Arendals Fossekompani

Investor Presentation • Feb 14, 2025

GENERATIONS FOR

GENERATIONS

ATIONS

Arendals Fossekompani Q4 Interim Report

14 February 2025

2024 O 4

arendalsfossekompani.no

Disclaimer

This Presentation includes and is based on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ from the projected results. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions and the economic conditions of the regions and industries that compose major markets for the businesses of Arendals Fossekompani ASA and its subsidiaries and affiliates (the "AFK Group"). These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.

lmportant factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the businesses of the AFK Group, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although the AFK Group believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation.

The AFK Group is making no representation or warranty, express or implied, as to the accuracy, reliability or completeness of the Presentation, and neither the AFK Group nor any of its directors, officers or employees will have any liability to you or any other persons resulting from the use of the Presentation.

Arendals Fossekompani around the world

• · Long term industrial investment company
• · Invest in B2B, energy and/or technology
• · Sustainable value creation
• Active ownership

Main investments 7 (1 listed) Employees ~2,500

Countries 24

Listed on the Oslo Stock Exchange

1913

Head Office Arendal, Norway

Our portfolio

Diversified portfolio within energy and technology

volue

Digital energy and infrastructure solutions for the green transition

Ownership 40%

Head office

Arendal, Norway

ENRX

Leading international tech company within induction heating and induction charging

AFK ownership Head office Skien, Norway

ATEKNA

Ownership

70%

Global technology driven powder producer for 3D printing, microelectronics and battery anodes

Headquarter Sherbrooke, Canada

Market cap (31.12) Listed at 414 MNOK Oslo Børs

NSSLGlobal

Cyber secure space & satellite communication services anywhere

Ownership 80%

Head office London, UK

alytic

Active investor and transformer of data intensive companies

Ownership 96%

Ownership

100%

95%

A VANNKRAFT

500 GWh hydropower production providing steady cash flow

Head office Arendal, Norway

Portfolio of property investments and development projects

Ownership Head office 100% Arendal, Norway

A portfolio containing both stabile cash flow generating companies and growth prospects

An attractive and diversified portfolio

Highlights Q4 2024

FINANCIAL

• · Group revenue: NOK 1.2 bn (1bn). 14% growth YoY
• Group operating profit (EBIT): NOK 151m (67m), margin 13% (7%)
• Financial gain in parent: NOK 3.3bn due to Volue transaction
• Dividend: NOK 1.00 per share for 04. Moving to annual dividend as of Q2-25

PORTFOLIO HIGHLIGHTS

• Volue implemented restructuring program, acquired PowerBot GmbH
• · Margin expansion and double-digit growth in NSSLGlobal and ENRX
• Tekna saw 14% growth in powder revenue, but system sales was weak
• High production offset by low prices gave 18% revenue decline from hydro

Development last 5 quarters Revenue and other income (MNOK) and operating margin

Highlights FY 2024

FINANCIAL

• · Group revenue: NOK 4.4bn (3.9bn), 12% growth YoY
• Group operating profit (EBIT): NOK 390m (444m), margin 9% (11%)
• Balance sheet: Net cash position of NOK 45m, liquidity NOK 2,9bn (2,2bn)
• Dividend: NOK 4.00 per share, NOK 219m

PORTFOLIO

• Focused and de-risked portfolio by discontinuing Ampwell and selling Vergia
• Positioned Volue for growth and value creation, new owner structure
• Record breaking year for ENRX and NSSL in terms for revenue and EBIT
• High power production, offset by normalized power prices at EUR 50/MWh (EUR 79/MWh)

Development last 5 years Revenue and other income (MNOK) and operating margin

volue .

AFK ownership Head office Oslo, Norway 40%

Q4 update Restructuring and growth

Development last 5 quarters Revenue and other income (MNOK) and operating margin

• · Recurring revenue: NOK 310m (276m), 12% growth YoY. 71% of total revenue
• SaaS revenue: NOK 157m, an increase of 45% compared to the fourth quarter of 2023, representing 36% of total revenue in the quarter.
• · Adjusted EBITDA: NOK 107m (86m), margin 24% (21%)
• As a result of a new and focused strategy, a significant restructuring was done in Q4, significantly improving Volue's cost position. Restructuring cost predominantly taken in Q4
• · Acquired Powerbot GmbH, will complement Volue's existing trading solutions
• · FY24: Revenue NOK 1 636m, 10% growth YoY, Adj. EBITDA NOK 361m (267m)
• · Going forward, Volue expects organic growth of around 15%, improvements in Cash EBITDA and a continued M&A activity

AFK ownership Head office 95% Skien, Norway

Q4 update Highest revenue and EBP. in the company's history

Development last 5 quarters

Revenue and other income (MNOK) and operating margin

• · Total operating revenue: EUR 46.0m (41.9m), 10% growth YoY
• · Growth driven higher activity levels in Heat, especially North America and Asia
• · Operating profit (EBIT): EUR 5.3m (EUR 3.3m), margin 11% (8%)
• · Order intake: EUR 37.3m (EUR 36.8m)
• · Order backlog: EUR 67m (86m), explained by high deliveries in 01 and 04 of 2024, in combination with reduced order intake in the same period.
• FY24: Revenue EUR 165m, 5% growth YoY, EBIT EUR 11.5m (10.1m), margin 7% (6%)
• · The market for heating products is expected to remain uncertain in the coming months as customer decision-making processes take longer and orders are postponed.

NSS (Global

AFK ownership Head office London, United Kingdom 80%

Q4 update Another record breaking year

Development last 5 quarters Revenue and other income (MNOK) and operating margin

• · Revenue: GBP 26.9m (23.5m), 14% growth YoY in local currency
• · Revenue growth largely due to increased activity in the Middle East and the completion of government projects
• · Operating profit (EBIT): GBP 5.6m (3.1m), margin of 18% (15%)
• · During the third quarter, NSSLGlobal won contracts of GBP 18.2m across the government and maritime sectors, of which GBP 14.5m represented new business opportunities.
• FY24: Revenue GBP 102m, 11% growth, EBIT GBP 18.2m (16.1m), margin 19% (18%)
• · Continued strong sales and bid pipeline supported by a solid customer base, competitive technology and service driven organization.

Currency rates (NOK/GBP) Average Q4 2024: 13.74. Average Q4 2023:13.33. End Q4 2024: 14.22. End Q4 2023: 12.93.

A VANNIKRAFT

AFK ownership 100%

Head office Arendal, Norway

Q4 update Higher hydropower production, offset by lower prices

Price and power generation*

Development last 5 quarters Revenue and other income (MNOK) and operating margin

• · Total operating revenue: NOK 96m (117m), -18% growth YoY
• Operating profit (EBIT): NOK 65m (87m), margin 68% (74%)
• Hydropower production: 148.5 GWh (126.4 GWh).
• Average electricity prices (NO2 region): EUR 53.5/MWh (70 EUR/MWh).
• FY24: Revenue NOK 363m (511m), EBIT NOK 252m (414m), margin 70% (81%)
• · The construction of Kilandsfoss hydropower plant is proceeding according to plan. Kilandsfoss hydropower plant will produce an annual average of 38 GWh once finalized in 2026.

Q4 update Advanced Materials growth, . but lower systems sales

Development last 5 quarters

Revenue and other income (MNOK) and operating margin

· Revenue: CAD 9.6m (11.4m), -16% growth YoY

• · Revenue decline due to low order intake for the Systems business, which decreased by 55% during the year. Advanced Materials grew by 14% YoY
• · Adjusted EBITDA: CAD-1.4m (-0.5m)
• · Order intake: CAD 9.6m (11.2m)
• · Backlog: CAD 16.7m (24.0m)
• · Cost reductions and operational improvements, including a reduction in headcount to 185 employees (222), resulting in lower overhead expenses.
• FY24: Revenue CAD 41m (42m), EBIT CAD -8m (-12m), margin -20% (-30%)
• · Profitability and capital discipline remain top priority going forward.

Currency rates (NOK/CAD) Average Q4 2024: 7.84. Average Q4 2023: 7.83. End Q4 2024: 7.89 End Q4 2023: 7.68.

alytic

AFK ownership 96%

Head office Arendal, Norway

Portfolio KONTALI veyt Virutel Factlines.

Q4 update ARR growth

Development last 5 quarters

Revenue and other income (MNOK) and operating margin

• · Annual recurring revenues (ARR) for the portfolio: NOK 55 million (42 million), representing an 31% increase compared to Q4 last year.
• · ARR growth driven by underlying strong demand and customer growth, introduction of new products and upselling to existing customers.
• Kontali: ARR: NOK 19 million), corresponding to a growth of 18% YoY. The quarter saw strong demand for Kontali's consulting services. In total, Kontali's revenue increased from NOK 25 million in 2023 to NOK 32 million in 2024. With a solid market position in the salmon sector and its scalable seafood insight portal, Kontali is well-positioned for continued growth.
• · Veyt: ARR: NOK 20 million (13 million), corresponding to a growth of 50% YoY. Q4 represents a strong quarter for Veyt. Securing several new deals and solidifying its position as a leading provider of data driven insights into low carbon and renewable energy markets, Veyt is well-positioned for continued growth.
• · All portfolio companies in the Alytic group are on a growth trajectory and Alytic expects continuous ARR growth in the coming quarters.

Financials

Strong performance from AFK's portfolio companies, in a year with declining power prices

Q4

• · Profitability improvement in portfolio companies ENRX, NSSLGlobal and Tekna.
• · Underlying profitability improvement also in Volue, Q4 impacted by significant non-recurring restructuring and transaction costs.
• Reduced profit from AFK Vannkraft due to lower electricity prices.

Outlook:

Arendals Fossekompani expects both revenue and operating profit for the Group in 2025 (excl. AFK Vannkraft) to be in line with 2024.

AFK Vannkraft is expected to generate lower revenue and operating profit in 2025, compared to 2024, due to normalizing production levels.

Operating Profit (MNOK)	Q42024	Q4 2023	Difference	FY 2024	FY 2023	Difference
volue	-122	-10	-112	-29	87	-116
ENRX	62	38	+24	134	116	+18
NSSLGlobal	70	48	+22	260	211	+49
FOANNKRAFT	65	87	-22	252	414	-161
ATEKNA	4	-45	+49	-63	-97	+34
alytic	-30	-24	-5	-88	-85	-3
バー《 Property	2	-2	+4	13	-10	+22
Arendals Fossekompani Consolidated	151	67	+84	390	444	-54

Net cash position and NOK 2,9bn in liquidity

Guiding

Total revenue and operating profit from Arendals Fossekompani Group, excluding AFK Vannkraft, is expected to be in line with 2024.

• · Volue expects revenue and operating profit to be higher in 2025 compared to 2024.
• · ENRX expects revenue in 2025 to be in line with 2024 and operating profit to be higher than in 2024.
• · NSSLGlobal expects 2025 revenue and operating profit to be lower than in 2024.
• Tekna expects revenue to be higher in 2025 than in 2024, and operating profit to improve in 2025 compared to 2024.
• · AFK Vannkraft expects revenue and operating profit to be lower in 2025 compared to 2024, driven by normalization in production level compared to 2024.

Closing Summary

Develop value in our existing portfolio companies

Optimize our portfolio to ensure optimal risk adjusted return and balance the capital cycle

Capture structural opportunities, both on portfolio level and on parent level

Ensure strong balance sheet and financial flexibility

VISITING ADDRESS Langbryggen 9, 4841 Arendal

POSTAL ADDRESS Box 280, 4803 Arendal

+47 37 23 44 00 firmapost@arendalsfoss.no arendalsfossekompani.no

Thank you!