Fjord Defence Group ASA

Investor Presentation • Aug 19, 2020

Second quarter 2020

Axxis Geo Solutions

Ronny Bøhn, CEO and Nils Haugestad, CFO

19 August 2020

Disclaimer

• The information in this presentation has been prepared by Axxis Geo Solutions ASA ("AGS" or the "Company"). By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations and provisions:
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Agenda

1. Highlights and outlook 2. Financials and restructuring 3. Proven business model 4. Summary

Q2 highlights

• AGS completed OBN survey in the Middle East and commenced related streamer operation
• We started North Sea contract for Equinor and received survey extension
• New CFO was appointed

Subsequent events

• Appointment of new CEO
• Closed the restructuring with converting USD 34.2 million from accounts payable to interest bearing debt
• Successfully finalized surveys in the Middle East as well as the North Sea
• Initiated smart-stack cost-reduction plans in accordance with communicated business strategy

Neptune Naiad crew

Q2 highlights – Egypt

• Program part executed as contract survey and part as multi-client survey
  • − Contract survey completed during the quarter; multiclient survey completed in July
  • − Multi-client survey as partner share, capped at USD 13.7 million in late sales
• Traversed one of the busiest shipping lanes in the world with both source and receiver
• Zero recordable incidents
  • − Solid HSE performance
  • − High number of close passes

Nodal deployment in the Suez Canal feeder lanes

Q2 highlights – North Sea

• Commenced OBN survey over Breidablikk field
  • − On-time start in the North Sea
  • − Extension of initial work scope over Frigg field
  • − Survey completed in July
• Solid HSE performance continued
  • − Zero recordables
  • − Covid-free operations

Infrastructure close pass – Neptune naiad

Asset light and node agnostic business model Flexible cost structure to address market cycles

Traditional seismic players – asset heavy

Technology-agnostic system for attaching nodes on a rope

Proprietary handling system and deployment up to 4 knots

Tender and pipeline overview Improving tender activity and project pipeline for 2021

Agenda

1. Highlights and outlook 2. Financials and restructuring 3. Proven business model 4. Summary

Second quarter segment financial review

• Revenues mainly driven by the project in Egypt of USD 4.8 million and in the North Sea of USD 7.9 million
• During the quarter, the Company commenced multi-client project in Egypt
• EBITDA of USD 2.3 million, representing an EBITDAmargin of 18%
• EBIT of USD 0.8 million, representing an EBITDA-margin of 6%

Second quarter segment P&L

YTD segment financial review

• Revenues mainly driven by the project in Egypt of USD 47.2 million, the North Sea of USD 7.9 million and the Brazil campaign USD 2.4 million
• EBITDA of USD 15.7 million, representing an EBITDAmargin of 27%
• EBIT of USD 12.3 million, representing an EBITDAmargin of 21%

YTD segment P&L

Financials segment overview

Sequential performance

• Segment revenue derives from both contract and multi-client activity
• High level of fluctuation quarter by quarter

Segment financial position – pre financial restructuring

30 June 2020

USD millions

Assets		Equity and liability
Multi-client library	40	Equity
PP&E	14	Interest bearing debt	11
Other current assets	22	Accounts payable	37
Cash	3	Other current liabilities	24
	79		79

Financial restructuring

• Conversion of USD 9.5 million of accounts payable into unsecured loan agreements
  • − Interest rate of 4% per annum
  • − Amortization schedule implying repayment by January 2022
  • − USD 1.4 million and USD 1.7 million amortization in Q3 and Q4 2020, respectively
  • − USD 1.6 million amortization the following quarters
• Maturity on the note payable to TGS extended from September 2020 to June 2021
• USD 24.7 million of accounts payable converted into a tradable and secured two-year bond loan
  • − Second-lien security
  • − Semi-annual interest payments as follows: 4% per annum shall be paid in cash and either 4% per annum in cash or 4.4% as additional bonds (payment-in-kind), at the Issuer's option

Pro forma balance sheet after the restructuring

USD thousands

Interest bearing debt and trade payables	Before conversion of unsecured loan	Adjustment unsecured loans	As reported 30.06.2020	Adjustment bond loan	Pro forma 30.06.2020 after all conversion of the restructuring
Interest bearing debt	-	3 257	3 257	24 739	27 996
Interest bearing debt current Trade payables	1 537 46 653	6 328 (9 585)	7 865 37 068	(24 739)	7 865 12 329

Agenda

1. Highlights and outlook 2. Financials and restructuring 3. Proven business model 4. Summary

Successfully proven model Three major surveys executed

• Largest ever North Sea OBN survey, at ~1,600 km²originally
  • Survey extended in 2019 to cover new block awards
• During 2019, 5 vessel operation over existing acquisition; 2 node handling vessels + 3 source vessels
• Data processing expected to be completed in September 2020
• Joint sales and marketing efforts with TGS

• Successfully completed 1,215 km2 FF OBN project for ONGC over the Mumbai High area
• AGS responsible for the entire offshore acquisition operation, and SAE provided onshore data processing support, contract holding and client interface

• OBN survey for WesternGeco in Egypt, Gulf of Suez
• Pilot for a substantially larger OBN program in the area
• The contract marked another milestone entering a new country and performing a difficult project in the midst of the COVID-19 pandemic
• Substantial late sale potential where AGS receives 60% of late sales (capped to USD 13.7 millions)

Successfully proven model Already proven metrics superior to competitors

Agenda

1. Highlights and outlook 2. Financials and restructuring 3. Proven business model 4. Summary

Summary

Completed financial restructuring: Trade payables reduced considerably and are now at customary run-rate trade creditor levels

Solid H1 2020 performance: Solid operations in Egypt and Norway in spite of COVID-19

Multi-client library: Commenced new project in Gulf of Suez; attractive sales potential from the Utsira project

Asset light business model: Initiated smart-stack mode; substantial cost reduction while allowing for rapid mobilization for new surveys

Proven operational capability: Track record of delivering cost effective projects benefiting from superior operational acquisition efficiency

Sound market fundamentals: Tendering activity showing signs of improvement; normalized market size next few years expected to be USD >1bn

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