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FINANCIAL REPORT HALF YEAR JUNE 2014


AT A GLANCE

KEY FIGURES

REVENUE (MILLION NOK) (1.1–30.6)

10,625 2013: 6,665 (2013 proforma: 9,556)

NUMBER OF EMPLOYEES (30.6)

16,062 2013: 10,200

Driven by our purpose of safeguarding life, property and the environment, DNV GL enables organizations to advance the safety and sustainability of their business. We provide classification and technical assurance along with software and independent expert advisory services to the maritime, oil & gas, and energy industries.

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HALF YEAR FINANCIAL REPORT 2014

GROWTH

11% 4% NOMINAL

ORGANIC

EBITA (MILLION NOK) (1.1–30.6)

863 2013: 682

We also provide certification services to customers across a wide range of industries. Combining leading technical and operational expertise, risk methodology and indepth industry knowledge, we empower our customers’ decisions and actions with trust and confidence.

EQUITY RATIO (30.6)

59% 2013: 52%

DEFINITIONS

» EBITA: earnings before interest, tax and amortisation. » Organic growth (proforma figures 2013): Growth adjusted for acquisitions and exchange rate effects.

We continuously invest in research and collaborative innovation to provide customers and society with operational and technological foresight. With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000 professionals are dedicated to helping customers make the world safer, smarter and greener.


ORGANIZATION

In the reporting period, DNV GL was structured into four business areas and one independent business unit. Following an acquisition, a second independent business unit, Marine Cybernetics, was formed at the end of the period.

MARITIME

OIL & GAS

ENERGY

We help oil and gas companies manage technical and business risks, safety and environmental performance across the entire value chain.

We support our customers across the energy value chain in ensuring reliable, efficient and sustainable energy supply.

BUSINESS ASSURANCE

SOFTWARE

We help create trust and confidence and assure sustainable performance for companies across a variety of industry sectors.

Our software supports design and engineering, risk assessment, asset integrity and optimisation, QHSE, and ship management.

We help shipowners, yards, authorities and other maritime players to manage risks in all phases of a ship’s life.

(INDEPENDENT BUSINESS UNIT)

HALF YEAR FINANCIAL REPORT 2014

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PRESIDENT & CEO’S MESSAGE

STRONG HALF-YEAR PERFORMANCE

The first half of this year has been both exciting and challenging for the newly formed DNV GL Group. We have continued to grow our business organically and through acquisitions, even as the integration process has continued apace. Our business areas have delivered strong results and we have strengthened our global position in all key areas.

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HALF YEAR FINANCIAL REPORT 2014

T

he half-year report gives an overview of our main external activities, and our performance as DNV GL for the first six months of 2014. Our sustained growth and value creation to our customers and stakeholders relies on us providing quality services with the highest standards of integrity. STRONGER PLATFORM. Bringing together DNV and GL was about creating a stronger platform for growth and a broader and better service offering for our customers. Integrating two global companies has demanded an extraordinary effort, and the integration is progressing according to plan. I am particularly pleased that we have managed to keep our focus on delivering value for our customers in this period, which is demonstrated by a strong first half-year market and financial performance. Operating Revenue of NOK 10 625 million is up 11% from first half 2013 (proforma figures), and EBITA of NOK 863 million has been achieved after deducting integration cost of NOK 422 million. We have also won important new contracts in the first half of the year that can be attributed to our combined expertise and wider service

offering as a result of the merger. We are now in a position to create even more value for our customers in the whole shipping, oil & gas and energy value chain. Parallel to maintaining our focus on delivering high quality services to our customers, significant effort has been put into bringing more than 6 000 previous GL and 10 000 previous DNV employees together in a new organizational structure sharing a common vision, common values, systems and processes. INCREASING EXPECTATIONS. I believe

that the increasingly complex risk and sustainability-focused environment for our customers will lead to increasing expectations and requirements to their suppliers and partners. Industry consolidation is a natural response to this, but so is foresight on new developments and the ability to acquire new skills and drive change. This spring, DNV GL acquired a 70% majority share in Marine Cybernetics, the leading company for third-party testing of computer control systems in the maritime and offshore industries. The primary decision to invest in Marine Cybernetics was driven by the increasing importance of software-dependent systems in ensur-


ing safe, reliable and efficient operations and is an example of our approach to better serving the industry. HSE PERFORMANCE AND MANNING DEVELOPMENT. Health, Safety and Envir-

onment performance is now monitored for the integrated DNV GL organization, and we have continued to prioritize the management attention towards mitigations addressing Lost Time Accidents (LTA) and absence due to sickness. The LTA level has stabilized, and ended at 1.9. The sickness absence rate has also been stable at 2%. Total manning of permanent employees has been fairly stable in the period, and with a marginally decrease of 45 to 16 062. Hence, the overall growth in business volume has been handled by increased operational efficiency.

chosen to mark this year’s 150th anniversary of DNV and year one of DNV GL by engaging in dialogue with our stakeholders on what we expect to be a period of significant change ahead. Some of the sharpest minds in our organization have looked at expected future developments in sustainability, transformative technologies, shipping, electrification, the risks in exploring the Arctic, and tactics for climate change adaptation. These topics have been chosen because they represent areas where we can make a difference, they are important for our customers , but also because safe and sustainable solutions will benefit society as a whole.

INNOVATIVE SOLUTIONS. Looking ahead,

As we embark on this endeavor we will maintain our focus on helping our customers to become safer, smarter and greener.

as DNV GL changes and grows, we will be guided by our vision of having global impact for a safe and sustainable future. We believe that new innovative solutions and knowledge sharing through standards, recommended practices and new insights are key elements for reaching this ambitious goal. That is also why we have

Henrik O. Madsen President & CEO DNV GL Group

HALF YEAR FINANCIAL REPORT 2014

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HALF-YEAR PERFORMANCE

GROUP PERFORMANCE

DNV GL – Oil & Gas has shown an improved performance during the half year with verification and marine assurance services being particularly strong.

SEGMENTS

DNV GL – Energy reports solid performance for laboratory testing and certification services, while a slowdown compared with 2013 due to the continued restructuring in the Energy advisory market, results in an overall revenue contraction.

While the industries served by DNV GL experience cyclical markets and are sensitive to global economic developments, DNV GL’s financial performance remains robust.

DNV GL – Business Assurance shows a strong revenue growth compared with 2013 coming from a full spectre of assurance services. DNV GL – Software shows a healthy revenue growth, while overall financial performance is weaker than expected. The Group’s financial performance is projected to be solid also for the second half-year.

So far, 2014 has been a solid year for DNV GL. Overall, we have performed well and our solid performance shows that we have been able to maintain focus on operations while at the same time drive the merger process between DNV and GL. The external revenue for the first half of 2014 amounted to NOK 10 625 million, producing an EBITA of NOK 863 million after integration cost. The nominal growth rate (based on proforma figures 2013) was 11%, while the organic and currency adjusted growth rate was 4% and the EBITA margin was 8%. KEY OBSERVATIONS:

DNV GL – Maritime continues to deliver strong financial results. It has achieved solid financial performance across locations and services, with classification being particularly strong.

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HALF YEAR FINANCIAL REPORT 2014

DNV GL Group has a strong balance sheet with a total equity of NOK 15 846 million after NOK 336 million dividend payment in June 2014. The equity ratio is 59%. The investment activities in 2014 relates primarily to acquisitions, lab investments and settlement of the minority shareholders in NV KEMA, and have been partly funded by cash and partly by NOK 1 100 million in external loans. Cash deposits amount to NOK 3 632 million. With effect from 2014, including comparable figures from 2013, DNV GL Group has transitioned to International Financial Reporting Standards (IFRS) from Norwegian Accounting Standards (NGAAP). The interim financial statements have been prepared in accordance with IFRS. The transitional effects are shown in note 2. The management regards DNV GL’s market positions as satisfactory and financial status as strong. Both give the company a robust platform from which to achieve its strategic growth and maintain its independence as a financially strong and trusted company.

MARITIME Maritime delivered strong financial results for the first half-year period. Year-to-date external revenue of NOK 4 352 million represents an organic, currency-adjusted growth rate of 8%.

DESPITE CHALLENGES relating to ton-

nage overcapacity and continuous weak developments in the global economy and trade, DNV GL’s maritime-related services performed well throughout the period. The classification services delivered strong performance, from ship in operation and offshore class to ship newbuilding. On the other hand, the market for maritime advisory is more mixed and advisory services show a weaker overall performance. Overall, the efficiency programmes introduced in 2013 has continued to deliver positive effect also this year while at the same time we are progressing well with the integration process. The shipping industry is still suffering from overcapacity and weak trade developments. This is likely to affect the shipping market for another one or two years, and we expect the competition to continue to be fierce also for classification societies. DNV GL will continue to focus on technology innovation, efficient energy use and LNG as shipping fuel to help its customers address current challenges.


OIL & GAS Oil & Gas improved the business performance during the period, and ended the half year with external revenue of NOK 3 119 million.

A REVENUE GROWTH of 8% compared

to same period 2013 is considered to be strong in the current market. The verification services continued on a strong note also for this period, and the Marine Assurance & Advisory services also performed well. The market for our Inspection services is satisfactory, but our business performance is requiring a constant focus on efficiency in the operation. For our Risk Management services the demand in the North Sea area has softened somewhat compared to last year. Overall, the oil & gas market for our services is positive with several opportunities within reach, and we have demonstrated our ability to win larger contracts linked to our customers’ most challenging projects.

year is partly result of the ‘Focus to Grow’ strategy we have followed for more than year, but also reflecting the challenging market for Energy Advisory services and partly also the Renewable Advisory and Certification services. Allowing for transfers to other business areas and divestments, the actual growth is a negative 4%. However, the increased attention to the sales process and key customer management has started to give positive effect in the order book, and we expect the revenue to develop more positively in third and fourth quarter. For our testing services on the other hand, we have experienced strong growth. Hence, the investment in the high voltage laboratory in Arnhem is expected to further strengthen the leading position we have in this market. Our energy efficiency business in the US is performing well. In total, we remain confident in the energy markets in which we operate as the demand for energy continues to grow. The supply will continue to rely primarily on fossil fuels during the years to come. However, a major transition towards cleaner energy is needed to meet tomorrow’s energy demand while addressing climate change, energy security, the depletion of resources and the ageing infrastructure.

The offshore market continues to be characterised by relatively high activity, but with a high focus on cost reduction and efficiency in operation of the assets. The onshore market, particularly in North America is strong.

BUSINESS ASSURANCE

ENERGY

Business Assurance revenue volume shows solid development compared to last year growing with 7% for the period.

Energy is operating in a challenging market and performed below expectations with external revenue of NOK 1 498 million.

THE OVERALL PERFORMANCE is lower than expected for the first half-year, but with a continuous improvement during the second quarter. The negative growth in external revenue of 12% compared to last

WHILE SEVERAL of Business Assurance’s

target industries experience cyclical markets and are sensitive to global economic developments, the Business Assurance entity has shown strong development. Increasing demand for companies to demonstrate sustainable business practices beyond compliance has contributed to this positive development.

The external revenue for the first half-year amounted to NOK 1 199 million, growing at a healthy rate of 7% year on year. The core Management System Certification service, which represents more than 70% of Business Assurance’s total revenue, showed revenue growth of 5% while other assurance services experienced even stronger growth. The demand for assurance services focusing on sustainable business performance and supply chain management is increasing. Our focus industry sectors; food, healthcare, automotive and aviation industry sectors achieved very good results. Looking ahead, we believe worldwide trends such as population growth, globalization, consumption patterns and urbanization, coupled with the challenging financial situation, will continue to drive the need for assurance services.

SOFTWARE In DNV GL we have organized our software services as an independent business unit, and external revenue for the period ended at NOK 377 million.

THE REVENUE GROWTH of 18% is demon-

strating a healthy overall demand for licence sales and implementation services for most of our software product lines. The market position is strengthened within shipbuilding, ship management and operation, offshore oil & gas and process industries. In particular the products for Process Risk & Reliability, Quality & SHE Risk Management and Ship Classification have demonstrated robust performance. On the other hand, the market for Asset Integrity and Simulation software has been more challenging and will need further attention to improve performance.

HALF YEAR FINANCIAL REPORT 2014

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STATEMENT OF COMPREHENSIVE INCOME INTERIM CONDENSED CONSOLIDATED (UNAUDITED)

AMOUNTS IN NOK MILLION

Total operating revenue

DNV GL GROUP AS

NOTE

2

1 JAN.– 30 JUNE 2014

1 JAN.– 30 JUNE 2013

1 JAN.– 31 DEC. 2013

10 624.8

6 665.2

15 234.1

5 883.1

3 801.6 1

8 446.3

164.7

104.6

271.4

Operating expenses Payroll expenses Depreciation Amortisation and impairment

263.3

26.4

203.1

3 714.1

2 077.4

4 980.9

Operating profit

599.5

655.2

1 332.5

Net financial income

(12.2)

21.1 1

(14.1)

Profit before tax

587.3

676.3

1 318.4

(176.2)

(208.7)

(491.9)

411.1

467.6

826.5

0.0

0.0

99.4

183.2

246.9

1 075.8

0.0

(267.0)

(198.2)

Other comprehensive income for the period, net of tax

183.2

(20.1)

977.0

Total comprehensive income for the period

594.3

447.5

1 803.4

Other operating expenses

Tax expense Profit for the period Other comprehensive income Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Actuarial gains / (losses) on defined benefit pension plans Other comprehensive income to be reclassified to profit or loss in subsequent periods: Currency translation differences / translation differences foreign operations Gain / loss on hedge of net investments in foreign operations

Profit for the period attributable to: Non-controlling interest

1.7

1.4

2.6

Equity holders of the parent

409.4

466.2

823.9

Total

411.1

467.6

826.5

Total comprehensive income attributable to: Non-controlling interest

1.7

1.4

2.6

Equity holders of the parent

592.6

446.1

1 800.8

Total

594.3

447.5

1 803.4

Payroll expenses and net financial income 1.1-30.06 2013 have been restated to reflect NOK 5.4 mill (income) in net of return on plan assets and interest expense on pension liabilities reclassified from payroll expenses to financial items. Ref note 7, Annual financial accounts 2013, DNV GL Group.

1

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HALF YEAR FINANCIAL REPORT 2014


BALANCE SHEET INTERIM CONDENSED CONSOLIDATED (UNAUDITED)

AMOUNTS IN NOK MILLION

DNV GL GROUP AS

30 JUNE 2014

30 JUNE 2013

1 JAN. 2014

ASSETS

Intangible assets

11 758.2

1 944.5

11 526.0

2 035.7

1 322.2

1 847.2

910.0

511.6

783.2

14 704.0

3 778.4

14 156.3

Trade debtors, work in progress and other receivables

8 444.5

4 922.0

7 520.2

Cash and bank deposits

3 632.2

2 025.2

3 874.7

Total current assets

12 076.7

6 947.2

11 394.9

TOTAL ASSETS

26 780.7

10 725.6

25 551.2

15 822.1

5 520.9

15 565.0

23.8

4.9

17.5

15 845.9

5 525.9

15 582.5

Provisions

3 616.9

1 370.3

4 232.5

Bank loans

1 100.0

0.0

0.0

Current liabilities

6 217.9

3 829.4

5 736.3

Total liabilities

10 934.8

5 199.7

9 968.8

TOTAL EQUITY AND LIABILITIES

26 780.7

10 725.6

25 551.2

Tangible fixed assets Non-current financial assets

Total non-current assets

Current assets

EQUITY AND LIABILITIES

Share capital and other equity Non-controlling interest

Total equity

Liabilities

HALF YEAR FINANCIAL REPORT 2014

9


STATEMENT OF CHANGES IN EQUITY INTERIM CONDENSED CONSOLIDATED (UNAUDITED)

AMOUNTS IN NOK MILLION

Equity as at 1 January 2013 - NGAAP

DNV GL GROUP AS

SHARE CAPITAL

OTHER EQUITY

TRANSLATION DIFFERENCES

NONCONTROLLING INTEREST

9.0

4 923.7

-

4.5

Effect of transition to IFRS Equity as at 1 January 2013 – IFRS

116.5 9.0

Profit for the period

5 040.2

4 937.2 116.5

-

823.9

Dividend

TOTAL EQUITY

4.5

5 053.7

2.6

826.5

(661.7)

(661.7)

Contribution in kind GL SE Group

36.5

9 323.5

9 360.0

Share capital fund issue

54.5

(54.5)

0.0

99.4

99.4

Actuarial gains / (losses) on defined benefit pension plans Exchange differences

877.6

Other equity changes Equity as at 1 January 2014 – IFRS

16.6 100.0

Profit for the period

14 587.4

877.6

409.4

Dividend

HALF YEAR FINANCIAL REPORT 2014

27.0

17.5

15 582.5

1.7

411.1 (335.5)

183.2

Other equity changes

10

10.4

(335.5 )

Exchange differences

Equity as at 30 June 2014 – IFRS

877.6

100.0

14 661.3

1 060.8

183.2 4.6

4.6

23.8

15 845.9


STATEMENT OF CASH FLOW INTERIM CONDENSED CONSOLIDATED (UNAUDITED)

AMOUNTS IN NOK MILLION

DNV GL GROUP AS

1 JAN.– 30 JUNE 2014

1 JAN.– 30 JUNE 2013

1 JAN.– 31 DEC. 2013

CASH FLOW FROM OPERATIONS

Profit before tax

587.3

676.3

1 318.4

0.0

0.0

(0.1)

(1.6)

0.0

(12.0)

428.0

131.0

474.4

Tax payable

(176.2)

(208.7)

(570.0)

Change in work in progress, trade debtors and trade creditors

(628.4)

(571.2)

(731.0)

Change in accruals, provisions and other

266.0

401.9

95.6

Net cash flow from operations

475.1

429.3

575.2

Net investments tangible and intangible assets

(475.5)

(213.1)

(471.4)

Net acquisitions / divestments

(237.7)

35.1

(12.1)

Settlement of minority shareholders KEMA

(670.0)

0.0

0.0

(98.9)

0.0

0.0

(1 482.1)

(178.0)

(483.5)

Dividend paid

(335.5)

0.0

(661.7)

Multi currency revolving credit facility drawn / borrowings

1 100.0

0.0

0.0

764.5

0.0

(661.7)

Net increase / (decrease) in cash and bank deposits

(242.5)

251.3

(570.0)

Liquidity at beginning of period

3 874.7

1 773.9

1 946.1

Demerger 1 January 2013 cash transferred

0.0

0.0

(172.2)

Cash in acquired companies

0.0

0.0

2 670.8

3 632.2

2 025.2

3 874.7

Gain / loss on disposal of tangible fixed assets Gain on divestments Depreciation, amortisation and impairment

CASH FLOW FROM INVESTMENTS

Change in other investments Net cash flow from investments

CASH FLOW FROM FINANCING ACTIVITIES

Net cash flow from financing activities

Liquidity at end of period

HALF YEAR FINANCIAL REPORT 2014

11


NOTES TO THE INTERIM ACCOUNTS FIRST SIX MONTHS OF 2014

01

BASIS FOR PREPARATION AND SIGNIFICANT ACCOUNTING PRINCIPLES

The condensed consolidated interim financial statements for the first six months of 2014 comprise DNV GL Group AS and its subsidiaries. With effect from 2014, including comparable figures from 2013, DNV GL Group has transitioned to International Financial Reporting Standards (IFRS) from Norwegian Accounting Standards (NGAAP). The condensed consolidated interim financial statements for DNV GL Group AS have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial statements for the year ending 31 December 2014 will be the DNV GL Group AS’ first IFRS financial statements (DNV GL will follow a simplified IFRS solution, which is an option under the Norwegian Accounting Act). Prior to adoption of IFRS, including the year ended 31 December 2013, the group’s primary financial statements were prepared in accordance with accounting principles generally accepted

02

in Norway (NGAAP). DNV GL Group AS has prepared an IFRS opening balance sheet as of 1 January 2013, see note 2 Transition to IFRS. The IFRS implementation effects identified are few and mainly related to amortisation of goodwill not allowed under IFRS and accounting for periodical maintenance for the Energy laboratories. The same principles used in the opening balance are used throughout the periods presented, therefore there are no changes in accounting principles in these interim condensed consolidated financial statements. A summary of significant accounting policies applied (IFRS) will be published together with the financial statements for the year ending 31 December 2014. The interim accounts do not include all of the information and disclosures required for the annual accounts, and these interim accounts should be read in conjunction with the consolidated financial statements of the Group for the year ended 2013, prepared under NGAAP. The interim accounts have not been audited.

TRANSITION TO IFRS

DNV GL Group have applied the following exemptions from retrospective application of certain IFRSs. Cumulative currency translation differences for all foreign operations are deemed to be zero as of 1 January 2013. With the exception of the acquisition of N.V. KEMA end of February 2012 and the business combination with GL SE Group in September 2013, the classification of former business combinations under previous NGAAP is maintained, and the carrying amount of goodwill recognized under NGAAP has not been adjusted. Under previous NGAAP DNV GL Group did not capitalise or measure development expenditures as assumed by IAS 38, and consequently no reliable estimate for development cost to be capitalised existed at 1 January 2013. Based on this, development costs are only recognized as an intangible asset subsequent to the transition to IFRS.

12

DNV GL GROUP AS

HALF YEAR FINANCIAL REPORT 2014

The main effects of transition to IFRS 1 January 2013 are: Acquisition related costs incurred in the acquisition of N.V. KEMA and in the Business Combination with GL have under NGAAP been considered part of the acquisition cost, these costs have in line with IFRS, been expensed in the period the costs were incurred.

A B

Goodwill related to the acquisition of N.V. KEMA and the Business Combination with GL have under NGAAP been amortised over the expected economic lifetime. These goodwill amortisations have been reversed to comply with IFRS. No impairment of Goodwill in excess of impairments reflected under NGAAP has been deemed necessary at 1 January 2013.

C

Periodic maintenance / overhaul related to the labora tories in Energy have under NGAAP been built up as provisions for expected maintenance cost. In the transition to IFRS, the periodic maintenance / overhaul has been recognized when the costs are incurred and amortised over its useful life.


NOTES TO THE INTERIM ACCOUNTS FIRST SIX MONTHS OF 2014

DNV GL GROUP AS

RECONCILIATION OF TRANSITIONAL EFFECTS:

1 JAN. 2013

BALANCE SHEET

EFFECT OF TRANSITION TO IFRS

IFRS

NGAAP

EFFECT OF TRANSITION TO IFRS

1 872.1

1 840.1

104.4

1 944.5

11 309.2

216.8

11 526.0

1 220.8

1 239.9

82.3

1 322.2

1 762.2

85.0

1 847.2

473.8

473.8

511.6

511.6

783.2

783.2

and other receivables

4 386.0

4 386.0

4 922.0

4 922.0

7 520.2

7 520.2

Cash and bank deposits

1 773.9

1 773.9

2 025.2

2 025.2

3 874.7

3 874.7

TOTAL ASSETS

9 622.2

104.5

9 726.7

10 538.9

186.7

10 725.6

25 249.4

301.8

25 551.2

4 937.2

116.5

5 053.7

5 331.5

194.3

5 525.9

15 269.7

312.8

15 582.5

Provisions

1 333.1

(12.0)

1 321.1

1 377.9

(7.6)

1 370.3

4 243.4

(11.0)

4 232.5

Current liabilities

3 351.9

3 351.9

3 829.4

3 829.4

5 736.3

TOTAL EQUITY AND LIABILITIES

9 622.2

9 726.7

10 538.9

10 725.6

25 249.4

Intangible assets Tangible fixed assets

NGAAP

EFFECT OF TRANSITION TO IFRS

A, B

1 823.7

48.5

C

1 164.8

56.0

1 JAN . 2014

NGAAP

AMOUNTS IN NOK MILLION

REF.

30 JUNE 2013

Non-current financial assets

IFRS

IFRS

Trade debtors, work in progress

Equity

A, B, C

104.5

1 JAN.– 30 JUNE 2013

STATEMENT OF INCOME

AMOUNTS IN NOK MILLION

186.7

REF.

NGAAP

EFFECT OF TRANSITION TO IFRS

IFRS

5 736.3 301.8

25 551.2

1 JAN.– 31 DEC. 2013

NGAAP

EFFECT OF TRANSITION TO IFRS

IFRS

Total operating revenue

6 665.2

6 665.2

15 234.1

15 234.1

Payroll expenses

3 796.2

3 796.2

8 446.3

8 446.3

Depreciation

C

102.8

1.8

104.6

267.7

3.7

271.4

Amortisation and impairment

B

76.0

(49.5)

26.4

455.6

(252.6)

203.1

A, C

2 080.0

(2.6)

2 077.4

4 887.4

93.5

4 980.9

610.2

50.4

660.6

1 177.1

155.4

1 332.5

15.7

15.7

(14.1)

(14.1)

(208.7)

(208.7)

(491.9)

(491.9)

467.6

671.1

Other operating expenses Operating profit Net financial income Tax expense Profit for the period

417.2

50.4

155.4

826.5

HALF YEAR FINANCIAL REPORT 2014

13


NOTES TO THE INTERIM ACCOUNTS FIRST SIX MONTHS OF 2014

03

SIGNIFICANT CHANGES IN GROUP STRUCTURE

The following acquisitions have been made since 1 January 2014:  May 2014: DNV GL AS acquired 70% of the shares in 6 Marine Cybernetics AS. In addition, DNV GL AS has entered into an agreement with the owners of the remaining 30% of the shares, where DNV GL AS has an obligation to acquire the remaining shares after three years at an agreed price. 100% of Marine Cybernetics AS has been included in the DNV GL Group AS consolidated accounts from 1 May 2014 with no minority interest. The expected payment for the remaining shares has been reflected as a liability under other provisions. A purchase price allocation (PPA) for the acquisition will be included in the 2014 annual financial accounts of DNV GL Group AS. 9 May 2014: DNV GL Group AS acquired the remaining 25.7% of the shares in the NV. KEMA Group. As part of the acquisition agreement from December 2011, DNV GL Group AS had an agreement with the minority share owners, where DNV GL Group AS

04

DNV GL GROUP AS

had a call option on acquiring the remaining shares after two years. The option structure was such that it was unlikely at time of acquisition that an acquisition of the remaining 25.7% of the shares would not take place after two years. 100% of NV. KEMA has been included in the DNV GL Group AS consolidated accounts from 1 March 2012 with no minority interest and the net present value of the expected payment for the remaining shares has been reflected as a liability under other provisions. This liability was settled 9 May 2014. In January 2014, NOK 47 million convertible loan to StormGeo Holding AS, including interest, was converted to equity. In addition, a capital contribution/share issue of NOK 99 million has been made. After these transactions, DNV GL Group AS’ ownership (through DNV GL AS) in StormGeo Holding AS is 27%. The investment is recognized in accordance with the equity method in the accounts of DNV GL Group AS.

OPERATING REVENUE PER BUSINESS AREA

AMOUNTS IN NOK MILLION

1 JAN.– 30 JUNE 2014

1 JAN.– 30 JUNE 2013

1 JAN.– 31 DEC. 2013

Business area: Maritime

4 352.0

2 741.4

5 700.3

Oil & Gas

3 119.2

1 467.7

4 218.7

Energy

1 498.2

1 188.6

2 612.3

Business Assurance

1 199.4

1 020.8

2 217.2

377.2

187.0

445.0

78.8

59.8

40.6

10 624.8

6 665.2

15 234.1

Software Other Total operating revenue

14

HALF YEAR FINANCIAL REPORT 2014


NOTES TO THE INTERIM ACCOUNTS FIRST SIX MONTHS OF 2014

05

DNV GL GROUP AS

PROFORMA CONSOLIDATED REVENUE

As described in the Annual Financial Accounts of DNV GL Group 2013, note 2, the business combination with GL SE Group was completed 11 September 2013. 100% of GL SE Group was included in DNV GL Group AS consolidated accounts from 1 October 2013.

The proforma consolidated revenue reflects the group as if the business combination with GL SE Group was completed 1 January 2013; i.e. revenue figures for GL SE Group are included full year.

OPERATING REVENUE 1 JAN.– 30 JUNE 2013

AMOUNTS IN NOK MILLION

HALF-YEAR ACCOUNTS 1 JAN.– 30 JUNE

ADJ GL SE 1 JAN.– 30 JUNE

PROFORMA 1 JAN.– 30 JUNE

OPERATING REVENUE 2013 AUDITED ACCOUNTS 1 JAN.– 31 DEC.

ADJ GL SE 1 JAN.– 30 SEPT.

PROFORMA 1 JAN.– 31 DEC.

Business area: Maritime

2 741.4

1 063.9

3 805.3

5 700.3

1 606.9

7 307.2

Oil & Gas

1 467.7

1 289.3

2 756.9

4 218.7

1 965.9

6 184.6

Energy

1 188.6

384.1

1 572.6

2 612.3

600.5

3 212.8

Business Assurance

1 020.8

35.2

1 056.1

2 217.2

67.4

2 284.6

187.0

111.9

298.9

445.0

174.7

619.8

59.8

5.9

65.7

40.6

3.6

44.2

6 665.2

2 890.3

9 555.5

15 234.1

4 419.1

19 653.2

Software Other Total operating revenue

HALF YEAR FINANCIAL REPORT 2014

15


SAFER, SMARTER, GREENER

HEADQUARTERS: DNV GL AS Veritasveien 1 NO-1322 Høvik, Norway Tel: +47 67 57 99 00 www.dnvgl.com

©DNV GL 08/2014 Design: Fasett

DNV GL 2014 first half year report  

DNV GL publishes here its half year report for the first half of 2014. It shows strong performance and a proforma revenue growth of 11%.

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