Beerenberg

Quarterly Report • Feb 23, 2022

BEERENBERGAS

Unaudited 4^th Quarter and preliminary Annual results 2021

Headlines

"2021 ended on a strong note with 21% revenue growth in $Q4 y/y''$

THIS QUARTER

Operating Revenue	619 MNOK
EBITDA	62 MNOK
Cash Flow from Operations	63 MNOK
Order Intake	130 MNOK
SIF	2,2
Employees*	1247

* Employees end of quarter

REVENUE

EBITDA

Group overview

The highlights for Beerenberg (Beerenberg AS consolidated) in the 4^th quarter 2021 were:

• Strong activity in the period.
• Revenue was MNOK 619, up 21% compared to 4^th quarter 2020. Activity increasing as Covid -19 restrictions soften.
• EBITDA of MNOK 62, up from MNOK 57 compared to Q4 2020.
• Total order intake in the period was MNOK 130 vs MNOK 22 in the 4^th quarter of 2020.
• Estimated order backlog at the end of the quarter was BNOK 7,3 compared to BNOK 8,3 at the end of 4^th quarter last year.

Income Statement

Revenue in 4^th quarter was MNOK 619 compared to MNOK 511 in 4^th quarter 2020. The increase from the corresponding quarter last year relates mainly to activity increasing as Covid-19 restriction soften. In the 4^th quarter 2021 the group had normal activity within most areas.

EBITDA in 4^th quarter 2021 was MNOK 62 up from MNOK 57 in the corresponding quarter last year. EBITDA margin in line with long term average.

Financial cost in the 4^th quarter 2021 was MNOK 22. down from MNOK 38 in the 4^th quarter 2020. High financial cost in 2020 was due to refinancing cost and currency effects.

Net profit in 4^th quarter 2021 was MNOK 21 compared to a net profit of MNOK 4 in 4^th quarter 2020.

Beerenberg - Unaudited Financial Report

Balance Sheet

The balance sheet reflects the higher activity level in the quarter compared to last year. The groups cash position has increased compared to last year due to sale of own bonds and net cash flow from operating activities. Total assets were MNOK 1827 at the end of the quarter, with an equity ratio of 30%.

Total non-current assets were MNOK 1034, down from MNOK 1037 compared to the end of 4^th quarter 2020. Current assets of MNOK 796 were up from MNOK 639 same period last year.

Total current liabilities of MNOK 601 were up from MNOK 507 at the end of 4^th quarter 2020 and total noncurrent liabilities were MNOK 683 compared to 682 at the end of 4^th quarter 2020.

The net interest-bearing debt was MNOK 551 compared to MNOK 599 in 4^th quarter 2020.

Net working capital ended at MNOK 121 in the period, compared to MNOK 95 at the end of 4th quarter 2020.

Cash Flow

The Groups cash position was MNOK 193 by the end of 4^th quarter 2021 compared to MNOK 140 as by the end of the 4^th quarter 2020. The reason for the increased cash position is sale of own bonds and cash flow from operating activities.

Cash flow from operating activities was positive by MNOK 63 in 4^th quarter 2021 versus positive MNOK 58 in corresponding period last year. No specific effects in the period.

Total cashflow in 4^th quarter 2021 was negative by MNOK 2 compared to negative MNOK 165 in 4^th quarter 2020. The difference between the periods is mainly refinancing effects in Q4 2020.

Capex was MNOK 15 compared to MNOK 9 same quarter last year.

Order Backlog & Market

The tender activity has been stable during the 4^th quarter of 2021 relating both to Benarx/Subsea deliveries and new build projects.

Total order intake of new contracts was approximately MNOK 130 for the period. The major portion of the order intake consists of a Frame Agreement with Norcem which includes the CCS (Carbon capture and storage) project in Brevik, Norway.

The current estimated order backlog (including frame agreements and options) is BNOK 7,3.

HSEQ

At the end of 4^th quarter Beerenberg had 1247 employees, up from 1203 last quarter.

Two serious incident this quarter, results in a total Serious Incident Frequency (SIF) in the period of 2,2 and 1,7 during the last 12 months.

FSG

In the ESG strategy three different areas have been defined where Beerenberg is determined to improve in the future. In the following we describe these focus areas and key KPI's for 2022.

Innovate to reduce emissions and waste

By using materials and methods that reduce emissions, the group contribute to less strain on our own and customers' logistics and climate footprint. At the same time, the group will adopt new technology, and actively look at the use of our products and solutions in new markets.

Goals

• 1. Reduce emissions to the external environment.
• 1. Choose materials with less climate footprint.
• 1. Use new technology and new methods to reduce our own and customers' climate footprint.
• 1. Increased collaboration with suppliers to explore circular solutions and adoption of new technology.
• 1. Utilize the groups products to reach new sustainable markets

By systematically investing in competence and management development, the group ensure a safe workplace, stable operations and cost efficiency. By being an attractive employer with engaging leadership, the group attract employees with the desired competence and commitment.

Goals

• 1. Prevention of incidents and injuries through risk identification and prevention
• 1. Facilitate a health-promoting, meaningful and inclusive work environment
• 1. Attract, develop and retain professional competence at all levels and across functions in Beerenberg
• 1. Cooperation with suppliers with high ethical standards

Open and transparent about ESG risk and opportunities

Responsible management is important to the group and is important for creating a sustainable business culture. By clarifying the groups ambition and implementation of the strategy, sustainability will be an integral part of the groups activity and will be visible to employees, business associates and investors

Develop people and create social security

Goals

• 1. Report on ESG risks and opportunities
• 1. Adhere to the principles of responsible business practice throughout the organization
• 1. Continue the integration of ESG in management systems and decision-making processes
• 1. Be open and transparent about our sustainability work

	ESG pillar	Focus area	Key KPIs	2021 Actual	2022 Goal	Impact on UN's SDGs
			1 Reduced release of microplastics in connection with surface treatment	27%	$>25\%**$	RESPONSIBLE 13 GLIMATE CONSUMPTION
	(\$) Sustainable materials methods B Innovation for reduced Climate emissions and waste action		2 Reduced CO2 footprint in connection with surface treatment	NA	>10%	AND PRODUCTION
		Sustainable	3 Number of new sustainable technology or solutions tested and adopted	$\overline{4}$	>3	14 UFE BELOW WATER
S			4 Number of suppliers with a ESG program	NA	>50%
$\boldsymbol{\omega}$ tit			5 Share of turnover in new and sustainable markets	3%	>10%
	Developing people and generating safety	ਬ੍ਰਿੰ Responsible procurement Safe work environment くっ	1 Numbers of TRIF	7.9	$3$	3 GOOD HEALTH AND WELL-BEING
$\overline{\mathbf{o}}$ $\overline{\phantom{0}}$			2 Proportion of sick leave	8,9%	$< 6\%$
Ω			3 Internal recruitment of managers	78%	>80%	O DECENT WORK AND O FCONDAIL GROWT
G ш		Attractive workplace	4 Proportion of suppliers signed declaration on ethical guidelines and human rights policy	NA	80%
		ę,	1 Report on ESG in quarterly and annual financial reports	NA	5	8 DECENT WORK AND
		ESG	2 Proportion of employees who have completed training in ethics	79%	>90%
	governance ₩	ESG	3 Number of decision cases per year where sustainability is emphasized	NA	5
	ESG transparency	$\wedge$ / Business	communication 4 Publish an external article in connection with the quarterly report NA 4
	& governance	ethics	* Benchmark 2020. Scope surface treatment Offshore ** Benchmark 2020. Scope surface treatment Offshore and Onshore

Beerenberg makes an effort to increase activities within sustainable areas.

Beerenberg wish to contribute to reduced climate emissions by upgrading insulation and thus facilitating reduction in energy spending.

In Korea, there is now a recovery in the market after a period of low activity and little newbuilding prospects for Beerenberg. Incentives from the Korean authorities to support projects such as wind power, hydrogen production and CO2 capture will contribute to reducing climate emissions. With this, projects will emerge that can generate new and sustainable work for Beerenberg, among other things through an already established collaboration with the Korean company, Lotte Chemicals.

Reduce CO2 emissions

The first collaborative project implemented with Lotte Chemicals is an assignment at one of their petrochemical plants which involves upgrading insulation on a certain part of the plant. After this upgrade, we will use our expertise to monitor the amount of energy saved in the process, which in turn will reduce CO2 emissions. Beerenberg has assisted in the planning and made calculations on the insulation thickness and the amount of material needed when changing insulation of approximately 7000 meters of pipelines.

For a period of more than a year, Beerenberg will monitor temperatures on the pipes, look at heat loss and calculate how much energy is saved and thus CO2 emissions. If successful this project is likely to open up significant

opportunities for Beerenberg across multiple business areas

The green shift

Overall there are several markets where Beerenberg has identified opportunities in the wake of the green shift and sustainable business.

Among other things, full efforts are being made to use LNG as fuel for vessels. LNG must be minus 162 degrees, and special types of insulation are required for equipment and storage tanks, which Beerenberg can perform with Aerogel products. Beerenberg has identified many areas where Aerogel can play an important part.

Changes in car production also provide opportunities for Beerenberg's insulation solutions. The Korean and other markets have a very large car production that is now gradually shifting to producing electric cars. In this type of production, there are requirements for insulation of car batteries, and here our solutions can be a good alternative, and thus a possible new and exciting market for Beerenberg.

New requirements provide new opportunities

In the fight to preserve the environment as best as possible, recycling of old insulation material is an important contribution. Waste constitutes large volumes, and here Beerenberg are looking at different solutions to be able to contribute with our expertise. Instead of dumping the material that is removed, it can be repainted or melted into new products. So far, this is only at the planning stage. Being in this market at an early stage means that Beerenberg has a good opportunity to influence the process for future isolation handling.

Business segments

Services

The Service segment revenue for 4th quarter was MNOK 555, an increase of 30% compared to corresponding period last year mainly due to softening of the Covid-19 restrictions in 4^th quarter 2021. The EBITDA margin was 8,0%.

Benarx

The Benarx segment reported a revenue of MNOK 84 for the quarter with an EBITDA of 20,6%. Revenue was down 20% compared to the same period last year. The quarter was affected by delays on projects as well as impacts of the Covid-19 pandemic internationally and especially in Asia.

Figures & notes

Condensed Consolidated Income Statement

Group Summary	Q4	Q4	YTD	YTD	FY
Amounts in NOK million Note	2021	2020	2021	2020	2020
Operating revenue	$\mathfrak S$ 619,4	511,2	2 1 3 6,0	1722,7	1722,7
Operating expenses	557.7	454.8	1919,6	1506,0	1506,0
EBITDA	6 61,7	56,5	216,5	216,7	216,7
Depreciation	12,5	14,1	49,1	54,4	54,4
EBITA	49,2	42,4	167,4	162,3	162,3
Amortisation	2,2	4,1	14,3	16,5	16,5
Operating profit (EBIT)	47,1	38,3	153,1	145,8	145,8
Finance costs - net	$\overline{4}$ 21,5	38,3	82,2	90,8	90,8
Profit before tax (EBT)	25,6	O, O	70,9	55,0	55,0
Income Tax expense	4.5	$-3.5$	14.4	8.5	8,5
Net profit	21,1	3,6	56,4	46,5	46,5
Profit for the period is attributable to:
Shareholders of the parent company	20,4	4,2	57,8	47.1	47,1
Non controlling interests	0,7	$-0,6$	$-1,3$	$-0,6$	$-0,6$
Net profit	21,1	3,6	56,4	46,5	46,5
Basic earnings per share for 1.000.000 A shares (NOK) Diluted earnings per share are identical as there are	0,02	0,00	0,06	0,05	0,05
no dilutive effect
EBITDA margin	10,0%	11,0%	10.1%	12,6%	12,6%
EBITA margin	7,9%	8,3%	7,8%	9,4 %	9,4 %

Condensed Consolidated Statement of Comprehensive Income

		Q4	Q4	YTD	YTD	FY
Amounts in NOK million	Note	2021	2020	2021	2020	2020
Net profit for the period		21,1	3,6	56.4	46,5	46.5
Other comprehensive income:
Conversion differences		0,7	$-1.9$	$-3.4$	$-1,1$	$-1,1$
Change in value of derivatives		1,1	5,4	6,1	0,0	0,0
Total comprehensive income		22.9	7.1	59,1	45.3	45,3

Condensed Consolidated Balance Sheet

$\bar{t}$

Group Summary		Q4	Q4	Q4
Amounts in NOK million	Note	31.12.2021	31.12.2020	31.12.2020
Intangible assets		19,2	31,1	31,1
Goodwill		782,8	782,8	782,8
Property, plant and equipment		208,3	213,6	213,6
Financial fixed assets		20,2	9,9	9,9
Deferred tax assets		3,0	0.0	0,0
Total non-current assets		1033,6	1037,3	1037,3
Inventory		77,8	66,2	66,2
Accounts receivables from customers		306,4	249,6	249,6
Earned, not invoiced accounts receivables		195,2	144,0	144,0
Other receivables		23,7	39,2	39,2
Cash at bank		193,3	139,7	139,7
Total current assets		796,4	638,8	638,8
TOTAL ASSETS		1830,0	1676,0	1676,0
Share capital		26,7	26,7	26,7
Share premium		240,3	240,3	240,3
Other equity		279,5	219,0	219,0
Non controlling interests		$-0,1$	0,8	0,8
Total equity		546,4	486,9	486,9
Pension liabilities		17,3	12,2	12,2
Deferred tax liabilities		0,0	0,3	0,3
Interest bearing long-term liabilities	4	665,2	668,4	668,4
Derivatives		0,0	1,1	1,1
Total non-current liabilities		682,5	682,0	682,0
Interest bearing short-term liabilities	$\overline{4}$	78,9	70,8	70,8
Supplier liabilities		188,0	135,3	135,3
Tax payable		18,5	12,0	12,0
Social Security, VAT and other taxes		91,0	72,3	72,3
Other short-term liabilities		203,2	196,9	196,9
Derivatives		0,0	0,0	0,0
Warranty liabilities		21,5	19,8	19,8
Total Current Liabilities		601,1	507,2	507,2
TOTAL EQUITY & LIABILITY		1830,0	1676,0	1676,0

Condensed Consolidated Statement of Change in Equity

Amounts in NOK million Equity
						attributable	Non
	Share	Share	Conversion	Hedging	Retained	to parent	Contollina
	capital	premium	reserve	reserve	earnings	Company	interests	Total equity
01. January 2021	26,7	240,3	2,3	$-0.9$	217,6	486,1	0,8	486,9
Net profit					57,8	57,8	$-1,3$	56,4
Other Comprehensive Income Changes in non-controlling			$-3,4$	6,1		2,7		2,7
interests							0,4	0,4
Equity as per 31.12.2021	26.7	240.3	$-1,0$	5,2	275.4	546.5	$-0.1$	546,4

Amounts in NOK million	Share capital	Share premium	Conversion reserve	Hedging reserve	Retained earnings	Equity attributable to parent Company	Non. Contolling interests	Total equity
01. January 2020	26,7	240,3	3,4	$-0,8$	170,5	440,1	0,0	440,1
Net profit					47,1	47,1	$-0.6$	46,5
Other Comprehensive Income Changes in non-controlling			$-1,1$	0,0		$-1,1$		$-1,1$
interests							1,5	1,5
Equity as per 31.12.2020	26,7	240.3	2,3	$-0,9$	217,6	486.1	0,8	486.9

Condensed Consolidated Statement of Cash Flow

	Q4	Q4	YTD	YTD	FY.
Amounts in NOK million	2021 Note	2020	2021	2020	2020
EBITDA	61,7	56,5	216,4	216,7	216,7
Taxes paid	$-0,6$	$-16,4$	$-13,3$	$-16,4$	$-16,4$
Change in net working capital	$-1,2$	22,9	$-26,4$	$-21,7$	$-21,7$
Changes to other time restricted items	2,9	$-5,3$	0,6	$-4,7$	$-4,7$
Net Cash flow from operating activities	62,8	57,7	177,3	174,0	174,0
Capex	$-14,8$	$-8,5$	$-41,8$	$-17,2$	$-17,2$
Net cash flow from investing activities	$-14,8$	$-8,5$	$-41,8$	$-17,2$	$-17,2$
Net repayment of interest bearing debt	$-25,2$	$-180,9$	$-12,9$	$-186,9$	$-186,9$
Changes in non-controlling interests	0,1	0,0	0,1	1,6	1,6
Net interest paid	$-24,5$ 4	$-33,3$	$-69,0$	$-88,6$	$-88,6$
Net cash flow from financing activities	$-49,6$	$-214.2$	$-81,8$	$-273,8$	$-273,8$
Total cash flow	$-1,5$	$-164.9$	53,6	$-117,1$	$-117,1$
Opening balance net bank deposits	194,9	304,7	139,7	256,8	256,8
Closing balance net bank deposits	193,3	139,7	193,3	139,7	139.7

Notes

Note 1 - General

Beerenberg AS is a company domiciled in Norway. The consolidated financial statements of Beerenberg AS comprise the company and its subsidiaries, together referred to as the group. The Beerenberg Group was established 01. March 2013, as a result of the Beerenberg AS acquisition of all shares in Beerenberg Holding AS.

Beerenberg is delivering products and services to its customers in complex environments implying operational risk with regards to quality, cost, time and injuries and accidents (HSE). Beerenberg works systematically to mitigate and manage risk on all levels. The annual report for 2020 provides further information on risks and uncertainties applicable to Beerenberg.

Shareholders in Beerenberg AS are specified in table below.

Shareholders	A-Shares	$\%$	B-Shares	$\%$	Total Shares	%
Sequiah IV L.P.	821940	82.2 %	223 247 653	83.9%	224 069 593	83.9%
AlpInvest Partners Co-Investments 2012 I C.V.	92 1 21	9.2%	24 931 110	9.4%	25 023 231	9.4%
AlpInvest Partners Co-Investments 2011 II C.V.	23319	2.3%	6310883	2.4%	6334202	2,4%
Management and others	62620	6.3%	11510354	4.3%	11572974	4,3%
Total	1 000 000	100.0%	266 000 000	100.0%	267 000 000	100.0%

Note 2 - Basis for preparation

The interim financial statements for the group are prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the European Union and their interpretations adopted by the International Accounting Standards Board (IASB).

The interim report does not include all the information required for full annual consolidated financial statements in an Annual Report and should be read in conjunction with the Annual Report of the group for 2020. The accounting policies applied in the interim financial statements is the same as those described in the Annual Report for 2020.

The condensed consolidated interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements are unaudited.

The Annual Report for 2020 is available at www.Beerenberg.com

Note 3 - Judgments, estimates and assumptions

In applying the accounting policies, management makes judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing this interim financial statement, the significant judgments made by management in applying the group's accounting policies and the key sources of uncertainty in the estimates were consistent with those applied to the consolidated financial statements as at and for the period ended 31. December 2020. Please refer to Note 3 in the Annual Report for 2020.

Note 4 - Bond and covenants

A 3-year Senior Secured Bond of MNOK 750 was issued in Q4 2020, and the previous bond of MNOK 850 was repaid. In total Beerenberg repaid MNOK 100 and acquired MNOK 50 in own bonds. The 50 MNOK in own bonds were sold in 3rd Ouarter 2021.

Discount on nominal value on Bond has been classified net with the Bond. The bond has, every 6-month, amortization of MNOK 25 until maturity, in total MNOK 125. The maturity date of the bond is 13 November 2023.

In connection with the bond issue Beerenberg has signed an MNOK 150 super senior credit facility agreement with Danske Bank.

The Facility agreement includes covenants related to quarterly Net Total Leverage ratio test (below 7.0). The group is in compliance with covenants as of 31^st of December 2021.

Amortization due within one year is presented as interest-bearing short-term liabilities.

Note 5 - Related party transactions

No related party transactions were conducted in 4^th Quarter of 2021.

Note 6 Operating segments

Beerenberg is organized in two operating segments in order to optimize and focus its business. The Services segment includes business related to the traditional ISS-activity in the group, which is mainly related to major framework agreements, and the Benarx segment which consists of advanced insulation for topside and subsea applications.

Revenue by Segment

	Q4	Q4	YTD	YTD	FY
Amounts in NOK million	2021	2020	2021	2020	2020
Services	554,5	425,2	1903,0	1431,1	1431,1
Benarx	84,3	104,2	308,2	341,9	341,9
Eliminations	$-19.3$	$-18,1$	$-75,2$	$-50.3$	$-50,3$
Total	619,4	511,2	2136,0	1722,7	1722,7

EBITDA by Segment

	Q4	Q4	YTD	YTD	FY
Amounts in NOK million	2021	2020	2021	2020	2020
Services	44,3	39,0	175,6	166,6	166,6
Benarx	17,4	17,5	40,9	50,0	50,0
Other	0,0	0.0	0,0	0.0	0,0
Total	61,7	56,5	216,4	216,7	216,7

Note 7 - Subsequent events

No events have occurred after the reporting date, that are of significant impact when considering the financial position or result in the group.