Hexagon Composites — Investor Presentation 2021

Feb 17, 2021

Q4 2020

Jon Erik Engeset, CEO David Bandele, CFO

17 February 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 forwardlooking 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 17 February 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

• Q4 highlights and key developments
• Key market developments
• Summary Group highlights and financials
• Outlook
• Q & A
• Appendix: Segment financials & other material

Key developments in the quarter

• All time high EBITDA performance in Agility
• Leading US brands set ambitious eco-targets by means of Renewable Natural Gas (RNG)
• Successful listing of Hexagon Purus (HPUR.OL) on the Euronext Growth exchange, raised NOK 750 million in new capital
• Unveiled LPG smart cylinder 4

Hexagon's g-mobility solutions had a positive CO2 impact in 2020

726,000*

Metric tons of GHG avoided

Petroleum cars

957,000 Acres of forest

Q4 2020 – strong quarter driven by Agility

Revenues NOK 803 million (NOK 770 million Q3)

EBITDA NOK 69 million (NOK 65 million Q3)

ex Purus Revenues NOK 770 million EBITDA NOK 121 million

COVID- 19 Impact

• 100 cases to-date, including one fatality
• Supply chain disruptions causing challenges
• All production facilities have remained open during the quarter and no COVID-19 transmissions have taken place on-site
• Underlying market demand is strong

Semiconductor shortage

• Volkswagen down 100,000 cars in the first quarter of 2021 - Golf platform including Volkswagen, ŠKODA, SEAT and Audi affected

• Impacting Hexagon CNG-LDV volumes in Q1'2021

…"We are now feeling the effects of the global semiconductor bottleneck. We are doing everything in our power to minimize lost production and to ensure that normal deliveries to customers can be resumed as rapidly as possible."

- Murat Aksel, Group Board of Management Member responsible for purchasing, Volkswagen Group

Hexagon Group

9 Note: data as of LTM Q'4'20 revenue 1) Hexagon Agility represents the combination of Mobile Pipeline and Agility Fuel Solutions. Combination and name is effective 01.01.2021

Hexagon Group

Revenue by geography

The US is Hexagon's largest market

Climate climbing the priority list in the US

• Rejoining the Paris Climate Accord
• Targeting zero emissions by 2050
• Proposing USD 2 trillion climate plan over 4 years

RNG (Renewable Natural Gas – biomethane) at the core of the US response

170 48 -83 -100 -50 0 50 100 150 200 2 Diesel Truck Electric truck* RNG Truck ** Ordered ~1000 CNG/RNG trucks Converting entire long-haul fleet to RNG powered trucks by 2022 Purchase >6,000 natural gas vehicles between 2020 – 2022 Cutting fleet emissions by 45% by 2038

Metric tons C02 equivalents / year

USD per diesel gallon equivalent

Diesel	RNG
USD 2.65-3.20	USD 1.20-1.85

Note: *Electric uses today's US electric grid, **RNG includes fuel produced from landfill and dairy sources Source : TruStar Energy

Rebound in US oil and gas rig count

Europe is Hexagon's second largest market

EU Green Deal; EUR 1 trillion by 2030

• 13 million zero- and low-emission vehicles expected on European roads 2025
• Digital technologies to increase efficiency, make transport cleaner, and boost circular economy
• From 1 to 40 gigawatt of green hydrogen by 2030

EU Policy quantifying 50% Clean Target by 2025

From waste to renewable LPG

The European LPG industry addressing CO2 reductions

• EU targeting 32% renewables in the energy mix by 2030
• Bio-LPG reduces CO2 emissions by up to 80% versus conventional LPG
• Primary raw material is organic waste

Establishing footprint in Asia

Gravity point shifting towards Asia

• China pledging carbon neutral by 2060
• Expected to be the largest market for fuel cell electric vehicles
• South Korea targeting carbon neutrality by 2050
• Southeast Asia to achieve 23% renewable energy in total primary energy supply in 2025.
• Hexagon will take leading positions with strong partners in the region

Financial update

2021 Reporting Structure

Current reporting structure as at Q4 2020

1) Carve out from Hexagon Purus upon spin-off and effective 01.01.2021

Reporting structure from 1 January 2021

Summary of reporting changes for Hexagon Group (HEX.OL)

• Hexagon Purus (HPUR.OL) quarterly earnings report and presentation published prior to Hexagon Group (HEX.OL)
• Hexagon Group presentation will focus primarily on the collective of "Hexagon" or "Hexagon proforma" segments, i.e.:
• g-mobility
• Digital Wave
• Ragasco
• Hexagon Group financials will include Hexagon Purus as 100% consolidated and include a Minority Interest related to the non-controlled interest in Hexagon Purus (25%)
• Hexagon Proforma numbers for 2020 will be issued in line with Q1 2021 reporting

Q4 2020 Financials

Group highlights from Q4 2020

• Record EBITDA in Agility
• Further deliveries to major logistics customers
• Very strong Medium & Heavy-Duty CNG Truck sales
• Mobile Pipeline still impacted by COVID-19
• Strong sales in seasonal virtual interconnect projects

• Modest CNG Light-Duty Vehicle volumes

• Slower ramp-up after production relocation of major customer
• Good profitability after receipt of annual volume rebate

• Seasonal LPG performance

• Good European sales volumes
• Smaller volumes to wide spread of markets
• Successful Hexagon Purus spin-off
• Very high interest in private placement attracting NOK 750m in additional capital
• Hexagon Group retains 75% ownership

Financial highlights Q4 2020

Hexagon Composites Group

• Strong Agility revenues
• Otherwise, volumes lower than Q4 '19 but overall higher than Q3 '20

11 -102 (-927%) NOKm

• Record Agility EBITDA offset by lower volumes elsewhere

• Strategic/transaction related costs NOK -20m

• Y-o-Y effects of interest & charges NOK +13m; FX NOK -30m

• Tax NOK -56m due to provisions on tax assets (Purus)

Hexagon (ex Purus) Proforma* | Q4 2020

Quarterly Hexagon Proforma* EBITDA > NOK 100m at 16% margin

Group Revenue by segment Q4 2020 | Before Group eliminations*

Revenue Q4'19 (Proforma after internal reorganizations**)

NOKm, before group eliminations

Revenue Q4'20

NOKm, before group eliminations

Hexagon Ragasco LPG

Hexagon Group Balance sheet | Q4 2020 vs Q3 2020

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 noncash FX translation movements; Interest bearing debt is stated excluding NOK 79m of related mark to market positions classified as non-current assets at the end of Q4 and not netted in liabilities

27

Hexagon proforma leverage | Q4 2020

• As of Q4 2020, Hexagon has a total NIBD of NOK 0.8 bn

• Total IBD of 1.2 bn and cash of NOK 0.4 bn
• Unsecured Bond NOK 1.1 bn. Maturing March 2023
• Secured Bank facility of NOK 0.6 bn, currently NOK 0.5 bn undrawn. Maturing September 2021

• Hexagon Purus currently debt free and holds cash of NOK 1.25 bn

• NOK 0.75 bn private placement and capital injection from Hexagon Composites ASA
• Ring-fenced Hexagon Purus from financial covenants in loan Agreements

Preliminary and unaudited Full Year 2020 Financials

Financial highlights Preliminary and Unaudited Full Year 2020

Hexagon Composites Group

• COVID-19 impacts felt especially in Mobile pipeline and US transit bus
• Major customer assembly facility relocation in CNG LDV

• Otherwise robust performance driven by Agility and LPG (Ragasco)

• Y-o-Y EBITDA impact on CNG LDV (- 90m) & Mobile Pipeline (-70m)

• Strategic/transaction related costs NOK -29m
• Total e-mobility ramp-up effect NOK -132m (-108m)

107 -153 -260 (-243%)

• Y-o-Y effects of tax NOK -96m due mainly to provisions on tax assets (Purus)
• All other below the line effects are net NOK +6m

Hexagon (ex Purus) Proforma* | Full Year 2020

Hexagon YTD Q4 2020 Proforma EBITDA of NOK 322m at 11% margin

* Unaudited and preliminary proforma aggregation, where CNG LDV business reported in Hexagon Purus is included, post eliminations 31

Group Revenue by segment Full Year 2020 | Before Group eliminations*

Revenue 2019 (Proforma after internal reorganizations**)

NOKm, before group eliminations

• Agility Fuel Solutions (Heavy and Medium-Duty)
• Hexagon Purus (e-mobility & CNG Light-Duty Vehicles)
• Hexagon Mobile Pipeline & Other
• Hexagon Ragasco LPG

Revenue 2020

NOKm, before group eliminations

• Agility Fuel Solutions (Heavy and Medium-Duty)
• Hexagon Purus (e-mobility & CNG Light-Duty Vehicles)
• Hexagon Mobile Pipeline® & Other
• Hexagon Ragasco LPG

1

Hexagon Group 2020* Financial Scorecard

Navigated COVID-19 & well positioned for profitable growth in 2021

• Double-digit EBITDA margin for Hexagon ex-Purus
• EBITDA ramp up impact of NOK -132 million related to Hydrogen business units
• NOK 272 million EBITDA in Agility Fuel Solutions
• Cash of NOK 1.6bn and additional undrawn liquidity of NOK 0.5bn
• Hexagon cash NOK 0.4bn and undrawn liquidity of NOK 0.5 bn
• Purus cash NOK 1.2bn
• 58% Equity Ratio
• Spun off Hexagon Purus with current valuation of NOK ~14bn**, retaining 75% ownership

Outlook & 2021 Full year guidance

34

Hexagon Agility Medium & Heavy-Duty Vehicles

Green focus driving g-mobility demand

• Strong orderbook for 2021 to deliver growth targets
• Modest first quarter after record H2 2020
• Sustainability targets drive fleet demand for Heavy-Duty Truck business
• Continued deliveries to major logistics suppliers
• Improved adoption among small fleet owners
• Positive demand for European bus
• COVID-19 continues to be disruptive and planned OEM shutdowns may delay some orders
• Refuse segment expected to pick up in 2021

Hexagon Agility Mobile Pipeline

Diversifying the customer portfolio

• Expect pick up in mobile refueling, flare gas capture, and energy intensive applications in 2021
• Customer synergies with Agility's automotive business
• Awarded USD 5.7 million (NOK 48.5 million) industrial gas company order (delivery in Q2'2021)
• Positive outlook for oil & gas segment
• Increasing rig count
• ESG drives conversion to CNG and RNG

Hexagon CNG-LDV

CNG Light-Duty Vehicles

• Semiconductor shortage affecting our volumes in Q1
• Call-offs expected to resume in Q2

Hexagon Digital Wave

Building our IoT opportunity and improving the circular economy

• Profitable existing product offerings
• Developing a new business model in 2021 incorporating
• IoT of tank systems & real-time health monitoring
• Life extension & improving circular economy of our industry
• Service & leasing models
• Some Opex investment to realize opportunities

Hexagon Ragasco

Strong demand for LPG leisure use

• Expect seasonally strong first half of 2021
• Supported by continued strong leisure market in Europe
• Onboarding of smart tank pilot programs with key European customers through 2021

Hexagon (ex Purus) 2021 targets*

Substantial and profitable growth

Hexagon (ex Purus) 2021 Guidance | as at Q4 2020

Hexagon (ex Purus): Q1 relatively weak while Q2 – Q4 expected to be strong

Hexagon Purus

Strong and growing pipeline of hydrogen activities

• Focus on operational execution of well-diversified order backlog, including:
• Hydrogen distribution, transit bus, rail and aerospace business
• Highly active and dynamic pipeline for new business across Purus' application and product footprint

Several recent contract announcements

Multi-year frame agreement with worth €14m to deliver multiple units of hydrogen distribution systems through to 2025

Leading global industrial gas company

Substantial order from leading global gas company to provide type 4 hydrogen cylinders for transportation of hydrogen to industrial customers

Appendix

Segment financial highlights Q4 2020 | (1/3)

• Record quarter for EBITDA driven by volume and product mix

46

• Volumes driven by Medium and Heavy-Duty Truck and European Transit bus as tough EU clean air directives in cities requiring compliance within 2025, driving increasing CNG/RNG adoption in European cities

Hexagon Purus* (e-mobility, incl. MW & CNG LDV)

NOKm

• VW Group relocation of CNG vehicle assembly line completed however ramp-up not yet in full
• Please see separate CNG and e-mobility figures and comments on next slide

Segment financial highlights Q4 2020 | (2/3)

• 2020 revenues for CNG LDV was adversely impacted by lower callsoff from VW Group due to relocation of its CNG vehicle assembly line, in addition to effects from COVID-19
• Production at VW's relocated facilities restarted towards the mid to end of Q3'20; call-offs recommenced
• Volume based price rebate received in Q4 (NOK 9m)

Hexagon Purus e-mobility*

• Continued Opex investment ahead of revenues driving negative results

Segment financial highlights Q4 2020 | (3/3)

• Macro impacts from COVID-19 led to some delays in customer taking delivery of new modules in Q4'20
• Strong deliveries to virtual-interconnect opportunities in North America and Indonesia

Hexagon Ragasco (LPG)

NOKm

• Seasonally typical volume
• Shortfall versus Q4 2019 due to no sales to Bangladesh during this period

Group cash Q4 2020*

Hexagon Purus private placement net receipts at end of quarter

* Preliminary unaudited pro-forma figures which may be subject to reclassification changes upon final year-end audit; Full and final FX translations pending have been included in Agility segment reporting in 2020

Consolidated financial statements | P&L Hexagon Composites ASA

Income Statement (NOK 1 000)	Q4 2020	Q4 2019	31.12.2020	31.12.2019
Revenue from contracts with customers	802 560	938 695	3 070 865	3 404 209
Other operating income	242	3 229	9 511	11 915
Total revenue	802 802	941 923	3 080 375	3 416 124
Cost of materials	270 015	460 402	1 500 976	1 673 120
Payroll and social security expenses	244 418	243 771	941 425	853 706
Other operating expenses	219 283	139 625	448 348	599 209
Gain / Fair value adjustment earn-out				-69 625
Total operating expenses before depreciation	733 716	843 798	2 890 750	3 056 409
Operating profit before depreciation (EBITDA)	69 086	98 126	189 626	359 715
Depreciation and impairment	62 071	62 618	248 340	239 606
Operating profit (EBIT)	7 015	35 508	-58 714	120 109
Profit/loss from investments in associates and joint ventures	-1 107	90	-1 885	-749
Net financial items	-47 810	-31 292	7 757	-8 114
Profit/loss before tax	-41 902	4 306	-52 841	111 246
Tax	49 332	-6 539	99 740	3 755
Profit/loss after tax	-91 234	10 846	-152 582	107 491

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

BALANCE SHEET (NOK 1 000)	31.12.2020	31.12.2019
ASSETS
Property, plant and equipment	747 266	804 099
Right-of-use assets	257 337	283 817
Intangible assets	2 105 569	2 204 253
Investment in associates and joint ventures	2 142	651
Non-current current assets	79 848	48 992
Total non-current assets	3 192 161	3 341 811
Inventories	740 639	783 669
Trade receivables	624 978	520 426
Contract assets (incl. prepayments)	814	3 962
Cash and short-term deposits	1 649 882	177 651
Total current assets continuing operation	3 016 313	1 485 708
Total assets	6 208 474	4 827 519

EQUITY AND LIABILITIES

Paid-in capital	2 165 590	1 270 018
Other equity	1 014 975	882 975
Equity attributable to equity holders of the parent	3 180 565	2 152 993
Non controlling interests	411 221	0
Total equity	3 591 786	2 152 993
Interest-bearing long-term liabilities	1 206 127	1 298 058
Lease liabilities	237 266	246 929
Other non-current liabilities	261 999	285 512
Total non-current liabilities	1 705 392	1 830 499
Interest-bearing current liabilities	0	2 857
Lease liabilities short-term	25 198	47 703
Contract liabilities (incl. prepayments from customers)	53 371	94 540
Other current liabilities	832 726	698 927
Total current liabilities	911 296	844 027
Total liabilities	2 616 688	2 674 526
Total equity and liabilities	6 208 474	4 827 519

Cash and cash equivalents at end of period	1 649 882
Cash and cash equivalents at start of period	0
Discontinued operations	177 651
Net currency exchange differences	112
Net change in cash and cash equivalents	1 472 119
Net cash flow from financing activities	1 434 228
Net cash flow from investment activities	-138 868
Net cash flow from operations	176 759
Change in net working capital and other	-18 739
Depreciation and write-downs	248 340
Profit before tax from continuing operations	-52 841
CONDENSED CASH FLOW (NOK 1 000)	31.12.2020

Financial statements | P&L Hexagon Purus e-mobility (excl. CNG LDV)

Income Statement (NOK 1 000)	Q4 2020	Q4 2019	31.12.2020	31.12.2019
Revenue from contracts with customers	32 455	69 072	178 121	207 154
Other operating income	293	3 529	1 693	4 140
Total revenue	32 749	72 601	179 814	211 294
Cost of materials	10 340	45 589	86 717	128 232
Payroll and social security expenses	40 719	42 354	123 497	143 157
Other operating expenses	34 093	22 724	110 322	83 167
Total operating expenses before depreciation	85 153	110 668	320 536	354 556
Operating profit before depreciation (EBITDA)	- 52 404	- 38 067	- 140 722	-143 261
Depreciation and impairment	7 247	5 286	26 906	25 508
Operating profit (EBIT)	- 59 652	- 43 353	- 167 628	-168 769
Profit/loss from investments in associates and joint ventures	- 1 107	90	- 1 885	-749
Finance income	1 207	-	10 110	3 243
Finance costs	- 66 230	- 8 596	- 113 969	-27 397
Profit/loss before tax	- 125 782	- 51 859	- 273 373	-193 672
Tax	- 20 253	- 11 316	35 579	-25 777
Profit/loss after tax before discontinued operations	- 146 035	- 40 544	- 308 952	-167 895
Profit/loss after tax for the period from discontinued operations	11 537	17 479	- 34 602	69 279
Profit/loss after tax	- 134 498	- 23 065	- 343 554	-98 616

Financial statements | Balance sheet & cash flow Hexagon Purus e-mobility (excl. CNG LDV)

BALANCE SHEET (NOK 1 000)	31.12.2020	31.12.2019
ASSETS
Property, plant and equipment	76 634	103 359
Right-of-use assets	30 457	53 577
Intangible assets	413 324	475 378
Investment in associates and joint ventures	2 066	651
Non-current financial assets	751	3 226
Deferred tax assets	-	41 213
Total non-current assets	523 232	677 404
Inventories	61 586	100 678
Trade receivables	26 657	125 015
Contract assets (incl. prepayments)	814	3 100
Other current financial assets	12 842	5 941
Cash and short-term deposits	1 246 351	65 093
Total current assets continuing operation	1 348 251	299 827
Assets held for sale	219 771	-
Total assets	2 091 254	977 231
EQUITY AND LIABILITIES
Issued capital	22 909	330
Other paid-in capital	372	-
Share premium	2 055 282	14 443
Other equity	- 452 223	-119 590
Total equity	1 626 341	-104 816
Interest-bearing loans and borrowings, related party	161 016	729 428
Lease liabilities	21 795	47 828
Provisions	689	1 613
Net employee defined benefit liabilities	2 635	2 076
Deferred tax liabilities	11 930	22 325
Total non-current liabilities	198 065	803 269
Trade and other payables	83 988	139 207
Contract liabilities	32 068	33 276
Lease liabilities, short term	9 244	12 810
Income tax payable	-	20
Other current liabilities	64 390	93 465
Total current liabilities continuing operation	189 690	278 778
Liabilities directly associated with the assets held for sale	77 158	-
Total liabilities	464 913	1 082 047
Total equity and liabilities	2 091 254	977 231

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CONDENSED CASH FLOW (NOK 1 000)	31.12.2020
Profit before tax from continuing operations	- 273 373
Depreciation and write-downs	26 906
Change in net working capital and other	123 643
Net cash flow from operations	-122 823
Net cash flow from investment activities	-36 288
Net cash flow from financing activities	1 387 081
Net change in cash and cash equivalents	1 227 969
Net currency exchange differences	-5 395
Discontinued operations	-41 316
Cash and cash equivalents at start of period	65 093
Cash and cash equivalents at end of period	1 246 351

Note: Balance sheet as of 31 December 2020 is that of Purus' e-mobility business with the CNG LDV business treated as a discontined operation; balance sheet as of 31 December 2019 inlcudes the CNG LDV business

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