TTS GROUP ASA. Q1 Results Oslo, 15 May 2014 Björn Andersson, CEO Arild Apelthun, CFO

Transcription

1 TTS GROUP ASA Q1 Results 2014 Oslo, 15 May 2014 Björn Andersson, CEO Arild Apelthun, CFO

2 Agenda 1 st quarter headlines Order intake and order backlog Business segments Market development 1st quarter consolidated accounts Shareholder structure The way ahead and summary

3 Agenda 1 st quarter headlines

4 TTS Group ASA 1 st quarter 2014 Summary 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 1 st quarter 2014 was MNOK Cancellations in the quarter were MNOK 47 relating to the heavy lift cranes.

5 TTS Group ASA Turnover and EBITDA 1 st quarter Turnover MNOK 800 EBITDA MNOK ,4 25,1 Q Q Q Q EBITDA margin -5,1% 3,4% * Restated 2012 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

6 TTS Group ASA EBITDA development 60 10% % Act Q Act Q Act Q Act Q Act Q Act Q Act Q Act Q ,4 0% -5% -10% % % EBITDA EBITDA margin Notes 1) Restated 2012 due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

7 TTS Group ASA Historical turnover development MNOK Marine Offshore & Heavy Lift Services Total

8 Agenda 1 st quarter headlines Order intake and order backlog

9 TTS Group ASA Order intake MNOK Q Q Q Q Q Q Q Q Q1 2014

10 TTS Group ASA Order backlog Q Order intake and backlog Q Cancellation of order in Offshore & Heavy Lift relates to heavy lift cranes. MNOK Q Backlog* Order-intake Cancelled Q Q Marine Offshore & Heavy Lift Services Total *Order reserve includes 50% of Joint Ventures. MNOK Order backlog per Q By year of delivery

11 TTS Group ASA Order cancellation Q Q MNOK ,5 5,7 10 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q consists of termination of the STX drillship contract.

12 TTS Group ASA Order backlog* - per MNOK Marine Offshore & Heavy Lift Services TTS Group *Order reserve includes 50% of Joint Ventures.

13 TTS Group ASA Order backlog* by division Q Q MNOK Marine Offshore & Heavy Lift Services Total Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 *Order reserve includes 50% of Joint Ventures.

14 Agenda 1 st quarter headlines Order intake and order backlog Business segments

15 New group structure - division and business units TTS Group ASA Turnover: 554 MNOK EBITDA: MNOK Marine Offshore & Heavy Lift Services Turnover: 284 MNOK EBITDA: MNOK 9.5 Turnover: 149 MNOK EBITDA: MNOK Turnover: 120 MNOK EBITDA: MNOK 6.5 Cargo Access Deck Equipment Offshore handling Offshore Shipyards Heavy Handling Heavy Lift Joint Ventures

16 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.

17 TTS Joint Venture operations in China 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.

18 Offshore & Heavy Lift Offshore and Heavy lift cranes, Hangar and watertight doors The division reports again weak results in the 1 st 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.

19 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.

20 Agenda 1 st quarter headlines Order intake and order backlog Business segments Market development

21 Outlook Offshore Vessels & Drill ship Global market Source: DNB Source: Pareto 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.

22 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 Suezmax Tanker K DWT VLCC K DWT Capesize K DWT Panamax 91-93k dwt Bulkcarrier Source: DNB

23 Outlook World Fleet Number of new Ship Orders No of ships Tanker General cargo/reefer Car Carriers/RoRo/RoPax Bulker Container Cruise Contracting Deliveries Scrapping Source: Maritime Strategies International

24 Agenda 1 st quarter headlines Order intake and order backlog Business segments Market development 1 st quarter consolidated accounts

25 TTS Group ASA Profit and loss statement 1st quarter Year MNOK Turnover EBITDA Operating profit Net financial items Profit/loss before tax Net result

26 TTS Group ASA Turnover as per MNOK Marine Offshore & Heavy Lift Services TTS Group Q1 14 YTD Q1 13 YTD

27 TTS Group ASA EBITDA as per MNOK 30,0 25,1 Marine Offshore & Heavy Lift 20,0 10,0 9,5 15,8 6,5 5,9 7,4 Services TTS Group 0,0-10,0 Q1 14 YTD Q1 13 YTD -20,0-30,0-28,4-40,0-39,1-50,0

28 TTS Group ASA Balance Sheet MNOK Non-current assets Current assets TOTAL ASSETS Equity Interest bearing liabilities Other liabilities and provisions TOTAL EQUITY AND LIABILITIES There have been no conversions of convertible bond during Q Equity ratio at end of 1 st quarter 2014 is 24.0%.

29 TTS Group ASA Equity share development Percent 50,0 45,0 44,8 44,8 40,0 38,3 35,0 33,8 33,5 32,8 30,0 25,0 22,4 22,9 25,5 24,0 20,0 15,0 10,0 5,0 0,0 Q Q Q Q Q Q Q Q Q Q * Restated from Q due to changes in IAS 19, recognition of actuarial gain/loss on pension liabilities.

30 TTS Group ASA Net working capital development ,0 % ,0 % 5,0 % 0,0 % Net working capital Total asset NWC % of total assets 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 ,0 % ,0 % ,0 %

31 TTS Group ASA Consolidated cash flow and net interest bearing debt YTD YTD MNOK Net cash flow from operations Net cash flow from investments -7-7 Net cash flow from financial activities Net change in cash Cash and bank deposits at the start of the period Effect of exchange rate changes in bank/cash Cash and bank deposits at the end of the period Net cash continued business 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. MNOK Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Short term interest b. debt Long term int. bearing debt Convertible Bond(*) Total Cash NIBD (**) (*) Convertible loan included at nominal value (**) Negative indicates net asset position

32 Agenda 1 st quarter headlines Order intake and order backlog Business segments Market development 1 st quarter consolidated accounts Shareholder structure

33 TTS Group ASA 10 largest shareholders at May 5 th 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%

34 Agenda 1 st quarter headlines Order intake and order backlog Business segments Market development 1 st quarter consolidated accounts Shareholder structure The way ahead and summary

35 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

36 Operational excellence & Synergies release total MNOK 150 in operational costs Re-engineering of Offshore Handling, Heavy Lift and Deck Equipment Phase 1 Business strategies GAP analysis Adjust organization structure Financial performance. Target set Phase 2 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 Phase 3 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

37 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 1 st 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.

38 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.

39 For further information, please visit us at TTS GROUP ASA