Kyoto Group AS

Investor Presentation • Aug 20, 2021

Kyoto Group | H1 2021 Presentation

August 20, 2021

IMPORTANT NOTICE

Disclaimer

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The Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or industry and markets in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Any forward-looking statements and other information contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts based on the current expectations, estimates and projections of the Company or assumptions based on information currently available to the Company, which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.

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TODAY'S SPEAKERS

Christopher Kjølner CEO

20 years' experience from finance, strategy and business development, with positions in large and international corporations (General Electric, Lorentzen & Stemoco, Nordea, Skagerak Energi) and in start-ups such as Scandwind, as well as various leadership roles such as EVP, CEO, CFO and COO

Camilla Nilsson CFO

20 years of experience from large international corporations (Norsk Hydro, Yara International) as well as start-ups (Umoe BioEnergy, Agrinos) in various leadership roles such as CFO, Investment Manager and General Manager

KEY EVENTS

Operational

• First full-scale HeatcubeTM thermal battery ordered for commercial installation as a demonstration unit
• Ongoing activities to broaden project pipeline with leads in the Nordic region
• New board established with extensive industry and renewable energy competence
• Appointed new CEO, CFO and interim CTO
• Scaling organization with 14 additional FTEs to execute on long-term growth strategy

Financial

• Raised NOK 183.3 million of new equity in from four private placements in the first half of 2021
• Shares admitted to trading on Euronext Growth from 24 March
• End of period cash position of NOK 158.9 million

FROM START-UP TO SCALE-UP

Kyoto today

Vemaps.com

Adoption of solar and wind requires flexibility to buy energy when it is cheap and store it for when it is needed

• ~50% of energy mix in Europe in 2030 is expected to be variable renewables1
• Increased supply and price volatility is expected as more variable renewable energy sources are connected to the grid
• All paths to achieving the EU climate targets require a more flexible energy system2

Industries largely consume fossil fuel generated heat3

1) Ecologic Climact: Analysing the impact assessment on raising the EU 2030 climate target (September 2020) 2) European Commission: Study on energy storage – Contribution to the security of the electricity supply in Europe (March 2020)

3) Total energy consumption 2014: 360 EJ, IEA & IRENA

⁷ 7 Ensure access to affordable, reliable, sustainable and modern energy for all 9 Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

HEATCUBE OPTIMISES INDUSTRIAL CONSUMPTION OF ENERGY

Delivered in modular 20-feet containers ready for on-site installations

• -Thermal energy for industrial applications
• -Combined heat and electricity through heat engine/turbine

First thermal battery for commercial pilot to decarbonize industrial heat ordered

• Fossil fuel replacement and electrification
• Developed in collaboration with some of the world´s leading experts in molten salt systems
• Heatcube module expected to be integrated and operational early 2022
• Will operate under a commercial contract for sale of heat (Heat-as-a-Service)

Source: Vattenfall 9

INITIALLY A BATTERY AS A SERVICE PROVIDER

Ambition to commercially demonstrate technology and build a portfolio of assets

• Kyoto Group builds, owns, and operates the thermal battery
• On-site installations, charging the customer for heat usage through energy purchase agreements
• Kyoto Groups control system enables the thermal battery to optimise energy input, including regulating services
• A portfolio of thermal battery assets with stable and long-term revenue streams can potentially be financed

Heat as a Service1 (HaaS) Battery as a Product (BaaP)

• EPC contracts or direct sales, with a profit margin
• Ancillary services such as support, maintenance, and service agreement with customers

ROLL OUT PLAN IN NORTHERN EUROPE

Existing and planned projects in pipeline, and visible potential

• One pilot Heatcube thermal battery in operation since June 2020, providing key insights for future installations

• First thermal battery ordered which will be installed as a commercial demonstration unit. The first order of a full-scale Heatcube module for commercial installation

20+ MWh Ancillary market participation Fossil fuel replacement and electrification

• Electrifying existing fossil fuel fired heat, avoiding peak hours and offering local site balancing
• Potential increased self consumption from on-site renewable installations

'22-'23

Multiple 20 MWh Ancillary market participation

• Explore baseload thermal solutions with generation • Example: greenhouses in Almeria (Spain) needing heat at night. CK

FOCUS ON COMMERCIALISATION AND PROJECT EXECUTION

Project timeline

• Focus on expanding pipeline in target industries for which thermal energy storage will add substantial value
• Delivering best-in-class project execution to customers
• Strengthening the organisation is a priority to accelerate commercialisation of the Heatcube and meet the expected growth in demand for TES-solutions

~12-24 months

SCALING THE ORGANISATION FOR GROWTH

On track for doubling of team by end 2021

• Expect to add 14 FTEs by year end 2021
• Expanding all key functions with special emphasis on management, commercial and technology capabilities
• Will provide substantial boost to long-term commercialization capacity
• Replacing and complementing current short-term use of consultants

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KEY FINANCIALS

NOK 184m New equity raised in H1 2021	NOK 15m Net cash used by operating activities	• Raised NOK 184 million through four private placements in H1 2021 • Net cash used by operating activities was NOK 15 million in the first half of 2021 and additional NOK 5 million invested in technology development
NOK 159m Cash position 30.06.21	MID 2022 Cash runway estimate	• End of period cash position was NOK 159 million • Scaling up organization and business activities will increase cash consumption in second half of 2021 • Expect current business to be funded through mid 2022

Summary: On track for Heatcube thermal battery commercialisation

SUMMARY

[…]

• []

• Full focus on delivering the first Heatcube installation in Denmark with expected operations early next year
• Progressing leads for installations in the Nordic region and expanding pipeline
• Scaling organisation to execute on growth strategy

Appendix

MANAGEMENT TEAM

Christopher Kjølner

CEO

Skagerak Energi GE Renewable

Camilla Nilsson

CFO

Yara Hydro

Bjarke Buchberg

Interim CTO

Siemens Gamesa

Peter Iversen

Interim Procurement Manager

Rambøll Maersk

Thommy Blommen

People & Projects

Assa Abloy Yara

CN

Gustavo Z. Holo

Products & Sales

Fast Computas

BOARD AND PARTNERS

Eivind Reiten Chairman

Several board positions, Ex CEO Hydro, former Minister & State Secretary

Arne Erik Kristiansen Former Chairman, cofounder Kyoto, Partner

Synergos & Advisor Asiju Invest

Ivar Valstad

Senior Advisor Corporate Development Norsk Hydro ASA

Thorleif Enger Several board positions, Ex CEO Yara

Hans Olav Kvalvaag SVP New Ventures Scatec Solar

Pål Selboe Valseth

Several board positions, CEO Valinor

OPERATING INCOME AND OPERATING EXPENSES	H1 2021	H1 2020
Government grants	0	2,920,119
Total operating income	0	2,920,119
Personnel expenses	7,071,078	3,018,305
Other operating expenses	9,165,715	6,344,816
Total operating expenses	16,236,793	9,363,122
Operating profit	-16,236,793	-6,443,002
FINANCIAL INCOME AND EXPENSES
Other interest income	40,586	0
Other financial income	30,113	20,358
Other interest expenses	4,866	35,433
Other financial expenses	9,944	7,476
Net financial items	55,889	-22,550
Operating result before tax	-16,180,905	-6,465,552
Tax on ordinary result	0	0
Ordinary result after tax	-16,180,905	-6,465,552
Half-year result	-16,180,905	-6,465,552

Balance sheet

ASSETS	30.06.2021	30.06.2020
FIXED ASSETS
INTANGIBLE ASSETS
Research and development	10,522,880	4,249,409
Deferred tax assets	5,162,830	5,162,830
Total intangible assets	15,685,711	9,412,239
TANGIBLE ASSETS
Equipment and other movables	85,216	305,981
Total tangible assets	85,216	305,981
FINANCIAL FIXED ASSETS
Investments in shares	0	30,000
Other long-term receivables	3,792,177	464,493
Total financial fixed assets	3,792,177	494,493
Total fixed assets	19,563,104	10,212,714
CURRENT ASSETS
DEBTORS
Other short-term receivables	3,630,152	1,952,088
Total receivables	3,630,152	1,952,088
Cash and bank deposits	158,899,943	333,085
Total current assets	162,530,096	2,285,173
Total assets	182,093,199	12,497,887

Total equity and liabilities	182,093,199	12,497,887
Total liabilities	7,434,873	8,517,908
Total current debt	5,034,873	6,117,908
Other current debt	554,789	423,385
Public duties payable	883,247	493,733
Trade creditors	3,596,837	2,950,790
Convertible debt	0	2,250,000
CURRENT DEBT
Total of other long-term liabilities	2,400,000	2,400,000
Other long-term liabilities	2,400,000	2,400,000
OTHER LONG-TERM LIABILITIES
LIABILITIES
Total equity	174,658,326	3,979,979
Total paid-up equity	174,658,326	3,979,979
Other paid-up equity	10,587,753	0
Share premium reserve	163,817,956	3,890,853
PAID-UP EQUITY Share capital	252,617	89,126
EQUITY
EQUITY AND LIABILITIES
	30.06.2021	30.06.2020

Cash flow

INDIRECT CASH FLOW	H1 2021	H1 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/loss before tax	-16,180,905	-6,465,552
Impairment of fixed assets	30,000	0
Change in accounts payable	646,047	2,256,857
Change in other accrual items	944,983	139,096
Net cash flows from operating activities	-14,559,875	-4,069,599
CASH FLOWS FROM INVESTMENT ACTIVITIES
Payments to buy intangible assets	-5,398,845	-4,555,390
Net cash flows from investment activities	-5,398,845	-4,555,390
CASH FLOWS FROM FINANCING ACTIVITIES
Change in loan, innovasjon Norge	0	2,400,000
Change in convertible debt	-2,250,000	2,000,000
Proceeds from equity	174,165,000	1,340,448
Sale of own shares	6,610,578	0
Net cash flows from financing activities	178,570,678	5,740,448
Net change in cash and cash equivalents	158,566,858	-2,884,541
Cash and cash equivalents at the start of the period	333,085	3,217,626
Cash and cash equivalents at the end of the period	158,899,943	333,085

We disconnect the time power is made, from when it is used