Nel ASA

Investor Presentation • Oct 16, 2024

Third quarter 2024 results presentation

16 October 2024

Forward-looking information

This Presentation includes and is based, inter alia, on forward-looking information and statements relating to the business, financial performance and results of Nel ASA and/or industry and markets in which it operates that are subject to risks and uncertainties that could cause actual results to differ materially from the statements expressed or implied in this Presentation by such forward-looking statements. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Nel ASA and Nel ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" , "aims", "anticipates", "intends", "plans", "projects", "targets" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Nel ASA's businesses, raw material prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and other factors.

Although Nel ASA believes that its expectations, estimates and projections are based upon reasonable assumptions, it can give no assurance that these will be achieved or that forecasted results will be as set out in the Presentation, and you are cautioned not to place any undue reliance on any forward-looking statements. Nel ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Nel ASA nor any of its, or its subsidiaries' directors, officers or employees will have any liability to you or any other persons resulting from your use of this Presentation. This presentation was prepared in connection with the Nel ASA third quarter 2024 presentation 16 October 2024. Information contained in this Presentation is subject to change without notice and will not be updated. This Presentation should be read and considered in connection with the information given orally during the presentation. The Nel ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.

NEL IN BRIEF

A fully dedicated electrolyser technology company

SUMMARY AND OUTLOOK

Nel's value proposition

Unrivalled track record

• Decades of experience
• Large installed base

Technology leadership

• Multiple technology platforms (AWE+PEM)
• Guaranteed and proven performance
• Game-changing next-generation solutions

Cost and scale leadership

• Front-runner in cost reductions
• Market leading production capabilities

2. Q3 2024 highlights

Quarterly highlights

Financial results and financing (from continuing operations)

Revenue NOK 366 million

EBITDA NOK -90 million

Order intake NOK 161 million

Order backlog NOK 1 872 million

Cash balance NOK 1 941 million

Key announcements in Q3 2024

• Follow-on equipment order of more than EUR 7 million for a European project
• Cancellation of Hy Stor Energy's capacity reservation agreement

Subsequent announcements

• Launch of Saipem's 100 MW turnkey hydrogen solution based on Nel's technology

Group Financials

(continuing operations)

(NOK million)	Q3 2024	Q3 2023 (restated)	YTD 2024	YTD 2023 (restated)
Revenue from contracts with customers	366	303	974	938
EBITDA	-90	-62	-137	-194
EBITDA margin*	-24%	-20%	-14%	-21%
EBIT	-146	-104	-284	-321
Pre-tax income (loss)	-116	-169	-199	-522
Net income (loss)	-115	-167	-194	-516
Net cash flow from operating activities	-47	-136	-108	-363
Cash balance at end of period	1 941	3 799

• Revenues positively impacted by increased deliveries of Alkaline electrolyser equipment
• EBITDA down y/y due to low revenues and weaker results from the PEM division
• Solid cash position with no need to raise additional equity given lower CAPEX from 2025
• Utilization of production capacity and staffing will be adjusted to market demand

Alkaline Electrolyser financials

• Solid revenue growth from the Alkaline segment, up 37% q/q and 54% y/y
• Positive underlying quarterly EBITDA driven by higher volume and partly offset by higher fixed costs
• Business model proven with clear scale effects in quarters with good capacity utilization
• Completion of line 2 at Herøya in 2024 enables order intake and revenue growth

^• Lower CAPEX from 2025

PEM Electrolyser financials

• 40% decrease in revenue y/y due to timing of project revenues and low shipments of small kW-units
• EBITDA down q/q and y/y due to low revenues and hence low cost absorption
• Completion of the 500 MW PEM production line will allow for growth in order intake and revenues for larger systems
• Expect to see the same scaling effect as with Alkaline, where higher volume will substantially improve results
• Lower CAPEX from 2025

Order intake and backlog

Order intake Q3 2024:	NOK	161 million	-52%	y/y
- Alkaline - PEM	NOK NOK	7 million 154 million	-97% +71%	y/y y/y
Order intake expected to vary between quarters as order sizes have increased

Order backlog (NOK million)

Order backlog Q3 2024:	NOK	1 872 million	-20%	y/y
- Alkaline - PEM	NOK NOK	1 431 million 441 million	-19% -20%	y/y y/y

The order backlog is subject to risks such as delays and/or cancellations

3. Political update

POLITICAL UPDATE

EU Hydrogen Bank 2nd auction: Significant steps taken towards a level playing field

• Mandatory non-price criteria now included projects must limit the sourcing of electrolyser stacks from China to not more than 25%
• With the new terms and conditions, the EU takes significant steps towards a level playing field for electrolyser OEMs
• Winners of the auction can utilize both Nel's technology platforms (alkaline and PEM) in their projects
• Total auction budget of €1.2bn for production of green hydrogen (+derivatives) within EU/EEA
• Auction opens in Dec'24 and closes in Feb'25

13

Examples of national programs and auctions in Europe

• UK: The government is currently assessing applications to award up to 875 MW of capacity through Hydrogen Allocation Round 2
• The Netherlands: Projects such as PosHydon have received grants from The National Enterprise Agency, RVO. Yesterday, RVO announced a new electrolyser subsidy scheme worth 1 bn Euro
• Germany: Funding through IPCEI has triggered Final Investment Decisions on several large-scale projects
• Norway: The government will significantly increase funding for zero-emission express ferries, heavy-duty vehicles, and related infrastructure through the state enterprise Enova

POLITICAL UPDATE

US IRA section 45V: Expect finalized rules by the end of the year

• US Treasury proposed regulations on the 45V Clean Hydrogen Production Credit early 2024
• Now, after US Treasury received comments on the proposed rules, it is working to include appropriate adjustments and additional flexibilities to help grow the industry and move projects forward
• "We intend to finalize rules for the section 45V Clean Hydrogen Production Credit by the end of the year" stated Aviva Aron-Dine, Performing the Duties of Assistant Secretary for Tax Policy

4. Commercial update

COMMERCIAL UPDATE

Saipem presents solution for large-scale green hydrogen production, utilizing Nel's technology

• Saipem unveiled IVHY 100, a scalable and modular 100 MW green hydrogen solution leveraging Nel's technology

• Part of a wider collaboration where Saipem as an EPC builds complete plant solutions around Nel's alkaline and PEM electrolyzers
• The IVHY 100 makes installation of large-scale hydrogen plants easier and less expensive with guaranteed scale design
• Follows a replicable production approach to achieve capex/opex reductions

COMMERCIAL UPDATE

PosHYdon: Real-life renewable offshore hydrogen production

• Nel's containerized PEM solution, an MC250, has been transported to Eni's Q13a-A offshore platform located 13km off the coast of The Netherlands for the PosHYdon project
• The system will undergo a rigorous test program to demonstrate its capability to produce hydrogen under varying electrical load conditions and transportation of hydrogen back to shore using existing gas infrastructure

COMMERCIAL UPDATE

The City of St. Cloud buys Nel electrolyser for wastewater treatment facility

In the future, the whole community of St. Cloud will use renewable hydrogen

Tracy Hodel, the city's Public Services Director

• Client: City of St.Cloud

• Size: 1.25 MW
• Location: Minnesota, US
• Will produce renewable hydrogen from solar power and biogas generated by the treatment process
• The hydrogen can be used onsite for heating and power or stored when excess renewable energy is generated
• Will also look at capturing oxygen for the facility's aeration system

5. Technology update

Nel's overall electrolyzer technology strategy

Nel's atmospheric akaline solution keeps getting better

• ~2% lower power consumption from 2023 to 2024, another ~2% possible next year
• ~8% annual stack cost reductions in both 2023 and 2024
• Increasing maturity on system level for large scale installations
  • Significantly reduced pre-FEED and FEED expenses for clients
  • Bankable performance guarantees on system level through EPC partners
  • High potential for further BoP cost reductions

Current PEM stack ready for mass production at 30% lower cost

• The new 500 MW PEM production line in Wallingford, CT, is soon completed
• With this production line Nel is positioned for large-scale projects for both PEM and Alkaline
• The production concept is developed in close collaboration with GM, and can be rolled out globally when demand picks up
• Process, design and sourcing advancements enable cost savings of ~30% on the stack

Pressurized alkaline concept rapidly maturing

• Nel's approach is different to other pressurized solutions in the market
• Cell stack performance verified, internal prototype under construction to verify system performance:
  • Transformer and rectifier received
  • All long-lead components in house
  • Fabrication of all skids ongoing
  • Stack manufacturing in progress
• In dialogue with several potential customers about full-scale pilot

Gas process skid Pressurized Alkaline stack

Next generation PEM solution developed in collaboration with GM already at mini-stack level

Current 1.25MW stack Proof of concept mini-stack Future 3MW stack

• < 1 3 platinum group metal usage
• < 1 4 membrane thickness
• < 1 2 cell thickness

530 kg/day, 53 kWh/kg >1200 kg/day, 47.5 kWh/kg

6. Summary and outlook

SUMMARY AND OUTLOOK

Market perspective

• The market has been slow in recent quarters
  • Purchase orders have been pushed out in time as projects have become larger and more complex and developers make more thorough assessments
  • Lack of visibility on political processes and subsidy programs (initially aimed to accelerate renewable hydrogen uptake) have also caused delays
• However, the market is showing signs of recovery, and projects continue to mature toward FID
  • Clarity around EU and US regulations in combination with national hydrogen auctions will help demand
  • Many of Nel's target projects are expected to take FID in the next quarters
    • Top-20 alkaline targets have a total capacity need of >5 GW
    • Top-20 PEM prospects >1 GW

SUMMARY AND OUTLOOK

Increased cash management focus

• Nel is well capitalized with NOK ~2bn of cash reserves, making it one of the best financed electrolyser OEMs
• There is no need to raise additional funding, in particular as CAPEX will come down by ~50% in 2025 due to prior expansion programs in Herøya and Wallingford
• However, Nel will put more emphasis on cash conservation and smart spending and align production output with real market demand
  • Only invest in the most important initiatives, predominantly next-generation technology development
  • Reduce inventory of parts and components as project lead times have increased
  • Adjust organization to align with current strategy and market demand

SUMMARY AND OUTLOOK Ready for market rebound

Improved current technologies and rapidly maturing next gen. solutions

World-class partners enable focus, growth and solid execution

Ready for high volume deliveries with limited further CAPEX

number one by nature