IR Presentation May 2016

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Revenue & Operating Profit

Quarterly Earnings

Annual Earnings (past five years)

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0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

-

5.0

10.0

15.0

20.0

2011 2012 2013 2014 2015

Revenue(Shipbuilding&Offshore)

Revenue(Others)

OP margin

13.4 14.5

14.8

9.7

8.7 8.3

6.2

1.4

(KRWt) (%)

12.9

2015 2016

1Q 2Q 3Q 4Q 1Q

Revenue 2,610 1,439 2,436 3,229 2,530

Operating Profit

(OP Margin)

26

(1.0%)

-1,548

( - )

-10

( - )

30

(0.9%)

6

(0.2%)

Income before tax 33 -1,498 -34 37 5

Net Profit 11 -1,155 -25 -43 16

□ Revenue: KRW 0.7t decreased vs. 4Q 2015

- Reduced number of working days due to seasonal reasons

- Deferral of revenue due to possible construction slow-down for

PETRONAS FLNG

□ Operating Profit: KRW 6.1b profit

- Decrease in profit is result of revenue deferral of FLNG projects

(KRWb)

Recent 5 Quarterly Results

Financial Summary

연결 손익계산서

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2011 2012 2013 2014 2015 2016 1Q 2Q 3Q 4Q 1Q

Revenue 13,392 14,490 14,835 12,879 2,610 1,439 2,436 3,229 9,714 2,530 2,530

Operating Profit

(OP Margin)

1,160

(8.7%)

1,206

(8.3%)

914

(6.2%)

183

(1.4%)

26

(1.0%)

-1,548

( - )

-10

( - )

30

(0.9%)

-1,502

( - )

6

(0.2%)

6

(0.2%)

Income before Tax

1,150 1,045 819 190 33 -1,498 -34 37 -1,462 5 5

Net Profit 851 796 632 147 11 -1,155 -25 -43 -1,212 16 16

Consolidated Statements of Income

(KRWb)

Financial Summary

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연결 대차대조표 증감 내용 Consolidated Statements of Financial Position (KRWb)

2010 2011 2012 2013 2014 2015 2016

18,850 16,414 16,635 17,427 17,122 17,302 18,265

Cash & Cash Equivalent 1,255 1,289 1,164 1,140 893 2,137 2,079

Inventories 607 540 699 842 1,169 1,449 1,542

Property Plant and Equipment 5,432 5,408 5,278 5,254 5,273 5,583 6,712

Accounts Receivable 5,449 4,078 5,091 5,935 6,400 4,710 5,102

Advanced Payments 1,638 1,675 1,501 1,354 1,204 895 824

FX Hedge Related Asset 3,370 2,592 2,064 2,035 1,113 1,225 870

Other 1,099 832 838 867 1,070 1,303 1,136

14,718 11,770 11,352 11,581 11,549 13,036 13,109

Advanced Receipts 5,431 5,602 3,967 3,885 3,799 3,928 3,448

Interest Bearing Debt 2,838 1,784 3,193 2,937 3,827 5,033 6,057

Accounts Payable 1,507 830 1,436 1,622 1,495 1,414 1,303

FX Hedge Related Liability 3,578 2,452 1,458 1,725 1,093 1,313 945

Others 1,364 1,102 1,298 1,412 1,335 1,348 1,356

4,132 4,644 5,283 5,846 5,573 4,266 5,156

Paid in Capital 1,155 1,155 1,155 1,155 1,155 1,155 1,155

Treasury Stock -662 -659 -657 -656 -970 -970 -970

Retained Earnings 3,007 3,610 4,299 4,841 4,872 3,594 3,610

Others 632 538 486 506 516 487 1,361

356% 253% 215% 198% 207% 306% 254%Debt/Equity Ratio

Total Liabilities

Total Assets

Total Equity

Risk Management

Improvement on risk management before/after the contract signing

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Pre-contract At execution

Risk assessment before bid participation

Prospect Selection Committee (ITT review incl.)

Cost Review Committee (Quantity review incl.)

Risk Review Committee

Contract terms Review Committee

Bid Review Committee

Bidding

only for risk hedging available projects

Contract Signing

Intensive risk analysis

& mitigation planning

Risk Workshop

Continuous risk verification & assessment

Specific action plans set-up

+3 months

of contract

Regular

Process

ITT issue

Award winning

KPI management

Factors to drive cost increase and construction delay

Regular KPI check and feedback

Lessons Learned System

To prevent repetitive errors,

lessons learned and improvements we’re making for current projects are systematically

recorded and applied to future projects

* Invitation to tender

Risk Hedging Policy

SHI Focuses on minimizing profit volatility

Building Event

Time Gap (months) 12 5 3 10

Currency

Receivable

Payable

Raw Material

Main Engine

Machinery

Steel Plate

Bulk Part

Contract Steel Cutting Keel Laying Launching Delivery

: Hedging, Order : Execution, Delivery

Foreign currency exposure is fully covered through forward transaction at the stage of shipbuilding contract

Main engine and machinery are ordered within 1~2 months after contract signing

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CONTENTS

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Ⅱ. New order & Backlog

April 2016

Trend

(USDb)

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7.3

New Order

0

2

4

6

8

10

12

14

16

2012 2013 2014 2015 2016.April

5.3

0

9.6

13.3

SHI had no new orders during 1Q 2016 due to low oil price

and limited market demand

《 Market Demand 》

① Commercial Vessel

- With weak Chinese market appetite and momentum,

global over supply concerns resulted in extremely limited

number of demand for commercial vessels

∙ During 1Q 2016, the number of new orders in the

global market was totaled at 77 units (9.7m DWT),

62% down vs. 1Q 2015

∙ There was only five new orders in the global market

subjected to SHI’s participation such as LNG carriers,

large-sized containerships and crude oil tankers

② Offshore Facilities

- As low oil price level continues since 2Q 2014,

development of offshore project became unfeasible

due to project economy concern

Order Backlog

April 2016

Trend

(USDb)

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Unit USDb

Containership 21 3.1

LNG Carrier 19 4.0

Tanker 39 2.6

Drilling Rig 10 5.9

Production Facility 11 13.7

Others 6 0.7

Total 106 30.0

Others 2%

LNG Carrier

13%

Tanker

9%

Drilling Rig

20%

Production

Facility

46%

Containership 10%

0

5

10

15

20

25

30

35

40

45

2012 2013 2014 2015 2016.April

30.0

37.2 37.5

35.4 34.8

$30.0 billion (106 Units)

CONTENTS

Ⅱ. New order & Backlog

Ⅰ. Financial Highlights

Ⅲ. Products & Market Situation

New orders expected to gradually increase after 2H 2016

- After heavy orders during 2015, we expect to start having new orders in the second half of 2016

as new form of alliance group finally be established in 2H 2016

Supply & Demand Balance Global order trend & SHI market share

(Source: Clarksons, SHI assumption) (Source: SHI)

(unit) (,000TEU)

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(M/S)

Containership

10

62

51

120 22%

8%

0%

5%

10%

15%

20%

25%

0

20

40

60

80

100

120

140

'12 '13 '14 '15

Global Order (Over 10kTEU) SHI M/S

11 10

1,340 1,265

986

183

8.1%

4.0% 3.7%

0.9%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

200

400

600

800

1,000

1,200

1,400

1,600

'16(e) '17(e) '18(e) '19(e)

Delivery Fleet Growth Trade Growth

Trade growth to be stable above 6%

Short term demand is weak, but long term outlook is solid due to

stable LNG trade growth(CAGR 5%) and longer distances with US exports

LNG Carrier

Long term outlook of LNG trading & Fleets

= approximately 120 vessels needed

Global order trend & SHI market share

(Source: SHI)

(unit)

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(M/S)

(Source: Gaslog, BP, Earnst&Young, Wood Mackenzie Jan 2015 )

2014 trading : approx 240mtpa

Current fleet

: approx 430 ships

(1.8ships/1mtpa)

~2030 trading(e) : approx 500mtpa Fleet outlook

: approx 900 ships

(= 30 ships to be

ordered a year

in avg )

< World LNG trading outlook>

CAGR 5%

2014 main routes New supply ~2030

32

39

64

27

13%

36%

8%

11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

10

20

30

40

50

60

70

'12 '13 '14 '15

Global Order SHI M/S

4

14

5 3

As downturn market condition continues, limited number of demand

for high specification drillship can be expected.

Drillship

Next generation: 20K BOP drillship

New demand for 20K BOP drillship is expected

- For safe and efficient operation in high-pressure

and high-temperature deep water reservoirs

Global order trend & SHI market share

(Source: SHI)

(unit)

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(M/S)

• BP-Maersk “Project 20K”

Jointly developing next generation drillship

using 20K BOP for Gulf of Mexico since

year 2013

* Drillship orders for the local content in Brazil included

(15 units in 2012 )

35

12

4

0

26%

42%

50%

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

35

40

'12 '13 '14 '15

Global Order SHI M/S

9

5

2

Seeking both growth and profitability in offshore EPC market through

enhancement of EPC execution capability with ongoing projects

Production Facility

What we do for strengthening competitiveness Key projects under construction

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Ichthys CPF(Gas), Austrailia

Egina Oil FPSO, Nigeria

Lessons Learned Program

- Accumulating and systemizing knowledge learned from current projects to execute following better

Reinforcement of engineering capacity

- New R&D center established only for FEED, FEED verification, detailed design etc.

- Recruiting experienced engineers and project managers

Organizational improvement

- Risk management team and offshore package procurement team established

SHI’s new growth engine

- Market to expand due to its cost benefit and environmental advantage

FLNG

Concept & Advantage

Production, treatment, liquefaction and offloading

of natural gas to be carried out on a vessel

- No need for extensive pipe lines and onshore

processing facilities

Less CAPEX required

Natural Gas

Pretreatment

Liquefaction

FLNG projects under consideration

Number Projects

Under construction

3 Prelude(Shell)

Kanowit, Rotan (Petronas)

Active 1 Mozambique(ENI)

Potential 34 Browse, Scarborough, Sunrise, etc.

Total 38

(Source: Clarkson World Offshore Register )

3 Projects will be complete during year '16~'18

1 Project is under review process

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Appendix- Global Network

Oslo

London

Athens Tokyo

Dubai

Rongcheng

Ningbo

Singapore

Houston

Kuala Lumpur

Houston

Deli

Rio De Janeiro

Lagos

Shipyard Block Factory Engineering Center Branch Office

Global production and engineering bases enable SHI to meet various needs of customers

Block Factories in China (2) Ningbo (Since 1997) , Rongcheng (Since 2007)

Offshore Engineering Centers (2) Houston [ASOG (J/V with AMEC)], Deli (Noida)

Branch Office (10) London, Oslo, Athens, Lagos, Dubai, Kuala Lumpur, Singapore, Tokyo, Huston, Rio De Janeiro

Geoje Shipyard

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Appendix- Shipyard View

Site : 4.0million ㎡

Quay Wall Length : 7.9Km (24 vessels)

3 Floating Cranes : 3,000 / 3,600 / 8,000ton

8 Docks (3 Dry Docks & 5 Floating Docks) ▪ No. 1 : 283m × 46m ▪ NO. 2 : 390m × 65m ▪ No. 3 : 640m × 98m ▪ G1 : 270m × 52m ▪ G2 : 400m × 55m ▪ G3 : 400m × 70m ▪ G4 : 420m × 70m ▪ G5 : 157m × 131m (only for Offshore)

SHI Focuses on minimizing profit volatility

Offshore Facilities

Dry Dock No.2

Floating Dock 3

Dry Dock No.3

Floating Dock 2

Floating Dock 4

Main Building

Dry Dock No. 1

ShinHanne Factory

Floating Dock 1

Floating Dock 5

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Disclaimer

This presentation has been prepared by Samsung Heavy Industries Co., Ltd. and contains forward-looking

statements that are subject to risks, uncertainties, and assumptions.

The presentation is solely for your information, subject to change without notice, and makes no

representation or warranty, expressed or implied and no reliability should be placed on the accuracy,

fairness, or completeness of the information presented herein.

The Company, its affiliates, or representatives accept no liability for any losses arising from any information

contained in the presentation.

The contents of this presentation may not be reproduced, redistributed or circulated, directly or Indirectly,

to any other person or organization, or published, in whole or in part, for any purpose.

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