Beerenberg — Interim / Quarterly Report 2021

Nov 26, 2021

BEERENBERG AS

Unaudited Third Quarter results 2021

Headlines

"Increasing activity in the quarter"

THIS QUARTER

563 MNOK
57 MNOK
107 MNOK
60 MNOK
1,3
1223

* Employees end of quarter

REVENUE

EBITDA

Group overview

The highlights for Beerenberg (Beerenberg AS consolidated) in the 3rd quarter 2021 were:

• · Activity catching up during the period.
• · Revenue was MNOK 563, up 28% compared to 3rd quarter 2020. The main reason for the increase is the low activity in 2020 due to the Covid-19 pandemic.
• compared to Q3 2020.
• MNOK 52 in the 3rd quarter of 2020.
• Estimated order backlog at the end of the quarter was BNOK 7,4 compared to BNOK 8,6 at the end of 3rd quarter last year. The decrease relates mainly to work in connection to longterm framework agreements.
• · Beerenberg sold MNOK 50 of BBERG03 bond in the period.

Income Statement

Revenue in 3rd quarter was MNOK 563 compared to MNOK 441 in 3rd quarter 2020. The increase from the corresponding quarter last year relates mainly to the challenging Covid-19 situation in the 3rd quarter 2020 where the activity was increasing from low volumes. In the 3rd quarter 2021 the group had normal activity within most areas

EBITDA in 3rd quarter 2021 was MNOK 57 down from MNOK 78 in the corresponding quarter last year. Good operational performance explains the EBITDA in the 3rd quarter 2021. EBITDA in Q3 2020 was positively affected by the government compensation program due to decrease in revenues in earlier periods.

Financial cost in the 3rd quarter 2021 was MNOK 19, down from MNOK 21 in the 3rd quarter 2020.

Net profit in 3rd quarter 2021 was MNOK 17 compared to a net profit of MNOK 31 in 3rd quarter 2020.

Beerenberg - Unaudited Financial Report

Balance Sheet

The balance sheet reflects the activity level in the quarter compared to last year. The groups cash position has decreased compared to last year mainly due to the repayment of the old unsecured bond (MNOK 850) and the new 3-year unsecured bond issue (MNOK 750). Total assets were MNOK 1825 at the end of the quarter, with an equity ratio of 29%.

Total non-current assets were MNOK 1026, down from MNOK 1043 compared to the end of 3rd quarter 2020. Current assets of MNOK 798 were down from MNOK 827 same period last year.

Total current liabilities of MNOK 584 were down from MNOK 1308 at the end of 3rd quarter 2020 and total non-current liabilities were MNOK 718 compared to 81 at the end of 3rd quarter 2020. From Q4-2020 the bond is classified as non-current liability following the completion of the refinancing process and issue of the new bond.

The net interest-bearing debt was MNOK 664 compared to MNOK 732 in 3rd quarter 2020.

Net working capital ended at MNOK 120 in the period, compared to MNOK 117 at the end of 3rd quarter 2021.

Cash Flow

The Groups cash position was MNOK 195 by the end of 3rd quarter 2021 compared to MNOK 305 as by the end of the 3rd quarter 2020. The main reason for the decline is repayment of the old bond and issue of a new bond of a lower amount.

Cash flow from operating activities was positive by MNOK 107 in 3rd quarter 2021 versus positive MNOK 41 in corresponding period last year. The increase relates mainly to working capital effects in the period.

Total cashflow in 3rd quarter 2021 was positive by MNOK 126 compared to positive MNOK 17 in 30 quarter 2020. The difference between the periods is mainly explained by sale of own bonds and working capital effects in the period.

Beerenberg sold MNOK 50 of BBERGO3 bond in the period.

Capex was MNOK 10 compared to MNOK 2 same quarter last year.

Order Backlog & Market

The tender activity has been stable during the 30 quarter of 2021 relating both to Benarx/Subsea deliveries and new build ISO projects.

Total order intake of new contracts was approximately MNOK 60 for the period. The major portion of the order intake consists of products and material deliveries on new build and modification projects.

The current estimated order backlog (including frame agreements and options) is BNOK 7,4.

HSEQ

At the end of 3rd quarter Beerenberg had 1223 employees, up from 1198 last quarter.

One serious incident this quarter, results in a total Serious Incident Frequency (SIF) in the period of 1,3 and 1,1 during the last 12 months.

ESG

Beerenberg has completed their work on developing an ESG strategy. Work on implementing the strategy is ongoing and the strategy will be a significant part of Beerenberg day to day business in the future.

The ESG strategy oranized three different areas where Beerenberg is determined to improve in the future. In the following we describe these focus areas and key KPI's for 2022.

Innovate to reduce emissions and waste

By using materials and methods that reduce emissions, we contribute to less strain on our own and customers' logistics and climate footprint. At the same time, we will adopt new technology, and actively look at the use of our products and solutions in new markets.

Goals

• 1. Reduce emissions to the external environment.
• 1. Choose materials with less climate footprint.
• 1. Use new technology and new methods to reduce our own and customers' climate footprint.
• 1. Increased collaboration with suppliers to explore circular solutions and adoption of new technology.
• 1. Develop strategies to reach new markets with existing and new services

Develop people and create social security

By systematically investing in competence and management development, we ensure a safe workplace, stable operations and cost efficiency. By being an attractive employer with engaging leadership, we attract employees with the desired competence and commitment

Goals

• 1. Prevention of incidents and injuries through risk identification and prevention
• 1. Facilitate a health-promoting, meaningful and inclusive work environment
• 1. Attract, develop and retain professional competence at all levels and across functions in Beerenberg
• 1. Cooperation with suppliers with high ethical standards

Open and transparent about ESG risk and opportunities

Responsible management is important to us and is important for creating a sustainable business culture. By clarifying our ambition and implementation of the strategy, sustainability will be an integral part of our activity and be visible to employees, business associates and investors.

Goals

• 1. Report on ESG risks and opportunities
• 1. Adhere to the principles of responsible business practice throughout the organization
• 1. Continue the integration of ESG in management systems and decision-making processes
• 1. Be open and transparent about our sustainability work

	ESG pillar	Focus area	Key KPIs	2022 Goal	Impact on UN's SDGs
		P	1 Reduced release of microplastics in connection with surface treatment	>25%	12 RESPONSIBLE 13 ACTION
		= Sustainable (\$) materials	2 Reduced CO2 footprint in connection with surface treatment	>10%	AND PRODUCTIO
		Sustainable methods	3 Number of new sustainable technology or solutions tested and adopted	>3	14 BELOW WATER
	Innovation for reduced		4 Number of suppliers with a ESG program	>50%	3
ies	emissions and waste	Climate action	5 Share of turnover in new and sustainable markets	TBD
		1000 minutes	1 Numbers of TRIF	<3	3 AND WELL-BEING
priorit		0 0 Responsible orocuremen	2 Proportion of sick leave	< 6%
G S U	Safe work environment Developing people and generating safety		3 Internal recruitment of managers	>80%	O DECENT WORK AND O ECONOMIC GROWTH
		Attractive workplace	4 Proportion of suppliers signed declaration on ethical guidelines and human rights policy	>70%
			1 Report on ESG in quarterly and annual financial reports	5	O ECONOMIC GROWTH
		200 ESG	2 Proportion of employees who have completed training in ethics	>90%
		governance ESG	3 Number of decision cases per year where sustainability is emphasized	5	9 ANDINERASTRUCTURE
	ESG transparency & governance	00 communication Business ethics	4 Publish an external article in connection with the quarterly report	4
					*Planned to be reported from Q1 2022

Business segments

Services

The Service segment revenue for 3rd quarter was MNOK 531, an increase of 41% compared to corresponding period last year mainly due to Covid-19 restrictions in 3rd quarter 2020. The EBITDA margin was 10.1%. Good operational performance explains the margins.

Benarx

The Benarx segment reports a revenue of MNOK 51 for the quarter with an EBITDA of 6,1%. Revenue was down 35% compared to the same period last year. The quarter was affected by delays on projects as well as impacts of the Covid-19 pandemic internationally and especially in Asia.

Figures & notes

Condensed Consolidated Income Statement

Group Summary	ОЗ	ОЗ	YTD	YTD	FY
Amounts in NOK million Note	2021	2020	2021	2020	2020
Operating revenue	රි 562,6	441,4	1 516,6	1 211,5	1 722,7
Operating expenses	505,8	363,3	1 361,9	1 051,2	1 506,0
EBITDA	රි 56,8	78,1	154,7	160,3	216,7
Depreciation	11.7	13,3	36,6	40.4	54,4
EBITA	45,1	64,8	118,1	119,9	162,3
Amortisation	4.1	4.1	12.2	12.4	16,5
Operating profit (EBIT)	41,0	60,7	106,0	107,5	145,8
Finance costs - net	4 19,3	21.2	60,8	52,5	90,8
Profit before tax (EBT)	21,7	39,6	45,2	54,9	55.0
Income Tax expense	4,8	8.7	ರಿ, ರ	12,0	8,5
Net profit	16,9	30,9	35,3	42,9	46,5
Profit for the period is attributable to:
Shareholders of the parent company	17,5	30,9	35,3	42,9	47,1
Non controlling interests	-0,5	0,0	-2,1	0,0	-0,6
Net profit	16,9	30.9	33,2	42,8	46,5
Basic earnings per share for 1.000.000 A shares (NOK) Diluted earnings per share are identical as there are no dilutive effect	0,02	0,03	0,03	0,04	0,05
EBITDA margin	10,1 %	17,7 %	10,2 %	13,2 %	12,6 %
EBITA margin	8,0 %	14,7 %	7,8 %	9,9 %	9,4 %

Condensed Consolidated Statement of Comprehensive Income

		ОЗ	ОЗ	YTD	YTD	FY
Amounts in NOK million	Note	2021	2020	2021	2020	2020
Net profit for the period		16,9	30,9	35,3	42,9	46.5
Other comprehensive income:
Conversion differences		-3,7	-0.4	-4,1	0,8	-1,1
Change in value of derivatives		1.4	1,8	5,0	-5,5	0,0
Total comprehensive income		14,6	32,3	36,3	38,3	45,3

Condensed Consolidated Balance Sheet

Group Summary	ОЗ	ОЗ	Q4
Amounts in NOK million Note	30.09.2021	30.09.2020	31.12.2020
Intangible assets	20,2	35,1	31,1
Goodwill	782,8	782,8	782,8
Property, plant and equipment	207,2	215,7	213,6
Financial fixed assets	16,2	9,2	ರಿ, ಇ
Total non-current assets	1 026,4	1 042,8	1 037,3
Inventory	91,0	72,9	66,2
Accounts receivables from customers	324,4	299,7	249,6
Earned, not invoiced accounts receivables	144,4	122,6	144,0
Other receivables	43.4	27,1	39,2
Cash at bank	194,9	304,7	139,7
Total current assets	798,1	827,0	638,8
TOTAL ASSETS	1 824,5	1 869,8	1 676,0
Share capital	26,7	26,7	26,7
Share premium	240,3	240,3	240,3
Other equity	257.4	211,9	219,0
Non controlling interests	-1,2	0,9	0,8
Total equity	523,1	479,8	486,9
Pension liabilities	14,1	10,8	12,2
Deferred tax liabilities	11,8	15,2	0,3
4 Interest bearing long-term liabilities	691,6	55,3	668,4
Derivatives	0.0	0.0	1.1
Total non-current liabilities	717,5	81,3	682,0
4 Interest bearing short-term liabilities	81,1	862,4	70,8
Supplier liabilities	166,6	112,3	135,3
Tax payable	-0,5	16,4	12,0
Social Security, VAT and other taxes	91,2	69,3	72,3
Other short-term liabilities	225,6	223,4	196,9
Derivatives	0,0	5,9	0,0
Warranty liabilities	19,8	19,0	19,8
Total Current Liabilities	583,9	1 308,7	507,2
TOTAL EQUITY & LIABILITY	1 824,5	1 869.8	1 676,0

Condensed Consolidated Statement of Change in Equity

Amounts in NOK million

	Share	Share	Conversion	Hedging	Retained	Equity attributable to parent	Non Contolling
	capital	premium	reserve	reserve	earnings	Company	interests	Total equity
01. January 2021	26.7	240,3	2,3	-0,9	217,6	486,1	0,8	486,9
Net profit Other Comprehensive Income Changes in non-controlling interests			-4.1	5,0	35,3	37.3 1.0	-2,1	35,3 1,0
Equity as per 30.09.2021	26.7	240,3	-1,7	4,2	252,9	524,4	-1,2	523,1

Amounts in NOK million	Share capital	Share premium	Conversion reserve	Hedging reserve	Retained earnings	Equity attributable to parent Company	Non Contolling interests	Total equity
01. January 2020	26,7	240,3	3,4	-0,8	170,5	440,1	0,0	440,1
Net profit					42,8	43.4	-0,61	42,8
Other Comprehensive Income Changes in non-controlling			0,8	-5,5		-4,6		-4,6
interests							1,5	1,5
Equity as per 30.09.2020	26.7	240,3	4,3	-6,3	213,3	478,9	0,9	479,8

Condensed Consolidated Statement of Cash Flow

		ОЗ	ОЗ	YTD	YTD	FY
Amounts in NOK million	Note	2021	2020	2021	2020	2020
EBITDA		56,8	78,1	154,7	160,2	216,7
Taxes paid		-0,1	0,0	-12,7	0,1	-16,4
Change in net working capital		52,6	-33,4	-25,2	-44,6	-21,7
Changes to other time restricted items		-1,9	-3,4	-2,3	0,5	-4,7
Net Cash flow from operating activities		107,3	41,4	114,4	116,3	174,0
Capex		-10.1	-1,6	-27,1	-8.7	-17.2
Net cash flow from investing activities		-10,1	-1,6	-27,1	-8,7	-17,2
Net repayment of interest bearing debt		46,0	-4,9	37,3	-5,9	-186,9
Changes in non-controlling interests		0,0	0,0	0,0	1,6	1,6
Net interest paid	র্ব	-17.2	-18,3	-69,5	-55,3	-88,6
Net cash flow from financing activities		28,8	-23,2	-32,2	-59.7	-273,8
Total cash flow		126,0	16,6	55,1	47,9	-117,1
Opening balance net bank deposits		68,9	288,1	139,7	256,8	256,8
Closing balance net bank deposits		194,9	304,7	194,9	304,7	139,7

Notes

Note 1 - General

Beerenberg AS is a company domiciled in Norway. The consolidated financial statements of Beerenberg AS comprise the company and its subsidiaries, together referred to as the group. The Beerenberg Group was established 01. March 2013, as a result of the Beerenberg AS acquisition of all shares in Beerenberg Holding AS.

Beerenberg is delivering products and services to its customers implying operational risk with regards to quality, cost, time and injuries and accidents (HSE). Beerenberg works systematically to mitigate and manage risk on all levels. The annual report for 2020 provides further information on risks and uncertainties applicable to Beerenberg,

Shareholders in Beerenberg AS are specified in table below.

	A-Shares	ും	B-Shares	%	Total Shares	%
Shareholders
Segulah IV L.P.	821 940	82,2 %	223 247 653	83,9 %	224 069 593	83,9 %
AlpInvest Partners Co-Investments 2012 I C.V.	92 121	9,2 %	24 931 110	9,4 %	25 023 231	9,4 %
Alpinvest Partners Co-Investments 2011 II C.V.	23 319	2,3 %	6310 883	2,4 %	6334 202	2,4 %
Management	62 620	6,3 %	11 510 354	4,3 %	11 572 974	4,3 %
Total	1 000 000	100,0 %	266 000 000 100,0 % F		267 000 000	100,0%

Note 2 - Basis for preparation

The interim financial statements for the group are prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the European Union and their interpretations adopted by the International Accounting Standards Board (IASB).

The interim report does not include all the information required financial statements in an Annual Report and should be read in conjunction with the Annual Report of the accounting policies applied in the interim financial statements is the same as those described in the Annual Report for 2020.

The condensed consolidated interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements are unaudited.

The Annual Report for 2020 is available at www.Beerenberg.com

Note 3 - Judgments, estimates and assumptions

ln applying the accounting policies, management makes judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revision to accounting estimates are recognized 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.

In preparing this interim financial statement, the significant judgments made by management in applying the groups accounting policies and the key sources of uncertainty in the estimates were consistent with those applied to the consolidated financial statements as at and for the period ended 31. December 2020. Please refer to Note 3 in the Annual Report for 2020.

Note 4 - Bond and covenants

A 3-year Senior Secured Bond of MNOK 750 was issued in Q4 2020, and the previous bond of MNOK 850 was repaid. In total Beerenberg repaid MNOK 100 and acquired MNOK 50 in own bonds. The 50 MNOK in own bonds were sold in 30 Quarter 2021.

Discount on nominal value on Bond has been classified net with the Bond has, every 6-month, amortization of MNOK 25 until maturity, in total MNOK 125. The maturity date of the bond is 13 November 2023.

In connection with the bond issue Beerenberg has signed an MNOK 150 super senior credit facility agreement with Danske Bank.

The Facility agreement includes covenants related to quarterly Net Total Leverage ratio test (below 7.0). The group is in compliance with covenants as of 30th of September 2021.

Amortization due within one year is presented as interest-bearing short-term liabilities.

Note 5 - Related party transactions

No related party transactions were conducted in 3nd Quarter of 2021.

Note 6 Operating segments

Beerenberg is organized in two operating segments in order to optimize and focus its business. The Services segment includes business related to the traditional ISS-activity in the group, which is mainly related to major framework agreements, and the Benarx segment which consists of advanced insulation for topside and subsea applications.

Revenue by Segment

	റ്റു	ОЗ	YTD	YTD	FY
Amounts in NOK million	2021	2020	2021	2020	2020
Services	531,6	377,9	1 348,5	1 005,9	1 431,1
Benarx	50,5	77,2	224,0	237,8	341,9
Eliminations	-19,6	-13,7	-55,8	-32,2	-50,3
Total	562,6	441,4	1 516,6	1 211,5	1 722,7

EBITDA by Segment

	Оз	ОЗ	YTD	YTD	FY
Amounts in NOK million	2021	2020	2021	2020	2020
Services	53,7	61,4	131,2	127,6	166,6
Benarx	3,1	16,7	23,5	32,6	50,0
Other	0,0	0,0	0,0	0,0	0,0
Total	56,8	78.1	154.7	160,3	216.7

Note 7 - Subsequent events

No events have occurred after the reporting date, that are of significant impact when considering the financial position or result in the group.