Airthings — Investor Presentation 2023

Oct 26, 2023

Airthings Capital Market Update 2023

Welcome to Airthings CMU

Geir Førre, Chairman

Introduction and Overview

"Path to profitability"

Oyvind Birkenes, CEO

Airthings

Leaders in the Invisible

Rooted in our beginnings as an innovator in the realm of radon monitoring, Airthings provides a suite of elegant indoor air quality (IAQ) monitors complemented with powerful software solutions. For both consumers and businesses.

We enable people to be aware of the air they are bringing into their bodies, the impact it has, and to take action to improve it. The clarity of information we provide is pushing the industry forward.

The problem

Two critical issues Airthings is addressing

The air we breathe has a huge impact on our health, but we don't know what's in it

We take 28,000 breathes a day

We spend 90% of our time indoors, where the air is up to 5 times worse than outside

Radon is the leading cause for lung cancer among those that do not smoke

Massive amounts of energy are consumed regulating indoor climate, but it is done largely "in the blind"

40% of global energy consumption comes from commercial buildings

>20% of ongoing energy consumption can be saved by optimizing HVAC (heating, ventilation and air conditioning)

80% of today's buildings will still exist in 2050

Top-of-the-line products developed for commercial use but designed from a consumer perspective

Continuous monitoring of IAQ providing rich data to users via app and web dashboard

Actionable insights to optimize and automate IAQ and energy consumption

Helping users see and take control over the air they breathe

Early mover pursuing a massive market opportunity

Airthings for Consumer Airthings for Business

Introduction

Airthings is uniquely positioned to capitalize on this market opportunity

Strong brand delivering an unparalleled value proposition

Introduction

Significant and lasting tailwinds supporting our long-term journey

Including megatrends and regulatory momentum

2022 demonstrated that we needed to rethink the strategy presented at the 2021 CMU

The result of this work was an updated strategy and focus we call "Airthings 3.0"

Introduction

Three core elements of Airthings 3.0

Introduction

We have a capable team already delivering on this strategy

• Great company culture
• 125 employees from >35 nationalities

• 60% with Masters degree or higher

• Several domain experts, particle physicists, and PhDs
• ~35% working in research and development

Today's presentations will focus on these three elements

And how, through them, we will improve along the dimensions of "# of customers" and "Customer Lifetime Value (LTV)"

Final reflection – only beginning to implement Airthings 3.0 but already seeing early results

Growing revenue and expanding GPM, while keeping OPEX under control

"Strengthening demand generation"

Millie Paakkola, CMO

Looking back

Marketing in Airthings has historically been somewhat tech focused and on building general awareness of indoor air quality (IAQ)

Going forward – opportunity to focus more on demand generation and setting Airthings apart

As recent entries into the IAQ market helps to confirm the relevance of the product category and generate overall category awareness

Recent entries into IAQ confirming product category and generating overall category awareness

Representing an opportunity for us to step up demand generating activities

Marketing in "Airthings 3.0"

Four critical Marketing initiatives to support our Go-to-market efforts

What we mean by "Leaders in the Invisible" (I/II)

For us, the invisible is an opportunity.

As the global leaders in indoor air quality, we're on a mission to transform the world – changing our relationship with the air we breathe for the better.

What we mean by "Leaders in the Invisible" (II/II)

More than information – it's about action

For something so abundant, air can feel inaccessible – but we're breathing new life into an industry weighed down by complex technology and lengthy jargon.

Because at Airthings, our approach is personal.

One brand – two tailored approaches to support our business units

"Leaders in the Invisible"

• Provide innovation and transparency to the invisible to change our relationship to the air we breathe
• Enable people to feel a sense of clarity and control

Airthings for Consumer

"Your air coach"

• Supporting a happier, healthier lifestyle from the inside, out
• Understanding needs, tailoring reporting, and providing advice

Airthings for Business

"Breathing life into buildings"

• Products that are specifically designed to promote wellness and energy savings
• Actionable insights and practical solutions

Elevating packaging to match the premium value proposition of our products

Performance marketing efforts geared toward supporting demand generation focus

How we are refocusing our performance marketing Examples of new creatives being rolled out

• Focusing on two main channels Meta and Google where we have seen historical success
• Be more tactical in the US, and focus on states where we see the best traction
• Ensure our creative approach is benefit-led and appealing for well-being minded audiences
• Expand target audiences from primarily male "techies" to new segments like women and families
• Target geographical locations with strong overlap of online and in-store presence to maximize overall effect on demand
• Shift focus from awareness building to driving conversion and growth on airthings.com while continuously optimizing spend

Focusing and strengthening our approach to PR & awareness

	Historical approach to PR & awareness	Approach going forward
1	• Activities generically related to indoor air quality and not aligned to real-time events	• Leverage opportunities and real-time events to be the thought leader when indoor air quality comes top of mind • Examples: Wildfires and gas stoves
2	• Global outreach with time and money spent de-facto on low-performing geographies (in terms of sales)	• Relevant and local messaging focused on the most pressing regional indoor air quality issues • Examples: California & PM, Colorado & Radon, etc.
3	• SOME focused on self-generated content	• Making user-generated content front and center

Concluding thoughts

Marketing is focused on supporting the Go-to-market efforts in our business units and increasing our overall # of customers

Marketing's focus – what we are doing in short:

Leveraging "Leaders in the Invisible", "Your Air Coach", and "Breathing life into buildings" to enhance our brand messaging as well as our emotional and aspirational appeal

Communicating our premium value proposition throughout every step of the customer journey ²

Tailoring our messaging and enhancing our relevance through improved performance marketing and focused PR & awareness building activities

Airthings for Consumer

"Channel discipline and multiroom monitoring"

Anders Follerås, SVP Airthings for Consumer

Airthings for Consumer has historically been fast-growing

With a holistic product experience to address customer needs

Addressing the North America and European markets via three primary channels

Providing resiliency in terms of both geography and distribution

of vendors

Customer segments evolving as market matures

Recent entries into IAQ category confirm we are at the "Expand" stage of category maturity Presenting strong growth opportunities

Innovate	Expand	Peak	Consolidate	Challenge	• Broaden our appeal to additional key customer segments, including:
					• Families
					• Women
					• Health-interested
					• Focus more of our marketing content on demand generating activities, including:
					• Communicating our premium value-proposition and differentiating ourselves
					• Aspirational and lifestyle appeals
			Time and category maturity

• segments, including:
  • Families
  • Women
  • Health-interested
• Focus more of our marketing content on demand generating activities, including:
  • Communicating our premium value-proposition and differentiating ourselves
  • Aspirational and lifestyle appeals

Airthings for Consumer

Airthings for Consumer in "Airthings 3.0"

Initiatives focused on both on our Go-to-market and Product Focus

Turning first to Consumer's Go-to-market efforts

Three priority initiatives to drive growth in the number of customers

Three key learnings from 2022 and early 2023 that formed updated Go-to-market strategy

	Learnings	Implication for GTM
1	Of all channels, Airthings.com has the best unit economics, but has traditionally received the least focus	Make growth on Airthings.com a top priority and dedicate the resources required to accelerate its progress
2	Amazon has been a very successful channel for Airthings.com and we are only scratching the surface	Ramp up marketing activities on Amazon and continue to nurture relationship
3	We went too broad too fast with our retail footprint, and this prevented us from developing a scalable model	Focus energies on key retailers where we have seen success, establish scalable model, and ramp when ready

Seeing early signs of traction from efforts on Airthings.com

Many opportunities to build on our historical Amazon success

• Sustainability positioning, events, and badging
• And many more …

Enforcing Retail discipline

To maximize short-term revenue gains and establish a scalable model which can be ramped up later

Tuyen Vo Olsen VP Global Retail

• Long tail created large administrative burden and stole capacity without generating meaningful results
• Going deeper where we have seen success, including:
  • Expanding the product offering at key retailers
  • Nurturing strategic partnerships to further develop the
  • Improving sell-through via tailored in-store merchandise and marketing efforts
• Ensuring we are capturing learnings from where we are seeing successes
  • Enabling us to develop a more "fool-proof" and scalable Retail model that can be replicated and ramped up

Turning now to where Consumer's Product focus is going to be for the foreseeable future

Three tightly connected initiatives to boost not only number of customers but also Customer Lifetime Value

Building a true hardware-enabled software company

Our App offering today – solid but a bit basic Our App offering in the future

• Immediate and historical graphs of key air quality metrics
• Notifications
• Set your focuses per room, such as asthma, allergies, etc.
• 3 rd party data (such as outside weather, etc.)

– an air coach in your pocket

• Tailored customer journeys, with personal insights and recommendations
• Compare your home to others in your neighborhood
• Automate your home using matter, and optimize your energy usage
• Get contacted by an Airthings approved professional

Targeting releasing value-adding user features/functionality on a bi-monthly schedule

Conveying and enhancing the value proposition on multiroom monitoring

Our hardware portfolio was designed with multiroom monitoring in mind

How we are going to enhance the value proposition

• Different rooms and spaces are subject to different air quality problems, i.e radon in basements, Co2 in bedrooms, mold in bathrooms
• People in a household are different; asthma, allergies, dry skin, etc
• Activities in rooms are different, i.e sleeping in a bedroom, lighting a fireplace in the living room, gym and gaming room in the basement
• Incorporate multiple data sources to provide even more advanced and personalized insights and recommendations
• Provide an overall score of the health of the home, with focus on key areas (e.g. kid's bedroom)
• Compatibility with smart home services like Matter to i.e., enable energy efficiency and automate your home

NOTIFICATION Wildfire

NOTIFICATION Pollen

NOTIFICATION Humidity

Wildfires ongoing in your region Monitor your PM levels and close windows, as necessary. 9:41 AM

Airthings for Consumer

Grass pollen high in your area Close windows and try to limit time spent outside. 11:13 AM

Mold risk alert in your basement Consider addressing humidity or temperature to reduce your risk. 7:36 PM

Concluding thoughts

Consumer's focus is on improving our go-to-market approach and strengthening our product offering via software

Consumer's focus – what we are doing in short:

Bringing focus and discipline to our GTM approach and doublingdown in our digital channels and existing geographies to grow our number of customers

Enhancing our software offering and the value of multiroom monitoring to increase Customer Lifetime Value (LTV) and strengthen the value proposition for both new and existing customers

Airthings for Business

"GTM focus and strengthening the software offering"

Oyvind Birkenes, Airthings for Business

Airthings for Business is a relatively young business unit showing strong early traction

With a user-friendly and appealing product offering that sets it apart

100,000+

Business devices installed

Buildings being monitored

Robust early traction Broad product range and holistic experience

Plug & Play installation with simple onboarding

Wireless sensors with very long battery life

Long-range cellular connection

Virtual sensors such as Occupancy & Ventilation rate

Enterprise security with ISO 27001 certification

Professional Dashboard and rich API

Addressing the North America and European markets with a partner strategy

Providing a scalable model for growth

Comprehensive geographical coverage with focus on

Early mover pursuing a massive market opportunity

Every building needs to be managed

Airthings is focusing on those that have portfolios of buildings, not single buildings

80%

of todays buildings will still exist in 2050

The life of Facility Managers and Building Operators

Tedious work with high expectations

Most buildings are run by antiquated technology

• Large building portfolios with many tenants
• Manual processes and tedious work
• Lots of complaints
• High expectations
  • Sustainability, compliance, wellness, fixer
• No good data or good overview of the buildings
• Reactive, not proactive

Target customers and value proposition

Targeting clients that can benefit from Airthings's entire value proposition

Target customer:

Enterprise Clients in EU or US who own or manage a building portfolio

• Enterprise customers
• Municipalities and School Districts
• Building Owners

Target stakeholders:

• Head of Facilities
• Head of Workplace Experience
• Sustainability Managers

Value proposition:

• Overview of the building portfolio with consistent data
• Energy efficiency tools
• Smart and proactive facility management
• Health, wellness, and compliance
• Enabling demand-based control of HVAC

Example of end-clients

Clients in EU or US who own or manage a building portfolio

Enterprise

• Multiple Fortune 500 companies in the US

• Several European-based global enterprise customers

• Ivy league universities

• Quebec schools
• California schools
• Schools in UK and Benelux
• Municipalities in Norway

Schools & Public sector Building owner/operator

• Høegh Eiendom
• DNB Næringseiendom
• Statens Vegvesen
• Atrium Ljungberg
• Landsec
• ATP Ejendomme

Focus on direct relationship with end-clients, but often sell through a value-adding partner

Case study: Global Enterprise Customer

Airthings awarded a total of USD 7M contracts from a global enterprise customer in 2022 and 2023 with a partner

Ensure a healthy environment for employees coming back to the office

Remotely monitor workplaces around the world

• Ensure health, wellness, and productivity
• Proactive facility management
• Operate the buildings more efficiently with less energy

Case study: Allianz

Allianz uses Airthings in their IOT platform to modernize building portfolio

1

2

Case study: Hamar Municipality, Norway

Moving from reactive to proactive and smart facility management

Remotely monitor all their buildings with consistent and valuable data

Key value from the solution

Energy efficiency

• 1500 devices installed throughout their building portfolio
• With data and insights from Airthings, reduced their energy consumption with about 2 GWh from 2021 to 2022
• Positive ROI in <1 year

"Without Airthings sensors in our buildings, control of the buildings is basically done in the blind. In addition, the indoor climate in the buildings has improved. The Airthings solution has become a very important tool to improve indoor environments and energy consumption at Hamar Municipality."

• Magnar Hommerstrand, Director of Energy and Technical Installations

Case study: Energy Control

Value-adding partner that provides demand-based control of Heating, Ventilation, and Cooling

• Energy optimization of buildings

  • 4000 Airthings devices installed in commercial buildings

  • Demand-based HVAC control from the Cloud

Key value from the solution

• 40-50% average energy reduction per building (Already saved several GWh)

Provides overview of their client's building portfolios with consistent data for efficient facility management

Move their clients from reactive to proactive facility management

Airthings for Business

Airthings for Business in "Airthings 3.0"

Initiatives focused on both on our Go-to-market and Product Focus

Looking first at Airthings for Business's Go-to-market efforts

Three priority initiatives to drive growth in the number of customers

Three key learnings from launch of AfB that formed updated Go-to-market strategy

	Learnings	Implication for GTM
1	Airthings itself is the best positioned to convey the strength and uniqueness of our solution	Spend more time with end-users, going together with our partners, to communicate our value proposition
2	We went too broad too fast with our partner model, and this prevented us from setting them up for success	Slim down the partner portfolio, and focus on making our most successful partners even more so	Pursue a disciplined go-to-market strategy with an emphasis on direct communication with end-users and a value-adding partner portfolio
3	We have been too opportunistic and pursued opportunities outside of key geographies - consuming capacity	Exercise discipline and focus our energies on the key geographies where there is significant untapped potential

Placing more emphasis on generating "pull" demand creation

Historically: Focused on sourcing partners Going forward: "Hunting" end-users

• Overall, Airthings for Business has dedicated a majority of its sales team capacity on sourcing and qualifying new partners
• The thought being that this would be the fastest and easiest way to scale sales
• However, this approach didn't fully appreciate the nascent nature of IAQ monitoring and the need of a clearly communicated value proposition to encourage adoption amongst end-users
• Thus, partners weren't necessarily set up for success resulting in variance of performance

• This resulted in the conclusion that we cannot rely on "push" demand creation alone

• Until adoption ramps up, time needs to be spent with endusers on selling the value of IAQ monitoring for health, wellness, efficient FM, and energy efficiency

• No one is better positioned than Airthings itself to communicate the value-proposition of our solutions
• Thus, we are going to shift the focus of the sales team to going into dialogue directly with end-users (often together with selected partners) to generate "pull" demand creation
• This will also have the added advantage of putting us in even closer dialogue with end-users to improve our product roadmap going forward

Directing our energies on value-adding partners

Percent of overall AfB hardware revenues, by Partner

• A fraction of our total partner count has historically been responsible for the bulk of our revenues • At the same time, the long tail have created a large administrative and operational burden and stolen capacity of the organization • A common trait amongst the highest performing partner is that they provide value-adding services to Airthings's offering • Whether it be through their own product offering, the technical expertise they bring to the table, or their logistics and distribution networks • Going forward Airthings will direct its energies towards
  • these value-adding partnerships and implement automated processes to handle the long-tail (more on this in Operations section)

Ensuring focus on two key geographies – North America and Europe

• Two primary geographies – North America and Europe – represent the overwhelming source of revenues in AfB (combined >90%)

• Historically, significant capacity has been utilized within the sales team trying to establish new geographies
• Furthermore, capacity has been consumed in other departments, such as Operations and Finance, working to set up logistics and ensure compliance with new geographies
• Going forward, we will be highly focused on our key geographies, as we are only scratching the surface of what is possible there

Looking now at Airthings for Business Product focus going forward

With short-term efforts focused on addressing pressing customer needs

Our short to medium-term product roadmap is focused on pressing customer needs

Converting end-user issues into meaningful benefits

	End-user issue	How we are addressing it	End-user benefits
1	Inefficient control of HVAC1 system, resulting in energy waste	SW offering to help HVAC and BMS experts see how they can easily optimize the HVAC system	• Lower energy costs • Reduced CO emissions 2 • Improved indoor air quality by providing fresh air to where and when it is needed
2	Poor indoor air quality impacting well-being and productiveness of employees / students	Advanced analytics and insights (both physical and virtual) so corrective actions can be taken	• Tangibly improving indoor air quality • Healthier and happier workforce / students • Increased productivity and concentration
3	Reactive and inefficient facility management driving avoidable costs	Actionable insights and alerts, with advanced features like Space Utilization, Virus Risk, and Ventilation Rate	• Proactive facility management • Reduced OPEX costs • Smarter and more efficient facility managers

And end-users are often trying to optimize for all three at the same time

Enabling the reduction of energy consumption and environmental impact

A tangible value proposition for end-users

Ensuring that buildings are being run in a healthy way

Ensuring a happy and productive workforce / students

Focus on making the life of a Facility Manager easier

While also giving other end-users the insights and information they require

Examples of progress we have made so far What's planned

Dashboard 2.0

1

2

3

• What: Customizable, more intuitive, and personalized software offering
• Why: Ensure that the end-user is getting the relevant insights and building overview that they require

Automated "work orders"

• What: AI generated mitigating recommendations and actions that facility managers can take
• Why: Make the life of a facility manager easier and help them avoid complaints

Enhanced reports and insights

• What: Provide clarity to complex data sets and reduce the threshold for knowing what actions need to be taken
• Why: Giving end-users a simple and understandable summary of the performance of their buildings

Concluding thoughts

Focus is on streamlining our go-to-market approach and addressing pressing end-user needs with our product offering

Airthings for Business's focus – what we are doing in short:

Free up capacity to spend more salesforce time in direct communication with end-users by enforcing discipline in our GTM approach in terms of both partners and geographical focus

2

Continue to address key end-user needs and build on our existing solutions to limit churn and enable multi-tiered subscriptions in the future - thus increasing Customer Lifetime Value (LTV)

Operations

"Building a scalable operating model"

Audhild Randa, COO

Operations

Focus of today will be on efforts to reduce variable costs of Operating Model

Operations

Operations in "Airthings 3.0"

Four critical initiatives to support our Operating model efforts

Currently revamping logistics set-up to optimize cost

Fast growth led to patchwork logistics which needs to be addressed

Background	Resulting situation end of 2022	Issues	Solutions being implemented
• Fast growth during 2018 – 2021, combined with Supply Chain issues (component shortage) putting	Different logistics partners for different channels; 1 Sub-optimal agreements	• No economies of scale	• Consolidated global 3PL agreement • Utilizing 3PL freight contracts for volume
pressure on delivery time and distribution • Focus on getting goods distributed, not on doing it in an optimal way	2 Sub-optimal flow of goods	• Multiple transportation legs driving up cost • VAT cost for NO to EU • Repacking for retail • Large share of air freight	• Clear strategy for flow of goods • Warehouse in EU (avoid transport EU->NO->EU) • Review packaging strategy Better PSI1 • modelling
• Clear opportunity to optimize cost without impact on delivery times	Lack of system integration 3	• Too many manual processes • Delays in deliveries	• Integrating systems and creating rule-based order processing for "no-touch" fulfillment

No-touch customer acquisition in AfB for small and medium size customers

Freeing up sales team capacity to focus on other, revenue generating, tasks

Keeping cloud cost per device in check – despite launching new computationally heavy functionality

37% YTD decline in cloud computing costs per device despite launch of Occupancy feature in AfB

Cost per device per month¹ , Jan. 2022 = 100

How we did it

"By utilizing Ray and its distributed computing capabilities, breaking down computations of virtual sensors into smaller tasks that can be executed in parallel across multiple nodes in our clusters, we can scale our applications to handle large amounts of data without compromising on throughput or latency.

In addition to Ray, we also use Kafka Streams to aggregate and enrich data from multiple sources that we feed to the algorithms. Adding these two components to our foundation has enabled us to build much more effective and cost-efficient analytics products than what we were previously able to do."

David Karlsson Lead Software Architect

Increasing internal productivity through AI

Type of tasks where we are

• Developer productivity
• Knowledge article production
• Customer support responses
• Content production
• SEO optimization
• Competitor research
• Internal meetings and project management
  • Creating actions out of notes
  • Summarizing projects
  • Improving writing
  • Regular prompts for individual updates

Type of tasks where we are experimenting with AI	Example use-cases
	LLMs for AI-powered assistants
		Experimenting with

Google ads brainstormed and written using AI

Concluding thoughts

Focus is on building a scalable Operating model which contributes to improving Customer Lifetime Value

Operation's focus – what we are doing in short:

Build a scalable and automated logistics setup and optimize flow of goods to drive down important variable costs such as freight, warehousing, and order handling

Increase customer life-time value through no-touch customer acquisition in Airthings for Business and optimizing cost of service across business units, including cloud cost; at the same time freeing up sales time to focus on larger deals

Experimenting with AI to increase internal productivity to ensure personnel cost does not scale with revenue and devices deployed

Finance

"Financial perspective – bringing it all together"

Jeremy Gerst, CFO

Moving away from providing long-term goals

Gave a goal of \$100M in revenues by 2024 when we originally listed on EuroNext

Reiterated that goal at the Capital Market Update in 2021

Stated we expected to be profitable, on an EBITDA basis, in the second half of 2023

Result – eroded credibility

What we have done What we are doing going forward

Continue to be transparent about both our successes and our challenges (e.g., working capital)

Demonstrate ability to follow our refined strategy by delivering on initiatives we have outlined

Continue to provide revenue and ARR forecasts for the coming quarter, and deliver within guidance

Aim – establish trust and long-term value creation

Recapping what has been presented today

Clear initiatives designed to improve our number of customers and lifetime value (LTV)

Area	What they are focusing on
Marketing	• Elevating our brand messaging to differentiate and incorporating emotional and aspirational appeal • Ensure we are reinforcing our premium value proposition throughout the entire customer journey • Improve the relevance and targeting of our PR and performance marketing efforts
Airthings for Consumer	• Heightened focus in our GTM approach with an emphasis on rapid growth in our digital channels • Continue to improve upon on our software offering, strengthen the value proposition of multiroom monitoring, and provide a seamless digital customer journey that encourages organic growth and "word of mouth"
Airthings for Business	• Disciplined GTM approach freeing up capacity within salesforce to focus more on end-users and generating "pull" demand • Address the most pressing issues for end-users - with a focus on energy, IAQ, and facility management – to further strengthen our value proposition
Operations	• Drive down variable costs by implementing improvements to our logistics setup and enhancing efficiency of cloud computing code • Automate as many customer-facing interfaces as much as possible to free up internal capacity and provide a superior experience for end-users

This represents a coordinated effort to improve Airthings's scale and profitability

Future Airthings Large scale Strong profitability

Operating model

Customer LTV¹

Airthings

Small scale

Weak profitability

today

Translating it to the traditional financial metrics

Growth along these two axes will drive significant improvements in financial figures going forward

We will also not lose focus on improving our working capital situation

• Remains key focus area • Takes time to turn around, but progress is being made • Source of capital going forward, as further improvements are secured, and cash tied up in inventories is freed up

Note: Days of Inventory calculated as Inventories per December 31st in respective year, divided by COGS in that year and multiplied by 365. For 2023 Inventories per September 30th are utilized with average COGS for the trailing 4 quarters multiplied by 90

Recall: Only beginning to implement Airthings 3.0 but already seeing early results

Growing revenue and expanding GPM, while keeping OPEX under control

End

Thank you