Nel ASA

Earnings Release • Feb 27, 2019

Q4 2018

Jon André Løkke Chief Executive Officer This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. 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" 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's businesses, raw material prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Nel ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those

expectations will be achieved or that the actual results will be as set out in the Presentation. 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 directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared in connection with the Q4 release on February 27th, 2019. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.

The Nel 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.

• Q4 highlights
• Nel in brief & organization
• Market trends
• Segment updates
• Summary/Outlook

Q4 highlights

Financial results and financing

• Revenues of NOK 124.9 million in Q4'18, up from NOK 115.6 million in Q4'17, representing a growth of 8 %:
• In line with guidance/trading update in the company presentation released together with the announcement regarding the contemplated private placement on January 30, 2019
• The quarter is influenced by cost overruns related to certain projects, non-recurring and ramp-up cost
• All-time high pipeline
• Order backlog of approximately NOK 350 million, exclusive any commercial station orders from Nikola
• Cash balance of NOK 349.7 million (Q4 2017: 295.0), excluding the NOK 462.7 million in gross proceeds from the January 2019 share issue

Operations and sales

• Participating in consortium to support hydrogen trains from Alstom
• Awarded a contract by Uno-X Hydrogen to deliver two H2Stations®
• Awarded EUR 1 million R&D grant from EUDP for continued H2Station® development
• Received PO for two H2Stations® in the Netherlands from Shell
• Awarded PILOT-E grant for development of green fertilizer project together with Yara

Subsequent events

• Awarded USD 6.5 million contract for the delivery of H2Station® solution for fueling of heavy-duty vehicles in the U.S. from Shell
• Completed a successful private placement of 84 906 560 new shares, raising NOK 462.7 million in gross proceeds
• Received notice on bid winner for two hydrogen fueling stations in Korea
• USD >3 million PEM electrolyser order from H2Energy for heavy duty trucking

Financial highlights

(NOK million)	2018 Q4 Adj*	2018 Q4	2017 Q4	2018	2017
Operating revenue	124.9	124.9	115.6	489.1	302.2
Total operating expenses	185.6	185.6	159.2	685.1	419.4
EBITDA	-18.3	-41.9	-23.9	-131.6	-77.4
EBIT	-37.1	-60.7	-43.5	-196.1	-117.2
Pre-tax loss	-32.1	-55.8	-44.6	-197.5	-124.4
Net loss	-30.9	-54.5	22.7	-189.0	-52.4
Net cash flow from operating activities	-44.6	-44.6	2.7	-142.6	-113.0
Cash balance at end of period**	349.7	349.7	295.0	349.7	295.0

*EBITDA negatively impacted in Q4'18 by non-recurring and ramp-up costs of NOK 23.6 million

** The figures do not include the NOK 462.7 million in gross proceed from the January 2019 share issue

Nel in brief & organization

• Global, listed pure-play hydrogen company facilities in Norway, Denmark and the U.S.
• Significant foothold in fast-growing markets with several breakthrough contracts
• World-leading on hydrogen electrolyzers and fueling equipment unrivalled performance and track-record
• Capable of delivering solutions to produce, store and distribute hydrogen from renewable energy

• 3,500 hydrogen solutions delivered in ~80 countries world wide since 1927

• ~40 hydrogen fueling stations delivered to 9 countries, entering South Korea in 2019

Evolving the Nel organization, to support next phase of development

Ramping the organization for growth, cost reductions and future development

• Build organization that is capable of taking Nel into the next phase of development, a number of strengthening adjustments
• In short, the following improvements are being made:
• Strengthening the finance function, added resource
• New Corporate Project function
• New Group Legal function
• Improved IR/PR/Corporate Communication function, added resource
• Stronger Business Development/Corporate Strategy function
• New function for Strategic Sales and Key Account Management
• Initiative to accelerate sales, incl. better coordination w/production, more focus on selling standard products
• Closer follow-up and coordination on technology, CTO

Updated organization

Ramping the organization for growth, cost reductions and future development

Market trends

• Conventional industries represents "traditional" hydrogen markets

• Steady demand for hydrogen

• Key market going forward both within hydrogen production and fueling

• Heavy duty sector developing faster than anticipated – hydrogen now relevant fuel for all forms of mobility
• Decreasing cost of renewables & electrolyzers is accelerating market
• Vast opportunities within existing & new sectors

Steady growing market Markets expected to see fast growth going forward

Hydrogen is becoming relevant in all forms of mobility Nel ASA Q4 2018

Hydrogen as preferred future fuel alternative:

• − True zero emission from production to use
• − Can beat fossil fuel applications on a TCObasis
• − Low weight (compared to e.g. batteries), especially relevant in the heavy duty segment
• − Fast recharging (fueling) time
• − Long driving range
• − Low/no need for electric grid upgrades
• − Not dependent on rare metals (e.g. cobalt, lithium)
• − Global standards for fueling established
• − Same quality fuel used for small to large applications

Trend supported by external analysts, like Miller, J. & Façanha

• Heavy duty vehicles responsible for 47% of CO2 emissions from land-based mobility and ~8% of total global CO2 emissions
• Freight activity (ton-km) projected to double by 2050
• Hydrogen most promising zero-emission fuel for heavy trucks

Sale of auto diesel has stabilized on a high level despite transition to electrical vehicles

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Centralized production close to power or heat source enables business case

• Regional hydrogen production, use of low cost renewable energy
• Possible to integrate with central heating and grid balancing services
• Parity with taxed diesel possible already from 4-8 ton per day

Establishing centralized, large scale production sites with local distribution, serving multiple mobility needs Radius of circle corresponds to ~2.5 hour driving Electrolyzer at optimal site for electricity heat grid integration

Green hydrogen Production:

• 8 – 24 tons / day from Hydro/Wind

Efficient hydrogen distribution:

• 1 000 – 1 500 kg pr. truckload

Efficient hydrogen distribution:

• 2.5 hour travel distance for optimal distribution cost
• H2Station capacity can easily be added or expanded
• Fuel with 100% renewable hydrogen at attractive price

Developing new solutions to strengthen position in heavy duty vehicle segments

• Wide variety of existing and new markets where electrolysis can play a major role
• Exchanging fossil hydrogen with renewable hydrogen (f.ex fertilizer)
• Exchanging coal with renewable hydrogen (f.ex steel manufacturing)
• Oxygen & heat adds value
• Electrolysis "bridges the gap" between the power and industry sector, increasing the value of electrons
• Ability to adapt to diverse and intermittent renewable energy sources becoming increasingly important

Targeting further development within all segments to maintain position

	Key specs	Key focus going forward
ATMOSPHERIC ALKALINE	High efficiency Low capex Proven, high reliability Already deployed in 100+ MW scale	Scaling up production dramatically to take out full cost potential Maintain and strengthen Nel's position in large scale electrolysis
NEXT GEN. ALKALINE	Targeting same efficiency as atmospheric electrolyzer Pressurized and compact Direct integration with renewables Adapted for GW-scale H2-production	Develop unique pressurized technology to be commercialised around 2022 Test unit together with key partners, e.g. Yara International (green fertilizer)
3 PEM	Most proven PEM electrolyzer in market High reliability and long life time Direct integration with renewables Offering PEM in all relevant markets	Increase cell stack to MW-level Further strengthen position within PEM electrolyzers Adapt and prepare for mass production

Segment updates

Nel preferred supplier for hydrogen train opportunity in Germany

Latest developments

Nel chosen as preferred supplier of hydrogen production and fueling equipment for Alstom in Schleswig-Holstein

• Centralized hydrogen production and distribution, owned by consortium (showed below)
• Green hydrogen production by centralized Nel electrolyser of 20 MW situated near Heide refinery
• No conclusion yet in relation to the tendering process
• Timeline has been extended
• No change in timeline for deployment, potential from 2021

Latest developments

Nel and Yara awarded grant for development of green fertilizer project

• Grant from PILOT-E scheme aimed towards developing next generation green (renewable) ammonia and fertilizer production
• Target to utilize Nel's next generation alkaline electrolyzer technology currently under development
• Technology tailored for large scale hydrogen production w/direct connection to renewables
• Ambitious development targets: lower unit cost, higher level of flexibility, higher pressure, lower footprint, equal efficiency
• Ammonia production accounts for >50% of total hydrogen market which currently is >95% fossil energy based
• USD >100 billion total theoretical market opportunity

Joint maritime hydrogen projects awarded public grants

Latest developments

HYON granted support to develop solutions for zero emission maritime vessels

• Four Norwegian hydrogen projects received funding through PILOT-E scheme, HYON is engaged in two of the projects:
• Project ZEFF Zero Emission Fast Ferry
• Project SeaShuttle zero emission container transport for short-sea market
• HYON will use Nel as supplier for the on-shore hydrogen production and fueling solutions
• HYON is a joint venture, owned by Nel, Hexagon Composites ASA and PowerCell Sweden AB

Latest developments

Targeted capacity of 360 MW per year, ~10x current annual production

• Detailed planning and pre-engineering done, currently in the process of receiving updated offers from key equipment suppliers
• Final design, production concept and CapEx levels still to be concluded
• Exact timing of expansion will be aligned with commercial demand, such as Nikola as well as other industrial customers
• Good interest for new low cost 20MW electrolyzer solution, total value of customer requests currently amounting to USD >200 million
• Working with Nikola on detailed commercial station roll-out plan
• Maintaining flexibility in expansion plan to accommodate the above

New facility located right next to existing plant

8-cluster electrolyzer solution, produces 8 tons of hydrogen per day

Receives H2Station® orders from Shell under new framework agreement Latest developments

Order follow signing of a new framework agreement between Nel and Shell

• The two H2Station® units in the Netherlands will be manufactured and installed during 2019
• Total contract value of approximately EUR 2.5 million
• Nel has delivered several H2Station® solutions for Shell since 2014, both in Europe and in the U.S.
• New framework agreement underscores a commitment between the two companies to continue a partnership in the global roll-out of hydrogen stations

Newly opened hydrogen at Citrus Heights, California

Source: www.greencarcongress.com (Dec. 25, 2018)

Received purchase order for two additional H2Stations in Norway

Latest developments

Extending network of hydrogen fueling stations between major cities in Norway

• Awarded a EUR 2 million contract with Uno-X Hydrogen to deliver two additional H2Station® hydrogen fueling stations in Norway
• Stations to be deployed in Hell and Sandemoen in the Trondheimregion, making hydrogen available in another important region in Norway
• Delivery expected during 2019
• Uno-X Hydrogen is a joint venture between Uno-X, Praxair and Nel, aiming at building a network of hydrogen fueling stations covering major cities in Norway by 2020

Newly opened energy station at Hvam, Norway (Photo: Uno-X)

Heavy duty fueling technology and standards reaching a mature stage

• Awarded R&D grant of EUR 1 million from the Danish Energy Technology Development and Demonstra�on Program (EUDP) for con�nued H2Sta�on® hydrogen technology development
• Support efforts in development and demonstration of increased hydrogen fueling capacity, especially for heavy duty applications
• Entered MoU together with Air Liquide, Hyundai, Nikola Motor, Shell and Toyota to develop and test hydrogen fueling hardware for heavy duty vehicles
• Standardization will enable cost reductions and allow different makes of trucks to utilize the same infrastructure

Nel ASA Q4 2018

Photo: Nikola Motor Company

Nel ASA Q4 2018 Awarded USD >6 million purchase order for HDV H2stations from Shell

Subsequent events

• Recently received a PO for a H2Station® solution for fueling of heavy-duty vehicles in California from Shell
• Order issued under the recently announced framework agreement between Nel and Shell Global Solutions International B.V.
• First order for a HDV station from Shell, potential for more
• H2Station® order has a total value of approximately USD 6.5 million, work has already started
• Nel Hydrogen has delivered several H2Station® solutions for Shell
• Nel will upgrade existing H2Station® technology to better accommodate the HDV requirements as well as further improving uptime/reliability of station equipment

Photos: Toyota, The Sun

Subsequent events

Enables Nel to extend and accelerate activities and sales in the region

• Nel Korea has received the notice as bid winner of two H2Station® hydrogen fueling station from Gangwon Technopark
• Value of proposed station solution is around EUR 2.8 million
• With financing in place, Nel and end customer will now work to finalize necessary agreements
• Korea has ambitions to increase number of stations from 30 to >300 by 2022
• The Special Purpose Company (SPC) for expanding the country's hydrogen infrastructure is under development
• Will be named HyNet
• Nel Korea is represented on the HyNet Board of Directors

Members of South Korean Government and the Ministry of Trade, Industry and Energy having signed agreement to build hydrogen fueling stations

Source: FuelCellWorks.com (April 25, 2018)

Nel ASA Q4 2018 Awarded PO for PEM electrolyzer and enters a 30 MW framework contract

Subsequent events

• Awarded a USD >3 million purchase order for a containerized 2 MW Proton PEM electrolyzer as part of a new 30 MW framework contract from Hydrospider AG, an affiliated company of H2 Energy AG
• Represents phase 1 of the 60 80 MW needed to supply green hydrogen to the 1000 expected trucks from Hyundai over the coming years
• Will be first containerized M-series PEM electrolyzer from Nel to be installed in Europe – during second half of 2019
• H2 Energy is working together with various partners to establish a nation-wide network of hydrogen stations and corresponding supply chain in Switzerland, and Hydrospider will own and operate the hydrogen production assets

Hyundai fuel cell electric truck, to be deployed in Switzerland

Summary/Outlook

Levering on the arising opportunities within energy storage and hydrogen fueling

• Ongoing growth initiatives and focus on long term high value orders will have a negative impact on Nel's ability to deliver positive EBITDA in the short term
• Continuing work on the x10 factory expansion at Notodden to support deliveries to Nikola and other customers
• Leveraging the fast-growing HDV opportunities, increasing technology development activities
• Develop next generation electrolyzer technology for industrial applications, such as ammonia, refineries, etc.
• Continue to explore further market penetration strategies in China
• Ongoing collaboration on H2Bus Europe for a large-scale hydrogen bus rollout
• Significant tender activities for larger projects for electrolyzers and H2Stations, continuing to strengthen pipeline

Q&A

Number one by nature