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STENA AB ANNUAL REVIEW 2019Thanks to NorthernMarine, our activitiescontinue to enjoy afirst-class reputationamong our customersin this industry.In ethical terms, when a company expandsit is important that everyone is treated equally.Our White Book is a guide that was createdmore than 30 years ago and 2019 the ninthedition was published. Every year's edition hasfeatured small, but significant, improvements.The definition and explanation of the term"care" is the best and most important thingwe have developed. When we are guided bycare for our fellow human beings (be theycustomers, colleagues or suppliers), financialresults, society and details, we will usuallybe acting correct. Both the company and theworld around us are developing constantly,so that we have created sustainability policiesthat are and must be adhered to.Past year we have continued to work on hundreds of environmental projects. Our methanol initiative makes it possible to usebio-methanol directly in our ferry operations.With wind turbines that have a "breakeven"level of 0.4 SEK per KWH, and solar panelswith even lower "breakeven" levels,we are very optimistic about the role of electricity in the future and are continuingto focus on our wind farms. We believe theenergy bearer can be the electron battery, orelectrons in water or ammonia.COVID-19 HAS CHANGED THE WORLD FASTDiversification creates resilience for as long aswe have the capacity to be a leader in what wedo. Small enough to care and big enough tocope, is our motto.Tough times normally create a vast numberof mergers. We are of course prepared to beactive, if chances will occur. At the same timewe are proud of the quality and effectivenessof our services creating performance to ourclients. Normally we have a sort of first refusaleven though we are rarely paid better thanthe market. This is the fifth slump in economic activity happening during my active time inbusiness. Despite cost awareness there are always unnecessary costs creeping into a business in reasonable times.Stena Line has already taken 950 peopleout of their operation and there are probablymore to follow. Many will not be reemployed,when times get better. Transporting freightand fewer passengers with reduced sailingfrequency is our present state of affairs.In South Korea they managed to turn thepandemic around in roughly two months.4We reckon with correspondingly three tofour months for Sweden. It may take longer.In such a case it will probably show up in a slower pace of recovery.Stena Line will be OK, when freight flows andpassengers start moving again. We will havephased out our oldest tonnage and we willhave a more efficient organisation and loweroperating cost. Our investments into logisticsshould give us higher utilisation and earningsover time.Our real estate business is only to a limiteddegree affected by its commercial tenants andwill not be affected unless the downturn willbe very extended. Capacity for more residential housing will continue for a long time in Sweden. The Adactum portfolio of companieshave adjusted themselves to run at 70% capacity and can do so for a long time.How our shipping activities will be affectedis difficult to judge. Stena Bulk is at presentexperiencing a boom. The number of shipsowned by Stena RoRo has been decreased andwe have only very few and small valued shipsopen for charter.Our lasting problem is of course the futureemployment of our drilling fleet. With price ofoil where it is activities will be reduced insteadof being expanded for a while. Depletion goeson and consumption of oil was on an increasetill present circumstances occurred. Hopefullythis only means a delay of one year in activities.Present low interest environment and thesupportive actions taken on by governmentswill, in my opinion, stimulate our economiesfast. Many people fear inflation. For as long asthere is a good supply of goods, I do not seethat happening. Distribution including transportation will hence be very crucial.In these demanding times we must doeverything we can to achieve, cost effective,accurate and developing operations. I wouldlike to thank all our employees, including those,who will not work with us any longer, ourcustomers and everyone, who partners with usin any way with the ambition to create greatervalue to our services.Göteborg, April 2020Dan Sten Olsson

STENA AB ANNUAL REVIEW 2019ABOUT STENABUSINESSESSUSTAINABILITYTHE WHITE BOOKStena’s success and survival are rooted in our business philosophy, which is setout in the White Book. The book describes how we should act within Stenaand how we should approach our business. Dan Sten Olsson has said: “Bydescribing the values we want to have at Stena, we ensure that everyone actsin the right way and that we take proper care of our customers, resources, andeach other.”OTHERMISSING YOUR WHITE BOOK?YOU CAN DOWNLOAD A COPY HERE:www.stena.com/core-values5

STENA AB ANNUAL REVIEW 2019STENA’S VALUE CREATIONSTRENGTH THROUGH ACTIVITIESIN DIFFERENT SECTORSSTENA BULKSTENA LINEOne of the world's leading tanker operators, with activities all over the world.Stena Bulk controls 87 vesselsfor transport of crude oil,refined oil products, vegetableoils, and gas.One of the world's largestferry companies, withfocus on freight andpassenger traffic. StenaLine operates 20 routesin Europe, with 38 ferries,and also owns five ports.Global tankershipping companywith high-quality,sustainable vesselsDevelopingfuture technologySTENA TEKNIKStena Teknik is a technicalresource for Stena’s marine-related business areas, to increase theircompetitiveness anddevelop techniques tohandle the Group's vesselson a safe, environmentallyfriendly and effective basis.6World-class ferryshipping companyOne of Sweden's largestprivately ownedproperty companiesSTENAPROPERTYOne of Sweden's largest privatelyowned property companies. Theportfolio primarily comprisesrental appartments in Sweden,but also commercial properties.In total, Stena Property owns andmanages 25,400 residential unitsand 3,700 commercial premises.

STENA AB ANNUAL REVIEW 2019ABOUT STENAThe Stena AB Group contributes to value creation and society's development byproviding maritime transport of goods, vehicles and passengers, offering securehomes in the Group's properties, generating electricity from wind power, andbuilding strong companies. The Group's stability is ensured through a deliberatestrategy to focus on activities in contracyclical industries. These activities createemployment for thousands of people all over the world.STENA ROROOne of the world's leading operators within design, constructionand operation of drilling units forthe offshore industry. Owns andoperates four drillships and twosemi-submersible rigs.Providing quality shipmanagement and marineservices with its multi national pool of 5,400sea farers and global network of onshore offices.Technical and crewmanagement ofdiverse fleet ofan internationalnetworkBuildingfinancial strengthSUSTAINABILITYResponsibleinvestmentValued operatorin the offshoreindustrySTENA FINANCELong-term investmentin listed and unlistedcompanies, with the aimof building strong, value- creating companies thatcan provide platforms fornew business areas withinthe Stena AB Group.Primarily engaged inmanaging the Stena ABGroup's financing, liquidityplanning and financialinvestments.OTHERSTENA ADACTUMBUSINESSESCharters out RoRo andRoPax vessels, offeringtechnical expertise andproject management tocustomers all over theworld, as well as controllinga fleet of six vessels.Offers technicalexpertise, as well assale and acquisitionSTENA DRILLINGNORTHERNMARINE GROUPStena ensures sustainable value creation through its employees,who seek constantly to contribute to positive development for bothour customers and society at large. Care, effective performance andinnovation are Stena’s key success factors – today and in the future.7

STENA AB ANNUAL REVIEW 2019STENA AS AN OWNERINDEPENDENTBUSINESSESWITH A SHAREDFRAMEWORKStena adheres to the principle of delegatedbusiness responsibility, with decisions takenclose to the business. By balancing independent businesses with a shared Group framework we create a successful dynamic whichstrengthens Stena.VISIONOur vision to “Always be the customer’s firstchoice and quality-assured partner” requires us tosafeguard the company’s and the world’s resources. We contribute to this vision by participating invalue-creating activities – often together with ourcustomers.MISSIONBy maintaining good contact with our customersand the world around us we nurture our growingtrust. By doing this we create more and betterbusiness – and more satisfied customers.BUSINESS CONCEPT By using our expertise, we will make moneyfrom our business areas: shipping, ferry lines,offshore, real estate and finance. We will alsocontinue to create new business areas for thefuture. We will take care of our most important longterm assets, our customers, in such a way thatwe contribute to their – and society’s – positivedevelopment. Never wasting our own or the world’s resourcesis a Stena trademark.SUSTENABILITYRead moreon page 388

STENA AB ANNUAL REVIEW 2019ABOUT STENAStena AB is an active, responsible owner with access to the expertise necessary to creategood development in values over time. WithinStena AB’s organisation, through our ownexperience and partnerships, this expertise is gatheredwithin business development, financing, reporting, HR, communication and procurement. Stena AB organisesand encourages contact and collaboration between companies, in order to enhance the benefits of beingpart of a large Group.BUSINESSESWHITE BOOK WITH SHARED GROUP VALUESEach business is responsible for its own profitability,but there are also a number of common denominatorsfor conduct within the Group. In the White Book theprinciples, beliefs and fundamental values applying toall companies in the Stena AB Group are to be found.Besides Stena’s vision, mission and business idea,this sets out shared success factors and describes theGroup's values. The ninth edition of the White Bookwas published in 2019.BUSINESS RESPONSIBILITYCOOPERATION FOR INCREASED SUSTAINABILITYSustainability work at Stena is managed according tothe shared Group SuStenability process. Cooperationand learning are critical factors in the work to increases ustainability. All business areas have a sustainabilitycoordinator, but the work is managed via the central sustainability department, which is responsible for holdingthe reins for all the work that takes place in the businessareas, and reporting on the development to the auditcommittee which is a committee under Stena AB's Boardof Directors twice a year. Read more about SuStenabilityon pages 38–58.SUSTAINABILITYEach business is based on a clear business idea. The strategy to achieve the goal is based on delegatedresponsibility. Business knowledge is found in thecompanies, which is also where decisions are taken.The individual responsibility of each employee is clearlydefined: Each employee must be able to understand,respect and communicate their company's businessidea, success factors and values.While emphasising the importance of the independence and active business responsibility of the businessareas, the work in each business area must adhereto adopted systems and processes, so that Stena can guarantee good performance throughout the Group.OTHER9

STENA AB ANNUAL REVIEW 2019Our ambition is to work for the next generation.If we always do our best, and respect other people,capital and the world around us, the pressureswithin the company will diminish and it will beeasier to create sustainable values.Dan Sten Olsson, CEO Stena AB10

STENA AB ANNUAL REVIEW 2019ABOUT STENASTENA'S CORE VALUESAT STENA WEWORK TOGETHERRESPONSIBILITY IN OURBUSINESS RELATIONSHIPSCUSTOMER RELATIONSHIP Always the customer’s first choice Leader in quality and quality assured partners Always efficient and effective with our ownand others’ resources A clearly delegated business responsibilitySUSTAINABILITY By building long-term relationships with ourcustomers, suppliers and subcontractors, we arecommitted to delivering high quality and bestvalue services. We will meet the highest safetystandards. Trust is the basis for all our relationshipsin society. We are committed to meeting our customers'expectations with regard to responsible businesspractices. We have high principles for corporate socialresponsibility, which we share with our businesspartners. We may withdraw from a business relationship if we feel that the standards we uphold are not being met by a business partner.BUSINESSESThe ability to survive and to create lasting value requires foresight, business responsibility andsustained focus. In order to be the customer's first choice and preferred partner, we have to be aleader in everything we do. We are convinced that we will succeed if we all live our values.CORE VALUES Stena's core values are Customer satisfaction,Quality, Dedicated employees, Innovation andResults. Customers’ experience of Stena must be sopositive that customers come back to do morebusiness with us. We always deliver the productor service that we promised. Conducting safeoperations is the most important way that we canshow how we care for other people.OTHER We encourage new ideas – continuous innovationis one of the factors that helped us to achieve theposition we hold today. Our ambition is to workfor the next generation. If we always do our best,and respect other people, capital and the worldaround us, the pressures within the company willdiminish and it will be easier to create sustainablevalues. Care drives our awareness of and attentionto activities and performance.11

STENA AB ANNUAL REVIEW 2019TRENDS AFFECTING STENADEMAND FOR SMART TRANSPORTSThe transport industry faces major changes. Environmental focus and globalisationare some of the strong trends influencing this development. The technical development and the increased e-commerce opportunities also mean that the variousstages of a product's journey towards its destination are becoming integrated.“For us, all this presents both challenges and opportunities. The best way wecan compete is to offer effective transport whereby we optimise routes and fuel– and also expand our business,” says Carl-Johan Hagman, Head of Stena Shipping& Ferries.1GLOBALISATION AND GROWING DEMAND FOR TRANSPORTGlobalisation and expanding trade have hadmajor positive effects on the global economyand individual countries. Millions of peoplehave been lifted out of poverty and living stan dards have generally increased across the world.“The world has come to ‘the point of noreturn’ with regard to globalisation. It will continue, despite the trade war between theUSA and China,” says Carl-Johan Hagman.“We cannot regulate our way out of globalisation, since it has far too many positive effectsfor so many people,” he continues.12

STENA AB ANNUAL REVIEW 2019Today, more than 80 per cent of the world'stransport takes place by sea. According toCarl-Johan Hagman, the technical developmentmeans that transport can be optimised in awhole new way, whereby the various transportmodes, including aircraft and storage premises,are integrated and logistics maps are redrawn.“E-commerce requires shorter lead timesand increased service. This entails that largecompanies can have more control of the entirevalue chain. An example of this is Amazon'spurchase of aircrafts and freight terminals.Many companies would call themselves logisticscompanies today.“This development entails both threats andopportunities for us. One approach to thisdevelopment is that we ourselves invest in andBUSINESSESdevelop end-to-end solutions, in order to betterunderstand freight owners’ and end-customers’value chains and requirements. We can alsoinvest in new technology that contributes tooptimising transport. This might, for example,be an app that can follow each cargo in realtime.“One of our greatest strengths is that we canoffer high-frequency ferry routes,” saysCarl-Johan Hagman.SUSTAINABILITY3ABOUT STENA2TECHNICAL DEVELOPMENTENVIRONMENTAL REQUIREMENTSBoth Stena Teknik and Northern Marine Groupwork with various different technical solutionsand operative improvements to benefit Stena'sown activities – but also the entire industry and,not least, the environment.“This is a matter of developing techniquesto reduce consumption of and emissions fromthe current fuels, and also finding solutionswith alternative fuels, such as battery operation, methanol and electrofuels, which in timecan lead to the complete elimination of CO2 emissions,” says Carl-Johan Hagman.He also points to the importance of sharedshipping regulations. Via the IMO, Stena takespart in drawing up global legislation.“It's vitally important that all players aresubject to the same game rules, for competitionand environmental reasons,” says Carl-JohanHagman.OTHERShipping is the mode of transport that releasesthe smallest volume of greenhouse gases perunit transported, and will continue to play animportant role in the global economy for manyyears to come. Today, shipping accounts for2.5 per cent (according to the InternationalMaritime Organization IMO, the UN’s shippingorganisation) of the world's total carbon dioxide emissions. At the same time, the world hasnever consumedas much oil as itdoes today.“In severalways, Stena playsan active rolein finding pathsto long-termsustainability forthe entire industry.13

STENA AB ANNUAL REVIEW 2019SUSTAINABLESHIPPINGThrough technical innovations, expanded responsibility in theEuropean Community Shipowners’ Associations, and efficiencyimprovement measures, in 2019 Stena continued to work forsustainable, effective shipping, with reduced emissions.This spread shows a selection of different examples of howthe Stena Group works to contribute to UNs Agenda 2030.WORKING TOGETHER FOR SUSTAINABLE SHIPPINGDuring the year, Claes Berglund, Stena’s Director of Public Affairs & Sustainability, was appointed President of the European Community Shipowners’Associations (ECSA). The European merchant fleet contributes approximatelyEUR 147 billion to the EU's GDP, and employs around 2.1 million people. SinceSweden is a world leader for sustainable shipping, it has a lot of influence atinternational level, and Claes Berglund’s role as President of ECSA gives Stenaa further opportunity to work for sustainable shipping.Stena is also a partner in the accelerator Katapult Ocean, thereby contributing to the growth of start-up enterprises which develop technical solutionsfor the benefit of the maritime environment, and can contribute actively toachieving UN Sustainable Development Goal no. 14, which focuses on theocean and marine resources.AI AND EFFICIENCY IMPROVEMENTSStena Line has strong focus on AI and machine learning, in order to achieve the objective tobe ”The world’s first cognitive ferry company”. Besides the opportunity to work on a morecost-efficient basis, digitalisation also gives Stena Line better opportunities for analysis andautomation. This creates the right conditions for increased profitability, a better understandingof the customers’ expectations, and reduced environmental impacts. As an example, in 2018Stena Line commenced a pilot project within AI onboard Stena Scandinavica called Stena LineFuel Pilot with the aim to find the most efficent way of operating a vessel on a specific route,in order to cut fuel consumption and reduce the total environmental impact. The project gavepositive results and reduced fuel consumption by 2-3 per cent per nautical mile. Now, theproject is to be rolled out on a further vessels during 2020, so that the total fuel consumption/emissions will continue to decline.14

STENA AB ANNUAL REVIEW 2019ABOUT STENAREDUCED EMISSIONSBUSINESSESIn recent years, Stena Line has completed more than 320 different projectsto reduce fuel consumption. Since 2015, methanol has been part of the fuelmix for Stena Germanica, which operates between Göteborg and Kiel. Usingfuel based on methanol cuts emissions of sulphur oxides and particles tozero, and emissions of nitrogen oxides are reduced considerably, comparedto oil.The project of converting the ferry Stena Jutlandica, which serves theGöteborg-Frederikshavn route, to a hybrid ferry, continued during the year.The idea is for the ferry to run on electricity in inshore waters. Since autumn2018 there is a battery installation on 1 MWh on board which replaces one ortwo auxiliary engines when operating. This is also a safety feature that can beactivated if other engines stop working.Since 1989, Stena Line has used shore power connection, and the firstinstance was the quay in Göteborg. Today, 41 per cent of Stena Line’svessels can connect to shore power in 20 per cent of the ports at which theycall, which has resulted in a CO2 reduction of an estimated 12,000 tonnes annually, which corresponds to the emissions from 6,400 passenger vehicles.SUSTAINABILITYOTHERCLIMATE-NEUTRAL VISIONStena Teknik plays a significant role in Stena's work to achieve thevision of climate-neutral transport. They are working intensively, forexample, to optimise the design of new vessels so th

Stena Impero; SUSTAINABILITY; 38 Sustainability managemen t ocus areas42 F vironment44 En ety46 Saf yees48 Emplo 52 Community ena in society54 St . reduce Stena Property's climate impact by 25 per cent up to 2023, and by 50 per cent up to 2030. To assist with repair and maintenance,