Nel ASA

Investor Presentation • Jul 17, 2024

Second quarter 2024 results presentation 17 July 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 second quarter 2024 presentation 17 July 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.

• Agenda 1. Nel in brief 2. Q2 2024 highlights
  • 1. Strategic and commercial update
  • 1. Production update
  • 1. Technology update
  • 1. Q&A

NEL IN BRIEF

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A fully dedicated electrolyser technology company

A century of electrolyser innovation and pushing for new technologies

One focus: Delivering the most energy-efficient and reliable electrolysers

World-class partners for delivering best-inclass turn-key systems

NEL IN BRIEF

A fully dedicated electrolyser technology company

2. Q2 2024 highlights

Quarterly highlights

Financial results and financing

(from continuing operations)

Revenue NOK 332 million

EBITDA NOK -79 million

Order intake NOK 270 million

Order backlog NOK 2 071 million

Cash balance NOK 2 228 million

Key developments in Q2 2024

• USD 41 million in additional tax credit for manufacturing expansion in Michigan
• Capacity reservation from Hy Stor Energy for more than 1 GW of alkaline electrolysers
• Technology Licensing Agreement with Reliance
• Fueling division spun-out and separately listed on the Oslo Stock Exchange as Cavendish Hydrogen

Subsequent events

• Follow-on contract of more than EUR 7 million for electrolyser equipment

Group Financials

(continuing operations)

(NOK million)	Q2 2024	Q2 2023 (restated)	YTD 2024	YTD 2023 (restated)
Revenue from contracts with customers	332	371	608	635
EBITDA	-79	-69	-48	-133
EBITDA margin*	-22%	-18%	-7%	-20%
EBIT	-125	-112	-138	-217
Pre-tax income (loss)	-120	-230	-83	-353
Net income (loss)	-118	-228	-79	-349
Net cash flow from operating activities	-24	-188	-60	-227
Cash balance at end of period	2 228	4 122

• Fueling division now separately listed and not included as "ongoing operations"
• YoY revenue development negatively impacted by lower volume delivery of Alkaline electrolyser equipment, YTD down due to lower PEM volumes
• YoY EBITDA development flat when adjusted for one-off expenses, YTD at -7% shows a significant improvement from the same period last year
• Solid cash position and no immediate need to raise additional equity
• Utilization of the production capacity will be adjusted to market demand.

Alkaline Electrolyser financials

• Revenue relatively flat over the last quarters, while 13% down YoY
• Steady EBITDA development over the last quarters
• Business model proven with clear scale effects
• Completion of line 2 at Herøya allows for growth in order intake and revenues

PEM Electrolyser financials

• 4% decrease in revenue compared to the same quarter last year
• Flat EBITDA development last three quarters, and in-line YoY
• Completion of the 500 MW PEM production line will allow for growth in order intake and revenues

Order intake and backlog

Order intake Q2 2024:	NOK	270 million	+18%	y/y
- Alkaline - PEM	NOK NOK	213 million 57 million	+1 379% -73%	y/y y/y
Order intake expected to vary between quarters as order sizes have increased

Order backlog (NOK million)

Order backlog Q2 2024:	NOK	2 071 million	-13%	y/y
- Alkaline - PEM	NOK NOK	1 689 million 383 million	-4% -37%	y/y y/y

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

3. Strategic and commercial update

STRATEGIC AND COMMERCIAL UPDATE

Cavendish successfully spun-out, making Nel a fully dedicated electrolyser company

• Nel's Fueling division was successfully spun-out as a separate listed company on the Oslo Stock Exchange on 12 June 2024
• Nel is now a 100% focused electrolyser company, dedicating all its capacity and hydrogen know-how to developing and delivering the world's most reliable and energy-efficient electrolysers
• Following the spin-off, Nel takes a step closer to profitability and reduces cash burn

The Fueling spin-off takes Nel closer to profitability

Including discontinued operations Excluding discontinued operations

NOK 956 million implied accumulated EBITDA improvement since 2020 without the Fueling division

STRATEGIC AND COMMERCIAL UPDATE

Technology Licensing Agreement with India's largest privately owned company

• Reliance (RIL) is renowned for its ability to execute large-scale industrial strategies and is building a multi-GW fully integrated end-toend new energy value chain
• The licensing agreement allows Reliance to produce Nel's alkaline solutions for captive use globally and non-captive use in India
• RIL and Nel will collaborate on R&D, value engineering, standardization and modularization to improve the competitiveness of the electrolyser platform

STRATEGIC AND COMMERCIAL UPDATE

Capacity reservation for more than 1 GW of alkaline electrolysers from Hy Stor Energy

• Hy Stor Energy's Mississippi Clean Hydrogen Hub (MCHH) will be the largest zero-carbon, off-grid hydrogen production and salt cavern storage hub in the US
• The MCHH project will supply renewable hydrogen to support the production of green steel in the US
• Nel and Hy Stor Energy signed a contract for a Front-End Engineering Design (FEED) study in December 2023
• Nel is now the exclusive electrolyser partner for phase one (>1 GW) of the MCHH and will provide alkaline and PEM technology at scale

4. Production update

PRODUCTION UPDATE

Alkaline capacity at 1GW

• Construction of the second 500 MW atmospheric alkaline production line at Herøya is completed
• Nel currently has 1 GW of real, fully automated, production capacity for atmospheric alkaline electrolysers at its disposal
• No further major CAPEX commitments, but the facility can be expanded to 2 GW given sufficient market demand

PRODUCTION UPDATE

PEM capacity increase on schedule

• The production capacity increase to 500 MW annually for PEM electrolyzers in Wallingford (CT) is progressing according to plan
• All major production steps will be optimized and automated, some previously outsourced processes will also be insourced
• Committed investment CAPEX to completion for the expansion is NOK ~120 million

PRODUCTION UPDATE

Additional USD 41 million support for the planned electrolyser facility in Michigan

• Nel was awarded USD 41 million in tax credits through the Qualifying Advanced Energy Project Tax Credit (48C) program
• All in all, Nel has secured close to USD 170 million in support and roughly half of this amount is cash incentives
• In the planned 4 GW facility, Nel is looking to manufacture its next-generation products
• FID for the Michigan facility is not yet taken

5. Technology update

TECHNOLOGY UPDATE

Nel is developing ground-breaking technology together with world class partners

a selection of Nel's partners

Nel's perspective on electrolyser technologies

TECHNOLOGY UPDATE

Development of 100 MW turn-key modules in partnership with world-class EPC companies

• Multiple strategic partnership agreements have been signed with world-class EPC partners, which cover different geographies, for developing 100 MW Alkaline and PEM turn-key solutions
• The new concepts reduce both price and footprint of large-scale electrolyser plants and allow Nel to focus its R&D on stack and balance of stack
• More details on different collaborations to be announced shortly

100 MW PEM concept example

TECHNOLOGY UPDATE

Following a successful stack test in H1-24, a turnkey pressurized alkaline protype will be built at Herøya in H2-24

Summary

Completed spin-off and separate listing of Fueling division, creating a fully dedicated electrolyser company

Signed a licensing agreement with Reliance for production and collaboration on technology development

Completed construction of line 2 at Herøya, bringing annual alkaline production capacity to 1 GW

Significantly improved YTD financials and shorter road to profitability following Fueling spin-off

NOK 2.2bn in cash reserves, no nearterm need to raise additional cash

number one by nature