Financial report Q4-2020 28. February 2021 • Boreal is a leading provider of mobility in Norway with 2 700 employees. Mobility is about people, and in Boreal we strive to provide our passengers with service beyond what is expected • Our core values reflect who we are and our way of working: Safety Quality Environment • We are ISO 9001-certified, which commits us to strive for satisfied customers • We are ISO 14001-certified, which commits us to take care of the environment • Our zero philosophy commits us to strive for an operation without damage to people, the environment or equipment 2 Boreal at a glance Vast majority of the business relates to PTA contracts A public transportation provider Geographical footprint • Leading public transport provider in Norway • Operating in four PTA segments; bus, car ferry, fast ferry, light rail in addition to commercial activities and Minol services • 2 700 employees, HQ in Stavanger • Main revenues stem from operating long-term gross contracts (i.e. availability based) from Norwegian Public Transport Administrators (“PTAs”) • Boreal is owned by Everbright Overseas Infrastructure Investment Fund, managed by China Everbright Limited, since 2018 Boreal Holding AS (Consolidation level) Boreal Norge AS Boreal Sjø AS Boreal Travel AS Boreal Buss AS Boreal Bane AS Real Estate 3 Companies Financial highlights – Q4 • Overperformed compared to 2019 both in NOKm Q4 2020 Q4 2019 Changes EBITDA and EBITDA margin Total revenue 758,4 784,6 -26,2 • Decrease in revenue Q4-2020 versus Q4-2019 is Cost of goods sold -256,6 -308,7 52,2 mainly due to a drop in the travel market related Personnel expenses -346,0 -344,9 -1,1 to the Covid-19 situation, however partly offset Other operating expenses -49,6 -53,7 4,1 by new contracts Operating expenses -652,1 -707,3 55,2 EBITDA 106,3 77,3 29,0 EBITDA margin 14,0 % 9,8 % 4,2 % Depreciation -99,3 -79,8 -19,5 Net financial items -36,4 -30,4 -6,1 Result before taxes -29,5 -32,9 3,4 Estimated tax* 1,8 -5,6 7,4 Result after taxes -27,6 -38,5 10,8 * Full tax calculations is performed on annual figures. Quarterly tax is estimated from 22% on result before taxes in addition to include deferred tax related to depreciation added values that stems from PPA18 4 Financial highlights - YTD • Overperformed compared to 2019 both in NOKm YTD 2020 YTD 2019 Changes EBITDA and EBITDA margin Total revenue 3 160,8 3 204,2 -43,3 • Decrease in revenue stems from the Covid-19 Cost of goods sold -1 226,7 -1 330,1 103,4 restrictions and the impact it has had on the Personnel expenses -1 309,0 -1 262,5 -46,5 commercial market, partly offset by new PTA Other operating expenses -206,6 -219,3 12,7 ferry and bus contracts Operating expenses -2 742,2 -2 811,8 69,6 EBITDA 418,6 392,3 26,3 • Increase in depreciation due to completion of EBITDA margin 13,2 % 12,2 % 1,0 % newbuilds Depreciation -350,3 -316,0 -34,3 Net financial items -132,0 -117,9 -14,1 • Increase in net financial items due to increased Result before taxes -63,8 -41,6 -22,2 long-term debt and bond Tax on ordinary result -5,1 -10,3 5,2 Result after taxes -68,8 -51,9 -16,9 5 Balance sheet Currently significant newbuilds program • As a result of PTA ferry contracts starting up the NOKm Q4 2020 Q4 2019 Changes coming two years Boreal has a large newbuild ferry program. Currently 11 ferries are under Assets construction and rebuild. As such fixed assets will Fixed assets 4 356,8 3 644,0 712,9 increase quarter by quarter Cash and cash eq. 682,6 208,2 474,5 Other current assets 299,2 344,4 -45,2 Total assets 5 338,7 4 196,6 1 142,2 • Positive change in cash is mainly due to the closed bond tap in Q3-2020 Equity and liabilities Equity 919,5 988,3 -68,8 • Increase in long-term debt is related to vessels Long term liabilities 3 690,0 2 584,5 1 105,4 under construction, delivered ferries and bond Current liabilities 729,3 623,7 105,5 tap Total equity and liabilities 5 338,7 4 196,6 1 142,2 • Boreal is in compliance with covenants related to Spec long term debt Q4 2020 term loan and bond Bond 2 461,0 Subordinated loan 572,0 Term loan and other 488,2 Deferred tax liabilties 168,8 Long term liabilities 3 690,0 6 Cash flow statement NOKm Q4 2020 Q4 2019 Ordinary result before taxes -29,5 -32,9 Depreciation and write-downs 99,3 79,8 Paid taxes -3,7 0,0 Change current rec., liab. and other periodisation 87,7 46,8 Net cash flow from operations 153,8 93,7 Capex fixed assets -211,5 -225,2 Sales fixed assets 0,0 0,3 Investments in subsidiaries and associated comp. -3,0 -4,8 Net cash flow from investments -214,5 -229,7 Proceeds from increased long term debt 3,9 0,0 Repayments long term debt -44,8 41,0 Other changes (e.g. financial lease) -6,3 -7,1 Net cash flow from financing activites -47,1 33,9 Change in cash position in the period -107,8 -102,1 Liquidity reserve at the begining of the period 790,4 310,1 Liquidity reserve at the end of the period 682,6 208,0 7 Operational highlights – Q4 • Boreal Sjø, -Buss and -Bane have insignificant effects related to Covid-19 regarding our PTA contract portfolio. Boreal saw a further drop in revenue in Q4 related to the travel market due to the Covid-19 situation • Boreal Travel has signed a two-year contract regarding assisted transport in Stavanger, Norway. The contract will commence in March 2021 • Boreal Sjø had a deviation from the NMA in December 2020. DNV GL is engaged to strengthen and improve the company's quality system, to secure best in class performance. MF Harøyfjord 8 Operational highlights - YTD • Shipbuilding contracts; – Flekkefjord, two ferries with Holland Yards – Indre Oslofjord, five ferries with Sefine – Molde Vestnes, two rebuilds with a Norwegian yard • Secured new contracts; – Rogaland, assisted transport. Two years contract commencing in March 2021 – Nordland, Helgelandspendelen. Six years fast ferry contract commencing in February 2021 – Rogaland, electric autonomous passenger vehicle. Two years contract commenced in October 2020 – Troms og Finnmark, patients express bus. Six years contract commencing in April 2021 • Secured bank financing facility of 1 000 mnok related to newbuilds and rebuilds • Bond tap issue of 775 mnok • Positive startup according to plan of three PTA contracts in 2020; – Hordaland (car ferry) – Tjøtta Forvik (car ferry) – Ryfylke (bus) • Delivery of three electric ferries to the Hordaland contract (first delivered in 2019) – MF Kinsarvik – MF Utnefjord – MF Matre 9 MF Kinsarvik IR – Boreal Sven Kloster Olsen CFO +47 959 68 297 [email protected] 10 Let’s og together.