January 2015

IR Presentation Oct 2015

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

CONTENTS

Ⅱ. New order & Backlog

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Revenue & Operating Profit

Quarterly Results (recent 4Q)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

-

5.0

10.0

15.0

20.0

2010 2011 2012 2013 2014

Offshore Shipbuilding E&I OP margin

Revenue & OP Margin Trend

13.1 13.4

14.5 14.8

12.9

10.8

8.7

8.3

6.2

(KRWt) (%)

(KRWb)

1.4

- 3 -

2014 2015

3Q 4Q 1Q 2Q

Revenue 3,263 3,078 2,610 1,439

Operating Profit 182 101 26 -1,548

OP Margin 5.6% 3.3% 1.0% -

Profit before income tax 175 46 33 -1,498

Net Profit 172 41 11 -1,155

▶ Revenue & OP declined in quarters

▷ Product mix change

∙ High margin drillship ↓,

Provision for construction loss on Ichthys&Egina P/J↑

▷ The overall cost increase for the remaining projects

∙ Expected future costs are reflected in 2Q financials

→ some as revenue decline, the others as provisions

* Details on page 4

Details on 2Q15 losses and 2015 guidance

2015년 2분기 적자 발생 내용 상세

- 4 -

Details on 2Q15 losses 2015 guidance

▶ Revenue

: Increased total estimated cost lagged percentage to

complete , and it resulted revenue for 2Q decline

▶ Profits

: KRW 1.5tn of EBT losses generated by revenue decline

and provisions for construction loss on projects

※ Breakdown of EBT loss KRW 1.5tn

Category Elements Amount (KRWt)

Due to cost increase

expensed in 2Q15 0.2

To be expensed from 3Q15 1.3

Due to accounting rules

Provisions 0.3

Revenue decline due to

lowered percentage to complete 1.2

Due to project nature

Further losses from Ichthys&Egina 0.5

Lower profits from FLNG&Drillship 0.7

Others 0.3

1H15 2H15 (e)

2015 (e)

1Q 2Q

Revenue 2,610 1,439 6,651 10,700

Operating Profit 26 -1,548 - -

Profit before income tax 33 -1,498 95 -1,370

Net Profit 11 -1,155 - -

(KRWb)

▶ Expected to be normalized from 2H

as all expected cost increase is recognized in advance

▷ 2015 revenue is expected to reach KRW 10.7tn

as production of large offshore projects is to peak

▷ 2015 EBT is to be recorded at KRW -1.37tn with

producing small profits in 2H

* Accumulated actual cost / Total estimated cost

* [Contract value ⅹ percentage to complete]-recognized revenue for the past periods

Risk Management

Improvement on Risk management before/after the contract

- 5 -

Pre-contract At execution

Risk assessment before participating bid

Prospect Selection Committee (ITT review incl.)

Cost Review Committee (Quantity review incl.)

Risk Review Committee

Contract terms Review Committee

Bid Review Committee

Bidding

only for risk hedging available projects

Contract Signing

Intensive risk analysis

& mitigation planning

Risk Workshop

Continuous Risk verification & assessment

Setting up specific action plans

+3 months

of contract

Regular

Process

ITT issue

Award winning

KPI management

Factors to drive cost increase and construction delay

Regular KPI check and feedback

Lessons Learned System

To prevent from repetitive troubles,

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

recorded and applied to future projects

* Invitation to tender

Risk Hedging Policy

SHI Focuses on minimizing profit volatility

Building Event

Time Gap (months) 12 5 3 10

Currency

Receivable

Payable

Raw Material

Main Engine

Machinery

Steel Plate

Bulk Part

Contract Steel Cutting Keel Laying Launching Delivery

: Hedging, Order : Execution, Delivery

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

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

- 6 -

Financial Summary

Consolidated Statements of Income

2011 2012 2013 2014 1H15 1Q 2Q

Revenue 13,392 14,490 14,835 12,879 2,610 1,439 4,049

Operating Profit 1,160 1,206 914 183 26 -1,548 -1,522

OP Margin 8.7% 8.3% 6.2% 1.4% 1.0% losses losses

Profit before income tax 1,150 1,045 819 190 33 -1,498 -1,465

Net Profit 851 796 632 147 12 -1,155 -1,143

(KRWb)

- 7 -

Financial Summary

Consolidated Statements of Financial Position

(KRWb)

- 8 -

2011 2012 2013 2014 2015.2Q

Total Assets 16,414 16,635 17,427 17,122 15,981

Cash & Cash Equiv. 1,289 1,164 1,140 893 1,711

Inventories 540 699 842 1,169 1,289

Accounts Receivable 4,078 5,091 5,935 6,400 4,127

Advanced Payments 1,675 1,501 1,354 1,204 1,072

Hedge Related 2,592 2,064 2,035 1,113 1,001

Total Liabilities 11,770 11,352 11,581 11,549 11,601

Advanced Receipts 5,602 3,967 3,885 3,799 4,300

Interest Bearing Debt 1,784 3,193 2,937 3,827 4,013

Hedge Related 2,452 1,458 1,725 1,093 1,005

Total Equity 4,644 5,283 5,846 5,573 4,380

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

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

Debt to Equity Ratio 253% 215% 198% 207% 264%

CONTENTS

Ⅲ. Products & Market Situation

Ⅰ. Financial Highlights

Ⅱ. New order & Backlog

New Order

September 2015

Trend

-

2

4

6

8

10

12

14

16

2011 2012 2013 2014 2015.Sep

Containership LNG Carrier

Tanker Drilling Rig

Production Facility Others(WTIV etc.)

9.8

14.9

9.6

13.3

7.3

(USDb)

- 10 -

Facility

62%

17%

Tanker

14% Production LNG Carrier

7%

Containership

Unit USDb

Containership 10 1.6

LNG Carrier 3 0.7

Tanker 26 1.4

Production Facility 6 6.1

Total 45 9.8

$9.8 billion (45 Units)

Order Backlog

September 2015

Trend

0

5

10

15

20

25

30

35

40

45

2011 2012 2013 2014 2015.Sep

Shipbuilding Offshore

38.3 37.2 37.5

36.4

9%

LNG Carrier

14%

Tanker 7%

Drilling Rig

16%

Production

Facility 51%

Others 3%

(USDb)

- 11 -

Unit USDb

Containership 26 3.5

LNG Carrier 24 5.1

Tanker 37 2.5

Drilling Rig 10 5.9

Production Facility 14 18.4

Others 7 1.0

Total 118 36.4

$36.4 billion (118 Units)

34.8

Containership

CONTENTS

Ⅱ. New order & Backlog

Ⅰ. Financial Highlights

Ⅲ. Products & Market Situation

Balanced supply & demand to generate solid order flow

- Mega containership market to be led by global alliances to achieve operational efficiency

and cost competitiveness among peers

Containership

Delivery decline & stable trade growth Global order trend & SHI market share

(Source: Clarksons, SHI assumption)

72

10

62

29

10 8

14%

28%

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

70

80

'11 '12 '13 '14

Global Order (Over 10kTEU) SHI M/S

(Source: SHI)

1,839

1,133

803

228

6.9%

4.8%

3.9%

1.1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

'15(e) '16(e) '17(e) '18(e)

Delivery Fleet Growth Trade Growth

Trade growth to be stable above 6%

(unit) (,000TEU)

- 13 -

(M/S)

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

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

LNG Carrier

Long term outlook of LNG trading & Fleets

= approximately 120 vessels needed

Global order trend & SHI market share

48

32

39

59

18

4

14

5

38%

13%

36%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

10

20

30

40

50

60

70

'11 '12 '13 '14

Global Order SHI M/S

(Source: SHI)

(unit)

- 14 -

(M/S)

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

2014 trading : approx 240mtpa

Current fleet

: approx 430 ships

(1.8ships/1mtpa)

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

: approx 900 ships

(= 30 ships to be

ordered a year

in avg )

< World LNG trading outlook>

CAGR 5%

2014 main routes New supply ~2030

Limited demand for high specification drillship is expected

while downturn continues due to shrinking investment in exploration

Drillship

Next generation: 20K BOP drillship

New demand for 20K BOP drillship is expected

- For safe and efficient operation in high-pressure

and high-temperature deepwater reservoirs

Global order trend & SHI market share

(Source: SHI)

25

19

12

4

10 9

5

2

40%

47%

42%

50%

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

'11 '12 '13 '14

Global Order SHI M/S

(unit)

- 15 -

(M/S)

• BP-Maersk “Project 20K”

Jointly developing next generation drillship

using 20K BOP for Gulf of Mexico since

year 2013

Seeking both growth and profitability in offshore EPC market through

enhancement of EPC execution capability with ongoing projects

Production Facility

What we do for strengthening competitiveness Key projects under construction

- 16 -

Ichthys CPF(Gas), Austrailia

Egina Oil FPSO, Nigeria

Lessons Learned Program

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

Reinforcement of engineering capacity

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

- Recruiting experienced engineers and project managers

Organizational improvement

- Risk management team and offshore package procurement team established

SHI’s new growth engine

- Market to expand due to its cost advantages and environmental benefits

FLNG

Concept & Advantage

Production, treatment, liquefaction and offloading

of natural gas to be carried out on a vessel

- No need for extensive pipe lines and onshore

processing facilities

Less CAPEX required

Natural Gas

Pretreatment

Liquefaction

FLNG projects under consideration

Number Projects

Under construction

3 Prelude(Shell)

Kanowit, Rotan (Petronas)

Active 10 Browse1,2,3(Shell)

Mozmbique(ENI), etc.

Potential 38 Scarborough, Sunrise, etc.

Total 51

(Source: Clarkson World Offshore Register )

3 Projects will be complete during year '15~'18,

and 10 projects are actively considered.

- 17 -

SHI leads the market with accumulated experiences in a solid relationship

with its strategic partners

FLNG

Long term relationship with the leading companies

(Source: SHI, Shell)

Prelude Browse

Region Austrailia Austrailia

LNG Capacity 3.5mpta 12.0mtpa

Contract amount 6 USDb under negotiation

FID 2011 2016

Delivery 2016 2021~2023

2 major projects are underway based on long term agreement with Royal Dutch Shell and Technip

that are leaders of FLNG market.

FEED & EPC contract for Browse project made in June 2015

- EPC contract amount ($4.7b) includes hulls of three FLNGs

and top side value will be added when the FEED is complete.

- 18 -

* To commence with NTP issuance in 2016

Appendix- Global Network

Oslo

London

Athens Tokyo

Dubai

Rongcheng

Ningbo

Singapore

Houston

Kuala Lumpur

Houston

Deli

Rio De Janeiro

Lagos

Shipyard Block Factory Engineering Center Branch Office

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

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

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

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

Geoje Shipyard

- 19 -

Appendix- Shipyard View

Site : 4.0million ㎡

Quay Wall Length : 7.9Km (24 vessels)

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

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

SHI Focuses on minimizing profit volatility

Offshore Facilities

Dry Dock No.2

Floating Dock 3

Dry Dock No.3

Floating Dock 2

Floating Dock 4

Main Building

Dry Dock No. 1

ShinHanne Factory

Floating Dock 1

Floating Dock 5

- 20 -

Disclaimer

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

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

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

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

fairness, or completeness of the information presented herein.

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

contained in the presentation.

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

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

- 21 -