Aker Carbon Capture — Interim / Quarterly Report 2023

Apr 26, 2023

Q1 2023

26 APRIL 2023

Egil Fagerland, Chief Financial Officer David Phillips, Head of UK and Investor Relations

Agenda

Introduction and first quarter highlights

Operations and business development

Delivery models

Financials

Way forward

Q&A

Aker Carbon Capture in brief

Pure play carbon capture company delivering ready-to-use capture plants

Best-in-class HSE friendly and proprietary patented technology for optimized all-round plant performance

Proven market-leading proprietary technology with close to 60,000 operating hours

...and engagement with new industry segments like refining and process industries

CEMENT BIO/WASTE-TO-ENERGY GAS-TO-POWER BLUE HYDROGEN

Highlights

Major projects progressing:

• Brevik CCS: installation of more key equipment on site
• Twence CCU: containers installed on site
• UK flagship projects proceed with governmental support

Key awards:

• Letter of Intent for two Just Catch™ units
• Mobile Test Unit campaign for Fortum Waste Solutions
• Pre-FEED for European power utility customer
• Several studies awarded

Proprietary technology good fit for smelting industry

Carbfix collaboration strengthened with extension of MoU

Continued revenue growth and solid cash position

Accelerating market activity

UK Government funding

• bp's Net Zero Teesside Power and Viridor's Runcorn CCS successful bidders in UK Track 1 CCUS Cluster Sequencing Process
• SSE Thermal Keadby 3 positioning for potential Track 1 extension

Pre-FEED and several studies awarded

• Pre-FEED for European power utility customer with a mega scale capture capacity
• Study for Fortum Waste Solutions
• Study for undisclosed European customer in the smelting industry

Mobile Test Unit campaign for Fortum Waste Solutions

• Fortum Waste Solutions' facility in Nyborg, Denmark
• Waste incineration plant specialized in safe destruction of hazardous waste and turning it into energy
• Planned capture capacity 170,000 tonnes CO2 per year

Research and development achievements

• ACC's proprietary capture technology shown to be highly effective with flue gas from smelters
• Third generation Just Catch™ launched with improved energy efficiency, smaller footprint and fewer modules
• Completed membrane R&D project for high pressure CO2 separation

Letter of Intent

● Letter of Intent for two Just Catch™ units with capture capacity of 200,000 tonnes CO2 per year

Extended MoU with Carbfix, CO2 storage provider

• Jointly explore full CCS value chain for industrial emitters, capturing and permanently storing CO2 by turning it into stone underground
• Strengthened collaboration for developing point source carbon capture with on-site storage across Europe and North America

Operations and business development

© 2023 Aker Carbon Capture Slide 6

November 2021 SIGNED CONTRACT

© 2023 Aker Carbon Capture

April 2023 ALL COLUMNS AND JUST CATCH™ CONTAINERS INSTALLED ON SITE

End 2023 PLANNED DELIVERY

WASTE TO ENERGY TWENCE CCU

Hengelo, Netherlands

• Capturing 100,000 TPA CO2
• First of a kind modular carbon capture project on track
• Containers received and installed on the same day
• CO2 will boost local greenhouse production

NORCEM HEIDELBERG MATERIALS BREVIK CCS Norway

• ² capture and liquefaction plant
• © 2023 Aker Carbon Capture 400,000 TPA CO ● Major equipment installed on site, incl. all nine Waste Heat Recovery Units, Flue Gas Fan and internals of Direct Contact Cooler
• Creating local employment and strong partnerships
• CO ² transport by ship to permanent storage as part of Northern Lights

2020 PROJECT START March 2023 ALL THREE COLUMNS AND STORAGE TANKS ARRIVED ON SITE

2024 PLANNED DELIVERY

Flagship projects in the UK

Track-1 Clusters

Proceeded to final negotiations for funding

• bp Net Zero Teesside Power FEED
  • ⁃ Design capacity of 2 million tonnes of CO2 per year
  • ⁃ Carbon capture partner to a consortium of Aker Solutions, Siemens Energy and Altrad Babcock
• Viridor's waste-to-energy Runcorn CCS pre-FEED
  • ⁃ Planned capacity of 1 million tonnes of CO2 per year

Awaiting potential Track-1 cluster expansion

• SSE Keadby 3 Carbon Capture Power Station FEED
  • ⁃ Targeting up to 2 million tonnes of CO2 per year

£20 billion UK CCUS infrastructure funding Ambition of 20-30 Mt CO2/year capture by 2030

Continued progress towards 10 in 25

Delivery models

Offerings and delivery models

Three core carbon capture products offered by Aker Carbon Capture

Indicative levelized cost of Carbon Capture as a Service

Levelized cost calculated as: Cost discounted over project period divided by the amount of CO2 captured discounted over project period; Discount rate: 7.5% Total cost for ACC delivered scope is within the range of 45-100 EUR/tonne, which include the Carbon Capture plant, operations & maintenance. All the figures are based on a European delivery model and covers European transportation and storage.

Financials

First quarter 2023 | Income statement

Revenue and EBITDA NOK million

• Revenue ended at NOK 287 million which was NOK 143 million higher compared to the same period last year. The increase is mainly driven by:
  • The Brevik CCS and Twence CCU projects
  • UK FEEDs with BP Net Zero Teesside Power and SSE Keadby 3
  • Pre-FEED for Viridor and CO2 Hub Nord MTU campaign
• EBITDA ended at negative NOK 51 million which was NOK 9 million better than the same period last year
  • Both the Brevik CCS and the Twence CCU projects are now recognizing profit and are expected to continue to deliver positive results through the year
  • Positive contribution from FEEDs, Pre-FEEDs and studies
  • The overall negative EBITDA continued to be driven by high sales and tender activity and R&D projects incl. digitalization

First quarter 2023 | Balance sheet

● Net Current Operating Assets (net working capital) ended at negative NOK 666 million which represents a strong positive cash position on key projects

● NOK 515 million negative Net Capital Employed signalling that the business' operating capital is currently funded by project working capital

• Healthy Cash and cash equivalents balance at NOK 1.3 billion which covers all liabilities 1.9 times
• Strong Equity position at NOK 0.8 billion

First quarter 2023 | Cash flow

• The quarter ended with an overall cash inflow of NOK 256 million
  • Loss before tax of negative NOK 49 million
  • Inflow of NOK 331 million related to change in Net Current Operating Assets mainly related to milestone payments on the key projects
  • CAPEX of NOK 34 million mainly related to product development and the construction of a new Mobile Test Unit
  • Payment of financial lease liabilities and adjustment for other non-cash items was net positive and represented NOK 8 million
• Cash and cash equivalents ended the quarter at NOK 1,348 million

Cash flow development NOK million

Financial outlook

Order backlog by execution year NOK billion SG&A and operating expenses

• Total salary, personnel and other operating costs ended at NOK 77 million in Q1 2023
• Excluding costs associated with projects, we expect to see operating expenses around similar levels through the next six months, with significant flexibility

Cash balance

• First quarter 2023 ended with a net cash balance of NOK 1.3 billion, driven by projectrelated cash inflows
• Expect cash position to gradually trend down through the rest of the year as project working capital is consumed

Summary

Way forward

Industries and geomarkets

Cement, bio/waste-to-energy, gas-to-power, blue hydrogen, refining, process industries Northern Europe initially; opportunities emerging in North America

Technology and innovation Further improve energy efficiency and capture rate Increased focus on new technologies

Cost-efficient product portfolio Standardization, modularization, digitalization Collaboration with strategic suppliers

Flexible contracts and business models EPC, License and Carbon Capture as a Service

Rapid growth through partnership

Integrated offerings, joint market positioning and bold innovation Aker group, Siemens Energy, Microsoft, SINTEF, HZI, Northern Lights, Carbfix etc.

People

A flexible international organization built on a collaborative and innovative culture

Deliver on ongoing projects

10 in 25

Secure contracts to capture 10 million tonnes CO2 per annum by 2025

Appendices

P&L | Balance sheet | Cash flow | ESG

Condensed consolidated income statement

	Full year					Full year
Amounts in NOK thousand	2021	Q1 2022	Q2 2022	Q3 2022	Q4 2022	2022	Q1 2023
Revenues	363,177	144,319	193,640	203,613	239,290	780,863	287,283
Materials, goods and services	(332,814)	(129,170)	(171,708)	(183,284)	(221,645)	(705,807)	(261,631)
Salary and other personnel costs	(92,102)	(34,135)	(38,357)	(44,574)	(35,073)	(152,140)	(52,615)
Other operating expenses	(128,104)	(41,689)	(32,159)	(31,353)	(29,463)	(134,663)	(24,408)
EBITDA	(189,843)	(60,675)	(48,584)	(55,597)	(46,891)	(211,746)	(51,372)
Depreciation	(5,346)	(2,597)	(3,014)	(2,597)	(2,799)	(11,008)	(3,871)
Operating profit (loss)	(195,189)	(63,272)	(51,598)	(58,194)	(49,690)	(222,754)	(55,243)
Financial income	3,148	2,445	3,078	5,286	7,569	18,377	6,885
Financial expenses	(659)	(186)	(272)	(170)	(165)	(793)	(132)
Foreign exchange gain (loss)	399	998	(997)	1,503	(406)	1,097	(757)
Net financial items	2,889	3,257	1,808	6,618	6,998	18,682	5,996
Profit (loss) before tax	(192,301)	(60,015)	(49,790)	(51,576)	(42,692)	(204,072)	(49,246)
Income tax benefit (expense)	-	-	-	-	-	-	-
Net profit (loss)	(192,301)	(60,015)	(49,790)	(51,576)	(42,692)	(204,072)	(49,246)

Condensed consolidated balance sheet | Assets

Amounts in NOK thousand 31/	12/ 2021	Q1 2022	Q2 2022	Q3 2022	31/ 12/ 2022	Q1 2023
Non-current assets
Intangible assets	11,292	12,256	26,722	57,453	73,152	97,469
Right-of-use assets	14,242	11,751	9,677	7,604	5,530	3,456
Property, plant and equipent	7,732	12,382	21,812	26,108	48,892	57,451
Total non-current assets	33,266	36,389	58,211	91,165	127,573	158,376
Current assets
Trade and other receivables	255,306	153,686	40,366	50,171	75,668	40,042
Derivative financial assets	-	-	-	7,208	677	172
Cash and cash equivalents	1,321,270	1,485,257	1,451,912	1,372,880	1,092,669	1,348,241
Total current assets	1,576,576	1,638,944	1,492,279	1,430,258	1,169,013	1,388,455
Total assets	1,609,841	1,675,333	1,550,490	1,521,423	1,296,587	1,546,832

Condensed consolidated balance sheet | Equity and liabilities

Amounts in NOK thousand	31/ 12/ 2021	Q1 2022	Q2 2022	Q3 2022	31/ 12/ 2022	Q1 2023
Equity
Share capital	604,242	604,242	604,242	604,294	604,242	604,290
Other equity and reserves	472,034	411,064	362,581	318,286	273,597	229,437
Total equity	1,076,276	1,015,307	966,823	922,580	877,839	833,727
Non-current liabilities
Pension liabilities	2,685	2,475	2,487	2,836	3,112	2,979
Non-current lease liabilities	6,091	3,545	1,273	-	-	-
Total non-current liabilities	8,775	6,020	3,760	2,836	3,112	2,979
Current liabilities
Trade and other payables	515,076	644,292	570,193	587,106	409,279	706,129
Current lease liabilities	9,714	9,714	9,714	8,686	6,356	3,997
Derivative financial liabilities	-	-	-	215	-	-
Total current liabilities	524,790	654,006	579,907	596,007	415,635	710,126
Total equity and liabilities	1,609,841	1,675,333	1,550,490	1,521,423	1,296,587	1,546,832

Condensed consolidated statement of cash flow

	Full year					Full year
Amounts in NOK thousand	2021	Q1 2022	Q2 2022	Q3 2022	Q4 2022	2022	Q1 2023
Profit before tax	(192,301)	(60,015)	(49,790)	(51,576)	(42,692)	(204,072)	(49,246)
Adjustment for:
Amortisation and depreciation	5,346	2,597	3,014	2,597	2,799	11,008	3,871
Hedge adjustment, no cash flow effect	-	-	-	-	1,020	1,020	3,089
Changes in net current operating assets	243,039	229,186	40,663	7,721	(203,982)	73,589	331,084
Accrued interest and foreign exchange	596	1,284	(887)	128	196	721	910
Cash flow from operating activities	56,680	173,053	(6,999)	(41,130)	(242,658)	(117,734)	289,708
Acquisition of property, plant and equipment	(5,341)	(4,953)	(9,733)	(4,597)	(23,290)	(42,573)	(6,379)
Payments for capitalized development	(7,769)	(1,184)	(14,686)	(30,952)	(15,919)	(62,741)	(27,351)
Cash flow from investing activities	(13,110)	(6,137)	(24,419)	(35,549)	(39,209)	(105,314)	(33,730)
Payment of finance lease liabilities	(4,888)	(2,429)	(2,787)	(2,429)	(1,804)	(9,448)	(2,359)
Share issue, net of transaction costs	824,888	-	-	-	-	-
Cash flow from financing activities	820,000	(2,429)	(2,787)	(2,429)	(1,804)	(9,448)	(2,359)
FX revaluation of cash	-	(499)	862	74	3,460	3,896	1,953
Net cash flow	863,571	163,988	(33,344)	(79,033)	(280,211)	(228,601)	255,572
Cash and cash equivalent at the beginning of the period	457,699	1,321,270	1,485,257	1,451,913	1,372,880	1,321,270	1,092,669
Cash and cash equivalent at the end of the period	1,321,270	1,485,257	1,451,913	1,372,880	1,092,669	1,092,669	1,348,241

ESG focus areas

¹ NB: Carbon intensity defined as: tCO2 emitted/tCO2 captured

STRATEGIC TARGETS ACTIONS TOWARDS 2030 HIGHLIGHTS

• Emissions will be reduced through execution, technological, and commercial initiatives such as:
  • Improve capture rate and energy efficiency
  • Supply chain engagement, e.g. low carbon materials and reduction targets
  • Strategic partner engagement, e.g. transport and storage
  • Purchase of Guarantee of Origin of renewable power
• Focus on carbon removals including offsetting residual emissions.

Founding members through Aker ASA. Creates predictability around demand for sustainable and low-carbon materials and products.

We have issued our commitment-letter and moving forward we will collaborate with Science-Based Target initiative to get our targets approved.

© 2023 Aker Carbon Capture

Copyright and disclaimer

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Disclaimer

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 Aker Carbon Capture Norway AS and Aker Carbon Capture Norway AS'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 Aker Carbon Capture Norway AS's businesses, 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 Aker Carbon Capture Norway AS 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. Aker Carbon Capture Norway AS is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither Aker Carbon Capture Norway AS nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.