NEL ASA

Good morning from Oslo, Norway. We are ready to present our second quarter 2026 results. My name is Hakon Volldal. I am the CEO of Nell, and I'm joined today by our CFO, Kjell Christian Bjornsen, and our Head of Communication, Marketing, and Investor Relations, Wilhelm Flinder. We have the following agenda. Nell in brief, we will skip and we will go to the second quarter highlights, followed by a commercial update, a technology update, and as usual, end with the Q&A session. In the second quarter, we generated 153 million NOK from contracts with customers. We ended the quarter with a negative EBITDA of 155 million. The order intake ended at 230 million NOK, order backlog at 1.2 billion NOK, and the cash balance at 1.3 billion NOK. Some of the highlights in the quarter were the following. We launched our new pressurized out-of-line platform, what we call the PA series, on May 8th. We'll come back to that later. We also progressed the new manufacturing line for this technology at Herøya, according to plan, and we received two purchase orders for containerized PEM solutions, each worth approximately $7 million. Looking at the group financials, revenue from contracts with customers, $163 million knockdown, 12% year-on-year. Outline revenues declined by 14%, whereas PEM revenues were down by 10%. Total revenue and income, 182 versus 215 last year. Ivita ended at 155 versus 86 last year, and this is driven by the settlement with Iwatani. If we adjust for the 70 million nok, Ivita was... Flat versus second quarter last year. And of course, this also impacts EBIT and pre-tax income, etc. So adjusting for the one-off settlement with Ivatani, all figures were actually in line or better than last year. Looking at alkaline financials, there has been a decline in revenues on the alkaline side. It's not surprising because we have had few orders for our atmospheric alkaline technology, and that's why we have launched a new platform, and it will take a few quarters for orders to materialize and to turn orders into revenue. So this is Development, which is expected, not appreciated, but again, the reason we're launching new technology is to bring these numbers back to the 2024 level, where the business was EBITDA positive. In the quarter, we had 56 million NOK from customer contracts in revenues, and 28 million NOK negative EBITDA. This quarter included 27 million NOC in R&D expenses compared to 18 million NOC in the second quarter of 2025, explaining some of the difference. In PEM, we have more stable revenues and higher revenues. There is solid demand for our containerized PEM solutions. Which means we had better revenues in the second quarter of 26 than in the first quarter, still slightly down 10% versus last year. Largely driven by kilowatt type electrolyzers, so the small, what we call the S8 and C series electrolyzers for industrial applications, and the megawatt type installations had lower project revenues in the quarter. We had also lower other income in the quarter due to delayed or canceled research grants in the US. Some of the programs have been reinstated and will be a positive effect in the second half of 26. Also, this quarter included 33 million NOC in R&D expenses compared to 33 million NOC in the second quarter of 25. So we keep a steady progress on the R&D side. More orders are needed also on the PEM side to break even, especially megawatt-scale projects. Order intake and backlog. Order intake in the quarter ended at 230 million NOK, and that's up significantly from a weak quarter in 2025, and also significantly up versus the first quarter in 2026. With 230 million NOK in Thank you very much. orders are not high enough we need to compensate by controlling expenses and that's why we have reduced our headcount from 430 down to 313 mostly in production and project delivery we have kept on most of our R&D people And this means that personnel expenses are down in the quarter versus last year, and of course versus the peak back in Q3 of 2024. On to the commercial updates. Thank you very much. The reason we see a strong demand for these type of solutions is that most projects have become smaller or start with the first build-out phase in the 10 to 50 megawatt range, which fits nicely with our containerized PEM offering. Multiple containerized PEM solutions offer a proven, efficient, and standardized alternative to customized solutions. And because we have managed to bring down CapEx considerably, combined with a growing list of references, this also increases snail's competitiveness in the market segment. Pressurized Outerline has received concrete interest, and there are several active and ongoing customer dialogues. However, it's still early phase, and we need some more months before the first orders materialize. Europe is currently the most active and promising region for now, and I guess most other electrolyser OEMs, but there are also some projects progressing in North America, the Middle East, and Asia. In the quarter, we received a $7 million purchase order for containerized PEM equipment. This is from Messure Process in France, valued at $7 million. It's the second purchase order from this customer. And we will supply, or Messure Process will supply hydrogen refueling stations and industrial applications in Europe with hydrogen. Another nice win in the quarter was with Douglas County in the U.S. This is the first system sold that will be owned and operated by a public utility, or as you said, the first NEL system sold. The electrolyzers will operate near a hydropower plant, and the equipment will be used to utilize excess power to balance the grid and to be used for other high-value applications. This reduces the need for mechanical adjustments to lower wear and maintenance on the turbine units and associated equipment. So a nice and interesting application for this equipment in the US. We have also expanded our technology partner network. We have signed a frame agreement with the leading power electronics partner SMA Altenso for PEM. Atmospheric Alkaline and Pressurized Alkaline Platforms. That means we have one supplier covering all our different platforms with power electronics. We have signed agreements with container integrators across the US and Europe delivering plug-and-play PEM containers, similar to the ones we showed on the previous two pages. We've also entered into contracts with PEM Thank you very much. Samsung E&A has recently completed its 100 megawatt rep for our new pressurized alkaline solution, what they call the Compass H2A+. That means Samsung E&A can now offer 100 megawatt or larger bankable solutions across all NELS megawatt platforms. Atmospheric alkaline, pressurized alkaline, and PAM, with long service agreements and full system guarantees. SiteBEM, we continue our close collaboration with SiteBEM is offering its IV100, a replicable and scalable full-scope electrolysis solution with sizes from 20 megawatts up to several hundred megawatts and more based on NELS atmospheric alkaline technology. And we're also working to expand the partnership with SiteBEM to cover other platforms. We have a strategic partner in India called Reliance. They have an ambition to produce electrolysers for captive use in India. The project to establish a gigafactory in India remains under development, with key supplies for its production facility contracted. The planned construction is expected to commence in this year. Nell and Reliance continue to work closely with dedicated teams on both sides, driving the project forward. So again, a very interesting project. Development with Reliance in India that we hope will materialize and bring significant profitable revenue growth for Nell in the years to come. On the technology side, we had a big happening in Norway in early May. That's when we launched our new pressurized alkaline platform, which we call the PA series. And just to remind the audience why we have launched this product, besides Having something new to show to our customers, we need to bring the order intake up. We need to get back to the levels we saw in 22-23 on the revenue side. And in order to do that, you need a compelling product offering. The new pressurized solution we said had to improve energy efficiency over the old platforms. We needed to bring the system footprint down. We needed to remove the building for the electrolysis because that building can be quite expensive. We wanted to dramatically reduce project engineering hours and site work because hours can constitute up to 50% of the total capex for the customer. We need to enable a wide operating range where in, for instance, Europe with today's energy system, You need to be able to turn the system down to let's say 10-20% loads and you also need to operate it at full load. And we need to design it for dynamic operations where you quickly shift the load factor up and down. Our answer to this is the new PA series. It's smaller, it's cheaper, and we think it's better. Starting with smaller, the new solution reduces the footprint. of up to 80% of NELS scope. That means thousands of square meters, if we talk about a large hydrogen plant. System cap base, what you see on the picture, is reduced by 40-60%. That covers power electronics, electrolyzers, and gas-liquid separation. System energy consumption is Estimated to be in the 61 to 53 kilowatt hours per kilogram range. This is best in class today if you look at real performance. Not what you find in data sheets, but real performance. And if you want more than the 25 megawatt building block, you can combine them into larger plants. This rendering shows a 100 megawatt plant. In addition to this, you'll need switchgear and high voltage to medium low voltage. You need water treatment and some other things, storage. But for the core system, you're down to less than 2,000 square meters for a 40 ton per day or 100 megawatt solution. And that's quite good, as I said, 80% down versus Nell's previous offering. More importantly, the new system redefines the cost of clean hydrogen. For a full turnkey CapEx comparison, you can look on the left-hand side. What we see in our reference projects, 20 to 30 megawatt projects using the old technology, you ended up around $3,000 per kilowatt. A similar scope with the new pressurized alkaline system reduces that down to $1,400. And that means you bring the levelized cost of hydrogen at 30 bar pressure down from $7.8 per kilo to $4.5. A significant reduction that enables new projects to move ahead. And please bear in mind that these figures are for small companies. Small-scale projects of 20 to 30 megawatt. We're not talking hundreds of megawatt or gigawatt scale projects, then the CAPEX of course would come down further. Looking at NELS build-up of the CAPEX, we have For this 25 megawatt module, roughly $1,000 linked to the hardware that you see at the bottom, and then $123 for services provided by Nell. Other hardware and services not included on this picture is $346, and that includes water purification, dryer, purification, compression from 15 to 30 bar, Additional cooling equipment, nitrogen for purging, etc. So this is an almost all-in cost estimate of $1,400 per kilowatt for a 25 megawatt system. Again, if you bring the size of the project up to, let's say, 100 megawatts, a lot of the labor costs will come down, and there are also some scale benefits on the hardware side. which means for larger scale projects it's possible to get the 1400 figured down further. The good thing about this is that it's not only a PowerPoint concept, it is a real concept and to prove that the system actually works, we have built it at Harøya outside our manufacturing facility. What you see on the picture is A plant with the gas-liquid separation to the left. You have an electrolyser and you have the power electronics, the transformer and the rectifier to the right. This system is one quarter of a full system. That means it can deliver six megawatts if you have all the electrolyses in the skids, but it can be built out to do 25 megawatts. And this is what we sold the world on in May, early May. We took the curtains to the side and allowed people to inspect it and have a look at how it's constructed and why we have designed it the way we have. To deliver this, not only build a prototype, but deliver at scale, we need a production line for some components. We will not build a huge manufacturing site where we make all the different components. We will have a capital-light approach to this. But we do need a production line for some components, and this production line is taking shape. There are ongoing tests that we have conducted that conform good product quality and we actually exceed prototype production results. We see clear quality improvements with higher yields and fewer critical defects. Cycle times are coming down and support higher capacity and improved efficiency. We have a strong process understanding. The baseline production run plan to look and the lock-in learnings with further improvement expected during the autumn. And in terms of capacity, 500 megawatts will be installed by the end of 26. This can be expanded to 1 gigawatt by 2027 through increasing the cycle time. And I want to remind everybody, especially the analysts, that capex per megawatt is significantly lower than for atmospheric alkaline and PEM. Again, back to the point that we will not make all the components ourselves. We will just make a few critical components and do the final assembly and testing in-house. The project is also funded by the European Union. We have received 135 million euros in funding. It has to be Maxed by Nell, and we have received already the first milestone payment in the second quarter, which is good. That shows progress, and it shows faith in what we have done so far. Final point, I will step down as president and CEO of Nell to pursue another professional opportunity. I have been with Nell since July 1st, 2022. It's been a fantastic journey. Great company, and I will still be around. I have a six-month notice period, and I will continue in my role until further notice. The board of directors has already initiated the process to recruit my successor. And I think it's important to say that We have gone through quite a bit of strategic shifts and organizational developments over the past four years. It's been a hectic period, but the strategy remains intact and it remains unchanged going forward. It's supported. It's not just me pursuing this strategy. It's anchored with the rest of the management team and the board of directors. So the current strategy, including technology, Product Roadmaps, Project Scope, Target Geographies, and the pursuit of partnerships with leading industrial players will remain unchanged. Going forward, the continued rollout and commercialization of the recently launched pressurized alkaline system and the future next-generation PEN technology will remain Nel's top priorities. So with that we conclude the presentation and I will be joined on stage by our CFO. Before we start answering questions, you will read the script that you normally follow, Wilhelm.

Thank you, Håkon. Before we start the Q&A session, just a few practical points. If you would like to ask a question, please use the raise hand function in Teams. We will call your name and unmute your microphone, but please make sure to unmute yourself on your end as well. We will also take written questions submitted through the Q&A function if time allows. And as a reminder, we will not comment on outlook-specific targets, detailed terms and conditions for individual contracts, or questions about specific markets. Also, modeling questions are also best handled offline. And with that, let's get started. First question comes from the line of Arthur Sittbom. Please go ahead, sir.

Thank you very much for taking my question. I would just be keen to have your thoughts on the funding of NEL at the moment. So you report a 1.3 billion cash position. You are still burning cash on a quarterly basis at the moment, and the other backlog seems to take a bit of time to pick up. while you're investing in the manufacturing platform. So I was wondering basically, do you consider yourself as being in a strong enough funding position at the moment to turn the group into a growing entity and a profitable entity? Or should we think about potential avenues and potential action plan on the funding for the coming 12 months? Thank you very much.