Samsung Heavy Industries

Jun 2012 ※ MOJAH 266K LNG Carrier (332m×54m×27m)

Contents

Company Overview Global Markets Future Strategy

Stena Drillmax (219m ×42m×19)

3

· Business Highlights

· Order & Backlog

· Risk Management

· Financial Results

· Construction Business

※ LNG Carrier (302m×50m×27m) & LNG FPSO(336m ×50m ×32m)

Company Overview

1.6

4.7

7.1

6.1

10.5

8.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

5

10

15

20

2006 2007 2008 2009 2010 2011

Offshore

Ship

Revenue & OP margin

(KRWt) (%)

4

Business Highlights

Revenue of 2011

Offshore

40% Commercial

Vessels 52%

Construction 8%

(KRWt)

Backlog as of May 31, 2012

※ Construction division excluded

Offshore

61%

Commercial

Vessels 39%

(US$b)

EPS and DPS

(KRW) (KRW)

8.5

10.6 13.1 13.1

13.4

※ 2010~2011, K-IFRS Adopted

6.4

675

2,178

2,899 2,900

3,848 3,777

-

200

400

600

0

1000

2000

3000

4000

5000

2006 2007 2008 2009 2010 2011

EPS DPS

5

Order & Backlog

(US$b)

Order backlog

2012 New orders Details

※ As of May 31, 2012

Containerships (16%)

14.9 15.3 13.5

21.2

1.4

(US$b)

New orders

9.7 $6.0Bil (10 Units)

Drillships (45%)

LNG Carriers (7%)

Production Facilities (45%)

Order backlog Trend (US$b)

26.3

42.1

48.7

38.3 39.3 40.7 Drillships (29%)

Production Facilities (31%)

LNG Carriers (14%)

Tankers (9%)

Etc. (1%)

2006 2007 2008 2009 2010 2012.May

Offshore Commercial Vessels

2006 2007 2008 2009 2010 2011 2012.May

Rigs Production LNGC Container Tanker Others(Ferry, WTI)

6.0

Tanker (3%)

6

Risk Management

6

Building Event

Time Gap (months) 20 4.5 2.5 3.0

Currency

Receivables

Payables

Raw Materials

Main Engine

Machinery

Steel Plate

Bulk Parts

■ SHI focuses on minimizing profit volatility

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 of contract signing

No Hedge tools available for Steel plates, SHI put buffer in bidding price to cope with unexpected price hike

7

Financial Results

(KRWb) ■ Income statement

2009 2010 2011 2012

1Q 2Q 3Q 4Q Total 1Q

Sales 13,095 13,071 3,516 3,162 3,410 3,303 13,391 3,539

Shipbuilding

Construction

12,261

834

12,091

980

3,234

282

2,909

253

3,137

273

3,039

264

12,319

1,072

3,291

248

Operating Profit

(Margin)

794

(6.1%)

1,378

(10.5%)

392

(11.1%)

339

(10.7%)

233

(6.8%)

196

(5.9%)

1,160

(8.7%)

337

(9.5%)

Pre-tax income 855 1,262 396 348 188 219 1,150 328

Non-OP income

Non-OP expense

6,222

6,161

3,773

3,621

46

42

35

26

45

90

78

55

204

214

87

96

Net income 670 977 301 262 111 175 851 253

■ Balance sheet

8

(KRWb)

Financial Results

2008 2009 2010 2011 (A) 2012.1Q(B) B-A

Total Assets 26,084 20,188 18,440 16,414 15,762 -286

Cash & equiv.

Account receivable

Advance payments

Hedge related

Inventories

2,490

1,999

2,880

12,796

778

1,085

3,814

2,405

6,916

579

1,226

5,444

1,663

3,370

600

1,289

4,078

1,675

2,592

540

1,713

3,376

1,499

2,126

553

445

-698

-196

-466

27

Total Liabilities 23,760 17,347 14,343 11,770 10,972 -470

Advance receipt

Debts

Hedge related

8,632

158

12,518

5,658

2,780

6,817

5,329

2,221

3,578

5,602

1,784

2,452

5,211

1,739

1,831

-387

256

-621

Total Equity 2,324 2,841 4,097 4,644 4,790 184

Paid in capital

Treasury shares

1,154

-674

1,154

-671

1,154

-662

1,154

-661

1,154

-661

-

-

Total Liab. & Eqty 26,084 20,188 18,440 16,414 15,762 -286

9

■ Business overview ■ Main projects

※ As of May 31, 2012

Revenue and profit

Order backlog

Tril KRW

Building & Housing

70%

Civil & Plant

30%

Road Apartment

Office building

Hotel Townhouse

0%

2%

4%

6%

8%

10%

-

200

400

600

800

1,000

2006 2007 2008 2009 2010

Revenue Operating Profit

(KRWb)

Incineration plant

Museum

Construction Business

10

· Global New Orders

· Major Market Situation

- Commercial Vessels’ Market

- Offshore Market

※ Major products of SHI : Containership, LNG Carrier, Drillship and FPSO (clockwise from upper left)

Global Markets

-

20

40

60

80

100

120

140

160

180

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12.Apr

LNG Carrier

Containership

Tanker

Bulker

Other

11

(Mn. GT)

46

35

77 74 69

116

177

111

30

AVG : 36

30 31

AVG : 73

AVG : 135

Increase of Sea trade volume together with chinese effect had lead shipbuilding orders for 2003~2008

After sharp decrease in 2009, new orders has been normalized to the level of 2003~2005

The orders of specialized vessels such as Drillship, LNGC and oversized Containership are increasing

76

50

Historical Orders by Shiptype and Countries

Korea

China

Japan

Global New Orders

9

Fleet vs backlog Freight index

Fleet (A)

Old Fleet (20yrs)

Backlog (B)

B/A

Bulk Carriers 351 56 109 31%

Tankers 249 12 44 18%

Source: Clarkson, as of May, 2012

(Mn. G/T) 11,459

950

08/1/2 08/9/2 09/5/2 10/1/2 10/9/2

120

54

B D I

W S

Bulk Carriers & Tankers : Overbooked

12/5/31

12 Source: Clarkson

Order trends and M/S by country

(Mn. G/T) [Bulk Carriers]

(Mn. G/T) [Tankers]

50% 31%

10% 9%

Korea China Japan Etc.

16%

59%

22% 4%

Korea China Japan Etc.

134

176 165

157

109

78

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

140

160

180

200

'07 '08 '09 '10 '11 '12(E)

Backlog

Delivery

New order

93 99

77 69

46 34

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

140

160

180

200

'07 '08 '09 '10 '11 '12(E)

Backlog

Delivery

New order

13

Fuel & charter cost ($/Ton)

Source: Clarkson, KMI

Containerships : Struggling for restricted new orders

(HRCI index)

(%)

Trade Growth & Fleets

Source: Clarkson

(mil.TEU)

13 11 11 10

4

-9

12 8

6.5

-15

-10

-5

0

5

10

15

-

5

10

15

20

25

'04 '05 '06 '07 '08 '09 '10 '11 '12(E)

Fleet

Trade Growth

New Order Trends

1,740

3,240

1,150

90

680

1,770

500

~800

0

500

1,000

1,500

2,000

2,500

3,000

3,500

'06 '07 '08 '09 '10 '11 '12(E)

(,000 TEU)

Source: Clarkson, SHI

Idle Fleets

Source: Clarkson

(,000TEU) (%)

0

2

4

6

8

10

12

0

200

400

600

800

1000

1200

1400

1600

1800

'10.1 '10.10 '11.01 '11.04 '11.09 '12.04

TEU

Ratio(%)

75 (0.5%)

1,600 (11%)

838 (5.3%)

1,406

514

720

615

0

200

400

600

800

0

400

800

1,200

1,600

'07.7 '08.1 '08.7 '09.1 '09.7 '10.1 '10.7 '11.1 '11.7 '12.5

HRCI

Bunker-C

50

70

90

110

130

150

170

190

210

Korea Japan China

198

67 14 65

3 5

Delivery Backlog

LNG Demand & LNGC Fleet Forecast

14

Energy Consumption & LNG Trading

Source: BP

(MTOE)

-

2,000

4,000

6,000

8,000

10,000

12,000

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09

Oil (35%)

Natural Gas (24%)

Coal (29%)

Hydro(7%)

Nuclear (5%)

2.3 Bil.Ton (consumption)

Pipeline 610(70%)

Trading

878

(Mil.Ton, ‘10)

LNG 268(30%)

Source: BP, Andy Flower

Economical

Eco-Friendly

LNGC Global M/S

(units)

89%

4% 7%

Source: SHI, 2000~2012.May

LNG Carriers : Warranted with solid demand

100 110 130 154 165

221 248

279

316

359

410

128 139

176

223 299

363

429 495

574

662

749

0

100

200

300

400

500

600

700

800

-

50

100

150

200

250

300

350

400

450

'00 '02 '04 '06 '08 '10 '12F '14F '16F '18F '20F

LNG Demand

LNGC Fleet

(Mil.ton) (units)

15

LNG Production & Supply Chain

LNG Derivatives : Convergence of Technology & Business

16

LNG FPSO

Supply Plan 10 vessels for 15 years

(5 Bil $/ vessel)

Target Field Australian northwest area

Capacity 3.5 mtpa

Storage 450k cbm

Progress Status 1st Vessel Contracted

Why LNG FPSO?

Capex Forecast for FLNG

Source: FlexLNG

Natural gas

Pre-treatment

Liquefaction

Shell LNG FPSO Project

LNG FPSO

Less Capex

[25%]

Mobility [cover more reserves]

Traditional onland plant

+

LNG FPSO Market – New Business Opportunity

0

3

6

9

12

15

18

21

'10 '11 '12(E) '13(E) '14(E) '15(E) '16(E) '17(E) '18(E) '19(E) '20(E)

(US$b)

Offshore Market – Why Deep Water?

Supply Increase in Deep Water

Source: Energyfiles

1930 1950 1972 1993 2007 2014 2030

Global Oil Supply 1930~2030 (mil barrels oil/d)

Conventional Onshore

Deep Water

Shallow Water

Oil Sands <Deep Water Supply Ratio> ‘00 ‘10 ’25(E) 2% 8.5% 13%

0

5

10

15

20

25

30

35

2000 2005 2010 2015F 2020F 2025F 2030F

shallow water

(mil. barrels oil/d) (mil. barrels oil/d)

Shallow water

Deep water

16

14

12

10

8

6

4

2

0

Source: Douglas Westwood 2011.May

Global Deep Water Capex (US$b)

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F

Global oil price forecast

($/Barrel)

(110~160)

(90~110)

(70~90)

Source: EIA 17

18

Jack-ups

Drillship

Semi-submersible

Rig Types

Deep W

ate

r Shallo

w W

ate

r

Order History & M/S by country

Jack-ups 20%

Drillships 49% Semi-sub

31%

※ 2005~2012.3, Floating rig, value based (source : RS Platou, SHI)

(50%) (30%) (11%) (9%)

110US$b Orders

Deep Water Rig orders

Drilling Rig – Drillship is main stream

2

9 15

19

2 6

33

8 10

19 12

10

1 3

4

6

0

5

10

15

20

25

30

35

40

'05 '06 '07 '08 '09 '10 '11 '12.May

semi-sub

drillship

Korea Singapore China Others

Drillship

Semi Sub

Jack-up

Korea Singapore China Japan Others

Barge TLP

Semi FPSO

19

F.P.U

F.P.S.O

Fixed Platform

Facility Types

Deep W

ate

r Shallo

w W

ate

r

FPSO 64%

Semi 17%

TLP 13%

Barge 7%

※ 1996~2012.3, Floating Facilities, number based (Source : IMA, Clarkson)

154Unit Order

(44%) (28%) (2%) (14%) (12%)

Order History & M/S by country

Order forecast for Deep Water Facilities

2012(F) 2013(F) 2014(F) 2015(F)

New Demand 15 17 5 5

Replacement - 5 10 15

Total 15 22 15 20

Order Forcast(*) 8 11 8 10

Amount(mil $) 8,250 12,100 8,250 11,000

Source: BP, Energyfiles, *: New Construction 50%, Conversion 50%

(unit)

Production Facility – Following the Rigs

20

· Technological Leadership

· Green Future

· Vision & Growth Strategies

· Appendix

※ Sakhalin fixed platform built by SHI

Future Strategy

21

Growing environmental awareness creating eco-friendly product markets

Innovative technology and shrinking oil reserves are triggering new Arctic oil production era

Increasing demand for new products provides SHI with new business opportunities

LNG FSRU

Ice Drillship Icebreaking Tanker Ice Container

LNG FPSO CRUISE

Technological Leadership

High Oil Price (Bunker)

co2 Emission Regulation

22

Source: Clarksons

- Development of Required EEDI - EEOI - GHG Fund, ETS, Carbon Tax

- 1990~2000 avg: $90/ton

- Current price at 615$

Paradigm Change

Fuel Saving of ships

Need for

In Technology

Fuel Efficiency becomes Everything

In Operation

Higher Fuel Efficiency Ship Design &

Structure

Propeller Technology Energy Saving Device

Propeller Technology

Rudder Bulb Saver Fin

Green Future – Fuel Efficiency matters

23

Vision 2020

Vision

Objectives

Business Stream

Revenue : 36 Bil.USD OP margin : ↑ 10%

Stable Growth Growth Engines Seeds for Future

GLOBAL LEADER of OCEAN & POWER in 2020

Reinforcing Shipbuilding & Offshore business and expanding Heavy Electric Machines business

to consolidate future growth

<LNG FPSO>

<LNG Fuelled Vessel>

<Electricity Powered Vessel>

<Floaters>

<Subsea Plants>

<Offshore Wind Power >

Growth Strategies

Shipbuilding

Business Structure in 2020

Shipbuilding(36%)

Heavy Electric Machineries (24%)

Offshore (40%) Revenue

36 US$b

High-end & Specialized vessels with Eco-Friendly

and innovative technologies

Optimized Global Production System

Consulting business for operating shipyards

Shipbuilding Business

Improvement of offshore engineering abilities

Diversification related with offshore business (Subsea Etc.)

Offshore Business

Motors, Generators and Transformers Etc.

Automated Robots for special purposes

Offshore Wind-Power business

Heavy Electric Machineries Business

Subsea plants

25

■ Site 4.0million ㎡ ■ Quay Wall Length: 7.9Km Berthing Capacity: 24vessels

■ Dock 1 Dock : 283m x 46m 2 Dock : 390m x 65m 3 Dock : 640m x 98m G1 Dock: 270m x 52m G2 Dock: 400m x 55m G3 Dock: 400m x 70m G4 Dock: 420m x 70m G5 Dock: 162m x 150m ( for offshore only)

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

Floating Crane 3,000 ton 3,600 ton 8,000 ton

ShinHanne Factory

Floating Dock 1

Appendix - Shipyard View

Floating Dock 5

26

Global base

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

Oslo

London

Athens Tokyo

Koje

Shipyard Dubai

Rongcheng

Ningbo

Singapore

Houston

Shipyard

Overseas subsidiary

Branch office

Malaysia

Houston

India

Moscow

China

block

factory

Ningbo (Start :1997)

- 240,000 tons in 2008

- 250,000 tons in 2010

Rongcheng (Start: 2007)

- 56,000 tons in 2008

- 300,000 tons in 2010

Offshore

engineering

center

Houston

- Production facility engineering design

India

- Production facility basic design

Brazil

Appendix – Global Networks

27

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

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