Arendals Fossekompani

Investor Presentation • Oct 15, 2020

Investor Presentation

October 2020

Strictly private and confidential || Strictly Private & Confidential

Disclaimer

The information contained in this presentation (the "Presentation") has been prepared by Volue AS ("Volue" or the "Company" and, together with its subsidiaries the "Group").

This Presentation is being made available only to, and is only directed at, persons to whom such presentation may lawfully be communicated (the "Relevant Persons"). Any person who is not a Relevant Person should not act or rely on this Presentation nor any of its contents.

This Presentation has been prepared for information purposes only. This Presentation does not constitute an offer or an invitation to buy, subscribe for or sell shares of the Company or shares in any of the Company's subsidiaries or any other securities in any jurisdiction. Furthermore, this Presentation has not been prepared for the purposes of, and does not form part of any subscription material for, any offering of securities.

The information contained in this Presentation reflects the conditions and views as of the date set out in the Presentation. The information contained herein is subject to change, completion, or amendment without notice. Past performance information included in this Presentation is not an indication of future performance and the actual returns on investments may differ materially from the returns indicated herein.

No representation or warranty, express or implied, is made or will be given by Volue or its sole shareholder Arendals Fossekompani ASA ("AFK") or by any of their respective affiliates, advisers, directors, employees or agents, and, without prejudice to any liability for, or remedy in respect of, fraudulent misrepresentation, no responsibility or liability or duty of care is or will be accepted by Volue, AFK nor any of their respective affiliates, advisers, directors, employees or agents, or any other person associated with any of the foregoing persons ("covered persons"), and no reliance may be placed on, the fairness, accuracy, completeness, currency, liability or reasonableness of the information or opinions contained in this Presentation or in any other written or oral information which may be made available to any Relevant Person in connection with this Presentation. Accordingly, neither the Company, AFK, nor any other covered person shall have any responsibility or liability whatsoever (for negligence or otherwise) and accepts no liability for any loss of any nature from the use of this Presentation or its contents or any additional information referred to above or otherwise arising in connection therewith, except as may follow from mandatory law. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any future projections, forecasts, targeted or illustrative returns ("Forward-Looking Information"). Forward-Looking Information must not be construed as an indication of potential future results and are included for discussion purposes only. There can be no assurance to achieve comparable results or be able to avoid losses.

Any investment in Volue involves risks, including risk of loss of the entire investment. This Presentation must be read in connection with other publicly available information about Volue. The contents of this Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdictions of Norwegian courts.

Today's presenters

Volue - Realising the future of energy

https://vimeo.com/455734115?ref=em-v-share

|

4

Cleaner energy pressuring the infrastructure

Trends Challenges Solutions Key enabler Grid instability MW Volatile markets € Smart grids Intelligent markets € \$ \$ € £ £ ¥ Conventional Renewable Centralised Decentralised Fixed Occasional End-to-end optimisation Grid congestion 0

Volue's business-critical digital solutions enable the green shift

Certainty for future oriented investment in green tech

Volue has a clear ESG strategy

Volue in brief: A leading supplier of software and technology solutions for the energy, power grid and infrastructure markets

Volue is active in three segments

Help customers master the energy transition by enabling end-to-end optimisation of the green energy value chain

LTM sales	NOK 437m	LTM sales
(% of total)	(51%)	(% of total)
Recurring revenue share (2019)	66%	Recurring revenue share
Degree of EU Taxonomy alignment	HIGH	Degree of EU Taxonomy

Enable power distributors to support electrification of society by unlocking flexibility and digital management of the power grid

LTM sales	NOK 231m	LTM sales
(% of total)	(27%)	(% of total)
Recurring revenue share (2019)	61%	Recurring revenue share
alignment	HIGH	Degree of EU Taxonomy

Deliver flexible capabilities for digital water management and help automate processes and machines for the construction industry

LTM sales	NOK 185m
(% of total)	(22%)
Recurring revenue share (2019)	59%
alignment	HIGH

Step change in revenue growth and highly sticky customer base

1 05 0

Step change in revenue growth expected ~0 customer relations lost due to replacement

1) Cancelled yearly value of recurring revenue divided by revenue. Mergers and bankruptcies the main churn generators

Software spending from the power sector to reach USD 5bn by 2025 (60% up vs. today), fuelled by the green energy shift

Source: Bloomberg New Energy Finance 1) Does not include coal and geothermal

2

1

Strong platform for growth: Accelerating recurring revenue and SaaS growth with scale effects driving margin expansion – additional growth potential through M&A

Integrated SaaS offering: Full end-to-end coverage throughout the value chain, deemed highly attractive for customers requiring dynamic and cloud-based software solutions

4

Unique market position: Strong customer relationships with the leading European energy companies, with a demonstrated ability to create value for customers

3

Favourable macro backdrop: Transition towards green, non-controllable energy sources increases complexity and volatility, and hence the need for advanced software solutions

Growing share of green, non-controllable power sources increases the complexity in the European energy markets

Increase in non-controllable production sources, with production changing in seconds

Few and expensive storage or switch-off alternatives

…making the process to optimise production and trading exponentially more complex

Real time decision making requires new software tools

Source: Arkwright

Example from the new reality: Penalties paid in the balancing market can be extreme if failing to re-position in the intra-day market

Example: Market prices in Finland, week 8 2020

Shift towards real time = increased volatility

Volue offers a comprehensive product and service portfolio, covering all aspects of the clean energy value chain

Significantly simplifying access and interaction for all actors ü

All services mentioned above are mainly delivered on a cloud platform, underlining the SaaS transformation as well underway ü

Addressing the shared customer segment across Volue's business units - opens significant cross-sales opportunities ü

1) Selected services from Volue system already delivered on a cloud platform

Large international client base a testament to Volue's high-quality offering

Recent significant strategic contract wins

Significant value creation potential demonstrated for customers adopting business-critical solutions from Volue

1) Revenue gain for customers up to 5% pre-Volue establishment. Given the benefits from Volue's wall-to-wall offering, this gain is expected to increase by additional 5 percentage points

Integrated SaaS offering covering the whole value chain

Real-life example – Volue trading platform

್ powel Intraday Trading										14:49:01 CEST O Portfolio O Portfolio O POWELAS - CXPWSP08 V O O Log out 9 @
POWSP-ISV--------- ▼ AMP ~		Latest trades PRODUCT	22:00-23:00-Tue 22:00-23:00-Tue	PRICE VOLUME - BUYER/SELLER A TIME ↓ 42.99 വ 43.00 9.2 RTE/RTE	RTE/10Y1001 Tue 15:48:54 Tue 15:48:54	PRODUCT Sell 17:00-18:00-Tue		My AMP orders > Source: All ▼ Unit: All units > > < (1 orders) Turbine 1A 150.00 10	AREA/UNIT PRICE VOLUME TYPE STYPE STATUS Limit Active	TIME J SOURCE PIDT Tue 15:38:31	II X	× Delete all 1 Activate al
All units	>		22:00-23:00-Tue	43.00 1.5 RTE/RTE	Tue 15:48:54							11 Inactivate all
Production	Market	Capacity	Summarya	Trading Strategy	Trade Results Flexibility					Resolution: ⊙ ● Hourly ○ Half-hour ○ Quarter View:	Chart	Table
	- 10000	10	36.69 36.00	34.99 42.95	46.50 42.14	52.72 41.69	65.95 42.84	62.46 40.83	47.63 37.01	42.33 42.51	0.00 37.03
P&L + P&L - Ref.: Spot Price	MW - 9000 MW - 8000			€40.76						€41.4
റി Block orders	MW - 7000 MW - 6000 MW	Short (Ask)				€42.94		€42.84	€42.49
□ Only my orders	- 5000 MW		16	17	18	19	20	21	22	23	24
ഗ്ര Imbalance	- 4000 MW - 3000 MW			€37.07	€39.1	€38.11	€37.15	€37.06
Ref.: Spot Price P&L + P&L -	- 2000 MW - 1000 MW	Long (Bid)							€37.02
	O	10		6.2	-74 36	14.6	46.5	61.2
O sell S O Buy		Product 18-Tue	6.5/15.9 MW € 42.33					Volume 6.5	1233.1 MW	Matched 6.5 MW for € 42.33	Spot Price € 46.50	Buy

Volue's successful Gemini SaaS platform illustrates the potential from the transition towards a cloud-based model

Step change in growth LTM, margins substantially improved since 2018

• § 9% top line growth mainly driven by increase in recurring revenue base
  • 13% LTM recurring revenue growth
  • Recurring revenue growth driven by European expansion in energy segments and continued strong growth for Infrastructure
• § Strong increase in EBITDA margin in 2019 on the back of restructuring and turnaround in 2018
• § EBITDA margin maintained above 20% LTM despite substantial strategic ramp-up of cost base and investments to drive future growth

Accelerating shift towards SaaS and recurring revenue

1) Recurring revenues is defined as revenue from subscriptions over a year

2) SaaS revenue is defined as revenue from software hosted by Volue and distributed through web applications

Potential listing considered to fund accelerating growth and enable M&A

Mid to long term ambitions		M&A strategy
	~15%	Highly fragmented market – Volue aims to pursue consolidation
Revenue growth	organic revenue growth per year	ANALYSE
% recurring revenues	80% Towards of total revenues	PLAN & OPERATE
% SaaS revenues	>50% of total revenues	MONETISE
Adj. EBITDA margin %	30% Towards adj. EBITDA margin	Ambitions to act as a consolidator and engage in bolt-on transactions on a recurring basis as well as pursue larger strategic options in a more opportunistic manner

Key takeaways

1

2

3

The shift towards green, non-controllable energy sources drives increased volatility and complexity for customers, requiring dynamic and cloud-based software solutions

Volue offers wall-to-wall SaaS solutions and has already built up a customer base comprising the leading European energy companies

Ongoing SaaS-transformation with solid growth in recurring revenues and an uptick in EBITDA margins

25 |

Appendix

1) Financial and operational information

Volue is rapidly becoming a global green tech leader

Group P&L and KPIs

Key metrics (NOKm)	2018A	2019A	LTM	H1 2019	H1 2020
Revenue	814	818	853	409	444
Growth (%)	-	1%	9%	-	8%
COGS	129	135	142	51	65
Gross profit	685	684	711	359	379
Gross margin (%)	84%	84%	82%	88%	85%
Personnel expenses (excl. capitalised R&D)	425	363	405	202	220
Other OPEX	150	143	130	60	66
Adjusted EBITDA	110	178	176	97	93
Adjusted EBITDA margin (%)	14%	22%	21%	24%	21%
Non-recurring items	26	34	35	12	13
EBITDA	85	143	141	85	80
Depreciation and amortisation	46	49	47	35	33
EBIT	39	95	94	50	47
EBIT margin (%)	5%	12%	10%	12%	11%
Recurring revenue growth (%)	-	11%	13%	7%	11%
Recurring revenue (% of revenue)	57%	63%	65%	61%	63%
SaaS revenue growth (%)	-	20%	23%	22%	27%
SaaS revenue (% of revenue)	10%	12%	15%	13%	15%
R&D CAPEX (NOKm)	74	84	85	42	41
R&D CAPEX (% of revenue)	9%	10%	10%	10%	9%

Group financial performance1

Comments

• § Revenue growth boosted by SaaS roll-out, SaaS increasing from 10% of revenue in 2018 to 15% LTM
  • Limited impact from Covid-19 with good order intake and growth in H1 2020
  • Growth driven by European expansion in energy segments and continued strong growth for Infrastructure segment
• § Growth momentum maintained with major recent contract wins with large industry players shifting from on premise to SaaSbased solutions
  • Seasonal slow-down typically seen in Q3 due to July-August holiday season impacting comparability between quarters
• § Stable EBITDA margin in H1 2020 vs. 2019
  • Personnel + other OPEX growing in line with revenue, scale advantages will boost margin levels substantially going forward
  • R&D capitalisation stable around ~10%

Pro-forma balance sheet

Assets (NOKm)	31 Dec 2018	31 Dec 2019	30 Jun 2020	Equity & liabilities (NOKm)	31 Dec 2018	31 Dec 2019	30 Jun 2020
R&D	75	82	87	Share capital	47	52	52
Patents and trademarks	1	0	0	Share premium reserve	22	55	28
Customer contracts	4	1	0	Other equity	0	0	171
Licenses & software	8	9	9	Holdings of own shares	0	0	0
Goodwill	94	95	95	Retained equity	177	176	55
Deferred tax assets	7	4	4	Minority interests	0	0	0
Property and buildings	72	64	128	Total equity	247	283	306
Fixtures and fittings	16	17	2	Pension obligations	9	8	8
Right of use	8	61	0	Deferred tax liabilities	5	4	11
Investments in subsidiaries	0	0	0	Leasing obligations	60	52	106
Investments in related companies	0	0	0	Other long-term debt	9	67	0
Financial investments	1	0	0	Total non-current liabilities	83	132	126
Pensions	21	19	15	Accounts payable	131	121	20
Long-term receivables	17	53	30	Tax payable	2	9	3
Total non-current assets	327	405	371	Public fees & taxes	62	32	90
Inventories	12	9	15	Short-term debt to financial institutions	99	69	2
Accounts receivable	221	174	129	Prepayments	32	31	147
Work in progress	35	36	33	Other short-term debt	188	250	258
Other receivables	64	54	70	Total current liabilities	514	512	519
Other financial instruments	0	10	10	Total equity & liabilities	845	927	951
Cash and cash equivalents	185	238	325
Total current assets	518	522	581
Total assets	845	927	951

Pro-forma balance sheet

Transaction overview

1) Volue minority interest with a total book value of NOK ~261m as of 30 June 2020; 2) The company may consider making an offer to acquire parts of or the whole minority share in Powel, Scanmatic, Markedskraft and/or Wattisight as well as to acquire other targets, potentially paying partially or fully in Volue shares, which would reduce the percentage of ownership of Arendals Fossekompani and new shareholders. Moreover, minorities in the subsidiaries where Volue has >90% ownership have the legal right to demand that Volue acquires their shares and Volue has received demands from certain minority shareholders under these rules that Volue acquire their shares; 3) The company is planning to introduce an incentive programs for management which could result in issuance of new shares in Volue AS, resulting in a dilution effect for Arendals Fossekompani and new shareholder

Volue operates in the highly fragmented and complex European energy market

Electricity production throughout Europe is complex, fragmented and leads to significant price discrepancies

Source: European commission, Wattsight

1) Domestic electricity production per source 2018, Eurostat 2018

2) Renewable energy production capacity from the EU Reference Scenario 2016 "Energy, transport and GHG emissions trends to 2050"

Highly experienced management team and organisation with strong track record

|

31