Hexagon Composites Asa · OSL:HEX
Hexagon Composites Asa — Hexagon Purus — Investor Presentation (November 2020)
46 slides from Hexagon Composites Asa's investor presentation, Nov 19, 2020
Slide 1: Presentation of Hexagon Purus – a Hexagon Composites Company
PRESENTATION OF HEXAGON PURUS – A HEXAGON COMPOSITES COMPANY 19 NOVEMBER 2020 1
Slide 2: Disclaimer and important notice
Disclaimer and important notice THIS PRESENTATION IS NOT FOR PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY This Presentation has been prepared for information purposes only. This Presentation does not constitute any OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, OR THE UNITED STATES (INCLU
Slide 3: Introduction to Hexagon Purus
1 INTRODUCTION TO HEXAGON PURUS
Slide 4: Hexagon Purus – driving the hydrogen transition
Hexagon Purus – driving the hydrogen transition Zero emission Hexagon Purus is a global leader in zero emission e-mobility, driving energy transformation through its hydrogen cylinders/systems, battery systems and electric drivetrain technologies 4
Slide 5: Separating Hexagon Purus as a stand-alone company to strengthen the zero emission business
Separating Hexagon Purus as a stand-alone company to strengthen the zero emission business Strategic rationale for separating out Hexagon Purus’ zero emission activities from Hexagon Composites: ✓ Unlock value by creating a pure-play zero emission player attractively positioned to benefit from the s
Slide 6: Key investment highlights
Key investment highlights Significant opportunity driven by the ongoing global shift towards a zero- I emission society Hydrogen type 4 cylinder champion set to accelerate growth in an addressable II market that can exceed USD 7bn in 2030 Industry leading hydrogen and battery systems as well as elec
Slide 7: Hexagon Purus – a world leader within hydrogen cylinders, fuel and distribution systems and electric drivetrain solutions
Hexagon Purus – a world leader within hydrogen cylinders, fuel and distribution systems and electric drivetrain solutions Type 4 cylinders Cylinder systems Electric drivetrain solutions 7
Slide 8: Hexagon Purus is a leading provider of type 4 cylinders
Hexagon Purus is a leading provider of type 4 cylinders – the optimal and preferred cylinder for hydrogen applications Hexagon Purus delivers state-of-the art type 4 technology – the preferred solution for hydrogen applications Hexagon Purus’ offering ✓ NON-CORROSIVE: Polymer liner is corrosion free
Slide 9: Hexagon Purus – a world leading company within hydrogen cylinders/systems and electric drivetrain solutions
Hexagon Purus – a world leading company within hydrogen cylinders/systems and electric drivetrain solutions Hydrogen storage cylinders and cylinder systems Battery systems and electric drivetrain integration Drivetrain integration for zero emission medium and heavy-duty vehicles (BEV, FCEV, hybrids)
Slide 10: Hexagon Purus is a systems integrator delivering components, sub-systems and vehicle integration
Hexagon Purus is a systems integrator delivering components, sub-systems and vehicle integration Leading manufacturer and fuel system provider, with a holistic system integration offering Hexagon Purus also delivers hydrogen distribution modules and ultra-high pressure hydrogen ground storage system
Slide 11: Hexagon Purus is one of the market leaders within EV systems and electric drivetrain solutions
Hexagon Purus is one of the market leaders within EV systems and electric drivetrain solutions Battery systems and electric drivetrain integration ✓ One of the most energy dense and lightest battery packs in the commercial vehicle industry Systems offering amongst other proven through The Daimler In
Slide 12: Experienced executive team with strong track record
Experienced executive team with strong track record CEO - Morten Holum • Served as CEO of Saferoad Group, a pan- European road safety company • Extensive international and industrial experience from key positions in Norske Skog, Norsk Hydro and American Airlines CFO - Dilip Warrier EVP, Systems - To
Slide 13: International organisation with leading partnerships, manufacturing and R&D capabilities
International organisation with leading partnerships, manufacturing and R&D capabilities Oslo, Norway Kelowna – BC, Canada • Corporate headquarters • Global innovation office Taneytown – Maryland, US • Corporate functions such as • Battery pack and hydrogen CEO office, corporate systems demonstratio
Slide 14: The hydrogen opportunity and Purus' positioning
THE HYDROGEN 2 OPPORTUNITY AND PURUS’ POSITIONING
Slide 15: Decarbonization is high up on the global agenda – strong push to limit carbon emissions
Decarbonization is high up on the global agenda – strong push to limit carbon emissions… 185 Parties that have ratified the Paris Agreement to date out of 197 parties to the UNFCCC 10 x Years remaining in the global carbon budget to achieve the 1.5C goal 15
Slide 16: Significant momentum for zero emission and clean energy initiatives across the globe
…leading to significant momentum for zero emission and clean energy initiatives across the globe Transportation is responsible for almost ~4,000 USDbn - cumulative investment in clean 20% of global CO2 energy globally since 2006 emissions CAGR 31% 66 countries have announced 3 983 net-zero emissions
Slide 17: Hydrogen is in the fast lane as a key zero emission solution
Hydrogen is in the fast lane as a key zero emission solution LEADING COUNTRIES ROLL OUT SIGNIFICANT HYDROGEN INFRASTRUCTURE Government’s first EU is investing The 2040 commitment - targets 100% zero- Government’s vision on dedicated hydrogen hydrogen, 2020 – USD up to EUR 180bn emission vehicle sale
Slide 18: Four key factors driving the hydrogen transition
Four key factors driving the hydrogen transition Near-term market and industry Policies and regulations Hydrogen TCO Infrastructure deployment development Europe, gCO2/km 6 Production cost of hydrogen, 5 USD / kg 4 (5%) p.a. 3 2 1 130 95 81 591 0 2015 2020/21E 2025E 2030E 2020 2030E 2040E 2050E • Na
Slide 19: Hexagon Purus in pole position to benefit from the sizeable market opportunity
Hexagon Purus in pole position to benefit from the sizeable market opportunity – H2 cylinder market expected to exceed USD ~7bn HEXAGON PURUS’ ADDRESSABLE HYDROGEN CYLINDER REVENUE POOL (USDBN)1 Passenger vehicles Hydrogen vehicle USD ~7bn hydrogen cylinder Vans, LCV and LDT adoption rate3 market re
Slide 20: China is expected to be the biggest market mid-term, followed by EU and the US
China is expected to be the biggest market mid-term, followed by EU and the US % of addressable market in 2030E HEXAGON PURUS’ ADDRESSABLE HYDROGEN CYLINDER REVENUE POOL (USDBN) ~39% • Represents the main driver of FCEV truck volumes because of large truck fleet, despite having similar adopting rate
Slide 21: Purus is planning to launch a JV in the world's largest hydrogen market
Purus is planning to launch a JV in the world’s largest hydrogen market before year-end 50% of new car sales 1,000,000 to be zero FCEVs by 2035 emission1 by 2035 • Term sheet agreement for a strategic cooperation signed in May 2020 • Targeting signing of JV agreement in Q4 2020 5,000 • CIMC ENRIC is
Slide 22: Significant growth in the market for vehicle and drivetrain integration
Significant growth in the market for vehicle and drivetrain integration representing a key opportunity for Hexagon Purus HEXAGON PURUS’ ADDRESSABLE SYSTEM INTEGRATION BATTERY ELECTRIC VEHICLES / SYSTEM INTEGRATION (BEV) MARKET FOR MDV/HDV (USDM) ✓ US represents the main addressable market; still in
Slide 23: This is only the beginning – ample opportunities beyond 2030
This is only the beginning – ample opportunities beyond 2030 HYDROGEN DEMAND EXPECTED TO INCREASE ~6X FROM 2030 TO 2050 Global energy demand supplied with hydrogen, EJ1 Power generation ~6x 78 Transportation ~28% Industrial energy 28 Building heat and power 14 New feedstock Existing feedstock 2030 2
Slide 24: Hexagon Purus is approaching the market from a leadership position
Hexagon Purus is approaching the market from a leadership position Hexagon Purus is a best-in-class provider of type 4 cylinders as well as hydrogen and EV systems TYPE 4 World class type 4 Extensive experience Unique industrial scale for Strong customer and high-pressure cylinders and know-how high
Slide 25: Strong customer relationships across a variety of end-use applications
Strong customer relationships across a variety of end-use applications Adjacent markets Construction & mining Toyota fuel cell electric heavy-duty 350 bar cylinders for the Xcelsior 700 bar cylinders to Mercedes 300 bar and 500 bar gas distribution Agriculture truck transit bus – operating in Califo
Slide 26: Strong momentum continuing to build – entering Northeast Asian market
Strong momentum continuing to build – entering Northeast Asian market for hydrogen-powered passenger cars… ✓ Hexagon Purus nominated for serial supply of cylinders for a zero emission FCEV SUV ✓ First prototypes delivered by the end of 2020 ✓ 2-year contract ✓ Estimated sales value of €25m “Hydrogen
Slide 27: Following a line of several recent key announcements
…following a line of several recent key announcements… Awarded contract by Selected by Hino Multi-year frame Stadler Rail to supply Trucks as development agreement with hydrogen cylinder partner to provide Everfuel worth €14m systems for first battery packs and to deliver multiple hydrogen powered d
Slide 28: A project pipeline supporting acceleration of growth in concert with the market
...and a project pipeline supporting acceleration of growth in concert with the market LIGHT-DUTY MEDIUM & HEAVY DISTRIBUTION MARINE, RAIL, GROUND OTHER VEHICLES DUTY VEHICLES STORAGE AND MOBILE REFUELING More than 80 projects High number of hydrogen and battery electric development projects across
Slide 29: Financials and outlook
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Slide 30: Overview of recent financial performance
Overview of recent financial performance GROUP REVENUES | NOKm COMMENTARY 217 • LTM revenue driven by hydrogen and battery electric systems shipments to North American 69 OEMs, hydrogen distribution 48 53 systems and cylinders for 46 aerospace and marine applications Q4’19 Q1’20 Q2’20 Q3’20 LTM Q3’2
Slide 31: Solid top-line growth expected in 2021
Solid top-line growth expected in 2021 GROUP REVENUES | NOKm COMMENTARY • FY 2020 not expected to be >50% YoY revenue growth materially different from LTM Q3 expected in 2021 2020 • Strong growth (>50%) expected in 2021 driven by pick up in hydrogen distribution in US and Europe as well as increased
Slide 32: Focus on ramping up capacity to support the pipeline and opportunities ahead
Focus on ramping up capacity to support the pipeline and opportunities ahead ESTIMATED CUMULATIVE CAPITAL EXPENDITURE Q4 2020 TO 20221 COMMENTARY (SOME INITIATIVES ARE MULTI-YEAR COMMITMENTS) | NOKM Signficant portion is contingent on timing of • Purus expects to make significant customer wins inves
Slide 33: Financial ambitions
Financial ambitions 2025 REVENUE AMBITIONS LONG-TERM PROFITABILITY AMBITIONS Double-digit NOK 4-5bn EBITDA margins 33
Slide 34: Purus has an excellent starting position and is setting the stage to capitalize on market momentum
Purus has an excellent starting position and is setting the stage to capitalize on the momentum in the market going forward Global zero emission mobility champion Strong early mover position Today 2030 ✓ One of few players with ▪ Market segments proven ability to deliver forecasted to grow by a on c
Slide 35: Key investment highlights
Key investment highlights Significant opportunity driven by the ongoing global shift towards a zero- I emission society Hydrogen type 4 cylinder champion set to accelerate growth in an addressable II market that can exceed USD 7bn in 2030 Industry leading hydrogen and battery systems as well as elec
Slide 36: Risk factors
1.Introduction Introduction 4RISK to to FACTORS Hexagon Purus Hexagon Purus
Slide 37: Risk factors (1/4)
Risk factors (1/4) RISKS RELATED TO THE BUSINESS OF THE COMPANY AND THE INDUSTRY IN WHICH IT OPERATES Business risk: Business risk relates to the risk of loss and reduced profitability due to changes in the Group’s competitive position. Factors which can impact the Group’s competitive position inclu
Slide 38: Risk factors (2/4)
Risk factors (2/4) The international operations of the Group will be subject to a number of risks inherent in operating a business in foreign countries: The Group operates in several jurisdictions in addition to Norway. The Company and the Group will thus be subject to a number of risks inherent in
Slide 39: Risk factors (3/4)
Risk factors (3/4) Hexagon is a spin-off: The Group is a result of a spin-off from the Hexagon Composites ASA group. A number of agreements have been entered into in order establish the Group's business into a separate legal structure, and the Group may have liabilities pursuant to said agreements.
Slide 40: Risk factors (4/4)
Risk factors (4/4) Future sales of the Company’s shares by its larger shareholder or any of its primary insiders may depress the price of the Company’s shares: The market price of the Company’s shares could decline as a result of sales of a large number of shares in the market by its major sharehold
Slide 41: Appendix to Hexagon Purus
Introduction APPENDIX to Hexagon Purus
Slide 42: Legal structure chart
Legal structure chart COMMENTARY TSA Operative in Hexagon Company name business segment Composites ASA • Purus has all necessary assets to conduct the e-mobility (zero emission) business, including inter alia access to skilled labour, raw material (carbon Holding within 100% fiber and battery cells)
Slide 43: Historical income statement
Historical income statement INCOME STATEMENT – CARVE-OUT FINANCIALS INCLUDING CNG LDV BUSINESS COMMENTARY For the six months ended 30 June (NOK 1000) 2020 2019 • The CNG LDV business unit is currently in process of being carved out Revenue from contracts with customers 184,639 290,493 from Hexagon P
Slide 44: Historical balance sheet
Historical balance sheet BALANCE SHEET – CARVE-OUT FINANCIALS INCLUDING CNG LDV BUSINESS COMMENTARY (NOK 1000) 30.06.2020 31.12.2019 Significant events after the balance sheet date ASSETS Property, plant and equipment 101,098 103,359 Right-of-use assets 77,870 53,577 • The CNG LDV business unit is c
Slide 45: Glossary list
Glossary list Term Description Term Description BEV Battery Electric Vehicle JV Joint Venture CAPEX Capital Expenditures LCV Light Commercial Vehicle CEO Chief Executive Officer LDC Light Duty, Cylinders and Distribution CFO Chief Financial Officer LDT Light Duty Truck E2E End-to-End LTM Last Twelve
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Hexagon Purus — Investor Presentation (November 2020) on 6ix