J.P. Morgan Korea CEO Conference 2015 February 23~24, 2015 · 2015. 2. 25. · HHI China Investment...

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J.P. Morgan Korea CEO Conference 2015 February 23~24, 2015

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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.

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Contents

H H I at a Glance

Business Performance

Financial Performance

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HHI at a Glance

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Date of Establishment : 1973. 12. 28

Date of Listing : 1999. 8. 24

No. of issued stocks: 76,000,000 stocks

Paid-in Capital : KRW 380 bil.

Market Value : KRW 8,740 bil. (As of December 31, 2014)

Credit Rating : A1 (Commercial Paper), AA (Corporate Bond)

Korea’s large conglomerate ranking : 7th

(Excluding public companies, based on total assets, As of December 31, 2013)

No. of employees : 25,663 (Average 18.5 years of continuous service)

No. of dry docks : 10 (Shipbuilding), 1 (Offshore & Engineering)

Business Division : Shipbuilding, Offshore & Engineering, Industrial Plant & Engineering,

Engine & Machinery, Electro Electric Systems, Construction Equipment, Green Energy,

Refinery, Financial Services

Summary

6

1973. 12 Establishment of Hyundai Shipbuilding & Heavy Industry Co., Ltd.

1974. 6 Inauguration of the Shipyard and Simultaneous Naming of First Two Supertankers

1978. 2 Change of Company Name to Hyundai Heavy Industries Co., Ltd.

1975.3~1985.6 Established Special Vessels, Offshore & Engineering, Industrial Plant & Engineering,

Engine & Machinery, Electro Electric Systems, Construction Equipment Divisions

1994. 6 Listed on the Korean Securities Dealers Automated Quotations,

Delivery of Korea’s First LNG Carrier

1999. 8 Listed on the Korean Stock Exchange

2002. 2 Disaffiliated from Hyundai Group and creation of Hyundai Heavy Industries group

(Hyundai Heavy Industries Co., Ltd., Asan Foundation and six other companies)

2002. 5 Acquired Samho Heavy Industries Co., Ltd.

2008. 9 Acquired HI Investment and Securities Co., Ltd. and HI Asset Management Co., Ltd.

(Underwriting company : Hyundai Mipo Dockyard Co., Ltd. )

2009. 12 Acquired Hyundai Corporation

2010. 8 Acquired Hyundai Oilbank Co., Ltd. (70% of Ownership and management)

2011. 2 Became the world’s first shipbuilder to deliver 1,700th ship

History

7

First to build LNG Carrier in Korea

(Jun. 1994) • 125,000 m3

Achieved world record production in 2-stroke

Markne engines (Sep. 2010) • 100 million bhp

Delivery of the World’s Biggest Jacket

(May, 1989)

• Exxon (U.S.A)

• 40,000 ton

No.1 in Global shipbuilding Market

(Since 1983) • HHI, HSHI, HMD : 12.16% (2011 delivery basis)

Recognized for building the ‘World Best

Ship’ for the 29th consecutive year

(Since 1983)

• Total 47 ships, World shipbuilding publications (Maritime Report and Marine Log)

Business Highlights

Completed World’s largest Saudi

Marafiq power plant (Apr. 2011)

• power generation 2,750 MW + desalination

176 MIGD

Achieved domestic record production in

Transformers (Feb. 2010)

• 600,000 MVA

Completion of World’s Largest Elf

Girassol FPSO (Feb. 2001) • 343,000 Ton

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Ownership Structure

(As of December 31, 2014)

Chung Mong-joon

10.15%

Hyundai Mipo

Dockyard Co., Ltd.

7.98%

National Pension

Service 4.69%

KCC 3.04%

Hyundai Motors 2.88%

Asan Foundation 2.53%

POSCO 1.94%

Asan Nanum

Foundation 0.65%

Treasury Shares 19.36%

Others 46.78%

(Foreign Ownership : 12.14% )

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Business Structure

Shipbuilding

Industrial Plant &

Engineering

Engine &

Machinery

Offshore &

Engineering

Construction

Equipment

Electro Electric

Systems

DSME (KOR)

SHI (KOR)

DSME, SHI (KOR) Technip (FR) Saipem (Italy) McDermott (USA) Siemens (GER) Hyundai E&C (KOR) Doosan Heavy (KOR) Samsung C&T Corporation(KOR) Doosan, STX (KOR)

Mitsui (JPN)

Hudong, Dalian(China) ABB (Sweden) Siemens (GER)

Hyosung (KOR)

Komatsu (JPN) Caterpillar (USA) Terex (USA) Doosan Infracore (KOR) Suntech, Yingli (CHN)

Vestas (DEN), GE (USA)

SK Innovation (KOR)

GS-Caltex (KOR)

S-Oil (KOR)

HAPAG-LLOYD (GER)

C.P. OFFEN (GER)

AP MOLLER (Denmaark)

Seaspan (Canada)

Diamond Offshore (USA)

BP(UK) ExxonMobile(USA) SHELL(USA) TOTAL (FR) CHEVRON (USA) ENI NORGE (NOR) SHELL (US) MEW (KUWAIT) SEC (SAUDI)

HMD(KOR)

Shanghai (CHINA)

DSME, SHI (KOR)

State-Owned Power company

Utility, IPP company

Wagner&Co Solartechnik(GER) MHH Solartechnik (GER) Sun Energy Europe (GER) Albatech (Italy)

8.00 mil. GT

Floaters : 1~2 units Fixed Platform : 3~4 units Pipeline laying : 30km

Power plant : 1,000MW

(4~5 projects)

Large Engines (500 units) :18 mil bhp Medium (1800 Units) : 5 mil bhp

Transformer (620 units)

120,000 MVA

29,000 units

(Excavators 16,000 units)

Solar Cell/module : 510 MW

Wind Turbine : 600 MW

390,000 B/D

Division Main Products Major Clients Competitors Capacity

• Excavators • Wheel Loaders • Forklifts • Skid Loaders

• VLCCs, Tankers, Product Carriers, Chemical Tankers

• Containerships, Bulk Carriers, OBO Carriers

• Ro-Pax Ships, Ro-Ro Ships, Pure Car Carriers, Tankers/VLCCs

• LNG Carriers, LPG Carriers

• Drillships

• Submarines, Destroyers, Frigates • 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

• Power Plants: Combined-Cycle, Cogeneration, Thermal Power Plants • Process Plants: Oil and Gas, Refinery, Tank Farm, GTL, and LNG Facilities • Plant Equipments: Industrial Boiler, HRSG, CFBF Boiler, Regenerator & Reactor

• Two-Stroke Diesel Engines, Four-Stroke(HiMSEN)Engines • Propellers and Crankshafts • Steam Turbines and Turbochargers • Diesel and Gas Power Plant Engines • Industrial and Marine Pumps, Industrial Robots, Side Thrusters • Presses, Conveyor Systems, and Steel Strip Process Lines

• Transformers, Gas Insulated Switchgear, Switchgear • Low- and Medium-Voltage Circuit Breakers • Rotating Machinery • Power Electronics and Control Systems

Green Energy

Refinery

Financial Services

• Petroleum: LPG, Gasoline, Kerosene, Jet Fuel • Petrochemicals: Propylene, Alkylate, BTX, Naphtha

• Securities Brokerage • Asset Management • Futures • Corporate Finance • Leasing

• Solar/Wind Power Systems

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Sales Breakdown

Shipbuilding

(KRW 16,432.2 bil.)

Offshore & Engineering

(KRW 4,653.4 bil.)

Industrial Plant & Engineering

(KRW 2,409.2 bil.) Engine & Machinery

(KRW 1,518.1bil.)

Electro Electric Systems

(KRW 2,354.6 bil.)

Construction Equipment

(KRW 2,866.8 bil.)

Green Energy

(KRW 312.3 bil.)

Others

(KRW 206.2 bil.)

Financial Services

(KRW 742.5 bil.)

Refinery

(KRW 21,087.1 bil.)

31.3%

8.8%

4.6%2.9%4.5%5.4%

0.6%

40.1%

1.4% 0.4%

(2014 Consolidated basis, preliminary results)

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27 affiliated companies in Hyundai Heavy Industries Group (HHI included, overseas corporations excluded)

Affiliates

• Changjuk Wind Power : As of Jan. 3. 2011, the date of addition as an affiliate

• Hyundai Energy & Resources : As of May. 2. 2011, the date of addition as an affiliate

• New Korea Country Club & Hyundai Oil Terminal Co., Ltd.: As of March. 2. 2012, the date of addition as an affiliate

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Vladivostok

Tokyo

Beijing

Hyundai Financial Leasing Co., Ltd.

Singapore

Mumbai

Atlanta

(office, incorporated)

New Jersey

Houston

Istanbul

Athens

Luanda

Nigeria

Oslo

Rotterdam London

France Hyundai Ideal Electric Co.

Osaka

Moscow

HHI China Investment Co., Ltd.

Tai’an

Riyadh

Al Khobar

(office, incorporated)

Alabama

Kuwait

Spain

Hungary

Offices (21)

Production / Sales(14)

Management(3)

Construction(3)

Sales (2)

R&D(2)

Region Overseas

office Incorporated

firm Total

Europe 7 9 16

America 3 4 7

Asia 4 11 15

Middle East / Africa

7 2 9

Total 21 26 47

India

Bulgaria

Belgium Germany

Hyudai Heavy Industries Shanghai R&D Co., Ltd.

Khorol Agro, Mikhailovka Agro,

Hyundai Electrosystems

Brazil

Established 21 Overseas offices and 26 Incorporated firms, a total of 47 global network.

• 21 overseas offices - Europe : 7, America : 3, Asia : 4, Middle East / Africa : 7

• 26 Incorporated firms - Production/sales : 14, Sales : 2, Construction : 3, R&D : 2, Management : 3, Agriculture: 2

【Europe】

【Middle East / Africa】【Asia】

【America】

[HHI]

Yangzhong

Global Network

Agriculture(2)

Dubai

Jebel Ali

Abu Dhabi

Shandong Yantai

Weihai Chanzhou

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Business Performance

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2,043 2,809

6,792 8,488 8,272

11,470

15,730 13,635

444 4,061

10,905

6,143

9,512

6,192 8,350 4,357

2,968

3,025

4,917

7,835

7,236

9,290

13,838

10,291

13,147

14,419

13,424

17,851

13,642

14,600

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

`01 `02 `03 `04 `05 `06 `07 `08 `09 `10 `11 `12 `13 `14`15 (Target)

Shipbuilding Non-Shipbuilding

6,400

5,777

9,817

13,405

16,107

18,706

25,020

27,473

10,735

25,324

New Orders Trend

(Mil. USD)

17,209

+15.7% YoY

19,567

27,363

19,834

22,950

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□ Achieving 92.2% of annual target, a 39.8% increase YoY on the back of positive order flow of commercial vessels and offshore production facilities

2012

Full

yearTarget Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Full

year

Achieve-

ment

(%)

Shipbuilding 6,143 7,750 937 0 570 1,049 1,733 682 916 865 85 997 1,297 381 9,512 122.7

Offshore 2,072 6,000 1,183 64 2,064 1,907 95 98 41 217 504 66 211 53 6,503 108.4

Industrial Plant 4,077 6,000 37 0 84 2 27 7 19 3,196 5 41 25 953 4,396 73.3

Engine & Machinery 1,858 3,100 162 235 292 170 283 290 200 219 137 211 208 18 2,425 78.2

Electro Electric 2,318 3,160 143 139 208 172 155 215 81 82 111 231 224 59 1,820 57.6

Construction

Equipment2,773 3,272 217 230 286 273 252 242 168 165 172 180 163 121 2,469 75.5

Green Energy 326 394 32 26 17 25 8 26 18 12 13 19 23 19 238 60.4

Total 19,567 29,676 2,711 694 3,521 3,598 2,553 1,560 1,443 4,756 1,027 1,745 2,151 1,604 27,363 92.2

Division

2013

Monthly New Orders in 2013

(unit : mil. of USD)

- Shipbuilding : 27 Containerships, 19 LPGs, 11 Bulk Carriers, 11 Tankers, 9 LNGs, 5 Special Vessels, 1 Offshore Construction Vessel,

1 Accommodation Vessel, 1 Semi Submersible Rig

- Offshore : 1 FPSO (Rosebank, Chevron), 1 TLP & 1 FPU (Moho Nord, Total), 1 Spar Topside (Aasta Hansteen, Statoil)

- Industrial Plant : Shuqaiq Oil fired Conventional Power Plant, Saudi Arabia, Az-Zour North Combined-cycle power plant, Kuwait

- Engine & Machinery : Four-stroke marine engine orders increased YoY due to demand increase for special vessels such as drillship in 2012

- Electro Electric Systems : Orders declined YoY as a result of profit-focused order taking

- Construction Equipment : Demand declined YoY esp. in the Middle East, America, Russia, South East Asia

- Green Energy : The ongoing oversupply problem and slowing demand continued to unfold

Monthly New Orders in 2013 (Non-Consolidated)

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Shipbuilding

Bulk Carrier Containerships Special Vessels LPG VLCC Naval Ships LNG Car Carriers Drillship

17

180

190

200

210

220

230

240

250

260

40

60

80

100

120

140

160

180

'07 '08 '09 '10 '11 '12 '13

Capesize 176-180K DWT (Left, Mil. USD)

VLCC 315-320K DWT (Left, Mil. USD)

Containership 8,500-9,100 TEU (Left, Mil. USD)

LPG Carrier 82,000m³ (Left, Mil. USD)

LNG Carrier 160,000m³ (Right, Mil. USD)

0.0

50.0

100.0

150.0

200.0

'07 '08 '09 '10 '11 '12 '13 '14

Others LPG Carrier LNG Carrier

Containers Tankers Bulkers

(Unit: Mil. GT)

39.9

95.5

-23%

* Index : 1988=100

Market

Newbuilding Price Trend since 2007

Shipbuilding

Global Demand since 2007

* Source : Clarkson

(Unit: Mil. USD)

* Source : Clarkson

(Unit: Mil. GT)

* Others : offshore, cruise vessels, ro-ro ferries, MPP, Reefers, PCC

`07 `08 `09 `10 `11 `12 `13 `14.12 YoY

Total 176.6 110.9 33.1 94.1 62.5 39.9 95.5 73.6 -22.9%

Bulkers 92.5 56.8 20.3 57.3 24.1 14.2 43.7 32.7 -25.2%

Tankers 27.7 29.8 8.0 20.3 5.9 7.9 18.5 14.6 -21.1%

Containers 35.0 12.7 1.0 6.6 20.1 4.7 19.4 9.5 -51.0%

LNG 2.5 0.6 0.0 0.5 5.1 3.8 4.1 7.1 73.2%

LPG 0.7 0.6 0.1 0.6 0.4 1.1 2.8 3.3 17.9%

others 18.2 10.4 3.7 8.8 6.9 8.2 7.0 6.4 -8.6%

`07 `08 `09 `10 `11 `12 `13 `14.12 YoY

Price Index 185 178 138 142.4 139 126.3 133.2 138.5 4.0%

Capesize Bulk(180K) 97.0 88.0 56.0 57.0 48.5 46.0 53.5 54.0 0.9%

VLCC(320K) 146.0 150.0 101.0 105.0 99.0 93.0 94.0 97.0 3.2%

Container(8,800teu) 134.0 129.0 86.5 95.0 92.5 76.5 85.5 89.0 4.1%

LPG(82,000m³) 93.0 92.0 72.0 72.8 73.0 70.0 74.5 79.0 6.0%

LNG(160,000m³) 237.0 245.0 211.5 202.0 202.0 199.5 198.0 200.0 1.0%

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Special

Purpose

3%

Containership

29%

Tanker

1%

LNG 17%

LPG 10%

Special

5%Bulk 5%

P/C 2%

Drillship

20%

Semi-sub

Rig 7%

Others 1%

Shipbuilding

40.0%

Overview

Annual Sales & New Orders

(Unit : sales - bil. KRW, New order – mil. USD)

Main Products

Sales Breakdown by Product (2014)

• VLCCs, Tankers, Product Carriers, Chemical Tankers

• Containerships, Bulk Carriers, OBO Carriers

• Ro-Pax Ships, Ro-Ro Ships, Pure Car Carriers

Tankers / VLCCs

• LNG Carriers, LPG Carriers

• Drillships

• Submarines, Destroyers, Frigates

Operational Highlights

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 1,700th vessel (Jan. 2011)

Shipbuilding

Sales Contribution(2014)

•Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP. •2014 preliminary results

* Non-Consolidated basis, preliminary results

6,443 7,557

9,084 9,003 7,849

9,487 9,766 10,159 9,349 11,470

15,730

13,635

444

4,061

10,905

6,143

9,512

6,192

0

5,000

10,000

15,000

20,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales New Orders


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Backlog by Shiptype (2013)

Performance

New Orders in 2013

2012 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total Target Achievement Details (mil. USD)

# of ship 38 9 0 6 12 9 10 10 7 1 6 13 2 85 - -

Amount

(mil. USD)6,143 937 0 570 1,049 1,733 681 917 865 85 997 1,297 381 9,512 7,750 122.7%

New Orders by Shiptype (2013)

Shipbuilding

-27 Containerships (3,053) -9 LNG Carriers (1,902) -19 LPG Carriers (1,372) -11 Tankers (803) -5 Special Vessel (662) -1 Semi Submersible Rig (629) -11 Bulk Carriers (580) -2 Others (511)

• Backlogs as of Dec. 2013 on a delivery basis : 141 vessels. USD 22.59 bil.

• The above data is based on the amount • The above data is based on the amount

Container ship22%

Tanker4%

LNG Carrier21%

LPG Carrier7%

Drillship

27%

Special & Naval

7%

Others3%

Semi Submersible

RIg6%

Bulkers

3%

Bulker

6%

LPG Carrier

14%

Others 12%Containership

32%

Tanker

9%LNG Carrier

20%

Semi

Submersible

Rig 7%

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Backlog by Shiptype (2014.12)

Performance

New Orders in 2014

2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Target Achievement Details (mil. USD)

# of ship 85 19 14 5 1 4 5 0 3 3 0 5 1 60 - -

Amount

(mil. USD)9,512 1,549 1,127 511 78 279 644 0 220 528 0 916 340 6,192 9,150 67.7%

New Orders by Shiptype (2014.12)

Shipbuilding

• The above data is based on the amount • Backlogs as of Dec. 2014 on a delivery basis : 145 vessels, USD 18.55 bil.

• The above data is based on the amount

- 26 LPG Carriers (1,964) - 18 Tankers (1,598) - 5 Containerships (501) - 6 LNG Carriers (1,294) - 3 Bulkers (242) - 2 Special Vessel (529) - Others (64)

Container ship16%

Tanker13%

LNG Carrier26%

LPG Carrier16%

Drillship 6%

Special & Naval11%

Others2%

Semi Submersible

RIg7%

Bulkers 3%

Others 9%

Bulker

4%

Containership 8%

Tanker 26%LPG Carrier

32%

LNG Carrier

21%

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5.16.4 6.2

4.8

6.2 6.0

3.74.6

0.3

0.81.8

0.9

1.10.3 0.9

0.8

1.2

1.20.7

0

1

2

3

4

5

6

7

8

9

10

2007 2008 2009 2010 2011 2012 2013 2014

Gunsan

Offshore

Ulsan

5.4

7.2

8.0

6.6

7.58.1

4.95.3

Delivery

Annual Delivery (mil. GT) Annual Delivery (number of vessels)

2007 2008 2009 2010 2011 2012 2013 2014

Ulsan 75 88 80 55 71 69 44 46

Offshore

(on-ground

building)

6 14 25 14 13 4 1 0

Gunsan - - - 10 9 11 12 10

Total

# of Ship81 102 105 79 93 84 57 56

Shipbuilding

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FPSO Semi-Submersible Unit Drilling Rig Subsea Pipeline

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1,935

2,222

3,095 3,423 3,413

3,729

4,373 4,753 4,653

1,997

1,102

2,978

2,352 3,069

4,480

2,072

6,503 6,005

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales New Orders

Offshore &

Engineering

20.0%

Sales Contribution (2014)

Overview




• 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

Main Products



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)

Received USD 1.9 bil. of Rosebank FPSO order (Apr. 2013)

Fixed Platforms&

Floaters

93%

Subsea Pipeline

7%




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Performance

New Orders by Type

($ mil.) 2008 2009 2010 2011 2012 2013 2014.Dec

Fixed 1,113 2,196 1,501 2,121 1,621 454 4,406

Floating 1,704 46 1,303 1,819 412 5,735 1,470

Subsea Pipeline 145 100 252 539 31 292 129

Others 16 9 13 1 8 22 0

Total 2,978 2,351 3,069 4,480 2,072 6,503 6,005

Performance Record

Major Projects in 2009/2010

Gorgon LNG (Oct. 2009)

- LNG processing modules fabrication ($2.1 bil. from Chevron)

Myanmar SHWE Field development project (Feb. 2010) - Installation of gas production & processing platform, pipeline & onshore terminal ($1.4 bil. from Daewoo International Corp.)

Goliat FPSO (Feb. 2010) - Cylindrical Floating Production Storage Offloading unit ($1.1 bil. from ENI Norge AS)


(1976 ~ present)

Total number

of projectsMajor Projects

Platforms 87· SHWE Platform

(Daewoo Inter, 2013)

Onshore Facilities 10· Sakhalin-1 OPF Onshore Modules

Fabrication(ExxonMobil, 2006)

Jack-up rig 3· Harsh Environment Jack-up Rig 2nd

(A.P.Moller, 2004)

Semi-submersible

Drilling Rig10

· Deepwater Horizon Semi-

Submersible Drilling Unit

(R & B Falcon, 2000)

FPSO 10 · Usan FPSO (TOTAL, 2012)

TLP 2· West Seno Field Development

(Chevron, 2003)

FPU 5 · Moho Bilondo FPU (TOTAL, 2008)

5,452 km· Barzan Offshore Project

(RasGas, 2013)

Fixed

Floating

Subsea Pipelines

Type

25

Performance

Major Projects Awarded in 2011

Qatar, Barzan Offshore Project

- Date : Jan. 2011

- Price : USD 860 million

- Owner : RasGas Company

- Completion : Nov. 2013

- Details : Fabrication and Installation of

Wellhead Platforms, Living Quarters,

Onshore & Offshore pipeline (EPC)


UK, Q204 FPSO UK, Clair Ridge Platform

- Date : Feb. 2011

- Price : USD 1.2 billion

- Owner : BP

- Completion : May 2016

- Details : Construction of FPSO (EPC),

Processing 0.32 million bpd, storing

0.8 million bbls

- Date : Mar. 2011


- Owner : BP



Drilling and Quarters Platforms (EPC)

26

Performance

Norway, Aasta Hansteen Spar Topside

- Date : Jan. 2013


- Owner : Statoil

- Completion : Feb. 2016


Spar Topsides (EPC)


Congo, Moho Nord TLP & FPU UK, Rosebank FPSO

- Date : Mar. 2013


- Owner : Total

- Completion : May 2015 (TLP)

Jun. 2016 (FPU)


Tension Leg Platform and

Floating Production Unit (EPC)

- Date : Apr. 2013


- Owner : Chevron


- Details : Construction of FPSO (EPC)

Processing 100,000 BOPD (Oil),

190 MMSCFD (Gas),

storing 1.05 million bbls

TLP (Tension Leg Platform)

FPU (Floating Production Unit)


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Performance

Indonesia, Jangkrik FPU

- Date : Feb. 2014


- Owner : Eni Muara Bakau B.V.

- Completion : Feb. 2016

- Details : Hull/LQ (EPC)



Abu Dhabi, NASR Package 2

- Date : Jul. 2014


- Owner : Abu Dhabi Marine

Operating Company

- Completion : May. 2019

- Details : Offshore Super Complex

Platforms & Power Distribution

Platform (EPCI)

Nasr Field

Umm Lulu

Russia, Odoptu Stage 2 Project

- Date : Jun. 2014


- Owner : Exxon Neftegas Limited

- Completion : Jun. 2017

- Details : Onshore Modules (EPC)

- Date : May. 2014


- Owner : Hess E&P Malaysia


- Details : Central Processing Platform,

Wellhead Platform, Bridge (EPCIC)

Malaysia, Bergading Project

28


Co-Generation Plant Process Plant Thermal Power Plant Combined Cycle Power Plant

29

Industrial Plant &

Engineering

10.0%


Overview




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



• 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)

Power

Plant

87%

Oil & Gas

2%

Plant

Equipments

11%

602

1,017

1,374

1,898

2,645 2,761

1,480 1,259

2,429

846

1,544

2,076

2,826

2,010

1,014

4,077 4,396

1,256

0

1,000

2,000

3,000

4,000

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales New Orders




30

Performance Performance Record New Orders by Type

(mil. USD) 2008 2009 2010 2011 2012 2013 2014.Dec

Power Plants 1,727 1,412 1,601 9 3,510 4,285 6

Chemical Plants/

Plant equipment349 1,414 409 1,005 567 111 1,250

Total 2,076 2,826 2,010 1,014 4,077 4,396 1,256


Major Projects in 2012/2013/2014

Jeddah South (Oct. 2012)

- 3.2 bil. USD / Saudi Electricity Company, Saudi Arabia - 2,400MW Oil fired Conventional Power Plant

Shuqaiq Power Plant (Aug. 2013)

- 3.3 bil. USD / Saudi Electricity Company, Saudi Arabia - 2,640MW Oil fired Conventional Power Plant

(1976 ~ present)

Project Type Major Projects

Oil &

Gas

Oil & Gas

· 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)

Tank Farm · KOC Crude Oil Export Facilities Project (Kuwait Oil Company, 2008)

· JPR Zarpa Tank Farm Project (Jordan Petroleum Company, 2000)

Refinery & Petrochemical

· 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)

Power

Combined Cycle/

Simple Cycle Power Plant

· Riyadh PP 11 Independent Power Project (Dhuruma Electricity Company, Saudi Arabia, 2013)

· Sabiya Combined Cycle Gas Turbine Project (Ministry of Electricity and Water, Kuwait, 2013)

· Al Dur Independent Water and Power Project (Al Dur Power & Water Co., Bahrain, 2012)

· Marafiq Independent Water and Power Project (Jubail Water and Power Company, Saudi Arabia, 2010)

· Shaybah Power Generation Project (Saudi Aramco, Saudi Arabia, 2008)

Cogeneration

· 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)

Thermal

· 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)

Desalination Plant · 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)

Clean Fuel Project (Apr. 2014)

- 1.1 bil. USD / Kuwait National Petroleum Company, Kuwait - Upgrade and expansion of Refinery

31

Engine & Machinery

Marine Engine & Equip. Marine & Industrial Turbine Industrial & Marine Pump Industrial Robot & System Marine Propeller

32

Engine &

Machinery

9.0%

Overview



Engine & Machinery


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


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 CO2 emission and 97% reduction of NOX emission

Surpassed cumulative two-stroke engine production of 100 mil. bhp (Sept. 2010)

Production of 1,000th Packaged Power Station (Jul. 2012)

Marine

Engine

78%

Power Plant

Engine 6%

Hydraulic

Machinery

7%

Robotics

9%

1,220

1,646

2,522 2,772 2,835 3,096 2,967

2,313 2,241 1,880

3,248

4,646

1,452

2,283

3,176

1,858

2,425

2,006

0

1,000

2,000

3,000

4,000

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales New Orders•Non-Consolidated basis, 2005 ~ 2009 sales are based on K-GAAP. •2014 preliminary results



33

Performance

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

Ship Engine New Orders by Region

Engine & Machinery

Market Share in 2013 (%)

Large-size

Marine

Engine

Medium-size

Marine

Engine

Propeller

Diesel

power

plant

Domestic 68 48 90 86

Global 36 18 23 6

Diesel Power Plants order from Bangladesh (Apr. 2010)

- USD 70 mil. order for 70 MW diesel power plants from Bangladesh Power Development Board (BPDB)

Eco-friendly Engine products

Major Projects in 2010, 2011

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

57% 45%

67%

92% 83% 87%

66% 69%

39%

44%

33%

8% 9% 9%

28% 17%

3% 11% 8% 4% 6% 14%

2007 2008 2009 2010 2011 2012 2013 2014

Domestic China Others

34


Transformers High Voltage Circuit Breakers Switchgears Marine Electrical Equip.

35

Transformer

28%

High Voltage

Circuit

Breaker

18%Low Voltage

Circuit

Breaker

6%

Switchgear

17%

Rotating

Machinery

22%

Others 9%

1,057

1,453

1,925

2,712

3,242

2,319

2,843 2,609

1,274

1,766

2,281 2,556

3,793

2,625

2,318

1,820

0

1,000

2,000

3,000

4,000

2006 2007 2008 2009 2010 2011 2012 2013

Sales New Orders

Overview





Main Products



• 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

Electro Electric

Systems 10.0%

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)




36

Performance

Sales by Region


• US transformer long-term supply contract (May 2010)

Major performance

- USD 600 mil. Order for supplying transformers ranging from

230kV to 500kV to Southern California Edison(SCE) for 10 years

from 2010 to 2019

- Largest transformer order to date

* The sales of Green Energy division is not included in 2011 & 2012 results

* 2007 ~ 2009 sales are based on K-GAAP. * 2014 preliminary results

Major Projects

Project Type Major Projects

Generator Installation · West Generating Project (U.S.A)

Power Transmission & Mutation Installation

· British Columbia Hydro & Power Authority (Canada)

Iron Manufacture Installation

· NUEVA VENTANAS 240MW Coal Fired Power Project (Chile)

Water Treatment & Cement & Petrochemical

Installation

· KODECO IKC Project (Indonesia)

Automotive Goods

· Seoul Metro (South Korea)

Marine Goods · Royal Nedlloyd Group (Netherlands)

Ocean Installation · Al-Jubail Saline Water Conversion (Saudi Arabia)

Marine Steam Turbine · Hyundai Merchant Marine LNG Carrier – 22,000MW Marine Steam Turbine (South Korea)

Know-how Export · Gas Insulated Switchgear : TATUNG Company (Taiwan)

Fresh Water Installation

· Shuweihat S2 IWPP Project (U.A.E.)

14% 14% 11% 12% 10% 7%

3% 4% 6% 9%

5% 8%

4% 2% 1%3%

1% 0%

11% 20%5%

7%

5% 6%

29% 18%

18%

21%

23%21%

3%4%

8%

2%

2%0%

35% 38%51% 46%

54% 58%

2009 2010 2011 2012 2013 2014

Domestic Others Middle East Europe Africa Asia North America

37


Crawler Excavator Wheel Loader Forklift Truck Skid Steer Loader Mini Excavator Wheel Excavator

38


9.0%

Overview

(Unit : sales - bil. KRW)

Annual Sales


Main Products



• Excavators (Local 16,000 units, China 18,874 units, India 1,800 units) • Wheel Loaders (2,900 units) • Forklifts (9,500 units) • Skid Loaders (600 units)


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 350,000th construction equipment (Oct. 2011)

Excavator

56%Folk Lift

17%

Wheel

Loader

10%

CKD

6%

Others

10%

Skid

Loader 1%

1,198 1,512

1,769

1,190

2,275

3,052 3,120

2,723

2,215

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2006 2007 2008 2009 2010 2011 2012 2013 2014




39

6% 6% 2% 3% 3% 3% 2% 3%3% 4% 6% 10% 15% 10%

21% 17%3% 6% 7%

8%9% 12%

20%17%

28% 22% 17%16%

18% 19%

14%

11%25% 27%

19%4%

5% 3%5%

6% 10%

39%49%

39% 38%48%

54%45% 43%

2007 2008 2009 2010 2011 2012 2013 2014

Others

Brazil

China

Domestic

Europe

North America

India

Construction Equipment Sales by Region

Performance Construction Equipment

Excavators Sales in China

※ Others includes Middle East (12%), Africa (11%), Russia (6%), Asia, Turkey and etc.

Dec 2013 Dec 2014 YoY

Market 104,925 84,573 -19.4%

H H I 7,532 3,743 -50.3%

M/S 7.2% 4.4% -2.8%p

Excavator Sales in China

HHI’s Excavator Market Share by Region

※ 2007 ~ 2009 sales are based on K-GAAP, 2014 preliminary results

(Source : Company data)

(Source : China construction machinery association)

41,500

60,856 71,767

93,237

162,908 162,908

104,908 104,917

84,573

9,138 9,495 8,377 10,101

18,467 17,294

8,540 7,532

3,743

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

30,000

60,000

90,000

120,000

150,000

180,000

2006 2007 2008 2009 2010 2011 2012 2013 2014.Dec

Market size(Left)

HHI(Right)

2010 2011 2012 2013

Domestic 28.0% 32.1% 27.5% 27.9%

Global

(Exclude Japan)9.7% 10.0% 9.0% 7.8%

China 11.3% 10.2% 8.1% 7.2%

India 11.1% 14.4% 17.7% 19.7%

40

Green Energy

Solar Power Wind Power

41

Solar Cell Solar Module Thin-film

Solar module Solar System

(Inverter)

Picture

Facilities Solar Cell Plant

(Eumseong, Korea)

Solar Module Plant

(Eumseong, Korea)

Hyundai Avancis

(Ochang, Korea)


Division (Ulsan, Korea)

Annual Capacity

(2013) 600MW 600MW 100MW 500MW

Details - Mono-crystalline, Poly- crystalline solar cells produced

- 54 cell(6X9), 60 cell(6X10), 72 cell(6X12) modules produced

- JVC with Saint-Gobain (50:50) - CIGS (Cu, In, Ga, Se) thin-film solar module produced

- Grid-Tied Solar Inverter with/without transformer

Solar Power 600MW capacity of solar cell & solar modules and solar inverter to provide total solution

Solar cell & solar modules, solar inverter production facility in 2013

Capacity and Sales

2005 2007 2008 2009 2010 2011 2012 2013 2014

Capacity

Cell (MW) 30 30 60 370 370 580 600 600 600

Modules (MW)

20 30 70 170 510 560 600 600 600

Sales (KRW bil.)

% of total HHI Sales

50

0.4%

107

0.6%

150

1.3%

591

2.6%

399

1.6%

344

1.4%

312

1.3%

317

1.4%

Solar Product Certification

•The above capacity expansion and sales plan is subject to change according to the market situation.

•The above sales is total sales of Green Energy division.

• 2014 preliminary results

- UL 1703

- IEC 61215 edition 2, IEC 61730 (TUV)

- J-PEC

- JET Cert

- CE Declaration

- MCS (UK)

- CSTB (France)

- Ammonia resistance (IEC 62716)

- Salt mist (IEC 61701 ed.2)

42

Wind Power

- HHI’s production : Nacelle part

- Outsourcing : Rotor Part (Blade, Hub), Tower

Generator

(HHI)

Gear box

(Jake)

Power converter

(HHI)

Transformer

(HHI)

(Installed in Tower)

Wind Turbine Production facilities

HHI’s Products & Certification

Model

Rated

Power

(MW)

Gear

Type

Installation

Type On Market

HQ1650 1.65 Geared Onshore Jun. 2009

HQ2000 2.0 Geared Onshore Jun. 2010

HQ5500 5.5 Geared Offshore Feb. 2014

Nacelle Part

Wind Turbine System Structure Company Name Details

Wind Turbine plant (HHI)

- Located in Gunsan, Korea

- Annual Capacity: 600MW

Weihai Hyundai Wind Power Technology

- Located in Weihai, China

- Annual Capacity: 600MW (2MW X 300 units)

- JVC with Datang Shandong Power Generation

(80% by HHI)

Jahnel-Kestermann (Jake)

- Located in Bochum, Germany

- Annual Capacity: approx. 500 units of gearbox

* On Market: based on proto-type installation date

43

Subsidiaries

44

Hyundai Oilbank

Refining Unit

Upgrading Unit

Crude oil 100%

(390,000 b/d)

LPG, Naphtha, Gasoline 19%

Kerosene, Diesel 37%

Bunker C 44%

Gasoline, LPG 46%

Diesel 37%

Propylene 9%

Others 8%

Total CAPEX : KRW2.6 tril.

(Jul. 2006 ~ Feb. 2011)

• Completion of # 2 HOU Plant 34.4% With the completion of # 2 HOU plant in Jan., 2011, Hyundai Oilbank achieved a ratio of 34.4%, the highest upgrading ratio in the industry

At a Glance

• Domestic Light Oil Market Share 22.1%

• Production Capacity 390,000B/D #1 : 110,000 B/D, #2 : 280,000 B/D

Facilities & Products

HHI’s Management Control 91.1% Acquired by HHI in Aug., 2010

45

8,642.6 8,506.5 8,597.97,701.2

215.1% 194.6% 181.6%151.0%

Assets

Liabilities-to-

Equity Ratio

2011 2012 2013 2014

Sales 18,958.6 21,523.9 20,295.6 18,258.0

Operating Income 594.7 308.4 403.3 192.8

% 3.1 1.4 2.0 1.1

Net Income 360.7 156.5 152.4 31.1

% 1.9 0.7 0.8 0.2

(Unit: KRW billion)

Income Statement

2011 2012 2013 2014

Total Assets 8,642.6 8,506.5 8,597.9 7,701.2

Total Liabilities 5,899.5 5,618.8 5,544.5 4,633.1

Total Shareholder’s Equity

2,743.2 2,887.6 3,053.5 3,068.1

Liabilities-to- Equity Ratio(%)

215.1 194.6 181.6 151.0

(Unit: KRW billion)

Financial Position

Hyundai Oilbank

* The financial information of 2009 is based on K-GAAP. * 2014 preliminary results.

594.7

308.4403.3

192.8

18,958.6

21,523.920,295.6

18,258.0

Operating

income

Sales

2011 2012 2013 2014

2011 2012 2013 2014

46

2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Target Achievement Details (mil. USD)

# of ship 65 15 2 1 2 10 0 0 0 1 0 0 0 31 47 66.0%

Amount

(mil. USD)5,350 1,600 134 87 143 683 0 0 0 79 0 0 0 2,726 4,000 68.2%

Containership20%

Bulker8%

PCTC 9%

LNG Carrier20%

LPG Carrier 11%

Semi Submersible Rig/ HLV /

F Dock9%

FPU 3%

Tanker20%

New Orders in 2014

At a Glance

Hyundai Samho

• Production Capacity 4.3 mil. GT - Delivered 42 vessels in 2013 - # of dry docks : 2

• 2014 Order Target

• 2014 Sales Target

Backlog by Shiptype (2014.12)

4,000 mil. USD

4,563 bil. KRW

• Backlogs as of Dec. 2014 on a delivery basis : 87 vessels, USD 9.14 bil.

• The above data is based on the amount

New Orders in 2013 (65 vessels) -9 Containerships (1,029) -12 LPG Carriers (907) -6 Tankers (495) -12 PCTCs (841) -11 Bulk Carriers (653) -11 P/Cs (547) -2 LNG Carriers (420) -1 FPU Hull (270) -1 High Lift Vessel (188)

New Orders in 2014 -10 Containerships (1,119) -12 Tankers (975) -4 PCTCs (298) -4 Bulk Carriers (246) -1 LPG Carrier (79) -Others (9)

47

804.3 254.0

-35.6-502.2

4,828.7

4,231.8

3,506.2

4,172.1

Operating

income

Sales

6,954.7 6,978.9 6,782.77,076.1

116.5% 109.1%102.2% 145.4%

Assets

Liabilities-to-

Equity Ratio

2011 2012 2013 2014

Sales 4,828.7 4,231.8 3,506.2 4,172.1

Operating Income 804.3 254.0 -35.6 -502.2

% 16.7 6.0 -1.0 -12.0

Net Income 551.0 -12.5 -52.1 -215.2

% 11.4 -0.3 -1.5 -0.5

(Unit: KRW billion) Income Statement

2011 2012 2013 2014

Total Assets 6,954.7 6,978.9 6,782.7 7,076.1

Total Liabilities 3,741.7 3,641.1 3,428.9 4,192.4

Total Shareholder’s Equity

3,213.0 3,337.7 3,353.9 2,883.7

Liabilities-to- Equity Ratio(%)

116.5 109.1 97.8 145.4

(Unit: KRW billion)

Financial Position

Hyundai Samho

* The financial information of 2009 is based on K-GAAP. * 2014 preliminary results.

2011 2012 2013 2014

2011 2012 2013 2014

48

Financial Performance

49

37,342.4

53.711.754,973.7 54,188.1 52,582.4

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

4,562.7 2,743.41,029.6 146.3

-2,206.1

12.2%

5.1%

1.9%0.3%

-4.2%-10%

0%

10%

20%

30%

-20,000.0

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

NI NI Margin

5,531.8 4,561.0

2,005.5 802.0

-3,249.5

14.8%8.5%

3.6%1.5%

-6.2%

-10%

0%

10%

20%

30%

-20,000.0

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

OP OP Margin

Financial Summary (Consolidated)

Operating Profit Net Income

37,342.4 100.0% 53,711.7 100.0% 54,973.7 100.0% 54,188.1 100.0% 52,582.4 100.0%

5,531.8 14.8% 4,561.0 8.5% 2,005.5 3.6% 802.0 1.5% (3,249.5) -6.2%

Shipbuilding 2,687.2 17.4% 2,494.3 13.6% 1,047.1 5.9% 12.6 0.1% (1,895.9) -11.5%

Offshore 764.0 22.3% 391.0 10.5% 319.3 7.3% 282.4 5.9% (230.3) -4.9%

Industrial Plant 344.3 13.0% 252.4 9.4% 106.5 7.4% 61.4 5.0% (1,130.8) -46.9%

Engine & Machinery 754.9 38.7% 602.2 28.0% 347.7 17.3% 118.3 6.9% (10.9) -0.7%

Electro Electric 566.9 17.2% 153.2 6.4% (74.3) -2.6% 90.5 3.3% 86.3 3.7%

Construction

Equipment388.7 11.6% 461.9 10.8% 276.5 7.3% 194.3 5.9% (33.4) -1.2%

Green Energy - - (175.0) -46.0% (106.3) -31.5% (103.2) -32.8% (16.5) -5.3%

Refinery 184.8 3.0% 595.6 3.2% 308.7 1.4% 404.4 1.8% 228.6 1.1%

Finance services 80.2 19.2% 89.7 13.0% 94.9 15.0% 34.5 5.2% 36.3 4.9%

Others (239.2) - (304.3) - (314.6) - (293.2) - (282.9) -

4,562.7 12.2% 2,743.4 5.1% 1,029.6 1.9% 146.3 0.3% (2,206.1) -4.2%

Operating Profit

Sales

Net Income

2011 20142010 2012 2013

(Bil. of KRW) (Bil. of KRW) (Bil. of KRW)

Sales

(Bil. of KRW)

* 2014 preliminary results.

50

46,853.9 49.000.8 49,273 .153,205.0 53,384.4

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

30,831.0 30,824.3 30,531.8

34,175.436,745.8

9,844.4 11,057.0 14,826.5 15,843.2 16,543.1

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

16,022.9 18,176.5 18,741.3 19,029.6 16,638.6

0.0

20,000.0

40,000.0

60,000.0

2010 2011 2012 2013 2014

Assets Liabilities & Total Debt Shareholder’s Equity

2010 2011 2012 2013 2014

46,853.9 49,000.8 49,273.1 53,205.0 53,384.4

Current Assets 22,929.1 23,076.4 25,278.6 29,254.2 29,871.6Cash& Cash Equivalents 1,878.8 1,609.9 1,107.7 1,336.6 3,229.3

Non Current Assets 23,924.8 25,924.4 23,994.5 23,950.8 23,512.8

30,831.0 30,824.3 30,531.8 34,175.4 36,745.8

Current Liabilities 26,011.7 25,490.8 22,174.0 26,516.4 27,702.7

Non-Current Liabilities 4,819.3 5,333.5 8,357.8 7,659.0 9,043.1

16,022.9 18,176.5 18,741.3 19,029.6 16,638.6

192.4% 169.6% 162.9% 179.6% 220.8%

Debt-to-Equity Ratio 61.4% 60.8% 79.1% 83.3% 99.4%

Total Debt 9,844.4 11,057.0 14,826.5 15,843.2 16,543.1

Total Assets

Total Liabilities

Total Shareholder's Equity

Liabilties-to Equity Ratio


Financial Summary (Consolidated)

(Bil. of KRW)


51

2,835.4 1,945.91,111.4 451.7

-1,754.7

12.7%

7.8%

4.4%

1.9%

-7.5%-10%

0%

10%

20%

-10,000.0

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

NP NP Margin

3,563.6 2,628.5 1,292.9 734.8

-1,923.3

15.9%

10.5%

5.2%

3.0%

-8.2%

-10%

0%

10%

20%

-10,000.0

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

OP OP Margin

22,408.1

25,019.625,055.0 24,282.7 23,463.5

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

Financial Summary (Non-Consolidated)

Operating Profit Net Income

22,408.1 100.0% 25,019.6 100.0% 25,055.0 100.0% 24,282.7 100.0% 23,463.5 100.0%

3,563.6 15.9% 2,628.5 10.5% 1,292.9 5.2% 734.8 3.0% (1,923.3) -8.2%

Shipbuilding 1,221.8 17.4% 1,321.7 13.6% 698.2 7.1% 311.0 3.1% (492.4) -5.3%

Offshore 759.9 22.3% 391.4 10.5% 319.3 7.3% 280.0 5.9% (230.5) -5.0%

Industrial Plant 330.3 13.0% 244.9 9.4% 102.9 7.0% 64.1 5.1% (1,068.8) -44.0%

Engine &

Machinery754.9 38.7% 637.3 28.0% 381.0 12.8% 145.8 6.3% 4.6 0.2%

Electro Electric 546.4 17.2% 155.9 6.4% (58.7) -2.1% 124.7 4.8% 110.0 4.9%

Construction

Equipment195.6 11.6% 320.7 10.8% 243.8 7.8% 194.6 7.1% 70.0 3.2%

Green Energy - - (172.7) -46.0% (103.1) -30.0% (100.8) -32.3% (13.6) -4.3%

Others (245.3) - (270.7) - (290.5) - (284.6) - (302.6) -

2,835.4 12.7% 1,945.9 7.8% 1,111.4 4.4% 451.7 1.9% (1,754.7) -7.5%

Operating Profit

Sales

Net Income

2011 20142010 2012 2013


Sales

(Bil. of KRW)


52

13,072.6 14,719.3 15,189.9 15,580.3 13,773.2

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

15,497.515,201.2 15,448.0 16,551.4

18,226.2

3,447.3 3,962.7 6,542.1 7,397.8 7,300.5

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

28,570.1 29,920.530,637.9 32,131.7 31,999.3

0.0

10,000.0

20,000.0

30,000.0

40,000.0

2010 2011 2012 2013 2014

Assets Liabilities & Total Debt Shareholder’s Equity

2010 2011 2012 2013 2014

28,570.1 29,920.5 30,637.9 32,131.7 31,999.3

Current Assets 11,511.1 11,605.9 13,260.6 14,815.7 14,778.7

Cash& Cash Equivalents 624.5 608.3 522.9 730.7 1,407.9

Non Current Assets 17,059.0 18,314.6 17,377.3 17,316.0 17,220.6

15,497.5 15,201.2 15,448.0 16,551.4 18,226.2

Current Liabilities 14,180.0 14,029.1 12,289.4 13,522.9 13,554.1

Non-Current Liabilities 1,317.5 1,172.1 3,158.6 3,028.5 4,672.1

13,072.6 14,719.3 15,189.9 15,580.3 13,773.2

118.5% 103.3% 101.7% 106.2% 132.3%

Debt-to-Equity Ratio 26.4% 26.9% 43.1% 47.5% 53.0%

Total Debt 3,447.3 3,962.7 6,542.1 7,397.8 7,300.5

Total Assets

Total Liabilities

Total Shareholder's Equity

Liabilties-to Equity Ratio


Financial Summary (Non-Consolidated)

(Bil. of KRW)


53

19,834.0 22,950.0

0

10,000

20,000

30,000

40,000

2014 2015(E)

+15.7%

23,463.5 24,325.9

0

10,000

20,000

30,000

40,000

2014 2015(E)

+3.7%

2014 2015(E) Change

Shipbuilding 6,192.0 8,350.0 34.9%

Offshore & Engineering 6,005.0 5,300.0 -11.7%

Industrial Plant 1,256.0 1,650.0 31.4%

Engine & Machinery 1,996.0 2,571.0 28.8%

Electro Electric Systems 2,006.0 2,445.0 21.9%

Construction Equipment 2,071.0 2,298.0 11.0%

Green Energy 308.0 336.0 9.1%

Total 19,834.0 22,950.0 15.7%

2015 Business Plan (Non-Consolidated)

Sales (bil. KRW)

New Orders (mil. USD)

2014 2015(E) Change

Shipbuilding 9,349.4 8,305.5 -11.2%

Offshore & Engineering 4,653.2 4,920.7 5.7%

Industrial Plant 2,429.2 3,290.0 35.4%

Engine & Machinery 2,110.2 2,417.1 14.5%

Electro Electric Systems 2,241.0 2,510.6 12.0%

Construction Equipment 2,214.7 2,370.0 7.0%

Green Energy 317.0 354.0 11.7%

Others 148.8 158.0 6.2%

Total 23,463.5 24,325.9 3.7%

54

Sales by Division (Non-Consolidated)

* The financial information above is based on K-IFRS

* The backlog above is on a delivery basis

Target Dec. Achievement Target Dec. Achievement

Shipbuilding 9,619 9,349 97.2% 10,475 10,159 97.0%

Offshore & Engineering 5,134 4,653 90.6% 4,900 4,753 97.0%

Industrial Plant &

Engineering3,130 2,429 77.6% 1,358 1,259 92.7%

Engine & Machinery 2,463 2,110 85.7% 2,821 2,313 82.0%

Electro Electric

Systems2,638 2,241 85.0% 3,134 2,609 83.2%

Construction Equipment 3,100 2,215 71.5% 3,600 2,723 75.6%

Green Energy 334 317 94.9% 385 312 81.0%

Others 152 149 98.0% 184 155 84.2%

Total 26,570 23,463 88.3% 26,857 24,283 90.4%

2014 2013

Sales (bil. KRW)

55

Backlog

2014

Target Dec. Achievement Target Dec. Achievement Dec.

Shipbuilding 9,150 6,192 67.7% 7,750 9,512 122.7% 18,550

Offshore & Engineering 6,900 6,005 87.0% 6,000 6,503 108.4% 21,704

Industrial Plant

& Engineering5,000 1,256 25.1% 6,000 4,396 73.3% 9,983

Engine & Machinery 2,900 1,996 68.8% 3,100 2,425 78.2% 3,242

Electro Electric

Systems2,424 2,006 82.8% 3,160 1,820 57.6% 2,076

Construction Equipment 2,837 2,071 73.0% 3,272 2,469 75.5% -

Green Energy 354 308 87.0% 394 238 60.4% 141

Total 29,565 19,834 67.1% 29,676 27,363 92.2% 55,696

2014 2013

New Orders

* The financial information above is based on K-IFRS

* The backlog above is on a delivery basis

New Orders by Division (Non-Consolidated)

New Orders and Backlog (Mil. USD)

56

Shipbuilding demand declined YoY, due to a slowdown in the global economic growth, imbalance of supply and demand in the market, falling shipping rates, weak newbuild order momentum.

- LNG Carrier: Demand is expected to grow, spurred by LNG project plans in regions including the US, Australia. - Large-sized containership: Alliance of top tier shipping companies is expected to intensify competition and boost large-sized containership demand to take advantage of economies of scale.

Shale gas production, fall in oil prices raised volatility risks in the market and limited the growth. HHI had total 7 projects which amount 6.0 bil. USD of new orders in 2014 and the market remained highly competitive.

Fall in oil prices, over budget of some large-sized offshore projects put pressure on oil majors to reduce their CAPEX and cut costs, as a short term action. In the long term, oil and gas investments will continue to maintain and expand market share and production level.

- Power: Competition among South Korean E&C Companies has eased and the market prices in the Middle East have recovered gradually. - Oil & Gas: Competition among South Korean E&C Companies in the Middle East has eased, investments for Shale Gas, LNG Plant have increased especially in the North America.

- Power: Demand for power is expected to grow in the Middle East, facing high energy needs and also in the Southeast Asia markets, suffering for energy thirst brought by industrialization. - Oil & Gas: Demand for the Middle East Upstream and refinery is expected to slow down slightly but demand for LNG and Gas projects is expected to pick up steam.

Shipbuilding



Business Overview & Outlook

2014 2015 Outlook

57

Active government incentives across the world and industry consolidation are expected to accelerate market recovery but the polarization between top tier companies and small companies is expected to get more intense.

North America and the UK are expected to see signs of economic recovery but demand in the emerging markets is expected to shrink due to China and Russia’s economic recessions, political unrest etc. In addition, the price competition from Japanese and Chinese makers is expected to intensify.

As the shipbuilding industry continued to see a slow newbuild growth, demand for marine engines stayed weak. Demand for non-marine engines has shrunk due to global economic recessions.

Dual Fuel Engine(ME-GI, DF Engine) sector will see growing demand with the rise of demand for high efficiency & eco vessels. Demand for LNG Carrier and large-sized containership engines is expected to grow but demand for non-marine engines is likely to remain weak due to global economic recessions.

Replacement demand for aging equipments in developed countries will continue but with the falling prices of oil, investments for oil producing infrastructures and electricity markets in the Middle East looks uncertain. In addition, economic slowdown in Russia and western economic sanctions are expected to scale back investments.

2014 2015 Outlook



Engine & Machinery

Green Energy

Demand for new high-voltage transmission line in the North America, replacement demand for aging equipments and demand for power infrastructures in the Middle East continued, but the new players in the market intensified competition.

Economic recessions and political uncertainties dampened demand in the emerging markets, and Japanese makers who Benefitted from the weak yen increased competition.

A growth in global market size and a decrease in new investments for production facilities helped to improve supply-demand balance And the market saw signs of recovery. The main target markets were Japan and the U.S.A.

Business Overview & Outlook

58

Q & A

59

Thank You http://www.hhiir.com

*For More Information

IR Team

E-mail: [email protected]

Tel: +82-2-746-4728, 4546, 7858

Fax: +82-746-4662

Website: www.hhi.co.kr (Company) /www.hhiir.com (IR)

http://www.hhi.co.kr/

http://www.hhiir.com/

J.P. Morgan Korea CEO Conference 2015 February 23~24, 2015 · 2015. 2. 25. · HHI China Investment...

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