Tekna Holding ASA

Investor Presentation • Nov 11, 2021

Q3 2021 financial results

Luc Dionne, CEO Tekna Holding AS

November 11, 2021

Disclaimer

This presentation has been prepared by Tekna Holding AS ("Tekna" or the "Company") solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

Statements in this presentation that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Norwegian securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of Tekna Holding AS ("Tekna" or the "Corporation") to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "projects," "anticipates," "will," "should," or "plans" to be uncertain and forward-looking. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this management analysis of the financial situation and operating results.

Information in this presentation is provided as of the date of this presentation. Tekna does not undertake to update any information in this presentation, whether as a result of new information, future events or otherwise, except as required by law.

Q3 2021 highlights

Financial results

Total Revenues CAD 5.6 million 14% decrease from Q3 2020

Adjusted EBITDA CAD -1.3 million CAD 1.3 m decrease from Q3 2020

Materials revenues

CAD 3.9 million 10% growth from Q3 2020

Recurring Materials revenues CAD 3.0 million 10% growth from Q3 2020

Operations, business development and sales

• Q3 2021 total revenues affected by lower systems revenues (42% decrease) which are returning to average yearly run-rates in Q4
• The adjusted EBITDA variation in Q3 (-\$1.3m) vs last year is due to a federal emergency grant received in Q3 2020 (\$1m)
• Materials revenues increased 10% YOY. Most popular AM powder sold out in the quarter. Focus on securing inventory for strategic customers
• YTD total revenues & materials revenues improved 43% and 40% respectively over 2020
• Outlook for AM market remains strong. Additional atomizer now operating, and productivity improvement adding 25% production capacity
• Qualification of customers in PE segment developing positively. On track to secure first commercial customer in 2022

Subsequent events

• Exploring further expansion of LG Chem Joint Development Agreement on a second research project
• Launch of PlasmaSonic equipment product line (Hypersonic flight)
• Cybersecurity: Implementing industry best practices

Tekna in brief

Tekna is a world-leading provider of advanced materials

~200 customers

Tekna is developing its position in three multi-billion-dollar market verticals

Tekna's technology starts where others' end

Sources: SmarTech – 3D Printing and Additive Manufacturing reports, Wohlers Associates – 3D Printing and Additive Manufacturing Global State of the Industry, ARK Investment management – Big Ideas 2021, Cairn Energy Research Advisors – SI Marketscape and opportunities, company estimates

6

Key developments

Key developments: Additive manufacturing (AM) / 3D printing

• Market continues to develop well, sales are accelerating in Europe
• Order backlog remains strong at >\$8M (+57% yoy)
• Average materials selling price increased in Q3 over 1H 2021 ranging 2% to 10% depending on part number
• Factory output included inventories produced for strategic customers, to be delivered at future dates
• Additional atomizer now operating, and combined with productivity improvement, increased production capacity by 25%. This will keep improving each quarter
• Q4 materials revenue outlook is improving compared to Q3 by \$1M
• 2022 order book filling-up, capacity is now close to where it needs to be to deliver 2022 orders

Demand is strong globally We are a trusted partner for large OEMs

• Airbus supplier qualification process well underway
• Consumer Electronics: Product qualification progressing, material specification met with 2 customers in China and Japan
• Live trade shows are resuming: Inside 3DP (KR), Rapid (USA), Formnext (EU)
• Additive Manufacturer Green Trade Association (AMGTA) membership

Visit us Hall 11 Booth B11

Key developments: Printed electronics (PE)

Successful roll-out of market entry strategy

NEW

• Qualification developing positively, on track to secure first customer in Japan next year.
• Initiated talks with industrial scale-up partners in Asia.
• In process to lease industrial-pilot production facility in Canada, with potential of providing capacity of up to 25 tons of powder annually by 2023.

Securing market position through rigorous and systematic business development

• We see the technology for smallest MLCC devices expanding outside Korea and Japan: new pipeline entry in Taiwan
• Continued positive and consistent development with OEMs
• Development on-going for 2 product families (50 nm and 80 nm generation)

Business development progress score card (80 nm Nickel powders)									Progress legend
													Completed Ongoing Closed
																				- newly added NEW
																				prospect
		Q2					Q3
						Q3

Key developments: Energy storage (ES)

Product development efforts on schedule

• Tekna nano Silicon initial product performance assessment is progressing according to schedule preliminary results expected by end of Q4-2021.
• Industrial-pilot capacity ready in early Q1 2022
• Initiated discussions with raw material (silane) manufacturers to secure long-term supply, incl. REC Silicon, Air Liquide and 2 Asian producers

Strengthening our position with LG Chem

• Mapping the supply chain relevant to Tekna, 154 leads identified
• LG Chem revised research milestone to January 2022 (design change)
• Discussing 2nd Joint Development Agreement started with LG Chem involving a different research angle

Introduction: PlasmaSonic

Leveraging 30 years of expertise: Plasma energy & system design

• Equipment based on Tekna's core technology
• Tekna's contaminant-free plasma torch provides unique simulation capabilities
• Wide range of solutions on offer:
• Currently fielded wind tunnel technology
• Design consulting services, instrumentation, lab scale modelling to near reality wind tunnel simulators, materials

Orbital Space and Hypersonic Flight: A developing Industry

• Total industry size estimated at \$270B
• Revenue potential over the next 10 years estimated at \$150M \$250M
• 11 research programs identified in 7 countries with total value over \$55M

Financials

Financial highlights Q3 2021

1 Financial highlights (CADm)	2021 Q3	2020 Q3	2021 YTD	2020 YTD	2020 FY
Revenue	5.6	6.5	20.8	14.6	22.0
Gross Margin 2	53%	41%	49%	45%	49%
2 Adjusted EBITDA	-1.3	0.0	-1.2	-1.8	2.2
Adjusted EBITDA %	-24%	0%	-6%	-12%	10%
EBITDA	-2.3	-0.1	-3.8	-2.0	1.4
EBITDA %	-42%	-1%	-18%	-14%	6%
Cash balance at the end of the period	38.6	2.1	38.6	2.1	2.5
Recurring revenue (% of materials revenue)	77%	87%			na

Notes

1 The figures have been prepared in accordance with IFRS. 2 EBITDA adjusted for non-recurring items.

Commentary

Revenues decreased 14% YOY in Q3, and increased 43% YTD over the same period

• Material revenues increased 10% YOY, 40% increase YTD
• Total orders on hand for Q3 2021 stood at \$12m
• 12 months recurring material revenues at 77% (85% over 24 mo.)

Q3 Gross margin increased 29% YOY

• Adjusted EBITDA at \$ -1.3m, in line with YTD expectations
• Adjusted YTD EBITDA increased 33% YOY

Summary and outlook

On track to deliver on 2021 priorities and mid-to-long term ambitions

Metric	2021	Mid-to-long term ambition
Revenue growth	Reach CAD 22M run-rate materials sales during 2021	40-50% organic revenue growth per year
Business mix	~50% AM, ~35% SY, ~15% other	Mid-term: ~30% AM, ~20% PE, ~25% ES, ~15% SY + other Long-term: ~50% ES, ~25% AM, ~15% PE, 10% SY + other
Operational EBITDA margin1	Below break-even	Towards 25% mid- and long-term
R&D	5% of revenues near-term Towards 3% mid- to long-term
Growth capex	Expansion within existing facilities	Targeting 30+ plasma units in operation by 2025, 250+ plasma units in operation by 2030
Other capex	Maintenance capex >1% of revenues

Key takeaways

Over 40% growth YTD. Demand and order backlog remain strong.

Positive market indicators for all business segments.

Ramping up capacity.

Reiterating our near- and long-term targets.

Summary: Solid position for profitable growth and expansion

2

3

4

• 1 Megatrends accelerating demand for high-quality micro and nano materials
• IP protected plasma technology driving disruptive manufacturing change
• Proven and commercialized technology with >200 blue-chip customers
• Scalable, recurring and sticky business model with low CAPEX requirements
• 5 Increasing market share and accelerating adoption drives strong revenue growth

Annexes

Industrial scale and optimized production enabling strong growth in Tekna's profitability

Financial statements INCOME STATEMENT

CADm	2021 Q3	2020 Q3	2021 YTD	2020 YTD	FY 2020
Revenue	5.6	6.5	20.8	14.6	22.0
Cost of sales1	2.7	3.8	10.6	8.0	11.3
Gross margin	2.9	2.7	10.2	6.6	10.7
Gross margin %	53%	41%	49%	45%	49%
Other income	0.0	-1.0	-0.2	-2.7	-4.2
Indirect personnel expenses	3.2	2.6	9.3	7.9	10.6
Other OPEX	1.0	1.1	2.31	3.2	2.12
Total other income and OPEX	4.2	2.7	11.4	8.4	8.5
Adjusted EBITDA	-1.3	0.0	-1.2	-1.8	2.2
Adjusted EBITDA margin %	-24%	0%	-6%	-12%	10%
Non-recurring expenses	1.0	0.1	2.61	0.2	0.82
EBITDA	-2.3	-0.1	-3.8	-2.0	1.4
EBITDA margin %	-42%	-1%	-18%	-14%	6%
Depreciation and amortization	0.8	0.9	2.4	2.8	3.9
EBIT	-3.1	-1.0	-6.2	-4.8	-2.5
EBIT margin %	-56%	-15%	-30%	-33%	-11%
Equity company loss (income)	0.4	0.0	1.1	0.0	2.0
FX variation (Gain) Loss	-0.7	0.0	-1.7	0.0	0.0
Finance cost	1.2	0.4	1.8	1.0	1.4
EBT	-4.0	-1.4	-7.4	-5.8	-5.9
Provision for income tax	0.0	-0.4	-0.1	-1.2	-1.1
Net profit/loss	-4.0	-1.0	-7.3	-4.6	-4.8

Notes

• 1. Legal fees of \$0.9m have been presented as nonrecurrent expenses in Q1 and Q2 2021.
• 1. Legal fees of \$0.8m have been presented as nonrecurring expenses in FY 2020.

Financial statements

BALANCE SHEET

Balance sheet
CADm	30.09.2021	31.06.2021	31.12.2020	30.09.2020
ASSETS
Deferred tax assets	0.0	0.0	0.0	1.7
Other intangible assets	9.4	9.8	9.4	11.2
Tangible fixed assets	18.8	18.8	18.1	17.4
Investment in equity companies	0.3	0.7	1.4	0.0
Other long-term receivables	5.6	5.5	4.2	4.1
Total non-current assets	34.1	34.8	33.1	34.4
Inventory	13.2	13.0	12.0	13.2
Contract assets	3.1	2.4	0.5	0.0
Accounts receivable and other receivables	6.8	7.0	5.8	9.7
Cash and cash equivalents	38.6	45.7	2.5	2.1
Total current assets	61.7	68.1	20.8	25.0
Total assets	95.8	102.9	53.9	59.4

Balance sheet
CADm	30.09.2021	31.06.2021	31.12.2020	30.09.2020
LIABILITIES AND EQUITY
Owners' equity	84.5	88.2	20.1	0.2
Minority interest	0.5	0.6	0.0	0.0
Total equity	85.0	88.8	20.1	0.2
Deferred tax liabilities	0.0	0.0	0.0	3.1
Leasing obligations	0.3	0.4	0.5	0.5
Other long-term debt	3.6	3.8	24.2	43.9
Total non-current liabilities	3.9	4.2	24.7	47.5
Current interest-bearing borrowings	1.1	3.0	0.7	2.8
Current interest-bearing liabilities	0.0	0.0	0.0	0.0
Accounts payable	2.7	3.4	4.3	3.3
Leasing obligations	0.2	0.2	0.2	0.2
Other current liabilities	2.9	3.3	3.9	5.4
Total current liabilities	6.9	9.9	9.1	11.7
Total liabilities and equity	95.8	102.9	53.9	59.4

Financial statements

CASH FLOW

Cash flow	2021	2021	2020
CADm	Q3	Q2	Q3
Net profit	-4.0	-1.6	-1.0
Depreciation and Amortization	0.8	0.8	0.9
Tax expense	0.0	0.0	-0.4
Net financial items and Fx variation	0.5	-0.6	0,4
Change in inventory, contract assets, receivables, payables and other liabilities	-2.0	-0.9	-0.3
Share of profit from associates	0.4	0.4	0.0
Net cash from operations	-4.3	-1.9	-0.4
Purchase of PPE and intangible assets	-0.4	-1.7	-1.6
Other Investments activities	0.0	0.0	0.0
Purchase of shares in subsidiaries1	0.0	0.0	0.0
Net cash from investing activities	-0.4	-1.7	-1.6
Cashflow from issuance of stock1	0.0	-0.6	0.0
Proceeds from the issuance of shares in subsidiary	0.0	0.0	0.0
New long-term borrowings	-0.1	0.1	0.2
Repayment of long-term borrowings	-0.1	-0.1	-0.1
Internal loans and borrowings	0.1	-50.4	2.3
Net change in current interest-bearing debt	-1.9	-0.8	0.0
Interest paid	-0.1	-0.2	-0.4
Net cash from financing activities	-2.1	-52.0	2.0
Cash flow1	-6.8	-55.6	0.0
FX adjustments1	-0.3	-0.8	0.0
Change in cash and cash equivalents	-7.1	-56.4	0.0
Opening Balance for Cash assets	45.7	102.1	2.1
Closing Balance for Cash assets	38.6	45.7	2.1

Notes

1. Adjustments were made in Q2 2021 in relation to the FX conversion