Post on 02-Jun-2020
4Q 2014 Presentation
25 February 2015
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This presentation (the “Presentation”) has been produced by Scanship Holding ASA ("Scanship" or the "Company") exclusively for
information purposes.
This Presentation includes forward-looking statements regarding Scanship, including projections and expectations, which involve risk and
uncertainty. Such statements are included without any guarantee as to their future realization. Although Scanship currently believes that
the expectations regarding the Company reflected in such forward-looking statements are based on reasonable assumptions, no
assurance can be given that such projections will be fulfilled. Any such forward-looking statement must be considered a long with the
knowledge that actual events or results may vary materially from such predictions due to, among other things, political, economic, financial
or legal changes in the markets in which Scanship does business, and competitive developments or risks inherent to the Company’s
business plans. Many of these factors are beyond Scanship’s ability to control or predict. Given these uncertainties, readers are cautioned
not to place undue reliance on any forward-looking statements. Accordingly, the Company does not accept any responsibility for the future
accuracy of the forward-looking statements expressed in this Presentation or the actual occurrence of the forecasted developments. The
Company does not intend, and does not assume any obligation, to update any such forward-looking statements as of any date subsequent
to the date hereof.
No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including, without
limitation, projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors,
omissions or misstatements contained herein, and, accordingly, the Company does not accept any liability whatsoever arising directly or
indirectly from the use of this Presentation.
By receiving this Presentation, the recipient acknowledges that he will be solely responsible for its own assessment of the market and the
market position of the Company and that he will conduct his own analysis and be solely responsible for forming his own view of the
potential future performance of the businesses of the Company. This Presentation must be read in conjunction with the recent financial
information, as well as other publicly disclosed information.
Nothing in this Presentation, nor any other information provided to the recipient by the Company or any of its advisers constitutes, or may
be relied upon as constituting, investment advice or any financial, tax or legal advice by such persons or anybody else.
Disclaimer
Scanship Holding ASA
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• Envirotech company – solution provider for
water purification and waste processing
• World leading cruise industry supplier
• Unique track record since 1993 with supplies
to 49 newbuilds and 30 turnkey retrofits
• R&D driven with new game changing
technologies under development
• One stop shop strategically located around the
cruise liner and yard clusters
6
R&DSales &
marketing
Engineering &
DesignProcurement Installation
Manufacturing
& assembly
(outsourced)
Commissioning
Aftersales
Service, spares
& chemicals
Business model scope of services
In brief Locations
1 Tønsberg/Lysaker (NORWAY)
2 Fort Lauderdale (US)
3 Victoria (CANADA)
4 Turin (ITALY)
5 Gdynia (POLAND)
6 BuHua Hai Equipment &
Engineering Co., (CHINA)
About the company
Scanship Americas Inc. Scanship Poland Sp.z o.o
Scanship AS
100%
100% 100%
Scanship Canada Inc.
100%
4
• Treats all wastewater streams from onboard
operations including galley water, reject water from
foodwaste management systems and bio-residue
treatment
• Meets all IMO Marpol- and local port sate regulations
such as Alaska and Baltic Sea (Helcom). System type
approved according to IMO Marpol MEPC 227(64)
• Compact, efficient and easy to operate, low cost with
an attractive LCC and ROI
• 44 systems in operation, whereas 19 systems
supplied to newbuilds and 25 systems as retrofits.
Layout illustration of the Scanship AWP on the ship classes NCL
Getaway and RCCL Quantum built at Meyer Werft in Papenburg,
Germany
Layout
illustration for
the Scanship
Waste
Management
system on the
Viking Star
project at
Fincantieri
Waste
Management
systemFood waste
Incinerator
Waste recycling
Bio-sludge
AWP (Advanced
Wastewater
Purification)
system
• Processes all garbage, foodwaste and bio residues from
shipboard operations
• Vacuum foodwaste conveying system to eliminate
overboard discharge and risk of contamination
• Incinerator system meets and exceeds the IMO Marpol
Annex V standard
• Recycled waste obtain savings and income from landing
• 50 systems in operation whereas 45 systems supplied
to newbuilds and 5 systems supplied as retrofits.
Company system offerings
Combined supplies of AWP and Waste Managment systems defined as a «total clean ship system»
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Operational highlights 2014
• Completed IPO on the Oslo Stock Exchange
• Record high order intake in 4Q14
• Maintained leading market share for AWP*
systems on new cruise ships
• Continued technology development and
commercialization of new solutions
* AWP – Advanced Water Purification system
RCCL’s Quantum of the Seas launched 2014 with Scanship AWP
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• STX France awards contracts for Scanship
Total Clean Ship* systems on MSC’s E34
and F34, with options for G34 and H34
• STX France awards contract for Scanship
AWP system on RCCL’s B34, the forth Oasis
class vessels
• Fincantieri calls on the option for the
Scanship Total Clean Ship* system on Viking
Ocean Cruises’ newbuild no. 4
Record high order intake in 4Q14
Illustration of MSC newbuilds E34 and F34
B34 Steel cutting ceremony at STX France
* Combined system supplies AWP and Waste Managment system
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Financial highlights 4Q14
• Total revenues 4Q14 at NOK 43.2m
ending full year NOK 145.6m
• Total revenues reflects retrofit market on
hold
• EBITDA* for 4Q14 at NOK 0.7m ending
full year NOK 4.4m -
0,5
1,0
1,5
2,0
2,5
-
10
20
30
40
50
1Q14 2Q14 3Q14 4Q14
Revenues & EBITDA*
Rev EBITDA
* EBITDA before non recurring items
NOKm NOKm
8
Revenues & gross margin 2012 - 2014
• Newbuild growth from NOK 46.6m to NOK
103.5m through period
• Retrofit revenue declined in the period
from NOK 60m down to NOK 3.3m
• Retrofits on hold but potential remains
unchanged
• Positive development in gross margin*
* 2012 Gross Margin is proforma, restated to reflect changes
to project accounting implemented from 2013
NOKm
27%
28%
29%
30%
31%
32%
33%
34%
35%
36%
-
20
40
60
80
100
120
140
160
180
2012 2013 2014
Segment Revenues & Gross margin
Newbuild Aftersales Retrofit Margin %
9
• Significant 4Q14 order intake within
newbuild
• Order backlog at year-end of NOK
185m, +83% from 3Q14
• Positive outlook from strong
momentum in cruise market
NOKm
0
50
100
150
200
1Q14 2Q14 3Q14 4Q14
Order Backlog
Building backlog
10
Revenue recognition in backlog
• Revenue recognition is driven by internal
hours consumed on each project
• Internal hours include engineering, project
management, procurement and
commissioning
• At the time of main equipment delivery the
project revenue recognition will typically
reach ~ 80 - 85% of contract amount
• Remaining revenue is recognized from
equipment delivery to date of completion
Project Name
Main equipment
delivery
(estimated)
Project
Completion
(estimated)
Mein schiff 4 - TUI 2 4Q-2013 2Q-2015
Viking Star 4Q-2013 2Q-2015
Anthem of the Seas 4Q-2013 2Q-2015
Oasis 3 - A34 1Q-2014 2Q-2016
Carnival Vista 3Q-2014 1Q-2016
Norwegian Escape 3Q-2014 4Q-2015
Viking Sky 4Q-2014 2Q-2016
Viking Sea 1Q-2015 4Q-2016
Ovation of the Seas 1Q-2015 2Q-2016
Mein schiff 5 - TUI 3 2Q-2015 2Q-2016
Genting World I 3Q-2015 4Q-2016
Fincantieri, Viking 4 3Q-2015 3Q-2017
Oasis 4 - B34 3Q-2015 3Q-2018
MSC E34 4Q-2015 1Q-2017
Norwegian Bliss 1Q-2016 3Q-2017
Mein schiff 6 - TUI 4 2Q-2016 2Q-2017
Genting World II 3Q-2016 4Q-2017
MSC F34 3Q-2017 1Q-2019
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• Awarded 9 newbuilds during 2014 from
total of 15 awards
• ~ 63% Scanship footprint in cruise
newbuilding marketspace, on 22 of total
35 vessels
• High tendering activity for several
newbuilds to fill yard slots from 2017 -
expected to impact revenue from 2015
Maintains high share in larger newbuild market
Block construction of Viking Sea with Scanship equipment
Illustration of Scanship waste system in the same block
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Newbuild overview with 2014 contracting
Contract awards
in 2014
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Status retrofit
• AWP retrofits pushed back by Exhaust
Gas Scrubbers (ECA)
• IMO decision on Helcom implementation
is expected to re-boost demand
• AWP retrofit cruise market size is
estimated to be ~ NOK 2.3bn
• Wärtsilä Hamworthy awarded AWP retrofit
for Cunard's QM2 in “exclusive” bidding
process
• Higher activity on feasibility studies and
tendering compared to last year
382
116
128
138
Total Already installed
AWP
Excluded Retrofit potential
AWP retrofit potential(# of vessels)
~ NOK 2.3bn
NOKm
0
10
20
30
40
50
60
70
2012 2013 2014
Retrofit Revenue (Scanship)
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Steady underlying growth in aftersales
• 33% growth in aftersales through
period 2012 – 2014
• Expect continued growth as more ships
are being delivered
• Revenue in 2013 includes emergency
repair from Carnival Triumph fire
NOKm
30%
34%
38%
42%
46%
50%
-
10
20
30
40
50
2012 2013 2014
Aftersales Revenue & Gross Margin
Aftersales CCL Triumph "fire" GM%
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Status technology development
• Development of the new Waste to Energy
solution - MAP*- on schedule
• Test facility under assembly in Norway with
operations set to start 1H15
• Waste to Energy solution for newbuilds and
retrofit will provide tangible pay-back for the
end user
• 6 product development projects completed in
4Q14, strengthening our system’s
effectiveness and broadening our range of
environmentally friendly products
* MAP – Microwave Assisted Pyrolysis
Microwave pyrolysis inside test reactor – test in 2014
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Condensed consolidated income statement
(NOK 1 000)
Unaudited Unaudited Unaudited Audited
4Q14 4Q13 FY 2014 FY 2013
Total operating revenue 43.188 49 572 145 631 169 974
Gross Margin 12 815 18 890 46 323 52 995
Gross Margin % 30 % 38 % 32 % 31 %
OPEX 12 069 9 370 41 915 32 013
EBITDA before non-recurring items 747 9 520 4 408 20 982
Operating profit (EBIT) 175 9 290 857 19 890
Finance income 1 745 1 073 9 318 3 042
Finance costs -16 040 -4 631 -22 783 -15 744
Profit before tax -14 120 5 732 -12 609 7 188
Profit for the period -10 331 4 103 -9 212 5 146
• Gross Margin % lower mainly
due to changes in project time-
and -cost estimates
• Gross Margin % improvement
YoY 2013 – 2014
• Opex increase reflects build-up
for higher activity
• Finance costs 4Q14 include
unrealized loss on financial
instruments NOK 9.9m
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Impact financial instruments
• Realized loss on Financial
Instruments includes approx.
NOK 3.3m related to currency
hedges that were renewed
• Some of the effect reversed to
date in 1Q15
• Forward share of hedging on new
contracts are reduced with larger
share of EUR-purchases
Currency effects on financial items in 4Q 2014
(NOK 1 000) Realized Unrealized Total
Agio 691 1 155 1 846
Disagio -810 -173 -983
Financial Instruments -4 948 -9 868 -14 815
Sum -5 067 -8 885 -13 952
Financial Instruments at end 4Q 2014
Maturity
(EUR 1 000) 2015 2016 2017 - Total
Amount secured through FI € 10 810 € 2 883 € 3 869 € 17 562
Average EUR/NOK Rate 8,58 8,28 8,71 8,56
% of Contract payments secured 94 % 83 % 72 % 86 %
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Consolidated condensed cash flow statement
• Cash flow from operating activities
reduced by NOK 3.3m due to EURO-
spike
• Late payments from Yard of approx.
NOK 10m has reduced Cash and
reduced Net cash flow from operating
activities
• Overdue payments from Yard at end
4Q14 received in 1Q15
• Investing activities mainly from product
development activities
• Cash flow expected to improve in 2015
Unaudited
(NOK 1 000) 4Q 2014
Profit before income tax -14 120
Adjustments:
Net cash flow from operating activities -5 567
Net cash flow from investing activities -3 301
Net cash flow from financing activities 7 775
Net change in cash and cash equivalents -1 093
Cash and cash equivalents ingoing balance 4 915
Cash and cash equivalents at end of period 3 821
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• Late payments from Yard of approx. NOK
10m has reduced Cash and increased Trade
Receivables
• Increase in non-current assets mainly due to
product development activities
Condensed consolidated financial statement
Unaudited Audited
(NOK 1 000) 31.12.2014 31.12.2013
ASSETS:
Total non-current assets 21 816 14 077
Current assets:
Inventories 5 684 5 109
Trade receivables 32 621 23 809
Contracts in progress 75 064 52 195
Other Receivables 4 170 5 035
Cash and cash equivalents 3 821 1 177
Total current assets 121 360 87 325
Total assets 143 176 101 401
Unaudited Audited
(NOK 1 000) 31.12.2014 31.12.2013
EQUITY AND LIABILITIES
Total equity 45 185 -21 360
Total non-current liabilities 1 667 26 783
Current liabilities:
Current borrowings - 10 000
Trade creditors 16 669 30 931
Contract accruals 35 379 22 058
Financial instruments 10 536 7 114
Income tax payable -112 823
Bank overdraft 27 674 14 290
Other Current liabilities 6 179 10 762
Total Current Liabilities 96 325 95 978
Total liabilities 97 991 122 761
Total equity and liabilities 143 176 101 401
• Non-current bank loan of NOK 20m
converted in 4Q14 to Bank overdraft
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Scanship Holding ASA
Lysaker Torg 12
P.O. Box 465
1327 Lysaker
Norway
Phone: +47 67 200 300
E-mail: mail@scanship.no
www.scanship.no