Elmera Group ASA

Investor Presentation • Feb 10, 2022

Q4 2021 PRESENTATION

Rolf Barmen (CEO) Birte Strander (CFO)

10th February

Q4 2021 HIGHLIGHTS

Rolf Barmen (CEO)

Highlights fourth quarter 2021

• Strong financial performance in the Norwegian operations in a challenging market environment
• Consumer EBIT adj. (+24% YoY)
• Business EBIT adj. (+22% YoY)
• First quarter with profitability in the New Growth initiatives segment
• The Nordic segment has been significantly affected by the extraordinary situation in the Nordic power market in Q4 – loss of 71 NOKm in the quarter from hedging inefficiencies
• Loss of 34' customers in the Consumer segment in Q4 due to intense competition and termination of "price match" service
• Proposed dividend of 3.5 NOK per share for 2021

	Key Highlights

1 # of deliveries (end of period)	Δ in # of deliveries (QoQ) Δ of deliveries
975 041	-28 659 -28 659
Decrease of -5 % YoY	Organic growth: -198 Organic growth: -28 659
Volume sold 2	Gross revenue
5 096 GWh	NOK 6 184m
Decrease of -9 % YoY	Increase of 276 % YoY
3 Net revenue (adj.) 2	3 EBIT (adj.) K6
NOK 436m	NOK 141m
Decrease of -6 % YoY 9	Decrease of -16 % YoY K7
Basic EPS (reported)	K13NIBD (cash)
NOK 0,77	NOK 513m
Increase of 19 % YoY	K19NIBD/LTM EBITDA: 0,57

Sources: Company information

¹⁾ Number of deliveries excl. Extended Alliance deliveries. Number of deliveries incl. Extended Alliance deliveries: 1,061,109

²⁾ Not including Alliance volume. Volume turnover for alliance partners in the quarter: 1,389 GWh

³⁾ Adj. Net revenue and EBIT are reported figures adjusted for any estimate deviations on sales and distribution of electricity related to previous reporting periods, special items, unrealised gains and losses on financial derivatives and depreciations from acquisitions

BUSINESS REVIEW

Rolf Barmen (CEO)

Market development

Key highlights in Q4 2021

• Geopolitical tension, high gas prices and low hydrology is resulting in an all-time high elspot price
• Considerable area price differences due to limited transmission capacity
• Very cold weather in Sweden and Finland and high peak/off-peak differences led to hedging inefficiencies in Q4
• The price level and peak/off peak differences were both ~4x the normal in December in SE/FI
• In Norway, the Government was subsidizing 55% of the Consumers' electricity cost above 0.7 NOK/kWh in December
• For Q1 2022, the subsidy is increasing to 80% of the cost above 0.7 NOK/kWh

Sources: 1) Temperature figures from met.no's monthly reports. The normal has been adjusted according to the temperatures in 1991-2020

2) Weekly system prices in NOK from Nordpool

Segment development - Consumer

Key highlights in Q4 2021

• Organic decrease of 33,814 deliveries in Q4 2021 due to intense competition and termination of "price match" service
• We observe a change in the consumption pattern
• Despite relatively cold weather, volume decrease by 29% YoY. This is mainly driven by a 24% reduction in average consumption per delivery, likely due to the extraordinary price level

# of electricity deliveries1 ('000)

1) Number of electricity deliveries at the end of the period

Segment Consumer - Volatility and price level increase the importance of a broad product portfolio

Spot contracts – pricing fluctuates 24 hours a day

Our product offering for 2022:

• Spot "price-fighter": A spot product campaign launched on Fjordkraft.no to match aggressively priced competition
• Spot with trading: Similar to an existing offering in the Business segment, allowing the Consumer to capitalise on the Group's power trading competence. In 2021, this product beat the market in 11 out of 12 months
• Spot with price cap: A spot contract with a guaranteed maximum price per kWh on set volume

Fixed contracts – fixed price regardless of time-of-use

Our product offering for 2022:

• Fixed price running contracts with a 14 day notification period ahead of any price change. May also include a price cap
• Fixed price contracts with longer durations typically 6, 12 or 15 months

Selected additional customer benefits:

"Trygg Strømhandel" certified by DNV, consumption monitoring, EV smart charging, Trumf reward discount, discounted mobile services, one invoice for grid rent and electricity and a loyalty program with a range of discounted products and services through our partners

Segment development - Business

• Organic decrease of 305 deliveries in Q4 2021
• Volume decrease by 2% YoY, driven by a 7% decrease in consumption per delivery
• Strong development in the segment
• Overperforming vs financial targets
• Good customer pipeline for Q1
• Our role as energy advisor and broad product offering including consumption monitoring, hedging advisory and local energy solutions differentiates us from our competitors and we experience great traction on our new concepts

Key highlights in Q4 2021 # of electricity deliveries1 ('000)

1) Number of electricity deliveries at the end of the period

Segment development - Nordic

Key highlights in Q4 2021 # of deliveries1 ('000)

• Increase of 5,460 deliveries in Q4 2021
• Higher-than-normal volumes and high peak/off-peak differences led to losses in Q4
• The process of aligning the contract structure and product portfolio with the Norwegian model in order to reduce the associated volume risk is ongoing
• Thus far, the consumption volumes in Sweden and Finland in Q1 have been in line with expectations and we have no indication of under-hedging in January
• The increased peak/off-peak difference is likely to continue throughout Q1

682 616

Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Quarter LTM

497

0

500

1 005

| Quarterly Presentation | Q4 2021

0

1 000

925

New Growth Initiatives

Mobile:

• Growth of 29,263 mobile subscribers in Q4 2021
• The growth is related to the Skymobil acquisition

Alliance:

• 15% YoY Alliance volume increase
• Growth of 4,686 electricity deliveries within Extended Alliance in the quarter and more than 30 thousand deliveries YoY

Key highlights in Q4 2021 # of Mobile subscribers1 ('000)

Sources: Company information

1) Number of mobile subscribers at the end of the period

FINANCIAL REVIEW

Birte Strander (CFO)

Net revenue development

Change in adj. net revenue (NOKm) Adj. net revenue LTM (NOKm)

• Strong net revenue development in all the Norwegian segments. Hedges affecting positively
• Nordic segment highly affected by the extraordinary situation in the Nordic power market in Q4, especially in December. Two main drivers for the negative development:
• Under-hedging of fixed price contracts. Contracts are hedged based on best estimated consumption, but very cold weather resulted in a much higher consumption than normal. Normally this deviation has a limited financial impact as volume risk is priced into the markup, but the huge spread between hedged price and spot price resulted in a significantly negative effect in this quarter
• Higher than normal peak/off-peak differences than estimated. Hedges are typically set versus a flat consumption curve, while the weighted cost of electricity increases with increased peak/off-peak differences. This risk is also priced into the markup, but larger than expected differences do affect margins negatively

Sources: Company information

EBIT adj. development

Adj. EBIT LTM (NOKm)

Change in adj. EBIT (NOKm)

• Net revenue performance in combination with good cost control resulting in EBIT growth in the Norwegian segments

• Nordic segment negatively affected by hedging inefficiencies
• Adj. EBIT margin decreasing 4 pp YoY

Segment overview

309 312 240 229 317 0 100 200 300 400 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 72.7 +3% Adj. EBIT (NOKm) 98 110 75 42 121 32% 35% 31% 18% 38% 0% 10% 20% 30% 40% 0 50 100 150 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 EBIT (adj.) EBIT margin adj.

• Net revenue increase 3% YoY driven by margin improvement - tailwind from good hedges
• EBIT adj. margin up 6 pp YoY

Consumer segment Business segment

• 13% increase in net revenue, driven by margin improvement
• EBIT adj. margin increase 5 pp YoY

Sources: Company information

Segment overview cont.

• Q4 losses related to hedging inefficiencies in an extraordinary market

• Currently no indication of negative volume effects in Q1, but due to the continued peak/off-peak differences, a negative EBIT adj. is expected also in Q1. However, likely not as negative as in Q4

• First quarter with positive EBIT adj. since the launch of Mobile in 2017

• Both Alliance and Mobile showing YoY improvements Mobile the most important contributor

Sources: Company information

NWC development

• Net working capital (NWC) is decreasing to -15 NOKm at quarter-end Q4 2021
• Part of the November power purchase was paid for in January, which led to increased accounts payables and lower reported NWC at year-end

Sources: Company information

1) NWC includes the following items from current assets: Inventories, intangible assets, trade receivables, derivative financial instruments and other current assets (that is, all current assets in the balance sheet except cash and cash equivalents); and the following items from current liabilities; trade payables, current income tax liabilities, derivative financial instruments, social security and other taxes and other current liabilities excl. 94 NOKm in short-term interest bearing debt

Net cash development

Change in net cash Q-o-Q (NOKm)

Sources: Company information

1) OpFCF defined as EBITDA adj. less CAPEX excl. M&A and payments to obtain contract assets

2) Non-cash NWC relates to items included in "change in NWC" that are not affecting net cash position. Other includes interest, tax, change in long-term receivables, proceeds from non-current receivables, proceeds from other longterm liabilities, share based payment expense, change in post-employment liabilities, payment of lease liability and adjustments made on EBITDA.

2021 performance vs financial outlook

Group	 Targeting high-single digit net revenue growth. 2021 expected above double digit due to acquisitions in 2020  Targeting a sustainable EBIT margin of 36-38%  Ambition to act as a consolidator in a fragmented market
	Growth  Targeting mid-single digit annual net revenue growth Revised in Q1: Expecting a slightly		negative net revenue growth and an EBIT margin in the area	 -1%
Consumer	EBIT margin	of 30% in 2021	 32%
	 Targeting a sustainable level of mid-single digit growth. 2021 expected above double digit due to Growth acquisitions in 2020
Business	EBIT margin	 Targeting a sustainable level of 52-54%	Revised in Q1: Expecting a higher EBIT margin than targeted in 2021	 60%
Nordic		Targeting an annual EBIT contribution of ~50 NOKm	Revised in Q1: Expecting an EBIT contribution of ~65 NOKm in 2021	 -26m
NGI	 Revised in Q1: Expecting a 75% improvement in Targeting a 50% improvement in nominal EBIT from 2020 to 2021 nominal EBIT from 2020 to 2021 and a positive run-rate EBIT from late 2021
Cap.ex.	 Targeted to be in the area of NOK 65-70m annually
Leverage	 Targeting a leverage of 2-2.5x NIBD/EBITDA with variations intra-year due to seasonality in net working capital  Current balance sheet enabling substantial capacity to finance acquisitions
Dividend	 	Target pay-out ratio of at least 80% of net income, adjusted for certain cash and non-cash items2 Attractive and increasing dividend		 NOK 3.5

1) Outlook on an organic basis, not including additional M&A transactions in the period. All targets are based on adjusted figures, further described under alternative performance measures in the quarterly report 2) Adjusted EBIT + net finance – estimated tax – amortisation of acquisition debt

Actual 2021

Updated targets will be presented on our Capital Markets Day 6 April 2022

Appendix

PROFIT AND LOSS ACCOUNT

NOK in thousands	Note 1	03 2021	04 2021			04 2020 Full Year 2021 Full Year 2020
Continuing operations
Revenue	2.3	2 383 717	6 183 8 38	1 644 100	15 208 587	4214727
Direct cost of sales	2	(2026783)	(5745973)	(1172644)	(13496576)	(2647005)
Revenue less direct cost of sales		356933	437865	471 456	1712011	1 5 6 7 7 2 2
Personnel expenses	2	(111242)	(106538)	(116748)	(409123)	(328485)
Other operating expenses	$\overline{z}$	(111056)	(130 280)	(152585)	(488517)	(471 938)
Depreciation right-of-use assets		(4966)	(5051)	(3958)	(19687)	(13302)
Depreciation and amortisation	2.7	(97363)	(98819)	(152988)	(383397)	(291872)
Total operating expenses		(324627)	(340699)	(426 278)	(1300723)	(1105596)
Impairment and change in provision for onerous contracts	4	(428675)	157544	(268493)	(413296)	(268493)
Other gains and losses, net	4,9,10	433727	(108528)	328 430	495 265	331 539
Operating profit		37 359	146 183	105 115	493 256	525 172
Income/loss from investments in associates
and joint ventures		380	335	2433	2 6 3 7	1168
Interest income		2933	3245	3196	12801	15814
Interest expense lease liability		(576)	(545)	(585)	(2374)	(1813)
Interest expense	12	(9000)	(14588)	(8335)	(42583)	(11982)
Other financial items, net		(2751)	(2451)	(11250)	(19219)	(15692)
Net financial income/(cost)		(9014)	(14004)	(14541)	(48737)	(11505)
Profit/ (loss) before tax		28 345	132 178	90 574	444 519	513 667
Income tax (expense)/ income	5	(6391)	(44618)	(16943)	(102150)	(113604)
Profit/ (loss) for the period		21954	87 560	73 631	342 369	400 063
Basic earnings per share (in NOK)*	6	0.19	0.77	0.64	3.00	3.73
Diluted earnings per share (in NOK)*	6	0.19	0.76	0.64	2.96	3.69

ADJUSTED EBIT reconciliation

NOK in thousands	03 2021	04 2021	04 2020	Full year 2021	Full year 2020
Revenue adjusted	2 393 927	6 183 942	1 635 353	15 200 165	4 183 361
Corporate 1)	(10210)	(105)	8747	8422	29 650
Special items 2)					1716
Revenue	2 3 8 3 7 1 7	6 183 838	1644100	15 208 587	4 2 1 4 7 2 7
Direct cost of sales adjusted	(2026783)	(5748230)	(1171745)	(13499669)	(2639876)
Corporate 1)		2 2 5 7	(899)	3.093	(7129)
Direct cost of sales	(2026783)	(5745973)	(1172644)	(13496576)	(2647005)
Revenue less direct cost of sales adjusted	367 143	435713	463 608	1700496	1543486
Corporate 1)	(10210)	2152	7848	11515	22 521
Special items 2)					1716
Revenue less direct cost of sales	356933	437865	471456	1712011	1 567 722
Total operating expenses adjusted	(278332)	(294868)	(295 905)	(1114448)	(935 208)
Special items 2)			(26414)	2354	(42 213)
Depreciation of acquisitions 3)	(46295)	(45830)	(103959)	(188629)	(128175)
Total operating expenses	(324627)	(340699)	(426 278)	(1300723)	(1105596)
Impairment and change in provision for onerous contracts	(428675)	157544	(268493)	(413296)	(268493)
Other gains and losses 4)	433727	(108528)	328 430	495 265	331 539
Operating profit	37 359	146 183	105 115	493 256	525 172
Income/loss from investments in associates and joint ventures	380	335	2433	2 6 3 7	1168
Interest income	2933	3245	3196	12801	16814
Interest expense lease liability	(576)	(545)	(585)	(2374)	(1813)
Interest expense	(9000)	(14588)	(8335)	(42583)	(11982)
Other financial items, net	(2751)	(2451)	(11250)	(19219)	(15692)
Profit/(loss) before tax	28 345	132 178	90 574	444 519	513 667

ADJUSTED EBIT reconciliation cont.

NOK in thousands	03 2021	04 2021	04 20 20	Full year 2021	Full year 2020
Special items incurred specific to:
- acquisition related costs and implementation costs			(5780)	(7485)	(21579)
- income related to compensatory damages					1716
- one off amortisation of customer contracts in acquired companies			(5745)		(5745)
- severance packages and other one off costs in acquired companies			(14889)	6451	(14889)
- gain from sale of trade receivables previously impaired				3 3 8 7
Special items			(26, 414)	2 3 5 4	(40497)

NOK in thousands	03 2021	04 2021	04 2020	Full year 2021	Full year 2020
TrønderEnergi Marked acquisition	(2608)	(2608)	(5180)	(10434)	(20718)
Oppdal Everk Kraftomsetning acquisition	(572)	(572)	(787)	(2 289)	(3148)
Vesterålskraft Strøm acquisition	(484)	(484)	(565)	(1936)	(2, 261)
Innlandskraft acquisition	(31068)	(31058)	(36254)	(128650)	(36254)
Troms Kraft Strøm acquisition	(10652)	(10320)	(7037)	(42031)	(7037)
Troms Kraft Strøm acquisition - Depreciation of fixed price customer contracts	$\overline{\phantom{a}}$		(52910)		(52910)
Other customer acquisitions	(910)	(777)	(1, 226)	(3 289)	(5847)
Depreciation of acquisitions	(46 295)	(45830)	(103959)	(188629)	(128175)

BALANCE SHEET

NOK in thousands	Note	30 September 2021	31 December 2021	31 December 2020
Assets:
Non-current assets
Deferred tax assets		35 904	35 092	37 31 6
Right-of-use assets property, plant and equipment		86 939	82 805	81724
Property, plant and equipment		8509	8098	8409
Goodwill	7	1428246	1419451	1442849
Intangible assets	7	719119	694 630	869 568
Cost to obtain contracts		246 459	287728	172 656
Investments in associates and joint ventures		13470	13805	11 168
Other non-current financial assets		45790	54784	63877
Total non-current assets		2 5 8 4 4 3 5	2 596 391	2 687 566
Current assets Intangible assets		5319	7518	2880
Inventories		5833	2146	2 3 9 8
Trade receivables	8,12,14	2048036	5 256 259	1476927
Derivative financial instruments	9,10	1072647	1449758	193175
Other current assets		61 636	38847	167065
Cash and cash equivalents		262 140	305 627	599 348
Total current assets		3455611	7061155	2 441 793
Total assets		6 040 046	9657546	5 129 359
Equity and liabilities:
Equity
Share capital		34 289	34 291	34 285
Share premium		991 998	992 094	991 614
Retained earnings		634 352	754 097	918148
Total equity		1 660 640	1780482	1944047

BALANCE SHEET

NOK in thousands	Note	30 September 2021	31 December 2021	31 December 2020
Non-current liabilities
Employee benefit obligations	11	126 747	93 837	110828
Interest-bearing long term debt	12	743 984	720 009	812808
Deferred tax liabilitites		91702	118318	130 499
Lease liability - long term		69552	65 25 9	67442
Other provisions for liabilities		17159	16740	14 649
Total non-current liabilites		1049143	1014164	1136225
Current liabilities
Trade and other payables	14	1415035	4516589	1029 604
Overdraft facilities	12	87178		29 400
Current income tax liabilities		77329	108 400	129 098
Derivative financial instruments	9.10	517530	974 554	110616
Social security and other taxes		85894	116390	143425
Lease liability - short term		20813	21055	17366
Other current liabilities	13	1126485	1125914	589 578
Total current liabilities		3 3 3 0 2 6 4	6862901	2 049 087
Total liabilities		4 379 407	7877064	3 185 312
Total equity and liabilities		6 040 046	9 657 546	5 129 359

CASH FLOW

NOK in thousands	Note	03 2021	04 2021			04 2020 Full Year 2021 Full Year 2020
Operating activities
Profit/ (loss) before tax		28 345	132178	90 574	444 519	513 667
Adjustments for
Depreciation	7	58 325	58893	114767	236 624	168012
Depreciation right-of-use assets		4966	5061	3958	19687	13 302
Amortisation of contract assets		39 039	39927	38 221	146773	123860
Impairment of intangible asset	4,7	(61)		197470	9762	197470
Interest income		(2934)	(3245)	(3195)	(12801)	(16814)
Interest expense lease liability		577	545	585	2 3 7 4	1813
Interest expense		9001	14588	8335	42 583	11982
Income/loss from investments in associates and joint ventures		(380)	(335)	(2433)	(2637)	(1168)
Change in long-term receivables		(119)	(7501)	(7686)	(3882)	(7686)
Share based payment expense		1001	1000	862	3910	3252
Change in post-employment liabilities		(521)	1732	(331)	5544	(302)
Payments to obtain a contract		(72064)	(83016)	(49510)	(264152)	(137280)
Changes in working capital (non-cash effect)
Impairment loss recognised in trade receivables	8	(7597)	(4853)	(2478)	(57666)	19342
Provision for onerous contracts recognised in other current liabilities	4	428736	(157544)	71023	403 535	71023
Change in fair value of derivative financial instruments	4.9.10	(433 727)	108528	(328 429)	(495 265)	(331 539)
Changes in working capital
Inventories		268	3 6 8 6	(1197)	251	(1453)
Trade receivables	8	(625 364)	(3211078)	(790 707)	(3740 539)	260 279
Purchase of el-certificates		(123)	271		(86044)	(245712)
Non-cash effect from cancelling el-certificates					85898	263 594
Purchase of guarantees of origination		(4483)	(2418)	(561)	(11206)	(4064)
Non-cash effect from disposal of guarantees of origination		802		1588	7028	7089
Other current assets		3424	22 292	39 987	127465	19435
Trade and other payables		550 386	3110514	453910	3 5 0 5 2 8 4	61721
Other current liabilities	13	119841	232 086	133 248	167198	(351741)
Cash generated from operations		97 336	261313	(32001)	534 244	580 866
Interest paid		(9691)	(15742)	(16135)	(43978)	(22058)
Interest received		2933	3245	3196	12801	15814
Income tax paid	5		(1629)	(23508)	(123774)	(113533)
Net cash from operating activities		90 578	247 187	(68448)	379 293	519 305

CASH FLOW

NOK in thousands	Note	03 2021	04 2021	04 2020		Full Year 2021 Full Year 2020
Investing activities				492	(2742)	(497)
Purchase of property, plant and equipment		(894)	(245)
Purchase of intangible assets	7	(12654)	(38021)	(14513)	(83 225)	(64 7 6 7)
Proceeds from sale of intangible assets	7					10000
Net cash outflow on acquisition of subsidiares	13	٠	(42674)	(501 872)	(42674)	(1033527)
Net cash outflow on acquisition of shares in associates						(10000)
Net (outflow)/proceeds from non-current receivables		1150	(1492)	(17131)	12975	(16985)
Net (outflow)/proceeds from other long-term liabilities		872	20	(194)	3164	(194)
Net cash used in investing activities		(11525)	(82412)	(533 219)	(112502)	(1115970)
Financing activities
Proceeds from overdraft facilities	12	(49623)	(87178)	29 400	(29 400)	29 400
Proceeds from revolving credit facility	12	۰		500 000		500 000
Repayment of revolving credit facility	12	٠		(500 000)		(500 000)
Proceeds from issuance of shares		۰	97		486	2730
Dividends paid					(399 986)	(313717)
Formation expenses		$\blacksquare$				(10)
Proceeds from long term debt	12			477000		937000
Instalments of long term debt	12	(23425)	(23 425)	(23, 425)	(93 700)	(65125)
Repayment of long term debt	12					(152900)
Payment of lease liability		(4284)	(5448)	(3911)	(19095)	(12450)
Net cash used in financing activities		(77331)	(115954)	479 064	(541696)	424 928
Net change in cash and cash equivalents		1722	48821	(122603)	(274905)	(171738)
Cash and cash equivalents at start of period		261 282	262 140	726 400	599 348	775 536
Effects of exchange rate changes on cash and cash equivalents		(863)	(4333)	(4450)	(17816)	(4450)
Cash and cash equivalents at end of period		262 140	306 627	599 348	306 627	599 348

FORWARD-LOOKING STATEMENTS

This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements with respect to Fjordkraft's expectations and plans, strategy, management's objectives, future performance, costs, revenue, earnings and other trend information. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Fjordkraft.

All forward-looking statements in this presentation are based on information available to Fjordkraft on the date hereof. All written or oral forwardlooking statements attributable to Fjordkraft, any Fjordkraft employees or representatives acting on Fjordkraft's behalf are expressly qualified in their entirety by the factors referred to above. Fjordkraft undertakes no obligation to update this presentation after the date hereof.

For more information: Fjordkraft's Investor Relations Morten A. W. Opdal +47 970 62 526 morten.opdal@fjordkraft.no