Tekna Holding ASA

Investor Presentation • Aug 19, 2021

Q2 2021 financial results

Luc Dionne, CEO Tekna Holding AS

August 19, 2021

Q2 2021 highlights

Financial results

Total Revenues CAD 7.4 million 95% growth from Q2 2020

Adjusted EBITDA CAD -1.1 million CAD 0.9m decrease from Q2 2020

Recurring Materials revenues

CAD 3.5 million 84% growth from Q2 2020

Materials revenues¹

CAD 5.0 million

103% growth from Q2 2020

Operations, business development and sales

Solid second quarter with \$7.4M in revenue, driving YTD revenues 88% above H1 2020

• Strong order intake of \$9.5m raising total backlog to \$14.2m
• 88% of annual revenue target secured
• Delivered on IPO new contract promises: Airbus (3-year) and LG Chem (multiyear)
• Launched \$16m investment program to scale-up capacity in all three powder business segments to deliver on accelerating growth
• Patent granted in Europe for Tekna Additive Manufacturing powder process

Subsequent events

• Additive Manufacturing: 10-year supply agreement with leading EU jet engine & Aerospace component OEM
• Printed Electronics: Positive feedback & re-ordering of samples. Annual demand from one customer exceeds 2022/2023 projected capacity - options are under review
• Energy Storage: LG Chem joint development agreement execution started

1 Includes tolling services 2

Tekna in brief

Tekna is a world-leading provider of advanced materials

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

Key developments

Key developments: Additive manufacturing / 3D printing

Sustained growth quarter over quarter

• 13% sales growth over Q1 2021
• 86% of powder sales generated from recurring customers
• Signed long-term Airbus agreement for Titanium
• Signed 10-year agreement for various alloys with other Aerospace OEM (July 2021)
• Market developing as projected
• Patent granted in Europe for Tekna AM powder process

Securing market position through rigorous and systematic business development

• Automotive over 200 prospects identified, 2 qualified and supplying
• Qualification in progress with 2 large OEMs in Consumer electronics
• Continuing to grow positions in aviation and medical sectors

Key developments: Printed electronics

Successful roll out of market-entry strategy

• Strong product matching with customer spec
• Industrialization progressing steadily
• Repeat sample order received to go to the next qualification stage

Systematically working through qualification stages with potential customers, paving the way for market entry

• Working with 10 companies (100% of the market) across the value chain
• Solid progress with all major customers
• Samples under evaluation

Business development progress score card (80 nm Nickel powders)

Customer	ountry ပ	ACCOUNT QUALIFICATION			PRODUCT QUALIFICATION			MANUFACTURING PRE-PROD. QUALIFICATION APPROVAL			QUOTE PROCESS & CONTRACT NEGOTIATION			Score Total
	SK																	$2H22$ 25
	SK																	$2H22$ 25
3	JPN																	$2H22$ 25
4	JPN																	$2H22$ 25
5	JPN																	TBD	22
6	JPN																	1H23 16
	JPN																	$1H23$ 14
8	JPN																	TBD	8
9	JPN																	TBD	8
10	SK																	TBD	$\overline{2}$

Completed On-going Closed

Key developments: Energy storage

Tekna's technology ranks among top 3 for LiB Silicon material producers

• Differentiating and growth-enabling factors:
• Particle high-purity and size below 150 nm
• Feasibility proven through industrial scale samples
• 30-years of plasma technology maturity
• Identifying potential partners for Silane (feedstock)
• Plan to share material with leading battery manufacturers, downstream Si anode startups and carmakers
• Scaling-up research and manufacturing capacity

Partnership with LG Chem developing positively Research milestone expected in Q4 2021

Financials

Financial highlights Q2 2021

1 Financial highlights (CADm)	2021 Q2	2020 Q2	2021 YTD	2020 YTD	2020 FY
Revenue	7.4	3.8	15.2	8.1	22
Gross Margin 2	46%	53%	48%	49%	3 49%
2 Adjusted EBITDA	-1.1	-0.2	-0.8	-1.9	1.4
Adjusted EBITDA %	-15%	-5%	-5%	-23%	6%
EBITDA	-1.2	-0.2	-1.5	-1.9	1.4
EBITDA %	-16%	-5%	-10%	-23%	6%
Cash balance at the end of the period	45.7	2.1	45.7	2.1	2.5
Recurring revenue (% of materials revenue)	86%	80%	82%	na	na

Notes

1 The figures have been prepared in accordance with IFRS

2 EBITDA adjusted for non-recurring items

3 2020 adjusted EBITDA includes CAD 2.7m in the form of grants for Covid mitigation, as well as CAD 3.6m

of commercial rights and OPEX recharge to the JV Imphytek powders in Q4

Commentary

• Revenues increased 95% in Q2 and 88% YTD over the same period last year
• YoY Q2 revenue growth in both business segments: systems (75%) and materials (>100%)
• Total orders on hand for Q2 2021 increased by 25% from Q1 2021 and 55% from Q2 2020
• Recurring material revenues steadily increasing, now 86%
• Materials revenue alone have more than doubled from Q2 2020
• Q2 gross margin in line with forecast for full year

• Q2 adjusted EBITDA at \$ -1.1m, in line with forecast announced in Q1 2021 report

• Adj. EBITDA improved by \$1.1m YTD over same period last year, due to volume increase and tightened operating costs
• YTD 2021 gross margin in line with same period last year

Strategy and growth ambitions

Tekna's market position keeps improving every day, in every segment

3D printing	ON TARGET ✓ 8% market share forecast and \$22m annual run rate revenue by YE2021 • Performance indicators are all green for AM powder revenues ✓ \$2.5bn market size and 24% market share growth projection maintained • Strong demand with increasing customer base and average order size • Market position is improving with long-term supply agreements
Printed electronics	ON SCHEDULE ✓ 2021 material validation and order intake targeted in H2 2022 • Demand for evaluation of Tekna ultra-fine nickel powder has increased in 2021 • \$1bn market size and 35% market share target could be favorably revised in 2022 ✓ Demand for EVs and 5G mobility is growing massively • Selling price of ultra-fine nickel powder is expected to stay high
Energy storage	FULL SPEED AHEAD ✓ Industrialization plan and powder development effort • Electrification of transport & green power are fueling demand for energy storage ✓ \$34bn market size and 3% market share targets are holding course • LG Chem JDA secured, Silicon samples and system design are on-going • Tekna's ranks 1st and 2nd on impact on energy density and scale-up potential

Countries and industries of relevance to Tekna are emerging from Covid-19

Developing Strategic Partnerships

The ideal position in the value chain is one where Tekna brings the most value to the customers, while increasing market share and revenue

Leadership on ESG strategy implementation

Reducing environmental footprint

• Assessment of Climate Risks and Opportunities
• Establishing baseline GHG emissions
• Continuously improving resource efficiency in production

Nurturing a Great Place to Work

E S G

• Great Place to Work Employee representation committee
• Employee survey, baseline, eSAT and eNPS¹
• Compensation package benchmarked

Focus on ethical business conduct

• Preparing EU Taxonomy and TCFD reporting
• Updated Supplier Code of Conduct and Self-Assessment
• Updated Employee Code of Conduct

Furthering transparency on ESG

• ESG report 2021

All (production) facilities powered by clean energy in Canada (hydro)

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

The Q2 performance is in line with our expectations

The market indicators we are monitoring are positive We reiterate our near- and long-term targets

Summary: Solid position for profitable growth and expansion

2

• 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 3
• Scalable, recurring and sticky business model with low CAPEX requirements 4
• 5 Increasing market share and accelerating adoption drives strong revenue growth

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

Financial statements INCOME STATEMENT

CADm	2021 Q2	2020 Q2	2021 YTD	2020 YTD	FY 2020
Revenue	7.4	3.8	15.2	8.1	22,0
Cost of sales1	4.0	1.8	7.9	4.1	11.3
Gross margin	3.4	2.0	7.3	4.0	10.7
Gross margin %	46%	53%	48%	49%	49%
Other income	-0.2	-1.7	-0.2	-1.7	-4.22
Indirect personnel expenses	3.4	2.7	6.1	5.3	10.6
Other OPEX	1.3	1.2	2.2	2.3	2.93
Total other income and OPEX	4.5	2.2	8.1	5.9	9.3
Adjusted EBITDA	-1.1	-0.2	-0.8	-1.9	1.4
Adjusted EBITDA margin %	-15%	-5%	-5%	-23%	6%
Non-recurring expenses	0.1		0.7
EBITDA	-1.2	-0.2	-1.5	-1.9	1.4
EBITDA margin %	-16%	-5%	-10%	-23%	6%
Depreciation and amortization	0.8	1.0	1.6	1.9	3.94
EBIT	-2.0	-1.2	-3.1	-3.8	-2.5
EBIT margin %	-27%	-32%	-20%	-47%	-11%
Equity company loss (income)	0.4		0.7		2.0
FX variation (Gain) Loss	-1.0		-1.0
Finance cost	0.3	0.3	0.6	0.7	1.4
EBT	-1.7	-1.5	-3.4	-4.5	-5.9
Provision for income tax	-0.1	-0.4	-0.1	-0.9	-1.14
Net profit/loss	-1.6	-1.1	-3.3	-3.6	-4.8

Notes

• 1. Accounting of direct labor is presented in the COGS
• 1. 2020 other income include CAD 2.7m in the form of grants for Covid mitigation and a further CAD 1.6m of commercial rights charged in Q4 to the JV Imphytek Powders

• 2020 OPEX costs include a CAD 2.0m recharge in Q4 to the JV

• Decrease of CAD 1.0m in amortization of intangibles and CAD 1.5m in tax expense have been recorded following the formal evaluation of the Purchase price allocation of 2013.

Financial statements BALANCE SHEET

Balance sheet
CADm	30.06.2021	31.03.2021	31.12.2020	30.06.2020
ASSETS
Deferred tax assets			-	1.5
Other intangible assets	9.8	9.3	9.4	11.4
Tangible fixed assets	18.8	18.4	18.1	16.6
Investment in equity companies	0.7	1.1	1.4
Other long-term receivables	5.5	5.5	4.2	4.1
Total non-current assets	34.8	34.3	33.1	33.6
Inventory	13.0	13.0	12.0	14.3
Contract assets	2.4	1.4	0.5
Accounts receivable and other receivables	7.0	7.9	5.8	4.7
Cash and cash equivalents	45.7	102.1	2.5	2.1
Total current assets	68.1	124.4	20.8	21.1
Total assets	102.9	158.7	53.9	54.7

For presentation purposes, adjustments were made to the Intangible assets following the formal evaluation of the Purchase price allocation of 2013. The intangible assets were increased by CAD 0.5m as of 30.06.2020, by CAD 1.0m as of 31.12.2020 andCAD 1.2m as of 31.03.2021

For presentation purposes, adjustments were made to the Deferred tax liabilities following the formal evaluation of the Purchase price allocation of 2013. The Deferredtax liabilities were increased by CAD 1.4m as of 30.06.2020

Balance sheet
CADm	30.06.2021	31.03.2021	31.12.2020	30.06.2020
LIABILITIES AND EQUITY
Owners' equity	88.2	87.1	20.1	1.2
Minority interest	0.6	0.7	0.0
Total equity	88.8	87.8	20.1	1.2
Deferred tax liabilities				3.3
Leasing obligations	0.4	0.4	0.5	0.6
Other long-term debt	3.8	30.6	24.2	41.4
Total non-current liabilities	4.2	31.0	24.7	45.3
Current interest-bearing borrowings	3.0	3.8	0.7	2.8
Current interest-bearing liabilities		23.6	-
Accounts payable	3.4	9.7	4.3	3.2
Leasing obligations	0.2	0.2	0.2	0.2
Other current liabilities	3.3	2.6	3.9	2.0
Total current liabilities	9.9	39.9	9.1	8.2
Total liabilities and equity	102.9	158.7	53.9	54.7

Financial statements

CASH FLOW

Cash flow	2021	2021	2020
CADm	Q2	Q1	Q2
Net profit	-1.6	-1.7	-1.1
Depreciation and Amortization	0.8	0.8	1.0
Tax expense			-0.4
Net financial items and Fx variation	-0.6	0.3	0.3
Change in inventory, contract assets, receivables, payables and other liabilities	-0.9	-4.6	-2.8
Share of profit from associates	0.4	0.3
Net cash from operations	-1.9	-4.9	-3.0
Purchase of PPE and intangible assets	-1.7	-1.0	-1.4
OtherInvestments activities		-1.3	-0.1
Purchase of shares in subsidiaries	0.2	-23.7
Net cash from investing activities	-1.5	-26.0	-1.5
Cashflow from issuance of stock	-1.2	96.8
Proceeds from the issuance of shares in subsidiary		1.3
New long -term borrowings	0.1	0.1	0.1
Repayment of long -term borrowings	-0.1	-0.1	-0.1
Internal loans and borrowings	-50.4	30.1	3.6
Net change in current interest -bearing debt	-0.8	3.1	-0.4
Interest paid	-0.2	-0.2	-0.3
Net cash from financing activities	-52.6	131.1	2.9
Cash flow	-56.0	100.2	-1.6
FX adjustments	-0.4	-0.6
Change in cash and cash equivalents	-56.4	99.6	-1.6
Opening Balance for Cash assets	102.1	2.5	3.7
Closing Balance for Cash assets	45.7	102.1	2.1