2012.MasterPresentation_final [Compatibility Mode] - TTS Group ASA

Welcome
Capital Market Day
20 November 2012
Oslo Konserthus

TTS Group ASA
Capital Market Day 2012
Oslo 20 November 2012
Johannes D. Neteland
CEO

Capital Market Day 2012
Agenda
• Recent News
• The sale of the Drilling Equipment unit
• Value Creation
• Strategy 2016
• The Organization
• The Development in China
• Summary

Recent News

The TTS Drillship Crane Package
Crane Supply for STX Sigma Drillship
Typical Order Value: 120-140 MNOK

Breakthrough Deal for TTS Offshore Crane
Entering a new growth-segment
• TTS Offshore Handling Equipment to supply the total
crane package for the Sigma Drillship-vessel
• State of the art subsea crane with active heave
compensation (GPOKac 5000-165-51,5)
• Pipehandling crane with gripper (1250 TM) handling all
drilltubes from vessel
• Vessel to be built by South Korean STX Offshore &
Shipbuilding, world’s fourth largest shipbuilder
• The Sigma drillship is designed for efficient drilling
operations in Gulf of Mexico, offshore Brazil, offshore west
Africa and South East Asia
• Drilling depths of 12,190 meters
• Water depths up to 3,660 meters
• Cranes ordered by STX:
• 1 x GPOKac 5000-165-51,5
• 3 x GPOKc 5000-100-45
• 1 x Pipehandling crane 1250 TM
• 1 x Riser yoke swl 35 ton

TTS Investment in Sigma Drilling
Entering a new crane segment and increasing earn-out potential
• 5 MUSD investment (approx. 28 MNOK) in Sigma
Drilling AS in connection with entity partly owned
by Sigma
• TTS to deliver the offshore cranes to the vessel
and Cameron International Corp. delivers the
drilling equipment
• With the sale of its drilling equipment unit earlier
this year, TTS established an earn-out agreement
with Cameron based on revenue of drilling
equipment to early June 2015
• Investment brings TTS into a new growing market
segment
• Increased earn-out potential of the sale of the
drilling equipment unit
Sigma Drilling AS

The Sale of
the Drilling
Equipment Unit

TTS Group ASA
TTS after the sale of Drilling Equipment
MNOK
3 500
3 000
2 500
2 000
1 500
1 000
500
0
00 01 02 03 04 05 06 07 08 09 10 11
Offshore Handling
Equipment
Marine
Port & Logistics

Sale of the Drilling Equipment Unit
• April 2012:
- TTS Group ASA signed the agreement to sell the drilling equipment business to
Cameron for USD 270 million on a cash free/debt free basis
- USD 15 million deferred payment over 2 years
- Turnover based earn-out model for a three-year period
• June 2012:
- Closing of transaction. Total gain from the sale was MNOK 420
• Q3 2012:
- Paid MNOK 500 to the shareholders in form of extraordinary dividends and
payback of share capital
• 2013 – 2015:
- Additional dividend capacity in 2013
- All paid earn-out and deferred payment will be allotted to the shareholders

Value Creation of
TTS Group

TTS in Brief
Long history of growth
• Global ship equipment company with
more than 40 years experience
• 25 units in 13 countries and a
workforce of around 1,100
• Is one of the top three suppliers in our
specialized market segments
• Headquarter in Bergen, Norway, listed
on Oslo Stock Exchange
• Long history of organic growth and
acquisition
• 30 acquisitions and establishments
since 1996
TTS in 2010
TTS in 2000

Strong Financial Performance
Historical key figures 2000-2012 in MNOK for TTS Group
* NGAAP, from 2004- IFRS
**Without Drilling equipment

4500
4000
3500
3000
2500
2000
1500
1000
500
0
A Story of Acquisition-Driven Growth
TTS Group turnover (NOKM)
Listed on the
OSE in 1995
Mongstad
Engineering
Norlift
Aktro
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Acquisitions
Hamworthy KSE
Sense MUD
Sense EDM
ICD Project
LMG Cranes
Kocks
GmbH
Hydralift Marine
Liftec Oy
100% of JV in
Shanghai
Wellquip
Holdings
Sense DrillFab
NavCiv
Engineering
Sense EDM,
Singapore
100% of JV
in Korea
Keyon
Marine
Engineering
TTS Brazil
NMF
GmbH

4500
4000
3500
3000
2500
2000
1500
1000
500
0
Divestments
TTS Group turnover (NOKM)
Listed on the
OSE in 1995
Controlteam AS
Intercontrol AS
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Divestments
TTS Construction
Aktro
TTS Keyon
TTS Brazil
Sense MUD
Sense EDM
Sense DrillFab
Sense Singapore

4500
4000
3500
3000
2500
2000
1500
1000
500
0
New Companies
TTS Group turnover (NOKM)
Listed on the
OSE in 1995
JV in
Shanghai
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
New companies
Jiangnan TTS,
China
TTS Keyon Marine,
China
TTS Inc.,
Miami
Office in
Pusan, Korea
TTS Marine
Equipment, China
TTS Marine,
Italy
TTS Singapore
TTS Vietnam
TTS BoHai
Machinery
TTS Mexico
TTS Greece

4500
4000
3500
3000
2500
2000
1500
1000
500
0
Combined Growth TTS Group
TTS Group turnover (NOKM)
Listed on the
OSE in 1995
Mongstad
Engineering
Norlift
Controlteam AS
TTS Automation AS
JV in
Shanghai
Intercontrol AS
Aktro
TTS Construction
Hamworthy KSE
Marine
Engineering
TTS Keyon
100% of JV
in Korea
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Acquisition Divestment New company
Aktro
Jiangnan TTS,
China
TTS Keyon Marine,
China
Sense MUD
Sense EDM
ICD Project
TTS Inc.,
Miami
LMG Cranes
Office in
Pusan, Korea
Kocks
GmbH
Hydralift Marine
Closed company
TTS Marine
Equipment, China
TTS Marine,
Italy
Liftec Oy
100% of JV in
Shanghai
TTS Singapore
Wellquip
Holdings
TTS Vietnam
Sense EDM,
Singapore
Sense DrillFab
Keyon
NavCiv
Engineering
TTS BoHai
Machinery
TTS Mexico
TTS Greece
TTS Brazil
NMF
GmbH
TTS Brazil
Sense MUD
Sense EDM
Sense DrillFab
Sense Singapore

Acquisition of NMF
Promising synergies for fast-growing Chinese market
• The acquisition of NMF was completed on August
20 th
• The integration of NMF started immediately
thereafter and will be finalized by 4 th quarter 2012
• Expected turnover in 2012 is approximately MEUR
90. EV/Sales 0,20
• The product range of NMF is complementary to
TTS’ existing product range
• Market access to China, with potential on
aftermarket, and lower production costs
• Significant synergies: sales and marketing, service
and manufacturing. Expect to increase EBITDA
margin 2-4%

Neuenfelder Maschinenfabrik Gmbh (NMF)
NMF is the world leader in the segment of heavy lift cranes.
Crane segment Size Cranes
delivered
Cranes in
operation
Boat and supply cranes 1.0t - 7.2t 1,200 cranes 743 cranes
Bulker cranes 30t - 35t 184 cranes 141 cranes
Container cranes 20t - 60t 1,260 cranes 928 cranes
Multipurpose cranes 20t - 120t 616 cranes 462 cranes
Heavy lift cranes 150t - 400t 455 cranes 326 cranes
Super heavy lift cranes* 700t - 1,000t 28 cranes 23 cranes
Total 3,743 cranes 2,623 cranes
* Will be offered as offshore oil and gas cranes, or for the installation of wind turbine
foundations with dynamic positioning system and deep sea capacities in the future.
Market
share
< 5%
< 5%
~ 25%
< 10%
> 60%
> 90%

Strategy 2016

Execution
The key to success
The 5 – 15 – 80 Rule:
•5% strategy
•15% position
•80% execution
Execution
Strategy
Position

Strategy 2016:
Building a global € 1 Billion shipping and
offshore equipment/ service company

€ 1 Billion Company in 2016
Leading shipping and offshore equipment/ service company with economies of scale
1
2
3
4
5
Strategy
Leverage strong
position in China and
Far-East
M&A
Focus on profitability in
challenging segments
Global service offering
Synergies and
operational excellence
� Leading position in China provides market access (NMF)
� Focus on attractive specialized ships segments
� Grow offshore handling in expanding Far-East markets
� Financial flexibility
� M&A track record
� Opportunities in distressed markets
� Marine (volume and high end)
� Offshore handling
� P&L
� End user focus
� Mission critical products
� 4 hubs for global reach (80%)
� COO
� Centralized standardization, product development and procurement
� Decentralized organization and decision making

The Organization

Corporate Management
Flat organization
Finance
Arild Apelthun
Cargo
Access
Deck
Equipment
CEO
Johannes D. Neteland
Operations
Ivar K. Hanson
Port &
Logistics
Offshore
Handling
Business units
Communications
Miao Reinlund
Service
TTS JV
Human Resources
Nina Aadland
TTS NMF

Chief Operating Officer (COO)
New Management Position
Ivar K. Hanson appointed COO:
• Joined TTS in 1994
• Former Executive Vice President for Marine
Division
• Solid trac- record with TTS Group

The Development
In China

TTS Group China Venture
• Long history of successful business in China
- Early mover, valuable experiences and strong position
• Unique relations with state owned companies
- Long term commitment, new high-level meetings in Q3-Q4
• Joint Ventures with two leading Chinese state owned corporations:
1. China State Shipbuilding Corporation (CSSC in 1998)
- China’s largest shipbuilding company
- TTS HuaHai in Shanghai (1998)
- Jiangnan TTS Marine Equipment Co. in Nantong (2007)
- Hatch Covers and Winches (introduced in 2011)
2. Dalian Shipbuilding Industry Corporation (DSIC in 2005)
- TTS Bohai in Dalian
- Cargo Cranes, Offshore Cranes (and previously drilling equipment)

Strong Development for TTS in China
• World’s biggest market for Marine
equipment
• All marine equipment products for the
Chinese market are included in the
two joint ventures
• Through the JVs TTS has gained a
significant market share within its
important and fast-growing niches in
China
• TTS is building a strong servicepresence
in the Chinese market in
close cooperation with its JV-partners

TTS Group Locations in China
TTS Bohai Machinery
TTS Marine Equipment
JiangNan TTS Marine Equipment
TTS Hua Hai
TTS Marine Shanghai

Locations of Shipyards in China
Xinjiang
Tibet
Gansu
Qinghai
Sichuan
Yunnan
Inner Mongolia
Ningxia
Guizhou
Shanxi
Guangxi
Hainan
Shanxi
Hubei
Hunan
Beijing
Henan
Hebei
Guangdong
Tianjin
Shandong
Anhui
Jiangxi
Liaoning
Jiangsu
Fujian
Zhejiang
Shanghai
Heilongjiang
Jinlin

Solid Structure for Growth
• Three solid revenue streams from TTS Group’s JVs in China:
1. Royalty
2. 50/50 profit split
3. 100% after market outside China
• Expected turnover of close to NOK 1,5 billion in 2012
• Market share of 40-60% in Hatch Covers and Cranes
• The most important and focused market for the company
- In 10 years, China is expected to be the largest market for offshore
equipment in the world
Uniquely positioned to serve the fast-growing Chinese offshore
market where TTS’ unique relations is a key success factor. (i.e.
NMF)

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
• Turnover in Joint Ventures in 2011
exceeded NOK 1 billion
• Increased turnover also in Q3 2012
• A weak market for bulkers lead to
lower order intake and some
cancellations in the quarter
• Still solid order backlog
Numbers are on a 100% basis and in MNOK.

China Offshore Growth
China, inclusive drilling equipment
MNOK

TTS Group ASA
Production of rig equipment in China

TTS Group ASA
Production of rig equipment in China

TTS Group ASA
Production of rig equipment in China

TTS Group ASA
Rig market in China with great potential
TTS Bohai’s deliveries:
•BOP handling crane
•BOP skids
•Pipe handling crane
•Derrick
Total order value of around 2,5 MUSD
Significant potential for expanding the
deliveries:
- Rig Cranes
- NMF cranes
- Winches
- Doors
- and more
Prospector’s jack-up rig in Dalian

Focusing on the Far-East
• China is the gateway
• Establishment of TTS Far-East Cooperation
• Increasing demand from South Korea,
Singapore and China
• Growth Strategy for Far-East Market:
1. Expanding the product portfolio
- Drillship Cranes, Offshore Rig,
Offshore vessels
2. Expanding other offshore products
Capitalize on existing infrastructure
to develop products and capture
market opportunites in the Far-East
markets

Summary

Summary
• Sale of Energy completed. The sale strengthened TTS financial
position significantly
• Acquisition of NMF improved TTS position in the marine crane
market and complements TTS product offering. Significant synergy
potential is expected to lift margins
• Dividends and repayment of MNOK 500 declared in 2012, additional
capacity for 2013
• Short term - market uncertainties
• TTS has reiterated it long term growth strategy through generic
growth and acquisitions. Capacity for growth after dividend
payments

www.ttsgroup.com

Capital Market Day
20 November 2012
Oslo Konserthus

TTS Group ASA
Capital Market Day
2012
Market Outlook
Ivar K. Hanson
COO

Capital Market Day 2012
The Promising Market
• Market Segmentation
• Marine Market
• Offshore Market
• Port & Logistics Market
• TTS Markets (Geo)
• Summary

Segmentations

Market Segmentation
Offshore Handling Port & Logistics
Marine

Marine Market
RoRo equipment
Hatch Covers
Side Doors
Cruise and Mega Yachts
Winches
Deck Equipment
Cranes
Davits

Marine – Status of Operations
RoRo equipment, Hatch Covers, Side Doors, Cruise and Mega Yachts.
Winches and Deck Equipment, Cranes and Davits for ships
• Generally good operation is resulting
in high margins, 10-11% EBITDA
• Activity and earnings in Joint
Ventures in China remain high and
looks promising for 2012
• Lower activity relating to standard
products due to several postponed
projects
• Low activity and difficult market for
Services
• Low order intake in the quarter, but
increasing trend of enquiries
• Acquisition of NMF expands TTS
product offering and position in the
Marine crane market

Marine Market Newbuilding
Market Development – contracting forecast - Trends

Marine Market Newbuilding
Overall contracting still on historical levels

Deliveries to the World Fleet
Forecast looks promising – China on the move

Positive Trend World Fleet
Contracting set to grow

Marine Focus: PCTC,Yacht, Eco Friendly Vessels
Marine Market Development by Main Segments vs. Competitive power
TTS Marine competitive power
Strong
Weak
Marine: MTO
• Bulk
• Tank
• Container
Low
TTS Market Attractiveness Matrix
Marine: ETO
•Car carriers
•Heavy Load
•LNG
•Yacht
•Cruise
•Multi P
Offshore
•Subsea constr.
•Drillships & Rigs
•OSV, PSV
•FPSO
Market growth 2012-2015 High
Market size equipment 2012
(annual new sales)
500’’- 1000’’
1.000’’- 2.000’’
2.000’’- 4.000’’
ETO: Engineer to Order
MTO: Make to Order

World Fleet Outlook
Market Development by Ship Types
• Container Decreasing market in all segments
• LNG Tankers Positive development in South Korea and Japan
• Tanker Market on low level, but slightly positive outlook
• Bulk Carrier In general low level, acceptable Chinese market, only few projects in
South Korea
• Car Carrier Currently high activity in market due to low shipbuilding prices,
demand expected to exceed supply in 2013-2014, more fuelefficient
Post-Panamax designs are introduced
• Short Sea RoRo Continued low activities expected
• Deep sea RoRo Will maintain low level, but large projects
• RoPax Expected to increase after several years of low demand
• Reefer Has not developed, strong competition from container,
conversions more likely than NB
• Multipurpose Few but interesting and substantial projects; heavy lift with growth
potential
• Cruise Slow increase towards normal levels
• Offshore Currently high activities, risk for lower oil price will reduce
activities. PSV has dropped, more complex, but fewer projects
• Navy New focus area, currently uncertain market
• Yachts Booming market
• Heavy Lift Market is slow, few contracts out but is expected to improve in 2013

Marine Segments
Estimated total market share/ value for Marine Products is 12 000 MNOK
Annual
Sales
in MNOK
Others
Seohae
Kyoritsu
Kikai
Total TTS
TTS JV
Macor
Navalimpianti
Others
Towimor
Kawasaki
Hatlapa
Ravenstein – 7%
Pusnes
Rolls Royce
Total TTS
Others
Seohae
Total TTS – 50%
Cargotec
Total TTS
TTS JV
Others
Others – 12%
Others
Liebherr
IHI
Mitsubishi
Total TTS
TTS JV
Liebherr
Others – 12%
Cargotec
Total TTS

Post Panamax:
Shipping market not all black – light at the
end of the tunnel

Post Panamax
Opens for new designs of Pure Car and Truck Carriers
• In 2015, the new, wider Panama Canal will open
which will tolerate vessels with 34-36 meter width
(compared to today’s 32m)
• New vessel size with increased capacity and
efficiency have generated increased demand
from ship owners and ship builders
• TTS well positioned for this fast-growing market
• Close and long-term relations with our
customers, combined with our leading
technology provides excellent platform to
capitalize on the Post Panamax segment
• Stern Ramp technology and internal ramps of
TTS Cargo Access approved and delivered
• TTS Cargo Access actively working together with
customers to constantly improve cargo efficiency
and capacity

Summary Marine
1.Challenging Market for new-building
2.Attractive segments in specialized ships
3.Positive Forecast for Bulk and Heavy Lift, ultimo 2013
4.Service market showing signs of improvement

Port and Logistics
Market
Equipment for
Shipyards, Terminals
and Industry

Port and Logistics - Status of Operations
• Low activity and backlog at the start
of the year still affects earnings.
However backlog has increased
markedly over the last 6 months
• Turnover still below break-even,
resulting in a negative EBITDA in the
quarter
• While investment activity in North
Europe remains at a relatively low
level for port business, there are still
opportunities in this market
• Two new contracts were reported in
August of 50 MNOK

Port & Logistics Segments
Container Port development - Trends
in Full TEU
200 000 000
180 000 000
160 000 000
140 000 000
120 000 000
100 000 000
80 000 000
60 000 000
40 000 000
20 000 000
-
Containerisation since 1995
FULL TEU growth
20,0%
15,0%
10,0%
5,0%
0,0%
-5,0%
-10,0%
-15,0%

P&L Focus: Linkspans and Shiplifts
Port & Logistics Market Development by Main Segments vs. Competitive power
TTS position/experience
Strong
Weak
Low
Heavy Industry
Shipyards
Ports
Market growth 2012-2015 High
Market size
(annual new sales)
300 – 500 MNOK
500-1000 MNOK
1000-1500 MNOK

Port & Logistics Segments
Estimated total market value for Port & Logistics: 1 870 MNOK
Annual Sales in MNOK
860 (46%)
Others
Ravenstein
Novatec
Ravenstein TEAM – 7%
Bladt Industries
Cargotec
TTS
Ports
650 (35%)
Shipyard
Others
IMG
TII Group
Locals
TTS
Rolls Royce
Shipyard
360 (19%)
Others
GIA
Kress
Seacom
TTS
TII Group
(Kamag
Scheurle
Industry

Port & Logistics Segments
Horizontal Transportation Eq. Market in Container ports: 3 000 MNOK
Annual Sales in MNOK
666 MNOK (22%) 1 240 MNOK (40%) 840 MNOK (28%) 300 MNOK (10%)
Others
CIMC
Houcon
TTS
Translifter+
Cassettes
Trailers
Others
Terberg
Cargotec
Terminal
Tractors
Straddle
Carriers
Others
Liberr
Terex
Cargotec
Cargotec Terex (Gottwald)
Auto
Shuttle
AGV

Summary Port and Logistics
1.Ship repair market is in development – a potential for TTS in
segments for ship handling solutions
2.Port market showing signs of improvement
3.Long-term forecasts for the Port segments are positive with a
growth in box movement between 5-6%

Offshore Market
Drillship and Rig Cranes
Active Heave Compensation-
Cranes
Winches

Offshore Handling Equipment
Drillship and rig-cranes, AHC Cranes, winch segments
• TTS continues focus on the offshore
market after the sale of drilling
equipment
• Improved order intake in the quarter
relates to offshore cranes
• Higher activity compared to 2011
explains the improved earnings
• Sold rest of the stocked offshore
cranes in the quarter
• Well positioned to take advantage of
active offshore market

Offshore Handling Equipment
Opportunities
• The offshore yards and rig/ drillship owners welcomes a new player
in the supply of offshore handling equipment
• TTS infrastructure in Europe and China provide unique position for
effective supply of offshore handling equipment
• TTS NMF GmbH facility for supply in Europe
• TTS Marine Shanghai Co Ltd. facility for supply in China
• Opportunities in the development of the offshore market in China
and the Far-East where TTS is uniquely positioned

Offshore Handling Market
Main Driver – oil price forecast expected to stabilize around USD 95
Source: IHS Fairplay, TTS analysis

Offshore Market Drivers
Global rig fleet development
800
600
# of units
400
jan 2002 jan 2004 jan 2006 jan 2008 jan 2010 jan 2012
Source: IHS Fairplay, TTS analysis
Utilization (%)
Total Supply Contracted Working Contracted utilization (rhs)
100%
75%
50%
25%
0%

Offshore Market Drivers
Rig Day Rates
USD'/day
700
600
500
400
300
200
100
0
jan.02 jan.03 jan.04 jan.05 jan.06 jan.07 jan.08 jan.09 jan.10 jan.11 jan.12
Source: IHS Fairplay, TTS analysis
UDW Midwater UK Premium jackup USGoM jackup

Outlook Offshore Vessels
Global demand 2010 - 2016

Offshore Handling Segments
Estimated total market value for Offshore Handling is 4 000 - 5 000 MNOK
Offshore & Subsea systems market and competitive situation
Annual sales (MNOK):
100 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0%
2 700
Other
ODIM
Huisman
TTS
MacGregor
National Oilwell Varco
Offshore cranes
1) Offshore AHC cranes and general offshore cranes.
Not platform /rig cranes
1200
Other
TTS
Huisman
MacGregor
Hatlapa
ODIM
National Oilwell Varco
Rolls Royce Marine
Offshore winches
MacGregor
3) A-frames, module handling systems and ROV
LARS
4) Products offered by TTS SE
Sources: Clarksons, Pareto, TTS analysis
2) AHT winches and subsea winches page 74
1000
Other
TTS
National Oilwell
Varco
Huisman
ODIM
Lifting & Handling
45
TTS Other
MacGregor
Shipyard
Offshore Access

TTS Offshore Competitive Power
Offshore Focus: Drillships, Rigs and OSVs
Market Development by Main Segments v.s Competitive power
STRONG
WEAK
TTS Offshore Market Attractiveness Matrix
LOW
WELL
FPSO
osv
DRILLSHIPS
Market Growth 2012 - 2015
RIG
HIGH
Market size offshore
equipment 2012
(annual new sales)
100 - 500 mNOK
500 - 1000 mNOK
1000 - 2000 mNOK
Engineer to Order
AHTS Make to Order

Summary Offshore Market
1.Drillship and Rig Markets are hot and provide opportunities for
TTS Rig Cranes
2.Increased demand for subsea construction vessel – possibilities
for AHC Cranes

TTS Markets
Summary

Enhancing the Global Presence
Other markets
In addition to China, TTS is building extensive local activites in Brazil, Singapore
and South Korea

The Market - Summary
Marine
•Market prospects for complex ships are positive, pessimistic prospects for container and
tank while the bulk and heavy lift sector shows signs of improvement ultimo 2013
Offshore Handling
•Market prospects for OSVs are generally positive with opportunities in the rig/ drillship
segments for offshore handling equipment
Port and Logistics
•Market prospects for ship-lifts are positive while the market for port equipment shows
minute signs of improvement on short term, long term – the trends are promising
Service
•Challenging market that holds great potential, especially with development of four hubs for
TTS’ global reach. Establish and develop long-term customer relations to end-user with
strong product development of mission critical equipment. Improvements and important
synergy effects already in place

www.ttsgroup.com

Coffee Break
Capital Market Day
20 November 2012
Oslo Konserthus

TTS Group ASA
Capital Market Day 2012
Streamlining Operations
Product Development
Service and After Market
Ivar K. Hanson
COO

TTS Group Operations
Topics
• Streamlining Operations
• Product Development
• Service and After Market

TTS Group ASA
Topics
Streamlining
Operations

Creating an Operations Platform for Growth
Establishing ‘’The TTS Model’’
Sales
Service
Sourcing
Production
Cargo
Access
Deck
Equipment
Port &
Logistics
Offshore
Handling
Service TTS JV TTS NMF

Continuous Cost Improvement
Centralized procurement at core of new organization
• Approx 50 MNOK reduction per year
based on order intake volume
• Across all product groups in TTS
• Estimates for 2013, full effect in 2014
5 - 10%
Reduced
Purchase Cost

Production Efficiency with New Organization
Maximize utilization, optimization based on core competencies
Germany:
TTS-NMF
Germany:
TTS-Service
(Bremerhaven)
Excluded are JV‘s, Sub‘s and their products.
Finland:
TTS-Liftec
China:
TTS-Marine
Equipment (Dalian)
China:
TMS
(Shanghai)
Korea:
TTS-Marine
Equipment

Enhancing Production Efficiency
Increase of Value Added - Example: Winches

Establish an Engineering Footprint for Growth
Creating a Basis for Growth in High Value Segments
• Engineering Gdansk, Poland: Offsh/PCTC 30 Engineers, Cost: NOK 120/hour
• Engineering Hai Phong, Vietnam: PCTC 14 Engineers Cost NOK 20 /hour
• Engineering Shanghai, China: Offshore 10 Engineers Cost: NOK 55 /hour

TTS Group ASA
Topics
Product
Development
Port & Logistics
Ship Lifts
Marine
Side Loading Systems
Offshore
Rig Cranes
Offshore Winches

Ship Lifts and Shipyard Solutions
Ship Handling Solutions
Heavy Load Transfer
Productivity Tools
Improving Customer Productivity
Ship Lifts
Handling solutions in the lowend
market 300t-3000t

Ship Handling Tools

Side Loading Systems
Reefer ship project
Side Loading systems
Handles both pallets and cars
Performance Upgrade
Increases load capacity and reduces port
turnaround

Potential for Additional Offshore Products
Cranes for rigs and drillships
Revitalize TTS efforts on
Anchor Handling Winches

TTS Group ASA
Topics
Service and
After Market

Service-Driven Operations
Key competencies available to the end-customer
Cargo
Access
Deck
Equipment
Ivar K. Hanson
Cheif Operating Officer
Port &
Logistics
Offshore
Handling
Service and After Market
Service
TTS JV
TTS NMF

After Market for Far-East
• TTS secured 100% after market from JV-partner for
service outside of China
• Optimization and efficiency through integration of
European and Far-East operations
• Through customer-driven development secure a
strong position in the Far-East Offshore Market

TTS Group Hub Strategy
Strategic Objectives and Actions
Service Hub Development:
• Increase ability to serve the customer on the
spot and in a timely manner so as to increase
our competitive edge.
• Independent entities with technical and
design knowledge for all TTS products
• The Hub Advantages:
- Customer accounts (sales)
- Service capability on all TTS products
- Stock of critical parts
- Workshop
- Technical knowledge (design)
Hub Development Areas:
•Bremerhaven
•Singapore
•Dubai
•Fort Lauderdale

Services
Customer-oriented main strategic direction
•There is great potential to grow the Service business, both in terms of
market shares and volume. This will be achieved by:
- Increasing market penetration: Establish hubs in US, Singapore, Dubai and
Bremerhaven. Establishing services company in Brazil
- Gearing the organization towards more pro-active sales: Not just CRM and
KAM but making our service engineers our prime sales force
- Implementing cost reduction initiatives and working “smarter”: Strategic
stocking and implementation of ERP system for Marine Inc and Singapore
- Optimizing pricing: Developing and implementing a competitive pricing
strategy

Summary
1. New Operations Platform in place for enhanced production efficiency and
synergies
- Optimization and efficiency through integration of European and Far-East
operations
1. Increased focus on Product Development to meet new and increased
demand
- Increase TTS Engineering Footprint and additional offshore products
1. Hub Strategy implemented to improve customer efficiency in vessel
operations
- Increase global After Market Sales and Service

www.ttsgroup.com

Capital Market Day
20 November 2012
Oslo Konserthus

TTS Group ASA
Capital Market Day 2012
Arild Apelthun
CFO

Capital Market day 2012
Topics
• Financial Status TTS Group ASA
- Main financial key figures and development
- Change in Joint Venture structure more in detail
- Balance sheet Q3 2012 after repayment of capital
- Capital structure
• Selected Topics
- Sale of Drilling: earn out model and potential
dividends going forward
- Growth strategy – from a financial perspective –
alternatives
- Pension obligation

Financial Status
TTS Group ASA

Financial Status TTS Group ASA
Main financial key figures
(MNOK) YTD Q3 2012 YTD Q3 2011 Full year 2011
Revenue 1 560 1 993
2 594
EBITDA 122 93
171
EBITDA (%) 7,8 % 4,7 % 6,6 %
EBIT 82 74
144
Net result continuing buiness 36 8
38
Net result divested business including gain on sale 418 0
-15
Net result in total 454 8
23
EPS (NOK, continuing business) 0,45
EPS (NOK, total) 5,61
Net working capital -47
Capital Employed (*) 860
(*) Adjusted for excess cash (i.e. dividends)
0,11
0,11
-94
1 634
0,50
0,30
-169
1 596

Financial Status TTS Group ASA
Changes in Joint Venture structure affects revenue
• Originally set up to
accommodate legislation in
China
• Decision to wind down was made
in 2010 and final close will be
early 2013 as arrangement no
longer needed. Marginal impact
on EBITDA
• Effects on working capital from
year end approx. 100 MNOK
(MNOK 125 from Q3 last year)
• Compared to 2011, revenues
excluding structure change are
down 12% YTD Q3

Financial Status TTS Group ASA
Balance Sheet after repayment of capital
28,7
29,0
Equity ratio
46,6 46,5
38,0
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2012
Illustration
• Consolidated TTS Group will remain
debt free company after repayment of
capital and adjusted for repayment of
capital.
- Equity ratio of 38% at the end of 3 rd
quarter 2012
• TTS Group aim at having a low working
capital going forward and remain a
“asset light” company
• Key focus is to minimize working capital
to limit need for credit. Key drives are:
- Significant projects aim at being
cash neutral
- Manage procurement and inventory

Financial Status TTS Group ASA
Net working capital development
• Working capital has moved
substantially during the last quarter
and year. Most of the movement in
Q2 and Q3 relate to the sale of the
drilling unit
• Change from year end of MNOK
148 – approx. MNOK 100 relate to
change in JV structure and approx.
MNOK 80 relates to acquisition of
NMF
• Working capital is expected to
increase gradually going forward
but is still expected to be kept at a
relatively modest level

Financial Status TTS Group ASA
Current capital structure
MNOK Q3 12 Q2 12 Q1 12 Q4 11 Q3 11
Short term interest b. debt 45 21 577 755 793
Long term int. bearing
debt 29 37 313 35 96
Convertible Bond(*) 95 112 188 193 195
Total 169 170 1 078 983 1 084
Cash 565 985 567 435 492
Net interest b. debt(*) -396 -815 511 548 592
(*) Convertible loan included at nominal value
(*) Negative indicates asset position
• In connection with the sale of the drilling unit TTS repaid 80% of its debt
• TTS expects to have a new finance package finalized in Q4 mainly to
maintain financial flexibility

Selected Topics

Earn Out Relating to Sale of Drilling Unit
• Base for the earn out relates to
12 months revenue relating to
specific products existing in the
business at the time it was sold.
• A 7.5% earn out of revenue
exceeding certain levels
• While the exact earn out is not
possible to estimate reliably and
depends on a number of factors
outside TTS control, the award of
equipment to drill ship improves
likelihood of earn out.
• TTS current view is that the gain
on the drilling business sale, after
repayment of debt, should be paid
to shareholders

Funding Growth
• TTS has a long history of
successful acquisitions
• Current market conditions and
development is likely to provide
opportunities for further growth
through acquisitions
• Over the last years TTS Group had
a significant gearing following the
acquisition of the drilling unit
• Sale of drilling unit results in a debt
free company
• Long term TTS aim at a gearing
which reflects its cyclic business,
working capital fluctuation and
especially need for financial
flexibility.
• Current target capital structure:
- Equity ratio above 30%
- Net debt/EBITDA below 2

Pension Obligation
• TTS has a defined contribution scheme for the majority of its
Norwegian employees
• TTS to adopt IAS 19 from 1 January 2013
- Liability being reflected in the balance sheet (and affect equity)
- Currently obligation is estimated to be between 50 and 80 MNOK
and represents 6-10 % on the equity ratio
- The change has limited impact to P&L and no cash effect
• TTS is expecting that legislation changes in progress could reduce
liability in 2013

www.ttsgroup.com

Thank you
Capital Market Day
20 November 2012
Oslo Konserthus