Elmera Group ASA — Investor Presentation 2021

Feb 19, 2021

Q4 2020 PRESENTATION

Rolf Barmen (CEO) Ole Johan Langenes (Acting CFO)

19th February

Q4 2020 HIGHLIGHTS

Rolf Barmen (CEO)

Highlights fourth quarter 2020

Growth through M&A

• 25% YoY increase in net revenue and 14% YoY growth in EBIT adj. driven by M&A growth

• of deliveries passing the 1m milestone with the inclusion of Nordic Green Energy's deliveries

• The transaction was completed on 10 November 2020 and figures and financials are included as from then
• Gross revenue decrease by 20% YoY, driven by a mild quarter with volatile and relatively low elspot prices
• Reached the targeted 125k mobile subscribers milestone in the Fjordkraft brand by year-end 2020

Key Highlights
1 # of deliveries (end of period)	Δ in # of deliveries (QoQ)
1 026 574	161 029
Increase of 65 % YoY	Of which org. growth -3 264
2 Volume sold	Gross revenue
5 572 GWh	NOK 1 644m
Increase of 39 % YoY	Decrease of -20 % YoY
3 Net revenue (adj.) 2	3 EBIT (adj.) K6
NOK 464m	NOK 168m
Increase of 25 % YoY 9	Increase of 14 % YoY K7
Basic EPS (reported)	K13NIBD (cash)
NOK 0.64	NOK 344m
Decrease of -46 % YoY	K19NIBD/LTM EBITDA: 0.41

Sources: Company information

• 1) Number of deliveries excl. Extended Alliance deliveries. Number of deliveries incl. Extended Alliance deliveries: 1,082,584
• 2) Not including Alliance volume. Volume turnover for alliance partners Q4 2020: 1,207 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

BUSINESS REVIEW

Rolf Barmen (CEO)

Update on Covid-19 and dialogue with the Consumer Authorities (CA)

• Covid-19 regulations and reduced activity in both Norway and Sweden/Finland continues

• Reduced activity following the governments' measures might have a short-term negative impact on consumption in the Business segment and is also expected to increase voice activity in the Mobile segment, which increases COGS and reduces margins
• The growth going forward might be temporarily hampered by reduced sales activity and shut down of sales channels, like we experienced in Q4
• The following matters have been subject to recent discussions with the CA:
• Purchase price contracts
  • Fjordkraft has been instructed by the CA to include an estimate of the size of the purchasing costs and clarify terms and conditions. The CA has also pointed out that the names of certain purchase price contracts need to be changed. Fjordkraft has done the necessary adjustments and has been notified by the CA that the case is settled
• Notification routines
  • Fjordkraft has changed routines related to notification of price changes to include either SMS or email notification, in accordance with the upcoming certification "Trygg Strømhandel". Fjordkraft has been notified by the CA that the case is settled. We have also been informed by the CA that they have received a follow up letter from the Consumer Council where the Consumer Council asks CA to resume the case, conduct additional enquires and clarify CA's view on notification routines as several suppliers have had similar notification routines as Fjordkraft, prior to Fjordkraft's change of routines. To our best knowledge, the CA has not yet decided how they shall respond to this request.

Market development

Key highlights in Q4 2020

• Volatile elspot prices in the quarter
• Decreasing and low prices in the first half of the quarter, followed by increasing prices in the second half
• All three months in the quarter were warmer than both last year and the normal1
• Oct: +1.5°C above normal (+2.9°C warmer than 2019)
• Nov: +4.6°C above normal (+5.6°C warmer than 2019)
• Des: +4.6°C above normal (+1.2°C warmer than 2019)

Weekly elspot prices (NOK/kWh)2

Sources:

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

| Quarterly Presentation | Q4 2020

Segment development - Consumer

Key highlights in Q4 2020

• Organic decrease of 5,982 deliveries in Q4 2020
• Volume growth of 38% YoY, driven by M&A growth
• Avg. volume per delivery is decreasing 1% YoY

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

# of electricity deliveries1 ('000)

| Quarterly Presentation | Q4 2020

Segment development - Business

• Organic growth of 2,718 deliveries in Q4 2020
• Volume growth of 14% YoY driven by M&A growth
• Avg. volume per delivery decreasing -16% YoY 19,845 kWh in Q4 2020 vs. 23,636 kWh in Q4 2019. Decrease affected by lower avg. consumption for the Innlandskraft deliveries

Key highlights in Q4 2020 # of electricity deliveries1 ('000)

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

New Growth Initiatives & Nordic

• Reached the targeted 125k mobile subscribers in the Fjordkraft brand by the end of 2020
• In addition: ~7k subscribers in Gudbrandsdal Energi
• 7% YoY Alliance volume decrease
• Growth of 9,892 electricity deliveries within Extended Alliance, comprising 56,010 deliveries at the end of Q4 2020
• Nordic is included as a new reporting segment from Q4 2020, comprising 164,293 electricity deliveries and a delivered volume of 497 GWh in the quarter

Key highlights in Q4 2020 # of Mobile subscribers1 ('000)

Sources: Company information

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

FINANCIAL REVIEW

Ole Johan Langenes (Acting CFO)

Continued net revenue growth

• Net revenue growth across all segments, with M&A growth as the primary driver
• Decreasing and low prices in the first half of the quarter, followed by increasing prices in the second half of the quarter
• Last twelve months adj. net revenue growth of 20%, driven by both organic growth and M&A

EBIT adj. development

Change in adj. EBIT (NOKm)

Adj. EBIT LTM (NOKm)

• EBIT improvement of 20 NOKm with the Business segment as the main driver for the growth
• Innlandskraft contribute with an EBIT adj. of ~30 NOKm in the quarter, in line with expectations
• Adj. EBIT margin decreasing 4 pp YoY
• Adj. EBIT margin LTM is increasing 1 pp YoY

Sources: Company information

| Quarterly Presentation | Q4 2020

Segment overview

Consumer segment Business segment

• YoY net revenue improvement driven by M&A growth

• Lower EBIT margin in the acquired Innlandskraft portfolio affecting the segment's total EBIT margin, which decrease with 7pp YoY

• Increase in adj. net revenue is driven by both M&A growth and LFL growth from both power sales and VAS

• EBIT margin increase 7pp YoY, driven by LFL product margin expansion

Sources: Company information

Segment overview cont.

New Growth Initiatives Nordic segment

• YoY net revenue improvement driven by Alliance
• EBIT adj. decrease YoY driven by Mobile, negatively affected by Covid-19

• Net revenue affected by lower volumes and COGS effects due to Covid-19

Sources: Company information

NWC development

Net working capital1 (NOKm)

• Net working capital (NWC) is increasing by 67 NOKm from last quarter
• Volume increase 133% from last quarter2
• Elspot prices increase 56%3 from Q3 2020 to Q4 2020
• Reduction of 73 NOKm from last year. Prices decrease by 62% YoY3. Volume increase 39% YoY
• Continuous improvements in the invoicing process is also contributing positively to the development

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. 46 NOKm in shortterm interest bearing debt

2) Volume sold in the Consumer, Business and Nordic segments

3) Average of daily system prices in NOK

| Quarterly Presentation | Q4 2020

Net cash development

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.

| Quarterly Presentation | Q4 2020

FULL YEAR 2020

Ole Johan Langenes (Acting CFO)

17

Full year Group figures vs financial targets

Adj. net revenue1 (NOKm) Adj. EBIT1 (NOKm)

• Product margin improvement is the main driver for the 20% adj. net revenue growth
• Well above targeted, also adjusted for positive M&A effects
• All time high adj. EBIT. The Consumer segment is the main driver for the increase
• Adj. EBIT margin increasing 1 pp from 2019

Full year figures per segment vs financial targets for 2020

• EBIT margin stronger than initial target and in line with revised target

Sources: Company information

• 1) 2020 figures are not audited
• 2) All targets are on an organic basis

Other relevant financial targets

	Targets	Status
Cap.ex.	 Targeted to be in the area of NOK 65-70m annually on an organic basis over the next three years	 In line with targets (65 NOKm)
Dividend	 Attractive and increasing dividend  Target pay-out ratio of at least 80% (based on adjusted net income)	 Proposed dividend of 3.5 NOK per share1,2

1)Subject to approval at the annual general meeting 2) How the dividend is calculated: [(Adjusted EBIT + net finance)*(1-average tax rate) – amortisation of acquisition debt]*pay-out ratio [(608 NOKm-12 NOKm)*(1-22%)-65 NOKm]*100%=400 NOKm, equivalent of a DPS of 3.5 NOK with the current number of shares outstanding

Outlook for 2021-20231

Group	 Targeting high-single digit net revenue growth. 2021 expected above double digit due to acquisitions in 2020  Targeting a sustainable EBIT margin of 36-38%  Ambition to act as a consolidator in a fragmented market
	 Growth Targeting mid-single digit annual net revenue growth
Consumer	EBIT  Targeting a sustainable level of 32-34% margin
	 Growth Targeting a sustainable level of mid-single digit growth. 2021 expected above double digit due to acquisitions in 2020
Business	EBIT  Targeting a sustainable level of 52-54% margin
Nordic	 Targeting an annual EBIT contribution of ~50 NOKm
NGI	 Targeting a 50% improvement in nominal EBIT from 2020 to 2021 and a positive run-rate EBIT from late 2021
Cap.ex.	 Targeted to be in the area of NOK 65-70m annually
Leverage	 Targeting a leverage of 2-2.5x NIBD/EBITDA with variations intra-year due to seasonality in net working capital  Current balance sheet enabling substantial capacity to finance acquisitions
Dividend	 Target pay-out ratio of at least 80% of net income, adjusted for certain cash and non-cash items2  Attractive and increasing dividend

1) Outlook on an organic basis, not including additional M&A transactions in the period. All targets are based on adjusted figures, further described under alternative performance measures in the quarterly report

2) Adjusted EBIT + net finance – estimated tax – amortisation of acquisition debt

Appendix

PROFIT AND LOSS ACCOUNT

NOK in thousands	Note	03 2020	04 2020			04 2019 Full Year 2020 Full Year 2019
Continuing operations
Revenue	29	588 991	1644100	2046 509	4214727	7122528
Direct cost of sales	2	(304540)	(1172644)	(1672256)	(2647005)	(5827394)
Revenue less direct cost of sales		284 451	471 456	374 252	1 567 7 22	1 295 134
Personnel expenses	Z	(78494)	(116748)	(49213)	(328485)	(236106)
Other operating expenses	2	(97001)	(152585)	(104661)	(471938)	(379973)
Depreciation right-of-use assets		(3111)	(3958)	(3556)	(13302)	(10404)
Depreciation and amortisation	2,5,6	(47877)	(152988)	(55339)	(291 872)	(190528)
Total operating expenses		(226 483)	(426 278)	(212769)	(1105596)	(817011)
Impairment and change in provision for onerous contracts	6,14		(268493)		(268493)
Other gains and losses, net	7,14	(1365)	328 430	13126	331 539	4615
Operating profit		56 604	105 115	174 610	525 172	482738
Income/(loss) from investments in associates
and joint ventures	13	(915) 3170	2433	5192	1168
Interest income			3196		16814	20071
Interest expense lease liability		(390)	(585)	(904)	(1813)	(1677)
Interest expense		(937)	(8335)	(2096)	(11982)	(6956)
Other financial items, net		(2005)	(11250)	(1177)	(15692)	(3737)
Net financial income/(cost)		(1077)	(14541)	1014	(11505)	7701
Profit/ (loss) before tax		55 5 27	90 574	175 624	513 667	490 440
Income tax (expense)/ income	З	(15366)	(16943)	(49944)	(113604)	(120269)
Profit/ (loss) for the period		40 161	73 631	125 681	400 063	370 171
Basic earnings per share (in NOK)*	4	0.38	0.64	1,20	373	3,54
Diluted earnings per share (in NOK)*	4	0.38	0.64	1,19	3.69	3,51

ADJUSTED EBIT reconciliation

NOK in thousands	03 2020	04 20 20			04 2019 Full year 2020 Full year 2019
Revenue adjusted	588 991	1 635 353	2045382	4 183 361	7 066 432
Corporate 1)		8747	1127	29650	56096
Special items 2)				1716
Revenue	588 991	1644100	2046509	4214727	7 122 528
Direct cost of sales adjusted	(304540)	(1171745)	(1673178)	(2639876)	(5782711)
Corporate 1)		(899)	921	(7129)	(44681)
Direct cost of sales	(304540)	(1172644)	(1672256)	(2647005)	(5827394)
Revenue less direct cost of sales adjusted	284 451	463 608	372 204	1543486	1 283 7 21
Corporate 1)		7848	2048	22521	11414
Special items 2)				1716
Revenue less direct cost of sales	284 451	471 456	374 252	1567722	1 295 134
Total operating expenses adjusted	(205687)	(295905)	(224495)	(935 208)	(792668)
Special items 2)	(12873)	(79324)	23 5 0 2	(95123)	21 218
Depreciation of acquisitions 3)	(7924)	(51049)	(11774)	(75265)	(45560)
Total operating expenses	(226483)	(426 278)	(212769)	(1105596)	(817011)
Impairment and change in provision for onerous contracts		(268493)		(268493)
Other gains and losses 4)	(1365)	328 430	13126	331 539	4615
Operating profit	56 604	105 115	174 610	525 172	482738
Income/loss from investments in associates and joint ventures	(915)	2433		1 168
Interest income	3170	3196	5192	16814	20 07 1
Interest expense lease liability	(390)	(585)	(904)	(1813)	(1677)
Interest expense	(937)	(8335)	(2096)	(11982)	(6956)
Other financial items, net	(2005)	(11250)	(1177)	(15692)	(3737)
Profit/(loss) before tax	55 5 27	90 574	175 624	513 667	490 440

ADJUSTED EBIT reconciliation cont.

NOK in thousands	03 2020	04 20 20		04 2019 Full year 2020 Full year 2019
Special items incurred specific to:
- acquisition related costs and implementation costs	(12873)	(5780)	(861)	(21579)	(3145)
- income related to compensatory damages				1716
- change in pension plan	$\sim$		28969		28969
- impairment charge			(4606)		(4606)
- one off amortisation of customer contracts in acquired companies		(5745)		(5745)
- severance packages and other one off costs in acquired companies	$\sim$	(14889)		(14889)
- depreciation of fixed price customer contracts (see note 6)		(52910)		(52910)
Special items	(12873)	(79324)	23 5 0 2	(93, 407)	21 218

NOK in thousands	03 2020	04 20 20		04 2019 Full year 2020 Full year 2019
TrønderEnergi Marked acquisition	(5180)	(5180)	(8188)	(20718)	(32753)
Oppdal Everk Kraftomsetning acquisition	(787)	(787)	(1085)	(3148)	(4342)
Vesterålskraft Strøm acquisition	(565)	(565)	(758)	(2261)	(1 516)
Innlandskraft acquisition		(36 254)		(36254)
Troms Kraft Strøm acquisition		(7037)		(7037)
Other customer acquisitions	(1 392)	(1 226)	(1 743)	(5847)	(6949)
Depreciation of acquisitions	(7924)	(51049)	(11774)	(75265)	(45560)

BALANCE SHEET

NOK in thousands	Note	30 September 31 December 2020	2020	31 December 2019
Assets:
Non-current assets
Deferred tax assets	10		37316
Right-of-use assets property, plant and equipment	10	70952	81724	65 976
Property, plant and equipment	5,10	8500	8409	7 108
Goodwill	6,10	1127050	1442849	166 696
Intangible assets	6,10	658559	869 568	178542
Cost to obtain contracts	10	161 366	172656	159 235
Investments in associates and joint ventures	13	8734	11168
Other non-current financial assets	10	39060	63877	25 365
Total non-current assets		2074221	2 687 566	602 923
Current assets
Intangible assets	6,10	4066	2880	23760
Inventories	10	1199	2 3 9 8	794
Trade receivables	8,10	499592	1476927	1507467
Derivative financial instruments	7,10	186026	193175	79274
Other current assets	10	141761	167065	18466
Cash and cash equivalents	10	726 400	599 348	775 536
Total current assets		1559044	2 441 7 93	2 405 297
Total assets		3 633 266	5 1 29 3 59	3 008 220
Equity and liabilities:
Equity
Share capital		34 285	34 2 85	31 349
Share premium		991614	991614	125 035
Retained earnings		835 904	918148	846 833
Total equity		1861803	1944047	1 003 216

BALANCE SHEET

NOK in thousands	Note	30 September 2020	31 December 2020	31 December 2019
Non-current liabilities
Net employee defined benefit plan liabilities	10	135456	110828	64062
Interest-bearing long term debt	$\overline{11}$	408 148	812808	139 000
Deferred tax liabilitites	3,10	118371	130 499	27451
Lease liability - long term	10	59766	67 442	56 51 5
Other provisions for liabilities	10		14649
Total non-current liabilites		721 741	1136 225	287 027
Current liabilities
Trade and other payables	8,10	310132	886 222	818143
Overdraft facilities	11		29 400
Current income tax liabilities	3,10	125378	129098	111 656
Derivative financial instruments	7,10	182859	110616	67 999
Social security and other taxes	10	73 554	143 425	142 620
Lease liability - short term	10	14113	17366	11428
Other current liabilities	10	343 686	732 960	566 129
Total current liabilities		1 049 722	2 049 087	1717976
Total liabilities		1771463	3 185 312	2005004
Total equity and liabilities		3 6 3 3 2 6 6	5 1 29 3 59	3 008 2 2 0

CASH FLOW

NOK in thousands	Note	03 2020	04 2020			04 2019 Full year 2020 Full year 2019
Operating activities
Profit/ (loss) before tax		55 527	90574	175624	513667	490 440
Adjustments for:
Depreciation	5,6	18464	114767	26 598	168012	82158
Depreciation right-of-use assets		3111	3958	3556	13 302	10404
Amortisation of contract assets		29413	38 2 21	28740	123860	108370
Impairment of intangible assets - Fixed price customer contracts	6.14		180540		180540
Impairment of intangible assets - Software and development projects	6, 14		16930		16930
Interest income		(3170)	(3196)	(5192)	(16814)	(20071)
Interest expense lease liability		390	585	904	1813	1677
Interest expense		937	8335	2096	11982	6956
Income/loss from investments in associates and joint ventures		915	(2433)		(1168)
Change in long-term receivables			(7686)	(154)	(7686)	(2879)
Share based payment expense		811	862	733	3252	2994
Change in post-employment liabilities		965	(331)	(34534)	(302)	(29556)
Payments to obtain a contract		(38221)	(49510)	(29137)	(137280)	(117693)
Changes in working capital (non-cash effect)
Impairment loss recognised in trade receivables		1580	(2478)	1019	19342	23502
Provision for onerous contracts recognised in other current liabilities	14		71023		71023
Change in fair value of derivative financial instruments	14	1365	(328429)	(13126)	(331539)	(4615)
Changes in working capital
Inventories		(248)	(1197)	(89)	(1453)	(262)
Trade receivables	8	19613	(790707)	(592 255)	260 279	489 360
Purchase of el-certificates	6		$\mathbf{0}$	370	(245712)	(242596)
Non-cash effect from cancelling el-certificates	6				263 594	246 569
Purchase of guarantees of origination	6	(1930)	(561)	(5912)	(4064)	(12975)
Non-cash effect from disposal of guarantees of origination	6		1588	1013	7089	18837
Other current assets		(2980)	39 987	19773	19435	20715
Trade and other payables	8	122 407	453910	345431	(81661)	(297054)
Other current liabilities		21 056	133248	198228	(208359)	72774
Cash generated from operations		230 005	(32001)	123 687	638 082	847 054
Interest paid		(1816)	(16135)	(2092)	(22058)	(8627)
Interest received		3170	3196	5192	16814	20071
Income tax paid	З		(23508)	(19600)	(113533)	(93793)
Net cash from operating activities		231 358	(68448)	107 187	519 305	764 704

CASH FLOW

NOK in thousands	Note	03 2020	04 20 20		04 2019 Full year 2020	Full year 2019
Investing activities
Purchase of property, plant and equipment	5	(989)	492	(939)	(497)	(3791)
Purchase of intangible assets	6	(12452)	(14513)	(12636)	(64767)	(47589)
Sale of intangible assets	6				10000
Net cash outflow on acquisition of subsidiaries	10	(531655)	(501872)		(1033527)	(22066)
Net cash outflow on acquisition of shares in associates	13				(10000)
Net (outflow)/proceeds from non-current receivables		545	(17131)	(1634)	(16985)	(2396)
Net (outflow)/proceeds from other long-term liabilities			(194)	(732)	(194)	(805)
Net cash used in investing activities		(544550)	(533 219)	(15939)	(1115970)	(76648)
Financing activities
Proceeds from overdraft facilities	$\overline{11}$		29400		29,400
Proceeds from revolving credit facility	$\overline{11}$		500 000		500 000
Repayment of revolving credit facility	$\overline{11}$		(500000)		(500000)
Proceeds from issuance of shares	4				2730
Dividends paid	4				(313717)	(229892)
Formation expenses					(10)
Proceeds from interest-bearing long term debt	11	460 000	477 000		937000
Instalments long term debt	11	(13900)	(23 425)	(13900)	(65125)	(55600)
Repayment of long term debt	11	(152900)			(152900)
Payment of lease liability		(3051)	(3911)	(2935)	(12450)	(8438)
Net cash used in financing activities		290 149	479 064	(16835)	424 928	(293930)
Net change in cash and cash equivalents		(23043)	(122603)	74413	(171738)	394 126
Cash and cash equivalents at start of period		749 445	726400	701123	775 536	381 409
Effects of exchange rate changes on cash and cash equivalents			(4450)		(4450)
Cash and cash equivalents at end of period		726 400	599 348	775 536	599 348	775 536

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