Avarn Security Group CEO statement for 2021

Avarn Security Group continued to deliver strong results in 2021, despite a challenging year where Covid continued to impact the business. The results in Avarn Security are in line with the strategic plans, which sees an increase in both revenues and EBITDA, however Nokas Cash Handling was heavily affected by Covid restrictions in 2021, with significant negative impact on volumes and revenue.

The financial performance of Avarn Security Norway improved during 2021, despite the heavily negative effects from Covid particularly during the last two months of the year.

Avarn Security Sweden has made significant improvements during 2021 and, despite challenges caused by Covid, the Swedish operation has managed to implement several initiatives to improve processes and margins.

Avarn Security Finland has during 2021 experienced extraordinary high sick leave in Guarding, declining demand in the Systems market, write-down of old projects, weakness in project management and lack of sales capacity in Systems, which made 2021 a challenging year. Increased sales capacity and new CRM system, which went live in November, will contribute to sales and improved customer service. A new strategic plan for Avarn Security, called “Best in Class 2025”, was approved in September 2021. With specific initiatives already being implemented in areas such as Price Strategy, Productivity and Customer Portfolio, we are expecting margin improvements going forward.

Guarding The Guarding business is operationally solid in all countries, however a rise in sick leave, overtime and lack of resources had significantly negative effects on the results.

The overall performance in Guarding has been good in 2021. Productivity is improving, aided by a focus on quality in services and deliveries and conscious pricing strategy. Guarding had

Vidar Berg GROUP CEO AVARN SECURITY GROUP

Photo: Avarn Security

a revenue growth of 11 % in 2021, however, high sick leave continued to affect costs and resource planning during 2021.

The launch of the new resource planning tool in both Norway and Finland, several successful negotiations in major guarding contracts and the closure of some unprofitable branches are expected to increase profitability in guarding further in 2022.

Aviation 2021 was another year with significant challenges for the Aviation industry in Norway and Sweden. Both countries experienced a significant increase in passengers during the summer (June-October), however, there was a 50 % drop from November, due to Omicron. Nevertheless, strong customer relationships and contract terms made it possible to achieve a positive result for the year. During 2021 we won the last three large airports in Norway (BGO, SVG, TRH), and have since March 2022 been providing security services across all Avinor’s airports in Norway.

Systems Systems sales was according to plan in Norway, but we experienced lower volumes and decrease in revenues in both Sweden and Finland. The Nordic market experienced challenges relating to global semiconductor shortage, shortage of project management and technician capacity, which also impacted productivity in all countries.

Overall, the results in Norway were satisfactory, however, in Sweden and

Our people are our most important asset as they are the core component of our service offering.

• We will be the most attractive employer through our open and honest culture • We will be best in class in developing our people through structured and targeted competency and leadership development • We empower and involve our people to create true ownership and engagement throughout our organization • Our people choose to stay with

Avarn Security as we provide a great place to work • We care about our employees and our impact on the society • Our core values Compassion,

Commitment and Collaboration are rooted in our daily work

Finland we have implemented initiatives, such as conceptualisation of product and service offerings and sales plans both on a personal and product-services level, to increase revenues and margins.

Monitoring The Monitoring business is developing positively as we have introduced closer co-operation across the Nordic countries, new management team in Sweden and the merger of the alarm centre and customer service in Finland. The organisations are now more closely aligned within the Group, which allows greater synergies and best practices across country borders. Smaller bolt-on acquisitions are in pipeline to secure revenue going forward.

Skan-kontroll and Semac A rise in demand for Covid-related services delivered a strong result for Skan-kontroll and helped compensate for a decline in loss prevention services, temporary guarding and tourist services. Normal levels of loss prevention and guarding services resumed during the second half, but sick leave and lack of resources have impacted negatively on the results. However, the market outlook is promising.

Semac experienced a significant increase in the volume of background checks, which was up 36 % from previous year, resulting in revenue growth. The solution for digital reference checks was launched in December 2021 and we expect to see results of sales towards the end of 2022. Due to a shift towards a recurring subscription-based strategy, a reduction in temporary services and the use of security managers, we have experienced a small reduction in security and risk management revenue.

Nokas Cash Handling Covid made 2021 a difficult year for Nokas Cash Handling, but there are signs of recovery, following the easing of restrictions. Severe restrictions in Q1 and parts of Q2 meant a tough start to the year and the absence of foreign tourism significantly affected the all-important summer season. Results improved when restrictions were eased but volumes are down from pre-Covid levels.

Despite a falling market, turnover in Denmark is up almost 40% compared to last year, driven by significant market share gains in the banking sector.

A Best In Class Programme has been developed and is being implemented, to ensure our future targets focus on Price, Productivity and Portfolio.

Photo: Avarn Security

Major improvement initiatives in Nokas Cash Handling are being implemented, cutting both administrative and operational costs. The initial impact of these measures will be seen in Q1 2022, culminating in 2023. The easing of any remaining Covid restrictions and our improvement initiatives are expected to significantly lift margins throughout 2022.

Market Sales within Guarding in Norway and Sweden have been better than expected in 2021. We have won, defended and increased market share with our strengths and size. Sales rate within Systems was according to plan in Norway, however we experienced a decline in the Systems market in both Sweden and Finland.

The Solutions business, which brings together systems and guarding, has been increasing month by month and we expect further growth in 2022.

In general, the security market is growing and sales activity and hit rates in all Nordic countries are good. We have won some significant customers during 2021 in both the Swedish and Norwegian markets, and we are optimistic about 2022. In general, the security market is growing and sales activity and hit rates in all Nordic countries are good.

• Profitable growth is a prerequisite for our capacity to invest in our dedicated people and best-in-class solutions • We compete on quality and provide the best value for money • We understand and act on the drivers of profitability at a customer and contract level • We have a relentless focus on continuous improvement and deploy leading practices across our business and operations • We use modern IT platforms and digital solutions to ensure efficient operations

Sustainability • We are ambitious and committed to reducing climate emissions to near zero by 2050 and set the same environmental requirements for our suppliers and subcontractors • We strive to become carbon neutral by applying a broad set of measures, including the use of new technology, reduction of travel, facility building/location optimization and replacement to fossil free vehicles • We set the highest standards in how we conduct our business, relate to the society and treat our customers and employees • We foster a culture of diversity and inclusion