Havyard Group ASA

Transaction announcement

May 20th, 2022

Disclaimer and Important Information

This presentation and its appendices (jointly the "Presentation") have been prepared jointly by Havyard Group ASA, HG Group AS and BKS Holding AS, including their subsidiaries (referred to as the "Combined Group"). The Presentation is made solely for information purposes in connection with the contemplated acquisition by Havyard Group ASA of HG Group AS and BKS Holding AS.

The Presentation is not intended to, and should not by anyone, form the basis of any investment activity or decision and does not constitute or form part of an offer to sell or issue, or a solicitation of an offer to purchase or subscribe for, any securities or other interests in the Combined Group or any related entity. The information set out in the Presentation shall not form the basis of any contract and should not be relied upon in relation to any contract or commitment.

This Presentation has not been approved, reviewed or registered by or with any public authority or stock exchange. This Presentation is not a prospectus within the meaning of the EU Prospective Regulation (Regulation (EU) 2017/1129) and does not contain the same level of information as a prospectus. The information document contemplated to be prepared in connection with the listing of the new shares on Euronext Oslo Børs will contain more extensive information about the Group and its operations than this Presentation.

The information in this Presentation has been provided by entities that are part of the Combined Group and/or has otherwise been obtained from publicly available sources. The Presentation does not purport to be comprehensive or include all information that a reader may need to evaluate the Combined Group or its business.

Nothing in this Presentation is, or should be relied upon as, a promise or representation, and no representation or warranty, express, assumed or implied, is made by the Combined Group (nor any of its respective advisers) as to the fairness, accuracy, reasonableness or completeness of the information contained herein, and no reliance should be placed on it. Moreover, the information in the Presentation reflects the Combined Group's estimates and/or assessments (unless otherwise indicated). In particular, no representation or warranty is given as to the achievement or reasonableness of future projections, management targets, estimates or prospects, if any. Accordingly, none of the Combined Group, nor any of its respective affiliates, representatives, directors, officers, employees or advisers, nor any other person, shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this Presentation. Any such liability arising out of or in connection with the Presentation, directly or indirectly, is hereby expressly disclaimed.

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The Presentation contains certain forward-looking statements relating to the Combined Group's business, financial performance and results and/or the industry in which the Combined Group operates. Forwardlooking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in the Presentation, including assumptions, opinions and views of the Combined Group or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other various factors that may cause actual events to differ materially from any anticipated development.

This Presentation speaks only as of May 20th, 2022. There may have been changes in matters that affect the Combined Group subsequent to the date of this Presentation. The Combined Group undertakes no obligation to amend, correct or update this Presentation or to provide any additional information about any matters.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo city court (Nw: Oslo tingrett) as exclusive venue.

Combining two leading industrial companies

Becoming a fully integrated service provider to Norwegian industries

Summary of transaction between Havyard & HG Group

Transaction price of NOK 5.19/share in Havyard, plus Havyard shareholders to receive 0.4 HAV Group shares per Havyard share they own

Havyard Group ASA has entered into a business combination agreement where Havyard will acquire HG Group AS for an aggregate purchase price of NOK 285 million
Prior to completion of the transaction, Havyard will distribute 10 million shares in HAV Group as a dividend to its shareholders, corresponding to approx. 0.4 HAV Group shares per Havyard share
The purchase price will be settled in the form of
Issuance of 47,2 million shares of the Company at a subscription price of NOK 5.19.
A seller credit of NOK 25 million
A cash amount of NOK 15 million
Based on the subscription price of NOK 5.19, the transaction values the existing business of Havyard to NOK 129 million, post the distribution of 10 million HAV Group shares

Transaction summary Numbers & calculations

Shares	Price	Value
24.78	5.19	128.6
47.21	5.19	245.0
		25.0
		15.0
		285.0

Shareholders	Position	% Ownership
HG Group shareholders	47,206,166	65.6%
Havyard shareholders	24,781,150	34.4%
Sum shares	71,987,316	100.0%
Share price	5.19

Combined offering in brief

A diversified industrial offering with two main segments

			Offering examples
1		Aquaculture	• Conversions, service and classification of vessels, as well as service and development of land-based facilities
Maritime services (HLE/BKS)		• Conversion and hybridization of vessels to enable the greens shift
	Green power	• Base-work on vessels and rigs at offshore-bases in the immediate area
		• Service and production of parts and systems for the process industry in the immediate area
	Maritime assets	• Service and repair, extensions, and 24/7-365 emergency dockings
2		Renewable energy	• Build and operate small hydro power plants
Products, solutions &			• Upgrades existing small hydro power plants
renewables (BKS/Fossberg)	Solutions	• Production lines/processes, complete pipeline systems, tank systems incl. engineering, power and automation
		Process	• Supplier of complete solutions for all kind of processes i.e. water treatment, filtration, scrubber systems

Why invest in Havyard ?

Long-term strategy and ambitions

Our strategy will enable steady growth in the coming years

Broad revenue streams

Secured revenue across cycles

Key macro drivers

Strong outlook for organic growth from a broad industrial coverage

Opportunistic M&A

Strategic action-plan towards further growth in key industry and service sectors

Experienced management

Backed by a seasoned board

Erik Høyvik CEO Havyard Group

15+ years of experience in maritime- and land-based industries

Eirik Sævareid CFO Havyard Group

15+ years of experience from executive finance positions in large industrial companies

Tore Thorkildsen CEO BKS Group

22 years of experience as CEO

Tor Leif Mongstad CEO Havyard Leirvik

25+ years diversified experience in the maritime industry

Tom Jensen CEO Fossberg Kraft

30 years of leadership experience with primary focus on production and procurement

Over 120 Years

Industry experience from management

Even Matre Ellingsen Chairman

Former Group CEO in Astrup Fearnley. Extensive board experience from both regulated and non-regulated businesses.

Vegard Sævik Board member

Employed in Havila Holding and holds several board positions and is Chairman of the Board in Fjord1

Rune Skarveland Ellen Hanetho Board member

CEO Skarveland AS from '97- '08 and held several board positions in property development, industrial and hydro power companies 20+ years of financial & strategic business development experience from HydrogenPro, MPC Energy Solutions and Goldman Sachs

TBN Board member

Two additional board members to be selected at next EGF

Strong knowledge

Among BoD to execute on growth ambitions

Board member

Havyard Leirvik at a glance

Shipyard - maritime service provider with attractive location

Renewed and improved strategy with less market volatility
Strategic shift to focus on maintenance and service with attractive location close to important industries in Norway
Broad offering to secure revenue streams from a variety of projects
70 employees covering different disciplines

Fully integrated service provider to the maritime industry Selected customer base

220-meter quay

Built-in dry dock

3-6 projects

Running at once

70 FTE's Broad backgrounds

Offering include;

Extensions
Conversion/ Hybridization
Classification
Repairs and inspections

Company highlights Strategic location close to main vessel routes

At the far end of Sognefjorden in Leirvik
2-hour drive to industry hub Bergen
Easy access to airport

BKS at a glance

Full-service supplier of technical installations to a wide range of industrial clients

A full-service supplier of technical installations Financial performance

BKS is a full-service supplier for technical installations, meaning presence throughout the entire value-chain from idea to installation
~370 employees spread across 5 companies
HQ in Sunde, Kvinnherad
Most projects are uniquely customized to the client's needs and require significant experience and technical capabilities
Typical "project" cash flow profile spread throughout the project stages
Loyal and large clients ensure repeat business
Many projects are directly linked to make the client's operations more environmentally friendly, i.e. more energy efficient, reducing unnecessary greenhouse gas emissions etc.

Blue-chip customer base

Key highlights

Founded in 2018
"Take-off" agreement with UK investment fund Downing for completed plants signed in 2021
Successfully sold 5 plants to Downing in 2021 with corresponding mgmt. and "take-off" agreement
80+ years of combined experience from project development and hydropower plants

Successfully bought & sold

4 plants

Successfully constructed/ refurbished and sold

16.5 GWh new cap.

From 3 plants under construction

Value creation illustration

Plant sourcing	Engineering, development and construction	Operations
Sourcing of projects done in conjunction with Downing	Fossberg in charge of construction of the plants – Services bought at a fixed price, i.e. Fossberg Kraft takes minimal project risk	Fossberg in charge of operations of the plants post sale to Downing
	Fossberg profits off the project margin and maintenance fee agreements with Downing

Portfolio, GWh

Havyard ASA | May 2022

Note: 1) Projects where there is a signed contract regarding acquisition of rights or physical assets - to be developed towards decision to start construction; 2) Projects which have been analyzed with regards to production/hydrology and financials, inspected and considered ready for offer/contract negotiations; 3) Projects which have attractive attributes – where preliminary calculations and studies should be done. Production should be > 5 GWh/year

How do we generate money?

Broad economics from both short- and long-term contracts enable possible quick access to liquidity

2-3 months Timespan of service and maintenance contracts

1 week – 12 months Effective backlog from maintenance and service projects

Regular and tailormade

Complex projects involving designs, extensions and similar

3-10% EBITDA margin

Target EBITDA margin depending on type of project

Adaptable payment structure

Pre-payment to completion – depending on project

Maritime services Products, solutions & renewables

1-3 years Timespan of contracts and frame agreements

1 week – 18 months Effective backlog from projects and frame agreements

Significant repeat business

Long-term relationships with large-scale clients

5-15% EBITDA margin Target EBITDA margin depending on type of project

Payments follow progress

Payment structure mainly in line with progress in projects

Strong macro tailwinds

Record-high industrial activity in western Norway

Diversified revenues

• New company structure with exposure to variety of industrial sectors – diversifying and securing revenue streams

Demand for maritime service and conversion

• Energy transition creates opportunities for additional conversions to sustainable operations

Decarbonization

• Havyard and BKS to spearhead decarbonization of increased industrial activity and operations on- and off-shore

Guiding for 2022 and 2023 – 2 main business segments

The groups will have two main divisions : Maritime Services and Product, Solutions & renewables

Guiding for 2022 and 2023, NOKm			Potential for further growth
	'22e	'23e	negatively
Revenues	550-600	650-7501	passed on to customers
EBITDA margin	5-6%	7-8%

• Turnover is estimated approximately equal between the two divisions

Financial position

Group net interest bearing debt estimated at NOKm 110 post transaction
Equity ratio of 43% based on pro-forma balance sheet as of 31.12.2021
First part of 2022 affected of macro factors influencing margins negatively
Sickness absence due to covid 19
Increasing prices on input factors time lag before passed on to customers
Est. abt. NOKm 15 in transaction & restructuring costs in -22
The restructuring will lead to synergies generating positive EBITDA-effect estimated at NOKm 3-5 per year from 2023
Successful restructuring done at yard facilities in Leirvik restated strategy (service and maintenance) transfers to healthy business with low-risk projects compared to previous strategy based on newbuilds
Strong market outlooks for the segment services and products
The new group will strive to increase further growth both through organic growth and M&A activity

Company summary

Fully integrated service and power provider in western Norway

Broad service offering to on- and offshore industries

Growing demand for hydro power – the worlds cleanest energy source

The green shift driving demand for services and clean energy across Havyard sectors

Strong management with a broad background to execute on strategic growth initiatives

Robust financial position post merger

Pro-Forma financials, Balance sheet

	31.12.2021
Non-current assets
Intangible assets	32
Deferred tax assets	0
Goodwill	256
Total intangible assets	288
Properties	126
Plants & equipment	49
Leased assets	4
Inventory	5
Total fixed assets	184
Investment in shares	60
Long-term receivable	4
Total financial assets	64
Total non-current assets	536
Current assets
Inventory	9
Account receivables	102
Other receivables	35
Total receivables	137
Bank deposits	242
Total current assets	388
TOTAL ASSETS	923

Assets, NOKm Equity and liabilities, NOKm

	31.12.2021
Equity
Share capital	1
Other equity	266
Ownership (own shares)	0
Total paid-in equity	267
Other equity	133
Minorities	2
Total retained equity	135
TOTAL EQUITY	402
Debt
Deferred tax	18
Total provision for liabilities	18

Leasing debt	4
Shareholder loans	2
Interest bearing debt	155
Other long-term debt	39
Total long-term debt	200

Interest bearing debt Accounts payable	32 54
Contractual obligation	36
Tax payable	7
Public fees	52
Dividend	0
Other current debt	123
Total current debt	303
Total debt	522
TOTAL EQUITY AND LIABILITIES	923

	2021

Sales revenue	1,263.6
Other income	12.9
Total revenue	1,276.5

Costs of goods sold	736.9
Salaries	367.3
Other costs	108.0
Total costs	1,212.3
EBITDA	64.2
Depreciation	15.2
EBIT	49.0
Net financial items	29.2
EBT	78.2
Tax	(5.7)
Net Income	83.9

P&L, NOKm Commentary

2021 figures includes completion of newbuildings at the shipyard in Leirvik (ref. the previous strategy in Havyard)
New strategy for the yard is based on service and maintenance – revenues will then be significantly lower than the 2021 figures