#1Cargotec Investor Day Shanghai 25th September 2019 MacGregor stronger together with TTS MSC GÜLSÜN PANAMA IMO 9839430 Jane Chen VP Strategy and Head of China MSC MACGREGOR 1 A#2Table of contents Global and China market overview MacGregor's TTS acquisition and TTS Chinese JVs Key actions to win through customer success Conclusion MACGREGOR#3Headwinds in short term; Clarksons forecasted the start of the recoveries for merchant will be 2020-2021; Chinese State Owned Enterprises important for MacGregor MACGREGOR#4Market Trade tension & the concerns of recession casting clouds; shipowners prioritizing regulatory compliance MERCHANT Soft short term demand continues, RoRo/Cruise/Navy in positive cycle Emerging economies growth insufficient to compensate the slowing growth in advanced economies Clarkson downgraded 2019 seaborne tonne-mile growth forecast from 3.4% to 2.2% in September Bulker, container and tanker demand disappointing, RoRo positive cycle OFFSHORE Oil price supports O&G development though pressured by demand outlook Offshore field development slowly picking up, activities in offshore wind Slow increase in offshore support vessel demand expected, e.g. tugs and research Fishery vessel market more steady from a slower start, promising outlook (e.g. fleet renewal in Russia) SERVICES Ship owners prioritising regulatory compliance retrofits over other spending Ship owner earnings at low level Regulatory driven investment limit owners' ability to spend elsewhere BDI 5+ year high, owners delaying repairs to enjoy high charter rates Financing tight → risk of bankruptcies and further consolidation MACGREGOR 4#50 34532250 15 10 50 Market On the path of a slow recovery, long term outlook with demand driven by regulations & supply-demand rebalancing Projected Demolition By Sector (m GT) Accelerated demolition due to environmental and regulatory pressures Contracting history and forecast March 2019 No. of ships, Merchant ship types > 2000 gt, excl ofs and misc 2500 2000 1500 historical avg 1996-2018: 1559 vessels 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 800 700 600 500 400 300 200 100 ■Tankers Bulkers Containerships Gas Carriers ■Other Source: Clarksons Research, March 2019, next update end Sep. MACGREGOR LO ° Avg. 08-18 1000 500 Avg. 96-18 2015 2016 2017 2018 2019 2021 Tanker OLNG/LPG Bulker Container MPP/GC RoRo/PCC Cruise Contracting history and forecast 2015 - 2025, March 2019 No. of units, Mobile offshore units Base case forecast Brent USD 75/bbl in 2022 2015 S 2016 2017 2018 Survey Mobile drilling Construction historical avg 2008-2018 479 units 2019 2020 220 Mobile production Logistics AHTS PSV 2023 2024 2025 Rescue & Salvage Utility Support#6Market Environmental regulations & global economy uncertainties dragging short term investment, mega mergers in Asia, European yards retaining big value stake Global Contracting Activity (1st September 2019) No. Builder country split YTD 1st Sep 2019 m. CGT TOTAL (>2,000 Dwt/GT**) 2017 2018 2019ytd 2017 1,264 1,324 487 29.6 2018 2019yt 2017 m. CGT 2018 2019ytd 3% 5% 6% 10% 13% 34.7 13.5 29.6 34.7 13.5 28% Vessel Type Bulkers 424 463 129 9.1 9.6 2.9 9.1 9.6 2.9 38% Tankers 376 266 124 8.5 6.3 3.1 8.5 6.3 3.1 44% Containerships 147 213 56 4.0 6.2 1.4 4.0 6.2 1.4 29% Gas Carriers 48 123 57 1.8 6.8 3.0 1.8 6.8 3.0 Offshore 47 56 14 0.8 1.0 0.5 0.8 1.0 0.5 Others 222 203 107 5.4 4.7 2.7 5.4 4.7 2.7 25% 34% Builder Country/Region 30% China 598 517 212 4.8 12.1 5.1 4.8 12.1 5.1 16% 12% South Korea 203 288 120 2.2 7.8 4.6 2.2 7.8 4.6 8% Japan 215 376 80 2.4 3.5 1.6 2.4 3.5 1.6 Nbr of Ships Value CGT 487 ships $37.8b 13.5m Europe 99 93 51 3.7 4.0 1.7 3.7 4.0 1.7 Other 149 50 24 16.5 7.3 0.4 16.5 7.3 0.4 ■Japan Korea ■China ■Europe Others Source: Clarksons Rsearch, Aug 2019 actual, March 2019 forecast MACGREGOR 6#7Market CSSC & CSIC control -40% Chinese shipbuilding; SOEs promote “internal synergy", and ambition to lead the industry m. CGT Chinese Yard Annual Contracting 25 20 20 100% CSIC ■CSSC ■COSCO SHIPPING 招商局集團 ■YZJ Holdings ■New Century Other CHINA MERCHANTS GROUP 59% 15 15 64% 44% 43% 10 10 5 0 2014 2015 MACGREGOR 7 State yards share 54% 36% CSSC CSIC 80% 60% 57% 60% 46% 40% 40% 20% 0% 2016 2017 2018#8Market Chinese shipowners global influence increasing, led by the major SOEs like China COSCO Shipping and China Merchants Fleet Growth: Looking At Three Key Levers Greece China States The graph shows the impact of deliveries, demolition and net secondhand (S&P) market activi- ty on the fleets of today's six largest owner countries (according to current fleet ton- nage), since the start of 2015, in GT terms. Data is basis vessels of 100+ GT and can be down- loaded directly from the timeseries section of World Fleet Register. The author of this feature article is Alex Springer. Any views or opinions presented are solely those of the author and do not necessarily repre- sent those of the Clarksons group. MACGREGOR Japan Germany United Norway 11 Deliveries Demolition ■Net S&P m. GT -40 -20 0 20 40 60 Source: Clarksons Research 8 Undoubted leader, quick to seize market opportunities, Greek owners remained very active in the past 5 years (for new build & 2nd hand). Old Greek owners with long history and experienced rounds of cycles are proficient in ship management, operations and capital operations, still getting support from European banks and Chinese leasing companies albeit tight financing. 2018, China replaced Japan as Number 2 for the 1st time, driven by Chinese seaborne trade demand; own shipbuilding capacity; scrap-to-build, & OBOR projects. Chinese shipping leasing companies increasing influence, supported 15% (new build and 2nd hand) during 2016-2018. China COSCO Shipping and China Merchants seen with potential to grow along consolidation trend.#9TTS acquisition at right time to improve the resilience of the new MacGregor, TTS JVS enhances China strengths MACGREGOR#10TTS acquisition 1st Aug, MacGregor welcomed 600+ TTS new colleagues (and ~200 in TTS JVs) MACGREGOR TTS vex uvex MACGREGOR 10 MACGREGOR TSיור TTS Singapore Pte Ltd HY#11TTS acquisition Together, we can support the maritime industry in a stronger and more impactful way than we could when separate Our joint portfolio and market positions are strong We can share knowledge and innovate We will create more value for our customers We have a larger service installed base, wider service network and service growth potential MACGREGOR 11 We are uniquely positioned in China through the joint ventures G TOGETHER we will create the new MacGregor, building on the best of both companies#12TTS acquisition Comprehensive lifecycle support provided by 850 specialists throughout 60 service centres in 31 countries worldwide MACGREGOR 12#13TTS acquisition In China, certain new equipment business in TTS JVs will be hold-separate to provide customers a 2-year transition period TTS A Mac company CSIC TTS Bohai Machinery Co. Ltd JV partner affiliate of CSIC Based in Dalian MACGREGOR 13 TTS A Mac company CSSC TTS Hua Hai Ships Equipment Co. Ltd. JV partner affiliate of CSSC Based in Shanghai TTS A MacGenge company CSSC TTS SCM Marine and Offshore Machinery Co JV partner affiliate of CSSC Based in Guangzhou#14TTS acquisition MacGregor has long history cooperating with CSSC/CSIC; close relationship built on C-level between MacGregor and CSSC; TTS JVs further complement the connections MACGREGOR 14#15TTS acquisition MacGregor has a strong market position both globally and in China; competing effectively with foreign and local players MACGREGOR 15 Japanese Manabe Zoki European Navalimpianti, Huisman, Liebherr, NOV Norway, Kongsberg (Rolls Royce) South Korean SMS. Chinese Flutek TTS temporary hold-separate in China for certain new equipment Goodway, BrightSea, Jiangsu Masada, IHI Wuhan#16Actions taken to win through customer success with strategic must win battles of Customer Centricity & Intelligent Services, addressing different customer needs MACGREGOR#17Actions Customer Centric approach to address certain customers' fit- for-purpose needs and improve competitiveness Customer survey feedback demonstrates "one size does not fit all❞ The request for low-price simple products attracts price leading low specification makers to buy market share Value engineering for product segmentation initiated to complement the existing portfolio, first offering starts October 2019 MACGREGOR 17 MACGREGOR#18Actions Meanwhile, intelligent services like On Watch Scout innovated to serve shipowner's advanced needs of life cycle support with connectability shiss MACGREGOR Condition & Predictive Information Working Record Health Status on- demand 18 OnWatch Scout the next generation digi offering, initially connecting cranes to advanced monitoring systems continuously analyse component condition and predict maintenance needs Wire Life Cycle Calculator Chief Engineer Predictive Warning Recomme nded Action Part on Vessel Order part Track or service Plan & Execute#19Actions Intelligent service solutions are strongly connecting MacGregor and top tier Chinese shipowners ■ In China, pilot cases started with top tier ship owners Based on real customer pain-points MacGregor On Watch Scout See Tomorrow. Today C ONWATCH SCOUT| <8 Fleet Analytic - Saturn Jonathan Smith 13/6/2019-29/6/2019 DOWNLOAD PDF ■ Applying machine learning algorithms Cargotec cloud connectivity ■ Intuitive customer interface on and offshore Monitoring with recommended actions to reduce unplanned downtime and maximise availability ☐ CARGOTEC 19 L ☐ MODEL:428 LJ GN Equipment System Events All (8) Event count Analytics A Notifications 801 CRA 1 (4) 1001 CRA 2 (2) 1001 CRA 3 (1) 1001 CRA 4 (1) 0 0 0 0 D HPU Tank Pump Slew Tugger Main winch AHC Whip winch Control Electrical Technical documents Status Event Code Equipment System Event number Dates 自 Service reports Critical 31 031 801 CRA 1 Control Meaning/Consequences Angle difference >3 between primary and secondary angle-encoder on jib Time vs Oil Pressure [Winches - Pumps - Motors] E Oil pressure (bar) Normal interval 200 100 Crane 1 150 bar D 16 Jun 21 Jun 26 Jun 1 Jul 6 Ju 11 Ju Time 801 CRA 1 100 CRA 2 100t CRA 3 1001 CRA 4 Time vs Temperature [Control System] Time (hrs) 200 100 -20-0 0-20 Normal interval 110 hrs 6 16/6/19-19/6/19, 17/7/19,16/8/19, 17/9/19 Accumulated torque on slewing bearing Accumulated torque is calculated from: (weight in hook)*(outreach) x (time) 180 180 BOT CRA 1 12000 8000 180° 100T CRA 2 90° 12000 270° 270 100T CRA 3 100T C TCRA 4 90 90° 8000 270 270° 8000 12000 Average Lift Load 20-40 40-60 Temperature (") 50-80 BOT CRA 1 100T CRA 2 100T CRA 3 100T CRA 4 0 D#20Conclusion MACGREGOR#21Conclusion Conclusion 雪龍 2 YUE LONG 2 ☐ Uncertainties in the global economy & trade, combined with environmental compliance requirements, puts pressure on short term market; the recovery of merchant market expected earlier than offshore. Cyclical market is part of the maritime industry nature; MacGregor have been long in the industry as an experienced veteran with asset light competence center + hubs model and strong execution capabilities.COM TTS acquisition completed at the right time to support business resilience; the integration work has commenced with services growth potential through serving the combined installed base and a strengthened global support network. Chinese customers increasingly important, particularly the mega SOEs; the strategic cooperation between MacGregor and the key SOEs will be complemented by TTS JVs to secure the growth of the population of the install base for service also in China, though hold-separate*. IMO 9829241 Intelligent services innovation, such as OnWatch Scout, increases shipowner's asset value and safety, builds a stronger bond between MacGregor and the key customers along the value co-creation journey... and new services revenue will follow. *Certain new equipment business in China is subject to temporary hold separate, which does not apply to aftersales services. MACGREGOR 21#22a MACGREGOR