Slide 1: Q3 2023 results presentation
Q3 2023 results presentation 7 November 2023 © EEW 2023/Peter Gercke
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS NOT FOR PUBLICATION NOR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA OR THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATED AND THE DISTRICT OF COLUMBIA) OR ANY OTHER JURISDICTION IN W
Slide 3: Today's presenters
Jan Kielland Chief Executive Officer Today’s presenters Ingar Bergh Chief Financial Officer Philipp Staggat Chief Product Officer
Slide 4: Highlights
Highlights Strong pipeline and revenue growth • 162% increase in revenues and 90% increase in engineering studies pipeline • Two CapsolGo® campaigns announced post Q3 – strong demand worldwide • Stockholm Exergi FID1 on track for early 2024 • New license agreement with large European company expecte
Slide 5: Capsol Technologies at a glance
Capsol Technologies at a glance Safe and highly cost-competitive carbon capture technologies Oslo (HQ) Berlin The US (ramp-up) Reduced capture cost Capture vs amines1 efficiency ~40% 90-95% Hours in Target operation industries Cement ~7 000 Biomass Energy-from-waste Current customers Project leads G
Slide 6: Path to net zero represents major CCS opportunity
Path to net zero represents major CCS opportunity The target What it takes The opportunity To avoid irreversible climate ~8 billion tonnes of CO2 capture Potential for EUR ~62 billion in change, CO2 emissions need to per annum by 2050 CO2 capture technology licensing be reduced to net zero by 2050 r
Slide 7: Teaming up with industry leading companies
Teaming up with industry leading companies Value enhancement Sales and marketing Plant delivery Cooperating with engineering and Working with key suppliers to reduce Partnering with global leaders to Ambition construction partners for efficient carbon capture cost capture market share delivery of ca
Slide 8: Capsol Technologies: Highly competitive vs amine based carbon capture
Capsol Technologies: Highly competitive vs amine based carbon capture Amine based carbon capture technology Capsol Technologies HPC carbon capture technology • The most well know capture technology • Hot Potassium Carbonate (HPC) for «post-combustion» carbon capture, in many instances the only viabl
Slide 9: Progressed entry into US, the largest market for CCS
Progressed entry into US, the largest market for CCS • A US-registered entity is established in the quarter, marking a critical step towards increased presence in the large and fast- growing US market • Ongoing projects in sales engineering and currently hiring the first key personnel – strong deman
Slide 10: License frame agreement expected to be signed in Q4 2023
License frame agreement expected to be signed in Q4 2023 • Capsol expects to sign license agreement before year end with a large utility company with several waste-to-energy (WtE) and biomass plants (BECCS) in Europe • Terms are within previously indicated range of EUR 7-12 EUR/tonne installed capac
Slide 11: Exploring JV in the Middle East
Exploring JV in the Middle East • Capsol has received several request from companies in the Middle East during the past months. This is a region that is rapidly ramping up its focus on carbon capture • Capsol is currently positioning the Company to handle growing inflow of activities efficiently • C
Slide 12: Uplisting process on track
Uplisting process on track • Preparing for an uplisting from Euronext Growth Oslo to the main board of Euronext Oslo Børs in 1H 2024 Ellen Merete Haneto Wendy Lam • Conversion to a public company (ASA) • Experience from Brussels Stock • Extensive career as an executive completed after the end of Q3
Slide 13: Operational review
Q3 2023 c Operational review
Slide 14: Rapidly growing pipeline of engineering studies
Rapidly growing pipeline of engineering studies Engineering to build CapsolGo Engineering studies 10 Sales engineering: 134 projects with a 9 total potential capacity of more than 40 million tonnes of CO2 8 Engineering studies1: 15 projects 7 totalling 7.8 million tonnes – up 85% since end-Q2 2023 M
Slide 15: Building position as the preferred carbon capture technology for cement
Building position as the preferred carbon capture technology for cement, the largest industrial emitter United Kingdom Location undisclosed Northern Europe Southern Europe United States ~700 000 ~1 000 000 1 000 000+ ~1 500 000 ~1 600 000 tonnes of CO2 per year (full- tonnes of CO2 per year (full- t
Slide 16: Proven traction in Waste-to-Energy
Proven traction in Waste-to-Energy New projects, solid execution and key partners KVA Linth, Öresundskraft Central Europe Westenergy, Germany EEW, Germany Central Europe Switzerland AB, Sweden Finland ~100 000 ~200 000 ~200 000 ~200 000 ~200 000 ~280 000 ~150 000 tonnes of CO2 per tonnes of CO2 per
Slide 17: Proven traction in BECCS
Proven traction in BECCS Stockholm Exergi, Sweden Biomass plant, Sweden United States Germany 800 000 ~170 000 ~100 000 ~200 000 tonnes of CO2 per year tonnes of CO2 per year tonnes of CO2 per year tonnes of CO2 per year (full-scale deployment) (full-scale deployment) (full-scale deployment) (full-s
Slide 18: Stockholm Exergi project on track
Stockholm Exergi project on track Selected as the preferred solution for Europe’s first large-scale negative emissions plant First technology licensing agreement with Stockholm Exergi Awarded in July 2022 Safety of HPC compared to amines Competition with all mature technologies Recover process heat
Slide 19: Received orders for two CapsolGo campaigns
Received orders for two CapsolGo® campaigns The two demonstration campaigns are to be executed for partner Sumitomo SHI FW (SFW) client base in the Nordics • Intended to be executed at one energy-from-waste (EfW) and one biomass powered plant • Marks an important commercial milestone in the partners
Slide 20: CapsolGo program overview
CapsolGo® program overview Carbon Capture Units Liquefaction Units #1 Current: EEW #1 Current: German client Energy from Waste Biomass #2 Current: German client #2 Next customer: SFW Biomass Biomass and Energy from Waste #3 Next customer: SFW Biomass and Energy from Waste Number of Number of units C
Slide 21: Strong interest for demonstration campaigns worldwide
Strong interest for demonstration campaigns worldwide € 3 CapsolGo® units from Q2 2024 Profitable investment Project accelerator • 6 demonstration campaigns per year1 • EUR 2-3 million in capex per • Helps project owners accelerate CapsolGo® unit investment decision for large scale • ~3 000 tonnes C
Slide 22: Financial review
Q3 2023 Financial review
Slide 23: Higher revenues driven by CapsolGo campaigns and paid engineering
Higher revenues driven by CapsolGo® campaigns and paid engineering; efforts to increase capacity continues Financial highlights Revenue NOK 13.6 million Pre-tax profit NOK -8.4 million Revenue was NOK 13.6 million in Q3 2023, an increase of 162% from Q2 2023, pre-tax profit was NOK -8.4 million, Up
Slide 24: Improved earnings as topline grows
Improved earnings Revenue (NOK million) Pre-tax profit (NOK million) as topline grows 14 One CapsolGo® was operating during the quarter, while the second unit has undergone an upgrade and was deployed on contract for EEW in Germany from the end of Q3 2023 In Q3 2023, the first CapsolGo® CO2 7 -7 liq
Slide 25: Maintaining capital discipline
Maintaining capital 33 Cash flow for Q3 2023 (NOK million) discipline 8 Keeping cash burn low and focusing on 3 value adding services 4 1 1 0 1 Net cash flow from operating activities was NOK -3.7 million in Q3 2023, improvement from NOK -11.5 million in the previous quarter primarily driven by incr
Slide 26: Fully funded on current business plan
Fully funded on current Cash position and committed spend next 12 months (NOK million) business plan 30 Dynamic ramp-up with flexible cost base Committed spend and committed revenue next 12 months leaves a capital buffer of about NOK 26 million for end Q3 2024 103 Contracted revenue includes the par
Slide 27: Deep dive: CapsolGT – carbon capture for gas turbines
Q3 2023 Deep dive: CapsolGT® – carbon capture for gas turbines
Slide 28: The challenge
The challenge Cement plants Gas turbines • Thousands of gas turbine operators look for an CO2 vol% in 18-20% 3-3.5% economically viable carbon capture solution exhaust • Gas turbines are used for electricity production CO2 captured and industrial purposes 600 000 600 000 (tonnes/year) • High CAPEX a
Slide 29: Introducing CapsolGT for open cycle gas turbines
Introducing CapsolGT® for open cycle gas turbines Ability to handle low CO2 concentration – potential for additional power generation CapsolGT® Input • Hot flue gas CapsolGT® Output • Pure CO2 • Low Carbon Electricity 29
Slide 30: The two largest gas turbine segments
The two largest gas turbine segments Simple cycle / Open cycle Combined cycle Gas turbine size 10 – 120+ MW 150 – 450+ MW Plant efficiency 35% – 40% + 55% – 62% + Oil & gas Industry Peak load Typical application (Base load) Electricity and heat production power plants CapsolGT® CapsolGT® applicable
Slide 31: A highly attractive value proposition
A highly attractive value proposition Proven capture solution No need for external steam Efficiency enhancing capture solution • HPC is used in more than 1 000 plants • CapsolGT® generates steam internally • Setup of the capture solution allows for globally to capture CO2 to avoid expensive investme
Slide 32: CapsolGT with significant cost advantage
CapsolGT® with significant cost advantage Example cost comparison for carbon capture on open cycle turbines Traditional post combustion absorption CapsolGT ® 1. High CAPEX, due to additional investment in steam generating 1. Capture section with similar CAPEX as competing technology, but facility an
Slide 33: CapsolGT outperforms on key customer criteria
CapsolGT® outperforms on key customer criteria Alternative CapsolGT® Advantages technologies GT + • CapsolGT® feasibility level to date with highly GT + Lower plot-space Steam cycle + attractive capture economics Capture unit Capture unit • Estimated levelised cost of carbon capture of Steam cycle +
Slide 34: Initiated customer dialogue across several attractive segments
Initiated customer dialogue across several attractive segments Greenfield project development Decarbonising oil & gas industry • For low-carbon power production • Capturing CO2 from pipeline stations and refinery power units Upgrading peak load plants to base Joint approach with turbine vendors load
Slide 35: Collaboration with GE Vernova
Collaboration with GE Vernova • Agreement with GE Vernova to collaborate on lower-carbon gas power by deploying GE’s aeroderivative gas turbines in combination with CapsolGT® carbon capture plants • A first project-specific three-party collaboration agreement with Marine Low Carbon Power Company Lim
Slide 36: Targeting a full-scale first-of-a-kind plant in 2026
Targeting a full-scale first-of-a-kind plant in 2026 Focus on modular and scalable solution (technically and commercially) Project/Product development Project engineering FID: Procurement and construction In operation Today H1 2024 TBD Target 2026 • Capsol currently • FEED on a project- • Through pa
Slide 37: Concluding remarks and Q&A
Q3 2023 Concluding remarks and Q&A
Slide 38: Ambition
2030 goals for long-term value capture Ambition 1 Make point source carbon capture accessible and viable for more emitters Top 3 position in target segments: cement, biomass, waste-to-energy and 2 gas power plants Becoming a leading global carbon capture technology company 3 Achieve 5-10% carbon cap
Slide 39: Building a global carbon capture tech leader
Building a global carbon capture tech leader 2023: Accelerating demand and traction • Secured 15 engineering studies and 6 CapsolGo® demonstration campaigns • Entered into collaboration with globally leading companies Siemens Energy and GE Vernova • Developed the industry’s first economically viable
Slide 40: Q&A
Q&A
Slide 41: Supporting material
Supporting material Drammensveien 126 0277 Oslo Norway Our vision is to accelerate the worlds capsoltechnologies.com transition to a carbon negative future
Slide 42: Enabling a sustainable future
Vision Accelerate the world’s transition to a carbon- negative future Enabling a sustainable future Mission Deliver energy-efficient and safe carbon capture technologies 42
Slide 43: A step change in CCS efforts required to save the planet
A step change in CCS efforts required to save the planet CO2 captured per year – Rystad Energy 1.6dg Scenario 9 000 7 849 6 604 8 000 Energy Industry Power Removal (BECCS & DAC) Million tons capture capacity installed • Carbon capture and storage (CCS) will play a critical role 7 000 in avoiding irr
Slide 44: Incentives making CCS projects viable in key markets
Incentives making CCS projects viable in key markets North America at the forefront • Emissions covered in key markets • EU ETS prices on sharp uptick USD/t CO2 emissions covered (Mt) Carbon incentive price (USD/t) 140 130 2 4001 120 100 99 85 88 87 85 80 80 1 600 60 At USD 80 per ton, several proje
Slide 45: Approaching value inflection point for CCS
Approaching value inflection point for CCS Market drivers making carbon capture increasingly attractive Market drivers Carbon capture incentives vs. cost Illustrative CO2 capturing incentives are expected to increase globally1 EUR per tonne CO2 captured All-in capture costs are expected to decrease
Slide 46: US leading the way for CCS
US leading the way for CCS Infrastructure in place, economies of scale and fast permitting Access to transport and storage US carbon capture pipelines and projects There are currently more than 9 000 km CO2 pipelines globally and By 2050 in Net Zero America study1 the US accounts for >8 000 km (more
Slide 47: What makes CapsolEoP solution superior
What makes CapsolEoP® solution superior No need for external heat A stand-alone system with a Produces usable heat supply safe and low-cost solvent • Capsol’s EoP solution can run • Capsol’s EoP can be installed without • CapsolEoP works as a heat pump, efficiently on electricity only impacting upti
Slide 48: Energy efficiency enables lower operating costs
Energy efficiency enables lower operating costs Energy consumption1 (GJ/t) Opex distribution (actual project) Levelized carbon capture2 cost (EUR/t) -40% -72% 36-58 10% Maintenance 10% Labor 2,5 GJ thermal2 10% Solvent 25-31 70% Energy ~60/40% 0,7 GJ electrical only opex/capex split Traditional amin
Slide 49: Efficient capture process based on reusing energy
Efficient capture process based on reusing energy • The challenge: Separate CO2 from the exhaust of industrial plants so that it can be stored or utilised • Capsol Technologies has developed a process to do this safely at low cost • The process is based on potassium carbonate to bind the CO2 • This
Slide 50: EU Carbon Border Adjustment Mechanism (CBAM)
! M A • CBAM will enter into application in its transitional phase on 1 October B 2023 C • Once fully phased in the CBAM will work as follows: ‒ EU importers of cement will have to pay allowances equivalent to the EU ETS expressed in EUR per tonnes ‒ At the same time EU domestic producers will lose
Slide 51: Highly attractive value proposition for cement
Highly attractive value proposition for cement • CapsolEoP® can typically reduce energy use by a minimum of 50% compared to traditional capture technologies such as amines1 • CapsolEoP® can reduce levelised capture costs by more than 25% • Flexible and easy to integrate – minimal production downtime
Slide 52: CapsolEoP for cement – superior energy efficiency
CapsolEoP® for cement – superior energy efficiency Traditional CCS technologies (amines) CapsolEoP® Heat consumption is a weak function of CO2 Electricity consumption is a strong function of CO2 concentration concentration Energy use – electricity (GJ/t CO2) Specific reboiler duty (GJ/t CO2) 4,5 2 4
Slide 53: Mature technology delivering commercial traction
Mature technology delivering commercial traction Technology 3 successful pilots Demonstration unit 2 demonstration Patent license Collaboration developed over 20 completed commercialised units in operation agreement with agreements years1 Stockholm Exergi In the EU and the US, Designed to Two in Ger
Slide 54: Illustrative revenue potential towards 2040
Illustrative revenue potential towards 2040 2023-2030 2031-2040 Based on Rystad Energy Capacity ~1 000 mtpa sanctioned ~5 200 mtpa sanctioned estimates X License fee EUR 7-12 per tonne = Market size EUR 7-12 bn EUR 29-50 bn From Technology licensing only (1 000 mtpa x EUR 7-12/tonne) (4 200 mtpa x E
Slide 55: CapsolGo: Helping emitters to accelerate CCS projects
CapsolGo®: Helping emitters to accelerate CCS projects • Two fully equipped 20ft containers • A ready-to-catch unit containing absorber and desorber columns, flue gas compression, instrumentation, control terminal, piping, insulation and trace heating, air cooling unit and absorber tank • Carbon cap
Slide 56: Capital light, low risk and high margin licensing model
Capital light, low risk and high margin licensing model Capsol is offering a highly scalable licensing model Currently three income streams ‒ Paid engineering/process design ‒ Revenues from demonstration units ‒ Licensing fees No project construction risk Mean and lean organisation – marketing power
Slide 57: Value chain overview
Value chain overview Carbon capture EPC1 Operations and Liquefaction & Transport Storage technology maintenance intermediate storage • Technology • Client selects • Client selects • Client selects • Clients selects • Client selects licensed out independent independent independent independent indepen
Slide 58: Patent portfolio overview
Patent portfolio overview Patent family 1: Patent family 2: Patent family 3: Patent family 4: Patent family 5: Low emission Combined storage Method and plant for Thermal power plant Purification of flue thermal powerplant solution for natural transport of rich gas with CO2 gas from marine gas and CO
Slide 59: Four strategic pillars supporting growth and long-term value creation
Four strategic pillars supporting growth and long-term value creation Strategic focus 2025 goals 2030 goals Technology Continue to develop and protect cost advantage to ensure long-term competitiveness 5-10% Technology licensing market share Product Commercialise new products and services to increas
Slide 60: Management
Management Jan Kielland, Chief Executive Officer Cato Christiansen, Chief Technology Officer >40 years experience with management and board positions in Former Shell, SPT Group and the Norwegian Ministry of the energy sector internationally. MSc in Petroleum Engineering Petroleum and Energy (Carbon
Slide 61: Board
Board Endre Ording Sund, Chair >40 years experience with management and board positions in the energy, banking and shipping sector Royal Navy Academy, Norwegian School of Management, Harvard Einar Chr. Lange, board member Wayne G. Thomson, board member Largest investor in Capsol. Management experien
Slide 62: Risks and mitigating actions
Risks and mitigating actions Key risk factors Mitigating actions • Licensing model highly scalable with limited resources • Partnering with big global players to greatly extend reach, capacity and capabilities Small player • A clear strategic roadmap for organic growth and opportunistic approach to