Hexagon Composites — Investor Presentation 2021

May 12, 2021

Q1 2021

Jon Erik Engeset, CEO David Bandele, CFO

12 May 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 12 May 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.

Agenda

• Q1 highlights and key market developments
• Summary Group highlights and financials
• Outlook
• Q & A
• Appendix: Segment financials & other material

Converting strong pipeline into major long-term agreements and orders

USD 90 million in order intake for RNG/CNG fuel systems YTD

4

Strong rebound & positive outlook for Mobile Pipeline®

USD 85 million LTA with Certarus

Hexagon Purus signed Joint Venture agreements with CIMC Enric for China and Southeast Asia

Extended & expanded strategic alliance with Mitsui & Co

EUR 200 million LTA with Nikola for H2 tank serial production

Q1 2021 – ahead of schedule

Revenues excl. Purus NOK 690 million (NOK 802 million Q1'20)

EBITDA excl. Purus NOK 87 million (NOK 82 million Q1'20)

Hexagon Purus Revenues NOK 57 million EBITDA NOK -62 million

ESG Highlights (annualized)

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

COVID- 19 Impact

• 122 cases to-date, one fatality
• All production facilities have remained open during the quarter
• Supply chain disruptions
  • Global semi-conductor shortage
  • Long lead-times on key components, e.g. battery cells

Increased global commitment & pace

The US resumes leadership

• Domestic goal to cut emissions by >50% within 2030 from 2005 levels
• Unveiled USD 2 trillion green infrastructure package
• >50% of the world's economy committed to limit warming to 1.5-degree C.

"We recognize the importance of public sector investment, particularly in green infrastructure… One estimate placed the needed incremental investments at over USD 2.5 trillion for the United States alone. Private capital will need to fill most of that gap." - Janet Yellen, Treasury Secretary

RNG technology classified as mitigating

EU taxonomy – Delegated act

• Renewable natural gas (RNG) qualifies as contributing substantially to climate change mitigation
• Positive impact on RNG investments
• Natural gas carved out
  • Subject to separate procedure and Delegated Act expected in December 2021

RNG will be part of the energy transformation in Europe

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

Well-to-wheel CO2-eq emissions, in g/km for class 7 truck

RNG usage reduces global warming by capturing methane otherwise emitted to the atmosphere.

Methane causes 30x more global warming than burning methane into CO² 1 .

No supply constraints of RNG for commercial vehicles

Biomass supply for RNG production and commercial vehicle energy demand, TWh¹

11 Source: Third party consultant, 1. Considers all biomass for either bio-gas or bio-methane production, 2018 figures.

20x

20x

Potential for biomethane supply ramp-up using sustainable sources.

~1.5x ~1.5x

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

RNG reduces total cost of ownership for truck operators

is cost competitive vs. diesel with today's incentive schemes in the EU and US

~1.5x

20x

Strong RNG momentum in the commercial vehicles space

Addressable market expected to grow four times next five years

Source: McKinsey & Company

Scalability

Leading engineering and production capabilities

• Escalating demand fills current capacity
• Capacity being added in the US, Germany and China
• Given our established footprint, limited incremental CAPEX needed to achieve significant volume increases at very attractive returns
  • Bottleneck in scaling of human resources
• A global production system allows cross border optimization and sourcing
• No other player enjoys Hexagon's scale and synergy potential

Ahead of schedule

Hexagon Agility targets significant RNG-driven growth

16

g-mobility e-mobility

Hexagon Purus claims leadership position for hydrogen & battery electric solutions

World-class manufacturing

Hexagon's global production system ready for scale

Financial update

2021 Reporting Structure

Reporting structure from 1 January 2021

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

Note: data as of LTM Q'4'20 revenue

2) Hexagon Digital Wave will be an own business area effective 01.01.2021.

Q1 2021 Financials

Hexagon (excl. Purus)

Highlights from Q1 2021

• Ahead of schedule and strong order book for remainder of the year
• Solid NOK 527m revenue in g-mobility
  • Strong order intake on Heavy-Duty Truck; RNG a significant driver in US
  • Temporarily reduced volumes in Light-Duty due to semiconductor shortage
  • Light quarter for Mobile Pipeline, but secured USD 15m order for Q2

• Strong NOK 34m EBITDA in Hexagon Ragasco

• Realized production efficiencies
• Finalizing technology and initiating pilot programs for the new SMART cylinder concept with major customers in Europe
• Hexagon Digital Wave
  • Executing development of pipeline of digital product/services
• Hexagon Purus publicly listed subsidiary
  • Strong order backlog including a EUR 200m LTA with Nikola in April
  • 75% ownership investment valued at ~ NOK 6bn
  • NOK 1.1bn of cash reserves

Financial highlights Q1 2021

Hexagon (excl. Purus)

• Overall strong underlying sustainability driven demand in Heavy-Duty automotive sector
• Y-o-Y revenue shortfall due to FX headwinds of NOK 50m+ and Mobile Pipeline overhang from COVID last year of NOK 50m+
• Strong order intake across the board for Q2 onwards

• Favorable mix, production efficiencies and

cost control resulted in higher profitability

• Similar depreciation and amortization levels

Hexagon g-mobility segment | Q1 2021

• Solid quarter for EBITDA while gearing up for strong Q2 and rest of year
• Hexagon Agility saw strong US Truck and EU Transit demand. Achieved operational synergies in the new combined business area

22

• Light-Duty results robust despite impacts of semi-conductor shortage; high activity towards Hexagon Purus

Revenue Share YTD Q1'21

Before eliminations

Heavy-Duty/Medium-Duty Truck Transit Bus Refuse Truck Heavy-Duty/Medium-Duty Other Light-Duty Vehicles Mobile Pipeline

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported

Hexagon Digital Wave* I Q1 2021

NOKm

in Agility segment reporting in 2020

• Strong SCBA Life extension sales offset by delay in Ultrasonic Examinations (UE) sales from Q1 to Q2
• Investment in organization to develop digitalization products pipeline

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported

Hexagon Ragasco* I Q1 2021

NOKm

• Strong demand from the Nordics and Switzerland
• High production efficiencies result in improved margin

24 * 2020: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2021 segment reported been included in Agility segment reporting in 2020

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported

Hexagon proforma leverage | Q1 2021

• As of Q1 2021, Hexagon has a total NIBD of NOK 0.9 bn

• Total IBD of 1.1 bn and cash of NOK 0.2 bn
• Unsecured Bond NOK 1.1 bn. Maturing March 2023
• Secured Bank facility of NOK 0.6 bn, substantially undrawn
• Hexagon Purus currently debt free and holds cash of NOK 1.1 bn
  • Hexagon Purus is ring-fenced from financial covenants in Hexagon loan agreements

Q1 2021 Financials

Hexagon Group

Hexagon Group Balance sheet | Q1 2021 vs Q4 2020

Stronger balance sheet after listing and private placement of Hexagon Purus Stronger balance sheet after listing and private placement of Hexagon Purus

*The bond was issued in NOK and the company entered into a currency swap hedging arrangement converting the instrument to USD and is therefore accounted for as USD and subject to non-cash FX translation movements; Interest bearing debt is stated excluding NOK 77m of related mark to market positions classified as non-current assets at the end of Q4 and not netted in liabilities

Overall summary | Q1 2021

• Solid opening quarter for Hexagon as it gears up for significantly stronger rest of year in automotive and mobile pipeline businesses
• Heavy Duty US Truck and European Transit Bus business powers ahead
• Strong EBITDA generation from Hexagon Ragasco provides a solid platform for smart cylinder and other growth initiatives
• Hexagon Digital Wave funding product development growth organically
• Hexagon Purus' opex and capex investment requirements are self-funded and ring-fenced from Hexagon's external financing obligations

Outlook & 2021 Full year guidance

Hexagon (excl. Purus) 2021 targets*

Substantial and profitable growth

Hexagon (excl. Purus) 2021 Guidance | as at Q1 2021

Hexagon (excl. Purus): Q2 – Q4 expected to be strong but headwind related to semi-conductor shortage in LDV may not be fully recouped within 2021

		CURRENT 2021 EXPECTED PERFORMANCE TARGET TO	OPPORTUNITIES	RISKS
	HEXAGON AGILITY	• Continued sustainability driven adoption	• Productivity improvements	• Prolonged Covid-19 recovery
	HEXAGON CNG LDV	• Semi-conductor shortage impact continues to Q2	• Indonesia and India	• Prolonged shortage of electronic components
HEXAGON	HEXAGON RAGASCO	• Strong underlying demand	• Further orders in newer geographies	• Delays to expected orders in newer geographies
	HEXAGON DIGITAL WAVE	• Investing in opex to extend existing profitable business

Hexagon Agility Medium & Heavy-Duty Vehicles

Very strong ESG driven demand

• Strong orderbook for Q2 and Q3
• Growing demand for Heavy-Duty Truck
  • USD 44 million in new orders from major logistics supplier
  • Improved adoption among small fleet owners
  • New customer order from Certarus
• Continued positive demand for European Bus
• Refuse and US Bus segments expected to pick up in second half of 2021

Hexagon Agility Mobile Pipeline

Rebound in volumes this year

• Strong backlog and good visibility for remainder of 2021
  • Oil & gas, RNG, industrial gas and mobile refuelling units
  • Decarbonization and sustainability targets drive demand
• Signed USD 85 million LTA with Certarus
  • Initial order for Hexagon Agility of USD 19 million to be delivered in Q2

Hexagon CNG-LDV

CNG Light-Duty Vehicles

• Semiconductor shortage continues to affect volumes
• Pick-up in volumes expected in the second half of 2021, albeit from a lower level

Hexagon Digital Wave

Developing our centre of excellence for Smart Technologies

• Expanding the expertise to digitalize Hexagon's products and solutions, including developing new revenue models
  • Developing factory installed sensor technology
  • Strong ESG benefits life extension of products
• Global semi-conductor shortage causing some delays
• Investing in organization and product development to realize future opportunities

Hexagon Ragasco

Seasonally strong demand from Europe

• Strong demand from European leisure market
• Significant order from South Asia with delivery in Q2
• Introductory order from German regional LPG marketer with delivery in Q2
• Introductory order from Tier 1 Southeast Asian LPG marketer with delivery in Q3
• Smart cylinders pilot program on track and receiving good response from key European customers

What are the 3 big things to look out for?

RNG uptake as fast-track alternative fuel to lower harmful emissions for commercial vehicles

Smart Cylinder digitalization of LPG product offering to accelerate adoption of Type-4 tanks versus steel

Smart systems digitalization and real-time monitoring of all high-pressure Type-4 tanks driven by Modal Acoustic Emissions technology

2021 onwards 2022 onwards 2025 onwards

Appendix

Hexagon proforma financial highlights (1/3)

• Hexagon (excl. Purus) provides clean solutions with strong ESG benefits
  • g-mobility: (renewable) natural gas clean mobility solutions
  • Ragasco: Portable LPG cylinders for household and leisure applications
  • Digital Wave: smart technology for monitoring and testing of cylinder systems and creating circular economy by extending life expectancy

• Hexagon Purus provides clean and sustainable fuel solutions for battery electric and hydrogen vehicles

Segment proforma financial highlights (2/3)

• g-mobility provides (renewable) natural gas clean mobility solutions for Heavy and Medium Duty Vehicles (Agility), Mobile Pipeline (MP) and Light-Duty Vehicles (CNG LDV)
• Global leading provider within markets including Heavy-Duty/ Medium-Duty Trucks, Refuse Truck, Transit Bus, Gas Transportation, Refueling units and Passenger cars

Segment proforma financial highlights (3/3)

• World leading provider of LPG composite cylinders
• Delivered over 18 million cylinders worldwide
• Strategic agenda include IoT and digitalization providing connectivity and driving value chain transformation

Hexagon Digital Wave*

• Proprietary safety technology Modal Acoustic Emission (MAE) technology for testing and certifying cylinders
• Strategic agenda include cylinder digitalization with real-timing monitoring, testing and certification, creating a circular economy through enabling life extension

Consolidated financial statements | P&L Hexagon Composites ASA

Income Statement (NOK 1 000)	Q1 2021	Q1 2020	31.12.2020	31.12.2019
Revenue from contracts with customers	692 295	817 870	3 070 865	3 404 209
Other operating income	182	7 285	9 511	11 915
Total revenue	692 478	825 156	3 080 375	3 416 124
Cost of materials	294 896	405 137	1 500 976	1 673 120
Payroll and social security expenses	254 442	248 906	941 425	853 706
Other operating expenses	117 713	134 331	448 348	599 209
Gain / Fair value adjustment earn-out				-69 625
Total operating expenses before depreciation	667 050	788 374	2 890 750	3 056 409
Operating profit before depreciation (EBITDA)	25 427	36 782	189 626	359 715
Depreciation and impairment	63 886	60 766	248 340	239 606
Operating profit (EBIT)	-38 459	-23 984	-58 714	120 109
Profit/loss from investments in associates and joint ventures	-702	-436	-1 885	-749
Net financial items	-48 949	105 582	7 757	-8 114
Profit/loss before tax	-88 110	81 162	-52 841	111 246
Tax	4 949	19 039	99 740	3 755
Profit/loss after tax	-93 059	62 123	-152 582	107 491

Consolidated financial statements | Balance sheet & cash flow Hexagon Composites ASA

BALANCE SHEET (NOK 1 000)	31.03.2021	31.12.2020
ASSETS
Property, plant and equipment	766 691	747 266
Right-of-use assets	268 303	257 337
Intangible assets	2 004 261	2 105 569
Investment in associates and joint ventures	2 064	2 142
Non-current current assets	78 973	79 848
Total non-current assets	3 120 292	3 192 161
Inventories	830 666	740 639
Trade receivables	679 324	624 978
Contract assets (incl. prepayments)	370	814
Cash and short-termdeposits	1 292 138	1 649 882
Total current assets continuing operation	2 802 498	3 016 313
Total assets	5 922 789	6 208 474
EQUITY AND LIABILITIES
Paid-in capital	2 171 451	2 165 590
Other equity	959 664	1 014 975
Equity attributable to equity holders of the parent	3 131 116	3 180 565
Non controlling interests	387 263	411 221
Total equity	3 518 379	3 591 786
Interest-bearing long-term liabilities Lease liabilities	1 103 935	1 206 127
Other non-current liabilities	229 652	237 266
Total non-current liabilities	189 616 1 523 203	261 999 1 705 392
Interest-bearing current liabilities	0	0
Lease liabilities short-term	47 879	25 198
Contract liabilities (incl. prepayments from customers)	89 020	53 371
Other current liabilities	744 309	832 726
Total current liabilities	881 208	911 296
Total liabilities	2 404 411	2 616 688
Total equity and liabilities	5 922 789	6 208 474

CONDENSED CASH FLOW (NOK 1 000)	31.03.2021
Profit before tax from continuing operations	-88 110
Depreciation and write-downs	63 886
Change in net working capital and other	-152 794
Net cash flow from operations	-177 018
Net cash flow from investment activities	-47 383
Net cash flow from financing activities	-131 743
Net change in cash and cash equivalents	-356 144
Net currency exchange differences	-1 600
Discontinued operations	0
Cash and cash equivalents at start of period	1 649 882
Cash and cash equivalents at end of period	1 292 138

Investor relations information

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