Investor Presentation · Currently reviewing strategic opportunities for Norwegian Reward Including...
Transcript of Investor Presentation · Currently reviewing strategic opportunities for Norwegian Reward Including...
Upcoming retail offering
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The Private
Placement
• The private placement was directed towards institutional investors, with existing shareholders being
given preferential allocation
• Price was set at NOK 155 per share, through a bookbuilding
• The Board of Directors will propose a subsequent offering of NOK 200 million at the same price per
share directed towards remaining shareholders not allocated and/or offered shares in the private
placement
• Arctic Securities, Carnegie, Danske Bank and Pareto Securities acting as Joint Lead Managers
Equity has been
raised to ensure
capital ratios
during
expansion
• Norwegian raised NOK 1,300 million in a private placement in the evening of 20 March 2018
• The equity infusion ensures substantial buffer to bond covenants on minimum equity levels, as well
as making the company better positioned for increasing fuel price and currency fluctuations
• A market update was issued prior to the issue of equity, confirming strong bookings, but seasonally
weak earnings expected through April 2018
• Capital ratios will be further enhanced through ongoing surplus aircraft disposal program
• Financing initiatives means no need for additional funding of working capital or PDPs
Settlement and
conditions
• The Private Placement was carried out in two tranches;
• Tranche 1 consists of 8.25% of share capital with settlement on or about 23 March 2018 (only
subject to Board approval)
• Tranche 2 consists of all remaining shares with settlement immediately following the approval
by an EGM, expected to be held on or about 4 April 2018
• The subsequent offering will likely be carried out during May 2018, subject to approval at the EGM
Note: Please refer to the Term Sheet and Application Agreement dated 20 March 2018 for the complete terms of the Private Placement
Fleet expansion and financial initiatives
The equity issue of NOK 1.3 bn significantly strengthens capital buffers against currency fluctuations and unstable markets
Growth in wide body fleet peaking in H1 ‘18Nine 787s scheduled for delivery in H1 ’18 and two in H2 ‘18
Total fleet of 30 787s by summer ‘18
Final delivery of current order in 2020, for a total fleet of 42 787s
Arctic Aviation Assets (“AAA”) signed LOI for PDP financing of six 787-9 Dreamliners with back stop SLB agreements
Deliveries in 2018 and 2019
Improves liquidity with USD 250m
Cash position driven by strong presalesNo need for additional funding of working capital or PDPs
AAA in discussions of selling up to five Airbus 320neosEstimated gain of USD 15-20m
Currently 65 additional Airbus 320neos on order
Currently reviewing strategic opportunities for Norwegian RewardIncluding incorporation and ownership
9 million members expected by year-end ‘18
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Overall bookings ahead of last year
5Booked and paid travels as of March 13, 2018 and March 14, 2017 (corresponding weekday).
Easter season in 2018 24 March – 2 April
Limiting cost growth while increasing production
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Airline cost situation
2017 unbudgeted costs Outlook for 2018
Actual and planned wetlease for ‘18 per mid-March’18 is 4.3 production months (incl in guiding) vs 29.3 last year
Will still see high growth and low utilization of staff in wide body in H1 ‘18, improving rapidly in H2
Secured new collective bargaining agreements with Scandinavian, Spanish, Italian and UK unions
Operational challenges during the summer season lead
to extensive use of wetlease
46% staff growth on 25% production growth in 2017
Wide body: To prepare for the extensive growth in H1 ‘18
Narrow body: To avoid pilot shortages in summer ‘18
Operating cost EBIT level per ASK (NOK)
Sources: Based on latest official annual reports
Norwegian Reward
Developing subsidiary services
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Norwegian Reward is an attractive program
An increasingly popular program
Awarded Program of the Year in
Europe by Freddie Awards in 2017
Strongly growing fundamentals
Million members
A solid network of partners
>50% of cash points earned from
external partners
Million cash points earned,
accumulated
7
FFPs provide significant earnings and value
Strategic review of Norwegian Reward (incl ownership) initiated
FFPs more worth than airlines
Estimated FPP value versus equity
value airlines $bn
Highly valued members3)
€ value per FFP member acquisitions
High margin business
Loyalty EBIT margins 20171)
Strong contribution to profits
Earnings contribution
announcements
21%
24%
24%
35%Loyalty EBIT
~$600m in 2022
MileagePlus
+$0.3bn by 2018
Amex contribution
$4bn in 2021
50% stake
9270% stake
11820% stake
14335% stake
17330% stake
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91
20% stake
Sources: FactSet, Qantas, United, Delta, EY, Mumbrella, Loyaltylobby.com, Etihad, Stifel
Note: 1) As of 14 March 2018 2) As of 20 March 2017 3) % stake acquired by FFP
FFP = Frequent flyer programme
35
40
10
29
38
8
20
27
26
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Loyalty2)Company1)
Q1 2018 market update
Stable demand despite record high growth in
production
Forward bookings ahead of last year
Higher fuel prices and stronger Euro impact cost
negatively
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Market and business Updated guiding for 2018
Guiding for Q1 2018
Production growth (ASK): 40% (unchanged)
Unit cost excl fuel and depreciation: 0.290-0.295
(unchanged)
Unit cost incl fuel and depreciation: 0.415-0.420
(previous estimate: 0.405-0-410)
Change in estimate due to increased fuel price and headwind from
currency
NOK billion Q1 '18 Q1 '17
Revenue 7.1 5.4
EBITDA* -2.0 -1.3
EBIT* -2.3 -1.7
EBT* -2.6 -1.8*Including in the EBITDA is other losses/gains related to hedging and currency
New assumptions Previous assumptions Change
Fuel price (USD/mt) 629* 575 9 %
USD/NOK 7.71* 7.75 -1 %
EUR/NOK 9.65* 9.00 7 %
*Based on forward curves as of ultimo February
Investment highlights
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3rd largest low
cost airline in
Europe
• Strong footprint in the Nordic region and selected European markets
• 6th largest overall airline in Europe
• 7th largest low cost airline in the world
• A moderate single digit growth rate in short haul going forward
Young fleet with
low operational
cost
• Average age of fleet of 3.6 years
• Low fuel cost through a modern and fuel efficient fleet
• Continue to reduce unit cost and strengthen competitive advantage vs legacy peers
• Order book with 210+ aircraft on order
• Leasing option to third parties adds flexibility to growth rates
First mover
advantage in
European low
cost long haul
• Successful launch of long haul with 787 Dreamliners has reached critical mass
• Build scalable organization and gained operating licenses for traffic rights
• Ramping up widebody operations to 32 aircraft by end 2018 (42 by 2020)
• Boeing 737 MAX 8 operating new innovative Trans-Atlantic routes
Financing
flexibility and
availability
• Export credit financing with JOLCO, and Insurance syndicate (AFIC)
• EETC (Enhanced Equipment Trust Certificates), Private Placements, Commercial Banks
• Sale and leaseback (SLB)
• Bonds
• Manufacturer support
• Attractive assets with a liquid secondhand market
The history of Norwegian
11
222
6
15
Long haul
Boeing SKY
ATW Awards
First-800 delivery
New distribution-systemLavpris
kalenderen
Arctic Aviation
Assets Ltd
19+8
Caribbean
30
NAI approved
by DoT 2
42
NUK approved
by DoT
15+3
The future requires a flexible corporate structure
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Ancillary
All activities not directly related
to aircraft operations
ResourcesNational entities –
Terms and conditions in tune with social welfare systems
and regulations in each individual country
Aircraft OperationsNorwegian & EU AOCs
Securing traffic rights & expansion also outside Europe
Asset / FinancialAircraft Financing Cluster
– Cape Town – ECA support – Leasing
(Securing access to financing)
Staff Dry Lease
Dry
Lease
Norwegian Air Shuttle
ASAParent Company
• Flexible corporate structure ensures appropriate platform to support international expansion
• Aircraft and leases assembled in Arctic Aviation Assets Ltd. enables ability to lease out aircraft not used in
own operation, personnel and cost optimization across geographies
• Cash-flow from operations (ticket sales) controlled by Norwegian Air Shuttle ASA (parent Company)
Stable load despite high ASK growth
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30 % growth in both capacity (ASK) and traffic (RPK)
ASK 2,783 3,432 4,516 5,461 6,517 9,176 11,142 11,909 15,109 19,704
Load Factor 76.2 % 76.1 % 77.4 % 78.5 % 76.7 % 77.9 % 80.7 % 84.9 % 85.8 % 85.3 %
76.2 % 76.1 % 77.4 % 78.5 %76.7 % 77.9 %
80.7 %
84.9 % 85.8 % 85.3 %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
01,000
2,000
3,0004,0005,000
6,000
7,0008,0009,000
10,000
11,000
12,00013,00014,000
15,000
16,00017,00018,000
19,000
20,00021,00022,000
23,000
24,000
Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17
Load
Fac
tor
Ava
ilab
le S
eat
KM
(ASK
)
ASK Load Factor Load
-0.5 p.p.
Q4 14 Q4 15 Q4 16 Q4 17
2,011
2,454 2,324
4,040
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
NO
K m
illio
n
Strong liquidity with NOK 4 billion in cash
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Cash development Q4Highlights
Cash from operations finances
the fleet increase
Cash flow from operations of
NOK 2.9 bn the last 12 months
(3.1 bn)
Invested NOK 3.6 bn the last 12
months
NOK million Q4 17 Q4 16 Chg
12 mths rolling
Q4 17
12 mths rolling
Q4 16 Chg NOK million
Profit before tax -1,431 300 -1,731 -1,067 1,508 -2,576 Profit before tax
Paid taxes 4 - 4 35 -29 64 Paid taxes
Depreciation 374 338 36 2,061 1,296 765 Depreciation
Change air traffic settlement liabilities -402 -445 43 1,827 652 1,176 Change air traffic settlement liabilities
Change working capital 603 13 590 45 -313 358 Change working capital
Net cash flows from operating activities -852 206 -1,058 2,901 3,114 -213 Net cash flows from operating activities
Net cash flows from investing activities -2,432 -1,112 -1,320 -3,646 -6,530 2,883 Net cash flows from investing activities
Net cash flows from financial activities 1,741 981 760 2,509 3,303 -793 Net cash flows from financial activities
Net change in cash and cash equivalents -1,527 90 -1,618 1,716 -131 -20 Net change in cash and cash equivalents
Cash and cash equivalents, end of period 4,040 2,324 1,716 4,040 2,324 1,716 Cash and cash equivalents, end of period
13 new aircraft on balance in 2017
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Added four 787-9s, six 737 MAXs and three 320neos on balance in 2017
NOK 22.3 bn net debt (21.2 bn in Q4 2016)
9 % equity ratio (11 %)19114
2,324
Cash4,040
3,470
Current assets8,1572,241
Other assets2,422
7,156
Aircraft PDP 5,219
22,572
Aircraft25,862
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Q4 16 Q4 17
NO
K m
illi
on
Equity4,091
4,049
Pre-sold tickets6,494
4,666
Otherliabilities
8,8105,573
PDP and bonds5,881
4,937
Aircraft financing
20,423
18,538
Q4 17 Q4 16
# aircraft B737 B787 B737 MAX A320
Export credits (UK and US) 23 7
AFIC 6
EETC 10
Private placement/banks 20 5
SLB 45
Leasing 19 14
Total 117 21 6 5
Debt mix:
Number of aircraft:
Balanced mix of funding
17
30 aircraft financed by export
credits
3.2 % average interest rate on long-
term aircraft financing (3.7 %)
95 % of aircraft financing on fixed
rates
Debt maturity profile*:
* Based on exchange rates as of 31.12.2017
Financing of incoming aircraft
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Long-term financing secured Aircraft available for growth and sale/leasing
Significant cash resources available
A strong track record in attracting financing
Flexibility achieved through multiple sources of
financing
Reduced funding cost for long term financing in 2017
LOI signed for PDP financing of six 787-9s with delivery
in ‘18-’19. Covers both PDP and back-stop SLB
Capital requirements for the Argentina venture are
marginal – will use 737-800 aircraft from the existing
fleet to produce 0.6% of the total 2018 production
In discussions to sell up to five Airbus 320neos with an
estimated gain of USD 15-20 million
1,500
0
4,500
3,000
6,000
Q2Q1
Group cash balance
NOKm
Q1 Q4Q3Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Cash and cash equivalents
20172016201520142013
Total gross orderbook end-Q1 2018:737 MAX: 104
787: 15
A320neo : 65
A321LR: 30
Expect low-single digit growth annually in narrow body
H1 2017 is the last phase of the ramp-up in wide body
Have initiated process to sell off further superfluous aircraft
NOK million
Effect on balance
(approx.)
Effect on income
(approx.)
1% decrease in jet fuel price -25 102
1% depreciation of NOK against USD 65 -164
1% depreciation of NOK against EUR 20 -7
FX and fuel has opposite effects on P&L and balance
Financing on track
Capex commitment (all aircraft incl PDP)USD 1.9 bn for 2018 (net: USD 1.0-1.5 bn)
USD 2.6 bn for 2019
Fleet renewal – initiated process to sell older aircraft and reduce
capex commitment
PDP financing / liquidityPDP financing for six 787s
SLB of two 737-800s in 2018
Tap of unsecured bond in January (EUR 65 million)
Undrawn credit facility of NOK 311 million (of NOK 1 bn)
Long-term financing
UKEF and JOLCO combination in Q1 2018
Utilizing a mix of long-term financing for the deliveries in 2018 to
2020 with focus on AFIC and export credits
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Adding 25 new aircraft to own operations in 2018
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2018:Deliveries 787-9
+3,724 seats
Deliveries 737-800 and 737 MAX
+2,640 seats
Re-deliveries 737-800
-744 seats
Youngest fleet among peers
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Source: Planespotters.net, January 20180 5 10 15 20 25
Norwegian
Aeroflot
Wizz Air
Spirit Airlines
Frontier Airlines
Emirates
Etihad
Qatar
Turkish Airlines
Ryanair
Vueling
Easyjet
Virgin America
Eurowings
Finnair
JetBlue
Flybe Group
Iberia
SAS
American Airlines
Southwest
Air France
KLM
Lufthansa
British Airways
United Airlines
Delta Airlines
Widerøe
Average fleet age
1. ---
2. +14%
3. +20%
4. +22%
5. +22%
6. +22%
7. +22%
8. +22%
9. +26%
10. +26%
11. +30%
12. +30%
13. +30%
14. +36%
15. +38%
16. +38%
17. +38%
18. +44%
19. +44%
20. +51%27
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28
29
29
29
30
31
31
31
32
32
33
33
33
33
33
34
35
40
British Airways
Lufthansa
SAS
US Airways
Virgin Atlantic
Swiss
United
Iberia
American
Alitalia
Delta
Icelandair
KLM
Air Canada
Aeroflot
Turkish
Air France
Aer Lingus
Airberlin
Norwegian
Fuel efficiency of the top 20 airlines on transatlantic routes
23
Pax-km/L fuel
Excess fuel/
Pax-km
Industry Average
Source: “Transatlantic Airline Fuel Efficiency Ranking, 2014”, ICCT (The International Council on Clean Transportation) published November 2015
2016 57,917 Discontinued
routes -283 New
routes 3,272 Frequency
changes 3,372 Discontinued
routes -52 New
routes 2,938 Frequency
changes 5,179
2017 72,343 Discontinued
routes -1,288 New
routes 2,798 Frequency
changes 7,722 Discontinued
routes -665 New
routes 8,212 Frequency
changes 13,503
2018 102,626
Paris
Milano
Change EBITDA
EBITDA*
Q4 16 -250
Narrow
Wide
Narrow
Wide
Growth driven by increased frequency in wide body operation
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Two thirds of the 2018 growth will come from increased frequency
70 % of the ASK growth in 2018 comes from the widebody fleet
Summary
Building a strong and committed investor base
Signed LOI for PDP financing of six 787-9s
In discussions to sell up to five A320neos
Reviewing further potential sale of aircraft
Holding in NOFI treated as financial from Q1 ’18
Reviewing strategic opportunities for Norwegian
Reward
Entering the last phase of extensive growth before
returning to a focus on profitability
Strengthening equity to meet the future more
robust
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Risk factors (1/3)
An investment in securities is associated with risk. Prior to taking any investment decision, it is important to carefully analyse the risk facts that are
considered to be of importance as regards the future performance of Norwegian and the new shares. These risk factors include, among others, the
following risks mainly relate to the industry and business of Norwegian:
Risks related to the airline industry:
The demand for air travel, Norwegian's profitability and its ability to finance its operations have been and may continue to be adversely affected by
the economic downturn in both the global and local markets.
Demand for airline travel and Norwegian's business is subject to strong seasonal variations.
Norwegian operates in a highly competitive industry.
Overcapacity in the airline industry may continue or increase in the future.
Norwegian is exposed to risks associated with the price and availability of jet fuel.
The airline industry is characterized by low profit margins and high levels of fixed costs.
The airline industry has experienced, and may continue to experience, consolidation.
Airlines are dependent on access to suitable airports, and such airports meeting the operational needs of the industry.
Airlines are exposed to risk of losses from air crashes and similar disasters, design defects and operational malfunctions.
Epidemics, pandemics or natural disasters can adversely affect the demand for air travel.
Airline insurance may become too difficult or expensive to obtain, which could expose Norwegian to substantial loss and may have a material
adverse effect on Norwegian's business, financial condition and results of operations.
The adoption of new regional, national and international regulations, or the revision of existing regulations, could have a material adverse effect
on Norwegian's business, financial condition and results of operations.
Environmental laws and regulations including, but not limited to, restrictions regarding noise pollution and greenhouse gas emissions, could
adversely affect Norwegian.
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Risk factors (2/3)
The adoption of proposed legislation by the European Commission to regulate the over-the-counter derivatives market may restrict the ability of
Norwegian to enter into derivatives transactions to manage its risk exposure, which could have a material adverse effect on Norwegian's
business, financial condition and results of operations.
Terrorist attacks and military conflicts or the threat of such attacks or conflicts, as well as their aftermath, could have a materially adverse effect on
Norwegian's business.
The airline industry is subject to extensive taxes, aviation and license fees, charges and surcharges, which can affect demand.
Airlines are subject to operational disruptions and interruptions.
Risks related to Norwegian:
Norwegian may not be able to meet the targets and projections. If Norwegian fails in meeting these objectives is otherwise unsuccessful,
Norwegian's business, financial condition and results of operations could be materially adversely affected.
The strategy of Norwegian and its future growth is underpinned by its fleet renewal program and access to the most cost efficient aircraft.
Although Norwegian has significant aircraft orders in place, its future growth may depend on further orders and access to the suppliers available
delivery slots.
The profitability and value of Norwegian's subsidiaries and holdings in affiliates may be adversely affected by a protracted market decline, making
it harder or impossible to carry out divestitures and, in connection with such divestitures, Norwegian may undertake continuing obligations
following such divestitures, which could have a material adverse effect on Norwegian's business, financial condition, results of operations, and
prospects if they materialize.
Norwegian depends on the Scandinavian markets for a significant portion of its revenue. Any economic slowdown in these markets may a
material adverse effect on Norwegian's business, financial condition and results of operations.
Norwegian's debt levels could have significant effects on its operations and liquidity, and Norwegian's liquidity position is vulnerable to adverse
economic and competitive conditions.
Any default of the obligations under, or breach of the financial covenants in, Norwegian's loan agreements could have a material adverse effect
on Norwegian's business, financial condition and results of operations.
Credit rating downgrades could have a material adverse effect on Norwegian's liquidity and Norwegian's cost of funds. 29
Risk factors (3/3)
Any deterioration in brand image or consumer confidence in the Norwegian brand may adversely affect Norwegian's ability to market its services and attract and retain customers.
Norwegian's largest shareholder has the ability to exert significant influence over Norwegian's actions.
Norwegian may not achieve its goals in future negotiations regarding the terms of collective labour agreements of its unionised work groups, exposing it to the risk of strikes and other work-related disruption, and the inability to maintain labour costs at competitive levels may harm Norwegian's financial performance.
Norwegian's dependence on third-party suppliers has increased in recent years in line with the growth of Norwegian, exposing it to the risk that quality and availability issues and/or unexpected costs associated with third-party suppliers have an adverse effect on Norwegian.
Norwegian is dependent on attracting and retaining qualified personnel at reasonable cost.
Norwegian is exposed to currency exchange rate risk.
Norwegian is exposed to interest rate risk.
Norwegian is involved in litigation and arbitration proceedings.
Norwegian is exposed to tax related risks.
A significant failure of, or disruption relating to, Norwegian's computer systems could adversely affect its business, financial condition, and results of operations.
Risks relating to the shares:
Norwegian can give no assurance of a successful completion of the private placement and/or the subsequent offering.
The share price may experience substantial volatility in response to, inter alia, the financial situation of Norwegian, variations in operating results, etc.
The market price of the shares may be adversely affected if Norwegian's largest shareholders, or other shareholders, sell substantial amounts of shares or if Norwegian issues additional shares, or by the perception that such sales or issuances could occur.
Norwegian may in the future see the need of additional equity investment. This may lead to a future need of additional issuance of shares in Norwegian, and Norwegian cannot guarantee that the current ownership of the shareholders will not be diluted.
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Disclaimer (1/2)
This presentation (the "Company Presentation") has been prepared solely for information purposes in connection with a presentation to potential investors held in respect of a proposed private placement (the "Private Placement") of ordinary shares (the "Shares") by Norwegian Air Shuttle ASA, as further discussed herein and as described in a term sheet (the "Term Sheet") and an agreement governing applications to participate in the Private Placement (the "Application Agreement" and collectively with this Company Presentation and the Term Sheet, the "Investor Documentation"). In this Company Presentation, references to "Norwegian", “NAS” or the "Company" refer to Norwegian Air Shuttle ASA, except where context otherwise requires.
This Company Presentation is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. This Company Presentation is furnished by the Company, and it is expressly noted that no representation or warranty, express or implied, as to the accuracy or completeness of any information included herein is given by the Company or Arctic Securities AS, Carnegie AS, Danske Bank and Pareto Securities AS as managers (the "Managers").
The Managers and/or their respective employees may hold shares, options or other securities of the Company and may, as principal or agent, buy or sell such securities. The Managers may have other financial interests in transactions involvingthese securities.
An investment in the Company should be considered as a high-risk investment. Certain risk factors relating to the Company and the Private Placement, which the Company deems most significant as at the date of this Company Presentation, is included under the caption "Risk Factors" in this Company Presentation.
This Company Presentation is current as of 16 March 2018. Neither the delivery of this Company Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This Company Presentation contains several forward-looking statements relating to the business, future financial performance and results of the Company and/or the industry in which it operates. In particular, this Company Presentation contains forward-looking statements such as with respect to the Company's potential future revenues and cash flows, the potential future demand and market for the Company's services, the Company's equity and debt financing requirements and its ability to obtain financing in a timely manner and at favourable terms. Forward-looking 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 this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.
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Disclaimer (2/2)
The Private Placement will be directed towards certain institutional investors on the basis of, and in such jurisdictions as
permitted or catered for by, exemption rules under applicable securities laws allowing private placements of this nature to
be undertaken without the filing of any prospectus, registration statement, application or other similar documentation or
other requirement. In making an investment decision with respect to the Company‘s securities, investors must rely on their
own examination of the Company and the terms of the Private Placement, including the merits and risks involved.
The shares to be offered have not been and will not be registered under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”), or under the securities law of any state or other jurisdiction of the United States and
may not be reoffered, resold, pledged or otherwise transferred, directly or indirectly, except pursuant to an applicable
exemption from the registration requirements of the U.S. Securities Act and in compliance with the securities laws of any
state or other jurisdiction of the United States. An Applicant in the United States or who is a “U.S. Person” (within the
meaning of Regulation S under the U.S. Securities Act), may not execute this Application Agreement or otherwise take
steps in order to subscribe or purchase New Shares unless (A) the subscriber is a registered client with a Manager as (i) a
"qualified institutional buyer" ("QIB") as defined in Rule 144A under the U.S. Securities Act, or (ii) a "major U.S. institutional
investor" as defined in SEC Rule 15a-6 to the United States Exchange Act of 1934. Any recipient of this document in the
United States is hereby notified that this document has been furnished to it on a confidential basis and may not be
reproduced, retransmitted or otherwise redistributed, nor may the contents of this document be disclosed, in whole or in
part, without the Company's prior written consent. Furthermore, recipients are authorized to use it solely for the purpose of
considering a purchase of the securities in the Private Placement and may not use any information herein for any other
purpose. This document is personal to each offeree and does not constitute an offer to any other person or to the public
generally to subscribe for or otherwise acquire the securities. Any recipient of this document agrees to the foregoing by
accepting delivery of this document. Please refer to the Terms of Application for information about transfer restrictions.
This Company 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 as first venue.
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