ABG Sundal Collier — Earnings Release 2017

Jul 13, 2017

Interim report

Revenues of NOK 297m vs NOK 350m last year (-15%)

YTD NOK 609m vs NOK 582m last year (+5%)

EPS of NOK 0.11 compared to NOK 0.13 last year

YTD NOK 0.24 vs NOK 0.19 last year

Annualised Q2 return on equity of 26.9%

Robust capitalisation (capital ratio of 18.2%) and liquid balance sheet

ABOUT ABG SUNDAL COLLIER

ABG Sundal Collier is an independent Nordic investment banking powerhouse, established for more than 30 years, founded on a hard-working partnership culture and the ability to attract and develop top talent.

Our strategy is to be an advisor and an intermediary, and our core product offering comprises corporate advisory, corporate financing and investor research and brokerage services.

We are a leading Nordic full-service advisor for companies looking to issue bonds, convertible bonds and equities or seeking M&A or restructuring advisory services. By being an independent advisory partnership, our clients can rest assured that they not only get access to the most dedicated and talented people, but also a firm that has all the right incentives for pricing and structuring transactions in the best interest of its clients.

Our corporate advisory team offers unparalleled transaction experience in combination with the value of our longstanding connections to regional and international investors and corporations. Our market-leading Nordic and international securities distribution platform provides access to financing for corporates and is well set up for naturally matching trading flows and delivering best execution for clients.

We provide our in-depth industrial knowledge across a broad range of sectors in our Nordic home market to companies and investors in the Nordics and internationally.

Our approx. 250 partners and employees are located in the Nordic offices in Norway, Sweden and Denmark and in offices in the key international markets of the US, the UK, Germany and Singapore.

OUR VISION AND MISSION

Our ambition is to be the preferred Nordic investment bank in our defined markets. We are committed to delivering long-term superior value for all stakeholders by:

• Providing the best advice in relation to strategic challenges
• Providing the optimal external corporate financing
• Improving clients' return on investment
• Being "the place to be" for talented staff
• Running a cost-focused and highly profitable operation

KEY FIGURES

Operating cost / Revenues Total compensation / Revenues Operating margin % Return on Equity (annualised)	% % %	54.4% 22.8% 26.9%	23.8% 27.4%		27.1%	18.9%
					23.8%	20.1%
		77.2%	76.2% 57.6%		76.2% 55.0%	79.9% 57.7%
	%
Operating costs per head (average)	NOKm	-0.92	-1.04	-12%	-1.83	-1.83	0%
Revenues per head (average)	NOKm	1.19	1.37	-13%	2.40	2.29	5%
Headcount (average)	#	250	256	-2%	254	254	0%
Book value per share	NOK	1.55	1.66	-7%	1.55	1.66	-7%
EPS (diluted)	NOK	0.11	0.12	-8%	0.23	0.18	28%
EPS (basic)	NOK	0.11	0.13	-15%	0.24	0.19	26%
Net profit	NOKm	54	62	-12%	112	88	27%
Taxes	NOKm	-15	-23	-34%	-38	-32	18%
Profit before tax	NOKm	69	84	-18%	150	120	25%
Net financials	NOKm	1	1	15%	5	3	65%
Operating profit	NOKm	68	83	-19%	145	117	24%
Total operating costs	NOKm	-229	-267	-14%	-464	-465	0%
Revenues Personnel costs Non-personnel costs	NOKm NOKm NOKm	Q2 2017 297 -162 -68	Q2 2016 350 -202 -65	Y-o-Y -15% -20% 4%	YTD 2017 609 -335 -129	YTD 2016 582 -335 -129	Y-o-Y 5% 0% 0%
KEY FIGURES

EPS (basic) (NOK)

COMMENTS FROM THE CEO

Following the strong first quarter, Q2 proved to be another quarter of high activity throughout the firm. In spite of a strong start to the quarter in terms of revenues, several transactions that were processed during the quarter were not completed during Q2 and/or were pushed into the second half of 2017. The vast majority of these transactions are still ongoing or in the completion phase and some of them have already been completed early in July and will be booked in Q3. This activity has strengthened the backlog for the remainder of the year.

Although Q2 revenue booking was down, YTD revenues are still 5% above last year. So far this year, we have advised on 50 transactions that are public.

Macro fundamentals are positive, with global industrial growth, and the Nordic economies have shown a great underlying performance in GDP growth, despite major setbacks with a lower oil price and low capex in oil & gas sectors, which have put a strain on the Norwegian economy.

The Swedish, Danish and Finnish equity markets improved consistently during the second quarter, while the Norwegian market fell with the oil price following a strong performance at the start of the quarter. The continued low volatility has been supportive for new issues of debt and equity. During Q2, we saw a number of new entrants to the Nordic exchanges such as EVRY, SSM and BoneSupport and a continued strong appetite for high yield bonds. The M&A market has been stable, but has underperformed the other segments as there were few sizeable transactions announced during the quarter.

ABGSC has made significant efforts in recent years to improve its position within the debt market. In order to further strengthen its international presence and distribution power, ABGSC has established a sales office in Singapore.

I firmly believe that our strong position in the markets where we operate will contribute to continued growth and profitability in the foreseeable future.

Knut Brundtland, CEO

MARKETS DIVISION

Key figures and comments

Revenues (NOKm)

Markets' revenues of NOK 177m in Q2 were in line with last year. Revenues from Equities were down 6% compared to last year while Non-Equities revenues were up 20% year-over-year.

The average headcount for the Markets division in Q2 was 68, down 7% year-over-year, with average revenue per head increasing by 8%. Operating profit before variable compensation increased to NOK 76m from NOK 68m for the same period last year.

INVESTMENT BANKING DIVISION

Key figures and comments

INVESTMENT BANKING DIVISION
The Investment Banking division comprises all primary operations and corporate advisory services, combining superior industry knowledge within the most important sectors in the Nordic markets with extensive transaction experience within ECM, DCM, M&A and financial restructuring.
Revenues in the Investment Banking division are mainly transaction fees, which to a large extent are based on the successful completion of the respective transactions.
Key figures and comments
NOKm	Q2 2017	Q2 2016	Y-o-Y	YTD 2017	YTD 2016	Y-o-Y
Revenues	122	174	-30%	246	266	-7%
Fixed operating costs	-61	-69	-11%	-119	-126	-6%
Operating profit before variable comp.	61	106	-42%	129	140	-8%
Headcount (average)	76	75	1%	76	74	3%
Revenues per head (average)	1.61	2.32	-31%	3.24	3.59	-10%
Operating costs per head (average)	-0.80	-0.92	-13%	-1.56	-1.70	-8%
Revenues (NOKm)			Revenues -		4 quarter rolling avg. (NOKm)
222
199 180 174

Net Investment Banking revenues totalled NOK 122m in Q2, down 30% compared to Q2 last year. The average headcount for Investment Banking in the quarter was 76, up 1% year-over-year, with average revenue per head decreasing by 31%. Operating profit before variable compensation was down from NOK 106m in Q2 2016 to NOK 61m in the same period this year.

Selected announced transactions

Sweden and Norway continue to be the two most active markets in the Nordic region, with Norway gaining momentum in the second quarter. ABGSC acted as global coordinator in the NOK 4,360m IPO of EVRY, the largest Nordic IPO so far in 2017. EVRY is one of the leading IT companies in the Nordic region and has a strong local and regional presence in 50 Nordic towns and cities. Furthermore, ABGSC acted as joint global coordinator and bookrunner in the successful SEK 575m IPO of BoneSupport, an innovative and rapidly growing commercial-stage orthobiologics company. We also acted as joint global coordinator and bookrunner in the NOK 425m IPO of BerGenBio, a clinicalstage biopharmaceutical company focused on developing a pipeline of first-in-class Axl kinase inhibitors to treat multiple cancer indications.

Placings launched in the second quarter of 2017 included a NOK 215m private placement for Awilco LNG, a Norwaybased pure play LNG transportation provider that owns and operates LNG vessels intended for international trade, a NOK 200m private placement for Targovax, a clinical-stage immune-oncology company that develops targeted immunotherapy treatments for cancer patients, and a SEK 1,663m secondary placement in Castellum, one of Sweden's largest real estate companies and listed on the Stockholm Stock Exchange.

The Nordic high yield market was very active during the second quarter of 2017, ABGSC is pleased to say that we have been able to take our fair share of the Nordic new issue volume, arranging fourteen bonds for companies within multiple sectors. At the beginning of the second quarter, ABGSC managed a SEK 100m tap issue by Amasten Holding, a property company focusing on residential properties, as well as a USD 75m senior secured bond issue for Songa Bulk, an investment vehicle established to invest in dry bulk assets at historically low levels. In June, three transactions

were carried out, including a SEK 250m senior unsecured bond issue by Qliro Group, a Nordic leader in digital commerce, a SEK 500m senior unsecured bond issue by Catella, a leading specialist in property investments, fund management and banking, as well as a SEK 600m senior unsecured bond issue by M2 Asset Management. ABGSC also acted as sole lead manager in the EUR 135m senior secured bond financing for Cherry, which was announced in December, and closed in Q2. Cherry is the third-largest Nordic-based casino and gambling company.

In Q2, Humana entered into an agreement to sell its home care service business to Attendo, a leading provider of publicly financed healthcare services in the Nordic region. ABGSC acted as advisor to Humana in the transaction. We advised the sellers in Telia Company`s acquisition of Phonero, which was announced in November and closed in Q2. Phonero offers telecommunication services to small and medium-sized corporate customers as well as public companies. ABGSC advised Svenska Vårdfastigheter, a leading Nordic property concept, in the sale of all of its shares to Magnolia Bostad. We also advised NetNordic, a Nordic system integrator specialized in delivering network, communication, security and cloud services, in relation to the sale of shares to Norvestor. Norvestor will become the largest shareholder in NetNordic, with 75% of the shares. At the end of the second quarter, ABGSC advised Nokas and its Board of Directors in connection with an offer to acquire shares in the company. Nokas is a leading provider of security and cash handling solutions to clients across Scandinavia.

FINANCIAL STATEMENTS

Financial review

Revenues in Q2 2017 were down 15% compared to a strong Q2 last year. For the first six months, revenues were up 5% to NOK 609m compared to NOK 582m for the same period last year.

Total operating costs (including variable personnel costs) were NOK 229m, down 14% y-o-y. The reduction was mainly due to reduced variable personnel costs being an indirect function of revenues, as well as a slightly positive contribution from currency effects and lower staff turnover costs. For the first six months, total operating costs (including variable personnel costs) were stable, NOK 464m compared to NOK 465m for the same period last year.

Net financial income in Q2 was NOK 1m, stable y-o-y. Pre-tax profit was NOK 69m. The tax charge was NOK 15m. Net profit was NOK 54m in the quarter vs. NOK 62m last year.

Basic earnings per share (EPS) was NOK 0.11 for Q2, compared to NOK 0.13 in the same period last year. The corresponding figures for the first six months of the year were NOK 0.24 and NOK 0.19, respectively.

The balance sheet remains very strong and liquid, with a significant portion of the asset base consisting of bank deposits in combination with a balanced net working capital. The Group's capital adequacy ratio as at 30 June 2017 was 18.2% (2.3x the regulatory minimum requirement).

Condensed consolidated income statement (unaudited)
-----------------------------------------------------	--

Condensed consolidated income statement (unaudited)
NOKm	Q2 2017	Q2 2016	YTD 2017	YTD 2016	2016
Brokerage revenues	123.4	137.8	266.7	269.0	546.8
Corporate Finance revenues	173.9	212.6	342.5	312.7	696.2
Total revenues	297.2	350.4	609.2	581.7	1,243.0
Fixed personnel costs	-94.0	-111.2	-187.9	-211.3	-426.4
Other operating costs	-66.0	-63.5	-126.1	-125.8	-245.5
Depreciation	-1.8	-1.7	-3.4	-3.6	-6.3
Total operating costs	-161.8	-176.5	-317.4	-340.7	-678.2
Operating profit before variable compensation	135.4	173.9	291.8	241.0	564.8
Variable personnel costs	-67.6	-90.7	-147.0	-124.1	-297.9
Operating profit after variable compensation	67.8	83.3	144.8	116.9	266.9
Net financial result	1.3	1.1	5.4	3.2	15.0
Profit before tax	69.1	84.4	150.2	120.2	281.9
Taxes	-15.0	-22.7	-38.1	-32.3	-71.2
Net profit	54.1	61.6	112.1	87.9	210.7
Condensed other comprehensive income
NOKm	Q2 2017	Q2 2016	YTD 2017	YTD 2016	2016
Net profit	54.1	61.6	112.1	87.9	210.7
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations	4.6	-10.1	7.2	-35.7	-46.1
Hedging of investment in foreign subsidiaries	-5.2	9.4	-6.9	37.7	47.9
Income tax relating to items that may be reclassified	1.3	-2.4	1.7	-9.4	-12.0
	0.7	-3.0	2.0	-7.4	-10.2
Total other comprehensive income

Condensed other comprehensive income

Condensed other comprehensive income
Net profit	54.1	61.6	112.1	87.9	210.7
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations	4.6	-10.1	7.2	-35.7	-46.1
Hedging of investment in foreign subsidiaries	-5.2	9.4	-6.9	37.7	47.9
Income tax relating to items that may be reclassified Total other comprehensive income	1.3 0.7	-2.4 -3.0	1.7 2.0	-9.4 -7.4	-12.0 -10.2

Condensed consolidated balance sheet (unaudited)
NOKm 30/06/2017 30/06/2016	31/12/2016
Total intangible assets 54.2 53.2	53.8
Plant and equipment 21.9 18.6	19.3
Financial non-current assets 12.3 16.1	16.6
Total non-current assets 88.4 87.9	89.7
Receivables 3,107.9 3,070.8	1,728.6
Investments 157.6 309.5	246.7
Cash and bank deposits 904.4 710.4	748.5
Total current assets 4,169.9 4,090.6	2,723.9
Total assets 4,258.3 4,178.5	2,813.6
Paid-in capital 304.9 306.2	305.4
Retained earnings 418.8 473.8	570.6
Total equity 723.7 780.0	876.0
Long-term liabilities 16.7 17.9	16.8
Short-term interest bearing liabilities 0.0 396.5	0.0
Short-term liabilities 3,517.8 2,984.0	1,920.8
Total liabilities 3,534.6 3,398.4	1,937.6
Total equity and liabilities 4,258.3 4,178.5	2,813.6
Condensed statement of changes in equity
NOKm Q2 2017 Q2 2016 YTD 2017 YTD 2016	2016
Shareholders equity - opening balance 883.9 1,019.8 876.0 997.7	997.7
Comprehensive income for the period 54.7 58.6 114.0 80.5	200.5
Payment to shareholders -235.4 -279.7 -235.4 -279.7	-279.7
New issuing of shares 0.0 18.1 0.0 18.1	18.1
Change in own shares 20.5 -36.9 -30.9 -36.6	-60.7
	876.0

Condensed statement of changes in equity

Condensed statement of changes in equity
Comprehensive income for the period	54.7	58.6	114.0	80.5	200.5
Payment to shareholders	-235.4	-279.7	-235.4	-279.7	-279.7
New issuing of shares	0.0	18.1	0.0	18.1	18.1
Change in own shares	20.5	-36.9	-30.9	-36.6	-60.7
Shareholders equity - closing balance	723.7	780.0	723.7	780.0	876.0
Condensed consolidated cash flow statement
NOKm	Q2 2017	Q2 2016	YTD 2017	YTD 2016	2016
Cash and cash equivalents - opening balance	745.4	843.5	748.5	853.5	853.5
Net cash flow from operating activities	360.7	-238.7	402.1	-249.2	203.1
Net cash flow from investing activities	12.3	7.6	19.1	7.7	14.3
Net cash flow from financing activities	-214.0	98.0	-265.3	98.3	-322.4
Net change in cash and cash equivalents	159.0	-133.1	155.9	-143.2	-105.0
Cash and cash equivalents - closing balance	904.4	710.4	904.4	710.4	748.5

Condensed consolidated cash flow statement

Condensed statement of changes in equity
Condensed consolidated cash flow statement
NOKm	Q2 2017	Q2 2016	YTD 2017	YTD 2016	2016
Cash and cash equivalents - opening balance	745.4	843.5	748.5	853.5	853.5
Net cash flow from operating activities	360.7	-238.7	402.1	-249.2	203.1
Net cash flow from investing activities	12.3	7.6	19.1	7.7	14.3
Net cash flow from financing activities	-214.0	98.0	-265.3	98.3	-322.4
Net change in cash and cash equivalents	159.0	-133.1	155.9	-143.2	-105.0

Notes

1) Accounting principles

The quarterly report is prepared in accordance with IAS 34 Interim Financial Reporting and International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and all interpretations from the Financial Reporting Interpretations Committee (IFRIC), which have been endorsed by the EU Commission for adoption within the EU. The quarterly report is prepared using the same principles as those used for the 2016 annual report. The quarterly report is unaudited.

2) Judgments, estimates and assumptions

The preparation of condensed consolidated interim financial statements in accordance with IFRS and the application of the chosen accounting policies require management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on a continuous basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. When preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as of the period ending 31 December 2016.

3) Risk and uncertainty

As described in ABGSC's annual report, ABGSC's total risk exposure is analysed and evaluated at the group level. Risk evaluations are integrated in all business activities both at the group and business unit levels, increasing ABGSC's ability to take advantage of business opportunities. There has not been any significant change in the risk exposure or the risks and uncertainties described in the annual report.

4) Related parties

There have not been any changes or transactions with any related parties that significantly impact the Group's financial position or results for the period.

5) Segment information

	Q2 2017	Q2 2016	YTD 2017	YTD 2016
NOKm	115	117	223	244
NOKm	62	60	140	72
NOKm	177	176	363	316
NOKm	101	108	199	215
NOKm	76	68	165	101
NOKm	Q2 2017	Q2 2016	YTD 2017	YTD 2016
NOKm	184	234	388	338
NOKm	-62	-60	-140	-72
NOKm	122	174	246	266
NOKm	61	69	119	126
NOKm	61	106	129	140
				YTD 2016
				237
NOKm	123	125	246	195
			20	40
NOKm NOKm	9 44	32 53	92	109
	NOKm	Q2 2017 121	Q2 2016 141	ABGSC's two business segments are Markets and Investment Banking. The management system is matrix-based, with revenues and expenses recorded by both business segment and geographical market. Assets and liabilities, except for items subject to direct allocation, and equity and cash flow are recorded by geographical market. Bonuses and profit sharing, financial results and income taxes are all treated as unallocated items in the internal reporting. YTD 2017 251

SHAREHOLDER MATTERS

Share transactions

Number of shares

SHAREHOLDER MATTERS
Share transactions
During the quarter, ABGSC sold 5.5m treasury shares to partners as settlement of forward contracts previously entered into.
Number of shares
		Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Shares outstanding (period end)	(1,000)	470,747	470,747	470,747	470,747	470,747
- Treasury shares (period end)	(1,000)	5,820	4,230	9,537	16,835	11,330
+ Forward contracts outstanding (period end)	(1,000)	31,033	29,462	29,493	38,755	33,250
Diluted shares (period end)	(1,000)	495,960	495,978	490,703	492,668	492,668
Shares outstanding (average)	(1,000)	469,439	470,747	470,747	470,747	470,747
- Treasury shares (average)	(1,000)	4,433	5,719	6,551	8,902	15,043
+ Forward contracts outstanding (average)	(1,000)	36,116	30,339	29,147	32,046	36,964
Diluted shares (average)	(1,000)	501,122	495,367	493,343	493,891	492,668
Shareholder structure
Shares held by Directors and staff		Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Shares held by Directors and Staff / Shares outstanding		23%	23%	22%	21%	22%
Shares and fwd contracts held by Directors and Staff / Diluted shares		28%	28%	27%	28%	28%
Shareholders by country (shares outstanding)		Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Norway		62%	62%	62%	61%	59%
USA		15%	13%	14%	14%	15%
Great Britain		16%	16%	14%	14%	14%
Sweden		4%	4%	4%	4%	4%
		4%	6%	5%	6%	8%

Shareholder structure

Shares held by Directors and staff	Q2 2016	Q3 2016 Q4 2016 Q1 2017			Q2 2017
Shares held by Directors and Staff / Shares outstanding	23%	23%	22%	21%	22%
Shares and fwd contracts held by Directors and Staff / Diluted shares	28%	28%	27%	28%⊾	28%

Shareholder structure
Shareholders by country (shares outstanding)		Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Norway		62%	62%	62%	61%	59%
USA		15%	13%	14%	14%	15%
Great Britain		16%	16%	14%	14%	14%
Sweden		4%	4%	4%	4%	4%
Other		4%	6%	5%	6%	8%

Largest shareholders

Largest shareholders
20 largest shareholders as of 30 June 2017 (registered in VPS as of 4 July 2017):
Shareholder	Number of shares	%
JP Morgan Bank Luxembourg (nominee)	45,294,800	9.6%
Sanden AS *	39,582,233	8.4%
State Street Bank (nominee)	28,567,624	6.1%
Perestroika AS	13,687,773	2.9%
ABG Sundal Collier Holding ASA (own shares)	11,329,623	2.4%
SEB Prime Solutions	11,000,000	2.3%
Citibank (nominee)	10,401,918	2.2%
Erling Neby AS	10,200,000	2.2%
Fidelity Int Small Cap Fund	9,028,610	1.9%
Verdipapirfondet Pareto Investment	8,666,830	1.8%
Landkreditt Utbytte	7,750,000	1.6%
Watrium AS	6,000,000	1.3%
Peter Schofield	4,623,000	1.0%
	4,565,201 4,500,000	1.0%
DnB Markets		1.0%
A/S Skarv
Giotto AS **	4,385,900	0.9%
Sasan AS ***	3,624,376	0.8%
Goldman Sachs & Co (nominee)	3,612,500	0.8%
Sole Active AS	3,085,000	0.7%
Florida Retirement System	3,056,615	0.6%
Total top 20	232,962,003	49.5%
Other	237,785,092	50.5%

*** Arild A. Engh, who is Head of Investment Banking and board member, owns a total of 5,432,976 shares including shares owned by Sasan AS and Kilen AS.

An up-to-date list of the 20 largest shareholders can be found under the Investor Relations section on the ABGSC website (www.abgsc.com).

Share price development

The ABG Sundal Collier Holding ASA share is listed on the Oslo Stock Exchange with the ticker symbol "ASC".

The closing price per share was NOK 5.37 as of 30 June 2017. The highest closing price observed during the quarter

was NOK 6.01 and the lowest was NOK 5.20. The share traded ex the NOK 0.50 dividend to shareholders from 27 April 2017.

Forward contracts with partners

April 2017.		was NOK 6.01 and the lowest was NOK 5.20. The share traded ex the NOK 0.50 dividend to shareholders from 27
	The average daily traded volume during the quarter on the Oslo Stock Exchange was 1,093k shares. This includes the placing of the approx. 35.8 million shares previously held by Ferd on 10 May 2017.
Stock Exchange.	According to the Fidessa Fragmentation Index, 95% of the total traded volume over the period took place on the Oslo
Forward contracts with partners
regards to the selling (or purchasing) of these shares.	As part of the partner share incentive programme, several partners in the firm have entered into forward contracts for the future delivery of shares. Under the programme, new and certain existing partners are given the opportunity to acquire restricted partner shares at market price, with a 15% price adjustment reflecting several restrictions with
contract is settled prior to the original expiry date.	The final settlement price will be adjusted to reflect any distribution to shareholders paid prior to settlement. The interest element in the forward contract will also lead to an adjustment of the settlement price in cases where the
	The forward contracts have settlement in the period 2018 to 2022.
		Forward average price
Expiry year	Forward contracts (1,000)
2018	8,076	2.49
2019	12,225	4.13
2020	500	3.88
2022	12,450	4.67

Policy for distribution to shareholders

The Board is committed to returning excess capital to shareholders through stable cash distribution and the buy-back of shares over time. Excess capital will be evaluated on a continuous basis, taking into consideration a number of factors including market conditions, regulatory requirements, counterparty and market perceptions and the nature of our business.

The Board currently has a mandate from the shareholders to acquire a number of ASC shares corresponding to approximately 10% of the share capital. The one-year mandate is valid until the end of June 2018.

Financial calendar

ABGSC has approved the financial calendar for the accounting year 2017:

• 18 October 2017, Earnings release Q3 2017
• 14 February 2018, Earnings release Q4/preliminary full-year figures 2017

SUPPLEMENTARY INFORMATION

Historical figures – nine quarters

SUPPLEMENTARY INFORMATION Historical figures – nine quarters
Income statement		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Revenues	NOKm	376	251	391	231	350	242	420	312	297
Operating costs	NOKm	-268	-206	-288	-198	-267	-204	-307	-235	-229
Operating profit	NOKm	108	44	103	34	83	37	113	77	68
Net financial result	NOKm	1	5	7	2	1	1	11	4	1
Profit before tax	NOKm	110	49	110	36	84	38	124	81	69
Taxes	NOKm	-32	-13	-46	-10	-23	-10	-29	-23	-15
Net profit	NOKm	78	36	64	26	62	28	95	58	54
Balance sheet		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Total non-current assets	NOKm	121	109	99	97	88	84	90	92	88
Receivables	NOKm	2,629	3,173	1,166	2,179	3,071	2,537	1,729	3,849	3,108
Investments	NOKm	201	251	291	120	309	228	247	242	158
Cash and bank deposits	NOKm	563	762	854	843	710	728	749	745	904
Total current assets	NOKm	3,394	4,185	2,311	3,142	4,091	3,493	2,724	4,837	4,170
Total assets	NOKm	3,515	4,294	2,411	3,239	4,178	3,576	2,814	4,928	4,258
Total equity	NOKm	874	919	998	1,020	780	802	876	884	724
Long-term liabilities	NOKm	18	19	18	18	18	18	17	16	17
Short-term interest bearing liabilities	NOKm	139	0	0	0	396	0	0	0	0
Short-term liabilities	NOKm	2,483	3,357	1,395	2,202	2,984	2,756	1,921	4,028	3,518
Total liabilities	NOKm	2,641	3,375	1,413	2,220	3,398	2,774	1,938	4,044	3,535
Total equity and liabilities	NOKm	3,515	4,294	2,411	3,239	4,178	3,576	2,814	4,928	4,258
Revenue split		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Equities	NOKm	150	113	142	113	135	114	162	139	127
Non-Equities (Fixed Income, CB & FX)	NOKm	45	28	50	27	41	32	36	48	49
Markets	NOKm	195	141	192	140	176	146	198	187	177
Investment Banking	NOKm	180	110	199	92	174	96	222	124	122
Revenues	NOKm	376	251	391	231	350	242	420	310	299
Key figures		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Headcount (average)	#	250	252	252	253	256	251	252	257	250
Revenues per head (average)	NOKm	1.50	0.99	1.55	0.91	1.37	0.96	1.66	1.21	1.19
Operating costs per head (average)	NOKm	-1.07	-0.82	-1.14	-0.78	-1.04	-0.81	-1.22	-0.91	-0.92
Operating cost / Revenues	%	71%	82%	74%	85%	76%	85%	73%	75%	77%
Total compensation / Revenues	%	54%	56%	55%	58%	58%	61%	58%	56%	54%
Operating margin %	%	29%	18%	26%	15%	24%	15%	27%	25%	23%
Return on Equity (annualised)	%	28%	16%	27%	10%	27%	14%	45%	26%	27%
Shares outstanding (period end)	(1,000)	466,168	466,168	466,168	466,168	470,747	470,747	470,747	470,747	470,747
Treasury shares (period end)	(1,000)	-9,128	-8,933	-3,043	-2,948	-5,820	-4,230	-9,537	-16,835	-11,330
Forward contracts outstanding (period end)	(1,000)	36,512	36,272	30,383	40,788	31,033	29,462	29,493	38,755	33,250
Diluted shares (period end)	(1,000)	493,552	493,507	493,507	504,007	495,960	495,978	490,703	492,668	492,668
Earnings per share (basic)	NOK	0.17	0.08	0.14	0.06	0.13	0.06	0.20	0.12	0.11
Earnings per share (diluted)	NOK	0.16	0.07	0.13	0.05	0.12	0.06	0.19	0.12	0.11
Book value per share (basic)	NOK	1.88	1.98	2.14	2.19	1.66	1.71	1.87	1.89	1.55
Book value per share (diluted)	NOK	2.00	2.09	2.23	2.33	1.78	1.82	2.00	2.11	1.72
Total capital adequacy	NOKm	2,835	2,940	3,286	2,879	3,219	3,020	3,393	3,565	3,124
	NOKm	697	697	687	687	669	670	600	549	569
Core capital		25%	24%
Total capital adequacy ratio	%			21%	24%	21%	22%	18%	15%	18%

Markets		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Revenues	NOKm	196	141	192	140	176	146	198	187	177
Fixed operating costs	NOKm	103	105	112	107	108	97	109	98	101
Operating profit before variable comp.	NOKm	93	36	80	32	68	48	89	89	76
Headcount (average)	#	74	73	74	73	73	73	70	74	68
Investment Banking		Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Revenues	NOKm	180	110	199	92	174	96	222	124	122
Fixed operating costs	NOKm	59	55	59	57	69	62	69	58	61
Operating profit before variable comp.	NOKm	122	55	140	35	106	33	153	68	61

RESPONSIBILITY STATEMENT

We confirm to the best of our knowledge that the condensed set of financial statements for the period 1 January to 30 June 2017 has been prepared in accordance with the IAS 34 "Interim Financial Reporting" and gives a true and fair view of the Group's assets, liabilities, financial position and results for the period viewed in their entirety, and that the interim report includes a fair review of any significant events that arose during the six-month period and their effect on the half-yearly financial report and any significant related parties' transactions. The report includes, to the best of our knowledge, a description of the material risks that the Board of Directors at the time of this report deem might have a significant impact on the financial performance of the Group.

Oslo, 12 July 2017

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Judy Bollinger (Chairman)	Anders Grudén	Adele Norman Pran
(sign)	(sign)	(sign)
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Jan Petter Collier	Arild A. Engh	Knut Brundtland (CEO)
(sign)	(sign)	(sign)