Hexagon Composites — Investor Presentation 2022

Nov 3, 2022

Q3 2022

Jon Erik Engeset, CEO David Bandele, CFO

3 November 2022

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 3 November 2022, 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

• Highlights Q3'22
• Market update
• Financials
• Outlook
• Summary and Q & A
• Appendix: Segment financials & other material

Highlights

Group revenues of NOK 1 243 million growth of 42% year-overyear

4

High costs of production and challenging operating conditions

Significant new orders for Mobile Pipeline®, Hydrogen Distribution and Mobile Refuelling

Hexagon Digital Wave continuing its strong growth path

Driving energy transformation

In the first three quarters of 2022, our low emission solutions have enabled the avoidance of approx.

metric tons of CO2 equivalent emissions

Financial summary

Hexagon excl. Purus

Revenue: NOK 1 080 million (NOK 848 million)

EBITDA: NOK 68 million (NOK 110 million)

Hexagon Purus

Revenue: NOK 222 million (NOK 103 million)

EBITDA: NOK -92 million (NOK -80 million)

Hexagon Group

Revenue: NOK 1 243 million (NOK 875 million)

EBITDA: NOK -24 million (NOK 30 million)

Operating conditions remain challenging

Challenges

• Continued high cost of energy, materials and components
• Supply chain shortages and disruptions impacting production planning and efficiency

Outlook

• Profitability measures including short term cost saving initiatives launched
• Improvements expected in 2023

RNG retains solid regulatory support in heavy duty vehicle segment Renewable natural gas (biomethane) retains regulatory support

• BIP establishes formal link between RePower EU biomethane target and Transport sector
• Hexagon member of European Biogas Association and engaged in BIP Transport Committee
• Heavy Duty Emission Regulation proposal expected early next year:
  • Strong member state and industry advocacy for "Well to wheel" approach

• The US Inflation Reduction Act
  • President Biden signed US bill into law on 16 August 2022
  • Extension of Alternative Fuel Tax Credit through 1 Jan 2024 moves from retroactive to prospective
  • Transition to Clean Fuels Production Credit for 2025 to 2027 creates technology-neutral production tax credit (PTC) for production of low-emissions transportation fuel
  • Extension of Section 48 energy investment tax credit (ITC) to include biogas

Renewable natural gas (RNG) recognized as high impact transport fuel in North America and Europe

US & EU government research institutes' study backs RNG for decarbonization¹

Concludes that RNG offers the biggest opportunities to reduce well-to-wheel GHG emissions

Strong growth of RNG facilities in North America

Accelerated growth and strong pipeline of new projects

Industry follows suit

Energy majors investing significantly in RNG

¹ Decarbonization potential of on-road fuels and powertrains in the European Union and the United States: a well-to-wheels assessment, www.rngcoalition.com

The majority of the natural gas being used in US transportation is now from renewable sources

10 1) Natural Gas Vehicle 2) Gasoline gallon equivalents Source: NGV America

New industry-changing natural gas engine being launched in 2024 unlocking the long-haul market segment

• Cummins' first natural gas engine specifically designed for heavy-duty truck applications
• Offering better fuel economy, efficiency and range
• Opens additional heavy-duty market of around 200-250k vehicles per year for natural gas solutions

US heavy-duty truck addressable market for natural gas solutions (# trucks sold per year)

RNG truck demand is strong and will further accelerate in 2024 when the new engine is introduced to the market

CNG/RNG uptake potential in US heavy-duty segment # of trucks ('000) % of total fleet

Comments

• RNG can be an immediate alternative to diesel:
  • ‒ Competitive Total Cost of Ownership
  • ‒ Highest carbon abatement potential
  • ‒ Supportive infrastructure
• Heavy-duty regulation and supply chain capacity will influence direction and pace of growth trajectory

Hexagon Agility is a key enabler of RNG

The RNG (biomethane) value chain

Hexagon offering

Hexagon Digital Wave on strong growth trajectory

Digital technologies for testing, recertification and systems automation

LTM Q4'21 LTM Q1'22 LTM Q2'22 LTM Q3'22 LTM Q4'22E

Selected key customers ¹⁴

Hexagon Ragasco preparing for piloting of smart cylinders in 2023

Hexagon Purus continuing to deliver on revenue growth supported by strong order book

61% PRO FORMA REVENUE GROWTH YOY (NOKM)

CURRENT ORDER BOOK

STRONG ORDER BOOK¹ OF

1) Includes minimum order value agreed in framework agreement announced on Fri. 14-Oct. 16

2) Include heavy-duty vehicles, rail, aerospace, transit bus and other (e.g. industrial gas)

Financials

David Bandele, CFO

Highlights from Q3 2022

Strong topline performance while supply chain disruption and input price inflation weigh on margin

NOK 930 million revenue in Hexagon Agility

• 25% revenue growth overall
• Low margins in Heavy & Medium-Duty as price rises lag input cost increases
• Higher margins achieved in Mobile Pipeline

NOK 119 million revenue in Hexagon Ragasco

• 38% revenue growth includes necessary price rises to combat material cost increases
• High energy costs weigh down on margins

NOK 30 million revenue in Hexagon Digital Wave

• 58% revenue growth driven mainly by Modal acoustic technology services
• Positive EBITDA from increased volume

Hexagon Purus – publicly listed subsidiary

• Doubling revenue with 2022 guidance on track
• 73% ownership investment valued at ~ NOK 3.9 bn1

Financial highlights | Q3 2022 Hexagon (excl. Purus)

• 27% Revenue growth
  • 16% growth excluding FX effects
• Continued margin pressure y-o-y from:
  • Output inefficiencies caused by supply chain disruptions
  • Sales prices lagging input cost increases in Heavy and Medium-Duty business
    • Estimated margin impact to EBITDA of ~4 percentage points

19 * Shows the effect to EBITDA and EBITDA margin if the secured price rises coming into effect on revenues from Q1 2023 were applied to sales volumes in Q3 2022.

Hexagon Agility | Q3 2022

• 25% Revenue growth

40%

Mobile Pipeline

Cylinder sales to Purus / LDV

– Strong Medium & Heavy-Duty truck and Mobile Pipeline markets

• Continued margin pressure from:

• Elevated carbon fiber price
• Suboptimal efficiency from industry wide disruptions
• Low volumes in Light-duty from key customer
• Diversified revenue streams supporting critical infrastructure and decarbonization targets

Hexagon Ragasco | Q3 2022

• 38% Revenue growth
  • Additional sales to Middle-East and African markets
• Positive margin development:
  • Better scale from volumes while price offsets material cost rises
  • Absorbing NOK 4m y-o-y energy cost hikes in quarter
• Resilient business with multiple introductory and repeat emerging markets orders

Hexagon Digital Wave | Q3 2022

• Profitable revenue growth
• Healthy mix of product and services businesses
• Modal Acoustic Emission (MAE) technology increasingly adopted in inspection and requalification activities
  • USD 2 million long-term agreement with key customer

Q3 2022 Financials Hexagon Group

23

Overall summary | Q3 2022

• Strong demand in Hexagon Agility
• Seasonally low volumes for Hexagon Ragasco but with profitable growth
• Strong momentum for Hexagon Digital Wave
• Hexagon Purus remains on-track for its growth targets

*Post eliminations between Purus and Hexagon (excl. Purus) of NOK -59 million in Revenue, please refer to Appendix for

24 additional Group financial results.

Hexagon Group Balance sheet | Q3 2022 vs Q2 2022

Strong balance sheet impacted by USD/NOK currency movements

25

Hexagon proforma leverage | Q3 2022

• Available committed financing facility in Hexagon Composites ASA of NOK 2,025 million
• As of Q3 2022, Hexagon has a total NIBD of NOK 1,450 million
  • Total IBD of NOK 1,656 million and cash of NOK 206 million
  • Available liquidity of NOK ~ 600 million
• Hexagon Purus currently holds cash of NOK 481 million and IBD of NOK 50 million
  • Hexagon Purus is ring-fenced from financial covenants in Hexagon loan agreements

Outlook & 2022 Full year guidance

Hexagon (excl. Purus) Full Year 2022 revised guidance per Q3 2022

Key takeaways

Healthy demand and strong revenue growth

Challenging operating conditions impacting profitability

Government commitments to decarbonize transport in the U.S. & Europe driving growth in future demand

2025 revenue targets:

Hexagon excl. Purus: NOK 6bn Hexagon Purus: NOK 4-5bn

Appendix

Investor relations information

Investor relations contacts

Ingrid Aarsnes Vice President, IR & ESG Email: ingrid.aarsnes@hexagongroup.com Direct: +47 950 38 364

David Bandele Chief Financial Officer Email: david.bandele@hexagongroup.com Direct: +47 920 91 483

Hexagon proforma financial highlights (1/3)

• Hexagon (excl. Purus) provides clean solutions with strong ESG benefits

• Hexagon Agility**: (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

NOKm 48 46 53 33 52 94 103 259 159 ^{210 222} -20 (-44%) -61 (-24%) Q3'20 -52 (-160%) Q4'20 -62 (-119%) -92 (-41%) -69 (-73%) Q1'21 -43 (-90%) Q2'20 Q2'21 -80 (-77%) -25 (-47%) Q3'21 Q4'21 Q2'22 -93 (-58%) Q1'22 -112 (-53%) Q1'20 Q3'22 Revenues EBITDA 1 2 3

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

*2020: preliminary unaudited pro-forma figures after adjusting for reorganizations; 2021 segment reported and is after central/corporate and eliminations within the segments ** previously referred to as g-mobility and being rebranded to be consistent with other reported segments and ahead of transferring operational responsibility of CNG LDV business to Hexagon Agility by 1.1.22

1) Correction from NOK 57m ; 2) Correction due to reclassification ; 3) Correction from NOK -57m

33

Segment proforma financial highlights (2/3)

• Hexagon Agility provides (renewable) natural gas clean mobility solutions for Heavy and Medium Duty Vehicles (Agility Fuel Solutions), 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, Mobile Refueling units and Passenger cars

*Previously referred to as g-mobility and being rebranded to be consistent with other reported segments and ahead of transferring operational responsibility of CNG LDV business to Hexagon Agility by 1.1.22;

2020: preliminary unaudited pro-forma figures after adjusting for reorganizations; 2021 segment reported

1) Correction due to reclassification34

Segment proforma financial highlights (3/3)

Hexagon Ragasco as reported

• World leading provider of LPG composite cylinders
• Delivered over 20 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

Group cash Q3 2022 Headline figures

been included in Agility segment reporting in 2020

Consolidated financial statements | P&L Hexagon Composites ASA

INCOME STATEMENT (NOK 1 000)	Q3 2022	Q3 2021	31.12.2021	31.12.2020	31.12.2019
Revenue from contracts with customers	1 242 648	874 435	3 539 537	3 070 865	3 404 209
Other operating income	159	745	3 354	9 511	11 915
Total revenue	1 242 807	875 180	3 542 890	3 080 375	3 416 124
Cost of materials	687 634	414 984	1 695 497	1 502 305	1 673 120
Payroll and social security expenses	377 853	268 388	1 101 298	940 096	853 706
Other operating expenses	201 791	162 238	637 512	448 034	599 209
Gain / Fair value adjustment earn-out					-69 625
Total operating expenses before depreciation	1 267 278	845 609	3 4 34 307	2 890 435	3 056 409
Operating profit before depreciation (EBITDA)	-24 471	29 571	108 584	189 940	359 715
Depreciation and impairment	84 149	64 625	262 801	249 212	239 606
Operating profit (EBIT)	-108 620	-35 055	-154 096	-59 272	120 109
Profit/loss from investments in associates and joint ventures	60 381	178	-2 957	-1 885	-749
Net financial items	-28 310	-14 660	-144 692	5 018	-8 114
Profit/loss before tax	-76 549	-49 536	-301 744	-56 138	111 246
Tax expense	4 436	15 424	25 833	91 643	3 755
Profit/loss after tax	-80 985	-64 960	-327 577	-147 781	107 491

Consolidated financial statements | Balance sheet Hexagon Composites ASA

BALANCE SHEET (NOK 1 000)	30.09.2022	30.09.2021	31.12.2021
ASSETS
Property, plant and equipment	1 374 350	852 462	1 010 625
Right-of-use assets	336 804	264 691	282 309
Intangible assets	2 730 591	2 043 841	2 384 524
Investment in associates and joint ventures	55 553	2 152	7 024
Other non-current financial assets	102 426	379	379
Other non-current assets	2 515	2 493	2 489
Deferred tax	13 678	1 775	13 678
Total non-current assets	4 615 917	3 167 793	3 701 029
Inventories	1 812 276	1 083 867	1 147 004
Trade receivables	749 572	707 755	880 396
Contract assets (incl. prepayments)	7 210	2 258	4 165
Other current financial assets	18	1 228	1 162
Other current assets	228 098	199 393	181 281
Bank deposits, cash and similar	687 204	976 131	600 209
Total current assets	3 484 378	2 970 630	2 814 217
Total assets	8 100 295	6 138 423	6 515 246

BALANCE SHEET (NOK 1 000)	30.09.2022	30.09.2021	31.12.2021
EQUITY AND LIABILITIES
Paid-in capital	2 217 337	2 181 911	2 194 303
Other equity	989 641	908 658	911 989
Equity attributable to equity holders of the parent	3 206 978	3 090 570	3 106 291
Non controlling interests	480 354	337 748	378 010
Total equity	3 687 333	3 428 318	3 484 301
Interest-bearing liabilities (non-current)	1 488 645	1 072 915	1 166 057
Lease liabilities (non-current)	295 487	225 448	230 276
Other financial liabilities (non-current)	368 448	64 662	190 529
Pension liabilities	5 256	3 411	4 645
Deferred tax liabilities	279 757	185 587	247 160
Provisions (non-current)	7 248	4 402	11 686
Total non-current liabilities	2 444 840	1 556 426	1 850 353
Interest-bearing liabilities (current)	217 402	-	13 635
Lease liabilities (current)	53 835	50 496	62 455
Trade payables	618 488	465 826	392 747
Contract liabilities (incl. prepayments from clients)	439 561	172 975	277 658
Other financial liabilities (current)	75 551	-	-
Income tax payable	92 275	140 966	47 201
Other current liabilities	377 668	235 600	320 150
Provisions (current)	93 342	87 816	66 747
Total current liabilities	1 968 122	1 153 679	1 180 592
Total liabilities	4 412 962	2 710 105	3 030 945
Total equity and liabilities	8 100 295	6 138 423	6 515 246

Consolidated financial statements | Cash flow Hexagon Composites ASA

CONDENSED CASH FLOW (NOK 1 000)	30.09.2022	30.09.2021	31.12.2021
Cash flow from operating activities
Profit before tax	-285 553	-206 059	-301 744
Depreciation, amortization and impairment	242 011	191 155	262 680
Net interest expense	45 272	40 189	52 166
Changes in net operating working capital (1)	-149 849	-305 846	-455 250
Other adjustments to operating cash flow	111 228	44 528	97 452
Net cash flow from operating activities	-36 891	-236 033	-344 696
Purchase of property, plant & equipment, net of proceeds from sale	-310 995	-183 905	-263 846
Purchase of intangible assets	-45 212	-34 376	-59 755
Interest received	8 214	1 825	4 394
Acquisition of subsidiaries, net of cash	-	-	-146 189
Investment in associated companies	-58 354	-	- 8 580
Other investments	-33 055	-1 915	-1 109
Net cash flow from investing activities	-439 402	-218 372	-475 085
Net repayment (-) / proceeds (+) from interest bearing loans	522 034	-143 165	-126 771
Interest payments on interest-bearing liabilities	-49 672	-37 231	-49 901
Repayment of lease liabilities (incl. Interests)	-60 926	-51 768	-70 716
Net proceeds from share capital increase (subsidiary)	157 817	-	-
Net proceeds from purchase (-) and sale (+) of own shares	-30 495	5 625	9 543
Net cash flow from financing activities	538 758	-226 540	-237 846
Net change in cash and cash equivalents	62 465	-680 944	-1 057 627
Net currency exchange differences	24 530	7 193	7 954
Cash and cash equivalents at start of period	600 209	1 649 882	1 649 882
Cash and cash equivalents at end of period	687 204	976 131	600 209

1) Net operating working capital: Inventories, trade receivables, contract assets, trade payables, and contract liabilities