SKEL Portfolio Update

Methodology of valuation The companies that have not been part of recent transactions were valued, they are Orkan, Löður, which is part of Orkan, and Gallon. Kvika Bank's consulting department was hired for the project, and the bank's valuation experts reviewed the companies' performance in the first half of the year. When deviations were significant, the companies' future budget were adjusted. Methodology Estimates of the fair value of companies owned by SKEL were based on Discounted Cash Flow (DCF), using both Free Cash Flow to Firm (FCFF) and Dividend Discount Model (DDM). The valuation is to a large extent based on management's operating budgets and discussions between the appraisers and management. Many of the estimates are based on actual changes in underlying figures and subsequently the inherent inflation premium of risk free interest is used for the estimate of future inflation of cash flow. All operating figures exclude the impact of IFRS 16 in this presentation The effect of that is that leases are charged among operating costs in the income statement and reduce EBITDA instead of the right of use being charged with depreciation and interest charged among capital items as required by the IFRS16 standard. SKEL

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