Nekkar — Investor Presentation 2022

Feb 17, 2022

Q4/FY 2021 financial results

Preben Liltved, CEO Kristoffer Lundeland, CFO

17 February 2022

Disruptive technologies, sustainable results

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Nekkar ASA Q4/FY 2021 highlights

Highlights Q4 2021

• Revenues of NOK 138 million (Q4 2020: NOK 132 million)
• Operational EBITDA* of NOK 47 million (NOK 38 million)
• Operational EBITDA margin of 34.3% (29.3%)
• EBIT of NOK 45 million (NOK 60 million)
• Formed "Inteliwell" joint venture with Transocean
• Fish farmer and Nekkar investigating site for full scale Starfish test

Highlights FY 2021

• Revenues of NOK 480 million (NOK 359 million)
• Operational EBITDA of NOK 143 million (NOK 71 million)
• EBIT of NOK 135 million (NOK 75 million)
• Aftersales/service growth: +165% in order intake, +35% in revenue vs. 2020

Events subsequent to quarter

*Excluding losses/gain on FX contracts not qualifying for hedge accounting • Ole Falk Hansen appointed CEO from 1 July 2022

Disruptive technologies, sustainable results

Digital business models to capitalise on unique hard-tech to unlock and drive value from SaaS revenue potential

Nekkar in brief

NOK 480 million revenues (2021)

69 FTEs

Headquarter in Kristiansand, Norway

Listed on Oslo Stock Exchange (NKR)

2021: Aftersales/service efforts starting to pay off

Full-size Starfish in production, preparing for testing

Digital Solutions

SkyWalker – the future wind turbine installation RENEWABLES

Completed:

• Concept design development
• Final assembly of electrical components

Ongoing:

• Final assembly mechanical parts
• Final tuning on software/programming
• In-house testing, will continue throughout winter

Next step: Outdoor tests in full model height (8 metres)

Financial highlights

Key financials | Per quarter

Revenues (MNOK) Operational EBITDA (MNOK) & margin (%) 0 20 40 60 80 100 120 140 160 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 +5%

Key financials | Full year

Order intake and backlog

Order intake per half-year period (MNOK) Order backlog development (MNOK)

Nekkar ASA Financial highlights

Consolidated statement of profit and loss

Nekkar ASA	Q4		Full-Year
	Unaudited	Unaudited	Unaudited	Audited
MNOK	2021	2020	2021	2020
Revenue	138	132	480	359
Reported EBITDA	48	61	140	77
Operational EBITDA*	47	38	143	71
EBIT	45	60	135	75
Capitalised development costs	8	6	29	16
EBITDA margin	34,8 %	46,5 %	29,1 %	21,5 %
Operational EBITDA margin1	34,3 %	29,3 %	29,7 %	19,9 %
Order intake	28	-	113	701
Order backlog	838	1 167	838	1 167
EPS (NOK)2	0,31	0,47	1,04	0,65

1 Excl. losses/gain on FX contracts not qualifying for hedge accounting 2 Continued operations

• Fourth quarter revenues of MNOK 138, representing an increase of ~5% year-on-year
• Full-year 2021 revenues of MNOK 480 compared to MNOK 359 in 2020, equivalent to an increase of 34%
• Revenue growth driven by high activity in Shipyard Solutions
• Fourth quarter operational EBITDA of MNOK 47 compared to MNOK 38 in the same period last year
• Full-year 2021 operational EBITDA of MNOK 143 compared to MNOK 71 in 2020. Operational EBTIDA margin of 29.7% and 19.9% respectively
• Order intake of MNOK 28 in the fourth quarter and a good order backlog of MNOK 838 at the end of the quarter
• Capitalized development costs (R&D capex) of MNOK 8 in the fourth quarter and MNOK 29 in 2021.
• Fourth quarter earnings per share of NOK 0.31 compared to NOK 0.47 in 2020

Nekkar ASA Balance sheet

Condensed consolidated statement of financial position

(NOK 1 000)	Unaudited	Audited
	31.12.2021	31.12.2020
Deferred tax assets	16 445	34 204
Goodwill	16 643	16 643
Intangible assets	40 084	26 840
Tangible assets	14 439	6 224
Right-of-use assets	5 804	6 076
Total non-current assets	93 414	89 987
Inventories	3 474	5 412
Trade receivables	134 749	36 643
Accrued, non-invoiced production	20 153	22 382
Other short-term receivables	20 155	35 810
Bank deposits	179 756	367 850
Total current assets	358 288	468 096
Total assets	451 703	558 084

(NOK 1 000)	Unaudited	Audited
	31.12.2021	31.12.2020
Share capital	11 714	11 695
Other equity	285 652	173 903
Non-controlling interests	19 402	17 879
Total equity	316 768	203 477
Deferred tax	1 024	599
Lease liabilities	4 234	4 550
Total non-current liabilities	5 258	5 149
Trade payables	20 682	24 616
Income tax payable	2 618	-
Prepayments from customers / deferred rev.	45 145	187 469
Current lease liabilities	1 566	950
Other current liabilities	59 664	136 423
Total current liabilities	129 676	349 458
Total liabilities	134 934	354 607
Total equity and liabilities	451 703	558 084

Nekkar ASA Cash flow statement

Condensed consolidated statement of cash flow

(NOK 1 000)	Unaudited	Audited
	2021	2020
Cash flow from operating activities
Profit (loss) before tax	133 110	71 717
Adjustments for:
Depreciation / impairment	5 089	2 746
Net financial items	1 569	2 909
Income tax paid	-	-245
Changes in:
Prepayments from customers / deferred revenue	-142 324	78 176
Trade receivables	-98 106	1 616
Other receivables and other payables	38 588	-23 054
Net cash flow from operating activities	-62 074	133 866
Cash flow from investment activities
Acquisition and expenditures of fixed/intangible assets	-26 253	-12 083
Disposal of discontinued operation	-98 337	-13 964
Net cash flow from investment activities	-124 590	-26 046
Cash flow from financing activities
Proceeds from issuance of share capital	1 130	2 829
Payment of lease liabilities	-991	-837
Net financial items	-1 569	-2 909
Net cash flow from financing activities	-1 429	-918
Net change in cash and cash equivalents	-188 093	106 902
Cash and cash equivalents at the start of the period	367 850	260 948
Cash and cash equivalents at the end of the period	179 756	367 850

• Operating cash flow of MNOK -62 compared to a positive cash flow of MNOK 134 in 2020
• Significant pre-payments received from customers in 2020 which is converted to revenues in 2021.
• Cash flow from investments of MNOK -125, highly impacted by the settlement of the Cargotec / MacGregor arbitration
• Cash flow from financing of MNOK -1.4 compared to MNOK 0.9 from the previous year
• As per 31 December 2021, Nekkar had drawn MNOK 224 of the guarantee facility
• Net cash position of MNOK 180 as per 31 December 2021, of which MNOK 10 is held as a deposit for FX-derivative exposures in DnB and MNOK 4.0 is restricted deposits related to employee's tax withholding.

Summary Q4 2021 & outlook

Summary Outlook

Strong financial performance in the 4th quarter and full-year

Solid financial position, no interest-bearing debt

Strategic efforts to win more upgrades/service contracts in Shipyard Solutions is yielding results; solid long-term order backlog of NOK 838 million

Progression as planned for Starfish and SkyWalker development projects xx

Lower newbuild order intake in 2021, but Nekkar expects project awards in 2022, both smaller fast track projects and larger long term

H1 traditionally slower than H2

Aquaculture

Continue development and testing of circulation systems and digital platform for monitoring and controlling of Starfish cage

Full-size version planned to be ready for testing in 2022

Renewables

Development of 1:20 SkyWalker model

Develop, manufacture and test of prototype on site: 2023

Digital Solutions

Solid leads on oil & gas SaaS projects through Inteliwell

Nekkar ASA Alternative performance measures

INTRODUCTION TO ALTERNATIVE PERFORMANCE MEASURES (APMs)

Nekkar Group (Nekkar) discloses alternative performance measures in addition to those normally required by IFRS. Nekkar is of the opinion that APMs are providing enhanced insight into the operations and prospects of the company. APMs are used as an integral part of the management and board of directors' key performance measure reporting and controls. Furthermore, securities analysts, investors and other interested parties frequently use such performance measures.

BASIS FOR PREPARATION

This presentation provides financial highlights for the fourth quarter and full-year 2021 for Nekkar ASA. The consolidated financial statements for Q4 2021 have been prepared in accordance with IAS 34 Interim Financial Statements, however the interim accounts do not include all the information required for a full financial statement and should therefore be read in connection with the audited consolidated financial statements of 2020.

The interim financial figures are not audited.

PROFIT MEASURES

EBITDA is short for "earnings before interest, taxes, depreciation and amortisation" in the consolidated income statement.

Nekkar defines "Operational EBITDA" as EBITDA excluding losses/gain on FX contracts not qualifying for hedge accounting.

EBIT is short for "earnings before interest and taxes". EBIT corresponds to "operating profit/loss" in the consolidated income statement.

Margins such as EBITDA and EBIT are used to compare relative profit between periods. The margins are calculated as EBITDA or EBIT divided by revenue.

ORDER INTAKE MEASURES

Order intake and order backlog are presented as APMs as they are indicators of the company's revenue generation and operations in the future.

Order intake includes new signed contracts in the period, in addition to expansion of existing contracts and any cancellations of contracts. For newbuild contracts, the order intake is based on the signed contract value excluding potential options and change orders.

Order backlog represents the estimated value of remaining work for signed contracts.

nekkar.com