Hexagon Composites — Investor Presentation 2018

Oct 31, 2018

Disclaimer and important notice

This company presentation (the "Presentation") has been prepared by Hexagon Composites ASA ("Hexagon" or the "Company").

The Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The Company makes no representation or warranty (whether express or implied) as to the correctness or completeness of the information contained herein, and neither the Company nor any of its subsidiaries, directors, employees or advisors assume any liability connected to the Presentation and/or the statements set out herein. This presentation is not and does not purport to be complete in any way. The information included in this Presentation may contain 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 its advisors or any of their parent or subsidiary undertakings or any such person's affiliates, 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 and its advisors assume no obligation to update any forward-looking statements or to conform these forward-looking statements to the Company's actual results. Investors are advised, however, to inform themselves about any further public disclosures made by the Company, such as filings made with the Oslo Stock Exchange or press releases. This Presentation has been prepared for information purposes only. This Presentation does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. This Presentation speaks as of 31 October 2018, and there may have been changes in matters which affect the Company subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Company have not since changed, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court as exclusive venue. By receiving this Presentation, you accept to be bound by the terms above.

Agenda

• •Group highlights
• •Business update
• •Summary Group financials
• •Outlook
• •Q & A
• •Appendix: Segment financials

Highlights from Q3 2018

• • Temporary weakness in sales driven by:
• Weak Mobile Pipelines volumes but capacity used to build for strong Q4
• Light-Duty Vehicles volumes heavily impacted by Worldwide Light-Duty vehicle Testing Program (WLTP); sales postponed to future quarters
• • Strong Agility Fuel Solutions profitability
• Heavy-Duty Truck sales begins an upwards cycle
• • Announced Digital Wave acquisition
• Unique testing technology for pressure vessels

Business Update Hot topics

3rd OEM FCEV serial production contract

• • Received our second largest contract to date
• Combined value for development and serial production in the range of NOK 420 to 590 million
• • Total projected revenues for the 2nd and 3rd contract in the range of NOK 1.4 to 1.8 billion
• • Both contracts to be served by previously guided NOK 300 million capex program through to end 2020
• Capex partly backstopped by customers

Hexagon FCEV illustration

3rd

QUARTER 2018 FINANCIALS

Financial highlights Q3 2018

Other Hexagon businesses vs Hydrogen results | Q3 2018

13% EBITDA margin from normalized non-H2 business

9

Q3 2018 Group income statement

O O N K M I L L I N	Q U A R T E R			F U L L Y E A R
	Q 3 2 0 1 8	Q 3 2 0 1 7	Va ia r nc e	2 0 1 7
Re ve nu e	2 7 6, 7	3 5 2, 8	( 7 6, 0 )	1 4 2 9, 4
O t ing p er a e xp en se s	( 2 8 7, 7 )	( 3 0 1, 5 )	1 3, 9	( 1 2 5 5, 4 )
Ea t o b l ig t io l rn -o u a n re ve rs a	5 0, 2	0, 0	5 0, 2	0, 0
E B I T D A	3 9, 2	5 1, 2	( 1 2, 0 )	1 7 4, 0
De ia io i b les t ta p re c n on ng	( 1 3, 9 )	( 1 2, 2 )	( 1, ) 7	( 2, 4 ) 5
Am isa io d im irm t t t or n an p a en	( 5, 9 )	( 5, 2 )	( 0, ) 7	( 2 2, 3 )
E B I T	1 9, 4	3 3, 8	( ) 1 4, 4	9 9, 3
S ha f p f i / ( los ) fro ia t te re o ro s m a ss oc s	1 1, 5	( 2, 1 )	1 3, 6	( 3, 0 )
Am t isa t io f a ia te in ta i b les or n o ss oc s ng	( 3, 4 )	( 3, 3 )	( 0, 1 )	( 1 3, 6 )
O f ( ) t he ina ia l i te t r nc m s ne	( ) 1, 6	( ) 6, 6	5, 0	( ) 3 4, 4
Pr f i t / ( lo ) be fo ta o ss re x	2 5, 9	2 1, 8	4, 1	4 8, 2
Ta x ex p en se	6, 7	( 5, 4 )	1 2, 1	2 1, 0
f / ( ) f Pr i t lo te ta o ss a r x	3 2, 6	1 6, 4	1 6, 2	6 9, 3
% E B I T D A	% 1 4, 2	% 1 4, 5		% 1 2, 2
E B I T %	7, 0 %	9, 6 %		6, 9 %
f / ( ) f % Pr i t lo te ta o ss a r x	1 1, 8 %	6 % 4,		8 % 4,

Revenue by Segment Q3 2018 | Before Group eliminations*

Revenue Q3'18

NOKm, before group eliminations

• Hexagon Mobile Pipeline® & Other
• Hexagon Ragasco LPG

Agility Fuel Solutions: Q3 2018

Business Operating results – Strong rebound in Heavy-Duty Truck sales

• • Continued increase in revenues and margin through 2018
• Driven by strong rebound in Heavy-Duty truck sales
• Q3 sales higher than Q1+Q2 combined
• • Continued high Transit bus volumes in quarter
• Strong year over year growth in Q3
• • Solid Refuse Truck sales
• Continued upward trend in 2018 over 2017
• • Good Liquidity
• Fully-funded

Revenues and adjusted EBITDA

Balance sheet | Q2 2018 vs Q3 2018

NOK 326m Net Interest Bearing Debt & 61% Equity Ratio

Inventory build ahead of revenue ramp-up in MP and LDV draws higher working capital requirements

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Macro drivers intact

• •UN report urges action
• •Oil price remains at high level

OEM programs put in motion

• • Another confirmation of the viability of Hexagon's hydrogen strategy
• • FCEV serial production order from 3rd OEM
• Development 2018-2020
• Serial production 2020-2025

Hexagon FCEV illustration

Hydrogen heavy-duty vehicle market is moving fast

• • Shaping the hydrogen bus market in North America together with New Flyer
• ‒20 buses delivered
• ‒Additional deliveries expected in 2019
• • Hyundai to deliver 1,000 hydrogen trucks in Switzerland

Photo: New Flyer

Photo: Hyundai Motor Co

Expanding portfolio of storage applications

• • Received US DOT* special permit for ultra-high pressure modules
• • First delivery of tank racks to hydrogen refuelling station in The Netherlands
• To be opened mid-2019
• •First orders in Canada

CNG Light-Duty Vehicles

20

Strong underlying demand, despite temporary WLTP* delays

"Caught off guard by the CNG boom: Car manufacturers struggle with bottlenecks" Article on October 22, 2018 in AUTOMOBILWOCHE (translated)

*Worldwide Harmonized Light Vehicles Test Procedure Source:KBA-Zulassungsstatistik , Bloomberg, Hexagon

Sustainability drives g-mobility in Europe

• • Deliveries have resumed in Q4
• Worldwide Harmonized Light Vehicles Test Procedure (WLTP) bottleneck easing out
• VW's high volume CNG models now WLTP compliant
• • VW reiterates CNG commitment
• Seat Leon and Skoda Octavia rolled out to all markets
• Steep ramp-up during second half of 2019

CNG Light-Duty Vehicles – cheaper and cleaner than the incumbent

Fundamentals point to strong demand

• •Q4 2018 looks very strong
• •Favourable fundamental drivers for 2019
• • New segment opportunities
• Growing biogas (renewable natural gas) supply in North America
• Opportunities in industrial gas segments

Biogas creates opportunities for Mobile Pipelines

• • Tradeable "green" credits drive investments into biogas (renewable natural gas) projects
• • Growing industry collaboration between utilities and biogas producers
• •Mobile Pipelines connect stranded production sites

Digital Wave Unique testing technology

• •Modal Acoustic Emissions (MAE) testing technology
• • Securing control of cutting edge testing and requalification process for composite cylinders
• • Great potential to commercialise the technology for other types of pressure vessels and structures
• • Expecting sound growth in 2019 and strong growth thereafter as modules come up for mandatory re-certification

Reaching a new milestone

15 million cylinders sold

2018 set to be a record volume year

• • Expect to deliver close to 1.8 million cylinders in 2018 compared with 1.7 million units in 2017
• •New market opened; Palestine
• • Q4 looking relatively strong
• Not optimal product mix
• Maintenance closure second half of December

Aman Gaz LPG cylinder in Palestine

Agility Fuel Solutions

Fuel price spread has become significantly more favorable

Price development last 12 months

Oil price increase vs. stable natural gas price drives the fuel price spread in favor of CNG

Sources: EIA, NYMEX, cngprices.com, Agility Fuel Solutions, Hexagon Composites * LTA: Long-term agreement for non-retail fleet CNG refueling

Rising demand backed by economic and environmental focus

• • Rebound in Heavy-Duty Truck segment in 2H 2018 ‒Chassis supply shortages may push orders into 2019
• • Strong North American and all time-high European Transit Bus market
• ‒Solid market development expected to continue into 2019
• •Refuse Truck market continues strong trend

Fuel Systems Assembly plant in Salisbury North Carolina Photo: Agility Fuel Solutions

Group Outlook

APPENDIX

Segment financial highlights Q3 2018

• • Light-Duty Vehicles impacted by delay in sales due to global emissions testing

• • Investing in future H2 growth dilutes EBITDA by NOK 15m

• •Sales volumes primarily from North America

• Profitable quarter within MasterWorks business unit

Segment financial highlights Q3 2018

• • Revenues primarily from Asian and core European markets

• •EBITDA lower due to product mix

• • Lower than normal revenues in quarter as previously explained

• • EBITDA margin achieved as earn-out reversal offsets large part of delayed revenues

After all eliminations

Hidden value of Agility Investment Agility Fuel Solutions

Agility represents ca. 40% of total balance sheet…

NOKbn

…but is not consolidated in Hexagon's Revenue

NOKm, based on average 2017 and 2018 exchange rates

Relative size HEX vs Agility

Agility Fuel Solutions: Q3 2018

Result to Hexagon Group per equity accounting method

Q3 2018 AFS EBITDA to profit before tax

Agility impact to Group P&L