Nexam Chemical () : Interim Report for Q2, January to June 2021

Interim Report

January - June 2021

"Nexam Chemical continues its growth journey and closes yet another strong quarter. We increase sales with 64 per cent compared to corresponding quarter 2020, meaning that we reach net sales of almost 60 million kronor this period"

- Johan Arvidsson, CEO

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-June 2021

1

Second quarter at a glance

Best quarter so far with strong

and profitable growth

Significant events:

• Continued high growth, +64% compared to the corresponding quarter in 2020.
• Both Performance Chemical, + 114%, and Performance Masterbatch, + 27%, are growing compared to the corre- sponding quarter in 2020.
• Important customer orders in the fiber and recycling area.
• Continued strong order intake during the quarter, indicates a strong continuation of 2021.
• During the quarter, due diligence was carried out by a potential acquisition candidate. The acquisition was never completed, but the legal costs of SEK 1,308 are charged to the result but are excluded from the adjusted EBITDA.

Financials:

• Net sales during quarter amounted to SEK 59,664,000 (36,379,000).
• Adjusted profit before depreciation (Adj EBITDA) for the quarter was SEK 3,265,000 (178,000).
• The operating profit before depreciation (EBITDA) for the quarter was SEK 1,957,000 (178,000).
• In comparison to the beginning of the year, cash and cash equivalents amounted to SEK 49,767,000 (29,791,000) excluding an unused credit facility of SEK 10,000,000.
• Cash flow from the operating activities during the quarter amounted to SEK - 7,471,000 (- 1,434,000).
• Earnings per share before and after dilution amounted to SEK -0.02 (- 0.05) for the quarter.

Key Figures for the Group

	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Full year
(SEK thousand)	2021	2020	2021	2020	2020
Net sales (SEK thousand)	59 664	36 379	112 170	78 083	165 830
Adjusted operating profit/loss before deprecia-
tion (EBITDA) (SEK thousand)	3 265	178	5 356	2 462	6 324
Operating profit/loss before depreciation
(EBITDA) (SEK thousand)	1 957	178	4 048	2 462	4 908
Cash and cash equivalents (SEK thousand)	49 767	50 657	49 767	50 657	29 791
Cash flow from operations (SEK thousand)	-7 471	-1 474	-3 871	-5 414	-17 084
Equity (SEK thousand)	219 515	192 443	219 515	192 443	187 183
Equity per basic share (SEK)	2,78	2,54	2,78	2,54	2,47
Equity/asset ratio (%)	72	73	72	73	75
Total assets (SEK thousand)	305 956	263 514	305 956	263 514	250 276
Quick ratio (%)	156	206	156	206	190
Average number of basic shares	78 903 367	75 803 367	78 903 367	75 803 367	75 803 367
Average number of diluted shares	78 903 367	75 803 367	78 903 367	75 803 367	75 803 367
Basic earnings per share (SEK)	-0,02	-0,05	-0,02	-0,06	-0,14
Diluted earnings per share (SEK)	-0,02	-0,05	-0,02	-0,06	-0,14
Share price on balance sheet date (SEK)	13,80	6,36	13,80	6,36	8,10

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-June 2021

2

Comments from the CEO

Another record quarter with mile-

stone in fiber and filaments

Nexam Chemical continues its growth journey and closes yet another strong quarter. We increase sales with 64 per cent compared to corresponding quarter 2020, meaning that we reach net sales of almost 60 million kronor this pe- riod. Thus, Nexam Chemical sets another sales record for a quarter. We also manage to achieve our best ever result on the EBITDA-level, 3,3 million kronor. We are very pleased with this, as it is well known that there is an inherent conflict of goals between growth and profit. Being a growth company entails periods of both investments and increased costs to enable new revenue streams, which is why profitability, in the short perspective, may not always follow sales and turnover in a linear way.

PET-foam is still the main driver of Nexam Chemical's business. We had a breakthrough on the platform some

years ago, which is now bearing fruit and we see an increasing business for a foreseeable future. Meanwhile, we are convinced that the company has the potential to grow even faster, but a prerequisite is that we manage a similar commercial success on other platforms. We have, during the past quarter seen, what we are hoping is the beginning of such a commercial success within fiber and filaments. As we communicated through press release on June 2nd, we have received our first order from a filament producer in Hungary. The order is a breakthrough withing both the area of fiber and filament, as within recycling since our products will enable the customer to use a higher degree of recycled material in the end product. The order is valued at somewhere between two and three million kronor per year, but it is a breakthrough having a customer which also combines two important growth platforms for us. This is

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-June 2021

3

something we will continue to build upon, and I am very impressed of our team in Hungary who have done a really great work with taking this product to the market.

"Parallel with our success on the market, we continue to also take important steps within sustainability".

Parallel with our success on the market, we continue to also take important steps within sustainability. We communicated around this in our latest newsletter which was published in June 2021. There is so much happening around us, and both EU's Taxonomy and the structures Nasdaq is building, are welcomed by us. We are convinced that these tools will make it easier to evaluate us as a company and clarify Nexam Chemical as a sustainable investment.

To add to the introduction, I would like to mention a few more words regarding the company's profitability develop- ment. We are in a position where we have delivered positive EBITDA-results for seven consecutive quarters. This is a clear indication that the company is doing well. Mean- while, the company's focus on growth does entail costs which may not be unsubstantial. To have the company continue growing, commercializing new platforms and so- lutions, and reach the market with these, we need to recruit new employees which we do continuously. Focus on new platforms will inevitably entail a hit on the margins initially, because the business is always marked with investments as well as running-in costs. This is mirrored in a natural way in the financial results. To apply the break on the growth with the purpose of keeping important investments

down is, however, not an option for us. We are of course working in parallel to find more and new ways of streamlining our current production and supply chains. We know that there is potential to save costs there, even though it is generally in the longer term.

"We see positive indications that our work with

commercializing new platforms is starting to bear fruit"

To conclude: we are following a very strong first quarter with an even stronger second quarter. We are moving in the direction we want to move, and the major joy, next to growth, is that we see positive indications that our work with commercializing new platforms is starting to bear fruit. Recycling is, naturally, an area with large future potential. Nexam Chemical has fine possibilities there, especially in combination with the rest of our product portfolio. To reach new markets takes time. However, we are in a favorable position where our business is growing, specifically within PET-foam, while we have the possibility to work long-term and persistent with our other business areas. We are sticking to our plan, we are growing, and we are looking at the rest of 2021 with confidence. With these words, I want to wish you all the best for the summer.

Johan Arvidsson, CEO

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-June 2021

4

This is Nexam Chemical

Nexam Chemical

Stronger, lighter and recyclable materials. It is one part of what the world needs to be able to grow in a sustainable way. We at Nexam Chemical can contribute to this. We work with improving polymeric materials - more commonly described as plastics. By adding our products, the customer can create materials that will give the end-products completely new and effective properties. Such as lower weight, increased heat resistance and strength, longer life cycle and increased recycling.

Today we help our customers to improve materials that are then used in everything from computers, wind turbines and vehicle components to water pipes and food packaging. We are a growth company with a turnover of approximately SEK 165 million, with production in four countries, employs close to fifty persons and cooperates with well-known chemical and material companies all over the world.

The Company's head office is located in Lomma, Sweden. Development of new products and applications and formulation evaluation takes place in the laboratory in St. An- drews, Scotland where also the facility for production of the

Company´s molecules are located. Large scale production of the company's unique molecules is also performed in collaboration with contract manufacturers. Manufacturing of masterbatch and multifunctional masterbatch is performed by the subsidiary Nexam Performance Masterbatch.

Our vision

To be a recognized world-leader in property modification of polymeric materials through heat-activated chemistry.

Our mission

To contribute to a more resource-efficient and sustainable society through innovative chemistry that improves proper- ties, usability and recycling of polymeric materials.

Our sustainability vision

Nexam Chemical strives towards a sustainable future through innovative and reactive chemistry and to create possibilities to save on our valuable and scarce natural resources. We want to enable our customers to develop lighter, stronger, more durable and more recyclable products.

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-June 2021

5