Nekkar — Investor Presentation 2024

Feb 15, 2024

Ole Falk Hansen CEO, Nekkar ASA

Marianne Voreland Ottosen Head of Finance, Nekkar ASA

Nekkar ASA | 15.02.2024

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 2023 MNOK 575

Order backlog MNOK 803

MNOK 194 in cash No interest–bearing debt

Employees 90

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: Q4 2023

• Revenue of MNOK 179, up 43% versus Q4 2022 (125)
• EBITDA of MNOK 32, up 136% (14)
• EBITDA margin of 18.0% (10.9%)
• EBIT of MNOK 30, up 233% (9)
• Strong balance sheet: MNOK 194 in cash, no interest-bearing debt, MNOK 200 undrawn credit facility
• Order intake of MNOK 242 (105)
• Healthy order backlog of MNOK 803 at quarter-end (824)

Events subsequent to Q4:

• Syncrolift: MUSD 5 engineering contract with ASMAR including MUSD 24 option for newbuild shiplift and transfer system

Financial highlights Operational highlights

Impact Technology Ventures

• Solid project execution • Service revenue increasing ~33% y-o-y
  • MUSD 15 contract: PT Pal Indonesia for newbuild shiplift and transfer system
  • Transocean Norge scope in finalization
  • Good feedback from all customer partners
  • MEUR 6.5 offshore crane contract for newbuild subsea/survey vessel
• Nekkar-led consortium awarded MNOK 75 grant to develop SkyWalker offshore major component replacement tool
  • Closed cage business unit testing solutions and preparing for customer contracts
  • Recruitment of new CEO Jan Erik Kvingedal

Key financials | Per quarter

Key financials | Per year

1 Unaudited

Order intake and backlog | Per quarter

Not included in above charts:

Asmar - MUSD 5 engineering design contract and MUSD 24 option (LoA in Q1/24)

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 Q4 update

Market & Sales

• Order confirmation for MUSD 15 shiplift and transfer system to PT Pal Indonesia
• Letter of award for MUSD 5 basic engineering design contract from Asmar Chile and MUSD 24 option (LoA in Q1/24)
• Continued high tendering activity within newbuilds and services

Financials

• 26% revenue growth vs same quarter last year
• Service activity increasing steadily 33% year over year growth
• Stability in EBITDA margins 25% for 2023

Operations

• Good progress on ongoing projects
• Commissioning of Cochin shiplift in the quarter

The leading provider of safe & efficient shipyard solutions

Recent newbuild awards

Pt Pal, Indonesia (Q4/23)

• Order confirmation: Delivery of newbuild shiplift and ship transfer system
• Value: USD 15 million
• Delivery date: Within approximately two years
• Project management and engineering: Syncrolift HQ, Vestby, Norway

ASMAR, Chile (Q1/24)

• Letter of Award: Basic engineering design of 5,000 t shiplift and ship transfer system
• Value: USD 5 million
• Delivery: End-2024
• Contract option: Equipment delivery of shiplift and ship transfer system (including option for equipment supply: USD 24 million)

Contract wins in past year emphasise Syncrolift's global reputation and competitiveness

Total secured contract value: MNOK∼300

Dubai Maritime City United Arab Emirates #1 Ship transfer system Undisclosed naval shipyard Europe Ship transfer system

Cochin Shipyard India

Reactivation of previously paused shiplift project

Song Thu Shipyard Vietnam

Extension of shiplift and ship transfer system previously supplied by Syncrolift

Pt Pal Indonesia Indonesia

Newbuild shiplift and ship transfer system

Chile

ASMAR1

Engineering design contract Option: Shiplift and ship transfer system

Service revenues continue to grow

Service revenues Service as % of total revenues

High visibility and tendering activity, no major tenders lost in this quarter

Asmar MUSD 5 engineering design contract and MUSD 24 option (LoA in Q1/24)

Running provision of service, maintenance, and spare parts

Techano Oceanlift | Q4 update

Market & Sales • Awarded MEUR 6.5 million contract to deliver offshore crane to newbuild subsea IMR/survey vessel • Developing new series of offshore/subsea cranes to meet increased demand for subsea operations and construction - electrified – enabling it to deliver regenerated power back to the vessel

• Financials
• Significant growth in revenues compared to previous quarters as execution is progressing
• Soft margins as market entry projects required to establish customers' trust in the company's solutions

Operations

• Execution of 70t offshore crane to Sefine Shipyard

• Engineering commenced on 150-tonnes crane for Sefine Shipyard

Intelligent offshore lifting & load handling solutions

Offshore crane for Agalas

• Shipyard: Sefine Shipyard
• Contract value: MEUR 6.5 million
• Capabilities:
  • 150 tonnes lifting capacity
  • Active heave-compensated winch
  • 3,000 m wire for subsea construction
• Control system: Intellilift
• Crane delivery: 2025

Intellilift | Q4 update

Market & Sales

• InteliWell pursuing new contracts for automation systems preparing a trial in H1 for a major oil company in the Gulf of Mexico
• Tendering for simulators and other drilling controls
• Nekkar related contract awards for Techano crane and Syncrolift projects

Financials

• Primarily driven by Transocean Norge scope

Operations

• Transocean Norge scope in finalization

Data-driven performance for ocean-based industries

Impact Technology Ventures | Q4 update

SkyWalker: Solving major bottlenecks for offshore wind

Major component replacement on bottom fixed and floating offshore wind

Installation & servicing wind turbines onshore

Installation of tower sections for bottom fixed offshore

Installation of floating turbines on floater at quay

Primary focus

Nekkar-led consortium awarded MNOK 75 grant

• Consortium to develop a safe and efficient solution for main component replacement (MCR) on offshore wind turbines
• Objective: Reduce time, cost, and loss of revenue due to downtime
• Develop: Remote-controlled, self-hoisting lifting equipment to replace main components such as gearbox, blade, etc. while on-site offshore
• Verify and test: SkyWalker MCR solution for both floating and bottom-fixed turbines across OEMs, for both newbuilds and installed base
• Total project budget for all partners: MNOK 140, of which MNOK 75 financed through Green Platform Initiative grant
• Timeline: Q1 2024 Q4 2026
• Nekkar focus: finalize partner agreements and project financing

FiiZK | Q4 Update

Q4 focus on finalizing restructuring that took place before Nekkar's entry into FiiZK

Relevant IP secured from former FiiZK entities and is now part of the new FiiZK Group

Following Nekkar's investment, FiiZK has transformed its organization and focused its efforts into three business units; Closed systems, Technical textiles, and Digital – each with its own management

In Q4 FiiZK had revenues of 36 MNOK, and a net profit of -19 MNOK1

A new Group CEO, Jan Erik Kvingedal, has been recruited. Jan Erik provides extensive operational experience from the Aquaculture industry

FiiZK | Unique market positions within aquaculture

Nekkar financial highlights

Profit & Loss, Q4 2023
MNOK	Q4 2023	Q4 2022	2023	2022
Revenue	179	125	575	388
Syncrolift	155	123	515	383
Intellilift	9	7	34	23
Techano Oceanlift	15	0	30	0
Other incl. eliminations	0	-5	-5	-18
EBITDA	32	14	109	68
EBIT	30	9	101	57
Net finance	8	11	8	-14
Profit (loss) before tax	38	20	109	43
Income tax expense	10	5	26	10
Profit (loss) for the period	28	15	83	33
EBITDA margin	18.0%	10.9%	18.9%	17.5%
Net capitalized development costs1	6	1	15	19
Order intake	242	105	478	277
Order backlog	803	824	803	824
EPS (NOK)	0.27	0.14	0.78	0.30

1 Net of received funding

Revenue

• Q4 revenue of MNOK 179, an increase of 43% compared to the same period last year
• YTD revenue of MNOK 575, 48% year-over-year growth

Profitability

• EBITDA margin at 18.0 % in Q4 2023, up from 10.9 % in Q4 2022
• Q4 Net financial items includes Nekkar's share of FiiZK's quarter loss, totaling MNOK 7. Net financial items is also driven by gains on FX contracts not qualifying for hedge accounting and interest income.
• Profit for the period of MNOK 28 compared with MNOK 15 in the same period last year

Sales

• Order intake of MNOK 242 in Q4 2023 and a YTD 2023 total of MNOK 478 compared to MNOK 105 and MNOK 277 in 2022 for the same periods in 2022, respectively
  • Order backlog of MNOK 803 at the end of the fourth quarter

Key financials | Per company

MNOK	2023	2022
Revenues	515	383
EBITDA	132	95
EBITDA %	26%	25%

MNOK	2023	2022
Revenues	34	22
EBITDA	6	4
EBITDA %	18%	18%

MNOK	2023	2022
Revenues	30	-
EBITDA	1	-
EBITDA %	4%	-

Balance sheet

Balance sheet, Q4 2023

MNOK	31.12.23	30.09.23	31.12.22
ASSETS
Intangible assets and goodwill	68.0	62.3	75.0
Deferred tax assets	0.0	0.0	7.0
Right of use assets	13.5	14.5	5.1
Tangible assets	9.2	9.7	9.1
Financial assets	48.9	51.6	0.2
Inventory	11.9	11.3	2.1
Accrued non invoiced production	144.0	112.0	115.8
Trade receivables	85.3	105.3	105.1
Other short-term receivables	4.3	11.7	6.4
Bank deposits	194.2	166.5	181.3
Total assets	579.1	544.9	507.1
LIABILITIES
Deferred tax liabilities	17.9	7.9	0.5
Lease liabilities	13.4	14.3	5.0
Trade payables	71.7	42.3	47.2
Prepayments from customers	39.0	39.1	42.4
Derivative financial instruments1	-19.0	3.0	7.2
Other current liabilities	29.3	34.6	53.6
Total equity	427.0	403.7	351.1
Total liabilities & equity	579.1	544.9	507.1
Net working capital	124.4	121.1	78.5

1 Positive market value of derivative financial instruments as of year end 2023

Assets

• MNOK 46.7 million of Financial assets as of Q4 2023 are linked to the investment in FiiZK

Working capital

• Stable working capital at Q4 end compared with Q3
• Increase in accrued non-invoiced production since Q3 2023; driven by projects approaching invoicing milestones

Cash

• Robust cash position of MNOK 194 at year end
• Quarter was positively impacted by solid EBITDA, partly offset by CAPEX and buy-back program
• Available credit facility; MNOK 200 provides additional financial flexibility

Net interest-bearing debt and equity

• No interest-bearing debt
• Solid equity of MNOK 427, representing a 74 % equity ratio

Cash flow

Cash flow development, Q4 2023

Cash flow

• Operating cash flow for Q4 2023 is positive at MNOK 29.7, driven by a solid EBITDA in the period.
• Cash flow from investments is negative at MNOK 4.8 in Q4 2023 and is mainly related to CAPEX
• Cash flow from financing is MNOK 2.7 in the fourth quarter of 2023, positively impacted by financial income and offset by the share buyback program
• In total a net cash inflow of MNOK 27.6 in the fourth quarter 2023. The company maintains a strong cash position of MNOK 194.1 at the end of 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 Q4 2023	MNOK
Net cash	194
Undrawn credit facility	200
Total	394
Expecting continued solid operational	cash flow

going forward

Share buy-back program Q3 and Q4	31.12.23
Number of shares purchased	1,392,333
Average price (NOK)	7.91
Total transaction value	11,008,702

Summary Q4 2023 & outlook

Summary Outlook

Significant revenue and EBITDA growth, versus both Q4 2022 and full-year 2022 – all time high revenue

Healthy order backlog of NOK 803 million, order intake of NOK 242 million in quarter. Additional 5+8 MUSD confirmed subsequent to the quarter (+ option 24 MUSD)

Continued strong cash position and balance sheet

Several commercial awards in the quarter – Syncrolift, Techano and promising development for SkyWalker

	 Backlog provides good visibility for 2024 and 2025  High tendering activity
xx	 Successful implementation of InteliWell's breakthrough award likely to open up further rig market opportunities
	 Execution of backlog for two offshore cranes  High tendering activity
	 Pursuing O&M within offshore wind for SkyWalker
	 Sales and marketing focus towards digital solutions and closed cage system

Next update: Q1 2024 financial results, 16 May 2024 29z

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 2023 for Nekkar ASA. The consolidated financial statements for Q4 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 2023.

The 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.

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