Bewi Invest AS

Quarterly Report • Oct 22, 2021

INTERIM REPORT APR – JUN / 2021

PAGE 1

Highlights for the second quarter of 2021 1

(numbers in parenthesis refers to comparable figures for the corresponding period of 2020)

• Net sales up by 88 per cent to EUR 198.1 million (105.1), of which 27 per cent from acquisitions
• Organic growth from higher volumes and sales prices in all segments
• Adjusted EBITDA increased to EUR 31.6 million (15.7), mainly due to higher margins for RAW
• Operating income (EBIT) of EUR 22.3 million (EUR 11.9)
• Continued positive contribution from minority interests
• Agreement to acquire a majority stake of listed Polish automotive company IZOBLOK
• Acquisition of Danish paper packaging company Honeycomb Cellpack
• Completion of private placement raising NOK 200 million

Highlights for the first half of 2021

• Net sales grew by 65 per cent to EUR 347.0 million (210.2), of which 25 per cent from acquisitions
• Adjusted EBITDA of EUR 48.3 million (30.5)

Subsequent events

• Completion of acquisition of majority stake of IZOBLOK and related private placement
• Announced intention to refinance existing bonds by issue of new sustainability-linked bonds in an aggregate amount of EUR 160 million under a new framework of up to EUR 250 million

million EUR (except percentage)	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Net sales	198.1	105.1	347.0	210.2	462.6
Operating income (EBIT)	22.3	11.9	29.1	18.4	39.5
EBITDA	31.1	18.7	46.6	32.4	70.0
EBITDA margin (%)	15.7%	17.8%	13.4%	15.4%	15.1%
Adjusted EBITDA	31.6	15.7	48.3	30.5	65.0
Adj. EBITDA margin (%)	16.0%	15.0%	13.9%	14.5%	14.0%
Items affecting comparability	-0.5	2.9	-1.7	1.9	5.0
Net profit/loss for the period	14.4	8.5	13.5	10.8	30.0
Earnings per share, basic and diluted (EUR)	0.10	0.06	0.09	0.08	0.21
Earnings per share, basic and diluted (NOK)	0.97	0.66	0.90	0.84	2.27
Capital Expenditure (CAPEX)	-8.5	-3.5	-15.4	-6.6	-26.6

Consolidated key figures²

2 Definitions of alternative performance measures not defined by IFRS are included on page 15

¹ For more information on the change in net sales and adjusted EBITDA from the corresponding period of 2020, see the revenue and EBITDA bridges included on page 17.

Comments from the CEO

We are delivering record-high results for the second quarter, driven by strong demand in our markets, and consequently high sales prices. Our net sales are up by 88 per cent over the same quarter last year and we more than double our adjusted EBITDA.

At the foundation of our results is our stable integrated business model and an organisation continuously securing well-run operations. In addition, we demonstrate progress on our growth initiatives, including completion of the acquisitions of Honeycomb Cellpack and IZOBLOK.

As communicated in the report for the first quarter this year, the shortage of Styrene in Europe has caused a historically sharp increase in raw material prices in 2021, and consequently also increase in the price of the EPS raw material. Combined with an increased demand for EPS-based products, and our ability to consistently outperform the market, this has resulted in a historically high GAP (i.e., the difference between the price of the EPS raw material and Styrene) for this quarter.

The high raw material prices continue to have a significantly positive effect on both sales and EBITDA for segment RAW, while our downstream segments, due to a lag of approximately one quarter in adjustments of sales prices towards customers, still experience somewhat lower margins due to the high raw material cost.

As mentioned, we have demonstrated good progress on our growth activities this year. Our organic initiatives are mostly developing as planned. We have ramped up commercial volumes at our recycling facility in Portugal and our new fish box facility at Senja is soon ready to commence operations. Further, our plan for developing a state-of-the art packaging hub at Jøsnøya, Hitra, is also progressing, and our partner for the project, KMC Properties, have now entered a pre-phase project agreement. Finally, our new XPS line in Norrköping, where we have had some delays, commenced production towards the end of the second quarter.

During the second quarter we acquired the Danish paper packaging company Honeycomb Cellpack, now BEWI Cellpack, and announced our acquisition of the Polish company IZOBLOK, a leading provider of EPP components to the European automotive industry. Both acquisitions are in line with our strategy to broaden our product offering and strengthen our market positions.

Going forward, we expect our key markets to continue to be strong throughout 2021. According to market analysts, prices of Styrene and the EPS raw material, are expected to remain at high levels throughout the year, also implying a high GAP.

Based on this, we expect our results for the third quarter to be in line with this quarter, despite lower volumes following holiday season in August.

In BEWI, we intend to continue to deliver profitable growth. Therefore, we recently initiated a process to refinance our existing bonds and our credit facility, to further fuel our financial flexibility to pursue attractive growth opportunities.

Summing up: Strong markets, a proven business model, a solid financial position and a pipeline of M&A opportunities makes us very well-positioned to deliver on our intentions.

Christian Bekken, CEO, Trondheim, 10 August 2021

Financial review

(Information in parentheses refers to the corresponding periods the previous year).

Profit and loss

Second quarter of 2021

Net sales amounted to EUR 198.1 million for the second quarter of 2021 (105.1), corresponding to an increase of 88.5 per cent. Acquired companies contribute to 27.3 per cent of the increase while currency effects had a minor impact. Organic growth ended at 59.7 per cent.

The organic growth can be explained by both improved volumes and higher sales prices in all segments. Following the continued increase in the cost of raw of raw materials, sales prices continued to increase in the second quarter this year.

Adjusted EBITDA came in at EUR 31.6 million for the quarter (15.7), representing a margin of 16.0 per cent (15.0). Acquired companies contribute to an increase of EUR 4.5 million compared to the second quarter last year.

The increased raw material prices positively impacted the margins for segment RAW while putting pressure on the margins in the two downstream segments, due to the lag in price indexation towards customers.

See further comments to the raw materials under the section for important events in the quarter.

For more information on the development in net sales and EBITDA, see explanations under each segment and the revenue and EBITDA bridges on page 16.

Operating income (EBIT) came in at EUR 22.3 million for the second quarter (11.9), up by EUR 10.4 million over the same period last year.

Net financial items amounted to a negative EUR 3.5 million for the quarter (-2.5). The period was negatively impacted by a EUR 0.4 million fair value adjustment of shares in a listed real estate company.

Taxes amounted to a negative EUR 4.4 million (-0.9).

Net result for the second quarter of 2021 ended at a positive EUR 14.4 million (8.5).

First half of 2021

Net sales increased to EUR 347.0 million for the first half of 2021 (210.2), corresponding to an increase of 65.1 per cent. The increase is driven 25.2 per cent by acquisitions, and 38.7 per cent is organic growth. All segments have recorded higher volumes so far this year, compared to the same period of 2020. In addition, significant price increases have been implemented to compensate for the increased raw material prices.

Adjusted EBITDA increased by 58.2 per cent to EUR 48.3 million for the first six months of the year (30.5). 23.0 per cent of the increase relates to acquisitions, while most of the organic increase relates to the improved styrene gross margin (GAP), driven by a strong market in combination with shortage of EPS raw materials. As for the quarter, this situation has been favourable for segment RAW but put pressure on the margins in segments Insulation and Packaging & Components.

Operating income (EBIT) came in at EUR 29.1 million for the period (18.4).

Net financial items came at a negative EUR 9.9 million so far this year (-5.2). The period was negatively impacted by a EUR 4.1 million fair value adjustment of shares in a listed real estate company, offsetting the fair value gain recorded in the fourth quarter of last year.

Taxes amounted to a negative EUR 5.7 million for the first six months (-2.4). The effective tax rate was negatively affected by the fair value revaluation of shares.

Net profit for the first half of 2021 was EUR 13.5 million (10.8).

Segment RAW

Improved volumes and EBITDA following a continued good market demand

Segment RAW develops and produces white and grey expanded polystyrene, known as EPS beads or Styrofoam, as well as Biofoam, a fully bio-based particle foam. The raw material is sold both internally and externally for production of end products. After expanding and extruding the beads, the material can be moulded or otherwise processed into several different end products and areas of application. BEWI produces raw material at 2 facilities, one in Finland (Porvoo) and one in the Netherlands (Etten-Leur).

Key figures

Amounts in million EUR (except percentage)	Q2-21	Q2-20	YTD-21	YTD-20	2020
Net sales	101.4	46.3	165.6	96.1	191.2
Of which internal	31.7	16.0	51.5	33.0	56.5
Of which external	69.6	30.3	114.0	63.1	134.7
Net operating expenses	-85.5	-45.1	-146.5	-92.8	-181.8
Adjusted EBITDA	15.9	1.3	19.1	3.4	9.4
Adjusted EBITDA %	15.7%	2.7%	11.5%	3.5%	4.9%
Items affecting comparability	0.0	-0.1	0.0	-0.1	0.5
EBITDA	15.9	1.2	19.1	3.3	9.9
Depreciations	-0.9	-0.9	-1.9	-1.9	-3.7

Second quarter of 2021

Net sales for segment RAW amounted to EUR 101.4 million for the quarter (46.3), an increase of 118.4 per cent explained by higher volumes and increased sales prices following a significant increase in underlying raw material prices. The positive volume development primarily relates to external sales.

For more information about the development in raw material prices, see the separate section under important events for the quarter.

Adjusted EBITDA amounted to EUR 15.9 million for the second quarter of 2021 (1.3). GAP (i.e., styrene gross profit) strengthened compared to the second quarter last year due to the higher raw material prices combined with a strong underlying demand. Good volumes combined with a stable production contributed positively to the quarterly EBITDA for segment RAW.

First half of 2021

Net sales for the first half of 2021 came in at EUR 165.6 million (96.1) for segment RAW, up by 72.2 per cent from the same period last year explained by higher volumes and increased sales prices, as explained for the quarter.

Adjusted EBITDA ended at EUR 19.1 million for the first six months (3.4), whereas the improvement primarily relates to the strengthened GAP (i.e., styrene gross profit), as for the quarter, in addition to higher volumes.

Segment Insulation

Strong demand and improved volumes in all regions.

Segment Insulation develops and manufactures an extensive range of insulation products for the construction industry. The products are primarily composed of EPS and XPS. BEWI is one of the larger European manufacturers of EPS-based insulation products. The Benelux is the main market representing around 50 per cent of total sales within the business area. BEWI has 17 facilities in 6 countries producing insulation products. In addition, BEWI has minority interests in 6 facilities in France, 6 facilities in Germany and 1 in the UK.

Key figures

Amounts in million EUR (except percentage)	Q2-21	Q2-20	YTD-21	YTD-20	2020
Net sales	58.2	39.0	98.9	71.2	146.6
Of which internal	0.7	0.2	1.4	0.7	2.4
Of which external	57.5	38.8	97.5	70.5	144.1
Net operating expenses	-51.1	-31.1	-87.0	-58.1	-120.1
Adjusted EBITDA	7.1	7.8	11.9	13.1	26.5
Adjusted EBITDA %	12.2%	20.2%	12.0%	18.4%	18.1%
Items affecting comparability	0.0	3.6	-0.2	2.8	5.9
EBITDA	7.1	11.4	11.7	15.9	32.4
Depreciations	-1.9	-1.3	-4.0	-3.3	-7.4

Second quarter of 2021

Net sales for segment Insulation came in at EUR 58.2 million for the quarter (39.0), an increase of 49.3 per cent. Excluding acquisitions, sales increased by 28.9 per cent. Volumes increased in all regions, including Benelux, which is the segment's largest market. Sales prices have been increased, following a continued increase in raw material prices.

Adjusted EBITDA for the second quarter amounted to EUR 7.1 million (7.8), a decrease of 9.9 per cent. Excluding acquisitions, adjusted EBITDA decreased by 29.8 per cent. The mentioned increase of sales prices does not fully compensate for the increased cost of raw material, due to a lag in contractual price indexation towards to the customers. Margins are expected to catch up when the raw material prices stabilise or decrease.

Production at the new XPS line in Sweden commenced towards the end of the second quarter. Delays in the project have entailed some extra cost.

First half of 2021

Net sales amounted to EUR 98.9 million for the first six months of 2021 (71.2), an increase of 39.0 per cent. Of this, 19.5 per cent was organic growth driven by higher volumes in all regions and increased sales prices related to the higher cost of raw material.

Adjusted EBITDA amounted to EUR 11.9 million (13.1). As for the quarter, the lower EBITDA is explained by the lag in contractual price indexation to customers. As volumes have increased in the first half of the year, the EBITDA will improve considerably when the cost of raw material stabilises or decrease.

Segment Packaging & Components (P&C)

Stable end markets with volume increases in most regions

Segment P&C develops and manufactures standard and customised packaging solutions and technical components for customers in many industrial sectors. Examples include boxes for transportation of fresh fish and other food, protective packaging for pharmaceuticals and electronics, and components for cars and heating systems. The material is composed primarily of EPS, EPP and fabricated foam. BEWI has 25 facilities in 7 countries producing P&C components. Also, the Group has minority interests in 2 facilities in the UK.

	Key figures
--	-------------

Amounts in million EUR (except percentage)	Q2-21	Q2-20	YTD-21	YTD-20	2020
Net sales	65.5	35.3	127.8	75.2	179.9
Of which internal	1.1	0.7	1.7	1.1	2.3
Of which external	64.4	34.6	126.1	74.1	177.6
Net operating expenses	-56.4	-27.8	-108.3	-59.1	-145.8
Adjusted EBITDA	9.1	7.5	19.5	16.1	34.1
Adjusted EBITDA %	13.9%	21.3%	15.3%	21.5%	19.0%
Items affecting comparability	-0.1	0.0	-0.2	-0.1	2.1
EBITDA	9.0	7.5	19.3	16.0	36.2
Depreciations	-3.7	-2.9	-7.3	-5.6	-12.3

Second quarter of 2021

Net sales amounted to EUR 65.5 million for the quarter (35.3), an increase of 85.8 per cent. Excluding acquisitions net sales was up by 28.0 per cent. All regions, except Norway, experienced higher volumes compared to 2020. The lower volume in Norway is explained by lower slaughter volumes of salmon in the quarter and is not market or customer driven. Sales prices have been adjusted upwards following the increase in raw material prices.

Adjusted EBITDA amounted to EUR 9.1 million (7.5), up by 21.5 per cent driven by contribution from acquired companies. Excluding acquisitions, adjusted EBITDA decreased by 16.0 per cent, mainly explained by the lower volumes in Norway. The positive impact from the higher volumes is not fully transparent in the quarter. As for segment Insulation, the lag in contractual price indexation towards to the customers explain why margins recover when raw material prices stabilise or decrease.

The new fish box facility at Senja is expected to commence operations in the third quarter of 2021. In March, BEWI also announced its intention to build a new packaging facility at the island of Jøsnøya.

First half of 2021

Net sales amounted to EUR 127.8 million 2021 (75.2), an increase of 70.0 per cent. Excluding acquisitions, sales increased by 19.4 per cent explained by higher volumes in all regions and increased sales prices.

Adjusted EBITDA amounted to EUR 19.5 million (16.1), up by 20.9 per cent. Excluding acquisitions, adjusted EBITDA decreased by 8.9 per cent explained by the same factors as for the quarter. The lower EBITDA margin is in addition a consequence of the relatively lower margins in BDH, which was acquired in August last year.

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Circular and corporate

BEWI Circular (Circular) is responsible for increasing the Group's collection and recycling of EPS. Since the establishment of the business unit in 2018, Circular has launched several initiatives, increasing the Group's recycling capacity to approximately 20,000 tonnes.

BEWI has announced an annual target of recycling 60,000 tonnes of EPS. The number refers to approximately onethird of BEWI's annual production, which is the volume BEWI puts into the end markets with a lifetime less than one year. The other two-thirds of the volume are used in products with a lifetime of more than one year, i.e., bike helmets, car components, insulation in buildings and similar.

BEWI's recycling capacity was significantly strengthened during 2020, following completion of a greenfield project in Portugal, acquisition of an extruder for recycling in Denmark and several acquisitions.

During the first half of 2021, production at the new recycling facility in Portugal delivered according to plan, providing a positive development for the Circular business. Further, in March, BEWI announced its acquisition of a 34 per cent interest of the Czech recycling company Inoplast, adding another 5,000 to 6,000 tonnes to the company's recycling capacity.

Sustainability is a top priority in BEWI with emphasis on reducing the environmental footprint of its operations and to increase the content of recycled materials in products. In March 2021, BEWI launched its sustainability strategy, with ambitious goals for the Group's sustainability work. The strategy covers the entire value chain with ambitions leading to 2030.

In August 2021, BEWI initiated a process to refinance its two existing bond loans and credit facility, enabling the company to pursue further growth opportunities. To support the company's commitments to sustainability, BEWI intends to establish a Sustainable Finance Framework (the "Framework"), covering the entire refinancing, including both Green and Sustainability-Linked features, enabling financing of green projects and assets. For more information on the refinancing and the Framework, see events after the close of the quarter.

Revenues and costs related to Group functions that do not belong to any specific business segment are booked as unallocated. This includes costs related to the Group's circular activities, Business Development, and other Group functions.

For the second quarter of 2021, the unallocated contribution amounted to a negative EUR 0.5 million (-0.9). For the first six months of 2021, the contribution was negative EUR 2.2 million (-2.1).

Financial position and liquidity

Consolidated financial position

Total assets amounted to EUR 603.3 million as of 30 June 2021, compared to EUR 543.1 million at year-end 2020. The increase since last year is mainly related to seasonal increase in working capital.

Total equity amounted to EUR 223.9 million as of 30 June 2021, compared to EUR 195.1 million at year-end 2020.

Net debt amounted to EUR 185.0 million as of 30 June 2021 (106.1 excluding IFRS 16), compared to EUR 170.2 million at year-end 2020 (91.7 excluding IFRS 16).

Cash and cash equivalents were EUR 42.3 million as of 30 June 2021, compared to EUR 51.4 million at yearend 2020.

Consolidated cash flow

Cash flow from operating activities amounted to EUR 1.4 million for the second quarter (7.4), including an increase of working capital of EUR 21.1 million (-4.3). Working capital followed normal seasonality but witnessed a bigger growth in accounts receivable than normal, due to the mainly price driven increase in sales in segment RAW. Various government initiatives in 2020, related to Covid-19, resulted in deferred payments of corporate income tax, VAT and social security during the same period last year. Such positive cash flow measures were not in place this year.

For the first six months of 2021, cash flow from operating activities amounted to EUR 1.7 million (2.5), including an increase in working capital of EUR 30.6 million (19.0). The reasons for the deviation to the same period last year were the same as for the quarter.

Cash flow used for investing activities amounted to EUR -15.9 million for the second quarter (-2.7). Higher CAPEX than in 2020, as further outlined below, combined with acquisitions and other strategic investments, explain the deviation to last year. The same period last year also noted a positive cash flow effect from a sale and leaseback transaction.

For the first half of 2021, cash flow from investing activities amounted to EUR -23.1 million (-13.6). Higher CAPEX this year and the effect in the spring of 2020

from a sale and leaseback transaction are the main components explaining the difference to the same period last year.

For an overview of the main investments, see section about Capital expenditures.

Cash flow from financing activities came in at a positive EUR 3.6 million for the second quarter (-16.1). The cash inflow from a new share issue offset the negative impact of reduced overdraft utilisation and dividend paid.

For the first half of 2021, cash flow from financing activities amounted to a positive EUR 12.1 million (-6.7), mainly impacted by a new share issue during the period. Utilisation of overdraft facilities also contributed positively to the cash flow, whereas dividend paid and loan repayment, including amortisation of leasing liabilities, had a negative effect. Although the same period last year saw a EUR 15.8 million precautionary draw-down of overdraft facilities amidst the Covid-19 turmoil, the refinancing of acquired companies and a bond redemption led to a negative cash flow during the first six months of 2020.

Capital expenditures

In the second quarter of 2021, investments continued according to plan.

For the second quarter of 2021, CAPEX totalled EUR 8.5 million (3.5), of which EUR 2.1 million related to greenfield projects, consisting of the new recycling facility in Portugal, two customer specific investments for P&C in Norway, and a new extrusion line for Insulation in Norrköping in Sweden.

For the first six months of 2021, CAPEX amounted to EUR 15.4 million (6.6), of which EUR 5.4 million related to greenfield projects. See below for further details about the investment programmes/ greenfield projects.

BEWI has launched a financial target of annual investments of EUR 12.5-15.0 million excluding greenfield initiatives. As the company is growing, the financial target for investments will be revised.

For 2021, investments are expected to end at EUR 20.0 to 22.5 million, including additional investments of approximately EUR 2.5 million to finalise ongoing investment programmes, as described in the section

about ongoing organic growth initiatives below. The number excludes investments in the announced greenfield project at Jøsnøya, which has not commenced yet, as well as further investments in the company's ERP systems which will depend on the progress of the project.

Organisation

As of 30 June 2021, BEWI ASA had 1,504 employees, up from 1,438 on 31 December 2020.

Important events in the first half of 2021

In BEWI, organic- and M&A growth initiatives, remains a high priority. The group has several ongoing organic growth initiatives and a strong pipeline of M&A opportunities.

Ongoing organic growth initiatives

The following investment programmes are ongoing in the BEWI group:

Packaging & Components Norway

BEWI is establishing a new fish box facility at Senja, Norway, where the company has a long-term supply agreement with SalMar. Production is expected to commence in the third quarter of 2021.

In March 2021, BEWI announced its plans to set up a new packaging facility on the Jøsnøya island, Hitra, on the west coast of central Norway. The new facility will be BEWI's most modern and efficient facility for production of fish boxes, as well as being a warehouse and a logistics hub for reusable boxes, reusable pallets, and other types of packaging products mainly for the fish farming industry. The real estate group KMC Properties ASA owns the plot and is responsible for the development project. The two parties have entered a conditional long-term lease agreement for the property.

In addition to the two new fish box facilities, the company has invested in new technology at its facility in Stjørdal to produce moulded components under a customer agreement. Production commenced towards the end of the second quarter 2021.

Insulation Sweden

During 2020 and into 2021, BEWI has invested in technology and new machinery at its new facility in Norrköping in Sweden, including modern extrusion technology improving production capacity and efficiency. Commencement of the new XPS production line has however been somewhat delayed, causing some extra costs so far in 2021. The production line is now producing commercial volumes.

Circular Portugal

In 2020, BEWI invested in a greenfield recycling project in Portugal. The production at the new facility commenced in the fourth quarter of 2020, and Circular Portugal is now in full production.

The new facility increases the company's recycling capacity by more than 10,000 tonnes, bringing the company closer to its strategic priority to become fully circular.

ICT

BEWI has started implementation of a new modern ERP system. Blueprints will be developed during 2021 and the system will be implemented gradually throughout the group's segments and operating units. The first roll-out of the system will be done during the first quarter of 2022 for segment RAW, while the second roll-out will be decided by the subsidiaries of the company, based on clearly identified benefits.

Acquisitions

During the first half of 2021, BEWI had good progress on several strategic opportunities. The company primarily focuses on acquisitions that fall in to one or more of the following categories:

• Strengthening of market positions
• Broadening product offering, in particular within complementary materials
• Geographic expansion
• Be a leading recycling consolidator

Acquisition of minority interest of Czech recycling company Inoplast

In March, BEWI announced its acquisition of a 34 per cent interest of the Czech recycling company Inoplast. Inoplast is a specialist in recycling of plastics, mainly expanded polystyrene (EPS), but also other types of

Q2 | 2021

plastics. Through the acquisition, BEWI added another 5,000 to 6,000 tonnes to its recycling capacity.

Acquisition of Danish paper packaging company Honeycomb

On 13 April 2021, BEWI acquired 51 per cent of the Danish paper packaging company Honeycomb Cellpack A/S. Honeycomb provides protective packaging solutions, including design, development and manufacturing of sustainable packaging which is recyclable and biodegradable.

Through the acquisition, BEWI is broadening its product offering, in line with its strategy to provide its customers with complementary solutions.

Acquisition of Polish automotive components company IZOBLOK

On 28 April 2021, BEWI entered into an agreement to acquire a majority stake of the listed Polish company IZOBLOK. IZOBLOK is a leading European provider of Expanded Polypropylene (EPP) components to the automotive industry, with a market share of approximately 20 per cent. The company has a growing portfolio of blue-chip clients, such as Volkswagen Group, Jaguar Land Rover, BMW, Hyundai, and Ford. The acquisition confirms BEWI's strategy to strengthen its market position in the automotive industry, a market that has shown considerable growth pre-Covid.

IZOBLOK has four facilities, located at strategic locations in southern Poland and Germany, with developed infrastructure ensuring effective access to customers across Europe.

The transaction was closed early July 2021 (see events after the close of the quarter). The consideration was approximately EUR 16.5 million, of which approximately EUR 13.5 million was paid in cash and the remaining settled through issuance of new shares in BEWI ASA.

Significant increase in raw material prices

From mid-February 2021, the price of the raw material for EPS, Styrene, recorded the steepest increased ever seen. Following a force majeure incident at the largest styrene plant in Europe, Maasvlakte in the Netherlands, prices increased by around 50 per cent in a week. In combination with other events, this led to extreme price development for Styrene in Europe. Further, this led to most of the EPS raw material producers minimizing their styrene purchase, both due to the limited availability and the extreme prices, which again led to a shortage of EPS as raw material. Combined with increased demand for EPS-based products, this created an imbalance in the market, resulting in significant increase in the price of the EPS raw material (beads) and consequently the GAP, i.e., the gross profit for EPS beads.

Both the Styrene and EPS prices remained high in the second quarter.

For BEWI, the company's integrated business model, combined with a robust procurement strategy, once again proved as a competitive advantage in this period. Backed by multiple suppliers, various contract structures as well as long and close relations to customers, the company managed to maintain or increase deliveries to its customers.

Share information

As of 30 June 2021, the total number of shares outstanding in BEWI ASA was 155,478,012, each with a par value of NOK 1. Each share entitles to one vote.

During the second quarter, the share was traded between NOK 26.70 and NOK 30.70 per share, with a closing price of NOK 27.30 on 30 June 2021.

Completion of private placement

On 6 May 2021, BEWI completed a private placement raising gross proceeds of NOK 200 million by issuance of 7 067 138 new shares at NOK 28.30 per share. The net proceeds will primarily be used to finance the acquisition of IZOBLOK, and to maintain a solid financial position, enabling BEWI to pursue further growth opportunities, in line with its strategy.

Combined with the private placement, existing shares for an aggregated amount of NOK 50 million were sold by the company's second largest shareholder Verdane Capital.

Significant risks and uncertainties

BEWI's risks and risk management are described in the group's annual report for 2020.

For the second half of 2021, BEWI's most significant risks and uncertainties relate to the development in raw material prices, shortage of raw materials,

including chemicals, and the continued uncertainty related to the Covid-19 development.

Events after the close of the quarter

Completion of acquisition of IZOBLOK

On 7 July 2021, BEWI announced completion of the acquisition of the Polish company IZOBLOK, as well as completion of a private placement directed towards the majority seller in the transaction, in which 1,132,792 new shares was subscribed for at a subscription price of NOK 27,50 per share.

Following the registration of the share capital increase with the Norwegian Register of Business Enterprises on 9 July 2021, the company now has an issued share capital of NOK 156,610,804, divided into 156,610,804 shares, each with a par value of NOK 1.

IZOBLOK receives large volume order

On 28 July 2021, IZOBLOK announced that the company had received a large volume order from Adient Ltd. for automotive EPP components, more specifically car seats, at a total value of EUR 47.5 million. Delivery of the order is planned for 2024 to 2032.

Refinancing initiated

On 9 August 2021, BEWI announced that its wholly owned subsidiary, BEWiSynbra Group AB, is requesting approval from the holders of its two existing bond loans of up to EUR 100 million and EUR 115 million with maturity in 2022 and 2023 respectively, to refinance before the maturity dates.

Subject to approval from the bondholders, BEWI ASA intends to refinance the bonds by issuing new senior unsecured floating rate sustainability-linked bonds in an aggregate amount of up to EUR 160 million under a framework of up to EUR 250 million.

The intended refinancing reflects BEWI's solid strategic growth outlook, including both organic growth initiatives and attractive M&A opportunities. The contemplated issue of new sustainability-linked bonds and increase of existing revolving credit facilities, as well as extended maturity profile, will allow for further financial flexibility to pursue these growth opportunities.

Advanced negotiations for acquisition

As mentioned above, growth initiatives remain a high priority in BEWI, and the company is continuously in discussions with potential M&A targets.

Currently, BEWI is in advanced negotiations for the acquisition of an insulation company in Benelux, in line with the strategy to strengthen its market position in established regions.

Outlook

For the first half of 2021, all BEWI's segments have recorded increased volumes compared to the corresponding period last year. The company is experiencing strong demand in most of its end-markets, and the volume development have remained solid also into the third quarter.

So far in the third quarter, the raw material prices seem to be stabilising, while the demand for EPS-based products remains high. Market demand is expected to continue to be strong also for the second half of 2021 and according to market analysts*, the average EPS contract price for the third quarter, which is an indicator of the selling price for segment RAW, is expected to be at the same level in the third quarter as in the second quarter. Further, the analysts also forecast a GAP (difference between prices of EPS raw materials and Styrene) for the third quarter high above the historical range of EUR 360-400 per tonnes. Currently, the forecasts estimate a GAP even higher than for the second quarter. This will have full drop-through impact on sold volumes for segment RAW.

As communicated in the report for the first quarter of 2020, the increased raw material prices positively impacted margins for segment RAW for the second quarter and put some pressure on the margins for the downstream segments, where sales price adjustments lag approximately one quarter. Margins in the downstream segments are expected to catch up when raw material prices stabilise or decrease.

The Board considers BEWI to be very well-positioned for further profitable growth. The company experiences strong demand and has a proven business model with solid operational performance. Combined with an attractive pipeline of M&A opportunities and a solid financial position, the company will continue pursuing growth opportunities in line with its strategy.

*IHS Markit forecast

Trondheim, 10 August 2021 The Board of Directors and CEO of BEWI ASA

Responsibility statement from the Board of Directors and CEO

We declare that, to the best of our knowledge, the half year financial statements for the period 1 January to 30 June 2021 have been prepared in accordance with IAS 34 – Interim Reporting, and that the information contained therein provides a true and fair view of the Group's assets, liabilities, financial position, and overall results. We further declare that, to the best of our knowledge, the half-year report provides a true and fair view of important events that have taken place during the accounting period and their impact on the half-year financial statements, as well as the most important risks and uncertainties facing the business in the forthcoming accounting period.

Trondheim, 10 August 2021 The Board of Directors and CEO of BEWI ASA

Gunnar Syvertsen Chairman

Kristina Schauman Board member

Stig Wærnes Board member

Anne-Lise Aukner Board member

Rik Dobbelaere Board member

Christian Bekken CEO

Definitions of alternative performance measures not defined by IFRS

Organic growth	Organic growth is defined as growth in net sales for the reporting period compared to the same period last year, excluding the impact of currency and acquisitions. It is a key ratio as it shows the underlying sales growth.
EBITDA	Earnings before interest, tax, depreciation, and amortization. EBITDA is a key performance indicator that the Group considers relevant for understanding the generation of profit before investments in fixed assets.
EBITDA margin	EBITDA as a percentage of net sales. The EBITDA margin is a key performance indicator that the Group considers relevant for understanding the profitability of the business and for making comparisons with other companies.
EBIT	Earnings before interest and tax. EBIT is a key performance indicator that the Group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures. Depreciations are included, however, which is a measure of resource consumption necessary for generating the result.
EBIT margin	EBIT as a percentage of net sales. The EBIT margin is a key performance indicator that the Group considers relevant for understanding the profitability of the business and for making comparisons with other companies.
Items affecting comparability	Items affecting comparability include costs related to the planned IPO, transaction costs related to acquired entities, including the release of negative goodwill from acquisitions, severance costs and other normalisations such as divestment of real estate, closing of facilities, unscheduled raw material production stops and other.
Adjusted (adj.) EBITDA	Normalised earnings before interest, tax, depreciation, and amortization (i.e., items affecting comparability and deviations are added back). Adjusted EBITDA is a key performance indicator that the Group considers relevant for understanding earnings adjusted for items that affect comparability.
Adjusted (adj.) EBITDA margin (%)	EBITDA before items affecting comparability as a percentage of net sales. The adjusted EBITDA margin is a key performance indicator that the Group considers relevant for understanding the profitability of the business and for making comparisons with other companies.
Adjusted EBIT	Normalised earnings before interest and tax (i.e., non-recurring items and deviations are added back). Adjusted EBIT is a key performance indicator that the Group considers relevant for understanding earnings adjusted for non-recurring items that affect comparability.
Operating cash flow	Earnings before interest and tax, adjusted for items not affecting cash flow and changes in operating capital. Operating cash flow is a key performance indicator that shows the contributions of the business to the cash flow for the financing of investments and acquisitions.
Equity ratio	Total equity in relation to total assets. The equity ratio is a key performance indicator that the Group considers relevant for assessing its financial leverage.
Net debt	Interest-bearing liabilities excluding obligations relating to employee benefits, minus cash and cash equivalents. Net debt is a key performance indicator that is relevant both for the Group's calculation of covenants based on this indicator and because it indicates the Group's financing needs.

Alternative performance measures not defined by IFRS

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Operating income (EBIT)	22.3	11.9	29.1	18.4	39.5
Amortisations	1.9	1.4	3.7	2.9	6.2
EBITA	24.2	13.3	32.8	21.3	45.8
Items affecting comparability	0.5	-2.9	1.7	-1.9	-5.0
Adjusted EBITA	24.7	10.4	34.5	19.4	40.8
EBITA	24.2	13.3	32.8	21.3	45.8
Depreciations	6.9	5.4	13.8	11.1	24.2
EBITDA	31.1	18.7	46.6	32.4	70.0
Items affecting comparability	0.5	-2.9	1.7	-1.9	-5.0
Adjusted EBITDA	31.6	15.7	48.3	30.5	65.0

Items affecting comparability

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
IPO related costs	0.0	-	0.0	-	-2.1
Severance and integration costs	-	-0.3	-	-0.4	-0.5
Restructuring costs	0.0	0.1	-0.1	-0.3	-0.4
Transaction costs	-0.5	0.0	-1.5	-0.4	-1.2
Additional purchase price	-	-	-	-	0.0
Capital gains from sale of fixed assets	0.1	0.0	0.1	0.1	6.3
Capital loss from sale of fixed assets	-0.1	-	-0.2	-	-
IT restructuring	-	-0.4	-	-0.4	-0.4
Recognition of negative goodwill in associate	-	3.5	-	3.5	3.5
Other	-	0.0	-	-0.2	-0.2
Total	-0.5	2.9	-1.7	1.9	5.0

Revenue bridge: Change in net sales from corresponding periods in 2020

million EUR	RAW	%	Insulation	%	P&C	%	Unallocated	%	Intra-group revenue	Total net sales	%
Q2 2020	46.3		39.0		35.3		1.4		-16.9	105.1
Acquisitions	-	-	7.9	20.4%	20.4	57.8%	0.5	35.0%	-0.1	28.7	27.3%
Currency	-	-	0.6	1.4%	1.3	3.7%	-0.4	-26.7%	0.0	1.5	1.4%
Organic growth	55.0	118.4%	10.7	27.5%	8.6	24.3%	5.2	371.6%	-16.6	62.8	59.7%
Total increase/ decrease	55.0	118.4%	19.2	49.3%	30.2	85.8%	5.3	379.9%	-16.7	93.0	88.5%
Q2 2021	101.4		58.2		65.5		6.7		-33.6	198.1

million EUR	RAW	%	Insulation	%	P&C	%	Unallocated	%	Intra-group revenue	Total net sales	%
YTD 2020	96.1		71.2		75.2		2.5		-34.8	210.2
Acquisitions	-	-	13.9	19.5%	38.1	50.7%	0.9	35.4%	0.0	52.9	25.2%
Currency	-	-	0.9	1.3%	2.0	2.7%	-0.3	-13.1%	-0.1	2.5	1.2%
Organic growth	69.5	72.2%	12.9	18.2%	12.5	16.7%	6.4	255.9%	-19.9	81.4	38.7%
Total increase/ decrease	69.5	72.2%	27.7	39.0%	52.6	70.0%	7.0	278.2%	-20.0	136.8	65.1%
YTD 2021	165.6		98.9		127.8		9.5		-54.8	347.0

EBITDA bridge: Change in adj. EBITDA from corresponding periods in 2020

million EUR	RAW	%	Insulation	%	P&C	%	Unallocated	%	Total adj. EBITDA	%
Q2 2020	1.3		7.8		7.5		-0.9		15.7
Acquisitions	-	-	1.6	19.9%	2.8	37.5%	0.1	-8.0%	4.5	28.4%
Currency	-	-	-0.1	-1.3%	0.2	2.7%	-0.1	6.4%	0.0	0.2%
Organic growth Total increase/	14.6	1,150.7%	-2.2	-28.5%	-1.4	-18.7%	0.4	-43.8%	11.4	72.3%
decrease	14.6	1,150.7%	-0.7	-9.9%	1.6	21.5%	0.4	-45.4%	15.9	100.9%
Q2 2021	15.9		7.1		9.1		-0.5		31.6

million EUR	RAW	%	Insulation	%	P&C	%	Unallocated	%	Total adj. EBITDA	%
YTD 2020	3.4		13.1		16.1		-2.1		30.5
Acquisitions	-	-	2.2	16.7%	4.8	29.8%	0.0	-1.8%	7.0	23.0%
Currency	-	-	-0.1	-0.8%	0.3	2.0%	-0.1	5.9%	0.1	0.3%
Organic growth Total increase/	15.7	469.4%	-3.3	-25.3%	-1.8	-10.9%	0.0	1.5%	10.6	34.8%
decrease	15.7	469.4%	-1.2	-9.4%	3.4	20.9%	-0.1	5.6%	17.8	58.2%
YTD 2021	19.1		11.9		19.5		-2.2		48.3

Consolidated condensed interim financial statements for the period ended 30 June 2021

Consolidated condensed interim statement of income

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Net sales	198.1	105.1	347.0	210.2	462.6
Total operating income	198.1	105.1	347.0	210.2	462.6
Raw materials and consumables	-88.4	-43.8	-148.5	-90.1	-181.1
Goods for resale	-23.4	-2.5	-41.7	-4.8	-35.3
Other external costs	-31.0	-23.9	-60.4	-47.3	-99.4
Personnel cost	-26.3	-20.0	-52.2	-40.0	-88.1
Depreciation/ amortisation and impairment of tangible and intangible assets	-8.8	-6.8	-17.5	-14.0	-30.4
Share of income from associated companies	2.1	3.8	2.4	4.4	4.9
Capital gain from sale of assets	0.0	-	0.0	-	6.3
Total	-175.8	-93.2	-317.9	-191.8	-423.1
Operating income (EBIT)	22.3	11.9	29.1	18.4	39.5
Financial income	0.0	0.0	0.1	0.1	4.2
Financial expenses	-3.5	-2.5	-10.0	-5.3	-11.4
Net financial items	-3.5	-2.5	-9.9	-5.2	-7.2
Income before tax	18.8	9.4	19.2	13.2	32.3
Income tax expense	-4.4	-0.9	-5.7	-2.4	-2.3
Profit for the period	14.4	8.5	13.5	10.8	30.0

Consolidated condensed interim statement of comprehensive income

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Profit/loss for the period	14.4	8.5	13.5	10.8	30.0
OTHER COMPREHENSIVE INCOME
Items that may later be reclassified to profit or loss
Exchange rate differences	-1.5	3.3	2.8	-5.8	-4.0
Items that will not be reclassified to profit or loss
Remeasurements of net pension obligations	1.1	-0.7	1.4	-0.8	0.0
Income tax pertinent to remeasurements of net pension obligations	-0.2	0.1	-0.3	0.1	0.0
Other comprehensive income after tax	-0.6	2.7	3.9	-6.5	-4.0
Total comprehensive income for the period	13.8	11.2	17.4	4.3	26.0

Profit attributable to:

million EUR (except numbers for EPS)	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Profit for the period attributable to:
Parent Company shareholders	14.4	8.5	13.4	10.8	30.1
Non-controlling interests	0.0	0.0	0.1	0.0	-0.1
Total comprehensive income attributable to:
Parent Company shareholders	13.9	11.2	17.3	4.3	26.1
Non-controlling interests	-0.1	0.0	0.1	0.0	-0.1
Earnings per share:
Average number of shares:	151,672,630	138,937,980	150,050,762	138,937,980	141,130,072
Diluted average number of shares	151,898,624	138,937,980	150,288,869	138,937,980	141,130,072
Earnings per share (EPS), basic and diluted (EUR)	0.10	0.06	0.09	0.08	0.21
Earnings per share (EPS), basic and diluted (NOK)	0.97	0.66	0.90	0.84	2.27
EPS in NOK is calculated using average rates for the period

Consolidated condensed interim statements of financial position

million EUR	30.06.2021	30.06.2020	31.12.2020
NON-CURRENT ASSETS
Intangible assets
Goodwill	90.6	72.4	83.8
Other intangible assets	78.7	69.4	79.4
Total intangible assets	169.3	141.8	163.2
Property plant and equipment
Land and buildings	68.9	63.5	70.0
Plant and machinery	83.5	69.7	80.8
Equipment, tools, fixtures and fittings	11.2	9.8	10.2
Construction in progress and advance payments	13.0	4.1	9.3
Total property, plant and equipment	176.6	147.1	170.3
Financial assets
Shares in associates	11.5	8.0	8.0
Other financial non-current assets	15.1	8.0	17.2
Total financial assets	26.6	16.0	25.2
Deferred tax assets	3.6	4.5	5.3
TOTAL NON-CURRENT ASSETS	376.1	309.4	364.0
CURRENT ASSETS
Inventory	57.8	42.6	57.4
Other current assets
Accounts receivable	112.3	56.9	58.3
Current tax assets	2.4	0.3	2.9
Other current receivables	6.3	1.0	6.3
Prepaid expenses and accrued income	6.1	3.2	2.8
Other financial assets	-	-	-
Cash and cash equivalents	42.3	38.0	51.4
Total other current assets	169.4	99.4	121.7
TOTAL CURRENT ASSETS	227.2	142.0	179.1
TOTAL ASSETS	603.3	451.4	543.1

Consolidated condensed interim statements of financial position cont.

million EUR	30.06.2021	30.06.2020	31.12.2020
EQUITY
Share capital	14.7	0.1	14.0
Additional paid-in capital	163.7	133.8	151.9
Reserves	-12.8	-5.4	-16.8
Accumulated profit (including net profit for the period)	57.9	26.6	45.6
Equity attributable to Parent Company shareholders	223.5	155.1	194.7
Non-controlling interests	0.4	-0.7	0.4
TOTAL EQUITY	223.9	154.4	195.1
LIABILITIES
Non-current liabilities
Pensions and similar obligations to employees	2.1	2.7	2.5
Provisions	0.6	0.8	0.7
Deferred tax liability	20.9	21.7	20.9
Non-current bond loan	64.0	137.6	137.9
Other non-current interest-bearing liabilities	70.2	29.6	70.2
Other financial non-current liabilities	3.8	-	-
Total non-current liabilities	161.6	192.4	232.2
Current liabilities
Current bond loan	74.5	-	-
Other current interest-bearing liabilities	18.7	25.0	13.5
Other financial liabilities	0.9	0.7	0.9
Accounts payable	80.3	39.6	54.9
Current tax liabilities	4.9	6.9	6.6
Other current liabilities	11.7	9.9	13.4
Accrued expenses and deferred income	26.8	22.5	26.5
Total current liabilities	217.8	104.6	115.8
TOTAL LIABILITIES	379.4	297.0	348.0
TOTAL EQUITY AND LIABILITIES	603.3	451.4	543.1

Consolidated condensed interim statements of changes in equity

million EUR		1.1.-30.06.2021 1.1.-30.06.2020 1.1.-31.12.2020
OPENING BALANCE	195.1	150.1	150.1
Net profit/ loss for the period	13.5	10.8	30.0
Other comprehensive income	3.9	-6.5	-4.0
Total comprehensive income	17.4	4.3	26.0
New share issue, net of transaction costs Dividend Share-based payments Acquisition non-controlling interest	18.9 -6.4 0.3 -1.4	- - - 0.0	17.9 - 0.1 1.0
Total transactions with shareholders	11.4	0.0	19.0
CLOSING BALANCE	223.9	154.4	195.1

Consolidated condensed interim statements of cash flows

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Operating income (EBIT)	22.3	11.9	29.1	18.4	39.5
Adjustment for non-cash items etc.	7.3	2.7	15.5	9.7	19.1
Net financial items	-2.8	-2.1	-6.0	-4.0	-10.1
Income tax paid	-4.3	-0.8	-6.3	-2.5	-12.0
Cash flow from operating activities before changes in working capital	22.5	11.7	32.3	21.6	36.6
Changes in working capital	-21.1	-4.3	-30.6	-19.1	-3.4
Cash flow from operating activities	1.4	7.4	1.7	2.5	33.2
Acquisitions non-current assets	-8.5	-3.5	-15.4	-6.6	-26.6
Divestment non-current assets	0.2	4.3	0.2	4.8	43.3
Business acquisitions/ financial investments	-7.6	-3.6	-7.9	-11.8	-14.0
Cash flow from investing activities	-15.9	-2.7	-23.1	-13.6	2.7
Borrowings	-	-	5.3	16.4	0.3
Repayment of debt	-8.9	-16.1	-5.7	-23.1	-49.4
Dividend	-6.4	-	-6.4	-	-
New share issue, net	18.9	-	18.9	-	8.4
Cash flow from financing activities	3.6	-16.1	12.1	-6.7	-40.7
Cash flow for the period	-10.9	-11.4	-9.3	-17.8	-4.8
Opening cash and cash equivalents	53.5	47.5	51.4	56.3	56.3
Exchange difference in cash	-0.3	1.9	0.2	-0.5	-0.1
Closing cash and cash equivalents	42.3	38.0	42.3	38.0	51.4

Notes to the financial statements

Note 1 | General information

The Company and the Group

BEWI ASA, corporate registration number 925 437 948, is a holding company registered in Norway with a registered office in Trondheim, address Postboks 3009 Lade, NO-7441 Trondheim.

BEWI ASA was incorporated on 29 July 2020. On 21 August 2020 all of the shares in BEWiSynbra AB were contributed to BEWI ASA against an issuance of shares in BEWI ASA to the shareholders of BEWiSynbra AB (a share exchange), thereby establishing the same shareholder structure in BEWI ASA as in BEWiSynbra immediately before the reorganisation. Following the legal restructuring, BEWI ASA has become the new parent company of the Group.

The reorganisation represents a capital reorganisation and not a business combination. The carrying values of assets and liabilities in BEWiSynbra were recognised in the Group (with BEWI ASA as the new parent company) with the same carrying values as in BEWiSynbra in line with predecessor accounting (i.e., to continuity) and with no fair value adjustments. Furthermore, as the reorganisation is considered to be a capital reorganisation from an accounting perspective, BEWiSynbra's historical consolidated financial statements represent the Group's historical financial information going forward, and as such these financial statements reflect the Group's historical activities.

Presentation currency and comparative information

Amounts are given in EUR million unless otherwise indicated. Information within brackets refer to the comparative periods. Historically SEK has been applied as the presentation currency for BEWiSynbra's consolidated financial statements. In the third quarter of 2020, the Group decided to change the presentation currency from SEK to EUR for the consolidated financial reporting with retroactive effect and in accordance with the provisions in IAS 21 The Effects of Changes in Foreign Exchange Rates. Comparative financial figures have been translated from SEK to EUR using either average rates for the income statement, or year-end exchange rate for the period end. The exchange rates applied are the average exchange rate SEK to EUR for the respective years and period ends.

NOTE 2 │ Accounting policies

The BEWi ASA applies the International Financial Reporting Standards (IFRS) as adopted by the EU. The accounting policies applied to comply with those described in BEWi ASA's Annual Report for 2021 This interim report has been prepared in accordance with IAS 34 Interim financial reporting and the Annual Accounts Act.

The presentation currency in the consolidated accounts was changed to EUR in September 2020, from SEK used in prior reporting in BEWiSynbra Group.

NOTE 3 │ Related party transactions

Christian Bekken, CEO of BEWI ASA, is together with other members of the Bekken family a major shareholder of the company through Frøya Invest AS, KMC Family AS and BEWi Holding AS. Other related parties are the three 34% owned associated companies Hirsch France SAS, Hirsch Porozell GmbH and Inoplast S.R.O. and the 49% owned associated company Jablite Group Ltd. Transactions with those companies are presented in the tables below.

In the second quarter of 2021, the final purchase price for the BDH group, acquired in 2020 from a company owned by members of the Bekken family, was settled through a cash payment of EUR 2.7 million, which was EUR 0.4 million more than estimated on 31 December 2020.

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Transactions impacting the income statement
Sale of goods to:
HIRSCH France SAS	6.1	0.6	9.7	1.5	5.1
HIRSCH Porozell GmbH	11.8	10.4	19.6	15.6	32.1
Jablite Group Ltd.	2.4	-	4.8	-	4.6
Total:	20.3	11.0	34.1	17.1	41.8
Purchase of goods from:
Bekken owned companies	0.4	0.1	1.1	0.2	0.7
Total:	0.4	0.1	1.1	0.2	0.7
Interest Income from:
Hirsch France SAS	0.0	0.0	0.1	0.1	0.1
Jablite Group Ltd.	0.0	-	0.0	-	-
Total:	0.0	0.0	0.1	0.1	0.1
Rental expenses to:
Companies with Bekken as significant shareholder	1.9	0.7	3.7	1.4	3.4
Total:	1.9	0.7	3.7	1.4	3.4
million EUR		30.06.2021	30.06.2020		31.12.2020

30.06.2021	30.06.2020	31.12.2020
0.1	-	0.1
2.3	2.3	2.3
1.7	1.6	1.7
4.1	3.9	4.1
1.6	-	1.5
0.6	-	0.6
-	0.1	-
0.0	0.0	-
2.2	0.1	2.1
0.5	-	3.8
0.5	-	3.8

NOTE 4 │ Segment information

Operating segments are reported in a manner that corresponds with the internal reporting submitted to the chief operating decision-maker. The Executive Committee constitutes the chief operating decision maker for the BEWI Group and takes strategic decisions in addition to evaluating the Group's financial position and earnings. Group Management has determined the operating segments based on the information that is reviewed by the Executive Committee and used for the purposes of allocating resources and assessing performance. The Executive Committee assesses the operations based on three operating segments: RAW, Insulation and Packaging & Components. Sales between segments take place on market terms.

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
RAW
Segment revenue	101.4	46.3	165.6	96.1	191.2
Intra-group revenue	-31.7	-16.0	-51.5	-33.0	-56.5
Revenue from external customers	69.6	30.3	114.0	63.1	134.7
Insulation
Segment revenue	58.2	39.0	98.9	71.2	146.6
Intra-group revenue	-0.7	-0.2	-1.4	-0.7	-2.4
Revenue from external customers	57.5	38.8	97.5	70.5	144.1
Packaging and Components
Segment revenue	65.5	35.3	127.8	75.2	179.9
Intra-group revenue	-1.1	-0.7	-1.7	-1.1	-2.3
Revenue from external customers	64.4	34.6	126.1	74.1	177.6
Unallocated
Segment revenue	6.7	1.4	9.5	2.5	6.4
Intra-group revenue	0.0	0.0	-0.1	0.0	-0.2
Revenue from external customers	6.7	1.4	9.4	2.5	6.1
Total
Total segment revenue	231.8	122.0	401.8	245.0	524.1
Total Intra-group revenue	-33.6	-16.9	-54.8	-34.8	-61.5
Total revenue from external customers	198.1	105.1	347.0	210.2	462.6

Each segment sells products that are similar in nature. External revenue for the different segments also represents the Group's disaggregation of revenue.

Q2 | 2021

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Adj. EBITDA
RAW	15.9	1.3	19.1	3.4	9.4
Insulation	7.1	7.8	11.9	13.1	26.5
Packaging and Components	9.1	7.5	19.5	16.1	34.1
Unallocated	-0.5	-0.9	-2.2	-2.1	-5.1
Total adj. EBITDA	31.6	15.7	48.3	30.5	65.0
EBITDA
RAW	15.9	1.2	19.1	3.3	9.9
Insulation	7.1	11.4	11.7	15.9	32.4
Packaging and Components	9.0	7.5	19.3	16.0	36.2
Unallocated	-0.9	-1.4	-3.6	-2.8	-8.6
Total EBITDA	31.1	18.7	46.6	32.4	70.0
EBITA
RAW	15.0	0.2	17.2	1.4	6.2
Insulation	5.2	9.9	7.8	12.6	25.0
Packaging and Components	5.3	4.7	12.0	10.4	23.9
Unallocated	-1.2	-1.5	-4.3	-3.1	-9.4
Total EBITA	24.2	13.3	32.8	21.3	45.8
EBIT
RAW	14.9	0.1	17.0	1.2	5.8
Insulation	4.6	9.6	6.7	11.6	23.1
Packaging and Components	4.2	3.8	9.9	8.7	20.4
Unallocated	-1.4	-1.6	-4.5	-3.1	-9.9
Total EBIT	22.3	11.9	29.1	18.4	39.5
Net financial items	-3.5	-2.5	-9.9	-5.2	-7.2
Income before tax	18.8	9.4	19.2	13.2	32.3

External revenue by country (buying company's geography)

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Total Finland	12.4	7.3	19.2	13.1	27.4
Total Sweden	18.3	13.4	33.1	25.7	49.4
Total Denmark	18.9	11.6	32.2	23.5	47.3
Total Norway	32.8	12.9	68.0	26.6	81.0
Total Portugal & Spain	13.5	5.4	22.8	11.6	26.0
Total Iceland	4.5	0.2	8.7	0.5	7.4
Total Baltics	4.0	1.8	6.7	4.5	8.4
Total UK	6.0	1.4	9.9	3.4	10.8
Total Germany	14.9	9.3	25.2	18.3	35.9
Total Poland	7.5	4.4	13.2	8.9	16.8
Total Russia	9.2	1.3	11.9	3.6	13.2
Total Netherlands	32.4	25.5	57.9	49.9	94.2
Total Belgium	3.8	2.1	6.3	4.2	8.9
Total France	6.9	2.0	11.1	5.1	11.9
Total Other	13.0	6.5	20.8	11.3	24.0
Total Group	198.1	105.1	347.0	210.2	462.6

NOTE 5 │ Depreciation/amortisation and impairment of tangible and intangible fixed assets

million EUR	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Attributable to operations	-4.1	-3.6	-8.2	-6.9	-15.0
Attributable to IFRS 16	-2.5	-1.3	-4.9	-3.3	-7.3
Attributable to fair value adjustments in business combinations	-2.2	-1.9	-4.4	-3.8	-8.1
Total	-8.8	-6.8	-17.5	-14.0	-30.4

NOTE 6 │ The Group's borrowings

million EUR	30.06.2021	30.06.2020	31.12.2020
Non-current liabilities
Bond loan	64.0	137.6	137.9
Liabilities to credit institutions	1.0	1.2	1.0
Liabilities leases	69.2	28.4	69.2
Total	134.2	167.2	208.1
Current liabilities
Bond loan	74,5	-	-
Liabilities to credit institutions	0.5	0.4	0.8
Liabilities leases	12.5	7.5	12.3
Overdraft	5.6	16.7	-
Other short term financial liabilities	-	0.4	0.4
Liabilities to non-controlling interests	-	-	-
Total	93.1	25.0	13.5
Total liabilities	227.3	192.2	221.6
Cash and cash equivalents	42.3	38.0	51.4
Net debt including IFRS 16 impact	185.0	154.2	170.2
Subtracting liabilities capitalised in accordance with IFRS 16
Non-current liabilities leases	67.5	27.4	67.4
Current liabilities leases	11.4	6.2	11.1
Total	78.9	33.6	78.5
Net debt excluding IFRS 16 impact	106.1	120.6	91.7

Net debt is also presented excluding the effect of IFRS 16, since the impact of IFRS 16 on net debt and EBITDA is excluded in the relevant covenant calculations.

The Group's loan structure

As of 30 June 2021, the Group had two bond loans outstanding.

Issued amount	Frame	Amount outstanding	Date of issuance	Maturity date
EUR 75 million	EUR 100 million	EUR 75 million	April 19, 2018	April 19, 2022
EUR 65 million	EUR 115 million	EUR 65 million	November 22, 2019	November 22, 2023

The bonds are recognized under the effective interest method at amortized cost after deductions for transaction costs. Interest terms, as well as nominal interest rates and average interest rates recognized during the quarter are presented in the table below.

Bond loans	Interest terms	Nominal interest		Average interest
		1.4-30.6.2021	1.1-30.6.2021	1.4-30.6.2021	1.1-30.6.2021
EUR 75 million	Euribor 3m + 4.75%	4.21%	4.21-4.24%	5.10%	5.12%
EUR 65 million	Euribor 3m + 3.40%	2.86%	2.86-2.89%	3.56%	3.54%

The Group's main bank has granted the Group an overdraft facility of SEK 375 million (equivalent to EUR 37.0 million). As of 30 June, EUR 5.6 million of the overdraft facility was utilised. In addition, the Group has a number of liabilities in acquired companies, such as liabilities to credit institutions that have not been refinanced post-acquisition, and liabilities for lease contracts.

Pledged assets

For the overdraft facility and bonds, collateral has been lodged in the form of business mortgages, pledged shares in subsidiaries and material intra-group loans to subsidiaries.

Contingent liabilities

Guarantees issued to suppliers amounted to EUR 23.9 million.

NOTE 7 │ Fair value and financial instruments

					Carrying
million EUR	Level 1	Level 2	Level 3	Total	amount
Financial assets measured at fair value through profit and loss
Participation in other companies	5.5	-	0.8	6.3	6.3
Total	5.5	-	0.8	6.3	6.3
Financial liabilities measured at fair value through profit and loss
Derivative liability	-	0.9	-	0.9	0.9
Other financial non-current liabilities	-	-	3.8	3.8	3.8
Total	-	0.9	3.8	4.7	4.7
Financial liabilities measured at amortised cost
Bond loans	142.0	-	-	-	138.5
Total	142.0	-	-	-	138.5

Financial instruments are initially measured at fair value, adjusted for transaction costs, except for financial instruments subsequently measured at fair value through profit and loss. For those instruments, transactions costs are recognized immediately in profit and loss. The Group is classifying its financial instruments based on the business model applied for groups of financial instruments within the Group and whether separate financial instruments meet the criteria for cash flows that are solely being payments of principal and interest on the principal amount outstanding. The Group is classifying its financial instruments into the Group's financial assets and financial liabilities measured at fair value through profit and loss and financial assets and financial liabilities measured at amortised cost. The table above shows the fair value of financial instruments measured at fair value, or where fair value differs from the carrying amount because the item is recognized at amortized cost (the bond loans). The carrying amount of the Groups' other financial assets and liabilities is considered to constitute a good approximation of the fair value since they either carry floating interest rates or are of a non-current nature.

Level 3 – Changes during the period (EUR million)	Participation in other companies	Other financial non-current liabilities
As of Dec 31, 2020	0.3	-
Exchange differences	-	-
Acquisitions	0.5	3.8
Divestments	-	-
As of June 30, 2021	0.8	3.8

Other financial non-current liabilities of EUR 3.8 million corresponds to the estimated value of option to acquire non-controlling interest in Honeycomb Cellpack A/S, as further outlined in note 10.

* Level 1 – listed prices (unadjusted) on active markets for identical assets and liabilities.

* Level 2 – Other observable data for the asset or liability are listed prices included in Level 1, either directly (as price) or indirectly (derived from price).

* Level 3 – Data for the asset or liability that is not based on observable market data.

NOTE 8 │ Business combinations

Final settlement BEWi Drift Holding AS (BDH)

In the second quarter of 2021, the final purchase price for the BDH group, acquired in 2020, was settled through a cash payment of EUR 2.7 million, which was EUR 0.4 million more than estimated on 31 December 2020.

Honeycomb Cellpack A/S

On 13 April, BEWI announced that the company had acquired 51 per cent of the Danish paper packaging company Honeycomb Cellpack A/S (Honeycomb). Honeycomb provides protective packaging solutions, including design, development and manufacturing of sustainable packaging which is both recyclable and biodegradable. In 2020, Honeycomb had revenues of close to DKK 30 million (the equivalent of EUR 4.0 million) and an EBITDA of DKK 7.0 million (the equivalent of EUR 0.9 million). The consideration was paid in cash and gave rise to a goodwill of EUR 5.3 million. The company is consolidated as from 1 April. Goodwill is not tax deductible.

Under the agreement, the seller has a put option to divest the remaining shares to BEWI in accordance with a predetermined pricing mechanism and within a given time frame. According to the same agreement, BEWi also has a call option to acquire the remaining shares within a certain time frame, calculated according to the same pricing mechanism. The option has been valued based on a forecast performance for Honeycomb over a three year period. As at 30 June 2021, the option was valued at EUR 3.8 million and is reported under Other financial non-current liabilities in the balance sheet.

NOTE 9 │ Business combinations after the close of the period

IZOBLOK S.A.

On 28 April 2021, BEWI entered into an agreement to acquire a majority stake of the listed Polish company IZOBLOK S.A. (IZOBLOK) and on 7 July 2021, after the end of the reporting period, the acquisition was completed. IZOBLOK is a leading European provider of Expanded Polypropylene (EPP) components to the automotive industry, with a market share of approximately 20 per cent. The acquisition confirms BEWI's strategy to strengthen its market position in the automotive industry, a market that has shown considerable growth pre-Covid. IZOBLOK has four facilities, located at strategic locations in southern Poland and Germany, with developed infrastructure ensuring effective access to customers across Europe.

BEWI has acquired 54.21 per cent of the shares, corresponding to 65.66 per cent of the voting rights, of IZOBLOK. The acquisition was structured as an acquisition of a holding company into which the sellers contributed the IZOBLOK shares prior to completion of the transaction. The holding company contains a combination of non-listed shares (series A-shares) with voting preferences and shares listed on Warsaw Stock Exchange (listed on GPW Main Market). The consideration comprised a combination of cash and 1,132,792 new shares issued in BEWI ASA at a subscription price of NOK 27.50 per share. At the time of the release of this report, the acquisition analysis is not completed, and a detailed description of the acquisition is therefore not available yet. Consequently, the fair values of acquired assets and liabilities are not disclosed, but the acquisition is deemed to result in a goodwill and fair value adjustments attributable to intangible assets, real estate and inventories. Transaction costs have amounted to EUR 0.7 million.

Oasis Global II AS and North Pack ApS

On 1 July 2021, BEWI acquired all shares in Oasis Global II AS, Norway, and North Pack ApS, Denmark. The two companies are trading packaging products for use at sea and the acquisitions are a continuation of the BDH acquisition in 2020. In 2020, the combined revenue and EBITDA of the two companies amounted to EUR 12.5 million and EUR 0.7 million respectively. The consideration was paid in cash. At the time of the release of this report, the acquisition analysis is not completed, and a detailed description of the acquisition is therefore not available yet, but the acquisition is deemed to result in a goodwill.

NOTE 10 │ Shares in associates

BEWI has four interests in Shares in associates; HIRSCH Porozell GmbH, HIRSCH France SAS, Jablite Group Ltd and Inoplast S.R.O. Inoplast S.R.O, in which BEWI holds 34 per cent, was acquired in March 2021 and the result of that company is reflected in BEWI consolidated accounts as from April 2021. BEWi Group holds an interest-bearing receivable from Hirsch France SAS of EUR 2.3 million and an interest-bearing receivable from Jablite Group Ltd of EUR 1.7 million. The table below presents key aggregated financial data as reflected in BEWI's consolidated accounts.

million EUR (except percentages and sites)	TOTAL
Number of production sites	16
Book value as of 30 June 2021	11.5
Key financials for YTD 2021
Net Sales YTD 2021	109.9
EBITDA YTD 2021	13.8
Of which owned share of EBITDA	4.8
EBIT	10.6
Net Profit	7.2
Consolidated into BEWi's EBITDA, share of Net profit	2.4
BEWi's share of EBITDA minus impact on consolidated EBITDA	2.4
Net debt Of which owned share Net Debt	34.8 12.8

NOTE 11 │ Earnings per share

	Q2 2021	Q2 2020	YTD 2021	YTD 2020	2020
Profit for the period attributable to parent company shareholders (million EUR)	14.4	8.5	13.5	10.8	30.1
Average number of shares	151,672,630	138,937,980	150,050,762	138,937,980	141,130,072
Effect of options to employees	225,994	-	238,107	-	-
Diluted average number of shares	151,898,624	138,937,980	150,288,869	138,937,980	141,130,072
Earnings per share (EPS), basic and diluted (EUR)	0.10	0.06	0.09	0.08	0.21
Earnings per share (EPS), basic and diluted (NOK)	0.97	0.66	0.90	0.84	2.27
EPS in NOK is calculated using the average rate in the period

The number shares outstanding have increased from 148,410,874 to 155,478,012 during 2021 in a new share issue in the second quarter. Earnings per share is calculated by dividing profit attributable to parent company shareholders by the weighted number of ordinary shares during the period. The weighted number of ordinary shares up until 21 August 2020 corresponds to the number of shares in BEWiSynbra Group AB, as further described in note 1.

NOTE 12 │ Five-year summary

million EUR (except percentage)	2020	2019	2018	2017	2016
Net sales	462.6	429.9	380.7	194.8	169.7
Operating income (EBIT)	39.5	20.3	13.7	3.6	6.4
EBITDA	70.0	48,0	28.6	8.9	11.4
EBITDA margin (%)	15.1%	11.1%	7.5%	4.6%	6.7%
Adjusted EBITDA	65.0	51.8	30.9	11.4	12.8
Adj. EBITDA margin (%)	14.0%	12.1%	8.1%	5.9%	7.5%
Items affecting comparability	5.0	-3.9	-2.3	-2.5	-1.4
EBITA	45.8	27.5	18.3	4.5	7.3
EBITA margin (%)	9.9%	6.4%	4.8%	2.2%	4.3%
Adjusted EBITA	40.8	31.4	20.7	7.0	8.7
Adj. EBITA margin (%)	8.8%	7.3%	5.4%	3.6%	5.1%
Net profit/loss for the period	30.0	5.6	1.6	4.2	4.5
Cash flow from operating activities	33.2	35.9	17.6	7.4	7.7
Capital Expenditure (CAPEX)	-26.6	-14.3	-13.8	-10,0	-5.1

As from 2019, the Group applies IFRS 16. The impact from IFRS 16 in 2019 was EUR 7.5 million on EBITDA, EUR -5.4 million on depreciations, EUR -2.5 million on financial expenses, EUR 0.1 million on income tax and EUR -0.3 million on net profit.

NOTE 13 │ Quarterly data

million EUR (except percentage)	Q1 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020	Q4 2019	Q3 2019	Q2 2019
Net sales	198.1	148.9	130.2	122.1	105.1	105.1	104.0	107.4	115.3
Operating income (EBIT)	22.3	6.8	10.6	10.6	11.9	6.5	1.2	5.7	9.0
EBITDA	31.1	15.5	19.5	18.1	18.7	13.7	8.6	12.4	15.9
EBITDA margin (%)	15.7%	10.4%	15.0%	14.8%	17.8%	13.1%	8.3%	11.5%	13.8%
Adjusted EBITDA	31.6	16.7	16.4	17.9	15.8	14.8	9.5	12.8	16.2
Adj. EBITDA margin (%)	16.0%	11.2%	12.6%	14.7%	15.0%	14.1%	9.2%	12.0%	14.0%
Items affecting comparability	-0.5	-1.2	3.1	0.1	2.9	-1.0	-0.9	-0.5	-0.3
EBITA	24.2	8.6	12.4	12.1	13.3	8.0	3.3	7.4	10.7
EBITA margin (%)	12.2%	5.8%	9.5%	9.9%	12.7%	7.6%	3.1%	6.9%	9.2%
Adjusted EBITA	24.7	9.8	9.4	12.0	10.4	9.0	4.1	7.9	11.0
Adj. EBITA margin (%)	12.5%	6.6%	7.2%	9.8%	9.9%	8.6%	4.0%	7.4%	9.5%
Net profit/loss for the period	14.4	-1.0	13.5	5.7	8.5	2.3	-2.9	2.7	4.1
Cash flow from operating activities	1.4	0.1	19.9	10.8	7.3	-4.9	19.5	22.9	7.6
Capital Expenditure (CAPEX)	-8.5	-6.9	-15.1	-4.9	-3.5	-3.1	-4.9	-2.6	-3.4