Hexagon Composites : 2Q 2020 Presentation

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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 forward-looking 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 12 August 2020, 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.

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Agenda

• Company update & market overview
• Summary Group highlights and financials
• Outlook
• Q & A
• Appendix: Segment financials & other material

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COVID- 19 Impact

• As of August 11, 2020
• • 14 Cases YTD
  • • 3 recovering
    • 11 recovered
    • 0 work related
• Business impact
• • No major supplier disruptions
  • Several segments impacted in Q2, but high market activity points towards recovery from Q3

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COVID-19: Moving from containment to recovery

"Governments have a once-in-a-

lifetime opportunity to reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy

future."

Dr. Fatih Birol,

IEA Executive Director

IEA Sustainable Recovery Plan

Over 3 years:

• Invest USD 1 trillion annually
• Produce 1.1 percent global economic growth annually
• Create 9 million jobs each year
• Reduce annual energy emissions by 4.5 billion tons

Funding the shift to clean energy

• EU Recovery plan for Europe
• US Department of Energy's - H2@Scale
• Germany allocated $10 billion of its recovery budget to "green hydrogen"
• Italy has implemented an "ecobonus" program
• France has pledged €15bn of "new" green funding
• The California Air Resources Board (CARB) has adopted a first-in-the-worldrule
• China's 'new infrastructure' concept
• Australia has adopted eight future of hydrogen international standards
• Korea's "New Deal" and "Hydrogen Law"

Hexagon is well positioned to capture the opportunities

g-mobility	e-mobility
LOW EMISSION	ZERO EMISSON

Compressed		Biogas / Renewable		Liquefied		Hybrids		Battery Electric		Hydrogen
Natural Gas		natural gas		petroleum gas

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Hexagon is well positioned to capture the opportunities

g-mobility	e-mobility
LOW EMISSION	ZERO EMISSON

Compressed		Biogas / Renewable		Liquefied		Hybrids		Battery Electric		Hydrogen
Natural Gas		natural gas		petroleum gas

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Multifaceted approach to low-carbon/no-carbon fuel adoption

"Trucking and logistics

companies are incrementally

adopting clean fuel

technologies that reduce

tailpipe pollutants and

greenhouse gas emissions."

Mike Roeth, Executive director for the

North American Council for Freight

Efficiency (NACFE)

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G-mobility is in the fast lane

More than

23 million Natural Gas Vehicles on roads worldwide

today

In 2019, 25% of UPS natural gas deployment was renewable - by next year, 50%

Cummins	The Climate Pledge -
commits to	commitment by
reducing	Amazon to have net
emissions from	zero carbon across
new products by	their business by
25%	2040

*Sources: The Natural & Bio Gas Vehicle Association in America (NGVAmerica) and Freightwaves.com

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Hexagon is well positioned to capture the opportunities

g-mobility	e-mobility
LOW EMISSION	ZERO EMISSON

Compressed		Biogas / Renewable		Liquefied		Hybrids		Battery Electric		Hydrogen
Natural Gas		natural gas		petroleum gas

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Global leader in Type 4 cylinder technology

Light-weight	High-	Durable	Non-
pressure	corrosive

We deliver storage systems and e-drive integration

eAxle	Battery system

Hydrogen system

System

integration

Complete Vehicle Integration

Software

Other vehicle systems

From

vision to

reality

Part of Toyota's fuel cell heavy- duty truck proof-of- concept

Several ongoing H2 bus projects

Delivered 700 bar

tanks to

Mercedes GLC-

FCELL

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Highest capacity distribution module worldwide

1st hydrogen

vessel in

the U.S

Photo: Switch Marine

World's 1st

hydrogen

powered regional

train

1st hydrogen

refueling station

in Western

Canada

In the push to decarbonize, hydrogen is ready for scale

Average CO2

emission need to decrease by 70% per passenger km

Hydrogen powered FCEV make up 20% of total vehicle fleet

Hydrogen

locomotives

replace 20% of

diesel

locomotives

* Targets by 2050	24
Source: «Path to hydrogen competitivness. A cost perspective». Hydrogen Council 01-20

Strong growth in FCEVs and hydrogen infrastructure expected in China over the next decade

750,000	25%
FCEVs in 2030	of new car sales
	to be zero-
	emissions by
	2025

3,000

H2 refueling

stations in 2030

EU H2 Strategy: Aims to be world leading region in Hydrogen

6GW of renewable	H2 integrated into	Hydrogen
hydrogen	energy system.	deployed at a
electrolysers	40GW of renewable	large scale
	H2	across all hard-
1 million tons of		to-decarbonize
renewable H2	10 million tons	sectors
	renewable H2.
Today - 2024	2025-2030	2030-

3 June:

Hexagon Purus

awarded contract by Toyota for hydrogen powered electric heavy-duty trucks

18 July:

Hexagon Purus

receives first contract to provide hydrogen transport modules in the US

21 July:

Hexagon granted funding by the U.S Department of Energy

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29 July:

Hexagon Purus to

produce

high-pressure

cylinders for a major

new aerospace

customer

Photo: iStockphoto. For illustration purposes only

Hexagon Purus is well positioned to benefit from the growth of zero-emission mobility

Leading		Trusted
product		customer
competence		relationships
Global leader in Type		Established and
4 pressure vessel		successful
technology		collaborations
		with major OEMs

Established		Extensive
operational		track
footprint		record
Engineering centers		Decades of
and serial production		experience in
facilities in EU and N.		pressure vessels and
America		clean fuel systems

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FINANCIAL UPDATE

IMPACTS OF COVID-19

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COVID - 19 Impacts

Company position update

• Deeper financial impacts in Q2
• • Reduced Transit bus volumes in North America especially and Europe
  • Mobile Pipeline being project based also impacted
  • LPG so far robust though activities in Bangladesh are delayed
• Difficult to assess or predict with precision the future broad effects of COVID-19 and the actual ongoing impact will depend on many factors beyond a company's control and knowledge
• • Can expect overall negative impact to full year results in 2020
  • Do not expect any material impairments within balance sheet
• Liquidity is good and Hexagon remains financially robust. As of Q2 we have:
• • Undrawn committed facilities of NOK 655m (includes NOK 400m of acquisition facilities)
  • NOK 128m in cash
  • Adjusted Net Interest-bearing debt of NOK 1.32bn* = ~16% of market cap*
• Flexible arrangements with our principal financier
• • Provides headroom for continual investment in e-mobility through challenging 2020
• We have access to relevant government stimulus programs in Norway, Germany and USA

* As of Aug 7th, 2020

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2nd

QUARTER 2020

FINANCIALS

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Highlights from Q2 2020

• Lower revenues and EBITDA for Agility due to impacts of COVID-19
• • Major new customer secured in logistics sector
• Weak Mobile Pipeline volumes impacted by COVID-19
• • USD 7.3m order received in quarter
• Low Purus CNG Light-Duty Vehicle volumes
• • Mainly due to planned production relocation of major customer
• Heated Purus e-mobility market
• • Awarded contract on latest Toyota fuel cell electric truck
  • Signed term sheet with CIMC Enric for Chinese market entry
  • Strong international focus on hydrogen green-technology
• Strong LPG sales volumes
• • Sales to Europe, Middle East, Africa and South America

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Financial highlights Q2 2020

Hexagon Composites Group

Revenue
NOKm
	-199
882	(-23%)
	683
Q2'19	Q2'20

• C-19impacts Group revenues negatively
• LPG revenues remained strong

EBITDA

NOKm

62

(7%)

-43.0

19

(3%)

Q2'19Q2'20

• Temporary C-19 driven top-line weakness mitigated significantly by cost control
• e-mobilityramp-up effect NOK -17m(-30m)

Profit after tax

NOKm
	-50
	(+185%)
-27
	-77
Q2'19	Q2'20

• Y-o-Yeffects of depreciation NOK -6m; mark to market charges on swap NOK +19m; interest NOK +1m; FX NOK -25m; tax NOK +4m

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H1 2020 | e-mobility & g-mobility financials*, NOKm

Solid base with profitable g-mobility business, supports major future growth in e-mobility

e-mobility	PURUS HYDROGEN
		REVENUE	EBITDA
ZERO EMISSION	PURUS BEV
2		174M	-68M
PURUS MASTERWORKS

PURUS CNG LDV

-39% MARGIN

H1 GROUP

HEXAGON HAS SOLUTIONS ACROSS THE ENTIRE CLEAN

FUELS SPECTRUM

g-mobility		AGILITY
LOW EMISSION				REVENUE	EBITDA
		MOBILE PIPELINE		1,381M	126M
				9% MARGIN
		RAGASCO

REVENUE: 1,508M

H1 GROUP EBITDA: 56M (4%)

(AFTER

ELIMINATIONS/OTHER)

* On aggregation of segments basis after internal reorganisations effective 1.1.20

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Balance sheet | Q2 2020 vs Q1 2020

Adjusted* Net Interest Bearing Debt NOK 1,316m (Unadjusted 1,380m) & Equity Ratio 43%

Assets				Liabilities & Equity
NOKm				NOKm
6 000	5 498			6 000	5 498
5 000	115	5 161		5 000	856	5 161
624	128	CASH AND CASH
		526	EQUIVALENT			771
		NOK 128m (NOK 115m)
	881			405
				363
4 000	863		4 000	325
		325
3 000				3 000	1 539	1 508
2 000	3 878	3 644		2 000
			Cash
1 000			Receivables	1 000	2 373	2 194
		Inventory
			Fixed assets
0	31.03.2020	30.06.2020		0	31.03.2020	30.06.2020
				X

ADJ.* NET INTEREST

BEARING DEBT:

NOK 1, 316m (1,251m)

EQUITY RATIO:

43% (43%)

Other current liabilities Other long term liabilities

Lease liabilities from right of use assets Interest bearing debt

Equity

Strong balance sheet

*The bond was raised in NOK and remains ultimately an obligation to be settled in NOK, however the company entered into a currency swap hedging arrangement effectively converting the	38
instrument to USD and is therefore accounted for as USD and subject to non-cash FX translation movements; such movements on the bond in total were NOK 64 million in the period

OUTLOOK

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Agility Fuel Solutions

Medium and Heavy-Duty Vehicles

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Increased activity in Heavy and Medium-Dutyg-mobility

• Heavy-DutyTruck business picks up in second- half of 2020
• • Additional orders expected in Q3
  • Large number of deliveries to major logistics supplier to be made in Q3 - and additional orders received
• European bus business expected to become stronger in second half of year - mainly due to ramp up after COVID-19
• • Slower year expected in transit bus sector for North America

Source: Amazon

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Hexagon Purus

e-mobility

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Distribution

• Signed first contract for hydrogen transport modules in the US
• • X-STOREtransport modules to major US H2 fuel supplier and refueling station operator
  • Estimated value: USD 4.8 million (approx. NOK 45 million)
  • Includes additional purchase options - if exercised, will bring the total value to approx. USD 7 million (approx. NOK 65 million)

Example of the X-STORE transport module where the hydrogen tanks are stored

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Battery Electric Vehicle Systems in demand

• Toyota Motor North America doubles order for hydrogen systems for its prototype hydrogen- powered heavy-duty fuel cell electric trucks
• • Increased from 1 million to 1.9 million USD
• Battery electric drivetrain deliveries continue to

major OEMs in Q3:

- Daimler Innovation Fleet successfully exceeded 300,000 miles

- Electric HINO XL7 prototype on the road

Freightliner announced that its eCascadias and eM2 trucks have accumulated more than 300,000 miles in real-world operation

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CNG Light-Duty Vehicles

• VW production line ramp up starting in Q3 as expected
• • Supply levels returning to normal with call-offs to end of year
  • Run rate in 2H of the year estimated somewhat lower than 2019 level (due to COVID-19)

For illustration purposes. Credit:Volkswagen AG

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Diversified hydrogen project pipeline

LIGHT-DUTY	MEDIUM & HEAVY	DISTRIBUTION	GROUND STORAGE,	OTHER
VEHICLES	DUTY		MOBILE REFUELING,
			MARITIME & RAIL

More than 50 projects

High number of hydrogen development projects across all segments

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Hexagon Mobile Pipeline

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Focusing on opportunities in new segments

• Continued COVID-19 and oil related impacts expected in Q3
• • Low activity in onshore oil and gas sector in North America and general risk of project delays due to capital constraints
• New opportunities with MicroCNG
• • Awarded X-Store module order for new segment in Indonesia
• Healthy development expected in mobile refueling business
• • Awarded SmartStore order with new customer, additional orders expected
• Additional orders for Virtual interconnect expected in Q3
  - Titan53 deliveries scheduled for Q4
• Positive trend for power generation business in Latin American market

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Hexagon Ragasco

LPG

LPG demand for leisure use increases

• Significant increase in orders from markets where LPG is used for leisure purposes - mainly Northern and Central Europe
• Expect delays in orders for domestic use to countries significantly impacted by pandemic
• Orders for cylinders from new market in the Caribbean expected

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Outlook summary

1. COVID-19related disruption may have a negative impact to earnings for Q3 2020
   Barring any unforeseen COVID-19 developments, we expect a stronger market outlook in the second half of the year
2. Strong liquidity and business resilience
3. Moving from containment to recovery - e-mobilityand g-mobilitydrivers are visibly strengthened, and Hexagon is well positioned to capture these opportunities

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APPENDIX

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Q2 2020 and YTD 2020 Group income statement

NOK MILLION
Revenue
Operating expenses
Earn-out obligation reversal /	gain on transaction
EBITDA
Depreciation on tangibles
Amortisation and impairment
EBIT
Share of profit/(loss) from associates
Other financial items (net)
Profit/(loss) before tax
Tax expense
Profit/(loss) after tax

	QUARTER		YEAR TO DATE	1
Q2 2020	Q2 2019	Variance	YTD 2020	YTD 2019	Variance
682,9	882,1	(199,2)	1 508,0	1 703,9		(195,9)
(664,1)	(820,2)	156,1	(1 452,5)	(1 561,0)		108,6
0,0	0,0	0,0	0,0	69,4		(69,4)
18,8	62,0	(43,1)	55,6	212,3		(156,7)
(48,4)	(44,8)	(3,6)	(94,4)	(87,6)		(6,8)
(16,4)	(14,3)	(2,1)	(31,1)	(29,5)		(1,6)
(45,9)	2,9	(48,9)	(69,9)	95,2		(165,1)
(0,1)	(0,3)	0,1	(0,6)	(0,7)		0,1
(39,0)	(34,0)	(5,1)	66,5	(59,7)		126,2
(85,1)	(31,3)	(53,8)	(4,0)	34,8		(38,7)
8,0	4,0	3,9	(11,1)	6,3		(17,4)
(77,1)	(27,3)	(49,9)	(15,0)	41,1		(56,2)

FULL YEAR FY 2019

3 416,1 (3 126,0)

69,6

359,7

(182,2)

(57,4)

120,1

(0,7)

(8,1)

111,2

(3,8)

107,5

EBITDA %

EBIT %

Profit/(loss) after tax %

2,8 %	7,0 %	3,7 %	12,5 %	10,5 %
-6,7 %	0,3 %	-4,6 %	5,6 %	3,5 %
-11,3 %	-3,1 %	-1,0 %	2,4 %	3,1 %

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Revenue by segment Q2 2020 | BeforeGroup eliminations*

Revenue Q2'19 (Proforma after internal reorganizations**)	Revenue Q2'20
NOKm, before group eliminations	NOKm, before group eliminations

175	174

NOK

121	931*	458

NOK

723*

	56
	million
177	84

million

409

Agility Fuel Solutions (Heavy and Medium-Duty)	Agility Fuel Solutions (Heavy and Medium-Duty)
Hexagon Purus (e-mobility & CNG Light-Duty Vehicles)	Hexagon Purus (e-mobility & CNG Light-Duty Vehicles)
Hexagon Mobile Pipeline & Other	Hexagon Mobile Pipeline® & Other
Hexagon Ragasco LPG	Hexagon Ragasco LPG

**Preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units	55

Segment financial highlights Q2 2020 | (1/3)

Agility Fuel Solutions*

Hexagon Purus* (e-mobility, incl. MW & CNG LDV)

NOKm
	Revenue
	-49
458	(-11%)
409
Q2'19	Q2'20

	EBITDA
	-22
46	(-48%)
(10%)
	24
	(6%)
Q2'19	Q2'20

NOKm
	Revenue
	-93
177	(-52%)
	84
Q2'19	Q2'20

	EBITDA
	-21
	(+211%)
-10
(-6%)
	-31
	(-36%)
Q2'19	Q2'20

• Positive FX movements partly offsetting YoY decline
• Medium-Duty(UPS contract) continues to contribute positively, albeit quarter is overshadowed by significant COVID-19 impacts in Transit segment

• Lower call-offs from VW Group following relocation of CNG vehicle assembly line coupled with COVID-19 shutdowns hit revenues in the CNG LDV segment
• Higher proportion of commercial hydrogen distribution revenues in Q2'20
• Please see separate CNG and e-mobility figures on next slide

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported	56

Segment financial highlights Q2 2020 | (2/3)

Hexagon Purus CNG-LDV*

NOKm

Revenues

EBITDA

129	124
					100
								39		41
22		22
	14
				-2
													-14
	Q2'19		Q3'19			Q4'19		Q1'20			Q2'20

• Q2'20 revenues for CNG LDV was adversely impacted by lower calls-off from VW Group due to relocation of its CNG vehicle assembly line, in addition to effects from COVID-19

Hexagon Purus Hydrogen*

NOKm

Revenues
EBITDA
		71
47	57	51
	43

-32	-21	-29	-35	-16
Q2'19	Q3'19	Q4'19	Q1'20	Q2'20

• Higher proportion of commercial hydrogen distribution revenues lifts profitability somewhat
• Furloughing and other cost initiatives implemented in the quarter

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported	57

Segment financial highlights Q2 2020 | (3/3)

Hexagon Mobile Pipeline & Other*

Hexagon Ragasco (LPG)

NOKm

Revenue

EBITDA

			-22
	-65	1	(N/A)
	(-54%)
121		(1%)
	56
			-21
			(-37%)
Q2'19	Q2'20	Q2'19	Q2'20

NOKm
	Revenue
	-1
	(-1%)
175	174
Q2'19	Q2'20

	EBITDA
	6
	(+19%)
	41
35	(24%)
(20%)
Q1'19	Q1'20

• Macro impacts from COVID-19 & onshore US oil & gas slowdown had negative impact to sales of new modules in
  Q2'20
• FX impacts revenue but marginally hits EBITDA, which distorts margin

• Favourable FX movements in the quarter
• Solid YoY margin accretion on unchanged revenue driven by geographic market mix

*2019: preliminary unaudited pro-forma figures after adjusting for reorganizations of e-mobility business units; 2020: segment reported	58

Group cash Q2 2020

Stripping out effects of FX translations

Cash
NOKm												+13.0
140																										128
							24
120			115					-46																	13
100										-9
80
													-33									88
60
40																	-5
																			-19
20
0
	Start of Q2'20 Underlying Ops		Operating		From		Capex (net of		Product		Interest paid		Drawings			All FX		End of Q2'20
											working capital		Operations		FX effects)		Development				from Treasury		translations
											changes (net		excluding															identified
											of FX effects)		OPWC

Drawing on liquidity to counter negative impacts of COVID-19

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