Nekkar — Investor Presentation 2023

Nov 28, 2023

Ole Falk Hansen CEO, Nekkar ASA

Nekkar ASA | 28.11.2023

By reading this company presentation (the "Presentation"), or attending any meeting or oral presentation held in relation thereto, you (the "Recipient") agree to be bound by the following terms, conditions and limitations.

The Presentation has been produced by Nekkar ASA (the "Company") for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction. The distribution of this Presentation may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction.

The Recipient acknowledge that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the Company's business. The Company shall not have any liability whatsoever (in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions.

An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. For a description of relevant risk factors we refer to the Company's annual report for 2019, available on the Company's website www.nekkar.com. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those described in this Presentation. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.

This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it operates. Any 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 and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by the forward-looking statements. The Company cannot provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments.

This Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Company shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not assume any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements).

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.

Nekkar in brief

Industrial technology company

Presently a portfolio of established businesses and impact technology ventures within ocean-based industries

World-class engineering expertise

Proven track-record delivering complex and profitable projects Strong in-house innovation and commercialization capabilities

Digitalization of sustainable ocean-based industries

Leveraging software and digitalization to increase efficiency and sustainability for fast-growing industries

Strong industrial ownership and history of value creation

+30 % ownership by Skeiegruppen, which has a solid industrial track record

Revenue 2022 MNOK 388

Order backlog MNOK 747

MNOK 167 in cash No interest–bearing debt

Employees 87

Headquarters Kristiansand, Norway

Stock listed OSE (NKR)

Industrial technology company driving efficiency & sustainability for ocean-based industries

World-class expertise

Scalable software leveraged across the portfolio

In-house innovation & commercialization capabilities

Proven track-record delivering complex and profitable projects

Engaged industrial ownership

Long-term active owner

Buy-to-build strategy

Focus on profitable growth

Strong cash flow to ensure flexibility

Flexible ownership model to maximize value

Individual degree of integration to maximize synergies and value per company

Focus on value-adding activities

Portfolio overview

Companies

The global leading provider of shipyard solutions for safe and efficient ship docking

Intelligent load handling systems, such as cranes and gangways, for renewables, subsea, and aquaculture vessels

Industrial software solutions focused on digitalizing workflows through automation and remote-control systems for drilling and offshore load handling

The disruptive wind turbine service and installation machine for onshore and offshore use

Impact Technology Ventures Associated companies (below 50% ownership)

The leading provider of closed-cage solutions, technical textiles, and software for the aquaculture industry

Nekkar operates in four main business segments, focused on sustainable technologies for ocean-based industries

Portfolio

Business

The portfolio consist of mature, financially solid business, and new impact technology ventures

Nekkar portfolio, overview of maturity level and key focus areas

Highlights: Q3 2023

Financial highlights Operational highlights

• Revenue of MNOK 162, up 105% versus Q3 2022 (79)
• EBITDA1 of MNOK 29, up 71% (17)
• EBITDA margin of 17.8% (22%)
• Strong balance sheet: MNOK 166 in cash, no interestbearing debt, MNOK 200 undrawn credit facility
• Order intake of MNOK 61 (117)
• Healthy order backlog of MNOK 747 at quarter-end (894)

Events subsequent to end-Q3:

• Syncrolift: Order confirmation for 15 MUSD shiplift and transfer system to PT Pal Indonesia

•	Good feedback from all customer partners
• •	Execution of 70t offshore crane as planned Tendering activity for both subsea and renewable vessels
•	SkyWalker development plan for offshore major component replacement (MCR) for

• MNOK 30 contract signed in August
• High tender activity

Impact Technology Ventures

• Transaction finalised for 39% ownership

• Moved Starfish into FiiZK Group

bottom fixed and floating

• Restructuring ongoing as planned

Key financials | Per quarter

1 See updated EBITDA definition on page 22 ⁹

Order intake and backlog | Per quarter

Additional 15 MUSD contract signed after Q3 not included in above charts

1 Does not account for FX fluctuations in existing contracts | 2 Order backlog does not include order intake received and executed in each quarter, i.e. service revenue and spare part deliveries

Syncrolift Q3 update

• Subsequent to the quarter: Order confirmation for 15 MUSD shiplift and transfer system to PT Pal Indonesia
• NOK 30 million contract for advanced ship transfer system to European naval shipyard
• Continued high tender activity within newbuilds and services no major tenders awarded nor lost in this quarter
• Offices established in Australia and India as part of Global Reach strategy

Financials

Market & Sales

• 88% revenue growth vs same quarter last year • Service activity somewhat increased from previous quarter – expecting solid activity for Q4 on services

Operations

• Good progress on ongoing projects
• No newbuild projects completed during Q3
• Improved sourcing through new India office
• Increased customer activity in inhouse Innovation Lab in Vestby

The leading provider of safe & efficient shipyard solutions

Syncrolift awarded USD 15 million newbuild project

• Order confirmation: Delivery of newbuild shiplift and ship transfer system
• Customer: PT Pal Indonesia, a government owned company
• Order value: USD 15 million
• Final contract: Expected to be signed within short time
• Delivery date: Within approximately two years
• Project management and engineering: Syncrolift HQ, Vestby, Norway

High visibility and tendering activity, no major tenders awarded nor lost in this quarter

Additional 15 MUSD contract signed after Q3 not included in above charts

1 Timings are indicative. Execution period and timing of contract awards may be impacted by external factors outside of Nekkar's control. Order backlog per 30 September 2023.

Techano Oceanlift Q3 update

Market & Sales

• Tendering activity for equipment deliveries to both subsea and renewable vessels

Financials

• Second quarter with revenue contribution from Techano Oceanlift

Operations

• Execution of 70t offshore crane to Sefine Shipyard/Agalas as planned • Successful delivery of two offshore cranes to Salmar's Artic Offshore Farming

Intelligent offshore lifting & load handling solutions

Intellilift Q3 update

Market & Sales

• InteliWell pursuing new contracts for automation systems • Tendering for simulators and other drilling controls

Financials

• Primarily driven by Transocean Norge scope

• Transocean Norge scope in finalization - good feedback from customers:

Operations

"Transocean and Hayfin are pleased with the successful installation of the Inteliwell product on the harsh environment semisubmersible, Transocean Norge, and the favorable impact it has had by automating offline standbuilding. The product is now being readied to deploy automated tripping functionality. Transocean's customers, Wintershall Dea and OMV, are also pleased with our progress and have been supportive of the efforts. Intelillift, as a partner in the Inteliwell JV, has been critical in developing the control software necessary to deliver these advances in drilling automation and our success is a direct result of the exceptional efforts from the Intellilift team. We anticipate that Inteliwell will be in use by more customers over the course of the coming year."

Data-driven performance for ocean-based industries

Financial highlights

Profit & Loss, Q3 2023

MNOK	Q3 2023	Q3 2022	YTD 2023	YTD 2022	2022
Revenue	162	79	396	263	388
Syncrolift	149	78	358	260	383
Intellilift	6	5	25	18	22
Techano Oceanlift	9	0	16	0	0
Other incl. eliminations	-2	-5	-2	-15	-18
EBITDA	29	17	77	54	68
EBIT	27	15	71	48	57
Net financials	2	-18	0	-25	-15
Profit (loss) before tax	29	-3	71	23	43
Tax expense	7	-1	16	5	10
Profit (loss) for the period	22	-2	55	18	33
EBITDA margin	17.8 %	22.0 %	19.3 %	20.6 %	17.5 %
Net capitalised development costs1	0	0	8	18	19
Order intake	61	117	236	142	277
Order backlog	747	894	747	894	838
EPS (NOK)	0.20	-0.02	0.49	0.17	0.30

1. Net of received soft-funding

Revenue

• Q3 revenue of MNOK 162, an increase of 105% compared to the same period last year
• YTD revenue of MNOK 396, 51% year-over-year growth

Profitability

• EBITDA margin at 17.8 % in Q3 2023, down from 22.0 % in Q3 2022
• Net financial items driven by gain/losses on FX contracts not qualifying for hedge accounting and Agio
• Profit for the period of MNOK 22 compared with negative MNOK 2 in the same period last year

Sales

• Order intake of MNOK 61 in Q3 2023 and a YTD 2023 total of MNOK 236 compared to MNOK 117 and MNOK 142 in 2022 for the same periods in 2022, respectively
  • Order backlog of MNOK 747 at the end of the third quarter

CAPEX

• Net capitalised development costs (R&D capex) of MNOK 0 in Q3 2023 compared to MNOK 0 in Q3 2022. CAPEX in the period is offset by received softfunding in Q3 2023 of MNOK 7

Balance sheet

Balance sheet, Q3 2023
MNOK	30.09.23	30.06.23	31.12.22
ASSETS
Deferred tax assets	0.0	0.0	7.0
Goodwill	17.1	17.1	16.6
Intangible assets	45.3	66.8	58.0
Right of use assets	14.2	15.1	5.8
Tangible assets	10.1	11.2	8.4
Financial assets	51.5	0.0	0.0
Inventories	11.5	9.8	2.3
Trade receivables	105.3	96.8	106.9
Accrued, non-invoiced production	111.8	50.3	113.6
Other short-term receivables	11.8	11.9	7.1
Bank deposits	166.5	236.1	181.3
Total assets	544.9	514.9	507.1
LIABILITIES
Deferred tax	8.0	0.7	0.5
Lease liabilities	13.9	14.7	4.3
Trade payables	42.2	43.3	45.9
Prepayments from customers/deferred rev.	39.1	9.8	42.4
Other current liabilities	38.1	58.0	63.1
Total equity	403.7	388.3	351.0
Total liabilities & equity	544.9	514.9	507.1
Net working capital	121.1	57.6	78.5

Assets

• Intangible assets decrease of MNOK 21 . 5 in Q 3 2023 , mainly due to the Starfish technology utilized as a contribution in kind in the FiiZK transaction
• MNOK 50 million of Financial assets as of Q 3 2023 are linked to the investment in FiiZK

Working capital

• Q3 end: MNOK 121 . 1 ; Increase from MNOK 57 . 6 per Q 2 2023
• Significant increase in accrued non -invoiced production since Q 2 2023 ; driven by projects approaching invoicing milestones

Cash

• Robust cash position of MNOK 166 at Q 3 end
• Quarter was negatively impacted by the increased working capital and the FiiZK transaction
• Available credit facility ; MNOK 200 provides additional financial flexibility

Net interest -bearing debt and equity

• No interest -bearing debt
• 17 • Solid equity of MNOK 404 , representing a 74 % equity ratio

Cash flow

Cash flow development, Q3 2023

Cash flow

• Operating cash flow for Q3 2023 is negative at MNOK -34.6, driven by an increase of MNOK 63.5 in working capital during the period.
• Cash flow from investments in Q3 2023 is negative at MNOK -25.3 in Q3 2023 mainly related to the MNOK 25 cash contribution in FiiZK
• Cash flow from financing is MNOK -9.3 in the third quarter of 2023, impacted by the share buyback program
• Despite a net cash outflow of MNOK -69.6 in the third quarter 2023, the company maintains a strong cash position of MNOK 166.4 as of September 30, 2023

Nekkar's capital allocation strategy

Portfolio growth

Investments in existing portfolio companies to fuel organic growth while maintaining a strong balance sheet

Share buy-backs

in Q3 2023

Buy-back program initiated

New business

Strategic M&A to strengthen Nekkar's defined business segments

Innovation & R&D

Prudent development of Impact Technology Ventures to validate technology and market potential

Available capital Q3 2023	MNOK
Net cash	166
Undrawn credit facility	200
Total	366

Expecting continued solid operational cash flow going forward

Summary Q3 2023 & outlook

Summary Outlook

Significantly improved revenue and EBITDA compared to Q3 2022

Healthy order backlog of NOK 747 million, order intake of NOK 61 million in quarter. Additional 15 MUSD confirmed subsequent to the quarter.

Continued strong cash position and balance sheet

Investment in FiiZK opens up growth opportunities in the aquaculture industry

 	Backlog provides good visibility for 2023 and 2024 High tendering activity
 xx	Successful implementation of InteliWell's breakthrough award likely to open up further rig market opportunities
 	Execution of backlog for offshore wind crane High tendering activity
	Pursuing O&M within offshore wind for SkyWalker

• Finalize restructuring and organization
• Sales and marketing focus towards digital solutions and closed cage system

Next update: Q4/FY 2023 financial results (Date: TBD) 20z

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 third quarter and YTD September 2023 for Nekkar ASA. The consolidated financial statements for Q3 2023 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 2022.

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.

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.

Historic results with updated EBITDA definition

MNOK	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Revenue	162	132	101	125	79	100	84
EBITDA	29	25	23	14	17	24	12
EBIT	27	22	22	14	15	22	10
Net financials	2	3	-5	10	-18	-6	-1
Profit (loss) before tax	29	25	17	20	-3	16	10
Tax expense	7	5	4	5	-1	3	2
Profit (loss) for the period	22	20	13	15	-2	13	7
EBITDA margin	17.8 %	18.6 %	22.6 %	10.9 %	22.0 %	24.5 %	14.5 %
EPS (NOK)	0.20	0.18	0.11	0.14	-0.02	0.12	0.07

22

Updated EBITDA definition to better reflect operational performance and separate foreign currency effects

• Losses / gains on FX contracts not qualifying for hedge accounting and realized agio are classified as net financials (both previously reported as part of EBITDA)

Excel sheet with details available on Nekkar IR website

nekkar.com