Hyundai Heavy Industries IR Presentation. (Apr. 2017)

Transcription

1 Hyundai Heavy Industries IR Presentation (Apr. 2017) 1

2 Important Notice This presentation of Hyundai Heavy Industries (HHI) contains forward-looking statements relating to HHI s operations that are based on management s current expectations, estimates and projections. Words such as anticipates, expects, intends, plans, projects, schedules, estimates and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors including new order flows, FX rates, steel plate prices and so on, some of which are beyond company s control and are difficult to predict. Therefore, actual outcomes and actual results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements. HHI undertakes no obligation to update any forward-looking statements to reflect subsequent events. 2

3 INDEX I. HHI at a II. Performance III. Performance IV. 3

4 HHI at a 4

5 Summary Date of Establishment : Date of Listing : No. of issued stocks: 76,000,000 stocks Paid-in Capital : KRW 380 bil. Market Value : KRW 11,058 bil. (As of December 31, 2016) Credit Rating : A (Corporate Bond), A2 (Commercial Paper) Korea s large conglomerate ranking : 9th (Excluding public companies, based on total assets) No. of employees : 23,538 (As of December 31, 2016) No. of dry docks : 10 (Shipbuilding), 1 (Offshore & Engineering) Division : Shipbuilding, Offshore & Engineering, Industrial Plant & Engineering, Engine & Machinery, Electro Electric Systems, Construction Equipment, Green Energy, Refinery, Services 5

6 History Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd Establishment of Hyundai Mipo Dockyard Delivery of World`s biggest Jacket (Exxon, 40,000ton) Delivery of Korea`s first LNG Carrier Separation from Hyundai Group and foundation of HHI group Acquisition of Samho Heavy Industries Co., Ltd Launch of World`s first ship built on the ground (105K DWT Crude Oil Carrier) Delivery of the World`s first LNG-FSRU Recognition as the World`s Significant Ship for 32 consecutive years Completion of the World`s largest Cylindrical FPSO 1970 ~ ~ ~ Listed on the Korean Stock Exchange Selected as a main contracter of the next Korean submarine builder Completion of the World`s largest deep-sea FPSO (343K Tons) Top Spot in China Excavator Market Completion of H-Dock, eligible for 1,000K Ton FPSO construction Acquisition of Hyundai Oilbank Co., Ltd. (70% of ownership and management) Completion of World`s largest Saudi MARAFIQ power plant (2,750MW) Delivery of 2,000 ships, for the first time in the world Produced Eco-friendly Tier-III engine for the first time in the world breakthrough the production of accumulating 10,000 HMSEN Engines 6

7 Ownership Structure Mong-Joon, Chung 10.2 * As of Dec. 31, 2016 Hyundai Mipo Dockyard 7.98 Others (Foreign Ownership : 14.8%) KCC 7.01 National Pension 8.1 Hyundai Motors 2.9 Asan Foundation 2.5 POSCO 1.9 Asan Nanum Foundation 0.6 Treasury Stock

8 Structure Division Shipbuilding Offshore & Engineering Industrial Plant & Engineering Engine & Machinery Electro Electric System Construction Equipment Main Products VLCCs, Tankers, Product Carriers, Chemical Tankers Containerships, Bulk Carriers, OBO Carriers Ro-Pax Ships, Ro-Ro Ships, Pure Car and Truck Carriers LPG Carriers, LNG Carriers Drill Ships, Semi-Submersible Rigs Submarines, Destroyers, Frigates Floating Units : FPSO, FLNG, FPU, TLP, Semi Submersible Unit Fixed Platform : Topsides Jacket & Pile, Jack-up, : Modules & Quarters Pipelines & Subsea Facilities, Land-based Modules Offshore Installations Power Plants t : Combined-Cycle, Thermal Power Plants Process Units t : Oil and Gas Refinery, Tank Farm, GTL and LNG Facilities Plant Equipment : Industrial Boiler, HRSG, CFBF, Boiler, Regenerator and Reactor Marine Engines : 2-Stroke and 4-Stroke(HiMSEN) Engines, Components, Marine Propulsion & Equipment Industrial Machinery Robot & Automation : Processor, Conveyor System, Robot Transformers, Gas Insulated Switchgear, Switchgear Low- and Medium-Voltage Circuit Breakers Rotating Machinery Power Electronics and Control Systems, Wind Power Systems Excavator Wheel Loader, Skid Loader Forklift Main Clients Hapag-Lloyd (DEU) C.P. Offen (DEU) CMA CGM (FRA) A.P. Moller (DEN) Seaspan (CAN) Enesel S.A. (GRC) BP (GBR) Exxon Mobil (USA) Shell (USA) Chevron (USA) Total (FRA) ENI Norge (NOR) Shell (USA) MEW (KWT) SEC (SAU) HMD (KOR) DSME (KOR) SHI (KOR) Shanghai (CHN) Aramco (SAU) KEOCI (KOR) DSME (KOR) Daelim (KOR) Competitors DSME (KOR) SHI (KOR) DSME (KOR) SHI (KOR) Technip (FRA) Saipem (ITA) Mc Dermott (USA) Siemens (DEU) Power Plant : 1,000MW Hyundai E&C (KOR) (4~5 PJTs) Doosan Heavy (KOR) Samsung C&T Corp. (KOR) Doosan (KOR) STX (KOR) Mitsui (JPN) Hudong Dalian (CHN) ABB (SWE) Siemens (DEU) Hyosung (KOR) Komatsu (JPN) Caterpillar (USA) Doosan Infracore (KOR) Capacity 10 mil. GT Floaters : 1~2 units Fixed Platform: 3~4 units Pipeline Laying: 30km Large Engines (500 units) : 18 mil. BHP Medium (1,800 units) : 5 mil. BHP Transformer (620 units) : 121,400 MVA Wind Turbine : 600MW 42,900 units (Excavator 26,200 units) Green Energy Solar Power Systems LG, Hanwha (KOR) SolarWorld (GER) Solar Cell/Module : 600MW Refinery Services Petroleum : LPG, Gasoline, Kerosene, Jet Fuel Petrochemicals : Propylene, Alkylate, BTX, Naphtha Securities Brokerage Asset Management, Leasing Futures Corporate Finance SK Innovation (KOR) GS-Caltex (KOR) S-Oil (KOR) 390,000 B/D 8

9 Sales Breakdown Shipbuilding (KRW14,679.4 bil) 37.3% Others (KRW bil) 0.7% * 2016 Preliminary results in consolidated basis Services (KRW bil) Offshore & Engineering (KRW 3,448.6 bil) 8.8% 2.0% 29.7% Refinery (KRW 11,672.8 bil) 6.2% Industrial Plant & Engineering (KRW 2,422.2 bil) 0.8% Green Energy (KRW bil) 3.5% Engine & Machinery (KRW 1,387.9 bil) 5.5% Electro Electric System (KRW 2,143.9 bil) 5.5% Construction Equipment (KRW 2,171.2 bil) 9

10 Affiliates 25 affiliated companies in Hyundai Heavy Industries Group (Including HHI, excluding overseas corporations) * As of Dec. 21,

11 Global Network Established 15 overseas offices and 28 incorporated firms, a total 43 global network As of Dec. 31, 2015 Nigeria [ Europe ] Oslo London Netherland Germany Moscow M-Agro, K-Agro France Belgium VGF Hungary Bulgaria Athens Beijing Tokyo Tai`an, Yantai, Weihai Osaka Kuwait Al Khobar Riyadh Dubai, Jebel Ali [ Middle East / Africa ] Ruwanda India [ Asia ] Singapore Jakarta Jiangso, Yangzhong, Shangdong HHI China Investment Co., Ltd. Hyundai Leasing Co., Ltd. HHI Shanghai R&D Co., Ltd. New Jersey Hyundai Ideal Electric Co. Alabama Houston Atlanta Oversea Office 15 Production/Sales 14 Sales 4 Construction 4 Agriculture 2 R&D 2 Management 2 [ America ] Region Europe America Asia Mid. East / Africa Total Brazil Oversea Office Incorporated Firm Total

12 Performance 12

13 Summary (Consolidated) (Unit: Bil. KRW) Sales Operating Profit 60, , , , , , , , , , , ,317.2 '11 '12 '13 '14 '15 '16 6,000 4,000 2, ,000-4, % 3.6% 1.5% 4.2% 4, ,006-3,250 1,642-1,540 '11 '12 '13 '14 '15 '16-3.3% -6.2% Operating Profit(Left) OP Margin(Right) 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Liabilities to Equity Ratio Debt to Equity Ratio 40, % 220.9% 250.0% 20, % 30,000 20,000 10, % 162.9% 30,824 30, % 34,175 36,746 34, % 31, % 150.0% 100.0% 50.0% 15,000 10,000 5, % 11, % 99.4% 89.8% 79.1% 83.3% 14,827 15,843 16,543 16,852 16, % 50.0% 0 '11 '12 '13 '14 '15 '16 0.0% 0 '11 '12 '13 '14 '15 '16 0.0% Liabilities(Left) L/E Ratio(right) Debt(Left) D/E Ratio(Right) 13

14 Quarterly Operating Income Margin Recorded KRW 3.2 tril. of operating loss in 2014 reflecting KRW 1.6 tril. of provision mostly for three semi-submersible rigs, two power plant projects and offshore production facilities Recorded KRW 1.5 tril. of operating loss in 2015 reflecting KRW 396 bil. of loss due to cancellation of two semi-submersible rigs and 1.3 tril. of loss from offshore production facilities 16,000 (Unit: Bil. KRW, %) 20.00% 13.5% 12,000 8, % 6.1% 7.1% 4.5% 7.0% 2.6% 2.9% 0.4% 2.2% 1.7% -0.6% -1.4% -0.2% -1.4% -2.5% 5.7% 3.2% 3.6% 4.2% 10.00% 0.00% -8.6% -1.6% 4, % % % % 14

15 Summary (Consolidated) (Unit: Bil. KRW) Sales Operating Profit 54, % 54, % 52, % 46, % 39, % 2, % % (3,249.5) -6.2% (1,540.1) -3.3% 1, % Shipbuilding 1, % % (1,895.9) -11.5% (648.3) -3.9% % Offshore % % (230.3) -4.9% (1,294.5) -29.0% % Industrial Plant % % (1,130.8) -46.9% (76.3) -1.8% (211.9) -11.9% Engine & Machinery % % (10.9) -0.7% % % Electro Electric Systems (74.3) -2.6% % % % % Construction Equip % % (33.4) -1.2% (116.2) -5.2% % Green Energy (106.3) -31.5% (103.2) -32.8% (16.5) -5.3% % % Refinery % % % % % Finance % % % % % Others (314.6) - (293.2) - (282.7) - (313.4) - (406.5) - Income Before Income Taxes Net Income 0.0% % % % % 1, % % (2,206.1) -4.2% (1,363.2) -2.9% % 15

16 Summary (Consolidated) (Unit: Bil. KRW) Total Assets 49, , , , ,249.2 Assets 25, , , , ,044.3 Cash & Cash Equivalents 1, , , , ,326.9 Non- Assets 23, , , , ,204.9 Total Liabilities 30, , , , ,359.5 Liabilities 22, , , , ,187.2 Non- Liabilities 8, , , , ,172.3 Total Shareholder's Equity Liabilities-to-Equity Ratio Debt-to-Equity Ratio 18, , , , , % 179.6% 220.8% 220.9% 175.3% 79.1% 83.3% 99.4% 108.7% 89.8% Total Debt 14, , , , ,073.3 Debt Status of major consolidated subsidiaries (Unit: Bil KRW) As of Dec. 31, 2016 : HHI 7,957(57.4%) / HMD 1,269 (58.7%) / HSHI 1,377 (47.4%) 16

17 Performance 17

18 New Order Trend (Parent) Shipbuilding Non-shipbuilding (Unit : Mil. USD) 27,473 27,363 25,020 25,324 9,817 13,405 4,917 16,107 7,835 18,706 7,236 9,290 13,838 10,735 17,208 13,147 14,419 19,567 13,424 17,851 19,834 13, % 14,538 8,554 9,146 6,400 5,777 4,357 2,968 2,043 2,809 3,025 6,792 8,488 8,272 11,470 15,730 13,635 10, ,061 10,905 6,143 9,512 6,192 5,984 5,269 3,877 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 18

19 2017 Orders & Backlog by Division (Parent) Achieved lower new orders than expected in Shipbuilding, Offshore and Industrial Plant divisions due to market downturn in (Unit: Mil USD) New Orders Backlog Mar. YoY Target Mar. Annual Mar. Shipbuilding 763-3, ,877 11,852 Offshore & Engineering % ,788 Industrial Plant & Engineering % ,743 Engine & Machinery % 1, ,555 Electro Electric Systems % 1, ,685 2,036 Construction Equipment % 1, ,617 - Total 2, % 9,199 1,662 8,869 34,974 (*Backlog above is on delivery basis) 19

20 Shipbuilding VLCC Containership Bulk Carrier LNGC LPGC PCTC Naval Vessels Drill ship Rig 20

21 World shipbuilding Market share <Output in 2016> Rank Shipbuilder (No. of Vessels) (1,000 CGT) Market Share (%) 1 Hyundai Heavy Industries Co., Ltd.(KOR) 58 2, % 2 Daewoo Shipbldg. & Maritime Engineering (KOR) 40 2, % 3 Hyundai Samho Heavy Industreis. Co., Ltd.(KOR) 43 1, % 4 Samsung Heavy Industries Co., Ltd.(KOR) 24 1, % 5 Hyundai Mipo Dockyard Co., Ltd.(KOR) 66 1, % 6 Imabari Shipbuilding(JPN) 51 1, % 7 Japanes Marine United Corportation (JPN) % 8 Sungdong Shipbuilding(KOR) % 9 Dalian shipbuilding Industry (CHN) % 10 Shanghai Waigaoqiao Shipbuilding (CHN) % Rest Total Output in ,232 20, % 1,633 34, % HHI Group 167 5, % (Source : Clarkson) 21

22 Demand Global Demand (Unit : Mil. GT) New Orders by Shiptype (Unit: Mil. GT) '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17.03 Bulkers Tankers Containers LNGC's LPGC's Others Bulkers Tankers Containers LNGC's LPGC's Others <Global Demand> (Unit : Mil. GT) '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 YoY '16.03 '17.03 YoY Total % % Bulkers % % Tankers % % Containers % LNGC % LPGC % Others % % * Others : Offshore, Cruise vessels, Ro-Ro ferries, MPP, Reefers, PCC (Source : Clarkson) 22

23 Competition 41% 32% 31% 30% 44% 24% 37% Global Market Share 47% 44% 41% 36% 19% 13% 22% 17% 21% 17% 29% Korea China Japan Backlog (Mar. 2017) Backlog (Mar. 2017) (Unit : Mil. GT) LNG&LPG 33.4 Mil. GT 52.9 Mil. GT 36.7 Mil. GT 3% 11% 31% 26% 22% Tanker Bulk Container Gas Offshore Others Total 한국 Container 20% 2% 38% 38% 중국 Bulker Tanker 38% 24% 24% 일본 Korea China Japan * Source : Clarkson 23

24 Price Trend 200 (Unit : Mil. USD) 300 Bulker180K dwt (Left) Tanker 320K dwt (Left) Container 13,000 teu(left) LPG carrier 78-84K m3 (Left) 0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 0 LNG carrier 160K m3 (Right) <Price Trend> '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 YoY '17.02 (Unit : Mil. USD) since 16/12/31 Clarkson Index % % Bulker(180K) % % Tanker(320K) % % Container (13,000TEU) % % LPGC(82K m3 ) % % LNGC(160K m3 ) % % * Index=100 in year 1988 (Source: Clarkson) 24

25 Shipbuilding Overview Sales Contribution (2016) Sales Breakdown by Product (2016) Shipbuilding 36% Drillship 4% LNG 24% LPG 15% Semi-Rig 1% Bulker 1% Tanker 31% Container 16% Others 2% Naval 6% Annual Sales & New Orders * Parent (Unit : Sales bil. KRW, New order Mil. USD) 15,730 13,635 10,905 9,084 9,003 9,487 9,766 10,159 9,5129,349 8,736 7,557 7,849 7,536 6,143 6,192 5,984 4,061 3, Sales New order Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Main Products VLCCs, Tankers, Product Carriers, Chemical Tankers Containerships, Bulk Carriers, OBO Carriers Ro-Pax Ships, Ro-Ro Ships, Pure Car and Truck Carriers LNG Carriers, LPG Carriers Drillships, Semi-Submersible Rigs Submarines, Destroyers, Frigates Operational Highlights * 별도기준 Completion of Gunsan Shipyard (Mar. 2010) Investment & Technical Corporation Agreement with OSX (May 2010) 10% of stake in OSX(USD 61.9 mil.) in exchange for technical advise for establishment of a shipyard Delivery of first drillship (Sept. 2010) Delivery of 1,700 th vessel (Jan. 2011) Recorded delivery of 100 million GT in ships (Mar. 2011) Delivery of the World s first LNG-FSRU (Feb. 2014) 25

26 Performance (2016) New orders by Shiptype (2016) Backlog by Shiptype (2016) Tanker 9% Container 12% Others 22% Tanker 24% Others 63% Gas Carrier 16% Gas Carrier 37% Container 17% Based on the amount Backlogs as of Dec. 2016(YTD) : 103 vessels, USD 13.1 bil Based on the amount Ner Orders in 2016 (in Mil. USD) 2015 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total Tarket Achieve - ment # of Ships Amount 5, ,739 3,878 3, % 26

27 Performance (2017) New orders by Shiptype (2017) Backlog by Shiptype (2017) Gas Carrier 58% Tanker 42% Others 33% Tanker 18% Container 18% Gas Carrier 31% Based on the amount Backlogs as of Mar. 2017(YTD) : 92 vessels, USD 11.9 bil Based on the amount Ner Orders in 2017 (in Mil. USD) 2016 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total # of Ships Amount 3,

28 Delivery Annual Delivery (Mil. GT) Annual Delivery (# of vessels) Ulsan Offshore (On-ground Building) Gunsan '08 '09 '10 '11 '12 '13 '14 '15 '16 Total # of Ships Ulsan Offshore Gunsan 28

29 Offshore & Engineering FPSO Fixed Platform Modules Installation Subsea Pipelines 29

30 Offshore & Engineering Overview Sales Contribution (2016) Offshore & Engineering 18% Sales Breakdown by Products (2016) Subsea Pipeline 2% Floaters 39% Fixed Platform 59% * Parent basis * Parent basis Annual Sales & New Orders (Unit : Sales bil. KRW, New order Mil. USD) 4,753 4,653 4,373 4,467 3,729 3,423 3,413 3,448 3,095 6,503 2,222 6,005 4,480 2,978 3,069 2,352 2,072 1,102 1, Sales New Orders Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Main Products Floating Units: FPSOs, FLNGs, FPUs, TLPs, Semi Submersible Units Fixed Platforms: Topsides, Jackets & Piles, Jack-ups, Modules & Quarters Pipelines & Subsea Facilities: Subsea Pipelines Offshore Installations: Platforms, Pipelines Land-Based Modules Operational Highlights Received USD 1.1 bil. of Goliat FPSO order (Feb. 2010) Received USD 0.9 bil. of Barzan offshore platform order (Jan. 2011) Received USD 1.2 bil. of BP Q204 FPSO order (Feb. 2011) Received USD 0.6 bil. of BP Clair Ridge platform order (Mar. 2011) Received USD 1.1 bil. of Aasta Hansteen Topside order (Jan. 2013) Received USD 1.9 bil. of Moho Nord TLP & FPU order (Mar. 2013) 30

31 History Goliat FPSO - Cylindrical Floating Production Storage Offloading unit - &1.1bil. (ENI) Q204 FPSO - Construction of FPSO (EPC), Processing 0.32 million bpd, storing 0.8 million bbls - $1.2 bil. (BP) A/H Spar Topside - Fabrication and Installation of Spar Topside(EPC) - $1.1 bil. (Statoil) Bergading Project - Central Processing Platform, Wellhead Platform, Bridge(EPCIC) - $700 mil. (Hess E&P) Gorgon LNG - LNG Processing - modules fabrication - $2.1 bil. (Chevron) Clair Ridge Platform - Fabrication and Installation of drilling and Quarters Platforms (EPC) - $620 mil. (BP) Barzan Offshore Project - Fabrication and Installation of Wellhead Platforms, Living Quarters, Onshore & Offshore Pipeline (EPC) - $860 mil. (RasGas) MHN TLP - Fabrication and Installation of Tension Leg Platform and Floating Production Unit(EPC) - $1.9 bil. (Total) NASR Package 2 - Offshore Super Complex Platforms & Power Distribution Platform(EPCI) - $1.9 bil. (Abu Dhabi Marine) Umm Lulu Nasr Field 31

32 Performance New orders by Type ($ mil.) '17.03 Fixed 1,501 2,121 1, , Floating 1,303 1, ,735 1, Subsea Pipeline Other s Fixed Total 3,06 9 4,480 2,072 6,503 6,005 1, Type Performance Record (1976~ 현재 ) # of projects Pla tforms 88 Onshore Fa cilities & Others 16 Ma jor Projects SHWE Platform (Daewoo Intl., 2013) Clair Ridge Platform (BP, 2016) Gorgon LNG Plant Modules (Chevron, 2016) Jack-up Rig 2 MSC Jack-up Rig (A. P. Moller 2004) FPSO 12 Goliat FPSO (Eni Norge AS, 2015) Quad 204 FPSO (BP, 2016) Expected Delivery 2015 ~ 2016 (9 Projects) 2017 (10 Projects) Gorgon (Chevron) Quad 204 (BP) Goliat (ENI) Backlog by Delivery Major Project (Owner) Clair Ridge (BP) Moho Nord FPU (Total) Moho Nord TLP (Total) DSO (Chevron) Odoptu Stage 2 (Exxon) BCP (Caligali Hess) Bergading (E&P) (The end of Mar. 2017, Unit : Mil. USD) Delivery Basis Backlog Sales Basis Completion 10,042 (Delivered) 7, % Floa ting FPU 5 Moho Bilondo FPU (Total E&P Congo, 2008) TLP 1 West Seno TLP (Unocal, 2003) 2018~ (1 Projects) Baronia (Petro. Caligali) NASR 2 (ADMA-OPCO) 1,889 1,617 14% S emi- S ubmersible Drilling R ig S ubsea Pipelines 3 Deepwa ter Horizon (R&B Falcon, 2000) 35 Offshore Gas Spur Line (PTT PCL, 2011) Others 0 63 Total (11 Projects) 9,788 2,637 32

33 Industrial Plant & Engineering Combined Cycle Power Plant Co-generation Power Plant Thermal Power Plant Oil & Gas Process Plant RFCC Plant Equipment 33

34 Industrial Plant Overview Sales Contribution (2016) Industrial Plant & Engineering 11% * Parent basis Sales Breakdown by Product (2016) Oil & Gas 27% Plant Equipment 8% Power Plant 65% * Parent basis Annual Sales & New Orders (Unit : Sales bil. KRW, New order Mil. USD) 4,396 4,077 4,174 2,826 2,761 2,645 2,076 1,898 2,010 2,429 2,240 1,544 1,374 1,480 1,017 1,014 1,259 1,256 1, Sales New Orders Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Main Products Power Plants Combined-Cycle, Cogeneration, and Thermal Power Plants Process Plants Oil and Gas, Refinery, Tank Farm, GTL, and LNG Facilities Plant Equipments Industrial Boiler, HRSG(Heat Recovery Steam Generator), CFBC(Circulating Fluidized Bed Combustor) Boiler, Regenerator & Reactor Operational Highlights Received a USD 1.0 bil. Das Island order (Jul. 2009) Received a USD 2.6 bil. Sabiya order (Sept. 2009) Signed an MOU for supplying ITER vacuum vessel (Jan. 2010) Received a USD 1.6 bil. Riyadh order (Jun. 2010) Received a USD 3.2 bil. Jeddah South order (Oct. 2012) Received a USD 3.3 bil. Shuqaiq order (Aug. 2013) Received a USD 1.1 bil. NRP order (Oct. 2015) 34

35 Performance (Mil. USD) Power Plandts 1, ,510 4, Chemical Plants / Plant Equip. New Orders by Type 409 1, ,250 1, Total 2,010 1,014 4,077 4,39 6 1,256 1, Main Projects in 2012/2013/2014 Jeddah South (Oct. 2012) bil. USD / Saudi Electricity Company, Saudi Arabia - 2,400MW Oil fired Conventional Power Plant Shuqaiq Power Plant (Aug. 2013) bil. USD / Saudi Electricity Company, Saudi Arabia - 2,640MW Oil fired Conventional Power Plant Clean Fuel Project (Apr. 2014) bil. USD / Kuwait National Petroleum Company, Kuwait - Upgrade and expansion of Refinery Zor Refinery Project (Oct. 2015) bil. USD / Kuwait National Petroleum Company, Kuwait - Refinery power plant Package 2(Ancillary process), package 3(Utilities & Offsite facilities) Oil & Gas Power Plant Project Type Oil & Gas Tank Farm Refinery & Petrochemical Performance Record (1976~Present) Major Projects Integrated Gas Development (IGD) Project (ADGAS, UAE, 2013) Escravos Gas Plant Phase Ⅲ (Chevron Nigeria Ltd., Nigeria, 2010) Bonny Terminal Integrated Project (Shell Petroleum Development, Nigeria, 2008) KOC Crude Oil Export Facilities Project (Kuwait Oil Company, 2008) JPR Zarpa Tank Farm Project (Jordan Petroleum Company, 2000) Clean Fuel Project (Kuwait National Petroleum Company, 2018(E)) Jazan Refinery and Terminal Project, Package 2 (Saudi Aramco, 2016(E)) HCP No.2 BTX Project Daesan (HC Petrochem, Korea, 2013) Mumbai Diesel Hydro-Desulfurization Project (Hindustan Petroleum Company, India, 2000) HPC 2nd Petrochemical Complex Project (Hyundai Oilbank, 1997) Gas to Liquid Pearl GTL Feed Gas Preparation Project (Qatar Shell, 2011) Riyadh PP 11 Independent Power Project (Dhuruma Electricity Company, Saudi Arabia, 2013) Sabiya Combined Cycle Gas Turbine Project Combined (Ministry of Electricity and Water, Kuwait, 2013) Cycle/ Al Dur Independent Water and Power Project Simple Cycle (Al Dur Power & Water Co., Bahrain, 2012) Power Plant Marafiq Independent Water and Power Project (Jubail Water and Power Company, Saudi Arabia, 2010) Shaybah Power Generation Project (Saudi Aramco, Saudi Arabia, 2008) Cogeneration Power Plant Thermal Power Plant Desalination Plant Tihama Cogeneration Expansion Project Stage II (Tihama Power Company, Saudi Arabia, 2015(E)) Saudi Aramco 3rd party Cogeneration Program (Tihama Power Company, Saudi Arabia, 2006) Jeddah South Power Plant (Saudi Electricity Company, Saudi Arabia, 2017(E)) Shuqaiq Power Plant (Saudi Electricity Company, Saudi Arabia, 2018(E)) Namjeju #3&4 Thermal Power Plant (KEPCO, Korea, 2007) Makkah-Taif Thermal Power Plant (Saline Water Conversion Corporation, Saudi Arabia, 1989) Taweelah A1 (ADWEA, UAE, 2002) Taweelah B (ADWEA, UAE, 1995) Umm Al Nar West (ADWEA, UAE, 1982) Al Khobar Phase 2 (SWCC, Saudi Arabia,1981) 35

36 Industrial Plant Projects in Backlog Two non profitable mega projects(jeddah, Shuqaiq) are in the final process and scheduled to be delivered in 2017 Project Owner Contract Date Jeddah South Thermal Power Plant SEC (Saudi) Oct Shuqaiq Steam Power Plant SEC (Saudi) Aug Expected Delivery 2017 (PAC*) 2017 (PAC*) Delivery Basis (The end of Mar. 2017, Unit: Mil. USD) Backlog Sales Basis Completion 6, % Jazan Refinery & Thermal Project** Aramco (Saudi) Dec Clean Fuel Project KNPC (Kuwait) Apr ,511 1,418 44% ZOR Refinery Project KNPC (Kuwait) Oct Others Total (5 projects) ,743 2,383 * PAC : Preliminary Acceptance Certificate ** Jazan Refinery & Thermal Project : constructed by HHI's overseas Corp. 36

37 Engine & Machinery Marine Engine Marine Propeller Power Plant Engine Industrial Machinery Robotics 37

38 Engine & Machinery Overview Sales Contribution (2016) Sales Breakdown by Product (2016) Engine & Machinery 10% * Parent basis Large-sized Engine 72% Mid-sized Engine 11% System 1% Robotics 10% Power Plant Engine 3% Industrial Machinery 4% * Parent basis Annual Sales & 2,522 2,772 2,835 3,096 2,967 4,646 1,646 3,248 3,176 2,283 1,452 (Unit : Sales bil. KRW, New order Mil. USD) 2,414 2,313 2,110 2,060 1,858 2,425 1,996 1, Sales New Orders Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Main Products & Capacity Two-Stroke Diesel Engines (500 units, 18 mil. BHP) Four-Stroke(HiMSEN) Engines (1,800 units, 5 mil. BHP) Diesel and Gas Power Plant Engines Propellers and Crankshafts / Steam Turbines and Turbochargers Industrial and Marine Pumps, Industrial Robots, Side Thrusters Presses, Conveyor Systems, and Steel Strip Process Lines Operational Highlights Surpassed cumulative four-stroke engine production of 20 mil. bhp (Mar. 2010) Production of eco-friendly marine engine meeting new IMO standards (Mar. 2010) Received a 95MW PPS order from Venezuela (Apr. 2010) Received a 75MW diesel power plant order from Bangladesh (Apr. 2010) Development of high output eco-friendly gas engine (May 2010) - 20% reduction of CO 2 emission and 97% reduction of NO X emission Surpassed cumulative two-stroke engine production of 100 mil. bhp (Sept. 2010) Production of 1,000 th Packaged Power Station (Jul. 2012) 38

39 Performance Major Projects Diesel Power Plants order from Bangladesh (Apr. 2010) - USD 70 mil. order for 70 MW Diesel Power Plants from Bangladesh Power Development Board (BPDB) Marekt Share in 2015 (%) Large-sized Maring Engine Mid-sized Marine Engine Diesel Power Plant PPS order from Venezuela (Apr. 2010) - USD 160 mil. order for 204 MW, 120 Packaged Power Stations from electricity company Electricidad de Caracas, Venezuela Diesel Power Plants order from Ecuador (May 2011) - USD 74 mil. order for 140 MW Diesel Power Plants from Equitatis, Equador PPS order from JINRO, Panama (Jun. 2015) - USD 32 mil., order for 57MW, 34 Packaged Power Station from JINRO, Panama Eco-friendly Engine Products Eco-friendly Diesel Engine - 15% reduction of NOx emission meeting new IMO standards High output eco-friendly HiMSEN Gas Engine - 20% reduction of CO2 emission compared to diesel engine - 97% reduction of NOx emission to reach the world`s lowest level of 50ppm - 47% improvement in engine performance Domestic Global New Orders by Region 28.0% 55.9% 51.2% 55.4% 15.3% 10.9% 13.1% 7.9% 56.7% 33.2% 35.7% 36.8% '12 '13 '14 '15 Domestic China Others 39

40 Electro Electric System Transformer Circuit Breaker Switchgear Rotating Machinery 40

41 Electro Electric Sys. Overview Sales Contribution (2016) Sales Breakdown by Product (2016) Electro Electric Sys. 10% * Parent basis Rotating Machinery 14% Switchgear 14% Others 20% Low Voltage Circuit Breaker 7% Transformer 27% High Voltage Circuit Breaker 18% * Parent basis Annual Sales & New Orders Main Products (Unit : Sales bil. KRW, New order Mil. USD) 3,793 2,281 2,556 2,625 2,318 1,766 1,820 2,006 1,873 1,685 2,712 3,242 1,453 1,925 2,319 2,843 2,609 2,241 2,354 1, Sales New Orders Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Transformers (up to 765kV, 1,300MVA), Gas Insulated switchgear(25.8kv~800kv), Low voltage Switchgear Low and Medium Voltage Circuit Breakers Rotating Machinery Power Electronics and Control Systems Operational Highlights Awarded Asia-Pacific Power Transmission Equipment Company of the Year by Frost & Sullivan (Aug. 2009) Received USD 0.25 bil. transformer order from South Africa (Nov. 2009) Received USD 0.6 bil. transformer order from the US (May 2010) Reached the transformer production milestone of 700,000MVA (Dec. 2010) Received 1,000 GIS order from Russia (Jun. 2011) 41

42 Performance Major Performance US transformer long-term supply contract (May 2010) - USD 600 mil. order for supplying transformers ranging from 230kV to 500kV to Southern California Edison(SCE) for 10 years from 2010 to Largest transformer order to date Project Type Gener ator Installation West Gener ating Pr oject (USA) Power Tr ansmission & Mutation Installation Major Projects Major Project British Columbia Hydro & Power Authority (Canada) Sales by Region(%) Iron Manufacture Installation Nueva Ventanas 240MW Coal Fir ed Power Pr oject (Chile) Domestic America Asia Europe Middle East Others Water Tr eatment, Cement & Petr ochemical Installation KODECO IKC Project (Indonesia) Automotive Goods Seoul Metr o (South Korea) Mar ine Goods Royal Nedlloyd Gr oup (Netherlands) Ocean Installation Marine Steam Turbine Al- Jubail Saline Water Conver sion (Saudi Arabia) Hyundai Mer chant Mar ine LNGC 22,000MW Marine Steam Turbine (South Korea) '09 '10 '11 '12 '13 '14 '15 Know-how Export Gas Insulated Switchgear : Tatung Company (Taiwan) 09 년 sales is based on K-GAAP. The sales of Green Energy division is not included since 11. The sales from wind power sales has been included since 15. Fr esh Water Installation Shuweihat S2 IWPP Pr oject (UAE) 42

43 Construction Equipment Small Excavator Mid Excavator Electric Excavator Forklift Wheel Loader Skid Loader Roller 43

44 Construction Equip. Overview Sales Contribution (2016) Sales Breakdown by Product (2016) Construction Equip. 8% CKD 8% Others 10% Skid Loader 1% Wheel Loader 9% Forklift 21% Excavator 51% Annual Sales * Parent basis * Parent basis (Unit : Bil. KRW) 3,052 3,120 2,723 2,275 2,215 1,769 1,844 1,852 1,512 1, Parent basis, 2005 ~ 2009 sales are based on K-GAAP. Main Products Excavators (Local 16,000 units, China 17,000 units, India 3,000 units) Wheel Loaders (2,900 units) Forklifts (9,500 units) Skid Loaders (600 units) Operational Highlights Introduction of Hi-Mate remote management system (May 2009) 9-series excavators recognized at Korea s Pin-up Design Awards (Dec. 2009) Introduction of new 9-series wheel loader (May 2010) Breaking ground for wheel loader factory in China (Jul. 2010) Introduction of 120-ton excavator (Apr. 2011) Production of 350,000 th construction equipment (Oct. 2011) 44

45 Performance Excavator Sales in China Excavator Sales in China Market size(left) HHI(right) 200, , ,000 80,000 40, , , ,908 71,767 93, ,908 84,573 53,014 62,993 18,467 17,294 3,743 8,377 10,101 8,540 1,889 1,956 7,532 '08 '09 '10 '11 '12 '13 '14 '15 '16 30,000 25,000 20,000 15,000 10,000 5,000 0 Mar Mar YoY Market 18,814 38, % H H I 621 1, % M/S 3.3% 3.2% -0.1%p (Source: China construction machinery association) Construction Equip. Sales by Region HHI`s Excavator Market Share by Region '08 '09 '10 '11 '12 '13 '14 '15 Parent basis, 2008 ~ 2009 sales are based on K-GAAP. Others Domestic Latin America Middle East Africa China Europe N. America Do mestic 27.5% 27.9% 25.1% 21.2% Glo bal (Excluding Japan) 9.0% 7.8% 6.2% 5.8% China 8.1% 7.2% 4.4% 3.8% India 17.7% 19.7% 20.4% 18.1% (Source: Company data) 45

46 Subsidiaries Hyundai Oilbank Hyundai Samho 46

47 Hyundai Oilbank Glace Facilities & Products Capacity 390,000B/D #1 : 110,000 B/D, #2 : 280,000 B/D Heavy Oil Upgrading Ratio 39.1% Crude oil 100% (390,000 b/d) Refining Unit LPG, Naphtha, Gasoline 19% Kerosene, Diesel 37% With the completion of #2 HOU plant in Jan. 2011, Hyundai Oilbank achieved a ratio of 39.1% (the highest HOU ratio in the industry) Domestic Market Share 22.2% Competitors : SK Innovation, GS Caltex, S-Oil Bunker C 44% Upgrading Unit Gasoline, LPG 46% Diesel 37% Propylene 9% Others 8% HHI`s management Control 91.1% Total CAPEX : KRW 2.6 tril. (Jul. 2006~ Feb. 2011) Acquired by HHI in Aug

48 Hyndai Oilbank (Parent) Income Statement (Unit: Bil. KRW) Sales 18, , , , , ,242.1 Operating Profit Margin(%) 3.1% 1.4% 2.0% 1.1% 4.8% 7.1% Net Income Margin(%) 1.9% 0.7% 0.8% 0.2% 3.6% 5.0% Position (Unit: Bil. KRW) Total Assets 8, , , , , ,131.8 Total Liabilities 5, , , , , ,937.8 Total Shareholder's Equity 2, , , , , ,194.0 Liabilities-to-Equity Ratio(%) 215.1% 194.6% 181.6% 151.0% 90.8% 93.9% * 2016 Preliminary results 48

49 Hyundai Samho Backlog by Shiptype (2017) Production Capacity 3.3 mil. GT FPU 7% Others 11% - Delivered 43 vessels in # of dry docks : 2 PCTC 11% Tanker 48% 2017 Sales Target 2,725 bil. KRW Gas Carrier 15% Container 8% Backlogs as of Mar. 2017(YTD) : 54 vessels, USD 5.05 bil Based on the amount New Orders in 2017 (in million USD) 2016 Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total # of ships Amount 1,

50 Hyundai Samho (Parent) Income Statement (Unit: Bil. KRW) Sales 4, , , , , ,868.6 Operating Profit Margin(%) 16.7% 6.0% -1.0% -12.0% -7.8% 4.4% Net Income Margin(%) 11.4% -0.3% -1.5% -5.2% -6.1% 1.3% Position (Unit: Bil. KRW) Total Assets 6, , , , , ,733.7 Total Liabilities 3, , , , , ,814.7 Total Shareholder's Equity 3, , , , , ,919.0 Liabilities-to-Equity Ratio(%) 116.5% 109.1% 102.2% 136.3% 169.3% 96.4% * 2016 Preliminary results 50

51 Hyundai Green Energy - 600MW capacity of solar cell & solar modules to provide total solution - Solar cell & solar modules, solar inverter production facility in 2016 Solar Cell Solar Module Picture Facilities Solar Cell Plant (Eumseong, Korea) Solar Module Plant (Eumseong, Korea) Annual Capacity (2016) 600MW 600MW Details Production of Mono & Poly-crystalline Production of 54cell(6X9), 60cell(6X10), 72cell(6X12) module Capacity Cell (MW) Module (MW) Sales (Bil. KRW) % of total HHi Sales Capacity and Sales % % % % % % % % % Solar Product Certificate - UL (UL 1703/USA, Canada) - VDE (IEC 61215, IEC / /International) - CE Declaration (International) - J-PEC (Japan) - JET (IEC 61215, IEC / /Japan) - JIS Q 8901:2012 (Japan) - KS Q 8003 (Korea) - MCS (IEC 61215, IEC / /UK) - CSTB (France) - INMETRO (IEC 61215/Brazil) - OPGE (IEC 61215/Puerto Rico) - Ammonia resistance (IEC 62716) - Salt mist (IEC 61701) - Sand & Dust (IEC 60068) - PID(IEC TS ) - Fire test (UN9177/Italy) 51

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53 Structure after Split Corporate Governance Restructuring < After Split > - Hyundai Robotics will become a holding Before Split Robotics company. HHI Electric & Energy Sys. Construction Equipment Oilbank Global Service - To abide by the Fair-trade law, Hyundai Robotics will acquire shares of affiliates (more than 20% of the listed, and 40% of others) by investment in kind through takeover bid and acquisition of HMD`s stake in operating HSHI HMD Oilbank Foreign affiliates Foreign affiliates Industrial Vehicle companies. Green Energy - All the shareholders will be guaranteed equal rights to take part in the investment in kind. (Capital increase by allotment to the 3 rd parties is not considered.) Turbo Machinery MOS HYMS Others 53

54 Semi-Submersible Rigs Status The prolonged weak oil prices caused the delay & cancellation of the E&P investment. Two semi-submersible rigs out of three in the backlog were cancelled and KRW 396 bil. of losses from the cancellation were incurred in 2015 The last rig(diamond) was successfully delivered in July of HHI HSHI Diamond(U.S.) Fred Olsen Energy(NOR) Seadrill Mira(NOR) Contract date 25-May May Jun-2012 Contract price USD 629 mil. USD 621 mil. USD 568 mil. Advance received USD 189 mil. (30%) USD 186 mil. (30%) USD 170 mil. (30%) Cancellation notice from owner - 27-Oct Sep-2015 Loss incurred on cancellation - KRW bil. KRW bil. status Delivered Settled (Returned $176M of Advance Received.) Settled (Returned $170M of Advance Received.) 54

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