Hexagon Composites ASA

Company presentation including RNG market opportunity 29 June 2021

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 29 June 2021, 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.

Our vision CLEAN AIR EVERYWHERE

Our purpose DRIVING ENERGY TRANSFORMATION

Our values INTEGRITY & DRIVE

2020 ESG highlights

Avoidance of

730,000 metric tons of CO2

equivalent emissions¹

Equal to removing 158,000 petroleum cars from the road for a year, or equal to planting 960,000 acres of forest

13% of employees are dedicated to Innovation, R&D

and World-Class Manufacturing

More than 30 nationalities in the workforce

1) The Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET) tool from the Greenhouse gases, 4 Regulated Emissions, and Energy use in Technologies (GREET®) model has been used for estimating emission reductions.

Hexagon Composites in figures

~7.1bn¹ market cap (HEX.OL)

~3.1bn² NOK revenues

1,100 employees

22 global locations

Hexagon Group in 2021

1) Hexagon Agility represents the combination of Mobile Pipeline and Agility Fuel Solutions. Combination and name is effective 01.01.2021

We have grown from NOK 100 million to NOK 3 billion in revenues over the past two decades

Type 4 pressure cylinder technology is at the heart of our storage and transport solutions

Hexagon is the global leader in type 4 composite cylinders

High-pressure cylinders for CNG, RNG and hydrogen

More than 600,000 highpressure cylinders on the road

Low-pressure cylinders for LPG

More than 19 million lowpressure cylinders have been delivered to leisure and household users

Key competitive advantages:

Safety
Polymer liner is non-corrosive
Lightweight
Reduces vehicle mass
Enhances handling and drivability
Good fatigue strength
High-strength carbon fiber and/or glass fiber construction reduces impact damage and fatigue
Leak-free
Precision-machined valve interface
Ensures leak free operation

We have a global footprint with proximity to our customers

19 20

Hexagon administration, marketing/sales and representative offices

1. Ålesund, Norway
2. Oslo, Norway
3. Costa Mesa (CA), U.S.
4. Heath (OH), U.S.
5. Chateauroux, France
6. London, United Kingdom
7. Wroclaw, Poland
8. Klagenfurt, Austria
9. Nizhny Novgorod, Russia
10. Santiago, Chile
11. Bangalore, India
12. Singapore

Hexagon production sites and engineering hubs

13. Raufoss, Norway 14. Kassel, Germany 15. Kelowna (BC), Canada 16. Lincoln (NE), U.S. 17. Taneytown (MD), U.S. 18. Denver (CO), U.S 19. Fontana (CA), U.S. 20. Ontario (CA), U.S. 21. Salisbury (NC), U.S. 22. Wixon (MI), U.S

7 8 5 6 14

1 2

Decarbonizing the transportation sector is necessary to reach the global climate targets

Transportation is responsible for almost 20% of global CO2 emissions

Average CO2 emissions need to decrease by 70% per passenger km

Government sustainability targets are being fast-tracked to 2030

11 Sources: McKinsey & Co., Hydrogen Council

Hexagon is uniquely positioned to reap the benefits of substantial market growth

Hexagon's competitive advantages:

Leading product competence Global leader in Type 4 pressure vessel technology

Trusted customer relationships Established and successful collaborations with major OEMs

Established operational footprint

Engineering centers and serial production facilities in Europe and N. America

Extensive track record Decades of experience in pressure vessels and clean fuel systems

We offer the full spectrum of clean fuel solutions

Customer reference case: UPS

Profitable, green growth ahead

Hexagon Ragasco and Hexagon Digital Wave enabling digital value chain innovation and new business models

Hexagon Purus claiming leadership position for e-mobility solutions

Hexagon Agility targeting significant growth in the years ahead – RNG a major driver

g-mobility and e-mobility equally key to driving clean energy transformation

Hexagon's addressable market is expected to grow by 4x by 2025

RNG market opportunity

How RNG is decarbonizing the transportation sector

What is RNG?

Methane CH⁴

(methane) content of more than 90 vol.-%

Produced from biowaste

Manure Landfill waste Agricultural waste Wastewater sludge

Certified for use in vehicles

Especially for medium- and heavy- duty trucks There is no difference in vehicle, engine and fuel

storage between CNG and

RNG

RNG is methane produced from biowaste certified for use in vehicles

RNG from manure is the only energy carrier with negative CO2-eq emission potential

Reference vehicle 18 t rigid truck, Mercedes-Benz Actros, 7.7 liter displacement, 200 kW, 1,100 NM, average payload 65% – diesel fuel consumption averaged based on web fleet, BEV and FCEV energy demand synthesized from various publications considering driving cycle, efficiency improvement and payload correction;
RED II, Annex VI, published 21.12.2018;
JEC Well-to-Wheels Report v5, 2020 – synthetics based on pathways with electricity and CO² from renewables;
Considering well-to-wheel emissions of CO2- equivalent omitted

Well-to-wheel CO2-eq emissions, in g/km for class 7 truck¹ RNG usage reduces global warming by capturing methane otherwise emitted to the atmosphere.

Methane causes 30x more global warming than burning methane into CO² 4

Today, only 5% of the global RNG supply potential is used…

ILLUSTRATIVE

Biomass methane production & potential in 2018, in EJ Biomass methane production & potential in 2050, in EJ

Only 5% of potential unlocked due to weaker competitive position compared of methane from biomass to fossil alternatives

Competitive position is weaker due to lower production costs of fossil methane, similar taxes in most countries and a low CO² price – if any – in most countries

1.Increase of supply potential between 2018 and 2040 not considered for this illustrative analysis

… to comply with climate targets, growth towards 100% utilization is expected

To reach a 1.5°C pathway, we need to reduce use of fossil energy carriers nearly to zero – with that expected that potential of biomass will be further captured

Degree of capturing depends on region and willingness to pay: EU and USA expected at higher share than rest of world

For use-cases that require energy storage and large energy densities expected that potential of biomass unlocked first

No supply constraint for RNG expected in Hexagon's core markets

Biomass supply for RNG production and commercial vehicle energy demand, EJ¹

20x

Potential for biomethane supply ramp-up using sustainable sources.

~1.5x

Potential supply in NA & Europe compared to expected commercial vehicle RNG energy demand.

Some of the world's largest fleet owners have set ambitious sustainability targets…

NOT EXHAUSTIVE

Company	Transport sustainability ambitions
	50%	Increase in fuel efficiency by 2025 (vs. 2005 levels)
	50%	Increase in carbon efficiency by 2025
	Net zero	Logistics-related emissions by 2050
	20%	Reduce absolute greenhouse gas (GHG) emissions by at least 20% by 2030
	20%	Reduction in logistics-related emissions by 2020 (vs. 2016)
	100%	ZEV among new vehicles purchased from 2040 onwards, according to infrastructure bill presented by US Congress (2020)
	100'000	Electric vans ordered as part of investment into Rivian (EV OEM), CNG trucks ordered for long-haul in USA
	40%	Of total road energy by alternative energy carriers by 2025, including 250 million gallons of RNG – significant investment in electric vehicles for urban and regional fulfillment
	25%	2025 sustainability goal of reducing carbon emissions across its value chain by 25, ABInBev will expand its fleet and investing in technology to transition to cleaner-burning renewable natural gas

…as emission targets are pulled forward

RNG classified as mitigating technology in the EU Taxonomy – Delegated act, expected to have significant impact on investments

Biden administration pledging 50%+ reduction in GHG emissions by 2030, unveiling USD 2 trillion green infrastructure package

>50% of the world's economy committed to limit warming to 1.5 degree C.

CNG/RNG is the only existing technology offering 500+ mile range today

CNG / RNG is complementary to BEV and FCEV

CNG / RNG has superior propositions as a fuel option for long haul operations requiring 500+ mile range

Hexagon Group has full coverage of clean energy solutions for today's and tomorrow's commercial fleet

RNG is a mature technology with over 100 available factory installed solutions globally

CNG/RNG prices are significantly more resilient than diesel prices

US Retail Fuel Prices per DGE 2009-2021

Electricity prices are reduced by a factor of 3.6 because electric motors are 3.6 times more efficient than internal combustion engines

Source: US Dept. of Energy, Alternative Fuels Data Center 24

CNG/RNG pump price has historically been significantly more stable than the one for diesel

Despite falling oil prices during the 2019 to 2021 period, the adoption of natural gas trucks in North America and Europe has seen unprecedented growth

Decision criteria moving from pure ROI focus to a more holistic focus, including carbon footprint and price visibility

Natural gas infrastructure in Europe and North America well developed to support CNG/RNG HDV

Summary of key regulations affecting RNG uptake in the EU

NOT EXHAUSTIVE

Scope Transportspecific Crossindustry Description Regulatory instrument Key targets EU-wide commitment to reach net zero emissions by 2050 Net zero 2050 -55% Definitions of sustainable biofuel feedstocks and RES² mandates in transport and energy. RED III in 2026 RED II 14% Definitions of activities that investors can classify as sustainable. To be further revised by the EC Taxonomy for sustainable activities 06/2020 Coutry-specific mandates linked to the execution of REDII Country blending mandates 29% Maximum highway distances between LNG and CNG stations by 2025. Directive to be updated 07/2021 Alternative fuels directive 400km HDT fleet emission reduction -30% Coutry-specific incentives and quotas to promote biomethane production Country biomethane schemes 7% Emissions by 2030¹ Net zero by 2050 RES in transport by 2030 Effective since Road biofuel share in Finland by 2030 For LNG 150km for CNG by 2025 HDT CO² reduction by 2030³ -15% by 2025 of gas in grid RNG in France by 2030 Key regulation Mandate Incentive Targets and incentives for HDT CO2 reduction. Considers standardized fuels, thus RNG treated as CNG

From 1990 level
Share of renewable energy sources
From 2019 level

Renewable energy in transport in RED II by 2030 14%

-30%

HDT CO² reduction from 2019 baseline by 2030 (RNG treated as CNG)

400km

Maximum highway distance between public LNG stations in Europe in Alternative fuels directive by 2025

Summary of key regulations affecting RNG uptake in the US

NOT EXHAUSTIVE

Key regulation Mandate Incentive

Scope	Regulatory instrument	Description	Key targets
Cross industry	Net zero 2050	Nationwide commitment to reach net zero emissions by 2050	Net zero	By 2050 milestones by 2030
Transport specific	EPA Renewable fuel standard	Federal emission trading scheme and blending mandate for biofuels. Several waivers have diminshed actual mandate	10%	Of diesel supply adv. biofuels in 2020 (EPA final mandate)
	Low Carbon Fuel Standard	California-based emission trading scheme and transport emissions cap	-20%	Transport GHG intensity by 2030
	HDT fleet emission reduction	California-based targets for HDT NOx emission reduction	100%	Of class 7-8 trucks zero-emission by 2045, 50% by 2030
	Alternate Fuel Tax Credit	AFTC \$0.50 p/gallon credit for use of natrual gas and propane autogas for	0.13\$/l	Current legislation extended through Dec 2021
	(AFTC)	transportation fuel
	State blending mandates and incentives	State-specific mandates and incentives linked to the execution of RFS	0.04\$/l	Biofuel production credit in NY in 20214
	Blender's tax credit	Federal tax credit for biodisel and renewable diesel blending	0.26\$/l	Federal biofuel blending tax credit in 2020-22
	Biogas subsidy schemes	Federal loan and grant schemes to promote farmers' biogas production through anaerobic digestion	25M\$	Loan guarantee for bioeconomy projects5 , up to 500k\$ as grants

From 1990 level 2. Share of renewable energy sources 3. From 2020 level 4. After the production of the first 40,000 gallons per year and limited to 2.5M\$ per tax entity year. 5. USDA Rural Development Rural Energy for America Program (REAP) supports small rural businesses and agriculture producers to initiate bioeconomy development projects such as an anaerobic digesters

10%

Of diesel supply adv. biofuels in Renewable Fuel Standard in 2020

-20%

Transport GHG-intensity by 2030 in California's Low Carbon Fuel Standard

100%

Class 7-8 trucks zero-emission vehicles in California by 2045

RNG with incentives are cost competitive with diesel today and in the long-term

RNG cost advantage vs. diesel

1. Weight classes : US: HDT: Class 7, 8 (>12t), MDT: Class 4-6 (6-12t); EU: HDT >16t, MDT: 7.5-16t, 2. Selected use cases represent the majority in the given weight class
1. Total cost of ownership, considering purchase price, energy demand and energy prices

RNG is incentivized due to its favorable propositions as an environmentally friendly, available fuel source

Today, RNG with incentives is in parity with diesel in the USA and advantageous in Europe from a TCO³ perspective

If subsidies continue to keep RNG at 2020 CNG prices, RNG will be competitive with battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV) in the long-term

RNG requires relative incentivization to be competitive with diesel on TCO

TCO for a long-haul vehicle¹ in \$ per km in 2020

1. Energy tax assumed to be same in absolute values for CNG and RNG, VAT applied at same percentage to production and supply chain costs of all fuels, no subsides for RNG assumed, energy demand derived from 18 t rigid truck reference vehicle

RNG requires relative incentivization to be competitive with diesel on total cost of ownership (TCO)

RNG is more expensive compared to fossil alternatives due to higher production costs, decentralized supply and relatively higher transportation cost

Potential for cost reductions from technological improvements, improved interconnection and strengthening of local supply chains – the need for relative incentivization likely to be lower in the future

RNG has the potential to replace diesel and is complementary to fuel cell and battery electric in the long term

Full potential: RNG can be the biggest CO2-eq emission reduction lever of MDT & HDT sold 2020-2030

Cumulative CO2-eq emission savings of MDT & HDT sold 2020-2030 in million t (EU example)

HIGH LEVEL ANALYSIS

Reference	Efficiency	Cumulative
Cumulative CO 2-	improvement1	CO 2-eq
emissions if eq		emissions if with
powertrain and		shown
energy mix of		improvements
sales stays as
today for 10 years

Methodology: Assessing 2019 sales as ICE-diesel powertrain powered with fossil diesel, then (1) deducting efficiency improvement at ~1% p.a. (considering improvements in engine, transmission, axles, brake, light weighting, tires and aerodynamics), then (2) considering biodiesel blend at 7 vol.-% today and 15 vol.-% in 2030 with a linear increase in between, then (3) changing powertrains at their share of the sales in every year, within these considering uptake of RNG in effective blend rate in methane consumption from 20 mass-% in 2020 to 100 mass-% in 2030 according to the full potential scenario, (4) BEV and FCEV market uptake around 2025 based on OEM & fleet operator announcements, slow market share uptake until 2030 – FCEV focused on HDT long-haul, BEV on regional-haul, market share in 2030 ~10% BEV, ~15% FCEV

Summary: RNG's full potential reduces CO2-eq emission & TCO

RNG full potential analysis

No supply constraints	~65% <10%	RNG supply potential required to cover 100% of commercial transport in the EU, US by RNG RNG supply potential required to cover 15%1 RNG share in commercial transport
Highest carbon abatement potential	200% 60%	CO2-eq emissions savings of RNG from manure compared to trucks with fossil diesel RNG can be the biggest CO2-eq emission reduction lever of MDT & HDT sold 2020-2030
RNG is cost competitive today	<15% 2030 and beyond	Lower TCO for RNG trucks to ICE-diesel resulting in savings for fleets with current RNG incentives RNG remains competitive vs. Diesel and BEV and FCEV at least to 2030
Mature CNG/LNG technology	15+ 10%	OEMs with mature offering in CNG/LNG, incl. Freightliner, PACCAR, Iveco, Traton brands, and more Parc share in MDV/HDV 2030 targeted by ambitious fleet operators to reduce CO2 emissions
1.	Assumes 30% sales share of RNG in 2030 and 13% parc RNG share

Supporting pages

Glossary

BEV Battery Electric Vehicle
EPA United Stats Environmental Protection Agency
FCEV Fuel Cell Electric Vehicle
HDT Heavy-Duty Transport
HDV Heavy-Duty Vehicle
ICE Internal combustion engine
MDV Medium-Duty Vehicle
MDT Medium-Duty Truck
▪NG Natural Gas
▪NGV Natural Gas Vehicle
▪RED II Renewable Energy Directive is the overall EU target for Renewable Energy Sources consumption
▪RES Share of renewable energy sources
▪RFS Renewable Fuel Standard a federal program that requires transportation fuel sold in the US to contain a minimum volume of renewable fuels
W2W Well-to-wheel
ZEV Zero Emission Vehicle

Exajoule (EJ) reference

EJ = Exajoule.

Used to reference energy demand or supply.

1EJ = 24 million tons of oil equivalent = 278 TWh (Tera watt-hours) = 947,817,000 MMBTu (million British thermal units)

Energy output of the 5 largest nuclear power plants operated at full capacity for one year or ~10% of Europe's nuclear energy supply

35% of MDV and HDV energy demand in Europe in 2018

Total energy demand of Portugal in 2020

1 EJ