Elmera Group ASA

Investor Presentation • May 15, 2019

Q1 2019 PRESENTATION

Rolf Barmen (CEO) Birte Strander (CFO)

Oslo, 15th May

Q1 2019 HIGHLIGHTS

Rolf Barmen (CEO)

Highlights first quarter 2019

Strong price management in an important quarter

• • Net revenue adj. and EBIT adj. performance better than expected, driven by strong price management and favourable market dynamics
  • • 3% YoY growth in volume sold, driven by 14% YoY growth in # of deliveries
    • • Partly offset by mild weather, negatively affecting average consumption per delivery
• • Positive organic growth in all segments QoQ
• • Fjordkraft is now the largest mobile service provider without its own mobile network
• • Positive revision of targets following strong results

K H i h l i h t e g g s y
1 # f d l i i ( d f i d ) N h i # f d l i t o e v e r e s e n o p e r o e c a n g e n o e v e
6 0 6 6 2 5	1 6 9 7
f % I 1 4 Y Y n c r e a s e o o	O f h i h t h 1 6 7 9 c o r g. g r o w w
2 V l l d o u m e s o	G r o s s r e v e n u e
4 4 0 2 G W h	N O K 2 4 6 5 5 m ,
f % I 3 Y Y n c r e a s e o o	f % I 3 3 Y Y n c r e a s e o o
3 N ( d j. ) t K e r e v e n u e a	3 E B I T ( d j. ) 6 a
N O K 3 8 4 7 m ,	N O K 1 8 1 9 m ,
f % I 2 0 Y Y K n c r e a s e o o	% ( ) 4 8 A d j. E B I T i t h i 7 m a r g n s q.
B i E P S ( d ) t K a s c r e p o r e	N I B D ( h ) 1 3 c a s
N O K 1 2 9 ,	N O K 2 3 3 m ,
f % I 3 2 Y Y K n c r e a s e o o	/ N I B D L T M E B I T D A 0, 0 4 1 9 :

Sources: Company information

• 1) Number of deliveries excl. Extended Alliance deliveries. Number of deliveries incl. Extended Alliance deliveries: 640,474
• 2) Not including Alliance volume. Volume turnover for alliance partners Q1 2019: 1,511 GWh
• 3) Adj. Net revenue and EBIT are reported figures adjusted for any estimate deviations on sales and distribution of electricity related to previous reporting periods, special items, unrealised gains and losses on financial derivatives and depreciations from acquisitions

2

9

Sustainability report for 2018

– read more at investor.fjordkraft.no

| Quarterly Presentation | Q1 2019

BUSINESS REVIEW

Rolf Barmen (CEO)

Market development

Key highlights in Q1 2019

• • Decreasing elspot prices throughout the quarter – beneficial for variable products
• • Warmer than normal weather in three out of three months, negatively affecting average consumption per delivery1
  • • January: +1.2°C above normal
  • • February: +3.5°C above normal
  • • March: +1.2°C above normal

Weekly elspot prices (NOK/kWh)2

Sources:

• 1) Temperature figures from met.no's monthly reports
• 2) Weekly system prices in NOK from Nordpool, forward prices from Montel

3) Figures from the Norwegian Water Resources and Energy directorate

Segment development - Consumer

Key highlights in Q1 2019

• • Positive organic development quarter over quarter
  • • Net additions in Q1 2019 were 921, all of which organic
• • Volume growth of -1% YoY driven by decrease in average consumption, partly offset by growth in # of deliveries
  • • Avg. volume per delivery decreasing -13% YoY 4,340 kWh in Q1 2019 vs. 4,967 kWh in Q1 2018

Sources: Company information

1) Number of electricity deliveries at the end of the period

# of electricity deliveries1 ('000)

| Quarterly Presentation | Q1 2019

Segment development - Business

Key highlights in Q1 2019

• • Increase in deliveries
  • • Net additions in Q1 2019 were 758
• • Volume growth of 7% YoY driven by growth in # of deliveries
  • • Avg. volume per delivery decreasing -11% YoY 27,653 kWh in Q1 2019 vs. 31,121 kWh in Q1 2018
• • Increase in market share according to TNS Kantar's survey2, now no. 1 in the Business segment alongside Hafslund

1) Number of electricity deliveries at the end of the period

# of electricity deliveries1 ('000)

New Growth Initiatives

Key highlights in Q1 2019

• • The organic growth in mobile subscribers continues
  • • Growth of 5,667 subscribers in Q1 2019
• • Fjordkraft is now the largest mobile service provider without its own mobile network
• • -6% YoY Alliance volume growth driven by mild weather
• • New contract in Extended Alliance
  • • ~6,000 deliveries with expected start-up Q3

# of Mobile subscribers1 ('000)

Sources: Company information

1) Number of mobile subscribers at the end of the period

FINANCIAL REVIEW

Birte Strander (CFO)

Solid growth in adj. net revenue

Adj. net revenue LTM (NOKm)

• • Quarterly adj. net revenue improvement ~ 90/10 split between improved margins and volume growth1 YoY due to strong price management and mild weather
  • Favourable elspot price development positively impacting variable product margins in both Consumer and Business segments
  • • 3% volume growth YoY, driven by increase in # of deliveries
    • • 10% decrease in average consumption per delivery in the Consumer and Business segment in total
• • Last twelve months adj. net revenue improvement ~ 60/40 split between improved margins and volume growth1 YoY
  • Improvement mainly driven by the Consumer segment

Sources: Company information

•

•

1) New Growth Initiatives figures are excluded from the calculations, as high volumes with very low margins distorts the analysis

Strong adj. EBIT performance

Change in adj. EBIT (NOKm)

Adj. EBIT LTM (NOKm)

• • Adj. EBIT performance and EBIT margin stronger than expected, mainly driven by growth in net revenues
  • • OPEX increasing by 17% YoY, driven by sales and marketing, variable costs and administrative costs
  • • Synergy realisation on track so far in 2019
• • All time high adj. EBIT last twelve months, 1pp increase in LTM adj. EBIT margin
  • • The Business segment is the main driver of the increase

Solid performance across all segments

223 174 156 213 267 0 50 100 150 200 250 300 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Adj. net revenue (NOKm) 72.7 +19% Adj. EBIT (NOKm) 103 55 35 72 126 46% 32% 23% 34% 47% 0% 10% 20% 30% 40% 50% 0 50 100 150 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 EBIT (adj.) EBIT margin adj.

Consumer segment

• • Increase in adj. net revenue driven by improved margins
• • 1 pp adj. EBIT margin improvement YoY driven by strong price management in favourable market conditions

Business segment

• • Margin improvement accounting for ~70% of the adj. net revenue improvement
  • • Increase in variable contracts, now amounting to 6%
• • 1 pp adj. EBIT margin contraction YoY, driven by sales and marketing costs

New Growth Initiatives

Adj. net revenue growth and adj. EBIT improvement primarily driven by product optimization within Mobile

•

•Alliance contributing with ~30% of the improvement in adj. net revenue and ~20% in adj. EBIT

Sources: Company information

Seasonally higher volume driving NWC increase QoQ

•

Net working capital1 (NOKm)

• Net working capital (NWC) increased by 283 NOKm from last quarter due to seasonally higher volume. Prices decrease 1%2 from Q4 2018 to Q1 2019
• • NWC decreasing 298 NOKm YoY. Prices increase 23% YoY2 and volume increase 3% YoY3
  • • However, Q1 2018 negatively affected by quarterend in Easter public holidays

Sources: Company information

1) NWC includes the following items from current assets: Inventories, intangible assets, trade receivables, derivative financial instruments and other current assets (that is, all current assets in the balance sheet except cash and cash equivalents); and the following items from current liabilities; trade payables, current income tax liabilities, derivative financial instruments, social security and other taxes and other current liabilities excl. 55.6 NOKm in short-term interest bearing debt

2) Average of daily system prices in NOK

3) Volume sold in the Consumer and Business segments

| Quarterly Presentation | Q1 2019

From net cash to net debt – driven by seasonal increase in NWC. Strong underlying cash generation

Change in net cash Q-o-Q (NOKm)

Sources: Company information

1) OpFCF defined as EBITDA adj. less CAPEX excl. M&A and payments to obtain contract assets

2) Non-cash NWC relates to items included in "change in NWC" that are not affecting net cash position. Other includes interest, tax, change in long-term receivables, proceeds from non-current receivables, proceeds from other long-term liabilities, share based payment expense, change in post-employment liabilities, payment of lease liability and adjustments made on EBITDA.

Outlook

• • Net revenue growth in the Consumer segment expected somewhat higher than targeted for 2019, due to a strong Q1
• • EBIT loss in 2019 in New Growth Initiatives targeted lower than 2018. Expecting ~25% improvement from nominal EBIT in 2018

Appendix

PROFIT AND LOSS ACCOUNT

Summary reported financials

O N K i l l i m o n	Q 1 2 0 1 9	Q 1 2 0 1 8	Y Y ∆ o
G r o s s r e v e n u e	2 4 6 5 5,	1 9 1 6, 0	6 2 9, 6
C f l t o s o s a e s	2 1 6 7, 3 -	1 6 0 1, 9 -	5 6 5, 3 -
N t e r e v e n u e	3 7 8, 4	3 1 4, 1	6 4, 3
P l e r s o n n e e p e n s e s x	6 4 4 - ,	3, 7 5 -	1 0, 8 -
O t h t i e r o p e r a n g e x p e n s e s	9 7, 9 -	9 3, 7 -	4 2 - ,
O t i p e r a n g e x p e n s e s	1 6 2, 3 -	1 4 7, 4 -	1 4, 9 -
O h i d l t t e r g a n s a n o s s e s, n e	0, 0	5, 1 -	5, 1
E B I T D A	2 1 6, 0	1 6 1, 6	5 4, 4
D i i & i i t t t e p r e c a o n a m o r a o n z	4 5, 1 -	3 2, 0 -	1 3, 1 -
O t i f i t ( E B I T ) p e r a n g p r o	1 7 0, 9	1 2 9, 6	4 1, 3
N f i i l t e n a n c a s	2, 0	2, 6	0, 5 -
P f i t / l b f t r o o s s e o r e a x e s	1 7 3, 0	1 3 2, 2	4 0, 8
T a x e s	3 8, 5 -	3 0, 5 -	8, 0 -
P f i / l f h i d t t r o o s s o r e p e r o	1 3 4, 4	1 0 1, 7	3 2, 7
B i i h ( i N O K ) a s c e a r n n g s p e r s a r e n	1, 2 9	0, 9 7	0, 3 1
D i l d i h ( i N O K ) t e e a r n n g s p e r s a r e n u	1, 2 7	0, 9 7	0, 3 0

ADJUSTED EBIT reconciliation

N O K i ho ds n t us an	Q 1 2 0 1 9	Q 1 2 0 1 8	F Y 2 0 1 8
Re d j te d ve nu e a us	2 5 4 5 6 3 4	1 9 1 6 0 0 5	6 7 1 2 2 9 1
Co 1 ) te rp ora	-	-	8 6 7 5
Re ve nu e	2 4 6 3 4 5 5	1 9 1 6 0 0 5	6 2 0 9 4 8 7
D ire t c t o f s les d j te d c os a a us	( 2 1 6 7 2 7 3 )	( 1 6 0 1 9 4 4 )	( 5 6 2 4 3 9 9 )
Co 1 ) te rp ora	-	-	8 7 3
D ire f s les t c t o c os a	( 2 1 6 2 3 ) 7 7	( 1 6 0 1 9 4 4 )	( 6 2 3 2 6 ) 5 5
Re les d ire t c t o f s les d j te d ve nu e s c os a a us	3 7 8 3 6 1	3 1 4 0 6 1	1 0 8 7 8 9 3
Co 1 ) te rp ora	-	-	9 5 2 9
Re les d ire f s les t c t o ve nu e s c os a	3 7 8 3 6 1	3 1 4 0 6 1	1 0 9 7 4 2 2
To ta l o t ing d j te d p era ex p en se s a us	( ) 1 9 6 4 2 4	( ) 1 6 7 3 5 1	( ) 6 9 7 7 5 1
Sp ia l i tem 2 ) ec s	-	( 1 0 9 6 7 )	( 2 5 8 3 5 )
f a ) De ia t ion is i t ion 3 p rec o cq u s	( ) 1 1 0 0 2	( ) 1 0 7 0	( ) 3 6 3 7 5
To ta l o t ing p er a ex p en se s	( ) 2 0 7 4 2 6	( ) 1 7 9 3 8 8	( ) 7 5 9 9 6 1
O t he ins d los 4 ) r g a an se s	8	( 5 0 6 0 )	( 1 0 5 7 8 )
Op t ing f i t er a p ro	1 7 0 9 4 2	1 2 9 6 1 3	3 2 6 8 8 3
In ter t inc es om e	4 8 8 2	3 9 4 1	1 5 1 7 8
In ter t e lea l ia b i l i ty es xp en se se	( 1 9 3 )	-	-
In ter t e es xp en se	( 1 5 7 8 )	( 5 4 )	( 4 9 2 7 )
O he f ina ia l i t tem t r nc s, ne	( 1 0 8 6 )	( 1 3 1 4 )	( 2 ) 5 7 7
f / ( ) fo Pr i t los be tax o s re	1 2 9 6 8 7	1 3 2 1 8 7	3 3 1 8 8 5

1) Corporate consists of estimate deviations previous year and special revenue items. A large proportion of the Group's final settlement of sales and distribution of electricity is made after the Group has finalised its financial statements. At the date of reporting, the Group recognises electricity revenue and the associated cost of sales based on a best estimate approach. Thus, any estimate deviation related to the previous reporting period is recognised in the following reporting period. Management is of the opinion that the underlying operating profit in the reporting period should be adjusted for such estimate deviations related to previous reporting periods, thus the table below also presents the Group's operating profit before such estimate deviations in the line "Operating profit (before unallocated and estimate deviations)".

ADJUSTED EBIT reconciliation cont.

2) Special items consists of one-time items as follows:

N O K in ho ds t us an	Q 1 2 0 1 9	Q 1 2 0 1 8	F Y 2 0 1 8
Sp ia l i tem inc d s i f ic to: ec s urr e p ec
t he f l is t ing t he Os lo S toc k Ex ha p roc es s o co mp an on c ng e y -	-	( 1 0 9 6 7 )	( 1 1 3 2 3 )
is i t ion la te d c ts ac q re os u -	-	-	( 1 1 6 4 3 )
leg l c ts la te d to t he tor da a os re co mp en sa ma g es y -	-	-	( ) 4 6 0
tra teg ic ts la te d to ke ts bro d s co s re ma r a a -	-	-	( ) 2 4 0 9
Sp ia l i te ec ms	-	( 1 0 9 6 7 )	( 2 5 8 3 5 )

3) Depreciation of acquisitions consists of depreciation related to customer portfolios and acquisitions of companies accounted for in intangible assets in the consolidated statement of financial position. The Group has decided to report the operating profit of the segments adjusted for depreciation of acquisitions. In order to accommodate this, historically reported figures have been adjusted accordingly:

N O K in ho ds t us an	Q 1 2 0 1 9	Q 1 2 0 1 8	Fu l l y 2 0 1 8 ea r
Tr de En i Ma ke d a is i t ion øn r erg r cq u	( ) 7 7 8 8	-	( ) 3 0 7 7 7
Op f da l Ev k Kr tom tn ing is i t ion p er a se ac q u	( 1 0 8 ) 5	-	( 1 3 0 6 )
O he is i ion t tom t r c us er ac q u s	( 2 1 2 9 )	( 1 0 0 ) 7	( 4 2 9 2 )
De ia t ion f a is i t ion p re c o cq u s	( 1 1 0 0 2 )	( 1 0 7 0 )	( 3 6 3 7 5 )

4) Other gains and losses, net consist of gains and losses on derivative financial instruments associated with the purchase and sale of electricity.

BALANCE SHEET

Summary reported financials

O N K i l l ion m	Q 1 2 0 1 9	Q 1 2 0 1 8	∆
In ta i b le ts ng as se	1 9 7, 5	8 5, 2	1 1 2, 3
P P & E	3 3, 1	3, 5	2 9, 6
Go dw i l l o	1 8 5 5,	-	1 8 5 5,
F ina ia l a ts nc ss e	2 3, 0	1 5, 1	7, 9
O t he t a ts r n on -cu rre n ss e	1 5 0, 6	1 4 2, 3	8, 3
To ta l n t a ts on -c ur re n ss e	5 5 9, 9	2 4 6, 1	3 1 3, 8
Tr de iva b les a re ce	1 9 7 0, 5	2 2 8 7, 7	( 3 1 7, 1 )
f De iva t ive ina ia l ins tru ts r nc m en	1 7 7, 5	1 6 2 4,	1 3, 3
O t he t a ts r c ur re n ss e	1 4 5, 8	6 0, 8	8 5, 0
Ca h a d c h e iva len ts s n as q u	2 1 3, 0	-	2 1 3, 0
To ta l c t a ts ur re n ss e	2 5 0 6, 9	2 5 1 2, 7	( 5, 8 )
To ta l a ts ss e	3 0 6 6, 8	2 7 5 8, 8	3 0 8, 0
To l e i ta ty q u	1 0 0 6, 3	1 8, 0 7	2 8 8, 3
Ne t e loy de f ine d be f i t l ia b i l i t ies m p ee ne	8 5, 7	7 8, 9	6, 8
In te t- be ing lon te de b t re s ar g rm	1 8 0, 7	-	1 8 0, 7
De fe d l ia b i l i ies tax t rre	1 2 7,	1 0, 8	6, 4
O t he is ion r p rov s	2 1, 2	-	2 1, 2
To ta l n t l ia b i l i t ies on -c ur re n	3 0 4, 8	8 9, 7	2 1 5, 1
Tr de b les a p ay a	1 0 6 5, 0	1 1 3 2, 4	( 6 7, 3 )
Ov dr f fac i l i ies t t er a	-	3 3 0, 6	( 3 3 0, 6 )
Cu t inc tax l ia b i l i t ies rre n om e	6 2, 5	6 8, 7	( ) 6, 3
De iva t ive f ina ia l ins tru ts r nc m en	1 6 9, 3	1 5 1, 3	1 8, 0

360,8

98,0 39,4 58,6

3 066,8 2 308,0

228,7

1 1 755,7 (195,5)

951,1

758,8

132,2

Social security and other taxes

Other current liabilities

Total current liabilities

Equity and liabilities

CASH FLOW

Summary reported financials

N O K i l l io m n	Q 1 2 0 1 9	Q 1 2 0 1 8	Yo Y ∆
E B I T D A	2 1 6, 0	1 6 1, 6	5 4, 4
( ) Pa ts to b ta in tra t tra t a ts y m en o a co n c co n c ss e	-2 5, 5	-2 8, 7	3, 3
O t he h d j tm ts r n on -c as a us en	6, 3	5, 2	1, 2
C fa f f ha in ir v lu in ia l in tru ts ng e a e o an c s m en	-0 0 ,	5, 1	-5 1 ,
C ha in k in i ta l, tc ng es wo r g ca p e	-2 6 2, 5	6 9 3, 8 -	3 1, 2 4
Ca h fro in iv i ies t t t s m o p er a g ac	-6 5, 6	5 5 0, 7 -	4 8 5, 1
In te t p i d re s a	-1 6 ,	-0 1 ,	-1 5 ,
In te t r ive d re s ec e	4, 9	3, 9	0, 9
Inc ta i d om e x p a	-7 3, 9	-3 5, 1	-3 8, 8
Ne h fro in iv i ies t c t t t as m o p er a g ac	-1 3 6, 2	8 1, 9 5 -	4 4 5, 7
Pu ha f p ty, la t a d ip t rc se s o ro p er p n n eq u m en	-0 1 ,	-0 2 ,	0, 1
Pu ha f in ta i b le ts rc se o ng as se	-1 5, 4	-1 0, 8	-4 5 ,
f f s Ne t c h t low is i t io bs i d ia as ou o n aq u n o u re s	-	-	-
fro Pr ds t r iva b le oc ee m n on -c ur re n ec e s	-0 5 ,	-0 9 ,	0, 4
Ne h d in inv in iv i ies t c t t t as us e es g ac	-1 6, 0	-1 1, 9	-4 1 ,
Pr ds fro bo in oc ee m rro w g s	-1 3, 9	-	-1 3, 9
Ne t ( t f low ) /p ds fro ha in dr f t fa i l i t ie ou ro ce e m c ng e ov er a c s	-	3 3 0, 6	-3 3 0, 6
D iv i de ds n	-	1 0 0, 0 -	1 0 0, 0
f Pa t o le l ia b i l i ty y m en as e	-2 3 ,	-	-2 3 ,
Ne h d in f in in iv i ies t c t t as us e an c g ac	-1 6, 2	2 3 0, 6	-2 4 6, 8
Ne t c ha in h d h e iva le ts ng e ca s an ca s q u n	-1 6 8, 4	3 6 3, 2 -	1 9 4, 8
Ca h d h e iva le ts t be in in s an ca s q u n a g n g	3 8 1, 4	3 6 3, 2	1 8, 2
Ca h d h e iva le ts t e d s an ca s q u n a n	2 1 3, 0	-0 0 ,	2 1 3, 0

FORWARD-LOOKING STATEMENTS

This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements with respect to Fjordkraft's expectations and plans, strategy, management's objectives, future performance, costs, revenue, earnings and other trend information. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Fjordkraft.

All forward-looking statements in this presentation are based on information available to Fjordkraft on the date hereof. All written or oral forwardlooking statements attributable to Fjordkraft, any Fjordkraft employees or representatives acting on Fjordkraft's behalf are expressly qualified in their entirety by the factors referred to above. Fjordkraft undertakes no obligation to update this presentation after the date hereof.

For more information: Fjordkraft's Investor Relations Morten A. W. Opdal +47 970 62 526 morten.opdal@fjordkraft.no