Arendals Fossekompani

Investor Presentation • Feb 9, 2022

Arendals Fossekompani Q4, 2021 presentation 10 February 2022

Disclaimer

This Presentation includes and is based on forward-looking information and statements that and uncertainties that could cause actual results to differ from the projected results. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions of the regions and industries that compose major markets for the businesses of Arendals Fossekompani ASA and affiliates (the "AFK Group"). These expectations estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similatif factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are of will be major markets for the businesses of the AFK Group, energy prices, market acceptance of new products and services, changes in govermental regulations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although the AFK Group believes that its expectation are based upon reasonable assumptions it can give no assurance that those expectations will be actual results will be as set out in the Presentation. The AFK Group is making no repress or implied as to the accuracy, relability or completeness of the Presentation, and neither the APK Group nor any of its directors, officers or employees will have any liability to you or any other persons resulting from the use of the Presentation.

Highlights Q4, 2021

Development Q4

• Revenues increased to 1,181 MNOK from 873 MNOK in Q4 2020,35% growth
• EBIT increased to 179 MNOK, up from 56 MNOK in Q4 2020. The best quarter on record for AFK
• Volue had a total top line growth of 30%, and confirmed progress of the SaaS transformation, with a 36% increase from Q4 last year. ARR increased with 17% compared to Q4, 2020
• Tekna had a material order intake of CAD 6.6 million in Q4, a 46% increase year on year. Production capacity increased by 26% over Q3, and the year ended with a record material order backlog of CAD 10.2 million
• EFD Induction increased its revenue to 331 MNOK, a 5% increase from Q4, 2020. EBIT margin was 9%, reflecting a steady increase for the year. EBIT in Q4 2021 was 72% higher than in Q4 2020.
• NSSLGlobal had a 5% revenue increase in local currency from Q4, 2020, and EBIT margin increased from 19% to 23%
• Electricity prices was about 10 times higher than in Q4 2020, lifting power revenue from 25 MNOK to 171 MNOK. AFK remains fully in the spot market

After end of the quarter

• Dividend NOK 0.90 in cash per share for the quarter, plus 0.2 Tekna shares for each AFK share (to facilitate uplisting of Tekna)
• Vattenfall and Seagust partnership announced, creating a leading offshore wind developer for the Norwegian licensing round

Q4 2021 UPDATE

AFK portfolio

Controlling ownership in well positioned listed companies

Non listed technology companies, with strong financial and operational performance, and high development potential

Establishing three new companies as response to energy mega trends

Offshore wind energy

ARENDALS FOSSEKOMPANI®

Green power shift

Hydropower

Hydropower, 500 GWh production in NO2

SEAGUST

n Prth ammonia

Green ammonia production

Volatility, digitalisation & big data

volue

Digital energy and infrastructure solutions for the green transition

Cyber secure space & satellite communication services anywhere in the world

alytic

Active transformer of big data intensive companies

Electrification, storage & i4.0

ATEKNA

Global technology-driven powder producer for 3D printing, battery anodes & micro electronics

INDUCTION

Leading international tech company with green induction applications and technologies

Solar ingots & wafers

BEYONDER Battery technology

ব

Volue: Delivering on targets

• 17% growth in recurring revenue from Q4, 2020
• SaaS revenue of 65 MNOK represents an increase of 36% from Q4, 2020
• From IPO in Q3 2020, Volue's recurring revenue base has grown with 27% by end of Q4
• Sales performance was strong, reflecting increased requirements from the customers as the energy transition accelerates and Volue expand its international footprint
• Adjusted EBIT of 27 MNOK, was up from 11 MNOK in Q4, 2020, reflecting increased scale and a strong balancing market
• After the quarter, Volue completed the integration and re-branding of Likron and ProCom

Tekna: Strong order intake

• · CAD 4.6 million in powder revenue represents a 25% increase in powder revenue from Q4, 2020
• · Material order intake was CAD 6.6 million in Q4, and for the total year CAD 19.8 million, representing a 46% increase
• The order backlog for materials reached a record CAD 10.2 million, reflecting a stronger market demand, and sales to medical implants recovering
• · The material production capacity increased with 26% over Q3, providing the basis for continued growth
• · Systems sales were down due to Covid related issues, hence total revenue for the quarter was CAD 6.0 million, down from CAD 7.4 million in Q4, 2020
• · remains strong (up 46% year-on-year)
• The Joint Development Agreement with LG Chem reached a first milestone in January 2022

ATEKNA

Q4 2021 UPDATE

EFD Induction

A world leader in induction heating

• Strong revenue recovery and margin improvements following automotive and Covid dip
• Continued operational and financial progress o throughout 2021, despite challenging supply chain dynamics
• lmproving market fundamentals, with strong growth for electric vehicles and green energy solutions
• Profitable growth opportunities – building on a strong position
  • · Broad geographical presence
  • Strong customer base o
  • Industry 4.0 capabilities

Revenue and EBIT-margin

NOK million

Q4 2021 UPDATE

Attractive M&A growth opportunities

Wireless charging solutions set to change mobility standards

• Continuing to explore opportunities to take a leading role in developing next-generation systems for wireless charging and power supply
• Innovative technologies about to reach the commercial stage
• In advanced discussions with M&A targets

Induction applications

World leaders

Exploring entry into high-growth induction opportunities

NSS Global

Stable performance and dividend contributor

Backlog and high visibility

• · Stable and profitable activities, generating steady dividend income for AFK
• · Long-term backlog provides stable outlook
• Key supplier of satellite o communication services to European governments with a strong bid/sales pipeline in 2022 including several large multimillion-pound government engineering and support projects pending
• · Markets developing positively as always connected theme plays out

Q4 2021 UPDATE

Alytic

New acquisitions on the horizon and scaling the portfolio companies through several successful key hires

• Alytic invests in companies with products and services relevant to global markets with data at the core of their value proposition.
• Alytic focuses on companies to which we can contribute with substantial value and work closely with a dedicated management team. This includes hands-on support in strategy, leadership, sales, recruitment, HR, data science and technology.
• · Alytic's mandate is to continue growing its portfolio. New acquisitions are expected during Q1.

Aquaculture

• provide.

alytic

Renewables

Network & Service Assurance

· Focus on developing the verticals further, expect 1-2 new acquisitions in Q1 2022. • Experiencing a strong growth in demand for the products the portfolio companies

· We are scaling capacity and strengthening competency areas especially within mgmt. and technology. A number of key hires were completed in Q4. • In 2022 we are looking to expand the product offering within the ESG/Renewables space, this is also a focus area for future acquisitions. • The transformation journey to a SaaS business model in Kontali is on schedule.

Launch of new Insights portal for aquaculture is planned in Q3 2022 4 2021 บุคคาร ง

nºrth ammonia

Next generation green fuels

Global maritime industry demands green energy from a new sustainable industry where Norway is in pole position

Arendal being developed as maritime hub

ldeally located for green ammonia production and distribution

• MoU's signed with maritime end-users
• World-class technology, engineering and maritime cooperation partners in place to develop project and production facility
• Developing strategic distribution partnership Production start: 2025

Full scale annual production: 100 000 tonnes NH3 CO2 emission savings: > 100 000 tonnes

Q4 2021 UPDATE

SEAGUST

Myndigheter

• Veileder for arealtildeling og konsesjonsprosess: offentlig høring gjennomført. Endelig versjon ikke utgitt
• Inndeling av prosjektområder ikke publisert, forventes Q2 20222
• Prekvalifisering og auksjon/konkurranse forventes høst 2022
• Tildeling Q2/Q3 2023

Seagust

• JV avtale med Vattenfall inngått 31.01.2022 om samarbeid på Sørlige Nordsjø II og Utsira Nord
• Vattenfall er en ledende aktør innenfor havvind i Europa. Selskapet driver 50 havvindfelter i fem europeiske land og har prosjekter tilsvarende 2GW under utbygging og utvikling
• Seagust /Vattenfall fremstår som et av de sterkeste konsortiene i den norske tildelingen

High taxonomy eligibility estimated for AFK*

*AFK taxonomy eligible activities for 2020

• Total % eligible ■ Total % not yet covered
• Total % not eligible

Activities	Green activity	Enabling activity	Transition activity
Climate mitigation	3%	62%	0%
Climate adaption	17%	17%	0%

Strong underlying results

• Strong profitability in the portfolio companies, except Tekna which continues to invest in its operations according to plan
• EFD Induction adjusted EBIT (28 MNOK of property gain in Q4, 2020), increased 72% from Q4 the previous year
• Contribution from hydropower increased EBIT with 152 MNOK (AFK Parent), as spot prices were 10x higher than in Q4 2020

EBIT, MNOK	Q4 2021	Q4 2020	Differenc
EFD Induction*	31	18	+1:
NSSLGlobal	52	44	+
Tekna	-53	15	-6%
Volue	27	12	+1
AFK Parent/Hydropower	125	-27	+15
Other	-3	-6	+
AFK consolidated	179	56	+12

AFK with 1.4 BNOK in cash and 3.4 BNOK in gross available liquidity

Total Available Liquidity in AFK Parent 31.12.21 (MNOK)

Q4 2021 UPDATE

Q4 2021 UPDATE - 16

trends and all festions of

Outlook 2022

• · As the AFK portfolio companies are positioned within attractive mega-trends, AFK expects continued growth in 2022
• · Electricity prices are expected to remain at a high level
• AFK expects no significant income from property development, as all flats at Bryggebyen were sold in 2021
• We expect continued AFK . activity in M&A and the capital markets

Megatrends

Green energy shift is based on volatile power sources (from ca 5% to 65%).

European energy production set to become more renewable and less stable, requiring more and faster optimisation to cope with market movements.

Electrification increasing 30% in 10 years

European Installed Production Capacity (GW)3

3 Source: Arkwright Consulting

Q4 2021 UPDATE

Green shift will lead to price volatility, a need for storage and cutting edge software technology

Volatility in the energy markets will increase ...

Historical prices and Volue forecasts towards 2030 shows increased price volatility in the coming years, driven by increased use of renewables and consumption

... Eventually offset by stationary energy storage and increased consumer flexibility ...

Global Energy Storage Consumption, 2013-2025 (MW)

Stationary storage has been steadily increasing both in front-ofthe-meter and behind-the-meter, underlining the need for balancing in both the utility scale and industrial markets

... Increasing complexity and further increasing the need for deep learning

Market cap creation: Internet vs. Deep learning1

As the degrees of freedom increases in the energy markets, the need for advanced analytics ("deep learning") will increase and possibly also drive valuation of energy companies

Q4 2021 UPDATE

Norwegian power surplus disappearing quickly. Strategic value of our hydro assets increasing

Norway uses land-based wind turbines to electrify the oil and gas sector

Electrification of oil & gas uses the entire power surplus

N

Norwegian power production & consumption 2021-2040 (Twh)

	2021	2030	2040
oduction total
onshore wind	11	21	23
offshore wind	O	4	15
solar	0	3	4
Hydro & others	142	146	153
otal productuton	153	174	195
wind & solar	7%	16 %	22 %
onsumption
Offshore electrification	10	18	18
Rest	130	154	167
otal consumption	140	172	185
offshore of consumption	7 %	10 %	10 %
et surplus/(deficit)	13	2	10

Electricity prices will remain high

... but will see some corrections in Q3 and Q4

Actual and forecasted EUR/MWh NO2, 2020-22

Source: Nordpool Spot for historical prices (average of months), Volue Insight for forecasted prices. Prices are average of historical and forecasted months

We have established 3 new companies, as a response to these megatrends

EVOLGY.
EVOLGY	EVOLGY	EVOLGY
HITAT	CHARGE	POWER

Leading international tech company with green induction applications and technologies

End to end storage system integration, design and operation, with multiple layers of software on top of base HW

markets

는 Ampwell

Industry scale battery as a service storage provider for international

Forward looking decarbonisation businesses in a synergistic ecosystem

Q4, 2021 closing summary

• Record results and strong balance sheet, with positive outlook and very well positioned portfolio in high growth niches
• Developing embedded positions within both high growth induction technologies (Evolgy) and battery storage solutions (Ampwell). Both will be active within M&A, and considered for external funding solutions
• · AFK decarbonisation initiatives coming into place through our new group Vergia, that will possibly seek further external partners and capital
• Strong EU taxonomy profile with a great planet, people and prosperity contribution from the full portfolio
• Continued high speed in developing our long-term net asset value and portfolio attractiveness

Q4 2021 UPDATE 23

Q4 2021 UPDATE

Solid P&L

• · Revenue mainly up due to increased electricity prices, combined with growth in the portfolio
• Large increase in tax cost reflects growth in Norwegian electricity prices

P&L consolidated Q4 2021 & 2020

	Q4 2021	Q4 202
	1181	87
	247	12
	20,9%	13,79
	179	5
	15,2%	6,49
cials	-49	-
re tax	125	4
e	-123	-1
ntinued operations	0	1
the period	2	3
ings per Share (NOK)¹	0,04	0,7

1 The number of outstanding shares has been normalized due to split (25:1) on 21.11.2020. Outstanding shares 31.12.2021 was 54 895 950