AS 3.99%

Skagen Vekst 3.72%

Skeie Capital Invest 2.92%

Holberg Norge Verdipapirfondet 2.59%

Tamafe Holding AS 2.49%

Total 57.23%

Agenda

• 1st quarter headlines

• Order intake and order backlog

• Business segments

• Market development

• 1st quarter consolidated

accounts

• Shareholder structure

• The way ahead and summary

Status on the initiatives

The adjustment of the 2013/Q4 accounts

additional loss of MNOK 90, was a

consequence of worse problems than

anticipated related to projects in offshore

and yacht.

As previously communicated, TTS has

launched a group wide restructuring and

cost optimization program. This program

continue with high priority throughout 2014

and 2015

The immediate actions

Cost cut and capacity adjustments,

mainly in Offshore and Heavy lift

Re-organization of Port & Logistics

with Marine to get a better utilization

and improve efficiencies.

Adjustment in management

The medium term processes are

ongoing, but has yet to be reflected in

the financial figures

Process improvement

Market approach adjustments

Momentum initiatives

Operational excellence & Synergies

– release total MNOK 150 in operational costs

Business strategies

GAP analysis

Adjust organization structure

Financial performance. Target

set

Re-engineering of Offshore Handling, Heavy Lift and Deck Equipment

2013 2014 2015

Organizational adjustments and

merging units

Port & Logistics first out

Staff reduction of 10% initiated

Focus on efficient

operation/process

Offshore and Heavy lift

downsizing and new work

process

Enhance market focus

Key account structure

implemented

Corporate driven controller

structure

Momentum cost reduction

projects

Product development plans in all

units

Customer driven growth

market shares to increase

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 Phase 2

Phase 3

A word related to the building blocks

The financial performance from last quarter must be radically improved.

The following highlights are the building blocks:

We are strong positioned with car carriers which will continue for years.

Consolidating our strong market position in China and expanding cooperation

partners. Order intake in JV (100%) exceeds 600 MNOK for 1st quarter.

Our offshore products have high quality and satisfied customers.

Our product range within offshore has been more expensive than anticipated to

develop, but the repeat orders achieve profit.

We will deliver our first drillship this year and we are in the process of finalizing

delivery of our first 900t heavy lift crane, even with the termination of drillship to

Sigma (STX) was a set-back.

The impact of momentum initiatives will demonstrate in the new booked orders.

Product development and product simplification actions.

Our network of design hubs in Poland and Vietnam is set up to provide competitive

cost and high quality.

Summary

We have a road map for the improvement processes going forward in 2014 and

2015 and that has not changed;

Productivity

Sourcing, economy of scale and simplification of logistics

Lead time reduction program

Additional cost cutting to adjust capacity and increase synergies is well

underway.

The changes implemented will generate improved results. However, in near term

the profitability is a challenge. We have a 2 year program.

We start out with some strong building blocks but capitalizing on these will take

time.

Outlook

The marine market remains good. Contracting of new vessels, especially bulkers

continues to be at a high level and Car carriers will continue with several repeats.

Container ships, especially feeder size grow up and General cargo/Heavy lift have

increased since the yearend. Offshore segments of OSV with heavy cranes are in

the pipeline.

TTS GROUP ASA

For further information, please visit us at

www.ttsgroup.com