PowerCell Sweden AB (publ)

Good morning and thank you very much for joining us. Also today we have our CTO of Paracel Andreas Bodén joining in to give you a presentation and an in-depth look at the technology of Paracel. But before going to the quarter, let me briefly frame the environment that we're operating in at the moment. We are now seeing an increasing demand of energy in society and in the world, both when it comes to energy resilience, but also the fact that the energy demand in society is accelerating quite drastically. So we see interesting surge in the industry that we're operating in. But at the same time, we are operating in a very uncertain time. Geopolitic issues that we are all affected by, we see capital discipline, but also some lack of infrastructure that is creating a headwind towards the increased demand that we see in energy. For Powercell, this is the reality that we're navigating in. Our commitment as management is to make sure that we have an action readiness and we're prepared for a variety of outcomes because we are going to navigate in uncertain waters for quite some time going forward. Today we will keep this presentation focused and structured because we have a lot to share. We will start with the technical foundation of our systems, giving you an update on what we have spent the last three years doing here at Powercell, both internally at Powercell but also with our industrial partners around the world. We are also giving comments to the quarter, the numbers from Anders, and then an outlook on what is happening in the marketplace and how we are framing Paracels opportunity going forward. But first, let me say for quarter one, for me as the CEO, the quarter one did not meet the expectations. At the same time, this is in line with the volatility that we predicted in quarter four report. We have said previously that 2025 was somewhat of an anomaly with more stable revenue over the quarters, where 2026 most likely more will resemble 2024 and 2023, where we have a more project-driven sales, which will give volatility and uncertainty over the quarters. More on that when we go into the technical or the financial side and also the market prediction. But before we go into the financial, I would like to start then with the foundation of our business, and also, I would say, the heart and soul of Powercell. Over the past years, we have invested in industrializing our technology, strengthening our product portfolio, and also building the process required to deliver demanding real-world applications. Everything we do, both commercially, strategically, and financially, is built on this foundation. And to give you an in-depth view on that one, I hand over the word to Andreas Bodén. Let me now change the slide.

Here we go. Thank you, Richard. So PowerCell builds on different layers to build reliability in real application. And the foundation of our company and technology products are the FuelCell stack. And I think we have talked about this over the years. And the last six years we have matured this stack and industrialized this together with Bosch. If you look on the bottom section, you can see that the cycle for a stack development is between five to seven years from start to full validation before we go to an application. This is the key. It takes a long time, and we want the stack to be mature and predictable. Because on top of the stack and around it we build a system architecture with pumps, fans, sensors etc. To both protect the stack from the application but also to create the environment for the stack so it can perform and operate over time in the application as good as possible. and then of course on top of that in a system we now have a control system and software that we can frequently update to recalibrate depending on application and recalibrate depending on live experience from the real application this is the three layers that build our foundation in our system product development and it's the core And as you can see, they have different cycle time. For the system, we spend one to two years for an iteration, and software we can do between weeks and months. So in real application, when we have a defined hardware, we can update them continuously to improve performance and enhance durability over time. So if you take the next slide, we go a little bit deeper into technology and lifetime. So lifetime is determined by the operating profile, how the system is used in the application and not by a single test by itself. And what affects the fuel cell is basically how it's operated, like load transients, if we cycle it, start to stop it a lot, and also the load level for the fuel cell. If we operate it on half load or 70% load, and in some applications we even run it a lot on the max load. So in this graph, which is a little bit technical, you can see degradation rates on the y-axis and operating hours in the x-axis. And the key thing here is it's not the single test result to determine how long a lifetime, it's the combination of experience and how we have designed the system, but how it's operated. And we have tests that have been running over time that show in the marine environment with different operating profile, we can have between 24 and 43,000 hours of operating. Before we need to change stack, mostly due to it has lost performance or the hydrogen consumption is increased. So it makes financial sense to swap the stack to lower the hydrogen consumption. The stack is full, you know, fully operational still, but less, yes, on a lower efficiency.

And this resembles degradation in batteries for electric vehicles, etc.