Q4 and full year 2022

KMC Properties ASA

Results Presentation | 23 February 2023

The preferred real estate partner for logistic and industrial companies

Building on 40+ years of industrial knowhow

1) KMC Property ASA portfolio is valued by third party Cushman & Wakefield quarterly (WAULT = Weighted average unexpired lease term)

2) The EPRA Best Practices Recommendations Guidelines focus on making the financial statements of public real estate companies clearer and more comparable across Europe (www.epra.com). See Alternative Performance Measure (APM) description in KMC Properties financial report for calculations of the EPRA performance measures.

Strategic locations

Strong financial profiles and established sectors

Infrastructure investments creating stickiness

Stable and high occupancy rates

Long lease agreements and investment horizon

Long-term value creation through well founded light industry infrastructure investments

Example properties

Continuing to execute on an expansive growth strategy

GAV, net yield and WAULT development

NOK billion, %, years

Key focus areas

Acquisitions in collaboration with current and new tenants, and other parties

Greenfield development of new facilities for new and existing clients

Contract extensions and investments in current portfolio (CAPEX)

Capital optimization

1) EPRA Net Initial Yield, see definition in interim report

2022 growth in annual contractual rent mainly from investments

Continuous process to extend or renew contracts
Identification of potential for investments in existing portfolio
Acquisitions of new properties meeting investment criteria
Identifying and engaging in business development activities

Well positioned for navigating high inflation environment

Solid tenants with long track records

Industry exposure with strong local presence

Solid framework mitigating risks

Currency and interest swaps

41% hedge ratio currently reducing total interest rate by at least 1.15%. Weighted average life (WAL) on interest rate swaps is 2.5 years

Triple net bare house contracts

Tenants responsible for almost all property related cost

CPI adjustments

98% of contract 100% CPI adjusted 1% of contracts 80% CPI adjusted

KMC Properties board and management with strong industrial experience

Operational review

First tranche of BEWI-transaction completed

Acquisition criteria

Targeting high yield industrialand logistic properties with long lease agreements and solid tenants
Strategic locations for tenants
Substantial relocation cost for the tenant
Securing diversification across industries, tenants, locations, and property types

Expect to utilize option for second tranche by end of June 2023

Gross asset value, NOK billion

Increased size implies potential for lower interest margin
Highly attractive EBITDA-yield with low additional recurring OPEX for KMCP
16.6 years WAULT

Ongoing greenfield projects progressing as planned

Greenfield project	Investment NOKm	Yield-on-Cost %	Lease term Years	Completion Estimate	Development
Salmon slaughterhouse for Slakteriet at Florø (NO)	~682	6.75%	20	H1'25	• Conditional agreement with Slakteriet for the development of the salmon slaughterhouse • Land plot established and ready for infrastructure work
Packaging hub for BEWI at Jøsnøya (NO)	~160	7.50%	15	H2'23	• Conditional long-term lease agreement with BEWI • Construction work started in September 2022 • BEWI has been rewarded a long-term agreement for supply of fish boxes to MOWI, along with running agreement with Lerøy Seafood
Automated storage facility for BEWI at Jøsnøya (NO)	~40	7.50%	10	Q4'23	• Conditional long-term lease agreement with BEWI for a new automated storage facility integrated with MOWI`s new salmon slaughterhouse • Construction start planned Q1'23

Continued investments in existing properties

Maintaining a close relation with customers to actively identify and engage in business development activities
Project and real estate development makes it possible to meet the changing needs of tenants
Maintenance investments of NOK 12.1 million across five properties in the fourth quarter of 2022
- Related to roofing, asphalt, facade, and property specific development to meet client need

Ongoing ESG projects to be supported by new-hire

H2 2023: Large scale roll-out

Current pipeline of value accretive opportunities

Note: detailed overview of pipeline in appendix

Financial review

Continued gross rental increase on a stable cost base

Profit and loss

NOK million, excluding discontinued operations¹

	Q4'22	Q4'21	FY'22	FY'21
Rental income	79.6	55.1	272.7	205.0
Property expenses	-0.4	-0.4	-2.5	-2.6
Net operating income	79.2	54.7	270.2	202.4
Administration expenses	-17.1	-10.9	-45.3	-30.7
Transaction expenses	-3.2	-3.6	-6.8	-33.3
EBITDA2	58.9	40.2	218.0	138.4
Net realised financials	-41.9	-18.5	-122.4	-82.1
Net income from property management	17.4	21.7	95.7	56.3
Net unrealised financials	-15.0	-20.0	34.7	-53.2
Changes in value of financial instruments	1.2	29.0	110.6	59.4
Changes in value of investment properties	18.5	113.4	41.3	317.3
Profit before tax	21.7	144.1	282.2	379.8
Profit from continued operations	30.2	118.3	244.0	302.9

1) Excluding discontinued operations in Russia (see KMC Properties' Q4 2022 report for further details)

2) See Alternative Performance Measure (APM) description in KMC Properties financial report

Rental income +45% Q4'22 vs Q4'21
- Increase mainly from new investments
- CPI adjustments account for 8 pp (NOK 1.9 million per quarter)
EBITDA increase +47% Q4'22 vs Q4'21
- Administration expenses increase due to larger organisation, higher audit cost and NOK 1.9 million in non-recurring expenses
Realized financial expenses increasing twofold
- ~30% increase in asset base
- IBOR increase
Slightly net positive change in value of investment properties
- Negative effect from increased interest rates and negative market outlook
- Positive effect from accretive investments and significant CPI adjustments in January 2023

High financial and operational visibility in current structure

Annualised run-rate

NOK million, 12 months forward

	Q4'221	Q3'22	Q2'22	Q1'22
Rental income	371.4	290.1	268.4	258.9
Property expenses	-5.0	-4.2	-4.1	-4.1
Net operating income	366.4	285.9	264.3	254.8
Administration expenses2	-40.6	-34.1	-33.9	-33.6
EBITDA	325.8	251.8	230.4	220.7
Net realised financials	-181.0	-136.5	-117.4	-111.3
Net income from property management	144.8	115.3	113.0	109.4

1) Based on completed agreements as of period end.

2) Does not include transaction costs and variable remuneration to employees.

3) Based on 3 months Nibor and swap agreements at period end. Does not include interest expenses on revolving credit facility.

Additional rental income from new investments and CPI adjustments (from 1 January 2023)
Low increase in property related expenses due to triple net bare house contracts
Administrative expenses increase due to additional costs from
- 2x new hires in 2023, est. NOK 3 million
- CPI adjustments, est. NOK 2.5 million
- Investments in Q4 2022, est. NOK 1 million
Financing cost driven by increase in interest-bearing debt and increased floating interests

Expand EBITDA to interest expense gap

EBITDA to interest expense gap

Annualized run-rate 12 months forward, NOK million

New investments, renewals and CPI adjustments set to increase overall EBITDA
BEWI-transaction highly EBITDA accretive
- First NOK 925 million tranche of the NOK ~2,000 million transaction concluded in Q4 2022
Potential for interest margin contraction with increased scale
IBOR, including swap agreements, set to increase with inflation

Solid balance sheet set to support continued growth journey

▪ Main main property portfolio changes for Q4'22

Change in value¹ of investment properties of NOK 18 million
Expansion projects, investments in new facilities, and acquisitions of NOK 961 million
Equity of NOK 2,377 million representing an equity ratio of 41.1%

1) Portfolio valued by Cushman & Wakefield quarterly

Group financing and structure accommodates growth

Current structure

Growth potential

Share of property portfolio

Working to increase funding sources preparing for refinancing of senior secured bond maturing 11 December 2023
Initial property portfolio was solely financed by senior secured bond
All new properties have been financed by Tier-1 banks, supportive to KMC's growth strategy
Active dialogue with potential creditors, including banks, bondholders, and providers of private debt

High inflation and weaker global growth outlook

Consumer price inflation is very high in many countries
European gas and electricity prices remain at high levels
Futures prices for the coming year are lower than in September
The high level of inflation is reducing household purchasing power
Futures prices indicate that both gas and electricity prices will remain high over the coming year but will fall thereafter
Other commodity prices have edged down over the past six months, and global supply chain disruptions appear to have eased

Source: Norges Bank (December 2022) Monetary Policy Report 3|22

Well positioned for continued value accretive growth

3.1 4.0 5.4 8.0 1.1 0.5 NOK billion YE'20 YE'21 YE'22 2023 2024 YE'24 target Additional growth Committed investments

Year end 2024 gross asset value target

Step-change transaction with BEWI set to unlock potential for interest margin compression

Continued accretive activities based on a defined set of investment criteria

Growth with low additions to current operational cost base increasing EBITDA yield

Synergies from utilizing industrial knowhow across a wider customer base

Appendix I Committed pipeline

Pipeline committed investments

Type	Tenant	Completion (estimated)	Value 1) (NOKm)	Remaining investments	Gross Yield	WAULT	Country
Greenfield	BEWI (Jøsnøya, Hitra)	Q2 2024	200	151	7.5%	14.0	NO
Greenfield	Slakteriet Holding	H1 2025	682	682	6.8%	20.0	NO
Acquisition pipeline	BEWI	Q4 2022 / 2023	2,000	1,000	6.7%	16.6	Europe
Acquisition pipeline	Kuraas/SG	Q1 2023	90	90	8.9%	12.6	NO
			2,972	1,923	6.9%	17.5

Appendix II Financials

Consolidated statement of comprehensive income

Amounts in NOK millions Unaudited Unaudited Unaudited Audited Rental income 80 55 273 Property expenses (0) (0) (3) (3) Net operating income 79 55 270 Administration expenses (20) (15) (52) (64) Net realised financials (42) (19) (122) (82) Net income from property management 17 22 96 Net unrealised financials (15) (20) 35 (53) Changes in value of financial instruments 1 29 111 Changes in value of investment properties 18 113 41 Profit before tax 22 144 282 Current tax 0 (3) (9) (3) Deferred tax 8 (23) (29) (74) Profit from continued operations 30 118 244 Profit from discontinued operations 0 (4) (81) Profit 30 114 163 Translation differences for foreign operations 28 29 54 (24) Comprehensive income 59 144 217 Profit attributable to: Equity holders of the company 30 114 163 305 Non-controlling interest - - - - Comprehensive income attributable to: Equity holders of the company 59 144 217 281 Non-controlling interest - - - -	Q4 2022	Q4 2021	2022	2021

				205

				202


				56

				59
				317
				380


				303
				2
				305

				281

Cash flow

Amounts in NOK millions	Q4 2022	Q4 2021	2022	2021
Earnings before tax	22	144	282	380
Changes in value of investment properties	4	(113)	(18)	(317)
Financial items	56	9	(23)	76
Change in working capital:
- change in current assets	5	(3)	38	20
- change in current liabilities	21	(12)	21	(79)
Other items not included in the cash flow	(3)	(7)	(3)	0
Taxes paid	(2)	3	(8)	(2)
Net cash flow from operating activities	103	21	288	78
Purchase of investment properties	(906)	(218)	(1,308)	(520)
Upgrades of investment properties	(55)	-	(139)	(140)
Proceeds from property transactions	95	-	95	-
Interest received	1	7	3	-
Change in other non -current assets	(12)	-	(12)	-
Net cash flow from investment activities	(876)	(211)	(1,360)	(660)

Capital increase from issue of shares	294	20	324	326
Proceeds interest -bearing liabilities	592	-	866	439
Repayment interest -bearing liabilities	(7)	112	(19)	(3)
Interest paid	(40)	(19)	(122)	(87)
Transaction fees paid and other financial costs	(7)	3	(8)	(15)
Change in other non -current liabilities	20	4	10	3
Net cash flow from financing activities	853	120	1,051	665
Effects of exchange -rate changes on cash and cash equivalents	1	1	0	0
Net change in cash and cash equivalents	80	(69)	(21)	82
Opening balance of Cash and Cash equivalents	107	276	208	125
Cash and cash equivalents at period end	187	207	187	208

Consolidated statement of financial position 31.12.2022 31.12.2021

Amounts in NOK millions	Unaudited	Audited

ASSETS
Non-current assets
Investment properties	5,366	3,982
Site leaseholds, right-of-use assets	19	19
Financial derivatives	180	68
Other non-current assets	16	5
Total non-current assets	5,580	4,074
Current assets
Trade receivables	7	24
Other current assets	7	27
Cash and cash equivalents	187	208
Assets held for sale	-	-
Total current assets	200	259

Total assets	5,781	4,333
EQUITY AND LIABILITIES
Equity
Share capital	65	56
Share premium	1,512	1,196
Translation reserve	20	(34)
Retained earnings	781	617
Total equity	2,377	1,836

LIABILITIES
Non-current liabilities
Deferred tax liabilities	163	132
Non-current interest-bearing liabilities	1,217	2,275
Lease liabilities	19	19
Other non-current liabilities	20	10
Total non-current liabilities	1,420	2,436
Current liabilities
Current interest-bearing liabilities	1,905	-
Trade payables	37	24
Current tax liabilities	0	3
Other current liabilities	41	34
Liabilities held for sale	0	-
Total current liabilities	1,984	61
Total liabilities	3,404	2,497
Total equity and liabilities	5,781	4,333

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