Hexagon Composites — Earnings Release 2016

Aug 18, 2016

Hexagon Composites ASA: Results for the second quarter and first half year 2016

Hexagon Composites ASA: Results for the second quarter and first half year 2016

In the second quarter 2016 Hexagon Composites generated NOK 315.6 (413.9)

million in operating income and made an operating profit before depreciation

(EBITDA) of NOK 37.0 (37.4) million. Operating profit (EBIT) was NOK 19.7 (23.2)

million and profit/loss before tax came to NOK 18.4 (-11.7) million.

Operating results in the second quarter were impacted positively by a 20% growth

in revenues within the Low-Pressure Cylinders segment versus the same period

last year. However weak sales volumes within High-Pressure Cylinders continue to

hamper overall profitability for the Group. The realized cost initiatives

executed towards the end of 2015 are proving effective in countering the above

volume reductions.

The first half year of 2016 provided an operating income of NOK 607.2 (815.5)

million and had an operating profit before depreciation (EBITDA) of NOK 55.6

(90.2) million. The operating profit (EBIT) was NOK 22.9 (62.7) million and

profit before tax was NOK 15.8 (41.6) million.

Key developments:

* Strong performance in Low-Pressure Cylinders.

* Profitability impacted by soft Heavy-Duty Truck sales.

* Mobile Pipeline® sales have improved versus first quarter but still

relatively low

* Order intake for deliveries later in the year is healthy.

* Announced joint merger of Heavy- and Medium-Duty CNG Automotive Products

with Agility Fuel Systems to form Agility Fuel Solutions with closing

targeted for 1st October 2016.

* Repaid all outstanding bank loans in the quarter.

* Announced joint venture agreement with Siddha Gas Technik in India to pursue

opportunities in India's natural gas market.

Other important events in the half-year reported previously

* The Group received NOK 667 million from a private placement of new shares

and entered a strategic cooperation agreement with Mitsui & Co., Ltd.

* Awarded extension of long-term agreement with New Flyer Industries for the

North American transit bus market.

* Acquisition of 67% of a Brazilian entity to pursue fuel systems

opportunities for transit buses and heavy-duty trucks in South America and

Africa.

* Awarded a significant Mobile Pipeline® order for distribution of biomethane

in the UK.

* Commenced a business viability study of a proposed joint venture with Mitsui

& Co., and Toray Industries, to manufacture and sell high-pressure cylinders

for hydrogen vehicles in Japan.

For more information:

Jon Erik Engeset, CEO, Hexagon Composites ASA

Telephone: +47 916 30 550 | jon.erik.engeset@hexagon.no

David Bandele, CFO, Hexagon Composites ASA

Telephone: +47 920 91 483 | david.bandele@hexagon.no

Solveig D Saether, Communication Manager, Hexagon Composites ASA

Telephone: +47 906 34 977 | solveig.saether@hexagon.no

About Hexagon Composites ASA

Hexagon Composites ASA is a publicly listed company with its headquarters in

Aalesund, Norway. The Group is a leading global supplier of composite pressure

cylinders and systems for storage and transportation of various gases.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#2035718]