Nel ASA

Investor Presentation • Jun 1, 2015

NEL – Acquisition of H2 Logic

June 2015

"NEL buys the world's largest independent hydrogen refuelling station company H2 Logic"

• NEL ASA & the Transaction
• H2 Logic
• Introduction
• Products and references
• Market overview
• Financials

NEL ASA

• Established in 1927 by Norsk Hydro
• World leading supplier of hydrogen production systems based on water electrolyser technology
• Decades of competence in designing hydrogen energy systems and refuelling stations
• More than 500 large scale electrolysers sold to clients in more than 50 countries
• Significant opportunities for hydrogen as an energy carrier, serving as a 100% "clean battery" for solar and wind energy production applications

NEL CUSTOMER REFERENCES

NEL has delivered electrolysers to more than 50 countries across the world in a wide span of industries

RATIONALE FOR ACQUIRING H2 LOGIC

By acquiring H2 Logic, NEL will be positioned as a world leading supplier of Hydrogen Refuelling Stations

World leading car manufacturers are introducing fuel cell electric vehicles, which will drive substantial demand for refuelling stations

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Synergies with hydrogen production from low cost electricity from solar and wind – to high value hydrogen fuel

NEL HYDROGEN REFUELLING STATION EXPERIENCE

NEL owns the Hydrogen Refuelling Station technology developed by Norsk Hydro and Statoil

HRS delivered:

• Reykjavík, Iceland (world's first public Hydrogen Refuelling station)
• Hamburg & Berlin, Germany
• Porsgrunn, Kjellstad & Økern, Norway

NEL – BUSINESS STRATEGY – 3 PILLARS

Hydrogen Production: NEL Hydrogen

Hydrogen Refuelling Stations: H2 Logic

Energy Storage: New business

• NEL ASA & the Transaction H2 Logic Introduction
• Products and references Market overview Financials

Established leading position	The worlds largest independent Hydrogen Refuelling Station company with 20 deliveries in 7 different countries
	Participant/supplier to all major European hydrogen transport projects since 2008, active member of FCHJV1
	Conducting fuelling of vehicles from all major car manufacturers on a daily basis in Europe
Performance	Fast refuelling in 3-5 minutes and highest reported average operation availability in the world (close to 100%)
Early mover	First in the world to operate a country-wide Hydrogen Refuelling Station network on daily basis (Denmark)
	First to achieve German approval for HRS operation according to latest standards2
	Early collaboration with Shell, Air Liquide, Daimler, Hyundai, Toyota, Honda and BMW
Focused and profitable	Strong continuous R&D effort on hydrogen fuelling with 15+ R&D employees and a growing patent pipeline
	Only Hydrogen Refuelling Station company in the world to achieve accumulated profits since inception

Track record of continuous innovation and partnership with all leading players

MANAGEMENT AND ORG. STRUCTURE

• Other members of management team:
• Jesper Boisen: Co-founder and R&D Manager
• Thomas Luckmann: Co-founder and Service Manager
• Martin Poulsen: Financial Manager

• Karsten Poulsen: Production Manager

• 1. Dedicated to, and key opinion leaders in, the HRS market
• 1. Marketing know-how and customer relationships
• 1. Advised by experienced board through commercialisation phase, including Svend Sigaard¹ , Flemming Hansen² and Mogens Filtenborg³

Notes

(1) Former CEO and CFO Vestas Wind Systems ; various present/past board positions: Wrist Group, BoConcept, Aalborg Industries (2) Former Danish Minister of Transport and MP; various present/past board positions: Arealudviklingsselskabet, Copenhagen Malmö Port (3) Former MD Boel Living and CTO Vestas Wind Systems; various past/present board positions: DEIF, Stirling Denmark, Kemp&Lauritzen

NEL ASA & the Transaction H2 Logic Introduction Products and references Market overview Financials

INVOLVED IN THE ENTIRE VALUE CHAIN

H2STATION® PRODUCTS H2STATION® SERVICES

H2Station® CAR-100 for cars

H2Station® MH-100 for industrial vehicles

• 1. Planning & procurement
• Station & network planning
• Hydrogen supply handling
• Site integration & planning
• 1. Delivery & installation
• Handling of permitting process
• Handling of installation and civil works
• Project management
• 1. Operation & maintenance
• Periodic maintenance
• Monitoring of operation
• Instant service response

H2STATION® CAR-100

KEY FEATURES

• Turn-key one-module system with installation down to 48 hours
• Fast refuelling in 3-5 minutes giving 500+ km range
• Up to 200 kg/day capacity or ~400 vehicles in a network
• Flexible hydrogen supply integrated onsite electrolyser or delivered
• Patented technology

"Must win battles" for H2Station®

Same fast refuelling & long range as gasoline

Hydrogen pump price competitive to gasoline

Profitable payback of station for owner/operator

98% availability in countrywide networks

Site integration of H2Station® at Shell gasoline station in Hamburg

H2 Logic assists customers in the early HRS planning phase:

• Site selection via extensive analysis of local/regional area
• Detailed site integration planning preparing civil works
• Hydrogen supply engineering onsite or delivered hydrogen
• Designing customizations to fit customers specific needs

H2 Logic is currently designing projects across Europe

Installation of H2Station® at a gasoline station in Denmark

H2 Logic manages the entire delivery & installation process:

• Managing the civil works conducted by contractors
• Handling authority permitting process – securing required permits to operate
• Installation and commissioning of H2Station® at site

Installation experience from 7 different countries in Europe

H2 Logic offers a wide range of H2Station® aftersales services:

• Periodic maintenance conducted at site by technical H2 Logic personnel
• Online monitoring of operation remote addressing of events
• Instant service response at site addressing operation events
• Operation reporting
• Key Performance Indicators
• Logbooks and repair reports
• H2Station® service inspection at Shell in Hamburg Hydrogen sales data for invoicing

H2 Logic handles daily operation of the entire Danish HRS network

PROJECT REFERENCES

• 20 H2Station® units delivered in 7 countries
• Operational partners include Shell, Air Liquide and leading car manufacturers such as Daimler, Hyundai, Toyota, Honda, and BMW
• Since 2008, H2 Logic stations have provided 11,577 refuellings and 20 tons of hydrogen without any reported safety events

DELIVERED THE ENTIRE DANISH NETWORK

The world's first country wide network in daily operation:

• H2 Logic services and operates the entire network
• The network is operated in collaboration with leading oil, energy and gas companies
• 5 Hydrogen Refueling Stations in operation additional 6 planned for 2015/2016
• Joint venture(s) with oil, energy & gas companies with regards to building and operations
• 100 % renewable hydrogen supply
• Hydrogen pump price same as gasoline (fuel cost per km)

H2STATION® FOR SHELL IN HAMBURG

• Turn-key Hydrogen Refueling Station with onsite production and storage for grid balancing Stand-alone dispenser at 50m distance - forecourt integrated next to conventional fuels
• First station in Germany to achieve approval according to the latest refueling standards

NEL ASA & the Transaction H2 Logic Introduction Products and references Market overview Financials

HYDROGEN VEHICLES ARE BEING INTRODUCED

• Hyundai, Toyota, Honda, BMW, Daimler, GM, Nissan, Ford and Volkswagen are all expected to launch hydrogen fuel cell electric vehicles (FCEV) before 2020
• Formidable cost reductions enable introduction: "The Toyota Mirai's powertrain is 95% cheaper to build than the fuel-cell system in the 2008 Highlander fuel cell SUV" 1

HOW A FUEL CELL ELECTRIC VEHICLE WORKS

• Battery electric vehicles and FCEVs are both electric vehicles
• FCEVs run on hydrogen which is converted to electric power in a fuel cell
• FCEVs provide the convenience of conventional cars, along with:
• Zero tail-pipe emissions
• Refueling in 3 5 minutes
• 500 km+ range

BEST COMPROMISE BETWEEN RANGE & COST

SIZE MATTERS:

• Small and medium sized cars used for short trips account for 50% of vehicles and 25% of emissions
• Medium/large cars used for longer trips account for 50% of vehicles and 75% of emissions
• FCEVs most cost efficient alternative for medium/large vehicles

FCEV VERSUS BATTERY ELECTRIC VEHICLES

FCEVs provide the advantages of conventional and battery electric vehicles - combining the best from both worlds

Model	Toyota Mirai	Tesla Model S 85D	Commentary
Price in the US: [\$]	57,500	80,000	Without subsidies (FCEVs have 2x BEV subsidy in the U.S.)
Range: [km]	500	500	FCEV range less affected by cold weather
Refuelling time fast: [min]	3	75	Fast charge, 0 - 100% for 85 kWh battery (120 kW)
Refuelling time slow: [min]	5	1,680	Slow charging 85 kWh battery at home (3 kW)
System weight [kg/car]:	195	570	Battery system (BEV). Tanks, fuel, fuel cell & battery (FCEV)
System weight, 2x range: [kg/car]	288	1,140	Only extra tanks & 5 kg H for FCEV 2

PRODUCTION COST VERSUS ELECTRICITY PRICE EXAMPLE: 24HR PERIOD IN GERMANY

EXAMPLE: ELECTRICITY PRICE OF 40 øre/kWh

• CAPEX, HRS + electrolyser: ~15 MNOK
• OPEX (electricity) hydrogen: 24 NOK/kg
• OPEX (O&M) HRS+electrolyser: ~5 NOK/kg
• e-price of OPEX > 80%
• HRS refueling capacity: 200 kg/day
• Sales price: NOK 90/kg
• 1kg of hydrogen gives ~100km of range

Business case highly dependent on electricity/hydrogen price & number of customers

Good business case in Oslo-region: >10,000 FCEVs

H2 Logic is targeting markets where major car manufacturers plan to launch FCEVs

Ensuring commercial introduction of hydrogen in the Oslo-region

• 2014 2018: 400 MNOK (high public funding: Oslo/Akershus/Enova/EU)
• 2019 2025: 1,000 MNOK (gradually lower public funding)
• Government proposed national strategy for hydrogen in Norway (Feb. 2015)
• Enova responsible for governmental support to make transport sector more energy efficient and environmentally friendly
• EU's hydrogen program: €1.4B until 2020
• Hydrogen Infrastructure going forward will be commercial grade:
• Higher capacity & availability/redundancy
• Lower CAPEX & OPEX

Note (1) Estimates by NEDO (New Energy and Industrial Technology Development Organization) Note (2) http://www.japantimes.co.jp/news/2015/01/20/business/tokyo-to-spend-%C2%A545-billion-on-hydrogen-stations-subsidies-ahead-of-olympics/#.VV7wo_mqpBc

"It's time to introduce a hydrogen era." - Prime Minister Shinzo Abe, Jan. 15, 2015

JAPAN, AN EARLY AND STRONG MOVER

Japanese market within hydrogen and fuel cells:¹

• 2030: \$ 10 billion
• 2050: \$ 80 billion

2020: Olympic Games

• Heritage from 1964 Olympic Games was the bullet train, "Shinkansen"
• Heritage from 2020 Olympics will be hydrogen
• Hydrogen vehicles
• "Hydrogen Olympic Village" for power & heat
• Japanese government pledged \$385 million support for FCEVs and HRSs until 2020²

NEL ASA & the Transaction H2 Logic Introduction Products and references Market overview Financials

INCOME MODEL

Through a diversified income model, H2 Logic has been able to achieve growth and profitability since inception in 2003

Commercialization		Fixed contract	Aftermarket (recurring)
Grant agreements	Partnerships	Direct sale/JVs	Supply and service
• Public funding for R&D and demonstration of H2Station® technology • Grants range from DKK 0.5m – 15m	• CAR-100 technology agreement with major global company for a selected market Sale of H2Drive® IPR •	Sale of H2Station® • to customers and through joint venture companies • Contracts range from DKK 3.5m – 15m	• Maintenance and operation services to H2Station® customers • Contracts range from DKK 0.1m – 1m / year
• National Danish programs • Various European programs	• Tech. agreement with major global company H2Drive® • sale to Ballard	Shell, OK (Danish oil) • Air Liquide • Car manufacturers •	H2Station® customers •

KEY INCOME STATEMENT DETAILS COMMENTS

Income statement (DKKt)	Note	2012	2013	2014
Revenue	1	31,439	47,758	34,452
Other operating income	2	2,000	6,838	11,533
Total operating income		33,439	54,596	45,986
Cost of goods sold		-16,119	-25,103	-35,429
Gross profit		17,320	29,493	10,557
Salary expense		-12,873	-12,211	-14,103
D&A		-2,798	-3,666	-2,184
Other operating expenses	3	0	0	-2,980
Total operating expenses		-15,671	-15,877	-19,267
Operating profit (loss)		1,648	13,616	-8,710
Income from investments in subsidiaries	4	-1,011	-12,968	13,197
Financial income		110	5	7
Financial expense		-398	-383	-280
Net financial income (expense)		-1,299	-13,346	12,924
Pre-tax profit		350	270	4,214
Tax expense		-355	-3,231	1,587
Net profit		-5	-2,962	5,802

• 1. Revenue derived from sale of H2Station® products and services
• 1. Income from public R&D grants, sale of infrastructure and H2Drive® assets (2014)
• 1. Provision for warranties in connection with joint venture transaction in 2014
• 1. Elimination of internal profit between related subsidiary (2013) and reversal in 2014 when subsidiary changed to a joint venture with minority share

KEY BALANCE SHEET DETAILS COMMENTS

Balance sheet (DKKt)	Note	2012	2013	2014
Completed development projects	1	2,303	733	4,083
Development projects in progress	2	4,654	9,277	4,168
Total intangible assets		6,957	10,010	8,250
Land and buildings		0	0	8,915
Other fixed assets		3,578	1,300	1,365
Total fixed assets	3	3,578	1,300	10,279
Inventories		3,097	1,979	4,553
Total receivables		12,763	31,238	19,803
Cash and cash equivalents	4	11,112	1,169	10,532
Total current assets		26,972	34,386	34,888
Total assets		37,507	45,696	53,417
Total provisions	5	2,585	18,728	6,946
Total long term debt (mortgage loan)		0	0	4,674
Trade and other payables		10,657	6,992	12,440
Prepaid subsidies and payments recognized as debt	6	10,328	13,538	15,795
Other short term liabilities		4,659	123	1,445
Total short term liabilities		25,644	20,653	29,680
Total liabilities		28,230	39,381	41,300
Total equity		9,277	6,316	12,117
Total liabilities and equity		37,507	45,696	53,417

• 1. From 2014 all intangible assets are related to after sale of H2Station® IPR (fuel cells)
• 1. Decrease in 2014 is related to the sale of H2Drive® IPR to Ballad Power Systems Inc.
• 1. Increase in 2014 due to investment in production and office premises (property)
• 1. Increase in 2014 is related to payments received from receivables
• 1. Provision for deferred tax and other provisions. The significant decrease in 2014 is related to reversal of internal profit related to disinvestment in subsidiary
• 1. Prepayments received related to contract work in progress and prepayments on public grants