Nel ASA

Earnings Release • Nov 16, 2016

Nel ASA: Third quarter 2016 results

Nel ASA: Third quarter 2016 results

(Oslo, 16 November 2016) Nel ASA (Nel) reported revenues in the third quarter of

NOK 24.4 million, sequentially up from NOK 13.5 million, with a solid order

backlog going into 2017. Nel is preparing for market entry in California, and

announces today a Letter of Intent (LoI) to establish a joint-venture (JV) with

a leading global solar company. The JV will build and operate the first solar

-driven hydrogen production plant in the US.

"Nel secured several important H2Station- and electrolyser contracts in the

third quarter, contributing to a strong project development pipeline and a good

backlog for 2017. We also announced the new Nel C-range containerised turn-key

electrolyser in the period, with the first sales contract already signed, and

are also preparing for the upcoming market entry in California", says Jon Andrè

Løkke, Chief Executive Officer of Nel.

In the third quarter of 2016, Nel reported revenues of NOK 24.4 million (Q3'15:

MNOK 30.8), with an EBITDA of NOK -10.2 million (2.3), impacted by the planned

high activity level within business development in new markets, investments, and

preparation for production ramp-up. Nel's cash balance at the end of the third

quarter was NOK 223.3 million, in line with the third quarter of 2015.

The California Energy Commission has doubled the Grant Funding Opportunity (GFO)

for 2016. The Commission's target is to reach 100 hydrogen fueling stations by

2020, of which half have already received funding. The 2016 GFO award is

expected to cover 20 stations to be developed in 2017.

"To ensure a successful market entry in California, Nel has both a direct and

indirect market penetration strategy. We have established the US subsidiary

Everfuel to apply directly for funding and to ensure feet-on-the-ground. In

addition, we have offered our leading H2Station technology to other GFO

applicants and have received confirmation that several operators have included

our equipment into their proposals. We are looking forward to the results of

this allocation, which is expected to take place during the fourth quarter of

2016", says Løkke.

Nel today also announced a Letter of Intent (LoI) to establish a joint-venture

(JV) with a leading global solar company. The JV will build and operate the

first solar-driven hydrogen production plant in the US. This project is the

first step towards large-scale commercial renewable hydrogen production to meet

the expected demand for renewable hydrogen in California and the US.

"We are excited to enter into this agreement for the development of the first

renewable solar-to-hydrogen production plant in the US. Given the requirement

from the government in California for 33 percent renewable hydrogen in the

transport sector, we are confident that this will become an attractive market

for our joint technology solutions," says Jon André Løkke.

The agreement is expected to be finalised before the end of 2016 and the JV aims

to begin production and delivery of renewable hydrogen during the second half of

2017. The parties are already exploring additional sites in California for

renewable hydrogen production at a larger scale.

The presentation will be broadcast live at www.nel-hydrogen.com/webcast and can

also be viewed at http://webtv.hegnar.no/presentation.php?webcastId=40094243

The third quarter 2016 report and presentation will be made available through

www.newsweb.no and www.nel-hydrogen.com.

ENDS

Further information:

Jon André Løkke, CEO, +47 9074 4949

Bent Skisaker, CFO, +47 4682 1693

About Nel ASA | www.nelhydrogen.com

Nel is a global, dedicated hydrogen company, delivering optimal solutions to

produce, store and distribute hydrogen from renewable energy. We serve

industries, energy and gas companies with leading hydrogen technology. Since its

foundation in 1927, Nel has a proud history of development and continual

improvement of hydrogen plants. Our hydrogen solutions cover the entire value

chain from hydrogen production technologies to manufacturing of hydrogen fueling

stations, providing all fuel cell electric vehicles with the same fast fueling

and long range as conventional vehicles today.