ABG Sundal Collier — Interim / Quarterly Report 2021

Apr 20, 2021

Strong performance in Q1, with revenues up 181%, to NOK 738m (263m)

All-time high LTM revenues of NOK 2,401m

Q1 diluted EPS of NOK 0.39 (0.05)

Solid pipeline going into Q2

2021 Q1 INTERIM REPORT

Comments from the CEO

A solid start to the year

The high level of activity in the second half of 2020 continued through the first quarter of 2021, and markets show no sign of cooling off. Even though Q1 is usually a seasonally weak quarter, Q1 2021 turned out to very strong, with solid contribution from all business areas and total revenues amounting to NOK 738m, up 181% y-o-y. The increase is partly driven by favourable markets, but there is also clear evidence that ABGSC continues to gain ground relative to peers.

Given the strong equity market sentiment, many companies in the Nordics are seizing the opportunity to raise capital. What distinguishes Q1 2021 from 2020 is the broader range of companies conducting capital markets activities. While tech companies dominated 2020, we are experiencing solid activity across many sectors this year.

We have over years steadily improved our position in the Swedish market. Our strategy is to further improve our position in Sweden by capitalising on being an integrated Nordic investment bank with a strong focus on collaboration across teams and across countries. Therefore, I am especially pleased to note that we are growing revenues and improving market share within Swedish ECM, while at the same time our business in Norway continues to be market leaders and performing very well.

Research quality is a key priority and ABGSC continues to invest in its research operation. During the quarter, we reached a couple of important milestones as we now cover a total of 400 Nordic companies and signed our sponsored research contract number 100.

Continued positive outlook

ABGSC has a very strong pipeline of transactions going into the second quarter, and we see no sign of this trend fading in the near term. At the same time, we are aware that market trends and investors' appetite for risk can change quickly, and hence continue to focus also on costs and efficiency.

Jonas Ström, CEO

Key financial figures: Q1 revenue of close to 3x last year combined with a decrease in non-compensation costs provides significant earnings leverage

Macro and market backdrop: Signs of interest rates bottoming out with falling market volatility and equity markets at all-time high

• Rising long-term interest rates in the US. Europe flat at zero level
• The S&P 500 volatility index (VIX) dropping to low 20-level
• S&P 500 up 6% and MSCI Nordic up 8% in the quarter

Capital market and M&A market perspectives: Positive trends in all segments with particular strength in ECM and DCM transactions

• High activity within primary equity capital has continued into Q1 with a large number of completed new issues
• Solid recovery in the DCM market after slow Q1 last year
• Increase in announced M&A transactions

Source: Refinitiv, Stamdata, Mergermarket

• 1) Issuers listed on Nordic stock exchanges
• 2) Corporate high yield, Nordic issuers
• 3) Nordic buyers or sellers, announced transactions

Corporate Financing: Massive growth as ABGSC continues to gain market share, especially within Swedish ECM

ECM – IPO	NOK 4.2bn	Renewables
ECM – IPO	NOK 1.8bn	TMT
ECM – IPO	NOK 1.4bn	Consumer
ECM – IPO	NOK 767m	TMT
ECM – IPO	NOK 750m	Renewables
ECM – IPO	SEK 6.0bn	TMT
ECM – IPO	SEK 4.5bn	Consumer
ECM – RI/PP	SEK 2.5bn SEK 1.1bn	TMT
ECM – IPO	SEK 1.7bn	Consumer
ECM – PP	SEK 1.2bn	TMT
DCM – HY	NOK 400m EUR 30m	Financials
DCM – HY	SEK 1.3bn	Real Estate

M&A and Advisory: Moderate increase in revenues with underlying activity picking up

Brokerage and Research: Encouragingly strong start to the year

Comments

• Strong equity markets and high activity throughout Q1
• The y-o-y comparison faced tough comps, primarily in March
• ABGSC continues to take market share in both Brokerage & Research
• Research coverage of 400 corporates gives ABGSC the broadest equity research franchise in Scandinavia by a wide margin

Operating costs: YTD operating costs are significantly up, however mainly due to revenue-driven compensation costs

▪ Increased compensation costs driven by higher revenues and profitability

• Headcount has increased by approx. 9%, reflecting our strategic decision to further expand the investment banking operation
• Non-compensation costs primarily down due to reduced travel costs

Closing remarks

• Exceptionally strong first quarter, with a continuance of last year's strong market trend
• ABGSC is gaining market share
• All segments contributing to increased revenues, although Corporate Financing continues to be the main driver
• Broader range of companies being active in the capital market, indicating a more sustainable growth
• Positive outlook with continued strong pipeline of transactions

Financial statements and supplementary information

Consolidated income and cash flow statements

Condensed consolidated income statement (unaudited) Other comprehensive income

NOKm	Q1 2021	Q1 2020	2020
Corporate Financing	491.7	50.4	1,044.6
M&A and Advisory	90.5	78.1	380.9
Brokerage and Research	155.9	134.5	500.6
Total revenues	738.0	262.9	1,926.0
Personnel costs	-395.4	-148.9	-994.1
Other operating costs	-54.2	-63.8	-241.8
Depreciation	-14.4	-13.7	-54.9
Total operating costs	-464.1	-226.4	-1,290.8
Operating profit	274.0	36.5	635.3
Net interest	-3.3	-0.5	-6.6
Associates	-2.0	-2.5	-9.9
Other	1.1	3.3	2.7
Net financial result	-4.2	0.3	-13.8
Profit before tax	269.8	36.8	621.4
Taxes	-63.1	-10.5	-157.9
Net profit	206.7	26.3	463.6
Profit / loss to non-controlling interests	-1.5	1.0	51.8
Profit / loss owners of the to parent	208.2	25.3	411.8

NOKm	Q1 2021	Q1 2020	2020
Net profit	206.7	26.3	463.6
Items that may be reclassified profit or loss to
Exchange differences on translating foreign operations	-15.9	53.0	6.6
Hedging of investment in foreign subsidiaries	12.7	-54.6	-6.8
reclassified Income tax relating to items that may be	-3.2	13.6	1.7
comprehensive income Total other	-6.3	12.1	1.5
Total comprehensive income for the period	200.4	38.3	465.0
Comprehensive income non-controlling interests to	-1.5	1.0	51.8
Comprehensive income owners of the to parent	201.9	37.3	413.2

Condensed cash flow statement
NOKm	Q1 2021	Q1 2020	2020
Cash and cash equivalents - opening balance	1,251.3	570.6	570.6
Net cash flow from operating activities	-292.1	114.1	1,031.1
Net cash flow from investing activities	2.4	-53.3	-74.4
flow from financing Net cash activities	-22.0	148.2	-276.0
Net change in cash and cash equivalents	-311.8	209.0	680.7
Cash and cash equivalents - closing balance	939.5	779.6	1,251.3

Consolidated balance sheet

Consolidated balance sheet (unaudited)

NOKm	31/03/2021	31/03/2020	31/12/2020
Intangible assets	161.8	161.4	164.6
Financial non-current assets	67.2	84.1	77.4
Tangible assets	263.8	311.8	289.0
Total non-current assets	492.8	557.4	530.9
Receivables	5,828.5	4,840.9	1,622.8
Investments	36.9	102.3	65.1
Cash and bank deposits	939.5	779.6	1,251.3
Total current assets	6,804.9	5,722.7	2,939.2
Total assets	7,297.7	6,280.1	3,470.1
Paid-in capital	112.6	111.8	113.1
Retained earnings	971.6	563.9	780.9
Equity attributable to owners of the parent	1,084.2	675.7	893.9
Non controlling interests	88.4	63.2	89.9
Total equity	1,172.7	738.8	983.8
Long-term liabilities	235.3	276.7	256.4
Short-term interest bearing liabilities	0.0	212.0	0.0
Short-term liabilities	5,889.8	5,052.5	2,229.9
Total liabilities	6,125.1	5,541.3	2,486.3
Total equity and liabilities	7,297.7	6,280.1	3,470.1

Condensed statement of changes in equity

NOKm	Q1 2021	Q1 2020	2020
Equity attributable owners of - opening to the parent balance	893.9	691.1	691.1
Comprehensive owners of income to the parent	201.9	37.3	413.2
Payment to shareholders	0.0	0.0	-183.6
of New issuing shares	0.0	0.0	0.0
Change in own shares	-11.6	-52.8	-26.8
Equity attributable to owners of the parent - closing balance	1,084.2	675.7	893.9
Equity attributable to non-controlling interests - Opening balance	89.9	62.2	62.2
Comprehensive income non-controlling interests to	-1.5	1.0	51.8
Payment shareholders to	0.0	0.0	-24.1
Business combinations	0.0	0.0	0.0
Equity attributable non-controlling interests - Closing balance to	88.4	63.2	89.9
Total equity - closing balance	1,172.7	738.8	983.8

Notes to the financial statements

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 European Commission for adoption within the EU. The quarterly report is prepared using the same principles as those used for the 2020 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 estimates are 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 estimate uncertainty were the same as those that applied to the consolidated financial statements as of the period ending 31 December 2020.

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

The group segments its business primarily on a product level as this provides the best understanding of the Group's integrated operation. The Group does not allocate profits or split the balance sheet per product. Revenues are also split at an overall geographical level. Segment information is presented on other pages of this report, including on the historical quarterly summary pages.

Cost ratios

Shareholder matters: Share count and shareholder structure

Share count

	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Shares outstanding (period end)	470 747 ,	470 747 ,	470 747 ,	470 747 ,	470 747 ,
(period end) - Treasury shares	32 534 ,	30 219 ,	29 364 ,	26 940 ,	26 870 ,
(period end) + Forward outstanding contracts	99 801 ,	97 836 ,	96 531 ,	94 483 ,	104 373 ,
(period end) Diluted shares	538 015 ,	538 365 ,	537 915 ,	538 290 ,	548 249 ,
Shares outstanding (average)	470 747 ,	470 747 ,	470 747 ,	470 747 ,	470 747 ,
- Treasury shares (average)	17 723 ,	31 639 ,	29 694 ,	27 906 ,	26 832 ,
+ Forward outstanding (average) contracts	80 437 ,	99 337 ,	97 178 ,	95 292 ,	96 645 ,
Diluted shares (average)	533 460 ,	538 445 ,	538 231 ,	538 134 ,	540 560 ,

Shareholder structure

Shares held by Directors and staff	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Shares held by Directors and Staff / Shares outstanding	20%	20%	20%	20%	20%
Shares fwd Staff / and held by Directors and Diluted shares contracts	36%	36%	35%	35%	36%

Shareholders by (shares outstanding) country	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Norway	73%	74%	73%	71%	69%
Great Britain	4%	4%	4%	4%	4%
USA	9%	9%	9%	9%	9%
Sweden	5%	5%	5%	7%	7%
Other	9%	8%	8%	9%	10%

Share transactions

During the quarter, ABGSC purchased 1.8m shares at NOK 8.44 per share in a buy-back offering. ABGSC also purchased 0.7m shares from retired partners at an average price of NOK 7.55 per share. ABGSC sold 2.3m treasury shares to partners as settlement of forward contracts previously entered into and sold 0.3m shares as part of the annual partner share offering. ABGSC also sold 12.2m shares on forward contracts as part of the annual partner share offering and to new partners.

Shareholder information

For more information about the ABGSC share and its largest shareholders, please visit the Investor Relations section on the ABGSC website (www.abgsc.com).

Shareholder matters: ABGSC sold a total of 12.4m shares to partners and repurchased 2.5m shares from the market and leaving partners in Q1

The Board currently has a mandate from the shareholders to acquire a number of ABGSC shares corresponding to approximately 10% of the share capital. The one-year mandate is valid until the end of June 2021.

Expiry year	(1 000) Forward contracts ,	Forward price average
2021	1 737 ,	2 74
2022	10 811 ,	3 21
2023	10 815 ,	4 37
2024	40 630 ,	3 07
2025	28 191 ,	2 30
2026	12 189 ,	72 7
Total	104 373 ,

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 regards to the selling (or purchasing) of these shares.

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 contract is settled prior to the original expiry date.

Shareholder matters: Distribution to shareholders

• 133% 89% 128% 2017 2018 2019 2020
• The Board is committed to returning excess capital to shareholders through cash and buy-backs 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 has decided to revert to annual dividend payments, so there will not be any mid-year interim dividend in 2021

Capital and balance sheet summary: Highly liquid asset base and solid capitalisation with satisfactory buffers to regulatory requirement

▪ ABGSC is well capitalised with a core capital ratio of 1.4x the current regulatory minimum requirement and >2x future requirement to be implemented in Q3

• Liquid balance sheet with limited proprietary trading activity and a modest and conservative security financing operation
• Net working capital shall be close to neutral over time, but may be subject to short-term fluctuations1)
• Cash & Bank includes collateral cash deposits (stock borrowing, clearing, etc.)

Historical figures – nine quarters

Income statement
NOKm	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Revenues	232	345	271	504	263	408	363	893	738
Operating costs	-199	-259	-219	-335	-226	-291	-264	-509	-464
Operating profit	33	85	52	169	36	116	99	384	274
Net financial result	-1	1	-3	-2	0	-4	-3	-7	-4
Profit before tax	32	86	49	167	37	112	96	377	270
Taxes	-7	-22	-11	-40	-11	-29	-24	-95	-63
Non-controlling interests	-2	-3	-2	-20	-1	-8	-5	-38	1
Net profit	23	61	36	107	25	76	67	243	208

Balance sheet
NOKm	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Total non-current assets	261	268	285	285	557	546	541	531	493
Receivables	3,491	2,941	2,943	1,356	4,841	4,238	4,762	1,623	5,828
Investments	54	47	105	59	102	78	249	65	37
Cash and bank deposits	364	275	566	571	780	507	752	1,251	940
Total current assets	3,908	3,264	3,614	1,986	5,723	4,822	5,763	2,939	6,805
Total assets	4,169	3,531	3,899	2,271	6,280	5,368	6,304	3,470	7,298
Equity attributable to owners of the parent	638	610	657	691	676	658	726	894	1,084
Non-controlling interests	63	44	46	62	63	49	54	90	88
Total equity	701	654	703	753	739	706	779	984	1,173
Long-term liabilities	126	122	119	66	277	263	265	256	235
Short-term interest bearing liabilities	0	59	246	0	212	14	223	0	0
Short-term liabilities	3,342	2,697	2,831	1,452	5,053	4,385	5,036	2,230	5,890
Total liabilities	3,468	2,877	3,196	1,518	5,541	4,662	5,524	2,486	6,125
Total equity and liabilities	4,169	3,531	3,899	2,271	6,280	5,368	6,304	3,470	7,298

Historical figures – nine quarters (cont'd)

Segment revenues

NOKm	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Corporate Financing	29	165	96	213	50	236	180	579	492
M&A and Advisory	115	82	81	170	78	46	82	175	90
Brokerage and Research	87	97	94	121	134	126	101	139	156
Group	232	345	271	504	263	408	363	893	738
NOKm	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Norway	80	174	96	272	136	211	168	524	343
Sweden	108	118	119	161	85	132	133	224	287
Denmark	15	13	24	32	8	10	23	37	21
International	29	40	31	39	34	54	39	108	87

Historical figures – nine quarters (cont'd)

Key figures
NOK	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
(average) Headcount	279	278	280	275	275	278	287	298	301
(average) Revenues per head	0.83	1.24	0.97	1.83	0.95	1.46	1.27	2.99	2.45
Operating (average) costs per head	-0.71	-0.93	-0.78	-1.21	-0.82	-1.05	-0.92	-1.70	-1.54
Operating cost / Revenues	86%	75%	81%	66%	86%	72%	73%	57%	63%
Total compensation / Revenues	58%	56%	55%	50%	57%	54%	54%	48%	54%
Operating margin %	14%	25%	19%	34%	14%	28%	27%	43%	37%
Return on Equity (annualised)	14%	39%	23%	64%	15%	45%	39%	120%	84%
Shares outstanding (period end)	470,747	470,747	470,747	470,747	470,747	470,747	470,747	470,747	470,747
Treasury shares (period end)	-17,899	-17,421	-14,996	-14,023	-32,534	-30,219	-29,364	-26,940	-26,870
Forward contracts outstanding (period end)	78,589	77,361	75,211	75,611	99,801	97,836	96,531	94,483	104,373
Diluted shares (period end)	531,438	530,688	530,963	532,335	538,015	538,365	537,915	538,290	548,249
Earnings per share (basic)	0.05	0.14	0.08	0.24	0.06	0.17	0.15	0.55	0.47
(diluted) Earnings per share	0.05	0.12	0.07	0.21	0.05	0.14	0.13	0.45	0.39
(basic) Book value per share	1.41	1.35	1.44	1.51	1.54	1.49	1.64	2.01	2.44
(diluted) Book value per share	1.76	1.67	1.75	1.79	1.86	1.77	1.89	2.17	2.62
Total capital adequacy	3,193	3,165	2,972	3,196	3,546	2,958	3,294	3,386	3,892
Core capital	442	458	391	504	450	462	386	441	431
Total capital adequacy ratio	14%	14%	13%	16%	13%	16%	12%	13%	11%
Minimum requirement coverage ratio	1.7x	1.8x	1.6x	2.0x	1.6x	2.0x	1.5x	1.6x	1.4x

Financial calendar

• Q2 2021 earnings release: 9 July 2021
• Q3 2021 earnings release: 15 October 2021
• Q4 2021 earnings release/preliminary full-year figures: 9 February 2022

The Annual General Meeting will take place on 20 April 2021 and the first trading day ex. dividend of NOK 0.83 per share will be 21 April 2021

Company overview

ABGSC is enabling businesses and capital to grow and perform

25 1) Source: Mergermarket. Pending and completed transactions with targets from Norway, Sweden or Denmark

2) Source: Thomson Reuters: Companies listed in Norway, Sweden or Denmark

3) Source: Stamdata. Non-Shipping related high yield issuers located in Norway,Sweden or Denmark and with documentation in Norway, Sweden or Denmark

Our vision is to be the most agile and respected Nordic investment bank

Norway

ABG Sundal Collier ASA Pb. 1444 Vika Munkedamsveien 45E 7th floor NO-0250 Oslo Tel +47 22 01 60 00 Fax +47 22 01 60 60

Sweden

ABG Sundal Collier AB Box 7269 Regeringsgatan 25 8th floor SE-11153 Stockholm Tel +46 8 566 286 00 Fax +46 8 566 286 01

United Kingdom

ABG Sundal Collier Ltd. St Martin's Court 25 Newgate St 5th floor UK-EC4M 7EJ London Tel +44 207 905 5600 Fax +44 207 905 5601

Denmark ABG Sundal Collier ASA Copenhagen Branch Forbindelsesvej 12 DK-2100 Copenhagen Ø

Tel +45 3546 3000 Fax +45 3546 3010

Germany

ABG Sundal Collier ASA Frankfurt Branch Schillerstrasse 2 5. Obergeschoss DE-60313 Frankfurt /Main

Tel +49 69 96 86 96 0 Fax +49 69 96 86 96 9

USA

ABG Sundal Collier Inc. 850 Third Avenue Suite 9-C US-10022 New York Tel +1 212 605 3800 Fax +1 212 605 3801

Singapore

ABG Sundal Collier Pte Ltd 10 Collyer Quay Ocean Financial Center #40-07, Singapore 049315

Tel +65 6808 6082

This material has been prepared by ABG Sundal Collier ASA, or an affiliate thereof ("ABGSC").

This material is for distribution only under such circumstances as may be permitted by applicable law. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the materials. It should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this material are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of ABGSC as a result of using different assumptions and criteria. ABGSC is under no obligation to update or keep current the information contained herein. ABGSC, its directors, officers and employees' or clients may have or have had interests or long or short positions in the securities or other financial instruments referred to herein and may at any time make purchases and/or sales in them as principal or agent. ABGSC may act or have acted as market-maker in the securities or other financial instruments discussed in this material. Furthermore, ABGSC may have or have had a relationship with or may provide or has provided investment banking, capital markets and/or other financial services to the relevant companies. Neither ABGSC nor any of its affiliates, nor any of ABGSC' or any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this material.

© 2021 ABG Sundal Collier ASA. All rights reserved. ABG Sundal Collier ASA specifically prohibits the redistribution of this material and accepts no liability whatsoever for the actions of third parties in this respect.