Nel ASA

Investor Presentation • Sep 27, 2017

Nel ASA Company presentation September 2017

Jon André Løkke Chief Executive Officer

Disclaimer

This Presentation has been produced by Nel ASA (the "Company" or "Nel ") in connection with a potential private placement and is solely for use at the presentation to investors and other stake holders and may not be reproduced or redistributed, in whole or in part, to any other person. This presentation is strictly confidential, has not been reviewed or registered with any public authority or stock exchange, and may not be reproduced or redistributed, in whole or in part, to any other person. To the best of the knowledge of the Company, the information contained in this Presentation is in all material respect in accordance with the facts as of the date hereof, and contains no material omissions likely to affect its importance. However, no representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its subsidiary companies or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this Presentation.

This Presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to be inaccurate or misleading. This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry 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. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of its parent or subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results.

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AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY'S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS.

SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION.

By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business. This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.

Transaction and trading update

The contemplated transaction

Transaction and trading update

KEY TRANSACTION DETAILS		USE OF PROCEEDS
CONTEMPLATED TRANSACTION	Private placement •	• Additional working capital in response to increased order volumes and improved positioning to benefit from markets with high activity and growth momentum
OFFER SIZE	• Approx. 10% of the current shares outstanding	– Funding of working capital requirement in connection with the newly announced Sunline contract – General working capital need in connection with expansion in new markets (China, Korea)
OFFER PRICE	• To be determined through bookbuilding	– Strengthening of working capital in Proton to execute on future potential Negative liquidity impact partly adjusted by less consideration shares to seller in post • closing adjustments
MINIMUM SUBSCRIPTION	• NOK equivalent of EUR 100,000	• Build-up of organization in connection with additional purchase orders from Royal Dutch Shell in California • Better financial positioning for large European power-to-gas projects (e.g. H2V), including
CONDITIONS	• Board approval of the transaction based on the authorization to issue shares from the annual general meeting	refineries (enabled by Nel's strong product portfolio) • Positioning the Company with the opportunity to take on attractive projects with strong industrial partners (certain projects can require some up-front capital)

Trading update and order backlog

Transaction and trading update

• Q3 sales NOK ~100 million
• All time high quarterly sales level
• Q4 sales NOK ~100 million
• Full-year organic growth of ~30% (excl. Proton)
• Q3 cash reserve of NOK ~80 million
• Impacted by Proton acquisition related items (negative NOK ~50 million)
• Working capital build-up related to higher sales/orders
• Order intake of NOK ~170 million
• Current order backlog of NOK ~400 million, all time high

TRADING UPDATE ORDER INTAKE AND ORDER BACKLOG

Orders announced post Q2 (since 30 June 2017)

• Sunline, PEM electrolyser and H2Station® for bus fueling in California, total contract value >USD 8m
• Additional order for the fourth system as part of Proton's agreement with Synergy (total agreement covers up to 13 MW-systems), additional order with a value of up to USD 1.8m
• Additional purchase orders from Shell under California framework contract. ~NOK 50m value

Introduction to Nel

Introduction to Nel

BUSINESS OVERVIEW

• Global pure-play OSE listed hydrogen company, w/facilities in Norway, Denmark and US
• World leading on hydrogen electrolysers and fueling unrivalled performance and track-record
• More than 3500 hydrogen solutions delivered in ~80 countries worldwide since 1927
• Significant foothold in fast-growing markets with several breakthrough contracts
• Complete range of products optimally positioned for large market opportunities
• Capable of delivering solutions to produce, store and distribute hydrogen from renewable energy – serving industry, energy and gas companies

Note: 1) Before the acquisition of Proton Onsite; 2) Pro-forma figures including Proton OnSite, as outlined in Nel June 2017 Prospectus

Nel - key historical events

Introduction to Nel

• Nel dates back to 1927 when Norsk Hydro installed the first small electolysers at Notodden
• Nel initially served Norsk Hydro's own demand for green hydrogen, a critical component in the production of ammonia/fertilizer
• In the 1970's, Norsk Hydro started offering the electrolyser technology to external customers
• Nel was later developed into a separate entity and listed on the Oslo Stock Exchange in 2014 (listed entity DiaGenic ASA acquired Nel and changed its name to Nel ASA)
• Nel has grown significantly through a range of acquisitions as well as organic growth, and has taken a leadership role in the development of the global hydrogen economy
• Hence, the slogan "number one by nature"

KEY EVENTS UNDER NEL ASA Nel was listed at the Oslo Stock Exchange Nel acquired H2 Logic, a supplier of Hydrogen fueling Stations Nel acquired RotoBoost H2 AS which holds all assets related to the RotoLyzer ® JV Uno-X Hydrogen AS established together with Uno-X, Nel and Praxair Nel entered into an agreement with SunPower to build and operate the first solar-driven hydrogen production plant in USA Framework contract for the supply, construction and maintenance of H2Station® hydrogen fueling stations in California for Shell in a partnership with Toyota Nel acquired Proton OnSite to become the world's largest electrolyser company JV agreement with Hexagon Composites ASA and PowerCell Sweden Oct 2014 May 2015 Aug 2015 Mar 2016 Feb 2017 Feb 2017 Apr 2017 Apr 2017 Sep 2017 Additional purchase orders from Shell

Segment overview

Nel Hydrogen Electrolyser Nel Hydrogen Electrolyser

Production and installation of water electrolysers for hydrogen production Production and installation of water electrolysers for hydrogen production

• Global leader in hydrogen production plants highest uptime, lowest conversion cost, robust and reliable
• More than ~3,500 hydrogen solutions delivered in >80 countries world wide since 1927
• Scalable production capacity for industrial and energy/transport applications small scale to large scale solutions

Proton OnSite

Part of Nel Hydrogen Electrolyser

• Completed the acquisition of Proton OnSite on June 30, 2017
• Creating the world's largest electrolyser company
• Enabling Nel to offer any type of electrolyser in the market
• Great strategic fit, and several areas of synergies
• Proton OnSite and Nel have already started to work together on integrated projects, proving the strong organizational and technical fit
• Enhances Nel's foothold in the US and accelerates Nel's growth ambitions
• Combined pro forma FY 2016 revenues of NOK 342.7 million (vs Nel 2016 revenue of NOK 114.5 million)

PROTON IN NUMBERS

• USD 27m in revenues (2016)
• 2600+ installations worldwide
• 75+ countries with generators installed
• 80 registered patens
• 20 years of installations
• ~100 employees
• Fully developed product offering, with the world's largest megawatt PEM electrolyser deal at the time in December 2016 (deal value excess of

Nel Hydrogen Fueling Nel Hydrogen Fueling

Production of hydrogen fueling stations for cars, buses, trucks, forklifts and other applications Production of hydrogen fueling stations for cars, buses, trucks, forklifts and other applications

• Global leader within hydrogen fueling solutions for vehicles, first to adapt the newest fueling standards
• Delivered more than 30 stations in 8 countries across Europe since 2003
• Highest reported availability and innovative, in-house developed technologies

High capacity, smallest footprint 200 kg/day, 10m2

Flexible installation, smallest footprint 50 m from station, 1/3 size of normal dispenser

Largest manufacturing facility 300 station per year capacity

Nel Hydrogen Solutions Nel Hydrogen Solutions

Established to utilize market opportunities across the Nel group and offers complete solutions to customers Established to utilize market opportunities across the Nel group and offers complete solutions to customers

• Unified delivery of complex renewable hydrogen solutions, efficient system integration, project development and sales across segments
• Only provider of integrated solutions along the entire value chain:
• 1. Fueling Networks
  2. Develop entire fueling networks, incl. renewable hydrogen production
  3. Service and maintenance
  4. Network monitoring services
• 1. Renewable Hydrogen & Storage Solutions
  2. Renewable hydrogen
  3. Production based hydro, wind or solar
  4. Large, medium or small scale
  5. Storage solutions and "constant" renewable supply

Recent announcements

PEM electrolyser and H2Station® for bus fueling in California

Recent announcements

15

Additional order as part of the world's largest PEM electrolyser agreement

Recent announcements

Another MW delivery to China for fuel cell busses

• Order for the fourth MW-system under agreement between Nel/Proton and Synergy in China
• Synergy also cooperating with Ballard on fuel cell technology
• Value of up to USD 1.8 million, including installation, commissioning, and other related services
• Total agreement covers up to 13 MW-systems with a total value, including installation and associated services, of more than USD 22 million
• Installations and commissioning will start towards the end of 2017 and continue into 2018

Synergy fuel cell bus production facility, official opening in Sept. 2017

Potential large scale energy storage project in Fredericia, Denmark

Recent announcements

Multi-value stream project in Denmark

• Potential project of ~20 MW electrolysis
• Renewable hydrogen for multiple purposes:
• Replace fossil hydrogen used in refinery process
• Energy storage and power generation
• Hydrogen used directly for transportation purposes, fuel cell electric busses and cars (FCEV's)
• Other value streams:
• Oxygen used locally within refinery
• Heat used for city district heating
• Developed solution relevant in many other oil refineries across the globe

Shell oil refinery in Fredericia, Denmark

Additional order from Shell under framework agreement

Recent announcements

• Nel has exclusive framework contract with Shell (in partnership with Toyota and Honda) for supply, construction and maintenance of hydrogen stations San Francisco CA
• Initial purchase order received Q1'17 with value of NOK ~140 million
• Recent additional purchase order with value of NOK ~50 million
• H2Station® modules expected to ship in 2017 and 2018, installation in 2018
• Retail hydrogen fueling stations have started to populate key markets in California
• 28 retail hydrogen stations open throughout the state

Shell hydrogen stations in the North

Locations where Shell receives CEC grants from current round of funding

Entered milestone agreement with H2V PRODUCT

Recent announcements

• Exclusive, industrial-scale power-to-gas framework agreement with H2V PRODUCT
• French company focused on massive carbon free hydrogen production
• Carbon free hydrogen will be injected into main gas pipeline that distributes natural gas throughout France
• First 100 MW hydrogen plant, contract value of NOK ~450 million, increasing to NOK ~3.15 billion for six other H2V PRODUCT plants (total of 700 MW)
• First plant developed 2018-2020, target to continue adding lines in period between 2020-2025
• Partnership represents significant opportunities for further expansions
• Expansion of Nel production capacity
• Investment decision related to capacity expansion at Notodden is expected in connection with final agreements

Dunkerque gas terminal

Attractive market opportunity

Total global hydrogen market

Attractive market opportunities

Large opportunities for growth within existing hydrogen market

• ~50 million ton/year market (~150 BUSD)
• Only 1% from water electrolysis
• Large potential for growth, driven by increasing focus on climate and renewable energy
• Increasing activities related to power-to-gas and refineries
• The entire market would represent ~2,800 TWh of electricity and ~450 GW, equivalent to more than 200,000 of Nel's largest electrolysers (NEL A-485)

Hydrogen from water electrolysis represents only 1% of total market

• Steam Methane Reforming
• Crude oil cracking
• Coal gasification
• Chlor-alkali by-product
• Water electrolysis

Power-to-H2 market of NOK 39 billion until 2025, in Europe alone Attractive market opportunities

• Recent study shows that power-to-hydrogen is already bankable in Europe at electricity prices of 40 – 50 €/MWh (37 – 47 øre/kWh)
• Potential in the EU from now until 2025 of a cumulative electrolyser capacity of 2.8 GW, representing a market value of NOK 39 billion
• Most bankable in short- and medium-term:
• Hydrogen mobility deployment
• Oil refineries
• Chemical and fertilizer industries
• Complemented by gas grid injection
• First ever Green-Ammonia Conference held in Rotterdam May 18th-19th

Project develop.: 400MW renewable H2 plant to outcompete natural gas reforming Attractive market opportunities

• Working on GIGA factory concept for renewable hydrogen production to outcompete natural gas reforming
• Largest electrolyser plant ever designed
• International industrial customer
• Tied to solar power
• CapEx of USD ~175 million
• Benchmark CapEx ratio:
• 0.45 MUSD/MW

Record range and low cost achieved

Attractive market opportunities

• Hyundai recently launched next generation FCEV
• Range of >800 km
• Second generation FCEV from Hyundai will receive fourth generation fuel cell tech.:
• ~20% lighter fuel cell
• ~10 % more efficient
• ~30% higher power density (kW/liter)

• 60% total (tank-to-wheel) efficiency

• Commercial launch in 2018, second generation Hyundai FCEV

New Hyundai FCEV launch early 2018

Hyundai 2018 model FCEV: >800 km range (NEDC)

Initial production capacity of 3,000 vehicles annually

Fuel cell efficiency improvements massively boosts energy output

Attractive market opportunities

• With 1000 kg of a given energy carrier, how much useful energy can be recovered?
• Battery: <140 kWh
• Diesel: ~4 000 kWh
• Hydrogen: >16 500 kWh
• Within hydrogen, small improvements in fuel cell technologies gives large improvements in recovered energy
• Ref. graph: increase from 50% to 65% fuel cell efficiency increases energy output by ~5 000 kWh 140

Useful energy per 1000 kg (in kWh)

* For marine applications, batteries tend to have ½ the kWh capacity compared to cars due to stricter durability requirements (i.e. ~60 kWh)

Several hydrogen initiatives ongoing: selected examples

Attractive market opportunities

Summary/Outlook

Creating a rapidly growing billion NOK company

Summary/outlook

Levering on the arising opportunities within energy

storage and hydrogen fueling

Financial highlights – Quarterly development 2016-2017

(NOK million)	2017 Q2 Adj.*	2016 Q2	2017 Q2	2017 Q1	2016 Q4	2016 Q3	2016 Q2	2016 Q1
Operating revenue	39.1	13.5	39.1	35.7	50.6	24.4	13.5	26.0
Total operating costs	63.9	29.9	63.9	51.3	66.6	32.7	29.9	36.1
EBITDA	-12.5	-14.0	-22.0	-13.0	-13.1	-10.1	-14.0	-7.6
EBIT	-15.3	-16.5	-24.7	-15.6	-16.0	-12.7	-16.5	-10.1
Pre-tax profit	-16.6	-16.0	-26.0	-16.2	-24.1	-12.4	-16.0	-10.1
Net profit	-17.3	-15.6	-26.7	-15.6	-18.5	12.0	-15.6	-9.7
Net cash flow from operating activities	37.3	-24.2	37.3	-14.0	11.0	10.5	-24.2	-21.3
Cash balance at end of period	201.2	265.9	201.2	386.3	225.0	223.6	265.9	289.0

• Revenue growth of ~190% compared to same period last year
• Operating earnings negatively impacted by ramp-up cost, non-cash option commitments, other Proton transaction related costs
• *Adjusted for Q2 acquisition cost of NOK 5.2 million and non-cash share options cost of NOK 4.2 million
• Nel Hydrogen Electrolyser continues to contribute positively to EBITDA, for the third quarter in a row

Profit and loss

(NOK million)	2017 Q2	2016 Q2	2017 Q1-Q2	2016 Q1-Q2	2016
Operating revenue	39.1	13.5	74.9	39.5	114.5
Operating costs	63.9	29.9	115.2	66.0	169.8
EBITDA	-22.0	-14.0	-35.0	-21.6	-44.9
EBIT	-24.7	-16.5	-40.3	-26.6	-55.3
Pre-tax profit	-26.0	-16.0	-43.4	-26.1	-62.6
Net profit	-26.7	-15.6	-42.6	-25.3	-55.8
Total comprehensive income	-25.0	-17.9	-41.9	-33.8	-75.4

Balance sheet

(NOK million)	2017 Q2	2016
Fixed assets	1,157.3	462.9
Current assets	416.7	300.0
-of which is cash and cash equivalents	201.2	225.5
Equity	1,200.5	671.2
Long term liabilities	26.1	12.6
Short term liabilities	216.4	65.6
Total balance	1,574.1	762.9
Equity ratio (%)	76.3%	88.0%

Cash flow

(NOK million)	2017 Q2	2016 Q2	2016
Pre-tax profit (loss)	-26.0	-16.0	-62.6
Net cash from operations	37.2	-24.2	-34.2
Net cash from investments	-198.5	-8.6	-60.2
Net cash from financing	-5.9	9.7	6.8
Net change in cash and cash equivalents	-167.2	-23.1	-87.6
Cash at end of period	201.2	265.9	225.5

Unaudited pro forma FY 2016 figures

Appendix

(NOK million)	2016
Operating revenue	342.7
Operating costs	241.6
EBITDA	-83.5
EBIT	-138.4
Pre-tax profit	-148.2
Net profit	-124.5

• Proton OnSite amounted ~67% of the Company's 2016 pro forma revenue

New organization in place

Appendix

35

New Nel Board

• Hanne Skaarberg Holen (chair of the Board)
• Partner of Advokatfirmaet Thommessen. Has worked as Managing Partner of Arntzen de Besche Advokatfirma and PriceWaterhouseCoopers
• Beatriz Malo De Molina
• Has worked as SVP and Head of M&A at Orkla ASA, and previously for Kistefos Private Equity, McKinsey & Co, various positions in Goldman Sachs
• Finn Jebsen
• Former CEO of Orkla ASA and business areas like Borregaard, Denofa Lilleborg, Ringnes-Carlsberg and Orkla Brands.
• Mogens Filtenborg
• Has worked as EVP, Board member and Operations/Chief Technology Officer of Vestas Wind Systems A/S
• Ole Enger
• Has worked as CEO in Nordsilmel, Elkem, SAPA, REC, and executive management of Norsk Hydro and Orkla.