Arctic Norwegian Value Creation Monthly Report June 2020

FUND COMMENTS Arctic Norwegian Value Creation (Class B) increased by 2.7% in June, compared to 0.3% for the Norwegian OSEFX index. The largest contributors to fund performance during June were Europris, XXL and Aker ASA. The strong sales performance by Europris in Q1 seems to continue into Q2. Europris’ trading update for April-May shows a sales growth of 34% year-on-year for the period. The company underlined that this unusually high growth has put pressure on delivery systems and yielded additional costs. XXL issued a positive trading update. Sales have been strong in all markets and across categories. XXL expects a sales growth in Q2 of 25-30%. This indicates increased market shares in a strong sport retail market. Moreover, XXL guided for the EBITDA-margin in the quarter to be in the range of 12.5-13.5%, well above market expectations. Aker Biomarine completed a private placement of USD 225 mill., diluting Aker ASA’ ownership from 100% to 78%. The shares will be traded on Merkur Market with an intention to be listed on within Q121. The pre-money market capitalisation of USD 840 mill. was 60% higher than Aker ASA’s book value by the end of Q120 and more than 3 times book value by 4Q19. Aker ASA has consequently visualised hidden values in its unlisted portfolio and strengthened the holding company’s balance sheet. Additionally, Aker benefitted from a 12% share price return in Aker BP, by far AkerASA’s most important asset. The most negative contributions during June came from Kongsberg Gruppen, and DNB, even though none of these shares were down more than 6%. There were a couple of broker downgrades for Kongsberg, mostly based on lingering uncertainties over the outlook for the maritime sector. Telenor continues to meet challenges in Asia, with covid-19 hitting countries like Bangladesh and Pakistan where physical stores are important for sales. In Bangladesh, the regulatory headwinds continued with new restrictions to control Grameenphone’s market power and a requirement to deposit close to USD 250 mill. in relation with an audit dispute. Telenor is doing well in the important Norwegian market, while they have been lagging competition in Sweden for some time. Following a rebound in May, the share price of DNB retreated in June. There was increased focus on the negative impact on net interest income from lower rates. Company executives reiterated that the impact – ceteris paribus – should amount to NOK 5 bn on an annual basis. Year to date, Europris, XXL and Tomra have been the most positive contributors to fund performance, while Aker ASA, Aker BP and Maersk Drilling have been the largest detractors. We subscribed for shares in the upcoming Merkur Market listing of Aker Biomarine, while we increased our holding in . At the end of June, the portfolio was valued at 17.1 times 12 months forward earnings and 1.4 times book value. The corresponding figures for the Norwegian OSEFX index were 20.5 and 1.5, respectively. On four quarter trailing basis the return on equity of the current portfolio is 9.0%, comparing to the market ROE of 7.3%. Oslo, July 2020 Sindre Sørbye Ole E. Dahl Tore Mengshoel Thomas Rasmussen Portfolio Manager Portfolio Manager Portfolio Manager Analyst

ABOUT THE FUND Arctic Norwegian Value Creation is research driven and truly index-independent UCITS fund. The investment process focus on identifying companies which are considered to be value-creating over time at a reasonable price. The portfolio is con- structed by bottom up stock picking. There are no constraints regarding sectors and the goal is to achieve the best possible long-term risk-adjusted return. The funds benchmark is Oslo Stock Exchange Mutual Fund Index (OSEFX).

10% 8.3 % 8.8 % 5.5 % 5.0 % 5.4 % 5.4 % 5% 2.7 % 0.3 % 0%

-5% -5.8 % -5.6 % -10%

-15% -12.1 % -13.6 % Month YTD 12m 36m p.a. 60m p.a. Incep. p.a. Arctic Norwegian Value Creation Class B (25/8-14) OSEFX FUND COMPOSITION END OF MONTH

Real Estate 0.0% 10 largest positions Energy 8.1% Europris ASA 6.8 % DNB ASA 3.5 % Industrials 14.8% Leroy Seafood Group ASA 5.4 % XXL ASA 3.5 % Health Care 1.4% Schibsted ASA 4.8 % ASA 3.4 % Consumer Discretionary 10.8% Kongsberg Gruppen ASA 4.4 % Borregaard ASA 3.3 % Materials 12.9% Telenor ASA 3.6 % Gjensidige Forsikring ASA 3.3 % Information Technology 5.3% Financials 20.3% 5 largest overweights +/- 5 largest underweights +/- Consumer Staples 10.2% Europris ASA 6.0 % ASA -8.7 % Telecommunication Services 10.1% Lerøy Seafood Group 3.7 % ASA -6.3 % Utilities 1.0% Borregaard ASA 3.3 % DNB ASA -5.1 % Kongsberg Gruppen 3.2 % Telenor -4.9 % 0% 5% 10% 15% 20% 25% XXL ASA 3.2 % Orkla -4.3 %

FUND PERFORMANCE AND RISK FIGURES —CLASS B NOK (FORMER CLASS A)

3 6 Since Month months months YTD 1 year 3 years launch Fund 2.7 % 21.3 % -12.1 % -12.1 % -5.8 % 17.3 % 63.6 % Benchmark 0.3 % 14.3 % -13.6 % -13.6 % -5.6 % 15.7 % 36.3 % Difference 2.4 % 7.0 % 1.4 % 1.4 % -0.1 % 1.6 % 27.3 % Vinx Nordic Net, NOK 1.5 % 11.0 % 7.9 % 7.9 % 20.3 % 29.5 % 95.3 % Euro Stoxx 600, EUR 3.1 % 13.5 % -12.1 % -12.1 % -4.3 % 2.7 % 23.9 % S&P 500 TR, USD 2.0 % 20.5 % -3.1 % -3.1 % 7.5 % 35.8 % 74.9 % MSCI AC World, LC 2.9 % 18.3 % -5.3 % -5.3 % 3.1 % 21.3 % 48.3 %

5 top contribut. Fund Fund Contri- 5 bottom contribut. Fund Fund Contri- year to date weight return bution year to date weight return bution Europris Asa 5.6 % 41.6 % 2.35 % Aker Asa-A Shares 3.1 % -35.5 % -1.75 % Xxl Asa 1.8 % 30.6 % 0.82 % Aker Bp Asa 3.3 % -37.1 % -1.37 % Tomra Systems Asa 2.7 % 26.8 % 0.65 % Drilling Co Of 1972/ 0.7 % -66.7 % -1.29 % Asa 2.2 % 20.4 % 0.45 % Sparebank 1 Sr Bank 2.7 % -30.1 % -1.07 % Borregaard Asa 3.2 % 10.0 % 0.33 % Asa 2.9 % -28.1 % -0.99 %

Standard Sharpe Tracking Information Portfolio characteristics Deviation Ratio Error Ratio Arctic Norwegian Value Creation 17.9 % 0.3 5.2 % 0.1 Benchmark 15.5 % 0.3 *) Based on 36 months performance Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2020 -2.21 % -8.08 % -19.38 % 11.03 % 6.36 % 2.70 % -12.12 % 2019 6.64 % 4.75 % 0.42 % 1.88 % -3.92 % 2.27 % -1.84 % -0.34 % 1.98 % 1.18 % 1.74 % 4.41 % 20.41 % 2018 -0.75 % -0.84 % -0.69 % 6.85 % 4.70 % -0.03 % 0.80 % 2.02 % 1.70 % -7.32 % -0.19 % -6.84 % -1.47 % 2017 1.70 % 0.29 % -2.35 % 4.19 % 0.70 % -0.07 % 3.81 % -0.48 % 4.53 % 3.17 % -2.03 % 3.09 % 17.51 % 2016 -7.33 % 2.60 % 2.10 % 4.08 % 3.70 % -3.14 % 3.81 % 1.29 % 1.71 % 3.60 % 1.99 % 3.96 % 19.23 % 2015 4.66 % -1.15 % 1.42 % 3.48 % 0.13 % -2.25 % 1.62 % -5.13 % -1.22 % 3.68 % 4.05 % -0.76 % 8.34 % 2014 0.44 % 0.28 % -0.88 % 1.49 % 2.05 % 3.39 % *) August performance from 22.08.14 - 31.08.14 Disclaimer: Historical returns are no guarantee for future returns. Future 100.0 % returns will depend, inter alia, on market developments, the fund man- ager’s skill, the fund’s risk profile and subscription and management fees. 80.0 % The return may become negative as a result of negative price develop- 60.0 % ments. Arctic Asset Management AS seeks to the best of its ability to ensure that all information given in this report is correct, however, makes reserva- 40.0 % tions regarding possible errors and omissions. Statements in the report reflect the portfolio managers’ viewpoint at a given time, and this view- 20.0 % point may be changed without notice. The report should not be perceived as an offer or recommendation to buy or sell financial instruments. Arctic 0.0 % Asset Management AS does not assume responsibility for direct or indirect loss or expenses incurred through use or understanding of the report. -20.0 % Employees of Arctic Asset Management AS may be owners of securities 08/14 02/15 08/15 02/16 08/16 02/17 08/17 02/18 08/18 02/19 08/19 02/20 issued by companies that are either referred to in this rapport or are part of Arctic Norwegian Value Creation Class B (Start 22.08.14) OSEFX the fund's portfolio.