Otovo AS IoC

Otovo AS BUY HOLD SELL
OTOVO NS · Energy · Renewable · Equity update · 13 October 2020 · 22:21
IOC: Ph(OTOVO)ltaics for the people (49p) Target NOK 200.0

We initiate coverage on Otovo with a Buy and a NOK 200 Recommendation
Target (NOK)
Buy
200.0
target price. Through its digital marketplace, Otovo offers Price (NOK) 105.0
outright purchase and leasing of optimised solar PV systems, Upside 90.5%
targeting the fast-growing European residential PV market. Market capitalisation (NOKm) 931
Enterprise value (NOKm) 794
The short-to mid-term focus lies on entry into new markets, No of shares, fully diluted (m) 8.86
increasing market share and sales volume; profitability will
follow suit. Near-term triggers comprise faster growth and
profitability than expected, M&A and a Mercur listing.
12 months share price performance:

A digital marketplace decentralising a decarbonised solar market Price Close Oslo Stock Ex change Benchmark Index
rebased
Otovo is an online marketplace and retailer for residential solar installations. 154
Through its platform, Otovo streamlines self-consumption of solar energy by
134
connecting customers to the lowest cost local installers. Otovo’s digital market
platform uses proprietary software to estimate positioning and profitability of 114
PV systems, which drives installation costs down and customer value 94
propositions up.
74
New markets and grabbing market share in focus, profitability will follow suit 54
Otovo’s launch of solar leasing has positioned the company to gain a greater Oct.19 Dec.19 Feb.20 Apr.20 Jun.20 Aug.20
share of the growing and highly diversified customer base. We believe Otovo will 3m 6m 12m
OTOVO NS 0.0% 31.3% 23.5%
soon set foot in Italy and Poland, expanding its footprint in the European
OSEBX 6.6% 19.2% -1.2%
residential PV market, expected to grow 5x by 2050. Such growth is underpinned
Source: Bloomberg
by improved cost competitiveness and demand for decentralised electricity as
Europe transitions to carbon neutrality. We expect Otovo’s installation volumes
to grow 7x by 2030 and profitability on a country level basis after 3-5 years.
Initiating coverage with a BUY and NOK 200 target price

We initiate coverage on Otovo with a Buy and a NOK 200 target price. In our
forecast, Otovo will become EBITDA break-even by 2024, and gradually move
towards 15-20% EBITDA margins in 2030. Our target is derived from the average
of a ’20 DCF, ’21 EV/Sales, ’25 EV/EBITDA and ’30 PE analysis with a 20%
discount. Triggers include faster than expected growth, Mercur listing and M&A.
Key Figures (NOK) Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

Revenue (m) 368 603 691 910 1,045
EBITDA (m) (67.55) (43.98) (18.37) 29.13 73.49
EBIT (m) (82.55) (58.98) (33.37) 14.13 58.49
EPS (9.46) (6.75) (3.94) 1.00 4.80
Adj. EBITDA (m) (67.55) (43.98) (18.37) 29.13 73.49
Adj. EBITDA margin (18.4%) (7.3%) (2.7%) 3.2% 7.0%
Adj. EPS (9.46) (6.75) (3.94) 1.00 4.80
Revenue growth 107.4% 64.0% 14.6% 31.7% 14.9%
EPS growth (14.4%) (28.7%) (41.7%) 380.2%
DPS - - - - -
Dividend yield 0.0% 0.0% 0.0% 0.0% 0.0%
Net interest bearing debt (m) 2.67 69.47 87.72 85.76 24.50
ROE (52.7%) (61.0%) (68.8%) 23.5% 67.2%
ROACE (63.7%) (43.1%) (25.5%) 11.3% 48.7%
FCFF yield (11.3%) (8.1%) (2.2%) 0.2% 7.4%

EV / Sales (x) 2.26 1.49 1.33 1.00 0.82 Sveinung Alvestad
EV / EBITDA (x) na na na 31.36 11.59 +47 21 01 32 85 · [email protected]
EV / EBIT (x) na na na 64.66 14.57
Kaja Mazarino Håkonsen
P / E (x) na na na 105.0 21.9
+47 90 58 17 21 · [email protected]
P / B (x) 7.27 13.66 28.01 22.11 10.99
See important disclosures at the end of this report. Powered by the EFA Platform
Issued for the exclusive use of Adrian Bergem (Arctic Securities AS)
Contents
Otovo AS 1
Otovo in six charts 3
Investment case 4
Otovo in brief - digitalising decarbonised and decentralised energy 8
Business model 11
Otovo offers both direct purchase and lease alternatives 14
Market overview 16
Peer overview/competitive landscape 26
Financials and estimates 29
Valuation 32
Appendix 1: The economics of small-scale distributed solar power 36
Appendix 2: US peers 39
Top Management 40
Board of Directors 41
Profit & loss statement 42
Balance sheet 43
Cash flow 44
Key ratios & Valuation 45
Disclaimer 46
Planned updates: 47
Contact Information 49
2
Otovo in six charts
Digital solar retailer enabling self-consumption of PV Target market expected to grow 5x by 2050
Otovo has sold solar panel systems online since 2017 Installed European small-scale* solar PV capacity (GW)
500
450
400
350
300
GW
250
200
150
100
50
-
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
Source: Company data Source: Arctic Securities Research, BNEF

*)Small-scale is a proxy of residential solar PV capacity
Installation volumes increase as prices fall Strong market and expanding footprint drives growth
Solar installations in GW and price of solar installations in USD/Watt Arctic’s forecasted number of installations for Otovo
0.40 35
0.35 12,000
30
0.30 25 10,000
# installations
USD/KWh
0.25
20 8,000
GW
0.20
15
0.15 6,000
0.10 10
4,000
0.05 5
0.00 - 2,000
-
2017 2018 2019 2020 2021 2022 2023 2024 2025
Average European LCOE Europe residential PV Norway Sweden France Spain Poland Italy
Source: Arctic Securities Research, IRENA Source: Arctic Securities Research
We expect country-level profitability after 3-5 years Target price in low-end peer range with sizable upside
EBITDA margin matrix (y-axis: volume, x-axis time in market) Equity values NOK/sh derived from peer multiples and ’20 DCF
Sales
volume 450 10.0x
5-20% EBITDA >20% EBITDA
margin
400 30.0x
margin
350 WACC 8%
3,000 - 5,000
units/year
300
EBITDA
40.0x
High marketing
costs, 0% EBITDA break-even to 10%
5-20% EBITDA
margin
250
margin margin
EBITDA
200 20.0x
1,500
units/year break-even
150 5.0x
WACC 12%
Investing phase, Loss making due to 100
high marketing low volume and Negative margins 20.0x
marketing cost
costs and capex
50
-
Market entry Gaining market share Established player
Otovo´s 20' DCF 21' EV/Sales 25' EV/EBITDA 30' P/E
time in the
(1st year) (3-5 years) (into perpetuity..) market Share price Target
Source: Arctic Securities Research Source: Arctic Securities Research
3
Investment case
A digital market platform decentralising a decarbonized solar market
Otovo is a residential solar PV retailer. The fast-growing energy company Capital light platform for residential solar PV
operates a capital light and highly scalable digital market platform that uses that offers both direct purchase and leasing
satellite imaging technology to estimate positioning and profitability of roof- to take a significant share of a growing and
mounted solar systems. Otovo’s 3-ingredient platform also connects customers highly diversified customer base
to the lowest cost local energy installers, which drives installation costs down,
customer value propositions up and helps penetrate new markets. Otovo offers
both direct purchase as well as leasing of solar systems. The latter provides for
a countercyclical product, expanding the pool of potential solar system buyers
as it lowers customer acquisition costs.
Capital light platform for residential solar sales Solar leasing expected to drive sales volume up
Otovo has sold solar panel systems on its platform since 2017 Otovo offers leasing and direct purchase as means of solar financing
Source: Company data Source: Company data
A booming solar market on the back of rapidly falling cost

The European small-scale market, a proxy for the residential solar PV market, Solar levelised cost of energy (LCOE) has
has grown by 4x the total installed capacity 10 years ago. The levelized cost of fallen over 80% in the past decade, expected
energy (LCOE) for solar has fallen over 80% over the same period, which has to continue to fall. This enables a 5-fold
largely been driven by and further driven the prominent development of market growth over the next three decades
photovoltaic capacities. Costs are expected to keep falling in conjunction with
increased adoption of solar PV enabling policies and regulations, which allows
for grid parity and profitability of solar PV systems in some European countries.
This will inevitably grow demand for solar, and third party data providers
forecast the European small-scale solar will grow by ~5x time in the period to
2050.
Otovo’s home market expected to grow 5x by 2050 Installation volumes increase as prices fall
Installed European small-scale solar PV capacity (GW) Solar installations in GW and price of solar installations in USD/Watt
500 0.40 35
450 0.35 30
400 0.30 25
USD/KWh
350 0.25
20
GW
300 0.20
15
0.15
GW
250 10
0.10
200
0.05 5
150
0.00 -
100
50
-
Average European LCOE Europe residential PV
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
Source: Arctic Securities Research, BNEF Source: Arctic Securities Research, IRENA
4
Strong customer value proposition
Otovo is streamlining the market for ‘prosumers’ by lowering the threshold for Payback times for Central Europe are mostly
customers to install solar energy on their roofs. The value propositions include less than 6 years, while Scandinavian
utility bill savings and the option to go green and become energy independent. countries are 12 years+
As a result of lower hardware costs and Otovo’s measures to make the installer
market more efficient, the payback time for customers has fallen and customers
can save up to 50% of their electricity bill, depending on the development in
electricity prices, technological advances and government subsidies.
Payback times are low as total cost of solar falls Going solar pays off after just a few years
Payback & average electricity price per country (EUR/kWh) Illustrative example of cumulative cost of electricity over 25 years
<6 year s Consumer electricity price

(EUR/kwh incl.taxes)
6-7.9 year s
After this point you save money from
NO 0.185 self-consumption of solar power
8- 9.9 year s
DK 0.31
10- 11.9 year s
SE 0.2
>12 year s UK 0.2
PL 0.13
BE 0.29
IT 0.205
FR 0.17
DE 0.31
NL 0.16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
ES 0.25
Without PV PV - leasing PV - owning
Source: Arctic Securities Research, Company data Source: Arctic Securities Research
Three stage business case, focus now is on growth

Otovo’s business case can be divided into three-stages: 1) entry into new Three stage business-model:
markets; 2) establishing market share in the respective countries; and 3)
1) Market entry
becoming profitable in mature markets with lower customer acquisition costs. A
rule of thumb estimate for Otovo is that it needs around 1,500 installations per 2) Gain volume and market share
market per year to reach EBITDA break-even. Otovo is currently located in four
3) Profitability; generally at 1,500
markets, namely Norway, Sweden, France and Spain, but we expect two
units per year
additional countries to be added relatively soon (Poland and Italy). Norway and
Sweden are Otovo’s most developed markets and are on the brink of entering
the third phase and achieving 1,500 units installed per year. France and Spain
were entered during 2019 and 2020, respectively. The focus for these markets is
consequently growth and market share for the next two years.
Country-level profitability expected after 3-5 years Norway and Sweden largest, but expanding elsewhere
EBITDA margin matrix (y-axis: volume, x-axis time in market) Units installed split on markets (LTM %)
Sales
volume Spain, 1%
5-20% EBITDA >20% EBITDA France, 20%
margin margin
3,000 - 5,000
units/year Norway, 37%
High marketing EBITDA
5-20% EBITDA
costs, 0% EBITDA break-even to 10% margin
margin margin
1,500 EBITDA
Investing phase, Loss making due to

high marketing low volume and Negative margins
costs and capex marketing cost
Otovo´s
Sweden, 42%
Market entry Gaining market share Established player time in the
(1st year) (3-5 years) (into perpetuity..) market
Source: Arctic Securities Research Source: Arctic Securities Research, Company data
5
New markets and grabbing market share in focus
Otovo has in a short period of time established itself as a key player in the H1/20 market share:
European residential PV market. Otovo’s sales and market shares are highest in
• Norway: 39%
Norway and Sweden, but we believe France and Spain will gain traction and
surpass the former two within a few years. This is driven by growing market • Sweden: 6%
shares from low levels, but also more favourable regulatory environments and a
faster growing total market. Otovo’s existing markets are already significant, • France: 2.5%
and as such we argue that without further market growth Otovo will reach • Spain: Top 5
profitable levels in France and Spain by simply increasing its market share. We
believe Otovo will expand into two new markets within H1/21, giving grounds to
believe the company could reach 9,000 installations a year by end-24.
Installations growing in geography and number.. ..as Otovo maintains and increases its market share*
Number of annual installations (units) per country (LTM) Market share (%)
3,000 70.0%
2,500 60.0%
2,000 50.0%
EBITDA break-even
1,500 40.0%
1,000 30.0%
500 20.0%
- 10.0%
-
H1/18 H2/18 H1/19 H2/19 H1/20
Norway Sweden France
Spain Poland Italy
Source: Arctic Securities Research, Company data Source: Arctic Securities Research, Company data
*)Data for calculating Otovo’s market share in Spain is undisclosed
EBITDA break-even on the horizon, profitability will follow suit..

In line with an increased installation rate we expect Otovo to be EBITDA break- We target EBITDA break-even within end-24,
even around H2/24 on a group level, driven by break-even in Sweden and and net profit thereafter, underpinned by
Norway from H1/22 and H2/22, and France and Spain around H1/23 and H2/23. further capital raises to fund expansion
We estimate lower margins in the initial years of Otovo’s presence in new
geographies as the customer acquisition cost are higher. Furthermore, we model
some modest EBITDA contribution from the lease JV, which is expected to grow
steadily as Otovo offers leasing to more countries. It will furthermore provide
Otovo with income from the purchase of solar systems from EDEA, in addition to
a recurring service fee of 1.5% of amortized installed base. We expect Otovo to
raise capital of NOK 100m or more covered by increased leverage or equity as a
means to fund expansion into new markets and reach estimated sales volume.
New revenue lines add to NOK 1bn in ’25 After 3-5 years in market EBITDA margin rises
Revenues per segment in NOKm Consolidated and per country EBITDA split in NOKm
100
1,000
50
800
NOKm
-
NOKm
600
-50
400
-100
200 2018 2019 2020 2021 2022 2023 2024 2025
-
'18 '19 '20e '21e '22e '23e '24e '25e Spain Poland Italy
Norway Sweden France Spain Poland Italy Leasing fees Other EBITDA (NOKm)
6
We have broadened the competitive landscape to find tradable peers
Otovo’s competitive landscape has relatively few publicly traded residential We have split Otovo’s peer group:
solar PV retailers. We have therefore created three peer groups that we can
• Residential solar retail peers
compare with Otovo’s characteristics; residential solar retail peers; online
marketplaces; and renewable industry peers from larger power providers to • Solar industry peers
upstream market players. Otovo differentiates itself from peers in several ways.
First of all, its business model is scalable on an international level, whilst • Online marketplace peers
maintaining focus on addressing local markets through its local dealer-installer
networks. Many of the solar retail peers, in for instance Sweden, are larger
energy providers and operate in single countries only. Otovo is also pioneering
the European solar leasing market, differentiating it from other solar retailers.
Otovo is differentiated from peers Trading at a discount to peers on an EV/sales multiple

Publicly traded digital marketplaces and renewable industry peers The median of the peer group’s EV/Sales multiples in’20e, ’21e & ‘22e
16.0x 15.0x
Residential solar retailer peers 14.0x
Renewable industry peers
12.0x 10.8x
Online marketplace peers
9.3x
10.0x
8.0x 6.8x6.6x
5.5x 5.2x 5.4x
6.0x 4.4x
3.4x 2.9x
4.0x 1.9x
.
2.0x
.
-
PV retail Online Energy Otovo
marketplaces industry
20Y 21Y 22Y
Source: Arctic Securities Research Source: Arctic Securities Research, Bloomberg
Target price of NOK 200 supported by a DCF and peer multiples We see significant upside to Otovo’s equity
We initiate coverage on Otovo with a Buy recommendation and a NOK 200 target value based on our target price derived from
price. In our forecast, Otovo will become EBITDA break-even by 2024, and a ’20 DCF using a 10% WACC, supported by
gradually move towards 15-20% EBITDA margins in 2030. Current peer pricing ’21 EV/Sales, ’25 EV/EBITDA and ’30 P/E
shows significant correlation to growth, and we find Otovo at a discount to multiples
peers. Our target is derived from the average of equity values from a
combination of a ’20 DCF, ’21 EV/Sales, ’25 EV/EBITDA and ’30 P/E analysis.
The applied multiplies to discounted estimates are based on the average of ’21e
median peer multiples. Expected upcoming triggers include greater than
expected installation growth, listing on Mercur and growing investor attention,
in addition to positive effects from new revenue lines as Otovo keeps expanding
its product offerings.
Company value is tied to growth and is currently.. ..valued in the low end range with substantial upside
2019 to 2021 sales CAGR vs ‘21 EV/sales Range of equity values NOK/sh from peer multiples and ’20 DCF
450 10.0x
50% Scatec Solar
Otovo 400 30.0x
(ARC target) 350 WACC 8%
40% Etsy
'19 to '21e CAGR
300
Otovo 40.0x
30% Sunnova 250
(Current)
200 20.0x
20% Sunrun 150 5.0x
Engie
WACC 12%
SolarEdge 100
10% EDF 20.0x
LindaB Shutterstock 50
Schibsted R² = 0.6123 -
0%
0.0x 5.0x 10.0x 15.0x 20.0x 20' DCF 21' EV/Sales 25' EV/EBITDA 30' P/E
'21 EV/Sales Share price Target
Source: Arctic Securities Research, Bloomberg Source: Arctic Securities Research
7
Otovo in brief - digitalising decarbonised and decentralised energy
Otovo AS “the Company” is a European digital market platform for residential
roof-mounted solar systems. The Company is currently listed on the Norwegian-
OTC under the ticker “OTOVO”. The solar retailer customises and optimises
solar systems to customers using satellite imaging technology to estimate
positioning and profitability of roof-mounted solar systems, and connects
customers to the lowest cost local energy installers thereafter. The Company
has already laid the building blocks for further growth through strategic
investments in geographical expansion and its proprietary software.
Furthermore, Otovo is on path to become profitable, with a widening gross
margin as the cost of operations falls with the maturity of the market.
Moreover, with recent developments in Otovo’s product offering, through
organic growth and M&A activities, the Company has positioned itself to take a
significant share of the growing and highly diversified customer base.
Historical development
Otovo was founded in 2016 by Andreas Thorsheim (CEO), Simen Jørgensen
(CPO), Andreas Bentzen (CTO) and former CFO Lars Syse, succeeded by Cecilie
Ellila Weltz (current CFO) in August 2020. Otovo commenced operations in
Norway, but quickly entered the Swedish market in 2018. In 2019, Otovo
entered into both France (through the acquisition of InSunWeTrust) and Spain
after raising EUR 10m in series B funding. Today, Otovo has 90+ employees with
offices in Oslo, Stockholm, Madrid & Paris. The Company launched Otovo Solar
Saver in June 2020, increasing the total addressable market and pioneering
leasing of solar systems in Europe.
Otovo has experienced growth in sales and geographical presence since the beginning
Company timeline
Otovo was founded Otovo acquires Otovo forms
Otovo closed NOK Otovo merger with Launch of Otovo
in 2016 by Andreas Sunmapper logistics Otovo enters into
60m funding July French In Sun We Solar Leasing June
Thorsheim, Simen Technology in partnership with partenrship with
2017 Trust (ISWT) March 2020 owned by
Jørgensen & september 2018 Swedish Solar in Tibber May 2019
2019 subsidiary EDEA
Andrease Bentzen November 2018
2016 2017 2018 2019 2020
Otovo Otovo
Otovo Otovo was Cecilie Ellila
Otovo closed Otovo launch of Otovo secures completes participated
consolidates registered on Weltz
NOK 30m in solar roofs as a NOK 100m in equity issuance with NOK 25m
software with the NOTC appointed CFO
seed funding in product series B funding of NOK 150m + in EDEA private
Solkart.no May December 2018 from August
2016 Febraury 2018 October 2018 sec.p led by A.J placement in
2017 2020
Nov. 2019 Sept. 2020
Source: Arctic Securities Research, Company data
NOTC-Listing & Ownership

Otovo AS was registered on the NOTC-list on 14 December 2018 under the ticker
“OTOVO”. Otovo’s share capital consist of Ordinary A-shares (consolidated A and
B shares 1:1 on 29 November 2019). The company currently has 8,862,214 shares
outstanding. Axel Johnson, a privately-owned industrial group, is the largest
shareholder (21%) through group company AXsol. It has also invested in other
European solar companies, such as Alight (previously Eneo), a leading solar
Power Purchase Agreement provider, Svea Solar, another solar system energy
provider in the consumer and large-scale commercial market, and Solkompaniet,
an installer of large solar plants, with an investment philosophy to actively
contribute to European expansion alongside long-term ownership. The CEO
Andreas Thorsheim has a total shareholding of 9.5%, with the CPO and CTO
holding 3.1% and 2.6%, respectively.
8
Dedicated and solid shareholders
Shareholders as of 30 March 2020
Rank Holders # Shares Position (% of shares)
1 Axel Johnson 1,862,881 21.0%

2 Agder Energi Venture 880,169 9.9%
3 Akershus Energi 854,533 9.6%

4 Andreas Thorsheim (CEO and Co-founder) 845,987 9.5%
5 Nysnø Fornybar (AS) 811,806 9.2%
6 KLP (AksjeNorge and KLPLiv) 700,717 7.9%
7 OBOS 358,904 4.0%

8 Simen Jørgensen (CPO and Co-founder) 273,450 3.1%
9 Andreas Bentzen (CTO and Co-founder) 230,724 2.6%

10 Lars Syse ( Co-founder) 205,088 2.3%
Others 1,837,955 20.7%
Total 8,862,214 100%
Management incentive scheme

Otovo has had a management incentive scheme in place since February 2020.
Under Otovo’s current share option program the Company has a total of 128,035
options available to be exercised in 2020 after a total of 153,098 options have
been exercised, within the BoD’s mandate of 576,400 shares. In addition, the
company will launch an employee incentive scheme, which we expected to be
cash positive in the near-term and involve a 3-5% dilution.
Company structure
Otovo’s operations in Norway, Sweden and Spain are managed through their
respective subsidiaries, Otovo AS, Otovo AB, and Otovo Iberic SL. Otovo’s
operations in France are run by its subsidiary In Sun We Trust (ISWT), which has
been in operation in the French market since 2014 and was acquired by Otovo in
2019, at which point it was valued at EUR 110m. In relation to the acquisition of
ISWT, Otovo agreed to settle the transaction with 90% shares and 10% cash. Half
of the earn-out obligation was settled in July 2020 through the issuance of
198,100 shares in addition to 42,205 shares in sellers loan settlement, with the
remaining half due in 2021/2022. Furthermore, Otovo has a ~50% controlling
stake in its subsidiary and solar leasing unit, European Distributed Energy Assets
(EDEA). Otovo invested NOK 25m in EDEA in the initial round and owns a total of
6,000 of the 11,999 shares in EDEA. EDEA currently operates in Norway and
Spain, but is expected to expand to other core markets soon. In addition, Otovo
has signed a shareholders agreement for the setup of a JV in Brazil, where
Otovo will be the provider of its platform-as-a-service. Otovo will own 34% of
the JV Otovo Gera Energia Brasil LTDA, together with Gera Brasil Tecnologiea
(53%) and Energy Investors AS (EIA) (12%). Otovo has invested NOK 0.5m,
expecting another NOK 4m investment by the end of this year with a 2-year
lock-up period.
9
The consolidated group currently consist of 4x 100% owned subsidiaries and the leasing asset company EDEA
Legal structure
Otovo AS
(Norway) Parent Company
(Ultimate Parent) Asset Company
Subsidiaries
Future subsidiaries
ISWT Otovo AB Otovo AS Otovo Iberic SL

Otovo SP.z.o.o Otovo S.r.l
(France) (Sweden) (Norway) (Spain)
(Poland) (Italy)
(100%) (100%) (100%) (100%)
European Distributed
Energy Assets (EDEA)
(<50%)*
Source: Arctic Securities Research, Company data. * We expect Otovo to be diluted below 50% as EDEA capitalises to facilitate a growing lease market.
10
Business model
Go-to-market strategy – a managed marketplace for green energy
Otovo’s proprietary software and digital platform is key to the company’s go-to-
market strategy and installation services. The Company has invested approx.
NOK 35-40m into the technology of the platform, which is able to integrate 3rd
party data sources. Otovo uses machine learning on geospatial data and
proprietary tools to advise on the profitability of different solar system sizes to
provide customers compelling offers. Otovo also empowers its network of nearly
300 installers by providing them with more business from sold Otovo projects.
Importantly, Otovo aims to remove inefficiencies in the installer market through
automated bidding on the platform, sourcing out the best local cost of installing
solar systems and improving installer utilization. Moreover, Otovo ameliorates
the process of becoming solar prosumers by providing competitive prices on the
back of improved cost models in addition to streamlining the purchasing process
and means of financing.
The solar systems constitute an alternative source of electricity for household

consumption. They are considered a means to become more self-sufficient in
clean energy for ~25 years. Otovo offers three types of solar panels, Standard,
Premium and Performance with wattage output of approx. 280w, 320w and
375w, respectively. The latter produce at least 17% more energy than premium
panels and 36% more than standard panels. Moreover, Otovo offers to purchase
any extra energy not used by its solar energy customers. In Norway and Sweden,
Otovo offers a subscription with Tibber, a Norway based electricity and smart
home company, allowing households to track their energy generation and
consumption.
The Otovo virtuous cycle streamlines installer markets and the process of installing small-scale solar systems
The marketplace allows installers to scale & have pipeline visibility and consumers are given the best available local-installation offers
Source: Company data
11
Otovo’s platform renders the installer market more efficient
The underlying elements of Otovo’s digital market platform comprise the
streamlining of the installers market, which is key to Otovo’s business model
and gross margin going forward. As more installers sign up to the platform, the
bidding logic behind the platform is set to work and Otovo is able to source local
installers for projects, requiring less transportation, more efficiency and lower
costs. In addition, the greater the portfolio the more competition amongst
installers, which ultimately improves the quality of each “market player”. Otovo
has already increased the diversity of its installer portfolio with almost 300
installer companies signed up to its platform.
An increasingly diversified installer portfolio with… .. almost 300 installers on the platform
Assigned projects per installer per month (one country) Number of installers’ signed contracts and offboarding
Source: Company data Source: Company data
Total installation costs are going down..

Hardware costs and a more efficient installers market drive down the average
total cost of small-scale solar systems. In light of falling hardware costs, the soft
cost of installations as a % of total system cost increases. As seen below, the
soft cost as a % of total cost has risen from 47% to 68% from 2011 to 2017.
Soft costs increasing as a % of total costs and cont’.. Which are also falling due to installation efficiency
Sales, planning & installation labour costs % of total costs Total cost of installations in Norway, Sweden and Spain
90% 83% 85% 190

76% 79%
80% 180
68%
70% 170
% indexed
54% 55% 57%

% of total cost
60% 160
47%
50% 150
40% 140
30% 130
20% 120
10% 2018-01 2018-07 2019-01 2019-07 2020-01
0% Norway Sweden Spain
'11 '12 '13 '14 '15 '16 '17 '18 '19 '20e'21e'22e'23e'24e'25e
The maturity of the market is of importance with regards to potential margin

extraction and the overall cost of solar systems thus differs per watt, averaging
between NOK ~25/W and NOK ~10/W across Europe, with the cost of installation
driving the differences. The French market for instance has much higher cost
per watt compared to Spain, which creates opportunities for Otovo to apply its
unique business model and extract inefficiencies in the installer market. The
mechanics behind Otovo’s platform have already proven effective as average
12
costs are down 15% and 18% LTM in Norway and Sweden, respectively, and down
38% in Spain YTD.
..drives costs of installation down across markets driven by local installers benefit and increased bids
Index=100 from July 2019 for Norway and Sweden, and from December 2019 for Spain, in local currency
Source: Company data
Otovo’s platform-as-a-service
In addition to its current line of business, Otovo previously announced plans to
offer access to the platform to customers outside of Europe. Otovo will “rent”
out its platform to solar retailers in other countries, which would allow these to
organise the local installation market and wholesalers. Otovo would receive
volume-based charges from those renting the platform. Otovo has already signed
a shareholders agreement for the setup of a new JV, Otovo Gera Energia Brasil
LTDA, with Gera Brasil Tecnologiea (53%) and Energy Investors AS (EIA) (12%),
owned by Svein Harald Øygard. Otovo will have a 34% share and has already
invested NOK 0.5m, expecting another NOK 4m investment by the end of this
year with a 2-year lock-up period. The JV will be operated from Brazil, run by
Rodrigo Freire, previous GM at UberEats Brazil and with a background from
private equity. The platform licence agreement is based on Otovo’s standard for
platform-as-a-service, where Otovo will be the provider of technology and
platform through its “Otovo Cloud” and “Otovo Installer” software. In light of
Covid-19 there have been delays in the project commencement, but once it is
up and running it will signify a potentially significant option value for Otovo as it
is a capital light means of scaling the business outside of Europe. In addition, it
will add to Otovo’s new lines of revenue as Otovo will charge a platform-as-a-
service fee, which will be derived based on sales volume in a market that is
largely underpenetrated, and is expected to grow exponentially on the back of
energy prices rising and favourable net metering policies.
13
Otovo offers both direct purchase and lease alternatives
There are two main ways by which Otovo customers can finance their solar
systems, direct solar purchase and solar leasing. Depending on their financial
preferences, customers can either pay the total cost upfront or enter into a
lease, although the latter is currently only on offer in Norway and Spain. In
addition, in some countries, Otovo offers customers solar loans through
agreements with banks. Regardless of the option chosen, the customer will
receive any public subsidies or tax relief, but the ownership of the solar energy
system and total cost will vary.
Otovo offers flexible financing options to potential solar prosumers

Customers can finance their solar system through outright purchase and leasing
Solar Purchase Solar Lease

• Customer is the system owner and • Leasing of system with monthly
receives subsidies and tax incentives payments to third party asset owner
• Direct purchase of solar system • Customer receives subsidies and tax
involve high upfront cost but no incentives and energy produced
monthly payments thereafter • No upfront costs, immediate savings
• Otovo-certified installer & equipment if monthly lease payment is less than
• Purchaser responsible for system not monthly utility bill
covered by guarantee • 20 year functionality guarantee
• 5 year functionality guarantee • Otovo responsible for system &
maintenance
Solar Purchase
The option to purchase the system directly entails the purchaser becoming the
owner of the solar system and paying the costs upfront. If the customer wants to
maximize the financial feasibility of installing a solar system, upfront purchase
saves the customer monthly interest payments, lowering total payback time.
After a few years direct purchase of solar pays for itself

Illustrative example of cumulative cost of electricity vs direct purchase
After this point you save money from

self-consumption of solar power
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Without PV PV - owning
Source: Arctic Securities Research
Otovo Solar Saver and the European Distributed Energy Assets (EDEA)
The relatively short term in which the loan must be repaid or the potentially
off-putting risk associated with owning the solar system, spurred the launch of
leasing of solar systems through Otovo Solar Saver. Otovo is the first solar
retailer in Europe to offer solar leasing, as of May and June 2020 in Spain and
Norway, respectively. The solar leasing-model emerged to take advantage of the
14
untapped market made available through removing the high initial cost for
liquidity-constrained homeowners, using customized lease agreements.
Moreover, the leasing model provides a useful tool for de-risking solar
purchases, acting as a counter-cyclical product.
The asset-owning company, the European Distributed Energy Assets (EDEA), buys
the solar systems from Otovo. Customers then lease the systems from EDEA for a
period of ~20 years, with the option to purchase the system, have them
removed or renew the lease at the end of the period. Otovo, installs the solar
PV system on a consumer’s roof and receives a monthly fee derived from the
monthly lease payments by customers to the asset company, for the duration of
the lease period. The self-generated electricity from the solar system lowers the
customer’s monthly energy bill, through reduced demand for electricity from
the grid. Fixed-rate long-term debt and recurring revenue is a means for Otovo
to provide visibility and backlog as well as improve unit economics. The revenue
backlog can ameliorate the process of raising capital to fund new projects, such
as expanding geographically or develop its technology further.
Customers save money from day 1 with solar leasing Otovo earns cost of sale + recurring fees from EDEA
Illustration of cumulative cost of electricity vs direct purchase Illustrative example of Otovo’s revenue stream from EDEA
Recurring fees for the

duration of the lease
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
1 2 3 4 5 6 7 8 9
Without PV PV - leasing
Solar Loans
In order to remove the hurdle of a 100% upfront cash settlement, customers may
also finance their solar energy systems through a solar loan. Otovo was the first
solar retailer to offer customized solar loans as a form of financing, without
retaining solar assets on Otovo’s balance sheet. Otovo collaborates with
Sparebank1 in Norway and Banco Bilbao Vizcaya Argentaria SA (BBVA) in Spain,
offering customers the opportunity to finance the cost of installation through
“green loans”, with varied interest cost. For Norwegian customers, Sparebank1
offers a loan up to 85% of installation cost with 1.8% and 3.8% interest on
secured and unsecured loans, respectively, as of April 2020.
15
Market overview
What is solar PV?

Solar photovoltaics (PV) is the technology that converts light into electricity
using semiconducting materials containing photovoltaic effects. There are two
main types of solar cells, thin film and crystalline silicon. The latter comes in
the form of either monocrystalline or polycrystalline technology. Mono- and
polycrystalline modules have become 12-17% more efficient in the last decade
as well as costing less, which has spurred annual exponential growth. PVs have
become a reliable and cheap source of renewable energy. Up to 95% of
materials used are recyclable (PV Cycle) and greenhouse gas emissions from
energy production are zero. Solar PV systems in Europe recoup the energy used
to manufacture them in 1.5-2.5 years. Solar electricity in the form of PV grid
connected systems can be split into residential (small-scale), commercial (small-
scale) and utility-scale segments.
Global solar PV market

In the 10 years to 2019 the global solar PV market grew by 26x the 2009
capacity. Solar PV accounted for 1/3 of renewable electricity generation growth
and 59% of total renewable electricity production from new production assets,
in 2019. Solar PV additions in 2019 were ~115 GW, (+12%, 44% growth excl.
China) raising total installed capacity to 627 GW, including on- and off-grid
capacity. This is enough capacity to produce around 2.8% of global electricity
generation as of 2019. IEA expect solar photovoltaics (PV) to lead the expansion
of renewable power capacity up until 2024 and beyond, estimating ~90 GW
additions in 2020. According to SolarPower Europe the estimated cumulative
installed capacity globally will be 1.5 TW by 2024, and 2.4TW by 2030 according
to Bloomberg NEF.
Global solar PV has reached 630 GW capacity.. ..and is expected to grow almost 10x by 2050
Annual additions and cumulative solar installations in GW Expected cumulative capacity in GW
700
8,000
600 7,000
115
500 6,000
103
400 5,000
104
GW
GW
300 4,000
77
50 3,000
200 40
37 2,000
30
100 17 31
8 1,000
- -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
'21e
'23e
'25e
'27e
'29e
'31e
'33e
'35e
'37e
'39e
'41e
'43e
'45e
'47e
'49e
'15
'17
'19
Previous years total capacity Annual additions

Global Utility-scale PV Global Small-scale PV
Source: Arctic Securities Research, IEA PVPS Source: Arctic Securities Research, BNEF
Solar LCOE is down 80% during the last decade

Since 2010, the total cost of installing solar systems has fallen on a global
weighted average from USD 4.7/W to USD 1.0/W whilst the global weighted
average capacity factor, has increased from 14% to 18% over the same time
period. The latter is driven by deployment of solar PV systems in regions with
higher solar irradiation as well as technological advances, resulting in a steep
decline of 80% for the solar LCOE in the last decade.
16
Costs of solar systems falling.. ..whilst capacity factor increases.. ..and LCOE continues to fall
Weighted total installed cost in USD/W Capacity factor Levelised cost of electricity in USD/kWh
7.0 35% 0.60
-71% +31% -81%
6.0 30% 0.50
5.0
25% 0.40
4.0
20% 0.30
3.0
15% 0.20
2.0
1.0 10% 0.10
- 5% -
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Range Average Range Average
Range Average
Source: Arctic Securities Research, IRENA Source: Arctic Securities Research, IRENA Source: Arctic Securities Research, IRENA
European solar market

Looking 10 years back, the European small-scale market was very small, and has
grown 4x since then. The European solar market has seen a 28% CAGR since the
early 2000s, of which the small-scale PV market accounts for 65% of installed
capacity of about 128 GW. European small-scale solar is expected to grow 5x by
2050, underpinned by policy making, general opinion, as well as increased cost
competitiveness and demand for electricity as Europe transitions to carbon
neutrality. The European solar market added over 20.4 GW in 2019, 16 GW out
of which were installed in the EU, bringing total capacity to 131 GW (+~18%
from 2018). This installed PV capacity can generate around 33 TWh, vs total
generation of electricity in the EU alone of 2700 TWh in 2019. Aligned with
Europe’s ambition for an accelerated carbon free electrification, European solar
is expected to grow 14% per year up until 2023 and 4.8x current capacity by
2050. Going forward we expect capacity to increase and surpass 1000 GW scale
by the early 2040s.
EU solar market has grown exponentially since 2000 And is expected to reach the terawatt scale by 2045
Cumulative installed capacity in GW in Europe Forecasted cumulative installed capacity in GW
140.00 1,600
120.00 1,400
100.00 1,200
80.00 1,000
GW
GW
60.00 800
40.00 600
20.00 400
200
-
2000
2001
2002
2003
2004
2005
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2006
-
'20e '25e '30e '35e '40e '45e '50e
Source: Arctic Securities Research, SolarPower Europe Source: Arctic Securities Research, BNEF
Within Europe, Germany is expected to drive the greatest demand for PV

installations with a total of 359 GW installed capacity by 2050. Spain is expected
to take second place in the near future with an estimated PV capacity of 25.3
GW by the end of 2023. France is expected to install over 11.7 GW by 2022, and
is expected to take a growing share of the European market with an estimated
installed capacity of 182 GW by 2050. Prior to COVID-19 Europe was expected to
add 92.6 GW by 2022, with a cumulative installed capacity of about 276.8 GW
by 2023 in SolarPower Europe’s high case scenario. PV additions are expected to
decline in 2020 as a result of COVID-19 and uncertainty around policy
transitions, but are expected to rebound and add 25 GW over 2020-2021 (-18%
from forecasts prior to COVID-19), led by Germany, Spain and France.
17
The European market is divided into two main segments, small-scale PV and
utility-scale PV. Over the next 10 years, small-scale is expected to grow faster
than utility-scale by around 3.5x and will represent more than 50% of total
installed capacity in 2030 according to BNEF estimates.
Small-scale solar makes up 35% of European PV And is expected to reach the terawatt scale by 2045
Cumulative installed capacity in GW in Europe Forecasted cumulative installed capacity in GW
1200 500
1000 400
800
300
GW
GW
600
200
400
100
200
0 -
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e '15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
France Italy Germany
Small-scale PV Europe Utility-scale PV Europe North Europe Other Europe
Source: Arctic Securities Research, BNEF Source: Arctic Securities Research, BNEF
What is small-scale?
Small-scale solar PV is a form of distributed electricity production with <1MW
installed capacity. Distributed solar power generation is the production of
electricity at or near the point at which it is used. In reference to small-scale
distributed solar PV, the source of energy can be roof-mounted or ground-
mounted. It can be connected to the grid to offset peak electricity demand and
lower the cost of electricity, or to sell excess energy when deemed feasible.
This form of solar energy has seen remarkable annual growth as a result of a
reduction in price of PV modules, government policies and its ease of use.
Globally, 35% of total PV installations in 2019 consisted of small-scale systems,
an upward-going trend as seen in the left chart below. In addition, it is
expected to be a key driver in overall solar PV capacity additions going forward
as it is seen as a sustainable option for decentralized power generation,
mitigation of energy poverty, and a solution to meet increasing electricity
demand while minimizing environmental externalities. The decentralized system
is a means for self-consumption and production of energy. The prosumers can
use the local grid to inject surplus energy when generation exceeds
consumption, as well as obtaining energy from the grid to meet household
energy demand when generation from the solar system is low.
EU solar market expected to grow 5x by 2050.. European small-scale solar PV capacity scenarios
Cumulative installed capacity small-scale PV in Europe in GW Annual capacity additions projections for European residential solar
500 20 18
450 18
400 16
14 13
350 12
300 12
GW
10
GW
250
8
200
6
150
4
100 2
50 0
- 2013-2018 2019-2024 base 2019-2024 high
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e case case
Source: Arctic Securities Research, SolarPower Europe Source: Arctic Securities Research, IEA
18
Commercial and residential buildings represent >55% of total electricity
consumption in Europe. 31% (41.6 GW) of additional installed capacity globally
in 2019 consisted of small-scale solar PV, known as rooftop solar or distributed
PV. Government policies, such as tenders and feed-in tariffs, are key drivers in
the solar PV market. The Green Deal by the European Commission seeks to
accelerate decarbonisation of the EU and increase electrification, and estimates
decentralized small-scale power generation to be 13.9% of all power generation
by 2050. Over 90% of European roofs are unused, portraying an estimated 1.4
TW installation opportunity for distributed solar installers, up from current
cumulative capacity of <100 GW.
The continued fall in the residential solar PV system cost is a key driver, in
addition to increased efficiencies, of demand for solar PV modules. The price of
solar power per watt has fallen from USD 101.5 in 1975 to about USD 0.29 in
2017, according to the International Renewable Energy Agency (IRENA). The cost
of solar power from residential rooftops is cheaper than traditional electricity in
most countries, and is expected to fall another 15-35% up until 2024 in light of
technological advancements, according to IEA. The total cost of residential solar
installations has fallen on a country level basis, with France having experienced
an 84% fall from 2011 to 2019. The levelized cost of energy reflects the cost of
producing, installing and operating a power plant (sum of capex, O&M expenses
and cost of capital). It measures the lifetime costs divided by energy production
as a means to calculate the present value of total installation cost and operation
costs over the panel’s assumed lifetime. The measure is used to compare solar
energy to other sources of energy regardless of size, capital cost, capacities and
return. BloombergNEF expects crystalline silicon module prices to fall another
37% to 2025, which adds to the possibility of the LCOE for Solar PV to dip below
residential electricity tariffs. The cost is currently around EUR 29cents/KWh in
Europe (vs EUR 29 cents/KWh average electricity price for private households
according to IEA’s 2019 annual report).
Residential solar PV total installed cost falling globally Residential solar PV LCOE has also been falling
Total installed cost by country/state in USD/KW Solar installations in GW and price of solar installations in USD/Watt
12000 0.80
0.70
10000
0.60
8000 0.50
USD/kWh
USD/kW
6000 0.40
0.30
4000 0.20
2000 0.10
0.00
0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Italy Spain France
Italy Spain France
Source: Arctic Securities Research, IRENA Source: Arctic Securities Research, IRENA
The future cost effectiveness of small PV systems is expected to be the key

driver in penetrating the market going forward. Parallel to falling LCOE levels in
the European solar PV market from an average of USD 0.37/KWh to USD
0.07/KWh in 2019, the residential PV market in Europe has on average risen 4x
to a total of ~33 GW. This is in part the result of demand for small-scale solar PV
systems being driven by an element of profitability versus other traditional
means of energy consumption, through potential customer savings. The cost
savings further result in a reduction of the total expected payback time for the
respective solar systems. The payback period translates the economics of solar
energy into the time taken for a project to pay for itself and is a simplified form
of measuring return on solar investment in timely manner. Average payback
times in Europe range between 5 and 12 years, and are in a reverse relationship
19
with electricity prices and the energy output per watt in the respective
countries. The payback time is also affected by the level of public incentives
from governments as these lower the initial installation costs and thus lower the
numerator in deriving the time it takes for the system to start paying for itself.
Installation volumes increase as prices fall Technological advances reduce payback time further
Solar installations in GW and price of solar installations in USD/Watt Estimated payback times (coloured) and electricity prices EUR/KWh.
0.40 35 Consumer electricity price

<6 year s
0.35 (EUR/kwh incl.taxes)
30 6-7.9 year s
0.30 25 NO 0.185
8- 9.9 year s
USD/KWh
0.25 DK 0.31
20 10- 11.9 year s
GW
0.20 SE 0.2
15 >12 year s UK 0.2
0.15
0.10 10 PL 0.13
5 BE 0.29
0.05
IT 0.205
0.00 -
FR 0.17
DE 0.31
NL 0.16
Average European LCOE Europe residential PV ES 0.25
Source: Arctic Securities Research, IRENA Source: Arctic Securities research, Company data
Otovo’s core markets

Otovo’s core markets currently consist of Norway, Sweden, France and Spain,
which have on average grown at a 26% CAGR since 2005. France has been
leading in terms of total installed capacity, with ~1.4 GW installed capacity in
2019. Whilst Spain’s additions in the total solar market (including small-scale)
are expected to be significantly lower in 2020, France is expected to keep
growing its additions this year, up 0.4 GW according to IEA estimates.
France has been the leading residential solar player

Residential solar PV capacity per country in MW
2,500
2,000
1,500
Mw
1,000
500
-
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
France Sweden Spain Norway
Source: Arctic Securities Research, BNEF, NVE
We further expect Otovo to enter into Poland and Italy in H1/21, which are two
markets experiencing a significant boom in residential solar installations on the
back of favourable self-consumption policies. In all of these markets demand is
heavily dependent on national policies entailing subsidy schemes or rebates to
justify upfront installation or monthly costs. Recently, many such policies have
shifted from “net-metering” policies, whereby prosumers are offered credits for
excess PV electricity injected into the grid, to feed-in-tariffs (premiums)
favouring real-time consumption. Some countries have policies for self-
consumption in collective buildings and neighbourhood policies, following the
European Union’s implementation of Renewable Energy communities (REC),
allowing households to sell excess electricity to their neighbours. These schemes
and policies vary across countries. Below is a summary chart of the main policies
in Otovo’s core markets and expected market entries.
20
Overview over government policies, installed solar PV capacity per Otovo “market”
Cumulative installed capacity (MW) and policy summaries in the respective countries in which Otovo operates / is expected to enter soon
Country Installed c apac ity (MW ) Government polic ies
Households receive direct subsidies from Enova, a public company, covering up to 35% of
45.00
installation costs in the form of NOK 10,000 per installation + NOK 1,250 per installed Kw up to
40.00
35.00 15Kw until 2021 when fixed-amount is reduced to NOK 7,500. Prosumers of systems <100kW
30.00 (650m2 solar system) can sell excess electricity to their power supplier. Prosumers are exempt
Norway
25.00 from fixed tariffs for feeding electricity into the grid and are usually paid the spot price for grid
20.00
electricity, this depends on whether the time and location of production and whether marginal
15.00
10.00 rates are positive (production volume in the area at the time is large and demand is low) when
5.00 prosumers have to pay for feeding-in electricity, or negative (excess demand over supply of grid
- electricity) whereby the prosumer will be paid by their power supplier per kWh produced up to
2003
2004
2005
2012
2013
2014
2015
2002
2006
2007
2008
2009
2010
2011
2016
2017
2018
2019
NOK 0.05/kWh.
Solar customers in Sweden can receive support through either the rebate scheme, which covers
500 20% of the installation cost (subject to available funds) or the ROT-support whereby customers
400 receive 9% of the total cost for houses older than 5 years. In June 2020 the Swedish Government
announced a replacement of the rebate scheme with an unspecified tax break from January 2021,
Sweden
300
which applies to private households only. A tax credit scheme on small-scale renewable electricity
200
production has been in place since 2015 in addition to the capital subsidy for PV installations. This
100 scheme acts like a feed-in-tariff whereby the PV owner receives EUR 0.06 per KWh of electricity
- into the grid, if a net electricity consumers. Prosumers that are net buyers form the grid are
2003
2005
2008
2010
2013
2015
2002
2004
2006
2007
2009
2011
2012
2014
2016
2017
2018
2019
exempted from network charges for electricity they feed into the grid.
500
450 The Power Sector Act and Royal decree 244/2019 regulates the market for self-consumption
400
constituting the right to 1) self-consume electricity without charges and tolls and to not be
350
300 subject to the tax on the value of the production of electric energy (7%), 2) collective self-
250 consumption, whereby consumer can take advantage of a neighbour's surplus and co-participate
Spain
200
in self-consumption. A drawback is that the premium paid to prosumers can never exceed the
150
100 cost of grid electricity (spot price). The most recent changes include a shift from net balancing
50 compensation where surplus energy was accounted for and offset watt to watt, to a system
- where the excess energy fed into the grid will be deducted from the electricity bill.
2003
2006
2007
2010
2013
2016
2017
2002
2004
2005
2008
2009
2011
2012
2014
2015
2018
2019
1,600 Government has introduced both an investment bonus to help finance solar system installation
1,400 costs and a feed-in-tariff scheme. The former is aimed at self-consumption of solar energy for
1,200 installations with sale of surplus energy, paying out a premium of EUR 390/kWp <3kWp, EUR
1,000
290/kWp 3<9kWp, EUR 190/kWp 9<36kWp, EUR 80/kWp 36 <100 kWp, phased over 5 years. As of
France
800
600 2019 small-scale self-consumed electricity incl 3rd party investments is exempt from taxes. For
400 sale of surplus electricity, prosumers benefit from a fixed purchase price by grid supplier, above
200 electricity prices. In 2020 these were EUR 0.1/kWh from 0<9 Kwp and EUR 0.06/ kWh for 9<100
- kWp. In addition, local aids from local authorities are common in France, for instance in the
2004
2006
2008
2011
2013
2015
2018
2002
2003
2005
2007
2009
2010
2012
2014
2016
2017
2019
Grand-Est region there is aid between EUR 200-400 /kWp up to EUR 30,000 for systems <100kWp.
800 The Polish Ministry of Energy supports prosumers through a discount mechanism by which excess
energy fed into the grid can be exchanged with free electricity from the grid when needed at an
600
exchange ratio of 0.8 (1 unit of surplus electricity is exchanged for 0.8 units of free grid
Poland
400 electricity) for systems smaller than >10 KW and a ratio 0f 0.7 for those between 10 and 50 KW.
The residential segment is further supported by a EUR 235 m rebate program for PV projects
200
ranging between 2 KW and 10 KW, which grants max USD 1,325 per project until funds are
- exhausted.
2014 2015 2016 2017 2018 2019
5,000
In February 2020 the Italian government introduced a legal provision 8/2020 allowing for small-
4,000
scale collective self-consumption of renewable energy below 200 KW for customers linked to the
3,000 same distribution sub-grid. Self-consumption of solar is further supported by a tax credit scheme
Italy
2,000 for small systems up to 20 KW in addition to a net-billing scheme, in which surplus energy is
remunerated depending on electricity market prices and grid service costs. Furtermore, the
1,000
Italian government launched a Eur 55bn stimulus package which increases the 50% tax deduction
- of the total cost of solar systems including storage options to 110% until July 2021.
2004
2006
2011
2013
2018
2002
2003
2005
2007
2008
2009
2010
2012
2014
2015
2016
2017
2019
Source: Arctic Securities Research, BNEF, NVE, Energymyndigheten, Company data, SolarPower Europe, IEA
21
Norway
The demand for small-scale systems in the Norwegian solar market is highly
correlated with electricity costs, as seen in demand for Otovo’s products in
relation to the development of electricity prices in the past. Accordingly, when
energy prices soar, marketing costs are expected to fall per sale and vice versa.
The Norwegian Government has helped foster incentives for prosumers in
Norway, via the support from the government agency Enova. Households receive
direct subsidies from Enova covering up to 35% of installation costs in the form
of NOK 10,000 per installation + NOK 1,250 per installed KW up to 15KW, until
January 2021 after which the fixed-amount is reduced to NOK 7,500. The initial
demand may experience a slump in light of this, but the fixed subsidy reduction
is expected to be offset by falling hardware costs, limiting the impact on overall
installation costs per household. In Norway, 90% of electricity generated by solar
power is derived from February to November, due to weak solar irradiation
during winter.
Norwegian solar market has grown 21x since 2002 #installation 70% higher in July 2020 than July 2019
Cumulative installed capacity in MW # installations in Norway from January 2015 until August 2020
45
40 1,500
# installations
35
30 1,000
25
MW
20 500
15
0
10
5
-
2002
2003
2004
2005
2006
2007
2008
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2009
2015 2016 2017 2018 2019 2020
Source: Arctic Securities Research, NVE Source: Arctic Securities Research, Enova
Sweden
The Swedish solar market has experienced immense growth since the solar
rebate scheme was adopted in 2009, providing a capital subsidy covering 20% of
the installation cost. In 2019 the government increased the budget for
residential and commercial solar PV installations to SEK 1.3bn up from SEK
736m. From 2021, Swedish customers will benefit from more predictability in
the incentives given, as a 15% tax relief with instant equity return will replace
the schemes outlined above. This is expected to be a positive trigger and
increase demand.
Exponential Swedish residential PV market growth Residential grid-connected solar PV dominates

Cumulative installed capacity in MW Annual installed capacity in Sweden up until 2018
500 50,000 800
450 680
45,000 700
400 40,000
600
# of installations
350 35,000
300 30,000 394 500
MW
25,000 400
MW
250
200 20,000 223 300
150 15,000 136 200
10,000
100 100
5,000 8,543 12,885 21,535 37,656
50
0 0
- 2016 2017 2018 2019
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2015
2016
2018
2019
2014
2017
# installations <20kw Installed capacity
Source: Arctic Securities Research, BNEF Source: Arctic Securities Research, Energimyndiheten
22
With regards to future demand forecasts, Sweden is on a path to achieve 100%
renewable electricity by 2040 as its share of renewable energy in total energy
use in 2019 was already 54%. Solar PV which only represents 0.25% of Swedish
electricity production as of 2019, is expected to increase significantly. Today
the Swedish solar market mainly consists of customers that purchase PV
systems, rather than large centralised production. The potential Swedish roof-
mounted solar electricity production market is estimated to over 40 TWh per
year.
France
Otovo entered the French solar markets in 2019 through the acquisition of In Sun
We Trust (ISWT). The French Government has adopted a scheme for small-scale
self-generation with a reduction of up to 45% of total cost through an
investment bonus to help finance solar system installation costs and a feed-in-
tariff scheme as explained in the overview above. As of 2019 small-scale self-
consumed electricity including 3rd party investments is exempt from taxes. In
addition, local assistance by local authorities is common in France, for instance
in the Grand-Est region there is a grant of between EUR 200-400 /kWp up to EUR
30,000 for systems <100kWp. The French solar power market is dominated by
commercial actors, with 55% of new capacity in 2019 out of a total of 945 MW
additional capacity in grid connected volumes. The electricity cost plays a
central role and is expected to rise to fund the divestment of nuclear power.
This is expected to drive up demand for self-consumption of solar power as
higher electricity costs will lower the payback times in France.
~60,000 self-consumption installations in France Small-scale solar PV expected to grow at an 8% CAGR

Number of installations in the self-consumption market in France Historial and forecasted installed capacity in GW
70,000 60 57
60,000 49
50
50,000 41
# installations
40
40,000 32
GW
30,000 30
23
20,000
20 14
10,000
10 4 4 5 5
0 3 3
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
-
2014 2015 2016 2017 2018 2019 '15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
Source: Arctic Securities Research, IEA PVPS Source: Arctic Securities Research, BNEF
Spain
The Spanish solar market is experiencing significant growth on the back of
greater regulatory certainty after the Royal Decree 244/2019, seeking to
promote self-consumption of energy, was passed in 2019. After Spain removed
the "sun tax" (fee per kWh consumed from self-generated power above 10 kW) in
November 2018, it saw a doubling of installed capacity for self-consumption
purposes from 2018 to 2019 to 1 GW according to the IEA. In addition to
increasingly attractive prices for solar panel modules, Spain’s solid solar
irradiation renders solar power in Spain very economically feasible. The total
capacity installed in Spain during 2019 for PV self-consumption was about 459
MW according to UNEF, whereas the total installed PV effect was 4 588 MWp.
The speed of increase in PV installed capacity in Spain is forecasted to be
sustained in light of the country’s long-term goal of 100% electricity generated
from renewable sources by 2050, and intermediate goals of 39 GW of PV
electricity generation by 2030. The self-consumption market is expected to fall
in 2020 in light of COVID-19, which has hurt the Spanish economy. According to
the UNEF, the Spanish Photovoltaic Union, the impact will be mitigated through
23
streamlining administrative procedures, tax relief, a reduction in the fixed
component of the electricity bill and promotional campaigns.
Estimated installed capacity of PV self-consumption

Cumulative installed solar PV capacity (MW) and annual additions (MW)
1,000 459 500

Cumulative capacity (MW)
900 450
Annual additions (MW)

800 400
700 350
600 236 300
500 250
400 200
122
300 150
200 49 55 100
22
100 50 103 109 242 467 913 50
- 0
2014 2015 2016 2017 2018 2019
Cumulative installed capacity (MW) Annual additions installed (MW)
Source: Arctic Securities Research, UNEF
Italy
The Italian solar market has grown 143x since 2006. This increase was mainly
driven by the booming market between 2005-2013 on the back of a period of
Feed-in premiums after the passing of the Feed-in tariff law. Since 2013 the
self-consumption of solar has been supported by a tax credit scheme for small
systems up to 20 KW in addition to a net-billing scheme, in which surplus energy
is remunerated depending on electricity market prices and grid service costs.
Moreover, in light of Covid-19, this is expected to significantly increase demand
for roof-mounted solar systems and consequently Italy is a very attractive
country for Otovo to enter at the beginning of 2021.
Residential PV has seen a 124% CAGR the last 4 years Italian small-scale installations expected to take off
Cumulative installed capacity of residential solar PV in MW Cumulative installed small-scale solar PV capacity (GW)
5,000 50
4,500 45
4,000 40
3,500 35
3,000 30
MW
2,500
GW
25
2,000
20
1,500
15
1,000
10
500
5
-
-
2000
2001
2002
2003
2004
2005
2006
2007
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2008
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
Source: Arctic Securities Research, BNEF Source: Arctic Securities Research, SolarPower Europe
Poland
The Polish small-scale solar market only started taking off in 2016 and has grown
from only 6 KW installed capacity in 2013 to over 1 GW in 2019. There are
around 85,623 prosumers in Poland who together self-consume from an installed
capacity of around 552 MW as of 2019. These benefit from the regulatory
systems which entail that the Distributed System Operator (DSO) purchases the
self-generated electricity. In addition, prosumers have a favourable policy
system whereby prosumers can take advantage of a discount mechanism by
which their excess energy fed into the grid can be exchanged for free electricity
from the grid when needed. In Poland there were about 65,000 prosumers
currently relying on the discount scheme, expected to grow to around 200,000
in the next few years. In addition, all roof-mounted solar benefits from a
24
reduction in VAT from 23% to 8%. Moreover there is no requirement for
residential system owners to receive building permits or licences, which makes
the barrier to enter the self-consumption market relatively straight forward.
The residential segment is further supported by a EUR 235 m rebate program for
PV projects ranging between 2 KW and 10 KW, which grants a maximum of USD
1,325 per project until funds are exhausted. As a result of increased divestment
from coal dependence, falling costs of solar hardware in addition to the
increased desire to meet the country’s energy needs, distributed local PV
energy sources are expected to grow.
124% CAGR for residential PV in the last 4 years Small-scale take of due to self-consumption scheme
Cumulative installed capacity of residential solar PV in MW Cumulative Installed capacity in MW
800 1,400
700 1,200
600 1,000
500 800
MW
MW
400 600
300 400
200 200
100 -
2013 2014 2015 2016 2017 2018 2019 2020
-
'15 '16 '17 '18 '19 Below 50 KW Above 50 KW
Source: Arctic Securities Research, BNEF Source: Arctic Securities Research, SolarPower Europe
25
Peer overview/competitive landscape
Otovo operates in a growing market, which is remodelling itself into companies
with focused business models. For the purpose of putting Otovo on a map we
have split the competitive landscape into three main groups of competitors;
residential solar retail peers, consisting of solar retailers with a digital market
platform; online marketplaces, consisting of all other online marketplaces but
not necessarily within solar retail; and other players in the renewables industry,
from larger power providers to upstream market players. We have chosen such a
wide range of peers as there are few traded residential PV retailers in Europe.
Furthermore Otovo is the only residential solar retailer in Europe that offers
solar leasing, differentiating the company from other solar retailers in Europe,
but similar to US peers. Furthermore, Otovo operates on an international scale,
whereas many of the larger energy providers and solar residential installers
operate only in one country. Otovo therefore can be differentiated from many
national competitors as it is less dependent on the growth of a particular local
market and has a greater ability to scale. As a result of the growing market with
increased synergies going forward, we expect there to be significant M&A
opportunities in the coming years.
The competitive landscape ranges from power providers to solar PV manufacturers to other digital solar retailers
Otovo is the only digital solar retailer that offers both direct sale as well as solar leasing in the European market.
Residential solar retailer peers

Renewable industry peers
Residential solar retail peers

In the European Market, non-listed Svea Solar is identified as a close peer, a
leading solar installer in Sweden through its installations of home solar panel
kits purchased at IKEA. This solar retailer acquired the residential solar business
of SolarCentury, expanding Svea’s presence into Ikea-related business in the
Netherlands, Belgium and Germany. Another European “peer” is Columbus
energy, the largest Polish solar player with a market cap of NOK 7bn, 23,000
clients and positive EBITDA since 2017. The Company’s European focus removes
to an extent competition from US-based companies, but these provide a useful
list of peers by which we can evaluate Otovo’s financials and potential market
share. US-based digital small-scale solar retailers, such as SunRun, Sungevity
and Sunnova have operated for more than a decade. SunRun is one of the
26
leading players in the US residential solar market, founded in 2007. The
company has experienced steady growth since inception and recently acquired
Vivint Solar, with a post-transaction market cap of USD 9.3bn, 500,000
customers and a 3% market penetration in the US according to PV Magazine. The
transaction has been seen to shift SunRun’s focus from being a software
solutions company to an installer of solar panels in addition to yielding cost
synergies of about USD 90m.
Going forward, we believe it will be important for Otovo to learn from Sunrun’s
ability to secure its position as a leading market player, achieve brand name
recognition and adopt its product offering based on target market
characteristics through its software solutions. As Otovo’s growth is dependent
on the volume of new customers, it is important it aligns its pricing with that
offered among its competitors. In the US, increased sales & marketing costs
have caused margin pressure, which was one of the perceived drivers of
SunRun’s acquisition of Vivint solar, as the latter’s local customer retention
strategy was seen by SunRun as a means to expand margins.
Renewables industry peers

In addition to the “direct competition” from solar retailers that offer solar
systems through a digital marketplace, Otovo faces competition from traditional
energy companies as well as other renewable and solar energy companies. In
Norway for instance, Fjordkraft, which delivers power to end users through
typical grid electricity, launched a digital platform selling solar panels, using
Solcellespesialistene as installers, just like Otovo. It also has an agreement with
DNB, a Norwegian bank, providing both green secured loans and unsecured loans
up to 5 years for customers who do not have sufficient capital for upfront cash
payment, and who do not opt for leasing of solar panels. In addition, Fjordkraft
pays customers NOK 1 for every KWh of surplus electricity produced and allows
customers to choose whether or not to save the electricity generated, sell it at
spot price and buy energy from Fjordkraft when the solar system does not
provide sufficient electricity. As these companies also operate within other
energy segments, we will not use their pricing multiples as guidance in our
valuation but rather note their presence in the market and potential threat on
margins through greater competition, as seen in the US market.

In deriving the value of the underlying proprietary market platform, other
marketplaces in differing segments and their respective market pricing could
provide a useful indicator. The average EV/Sales in the online platform peer
group is 11.6x for 2020 and 9.3x in 2021. As these peers are established market
players with market caps of USD 222bn and USD 45bn for Netflix and Spotify,
and positive EBITDA, Otovos’s shares should not be traded at similar multiples.
Nevertheless, it provides a rough indication of how similar digital platforms are
valued in the market.
27
Peer overview
Financials and multiples overview of publicly traded peers as well as Otovo
20Y 21Y 22Y 20Y 21Y 22Y 20Y 21Y 22Y
M .cap
Equity ticker Company Currency (USDbn) NIBD EV EV/Sales EV/EBITDA P/E
OTOVO NS Equity OTOVO AS - A NOK 0.11 (12.38) N/A 4.50 2.50 1.90 (17.10) (17.30) (25.00) (12.54) (12.50) (15.76)
Small-scale solar retailer

NOVA US Equity SUNNOVA ENERGY I USD 2.8 1,370.3 N/A 29.00 23.42 20.30 88.13 56.53 42.25 N/A N/A 134.45
RUN US EQUITY SUNRUN INC USD 10.1 1,814.7 13,567.8 16.51 12.31 11.34 (2,435.69) 763.96 121.95 N/A 132.88 68.65
TSLA US Equity TESLA INC USD 404.2 8,335.0 405,520.0 13.55 9.35 7.22 82.28 58.84 41.84 233.20 138.30 92.12
LIAB SS Equity LINDAB INTERNATI SEK 1.4 163.8 N/A 1.49 1.41 1.31 11.32 9.99 9.10 19.55 17.73 15.88
Average peers 15.1x 11.6x 10.0x -563.5x 222.3x 53.8x 126.4x 96.3x 77.8x
M edian peers 15.0X 10.8X 9.3X 46.8X 57.7X 42.0X 126.4X 132.9X 80.4X
Online marketplaces
UBER US EQUITY UBER TECHNOLOGIE USD 64.4 (3,887.0) 65,778.6 5.58 3.87 3.08 (25.79) (237.19) 59.86 N/A N/A N/A
SSTK US EQUITY SHUTTERSTOCK INC USD 1.9 (246.4) 1,584.6 2.41 2.16 1.93 14.62 12.08 10.02 33.70 29.19 24.70
JET LN EQUITY JUST EAT TAKEAWA GBp 16.8 247.4 N/A 6.64 4.87 3.68 50.82 38.72 22.71 185.90 77.66 45.66
TRIP US EQUITY TRIPADVISOR INC USD 2.6 (152.0) 3,227.7 4.61 2.90 2.66 (117.77) 13.65 10.16 N/A 35.77 16.75
ETSY US EQUITY ETSY INC USD 15.9 56.2 16,339.5 10.82 9.78 8.41 36.92 34.89 28.27 58.72 55.79 42.50
SCHA NO EQUITY SCHIBSTED ASA-A NOK 10.1 511.6 N/A 5.33 4.97 4.33 29.48 22.98 17.63 89.73 52.83 39.20
NFLX US EQUITY NETFLIX INC USD 228.9 11,354.1 237,005.5 9.58 8.20 7.05 50.07 38.65 29.40 77.49 55.26 41.75
SPOT US EQUITY SPOTIFY TECHNOLO USD 45.5 (1,266.6) 44,146.2 4.68 3.78 3.11 (153.86) 1,742.04 164.09 N/A N/A N/A
Average peers 6.2x 5.1x 4.3x -14.4x 208.2x 42.8x 89.1x 51.1x 35.1x
Energy/renewables industry
ENGI FP Equity ENGIE EUR 32.6 28,653.0 N/A 1.05 0.97 0.96 6.62 5.72 5.60 15.83 10.84 9.85
EDF FP Equity EDF EUR 35.2 44,727.4 N/A 1.31 1.26 1.23 5.90 5.47 5.22 20.46 17.47 15.48
FKRAFT NO Equity FJORDKRAFT HOLDI NOK 1.1 (64.8) 1,143.8 2.90 1.60 1.55 13.33 11.92 11.93 20.52 19.31 18.14
SSO NO Equity SCATEC SOLAR ASA NOK 3.3 1,514.4 N/A 14.02 12.40 10.27 17.44 14.81 11.67 93.71 62.86 49.25
SEDG US Equity SOLAREDGE TECHNO USD 12.8 (381.7) 12,195.3 8.13 6.55 5.21 48.41 34.68 26.24 66.99 51.42 39.96
TOM NO EQUITY TOM RA SYSTEM S AS NOK 6.3 287.2 N/A 6.15 5.69 5.21 30.94 27.65 24.29 75.26 59.75 50.47
ORSTED DC EQUITY ORSTED A/S DKK 62.2 2,775.9 N/A 6.85 6.81 6.81 24.56 19.06 18.50 52.98 42.50 41.78
QFUELM E NO EQUITYQUANTAFUEL NOK 0.8 (12.0) 916.6 400.35 49.68 13.11 (131.55) 123.60 19.85 N/A 626.41 45.71
NEL NO EQUITY NEL ASA NOK 2.6 (46.0) 2,319.0 33.07 21.37 13.80 (118.04) (286.56) 175.07 N/A N/A N/A
Average peers 52.6x 11.8x 6.5x -11.4x -4.8x 33.2x 49.4x 111.3x 33.8x
Source: Arctic Securities Research, Bloomberg
28
Financials and estimates
Revenue
The main driver for Otovo’s sales revenue is growth in new customer contracts.
Otovo has experienced rapid growth since inception and sold a total of 2,118
installations in 2019. Whilst offering different financing means, outright
purchase and solar leases, the sale of systems is recognized as one revenue
stream. When customers choose the option to lease their solar systems they will
do so from EDEA, which will pay Otovo the upfront cost of the system, allowing
Otovo to recognize the sale as a direct purchase like from any other solar
customer. In addition, Otovo will receive a “fee” from EDEA per lease for the
duration of the lease. Otovo’s revenue model is built on the reported number of
installations per country. Otovo generated NOK 193m in sales revenues in FY/19.
For the first half of 2020 the company reported revenues of NOK 77m on a group
level, vs NOK 108m in H2/19. We expect revenues to grow in line with sales.
Growing revenues from diversified product offerings.. ..new market entries and a booming market
Revenues in NOKm Revenues per segment in NOKm
1,000 1,000
800 800
NOKm
600
600
400
400
200
200
-
- '18 '19 '20e '21e '22e '23e '24e '25e
'18 '19 '20e '21e '22e '23e '24e '25e Norway Sweden France Spain Poland Italy Leasing fees
Due to new market entries in 2021 we expect the gross margin to fall from
current levels, but to quickly increase towards the 20% expected margin as the
operations on a country basis mature. As the volumes rise, COGS is expected to
fall due to discounted system purchase prices. We believe a gross margin of 20%
will be attainable in the next few years. Our gross margin estimates differ
slightly between countries, in part as customers’ willingness to pay and system
size differ, affecting the unit rate.
Volumes drive down the cost of operations and units .which lowers COGs and increases gross margin
Revenues and COGS in NOKm Gross margin %
16%
14% New mar ket entr ies
12%
10%
8%
%
6%
4%
2018 2019 2020 2021 2022 2023 2024 2025 2%

0%
Revenues Cost of goods sold
2018 2019 2020e 2021e 2022e 2023e 2024e 2025e
29
EBITDA margins of 20%+ after 5 years in market
We estimate Otovo to reach EBITDA breakeven when exceeding 1,500 sales on a
country level. After 3-5 years in the market, we expect Otovo to reach an
EBITDA margin between 5-20% if sales range between 3,000-5,000 or more in the
respective countries and marketing costs fall. In our view, the main drivers for
Otovo’s future profitability are the growth rate of the small-scale solar PV
market and Otovo’s share of that growth, which for the respective countries we
have based on forecasts from IEA, Bloomberg NEF, SolarPower Europe and UNEF.
We estimate a 5% drop in growth rates for FY/20 in light of the Covid-19 impact
on demand. We base our market growth estimates for core markets on a
combination of country specific growth rates in the last 2 years, as well as
overall total solar market growth expectations. On the back of these estimates
we expect gross margins in the 20% range in the next few years driven by
increased volumes and improved unit margins. On a country level this will differ
due to different policy schemes and incentives as well as the efficiency of the
installers market. According to our estimates, we expect Otovo to be profitable
on an EBITDA basis from 2024 onwards.
Country-level profitability expected after 3-5 years Installations growing in geography and number
EBITDA margin depends on sales volume and Otovo’s time in market Total installations (units) LTM per country
Sales
volume 3,000
5-20% EBITDA >20% EBITDA
margin
2,500
margin
3,000 - 5,000
2,000
units/year EBITDA break-even
1,500
High marketing EBITDA
5-20% EBITDA
costs, 0% EBITDA
margin
break-even to 10% margin 1,000
margin
1,500 EBITDA 500
-
Investing phase, Loss making due to
high marketing low volume and Negative margins
costs and capex marketing cost

Otovo´s
Market entry Gaining market share Established player time in the
Spain Poland Italy
(1st year) (3-5 years) (into perpetuity..) market
As Otovo is still in an early stage it has delivered negative results to date.

However we estimate Otovo to report growing earnings and positive EPS from
2024 onwards as reflected by the growing earnings yield to around 35%.
After 3-5 years in market EBITDA margin rises and… .. we expect positive earnings from 2024 onwards..
Consolidation and per country EBITDA split in NOKm Net profit (loss) and earnings yield %
100
60 6%
50 40 4%
20 2%
NOKm
- 0%
-
-2%
-20
-50 -4%
-40
-6%
-100 -60 -8%
2018 2019 2020 2021 2022 2023 2024 2025
-80 -10%
Spain Poland Italy -100 -12%
'18 '19 '20 '21 '22 '23 '24 '25
Other EBITDA (NOKm)
Net income (loss) Earnings yield
30
Asset-light balance sheet
Otovo’s expansion and M&A activities are primarily financed through a series of
equity raises. Furthermore, in order to strengthen its liquidity position the
Company raised a total of NOK 174m in equity throughout 2019 and had a
reported book equity value of NOK 210m at year end. As of H1/20, Otovo had a
cash position of NOK 153m, which is expected to fall following the equity
funding of EDEA of NOK 25m, in addition to operating losses. As of H1/20 Otovo
had NOK ~18m interest-bearing debt outstanding which consists of debt to
Innovation Norway as well as debt to financial institutions in France with an
interest cost varying between 5.2%-1.36%, which is expected to be fully
amortised by 2030. In addition, Otovo has a current outstanding earn-out
obligation following the acquisition of ISWT. Otovo will settle the transaction
with 90% shares and 10% cash. Half of the earn-out obligation was settled in July
2020 through the issuance of 198,100 shares in addition to 42,205 shares in
sellers’ loan settlement, with the remaining half due in 2021/2022.
We expect further equity issuance to fund expansion Assets nearly fully funded by equity
Free cash flow and Cash and deposits (NOKm) H1/20 balance sheet breakdown (NOKm)
250 400 Tangible Interest bearing Current

assets debt liabilities
200 350 24
5 18
150
300
100 Intangible Non-interest
250 Assets bearing debt
50 127
NOKm
56
- 200
-50 150 Total
-100 Cash equity
100 240
193
-150
50
'18 '19 '20 '21 '22 '23 '24 '25
-
Free cash flow Cash and deposits Assets Liabilities
We expect Otovo to raise capital of NOK 100m or more covered by increased

leverage or equity as a means to fund expansion into new markets, reach
estimated sales volumes, and profitability as a result.
31
Valuation
Otovo valuation
We initiate coverage of Otovo with a Buy recommendation and target price of
NOK 200, based on a multiple method. Our target is derived from the average of
a ’20 DCF and ’21 EV/Sales,’25 EV/EBITDA and ’30 P/E analysis. We have used a
combination of different valuation approaches as a means to validate our
assumptions as to how Otovo should trade relative to its peer group, as well as
evaluate our assumptions regarding Otovo’s forecasted cash flow by considering
how companies with similar assets/characteristics are priced in the market. As
there are few traded “direct” peers in Otovo’s market we have divided the
competitive landscape into three peer groups of publicly traded companies 1)
other small-scale solar PV retailers, 2) online marketplaces as well as 3)
companies within the solar/renewables industry. We further provide an
overview of the range at which peers in the three peer groups are priced in the
market. Based on this range, Otovo is currently trading at a steep discount to
peers. Moreover, as Otovo is at an earlier stage than most of its peers, we base
our multiple valuation analysis on Otovo’s sales, EBITDA and earnings figures in
2021, 2025 and 2030, respectively, discounted back to 2020. Our target price is
therefore the result of the average of the equity values derived from a ’20 DCF,
and discounted ’21 sales, ’25 EBITDA and ’30 PE multiplied by average forward
2022 peer multiples.
Our target price is in the low-end of the range in which peers trade..
Equity values NOK/sh derived from median peer multiples and ’20 DCF’ using 10% WACC
450 10.0x
400 30.0x
350 WACC 8%
300
40.0x
250
20.0x
200
150 5.0x
WACC 12%
100
20.0x
50
-
20' DCF 21' EV/Sales 25' EV/EBITDA 30' P/E
Share price Target
We average out the respective equity values in the table below and arrive at an
equity value of NOK 250/sh. Due to the uncertainty with regards to the
estimated growth trajectory, we apply a 20% to this value and arrive at our fair
value target price of NOK 200/sh.
Target price of NOK 200 derived from 4 valuation approaches

Breakdown of target price methodology
20' DCF 21' EV/Sales 25' EV/EBITDA 30' P/E
Equity value/sh 149 202 119 232
A pplied multiple/discount WA CC 12% 5.0x 20.0x 20.0x
Equity value/sh 304 404 241 348
A pplied multiple/discount WA CC 8% 10.0x 40.0x 30.0x
Average low & high 227 303 180 290
Average of methods 250
Discount to target -20%
Target pric e 200
32
Our price target based on a ’20 DCF using a 10% WACC
We find a DCF, supported by multiples, the most appropriate valuation approach
as the company is in a growth stage and earnings are not expected to be
positive until end 2024/beginning 2025. Our projection period goes out to year
2030 as we do not believe the company will reach “steady state” until this
point. Our DCF model implies a fair value of NOK 200/sh. We apply a 10% WACC
and a terminal growth rate of 1.5%, based on 30-year US Treasury rate. We
further assume no positive change in working capital into perpetuity, as Otovo
may no longer delay paying suppliers when competition increases. We may lower
the risk rate applied in our DCF as the company’s operations matures and they
show ability to become EBITDA profitable on a country-level basis. The chart
below illustrates the potential upside from adjusting our assumptions.
We expect further equity issuance to fund expansion Assets nearly fully funded by equity
DCF sensitivities to WACC adjustments DCF sensitivities to terminal value perpetual growth adjustments
350 270
304 245
250
300 230
249 230 218
250 207
207 210 197
188
NOK/sh
NOK/sh
200 174 190

149
150 170
105 Ar ctic Ar ctic
150 tar get
100 tar get
130
50 105
110
0 90
Current DCF'12 DCF'11 DCF'10 DCF'9 DCF'8 Current 0.5% 1.0% 1.5% 2.0% 2.5% 3%
We discount estimated FCF up until and including 2030 by a 10% WACC

Discounted Cash Flow (DCF) summary
Discounted Cash Flow (DCF) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 TY
Revenues 177.25 367.65 602.81 690.53 909.52 1,045.09 1,207.15 1,360.13 1,518.77 1,661.81 1,809.22 1,836.35
y-y growth -8% 107% 64% 15% 32% 15% 16% 13% 12% 9% 9% 2%
EBITDA (65.72) (67.55) (43.98) (18.37) 29.13 73.49 108.04 155.70 221.90 270.71 305.28 367.27
EBITDA margin -37% -18% -7% -3% 3% 7% 9% 11% 15% 16% 17% 20%
EBIT (82.79) (82.55) (58.98) (33.37) 14.13 58.49 95.04 142.70 208.90 257.71 292.28 296.66
EBIT margins -47% -22% -10% -5% 2% 6% 8% 10% 14% 16% 16% 16%
Depreciation (17.07) (15.00) (15.00) (15.00) (15.00) (15.00) (13.00) (13.00) (13.00) (13.00) (13.00)
Capex (48.00) - (25.00) - - (25.00) - - - - (5.00)
Change in working capital 13.18 4.26 4.63 2.56 2.86 2.55 3.14 3.04 3.15 2.84 2.92
Tax - - - - (2.57) (12.33) (20.37) (30.85) (45.42) (56.16) (63.76) (59.33)
Free Cash Flow (FCF) -101 -63 -64 -16 29 64 66 128 180 217 244 303
Terminal value 0 0 0 0 0 0 0 0 0 0 3,564 3,564
NPV Cash flow 310 404 509
NPV terminal value 1,374 1,511 1,663
Mid-year adjustments 82 94 106
Enterprise value (NOKm) 1,766 2,009 2,278
NIBD -66 3 69
Market c ap (NOKm) 1,832 2,007 2,208
# shares 8.9 9.1 9.1
Share pric e (NOK) 207 220 243
33
EV/Sales
One of the methods we use to arrive at our estimated fair value target price is
to apply an average EV/sales peer multiple of 6x to estimated sales in 2021. We
estimate sales of NOK 367m in 2021, underpinned by an expected total of
~6,900 units installed across, Norway, Sweden, France, Spain, Italy and Poland.
We see significant upside to our applied multiple, which is in the low range of
where peers trade today. The applied multiple is derived by discounting the
average of the median multiples from the three peer groups expected in 2021.
We apply a discount as peers are relatively mature companies with larger
customer bases, in addition to some having positive earnings, which should
reflect a higher sales multiple. We also discount the implied equity value from
the EV/Sales multiple by a discount rate of 10% to the 2-year forecast. As seen
below, Otovo is currently trading at a discount to peers based on estimated
revenues and current EV. As seen below in the sensitivity table, there is
significant upside potential to the implied equity value and fair target price if
applying a peer multiple in the higher end of the range.
Otovo trading at a discount to peers.. ..with substantial upside potential to enterprise value
Otovo and peers multiples estimates in year 20’, 21’ and 22’ (x) EV sensitivities to changes in sales (NOKm) and EV/sales (x)
16.0x 15.0x
EV /Sales
14.0x
10.8x 2.5x 5.0x 6.3x 7.5x 8.8x 10.0x 12.5x
12.0x
9.3x 257 70 141 176 212 247 282 353
10.0x
8.0x 6.8x6.6x 294 80 161 202 242 282 323 404
5.5x 5.2x 5.4x
6.0x 4.4x 331 91 181 227 272 318 363 454
3.4x
Sales
4.0x 2.9x 368 101 202 252 303 353 404 505
1.9x
2.0x 404 111 222 277 333 388 444 555
- 441 121 242 303 363 424 484 606
PV retail Online Energy Otovo
478 131 262 328 394 459 525 656
marketplaces industry
20Y 21Y 22Y
EV/EBITDA
Based on the average of the median from the three peer groups we find a
EV/EBITDA range from 20-40 on 2022 earning. If applying this to 2025 estimates,
we find a fair discounted share price of NOK 119 for the lower range, NOK 241 in
the upper range, and NOK 180 as a mid-point.
Otovo trading at a discount to peers.. ..with substantial upside potential to enterprise value
Otovo and peers multiples estimates in year 20’, 21’ and 22’ (x) EV sensitivities to changes in EBITDA (NOKm) and EV/EBITDA (x)
70.0x
57.7x EV /EBITDA
60.0x
15.0x 20.0x 25.0x 30.0x 35.0x 40.0x 45.0x
50.0x 46.8x 42.0x
51 62 83 104 125 147 168 189
40.0x
28.9x 59 71 95 119 144 168 192 216
30.0x 25.5x
22.1x 66 80 107 134 162 189 216 244
EBITDA
18.5x
20.0x 13.3x14.8x 73 89 119 150 180 210 241 271
10.0x 81 98 131 165 198 232 265 298
88 107 144 180 216 253 289 326
-
PV retail Online Energy industry 96 116 156 195 235 274 313 353
marketplaces
20Y 21Y 22Y
P/E
We further apply an average of current and forward peer multiples to Otovo’s
discounted expected earnings in 2030. In order to arrive at the average peer
multiple, we have removed peers that are regarded as rather overvalued either
34
as the companies do not yet report positive earnings, or as the company’s brand
name or “ESG-appeal” have been key triggers. We end up with a peer multiple
range between 9.9x and 34x, where the average of multiples between 2020 and
2022 across all peer groups is roughly 25x, which when we apply to Otovo
implies a NOK 290/sh.
Otovo trading at a discount to peers.. ..with substantial upside potential to equity value
Otovo and peers multiples estimates in year 20’, 21’ and 22’ (x) Share price sensitivities to changes in earnings NOKm and P/E(x)
40.0x
33.7x PE
35.0x
29.2x 15.0x 20.0x 22.5x 25.0x 27.5x 30.0x 35.0x
30.0x 158 122 162 182 203 223 243 284
24.7x
25.0x 181 139 185 209 232 255 278 324
19.5x
20.0x 17.7x 203 156 209 235 261 287 313 365
15.9x 15.8x
EBITDA
15.0x 226 174 232 261 290 319 348 406
10.8x9.9x
249 191 255 287 319 350 382 446
10.0x
271 209 278 313 348 382 417 487
5.0x
294 226 301 339 377 414 452 527
-
PV retail Online Energy industry
marketplaces
20Y 21Y 22Y
35
Appendix 1: The economics of small-scale distributed solar power
Small is beautiful
The economics of small-scale solar systems vary across locations. These
differences are underpinned by solar irradiation yield (the amount of sun), the
alternative cost (electricity prices), as well as the regulatory environment and
net metering policies. The conversion of sunlight into usable energy forms has
become a low-cost, highly available source of electricity as the cost of solar
panels has fallen, through technological advances and a steep learning curve.
Another determinant of the financial viability of self-consumption of solar
energy is the initial investment cost, which is lowered through technological
advances and depends on the learning curve of solar modules. Electricity prices
in the respective countries and the efficiency of the panels are also key
components as one of the main aims of solar self-consumption is to reduce
electricity provided by the grid and compete with the respective prices.
Furthermore, flexible financing options for installation costs affect the marginal
cost of solar power, and if paid upfront the cost of producing energy will be
close to zero.
Significant energy cost savings by going solar Which are also falling due to installation efficiency
Illustrative example cost of electricity over 25 years in 3 scenarios Total cost of installations in Norway, Sweden and Spain
Direct purchase Solar lease No solar panels

Total savings of Total savings of No energy cost
Cost
20-50% 30-50% savings
Cost of no panels Cost with leasing

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 231242 25
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1252 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cost of owning
Payback period - 4 KW rooftop PV system across Europe

The payback period translates the economics of solar energy into the time taken
for a project to pay for itself. For the purpose of illustrating Otovo’s value
proposition to customers we have used a study1 encompassing a life cycle
impact assessment of a similar size rooftop PV system across Europe. Using an
average rooftop 4000W system, equal to about ~12 of Otovo’s premium panels,
and the cost of electricity from 2018 for each country, we assume a total cost of
EUR 7,000, keeping the cost of systems (incl. hardware costs, transportation &
installation) equal. In order to compare payback times between countries
assumptions are made as energy policies, labour costs and the cost of modules
may vary between countries. The amount of electricity generated further
depends on solar irradiation, thus the direction of the roof and the slope of the
roof, which determines how much energy is produced, must also be assumed. In
brief the payback time is derived by dividing the cost of solar systems (total cost
of solar installation - value of financial incentives) by its yearly energy output,
multiplied by the cost of electricity. Doing this for the respective countries
shown below, average payback times in Europe are derived, yielding an average
of 5-11 years, which shows that PV systems are a feasible investment up against
their 25-year life span.
1. Georgios Martinopoulos, Are rooftop photovoltaic systems a sustainable solution for Europe? A life cycle impact assessment and cost analysis, Applied Energy, Volume 257,2020, 114035, ISSN
0306-2619, https://doi.org/10.1016/j.apenergy.2019.114035
36
Cost of electricity in European countries
Cost of electricity in European countries in 2018 and April 2020 - they are 30% lower on average in 2020 which would increase payback times
0.35
0.30
Cost/Kwhe
0.25
0.20
0.15
0.10
0.05
0.00
United…
Ireland
Cyprus
Iceland
Denmark
Spain
Austria
Luxembourg
Italy
Portugal
Estonia
Belgium
Poland
Croatia
latvia
Netherlands
Norway
Slovakia
Romania
France
Germany
Sweden
Slovenia
Finland
Greece
Czechia
Cost/Kwhe used in analysis Cost/Kwhe April 2020

France & Spain – over 6000 KWh of annual productions European average payback times between 5-11 years
Annual electricity production 2000-<6500 KWh Simple payback period of PV systems in years
Source: Arctic Securities Research, Applied Energy Journal data Source: Arctic Securities Research, Applied Energy Journal data
The NPV of solar systems – customer value proposition broken down

The cost of solar systems, the return from investing in self-consumption solar
systems and the cost-competitiveness versus grid-dependence depend on factors
such as the way the project is financed, i.e. the cost of financing and other
economic parameters such as depreciation of the asset and taxes. If the
consumer chooses to finance a solar system installation with a solar loan, the
interest rate and debt interest must be considered. This will affect the discount
rate used to evaluate the Net Present Value (NPV) of the installation. Another
important component of relative profitability is whether the household in mind
receives remuneration from the grid operator for surplus electricity generated
from the solar system, or whether this is wasted. As a result feed-in tariffs (FiT)
and related energy policies in the respective markets are key parameters in
affecting the profitability.
37
As the payback time goes down, project IRR increases .. which is dependent on lower hard- & software costs
Norwegian electricity prices, payback times and consequent project Breakdown of the average cost of a solar system in Norway in
IRR NOK/watt
18 8.0% 14
16 7.0% 12
Payback time (years)
14 7.5% 10
6.6% 7.1% 6.0% 6.6
NOK/W
12 6.1% 8
5.0%
10 5.5% 6 12.9
IRR %
5.0% 4.0% 1.7
8 4.4% 4 1.3
3.0% 0.2
6 2 3.2
4 2.0% 0
2 16 15 15 14 13 13 12 1.0%
0 0.0%
0.8 0.85 0.9 0.95 1 1.05 1.1
Electricity prices NOK/KWh
Payback time (years) IRR
Source: Arctic Securities Research, Company data, Sparebank1 Source: Arctic Securities Research, Company data
The total energy generation by each system depends on the efficiency and type
of solar panels chosen. The average Norwegian solar rooftop system produces on
average 650-1000 KWh per installed KWp per year, with solar cells delivering an
average of 100-170Kwh/m2. In comparison, the total installed solar PV capacity
in Norway in 2019 was about 120 MWp, and solar power production was close to
0.1 Twh. If you produce more than you consume in Norway you can sell your
excess electricity to Tibber (an Otovo partner) for NOK 1/KWh (up to
1GWh/year).
In order to provide an example of the cost for consumers and potential return
we can use an average purchaser of Otovo solar panels in Norway. A solar
system consisting of 26 Otovo panels at 320W capacity is expected to generate
approx. 8,700 KWh in annual electricity (assuming the system operates 24h a
day for 365 days with a load factor of 12%). At average electricity prices in
Norway including grid rent and taxes for households from Q1/17 up until Q2/20
of NOK 1.05/KWh, a system lifetime of 30 years and public support from ENOVA
of NOK 20,400, the customer would have yearly savings of NOK ~2,393 and total
lifetime savings of approx. NOK 71,795, according to rough calculations as seen
below.
Annual savings depend heavily on electricity prices & public support

Cost and savings per consumer of a 320W x 26 panel solar system in Norway
Average cost of small-scale solar system Norway 26 panels of 320W
Cost per consumer NOK 224,103
Public support '' 20,400
Total cost '' 203,703
Lifetime years 30
Cost per month NOK 566
Electricity produced KWh/annum 8,746

Electricity price (incl grid rent + public duties) NOK/KWh 1.1
Reduction in monthly electricity bill NOK 765.27
Savings per annum NOK 2,393

Saving total lifetime '' 71,795
38
Appendix 2: US peers
In order to understand the potential for European solar PV growth at residential
scale, a lesson or two can be drawn from the US market. The total addressable
US market is estimated to be about 84m single-family homes, of which the
current market penetration rate is roughly 3%, but where costs have fallen and
capacity has increased exponentially. Solar leasing representa around 30% of US
residential solar installations according to Wood Mackenzie. The counter-cyclical
characteristic of leasing can be backed by the growth of solar rooftop
installations which grew exponentially during the financial crisis and at a CAGR
of 41% between 2003 and 2019. This was further driven by the investment tax
credit (ITC) scheme which allowed the homeowner to deduct around 26% of the
total installation cost of the solar system, signalling the importance of a
favourable regulatory environment. In 2019, the US residential solar PV market
grew by 2.8 GW and in Q1/20, 313 MW of new net residential solar installations
took place in the US, with 21% using a third-party ownership structure,
according to BloombergNEF. The market is expected to double to about 5.4
million installations by 2024, implying a CAGR between 12-16%. When a market
where the cost of installing solar systems relative to the installed capacity is
high versus what it is for Otovo in its core markets, keeps growing at this pace,
the opportunities that present themselves in Europe are very attractive.
US market has grown exponentially since early 2000’s .. ..and will continue grow despite subsidy cuts
Residential PV cumulative installed capacity in MW Forecasted small-scale (residential + commercial) in GW
18,000 16,693 200 182

16,000 180
154
14,000 160
140 130
12,000
10,000 120 109
MW
89
GW
8,000 100
6,000 80 66
4,000 60
40 28 33
2,000 20 24
20 12 16
-
-
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
2015
2016
2017
2018
2019
2011
'15 '16 '17 '18 '19 '20e '25e '30e '35e '40e '45e '50e
Source: Arctic Securities Research, Company data, BNEF Source: Arctic Securities Research, BNEF
Residential solar PV cost has fallen 50% since 2010 Otovo pays less than peers per system sale
Total installation cost in USD/KW Cost USD/W in 2018
300,000 285,000
3.5
3.12 3.11
250,000
3 2.8
200,000 2.48
# customers
2.5
150,000
2
100,000 1.5
50,000 1
- 0.5
0
SunRun Vivint solar Otovo Otovo at scale
Source: Arctic Securities Research, IRENA Source: Arctic Securities Research, Company data
39
Top Management
Andreas Thorsheim - Chief Executive Officer

• Previously SVP Product at Opera Software
• Various executive positions at Schibsted and strong consumer internet experience
• MSc in Economics from NHH and MSc in International Management from London School of Economics
Cecilie Weltz - Chief Financial Officer

• Previously worked as investment professional at private equity firm Verdane
• Experience from corporate finance and acquisition finance at Swedbank
• MSc in Economics and Business Administration, Finance Major from the Norwegian School of Economics (NHH)
Babak Tighnvarad – Chief Growth Officer

• Previously CEO at Soundation and COO at SaltsideTechnologies
• Various roles at Google and HP
• BSc in Marketing Stockholm University and MSc in Electrical and Electronics Engineering
Anne Lene Holstad – Chief Operating Officer

• Former lean and strategy director at Circle K and Topaz Energy (Ireland)
• Former operations consultant at Karabin Consulting
• BS in Auditing from Høgskolen i Agder and MSc in Management Accounting & Finance from University of Agder
Simen Jørgensen – Chief Product Officer

• Previously Founder and CEO of Iterate
• Experience from Tieto and Norwegian Government (Directorate for Civil Protection and Emergency Planning)
• MSc in Computer Science, NTNU
Andreas Bentzen – Chief Technical Officer

• Previous VP Technology at Renewable Energy Corporation (REC)
• Research at Institute for Energy Technology and KTH
• MSc in Physics, NTNU and PhD in Physics, University of Oslo
40
Board of Directors
Peter Mellbye – Chair of Board of Directors

• Former EVP at Statoil
• Statkraft board member
Ingunn Randa – Board of Directors

• EVP at OBOS
• Previously with Nordea (IBD) and Quartz
Johan Bergström – Board of Directors

• CEO AxSol (Axel Johnson Group Company)
Tor Øystein Repstad – Board of Directors

• CEO Agder Energi Venture
Antoine Ebel – Board of Directors

• Employee representative
Jean Baptiste Curien – Board of Directors

• Investment Manager at Nysnø Klimainvesteringer
Olivier Aizac – Board of Directors

• Former SVP Schibsted Latin America
41
Profit & loss statement
Profit and loss (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Revenue 193.7 177.2 367.6 602.8 690.5 909.5 1,045.1
Cost of sales (165.8) (157.7) (351.6) (563.2) (625.3) (796.8) (888.0)
SG&A (43.2) - - - - - -
Other (gain on sale etc.) (38.7) (85.2) (83.6) (83.6) (83.6) (83.6) (83.6)
Operating expenses (247.7) (243.0) (435.2) (646.8) (708.9) (880.4) (971.6)
EBITDA (54.1) (65.7) (67.5) (44.0) (18.4) 29.1 73.5
Depreciation (5.6) (17.1) (15.0) (15.0) (15.0) (15.0) (15.0)
Impairment (7.1) - - - - - -
EBIT (66.7) (82.8) (82.5) (59.0) (33.4) 14.1 58.5
Other (1.7) (4.4) (2.5) (2.5) (2.5) (2.5) (2.5)
Pre-tax profit (68.4) (87.2) (85.0) (61.4) (35.8) 11.7 56.0
Income tax 17.0 - - - - (2.6) (12.3)
Net income (51.4) (87.2) (85.0) (61.4) (35.8) 9.1 43.7
Attributable to
Equity holders of the parent (51.4) (87.2) (85.0) (61.4) (35.8) 9.1 43.7
Per share data (NOK) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Revenue per share 28.82 22.49 40.93 66.23 75.86 99.92 114.82
Adj. EPS (7.65) (11.06) (9.46) (6.75) (3.94) 1.00 4.80
Adjusted data (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Adj. revenue 193.7 177.2 367.6 602.8 690.5 909.5 1,045.1
Adj. EBITDA (54.1) (65.7) (67.5) (44.0) (18.4) 29.1 73.5
Adj. EBIT (66.7) (82.8) (82.5) (59.0) (33.4) 14.1 58.5
Adj. net profit (51.4) (87.2) (85.0) (61.4) (35.8) 9.1 43.7
Margins Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

Gross margin 14.4% 11.0% 4.4% 6.6% 9.4% 12.4% 15.0%
EBITDA margin (27.9%) (37.1%) (18.4%) (7.3%) (2.7%) 3.2% 7.0%
Adj. EBITDA margin (27.9%) (37.1%) (18.4%) (7.3%) (2.7%) 3.2% 7.0%
EBIT margin (34.4%) (46.7%) (22.5%) (9.8%) (4.8%) 1.6% 5.6%
Adj. EBIT margin (34.4%) (46.7%) (22.5%) (9.8%) (4.8%) 1.6% 5.6%
Net profit margin (26.5%) (49.2%) (23.1%) (10.2%) (5.2%) 1.0% 4.2%
Adj. net profit margin (26.5%) (49.2%) (23.1%) (10.2%) (5.2%) 1.0% 4.2%
Year-over-year growth Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

Revenue growth 103.2% (8.5%) 107.4% 64.0% 14.6% 31.7% 14.9%
EBITDA growth 42.8% 21.6% 2.8% (34.9%) (58.2%) 152.3%
EBIT growth 67.2% 24.2% (0.3%) (28.5%) (43.4%) 314.1%
Net profit growth 28.1% 69.5% (2.5%) (27.7%) (41.7%) 380.2%
Source: Arctic Securities Research and Company
42
Balance sheet
Balance sheet (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Property, plant and equipment 4.6 30.3 29.3 53.3 52.3 76.3 75.3
Intangible assets 126.9 131.5 117.5 103.5 89.5 75.5 61.5
Other non-current assets 0.8 - - - - - -
Total non-current assets 132.3 161.8 146.8 156.8 141.8 151.8 136.8
Receivables 30.9 25.9 53.8 84.0 100.8 119.5 136.2

Other current financial assets - - - 0.0 (0.0) 0.0 (0.0)
Cash and cash equivalents 193.0 82.1 43.9 7.5 7.5 7.8 67.4
Total current assets 223.9 108.0 97.7 91.5 108.3 127.3 203.6
Total assets 356.2 269.8 244.5 248.3 250.1 279.1 340.4
Equity attributable to the parent 239.9 191.2 131.4 69.9 34.1 43.2 86.9
Total equity 239.9 191.2 131.4 69.9 34.1 43.2 86.9
Long-term interest-bearing debt 17.6 16.3 46.6 76.9 95.3 93.6 91.9
Other non-current financial liabilities - - - (0.0) 0.0 0.0 (0.0)
Other non-current liabilities 56.4 32.5 4.5 4.5 4.5 4.5 4.5
Total non-current liabilities 74.0 48.8 51.1 81.5 99.8 98.1 96.5
Payables 9.9 15.5 32.2 50.4 60.4 71.6 81.6

Other current financial liabilities 20.7 - (0.0) 0.0 - 0.0 (0.0)
Other current liabilities 11.8 14.3 29.7 46.5 55.8 66.1 75.4
Total current liabilities 42.3 29.9 62.0 96.9 116.2 137.8 157.0
Total equity and liabilities 356.2 269.8 244.5 248.3 250.1 279.1 340.4
Balance data (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Gross debt 17.6 16.3 46.6 76.9 95.3 93.6 91.9
Net interest bearing debt (175.4) (65.9) 2.7 69.5 87.7 85.8 24.5
Net interest bearing debt and lease liabilities (175.4) (65.9) 2.7 69.5 87.7 85.8 24.5
Working capital 9.2 (4.0) (8.2) (12.9) (15.4) (18.3) (20.8)
Capital employed 64.4 125.3 134.0 139.4 121.8 129.0 111.4
43
Cash flow
Cash flow statement (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Net profit (68.4) (87.2) (85.0) (61.4) (35.8) 9.1 43.7
D,A&I 12.6 17.1 15.0 15.0 15.0 15.0 15.0
Change in working capital (2.8) 13.2 4.3 4.6 2.6 2.9 2.6
Other 12.4 - - - - - -
Cash flow from operations (46.2) (56.9) (65.7) (41.8) (18.3) 27.0 61.3
Net acquisitions/divestments (28.6) (48.0) - (25.0) - (25.0) -

Cash flow from investing activities (28.6) (48.0) - (25.0) - (25.0) -
New debt - - 32.0 32.0 20.0 - -

Repayment of debt - (1.7) (1.7) (1.7) (1.7) (1.7) (1.7)
Change in debt - (1.7) 30.3 30.3 18.3 (1.7) (1.7)
Equity issue 150.2 25.2 25.2 - - - -
Other - (28.0) (28.0) - - - -
Cash flow from financing activities 150.2 (4.5) 27.5 30.3 18.3 (1.7) (1.7)
Other (e.g. FX) (0.0) (1.5) - - - - -
Net cash flow 75.4 (109.4) (38.2) (36.5) 0.1 0.3 59.6
Cash flow data (NOKm) Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Free cash flow to firm (74.75) (134.43) (93.74) (66.80) (18.26) 1.96 61.26
Free cash flow to equity (74.75) (136.10) (63.41) (36.47) 0.08 0.30 59.60
44
Key ratios & Valuation
Market data Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e
Avg. shares outstanding (m) 6.72 7.88 8.98 9.10 9.10 9.10 9.10
Avg. diluted shares outstanding (m) 6.72 7.88 8.98 9.10 9.10 9.10 9.10
Enterprise value 755 865 933 1,000 1,018 1,016 955
Credit metrics Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

NIBD / EBITDA (x) 3.25 1.00 (0.04) (1.58) (4.78) 2.94 0.33
IBD / EBITDA (x) (0.33) (0.25) (0.69) (1.75) (5.19) 3.21 1.25
IBD / (EBITDA - capex) (x) (0.33) (0.25) (0.69) (1.75) (5.19) 3.21 1.25
IBD / Total assets 4.9% 6.0% 19.1% 31.0% 38.1% 33.5% 27.0%
Operating cash flow / IBD (262.4%) (350.0%) (141.1%) (54.3%) (19.2%) 28.8% 66.6%
Free cash flow / IBD (424.5%) (826.6%) (201.2%) (86.8%) (19.2%) 2.1% 66.6%
Equity / total assets 67.3% 70.9% 53.7% 28.2% 13.6% 15.5% 25.5%
Profitability Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

FCFF yield (9.0%) (16.2%) (11.3%) (8.1%) (2.2%) 0.2% 7.4%
FCFE yield (9.0%) (16.4%) (7.7%) (4.4%) 0.0% 0.0% 7.2%
ROE (29.0%) (40.4%) (52.7%) (61.0%) (68.8%) 23.5% 67.2%
ROACE (186.8%) (87.3%) (63.7%) (43.1%) (25.5%) 11.3% 48.7%
Valuation Dec-19 Dec-20e Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

EV / Sales (x) 3.37 4.30 2.26 1.49 1.33 1.00 0.82
EV / adj. Sales (x) 3.37 4.30 2.26 1.49 1.33 1.00 0.82
EV / EBITDA (x) na na na na na 31.36 11.59
EV / adj. EBITDA (x) na na na na na 31.36 11.59
EV / EBIT (x) na na na na na 64.66 14.57
EV / adj. EBIT (x) na na na na na 64.66 14.57
P / E (x) na na na na na 105.0 21.9
P / adj. E (x) na na na na na 105.0 21.9
P / B (x) 3.02 4.87 7.27 13.66 28.01 22.11 10.99
Earnings yield (7.3%) (10.5%) (9.0%) (6.4%) (3.7%) 1.0% 4.6%
Source: Arctic Securities Research, Company and Bloomberg
45
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Company(ies)
Otovo AS
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1)
Otovo AS - X - - X - -
1) Arctic has provided general investment banking services to the Company in the previous twelve months.
2) Arctic has acted as financial advisor in connection with a placement of shares or bonds of the Company in the previous twelve months.
46
3) Arctic has acted as financial advisor in connection with an IPO of the Company in the previous twelve months.
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Company(ies) Analyst shares 1) Analyst bonds 2) Net short position 3) Net long position 4)
Otovo AS - - - -
1) Number of shares owned by the analysts who are authors of the parts of the report concerning the mentioned Company.
2) Number of bonds owned by the analysts who are authors of the parts of the report concerning the mentioned Company.
3) The size of the position if Arctic alone, or together with its affiliates or subsidiaries hold a net short position exceeding 0.5 % of the
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Otovo AS
The part of this report concerning Otovo AS has been prepared by Sveinung Alvestad (Equity Analyst) and Kaja Mazarino Håkonsen (Equity Backup).
Equity recommendations:
Price Close
138
128
118
108
98
88
78
68
58
Oct.19 Dec.19 Feb.20 Apr.20 Jun.20 Aug.20
Source: Bloomberg, Arctic Securities Research
Date Recommendation Target (NOK) Price (NOK)

N/A
Source: Bloomberg, Arctic Securities Research
Planned updates:
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• New accounting figures are released, or
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Otovo AS BUY HOLD SELL

OTOVO NS · Energy · Renewable · Equity update · 13 October 2020 · 22:21

IOC: Ph(OTOVO)ltaics for the people (49p) Target NOK 200.0

12 months share price performance:

Initiating coverage with a BUY and NOK 200 target price

Key Figures (NOK) Dec-21e Dec-22e Dec-23e Dec-24e Dec-25e

FCFF yield (11.3%) (8.1%) (2.2%) 0.2% 7.4%

Source: Company data Source: Arctic Securities Research, BNEF

Source: Arctic Securities Research, IRENA Source: Arctic Securities Research

Source: Arctic Securities Research Source: Arctic Securities Research

Source: Company data Source: Company data

A booming solar market on the back of rapidly falling cost

<6 year s Consumer electricity price

Three stage business case, focus now is on growth

Investing phase, Loss making due to

EBITDA break-even on the horizon, profitability will follow suit..

Otovo is differentiated from peers Trading at a discount to peers on an EV/sales multiple

Source: Arctic Securities Research Source: Arctic Securities Research, Bloomberg

Source: Arctic Securities Research, Bloomberg Source: Arctic Securities Research

2016 2017 2018 2019 2020

Source: Arctic Securities Research, Company data

NOTC-Listing & Ownership

Rank Holders # Shares Position (% of shares)

1 Axel Johnson 1,862,881 21.0%

3 Akershus Energi 854,533 9.6%

5 Nysnø Fornybar (AS) 811,806 9.2%

6 KLP (AksjeNorge and KLPLiv) 700,717 7.9%

7 OBOS 358,904 4.0%

9 Andreas Bentzen (CTO and Co-founder) 230,724 2.6%

Total 8,862,214 100%

Source: Arctic Securities Research, Company data

Management incentive scheme

ISWT Otovo AB Otovo AS Otovo Iberic SL

The solar systems constitute an alternative source of electricity for household

Source: Company data

Source: Company data Source: Company data

Total installation costs are going down..

90% 83% 85% 190

54% 55% 57%

The maturity of the market is of importance with regards to potential margin

Source: Company data

Otovo offers flexible financing options to potential solar prosumers

Solar Purchase Solar Lease

Source: Arctic Securities Research, Company data

After a few years direct purchase of solar pays for itself

After this point you save money from

Source: Arctic Securities Research

Recurring fees for the

Source: Arctic Securities Research Source: Arctic Securities Research

What is solar PV?

Global solar PV market

Previous years total capacity Annual additions

Solar LCOE is down 80% during the last decade

European solar market

Within Europe, Germany is expected to drive the greatest demand for PV

The future cost effectiveness of small PV systems is expected to be the key

0.40 35 Consumer electricity price

Otovo’s core markets

France has been the leading residential solar player