Nel ASA

Earnings Release • Oct 20, 2022

Nel ASA: Third quarter 2022 financial results

Nel ASA: Third quarter 2022 financial results

(Oslo, 20 October 2022) Nel ASA (Nel, OSE:NEL) reported revenues of NOK 183

million in the third quarter of 2022, down from NOK 229 million in the same

quarter of 2021. Third quarter order intake was NOK 775 million, up 456% from

the same quarter last year, heavily impacted by the 200MW, EUR 45 million,

purchase order from an undisclosed US customer. At the end of the third quarter

the order backlog was 2 103 million, up 107% from Q3 2021. Subsequent to the

quarter Nel announced another record, signing a NOK 600 million contract with

Woodside Energy for its first hydrogen project in the US.

Quarterly highlights

· Nel ASA (Nel) reported revenue and operating income in the third quarter

2022 of NOK 183 million, down 20% from the third quarter 2021 (Q3 2021: 229).

The decline was driven by lower sales in Fueling and PEM electrolysers whereas

alkaline electrolysers experienced strong growth.

· Order intake in the quarter amounted to NOK 775 million (88% from

electrolyser), up 456% from the same quarter last year (Q3 2021: 139).

· At quarter end, Nel had a record high order backlog of NOK 2 103 million

(80% related to electrolyser), up 107% from the third quarter of 2021, and up

46% compared to the previous quarter.

· EBITDA of NOK -214 million (Q3 2021: -113) driven by high losses in Fueling,

low margins on electrolyser projects signed in 2020/2021 and increased personnel

expenses to prepare for large-scale projects

· Strong cash balance of NOK 3 520 million (Q3 2021: 2 930).

· Subsequent to the quarter,

· Nel has received approximately USD 6 million in funding from US Department

of Defence for accelerating advanced PEM electrolyser stack development

· Nel has received a new NOK 600 million contract in the U.S. from Woodside

Energy for alkaline electrolyser equipment.

"We are truly excited about the recent developments with the signings of two

record size contracts in a very short time period", says Nel's CEO, Håkon

Volldal.

"As our clients are increasingly worried about electrolyser production capacity

from quality producers, the market balance is moving in Nel's favour. We are now

able to negotiate better terms and conditions, a trend we foresee to continue

going forward", Volldal says.

US is becoming an important market for green hydrogen production, mainly due to

favourable framework conditions following President Biden's Inflation Reduction

Act (IRA), which is now accelerating final investment decisions (FID). The

electrodes Nel will deliver to the recently signed large-scale projects will be

produced in the Herøya facility in Norway - the only fully automated

electrolyser manufacturing facility in the world.

"Having a proven and fully automated production concept gives Nel a huge

advantage as it allows for future-proof scaling at speed. This is key to meeting

the rapidly growing market demand" Volldal says.

Nel is well underway finding a suited site in the US for PEM and Alkaline

electrolyser production and expects to conclude the site selection process

within H1 2023.

Revenues in Q3 2022 of NOK 183 million were flat from Q2 2022, while down from

NOK 229 million in Q3 2021. This was mainly caused by reductions in both Fueling

and for PEM electrolysers, while alkaline electrolysers experienced high growth.

In Fueling the low order intake in previous quarters combined with supply chain

challenges resulted in low sales of new fueling stations. For PEM electrolysers,

the order intake has been good for smaller systems, but actual deliveries and

revenue recognition has slowed down due to long lead times on certain

components.

EBITDA decreased from same quarter last year. In addition to lower revenues in

Fueling and PEM electrolysers and higher personnel expenses, the EBITDA was

negatively impacted by high quality costs in Fueling, increased raw materials

expenses and supply chain challenges.

EBITDA and other alternative performance measures (APMs) are defined and

reconciled to the IFRS financial statements as a part of the APM section of the

third quarter 2022 report on page 21.

Note that Nel has decided to increase its value threshold for stock exchange

notices when receiving firm purchase orders or grants. The current value

threshold of about EUR 2 million has been increased to about EUR 5 million.

The third quarter 2022 report and presentation are enclosed and available on

www.newsweb.no (Ticker: NEL) and www.nelhydrogen.com. The presentation will be a

virtual event only, followed by a Q&A session. The live presentation can be

accessed on the company's website www.nelhydrogen.com or by following this

link (https://nelhydrogen.com/quarterly-presentation/). A recording of the

presentation will be publicly available following the event.

ENDS

For additional information, please contact:

Kjell Christian Bjørnsen, CFO, +47 917 02?097

Wilhelm Flinder, Head of Investor Relations, +47 936 11 350

About Nel ASA | www.nelhydrogen.com

Nel is a global, dedicated hydrogen company, delivering optimal solutions to

produce, store and distribute hydrogen from renewable energy. We serve

industries, energy and gas companies with leading hydrogen technology. Since its

origins in 1927, Nel has a proud history of development and continual

improvement of hydrogen plants. Our hydrogen solutions cover the entire value

chain from hydrogen production technologies to manufacturing of hydrogen fueling

stations, providing all fuel cell electric vehicles with the same fast fueling

and long range as conventional vehicles today.

This information is subject to a duty of disclosure pursuant to Section 5-12 of

the Norwegian Securities Trading Act. This information was issued as inside

information pursuant to the EU Market Abuse Regulation, and was published by

Wilhelm Finder, Head of Investor Relations, at NEL ASA on the date and time

provided.