KMC Properties ASA

Investor Presentation • May 28, 2021

KMC Properties ASA

Q1 2021

28 May 2021

The preferred partner for logistics and industrial properties

Liv Malvik CEO

Kristoffer Holmen CFO

3

Disclaimer

This presentation, prepared by KMC Properties ASA (the "Company"), may contain statements about future events and expectations that are forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements.

The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This presentation contains alternative performance measures, or non-IFRS financial measures. Definitions and calculations are presented in our quarterly report.

Company overview

KMC Properties at glance

• Real estate company focused on owning industrial and logistics properties
• Portfolio of 41 assets, primarily in the Nordics, constitution approx. ~345,000 sqm
• Long-term lease agreements with solid counterparties

• Two largest tenants are BEWI and Insula owned by the Bekken and Witzøe families respectively; both large shareholders in KMCP

• Current portfolio gross yield of ~6.8%

• Investments for lessees in current portfolio of NOK ~140 million, at yield-on-cost of ~7.5%
• Acquired 2 new properties for NOK ~70 million at YoC of 7.3%
• Actively pursuing further acquisitions of NOK ~445 million at ~7.8% average YoC. Estimate additional potential growth before year-end to NOK 350 million²

• Assuming all investments are completed, GAV may grow to NOK ~ 4.1bn by year end ²

• Strategic target of NOK 8bn by year end 2025

• Planned growth well within expected possibility in the sector – corresponding to approx. 4% of average relevant Nordic real estate volumes ¹

• Continued focus on assets we know well: foodstuff facilties, light industry – infrastructure for our lessees

• 1) Pangea Nordic Property Outlook 2021: average Nordic «Industrial/Storage» transaction volume, 2016-2020, of EUR ~2,45 bn.

• 2) Current company estimates, based on current transaction pipeline and market visibility and outlook. No assurances can however be given that any such acquisitions will be concluded, or at what terms. Further information will be provided in due course, as and when relevant or appropriate.

Committed owners combining industrial expertise with financial strength

Main owners1	Ownership structure	Selected investments	Property experience
EBE Eiendom (41% ownership in KMC)	Owned 50-50 by Bekken family and Thoresen family
Bekken Invest AS	Bekken family's investment company, majority owner of BEWI ASA and selected other companies		Ownership of the tenants'
Kastor Invest AS	Thoresen family's investment company, investing in real estate and companies across various industries		properties since inception
Kverva Industrier AS (34% ownership in KMC)	Witzøe family's investment company, established in 1991 with a focus on maritime industries

40-year history in the industrial property market

Management team with solid finance and real estate development experience

Liv Malvik, Chief Executive Officer

▪ Previous experience as CEO of Heimdal Eiendomsmegling AS (2018-2020), Grilstad Marina AS (2011-2018) and Inter Revisjon Norge AS (2008-2011) in addition to 7+ years experience from management positions in Sparebank1 SMN (2001-2008) and from Fokus Bank AS (1990-2000)

▪ MSc in Business Administration from the Norwegian School of Economics

Audun Aasen, Chief Operating Officer

• +15 years experience from construction and real estate sector
• Previous property manager and real estate developer (2014-2019). University Degree as real estate appraiser and technical construction controller. Carpentry Masters Degree and construction work experience (2005-2011)

Kristoffer Holmen, CFO

• Previous experience as CEO/CFO of Storm Real Estate ASA, CFO/Compliance of Storm Capital Management and state certified public accountant (statsautorisert revisor) in PwC Oslo.
• BSc in Business and Administration and MSc in Auditing and Accounting from the Norwegian School of Economics, and three years of law school at the University of Oslo.

Kristoffer Formo, Head of M&A

• • 20 years of experience in finance and real estate, most recently as a real estate investor over the past five years. Previous experience as a real estate advisor for DNB Næringsmegling ASA; partner and investment advisor for Real Forvaltning ASA; special advisor capital management for Sparebank 1 SMN; senior investment advisor for Orkla Finans ASA; corporate advisor M&A for Nordic Corporate Management ASA
• Norwegian business school BI, Bachelor, Finance

Integrating ESG into KMC Properties' business operations

To operate in a sustainable manner is important to KMC Properties and is seen as a prerequisite for the company's long-term results and value creation. KMC will introduce a systematic approach towards understanding and managing the company's impact on society and the environment, as well as stakeholder requirements and expectations. As per today, KMC works to integrate ESG into its business operations through the following measures:

Environmental

• Actively working with tenants to reduce energy consumption, waste and pollution
• Prepare annual sustainability reports in co-operation with tenants
• Sustainability is a criteria for contract renewals and property acquisitions
• Refurbishment and construction follow provided guidelines to ensure climate protection and energy efficiency
• EDD (Environmental Due Diligence) reports are prepared in connection with acquisitions

Social and Governance

• Code of Conduct promotes good business ethics, zero tolerance for corruption and money laundering and guidelines for equality and diversity
• All transactions with related parties (primarily the owners of the largest tenants) are carried out at arm's length terms and at fair market values
• Actively working to ensure a healthy environment for the tenants' employees

Property value and yield

Gross asset value of property portfolio Gross asset value per country (%)

Properties on long lease agreements across strategic locations

Overview of portfolio and tenants Geographical locations

1. Not including the development project at Senja

2. Not including the Gasfield Property

3. Portfolio as of 31 March 2021 ¹³

Solid tenant base consisting of market-leading companies

% of operating income¹

53%

• Founded in 1980 by Bekken family
• Leading European provider of packaging, components and insulation solutions
• Proven buy-and-build strategy with 19 deals executed and integrated since 2014
• Frontrunner in innovation and sustainability
• Nordic seafood group built through 20 acquisitions since foundation in 2015
• Vertically integrated from fish stations through processing and transportation to strong consumer brands
• Majority-owned by Kverva (95.8%), with 1,100 employees across the Nordics
• One of the world's leading pelagic companies specializing in herring products customised to clients' preferences
• Strategically located close to rich fishing grounds of the Northeast Atlantic with a long heritage dating back to 1830
• Business is certified by MSC and Grøntvedt aims to utilise 100% of its raw materials

Company overview Key customers / brands

Key customers

Flexible properties with "light" production

Key property characteristics

Buildings in lowmaintenance materials

• Several of the properties constructed after 2000 and multiple upgrades conducted on older properties in recent years

• The majority of properties are constructed in low-maintenance materials steel and/or concrete

• "Light" production The production that takes place on the properties is "simple" and clean, with limited pollution

• Insula and Grøntvedt produces food products for human consumption and follow strict hygiene requirements
• Production at BEWi properties is primarily heating and moulding of raw EPS into finished products through a clean production process, which follows stringent European health and safety requirements

Flexible properties with limited degree of customisation

• Limited degree of customisation for tenants
• The properties are flexible with high ceilings and include modern storage facilities such as motorised shelf systems and lifts where relevant

BEWI is largest tenant representing ~53% of operating income

• Founded in 1980 by Bekken family, who has developed the company into a leading European packaging and insulation providers
• BEWi is strategically integrated throughout the value chain, with revenue diversified across 3 operating segments, whereof ~1/3 is from upstream and 2/3 from downstream
• 38 production facilities located across Norway, Denmark, Sweden, Finland, the Netherlands and Portugal, in addition to eight recycling sites
• ~1,400 FTEs across eight countries
• Revenue of EUR 463 million and adj. EBITDA of EUR 65 million in 2020
• Listed on Oslo Stock Exchange since 2020. Market cap. of NOK ~3.5bn

Strong organic growth coupled with strategic acquisitions

Company overview Extensive production and logistics platform

Committed owners with industrial heritage

Ambitious growth strategy for portfolio

Investments in expansion projects for existing clients

Investments in new facilities for new and existing clients

Acquisitions in collaboration with current and new tenants, as well as third parties

Selected ongoing projects

	Location	Expected completion	Lease increase annually	Tenant	Est. total project cost (NOKm)
Expansion projects (Capex) Ongoing projects existing tenants		2021	8.6	BEWI/Insula	70
New facilities (Capex) Fish box facility Senja	Senja, Norway	Q3 2021	7.0	BEWI	95
Acquisitions New Property Molde Area New Property Denmark		Q2 2021 Q2 2021	3.1 2.1	Other BEWI	43 28
Sum			20.8		236

Selected ongoing projects

	Location	Expected completion	Lease increase MNOK Q3->	Tenant	Est. total project cost (NOKm)
M&A Contemplated		2021	33.8	Other	445
M&A Estimated additional growth		2021	24.5	Other	350
Sum

Financial profile

Existing contracts provide solid cash flow

^{32 34 36 36 37 37 37 37 39 39 39 39} Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 NOK million

Contractual gross rental income for the period 2021-2023 Comments ¹less estimated interests on the bond loan²

• Contracts with solid tenants, with COVID-19 resilient business models
• Low OPEX and SG&A expenses due to triple net bare-house lease contracts
• Cash flow provide strong debt capacity and flexibility for further growth

1) Based on contracts as of 31 March 2021. CPI adjustment is set to 2%. Rental income from the Gasfield property (spot contracts) is estimated to be stable during the period.

2) Based on current swap agreements and interest rate for the current quarter.

WAULT of ~10.7 years reduces refinancing risk

• 2 contracts expire 2021 2027:
• o BEWI at Levanger (2022)
• o BEWI at Torgård (2027)
• BEWI estimates cost of relocation to NOK 25-50 million
• Sensitive production lines, relocation involves significant risk
• Exclusive Right of First Refusal (ROFR) with BEWI, to offer extension of the contracts at or before expiry

22

Interim report Q1

Highlights of the quarter

Key events Key figures

• Strengthened the organisation with new hires
• Integration of companies acquired in Q4 2020
• Mandatory offer by EBE Eiendom and Kverva Industrier completed
• Subsequent offering completed
• Letter of intent signed with BEWI for development of packaging hub at Hitra
• Invested ~NOK 49.7 million in development of existing properties increasing the value of the portfolio

NOK million	Q1 2021
Gross rental income	53.1
Income from property management	3.2
NAV	1 297
WAULT (years)	10.7
Occupancy rate (%)	98.7%

Key developments

• Current capex pipeline of NOK 90 million split on projects
• Completed M&A of NOK 70 million
• M&A in process of approximately NOK 445 million
• Estimated additional growth in 2021 of NOK 350 million

Profit and loss statement

All amounts in NOK million	Q4 2020	2020
Gross rental income	53.1	51.8
Direct property related expenses	-4.2	-2.8
Net operating income	48.9	49.0
Other operational expenses and depreciation	-24.6	-18.5
Net fair value Adjustments on Investment Property	65.1	404.6
Total operating profit (loss) (EBIT)	89.4	435.0
Net financial income (expenses)	-12.9	-28.1
Tax	-15.9	-94.3
Net income	60.6	312.6

Financing

Financing activity in the quarter

▪ Utilised NOK 29.3 million of revolving credit facility

Maturity profile and composition of interest-bearing debt

All amounts in NOK million	0-1 yrs	1-2 yrs	2-3 yrs
Revolving credit facility (RCF)	29.3	0	0
Bonds		0	1 850
Total	29.3	0	1 850

Source of funds

Balance sheet

All amounts in NOK million Q4 2020	2020
Total assets
Investment properties 3 094	3 089
Other assets 115	81
Cash and cash equivalents 92	125
Total assets 3 301	3 295
Total shareholders' equity and liabilities
Equity 1 248	1 243
Bond 1 850	1 850
Other liabilities 203	202
Total shareholders' equity and liabilities 3 301	3 295

KMC Properties at glance

• Real estate company focused on owning industrial and logistics properties
• Portfolio of 40 assets, primarily in the Nordics, constitution approx. ~330,000 sqm
• Long-term lease agreements with solid counterparties

• Two largest tenants are BEWI and Insula owned by the Bekken and Witzøe families respectively; both large shareholders in KMCP

• Current portfolio gross yield of ~6.8%

• Investments for lessees in current portfolio of NOK ~140 million, at yield-on-cost of ~7.5%
• Acquired 2 new properties for NOK ~70 million at YoC of 7.3%
• Actively pursuing further acquisitions of NOK ~445 million at ~7.8% average YoC. Estimate additional potential growth before year-end to NOK 350 million²

• Assuming all investments are completed, GAV may grow to NOK ~ 4.1bn by year end ²

• Strategic target of NOK 8bn by year end 2025

• Planned growth well within expected possibility in the sector – corresponding to approx. 4% of average relevant Nordic real estate volumes ¹

• Continued focus on assets we know well: foodstuff facilties, light industry – infrastructure for our lessees

• 1) Pangea Nordic Property Outlook 2021: average Nordic «Industrial/Storage» transaction volume, 2016-2020, of EUR ~2,45 bn.

• 2) Current company estimates, based on current transaction pipeline and market visibility and outlook. No assurances can however be given that any such acquisitions will be concluded, or at what terms. Further information will be provided in due course, as and when relevant or appropriate.