HydrogenPro AS Aktie

Good morning. Today, I am accompanied by Martin Holtet, who will present the financials and Michael Caspersen, who will give an update on market outlook. As introduction, what does HydrogenPro do? HydrogenPro develops, manufacture, and sell, and commission equipment for green carbon-free hydrogen production. As an original equipment manufacturer, the company's focus is on its core technology well suited for renewable energy sources. High-pressure alkaline electrolyzers and gas separation skids are our core product. We address markets for decarbonization of selected large-scale industries, segments already using gray hydrogen or where decarbonization is hard to achieve through electrification. I will not go into details on pros and cons for the most common technologies for splitting water and produce carbon-free hydrogen, but highlight HydrogenPro's focus on technology for driving down the levelized cost of hydrogen.

With our unique and proprietary electrode technology, we reduces the operational cost by lower energy need in the hydrogen production. First, our electrodes represent lower CapEx as we use no noble metals, which, by the way, increases continuously in price. Secondly, the electrodes are more efficient, using less energy, reducing the production cost of hydrogen. And we deliver pressurized electrolyzers, which is very responsive to variations from renewable energy sources. I do notice that some colleagues are also developing pressurized systems. We have installed 220 megawatts and are in process of installing another 100 megawatts of pressurized electrolyzers. The projects we have installed are among the largest green hydrogen projects in the world and very few other OEMs have similar references, which is one of the first things prospect customers are asking.

Four milestones have defined the first quarter. HydrogenPro and LONGi have agreed on optimizing its manufacturing footprint, entering into a joint strategic OEM agreement. We will, therefore, until further strategic steps, mothball the Tianjin plant. The ACES project is under commissioning and for us going into service support. Development of our electrolyzer and electrode technology is continuously high on our agenda. We see strong progress from the dedicated work on developing, testing, and documenting performance where we are now reaching world-class results. Things do take time and I must admit it has taken longer than I expected to reach FID on some ongoing projects in negotiations. However, we still expect FIDs throughout 2026 and 2027.

Execution on technology, partnerships, and cost discipline positions HydrogenPro for 2026 order intake. The OEM agreement with LONGi offers larger capacity, cost savings on fixed as well as on direct cost based on shared capacity utilization and high automation. This cooperation makes HydrogenPro more competitive. Although we will be producing in LONGi's state-of-the-art factory, HydrogenPro will have our key quality and operational leadership at site, and HydrogenPro's well-recognized production data and quality system is being implemented.

I will also point out that the agreement is a production agreement, where we will continue to deliver our own proprietary technology, which is developed and tested in Norway and in Denmark. The electrode development and production is continuing in Denmark. For the European market, we will continue assembly in ANDRITZ [ electrolyzer ] plant in Germany. The cooperations are representing a cost-effective and asset-light model.

Our partnerships enables a broader reach and wider offering to projects in addition to bankability on large-scale projects. Through the partnerships, we have full scope offering at local presence. Common for all partners is that they are committed to energy transition and green hydrogen. They represent a broader delivery scope and gives bankability towards the customers and access to strong technical and engineering resources.

The ACES project is a flagship project where the support from Mitsubishi is now offering a reference site for our new potential customers. One of the first questions new prospects are raising is, do you have any large-scale references and can we see it in operation? Not many OEMs can answer, yes, we do.

Currently, all 40 electrolyzers have been operated at full load, gone through numerous starts and stops and testing of load variations. The electrolyzers are operating stable and consistently. The ACES Phase 1 project is using 30% hydrogen in its power generation to the grid. Los Angeles Department of Water and Power and Intermountain Power Project are now in preparation for next stages, which when realized, will increase to first 67%, later to 100% hydrogen content, meaning Phase 1 will be copied 2 more times.

Product development and product improvements are prioritized activities where performance and cost are the main focus. Our electrolyzers have always been robust, stable, and consistent, which we have tested out on our installations. They have gone through numerous starts, stops and load variations without any negative impact on performance or degradation. Over the 2 years, we have now developed the new electrodes without any noble metals, showing a massive improvement in current efficiency.

If we look at the graph on the right, we see the latest improvements towards 95% current efficiency at 100% load. However, electrolyzers are not always operated at 100% load and will normally lose efficiency at lower loads. Many OEMs will give high current efficiency figures, but only at 100% load. If we look at the upper curves, we see a very small loss in efficiency between 100% and 30% load. To achieve the results shown in the graph, we are focused on interior stack design to reduce loss of energy when producing hydrogen, improving electrodes, both efficiency performance and reduced degradation and also reduce the steel weight of the electrolyzer to reduce the CapEx.

The result is now that we can operate with higher current density and get more gas out per kilowatt hour at lower cell voltage. All in all, reduced cost of hydrogen for the customers. And we are not stopping here. We are continuously improving our stack design and electrode chemistry to deliver high-efficiency stacks and high gas quality.

For the continuation of 2026, we are focusing on 3 main priorities: Convert the pipeline to orders and build backlog, deliver and handover of the reference projects, including electrode development and maintaining financial discipline. Based on the current interest from project developers, customers, and stakeholders, we are now initiating a strategic review in light of potential future projects, the company's liquidity position, and the general development. The company has, therefore, engaged a financial adviser to assist in ongoing strategic discussions and to evaluate potential financing alternatives. However, there can be no assurance that the strategic review will result in any transaction or other specific outcome. And I will now hand over the presentation to Martin.

Thank you, Jarle. I will now then walk you through the Q1 2026 financials. So we are continuing to deliver on the SALCOS order and doing now some on-site work at the ACES site. So in the quarter, we generated revenues of NOK 16 million and net of direct materials, the gross profit stood at NOK 10 million, which then equates to a 62% gross margin. And the uptick in the margin compared to the previous quarters is then mainly due to the fact that we are delivering high-margin components and then, of course, with on-site services being a high-margin business.

Looking at the personnel costs, it was stable with NOK 30 million compared to -- meaning at the same level as in the fourth quarter. Other operating expenses was at NOK 11 million, down NOK 5 million compared to the fourth quarter. And this is driven by 2 main factors. There was a reversion of previous provision in the quarter, but we also do see the impact of continued cost measures throughout the company. So with this, the EBITDA came in at minus NOK 32 million and the net loss was at NOK 41 million in the quarter.

Then let's look into development in the liquidity position in the quarter. So the cash balance at the start of the first quarter was NOK 102 million and it ended at NOK 56 million. So the key changes in the liquidity were as follows. The EBITDA was at minus NOK 32 million. There were changes in net working capital of some minus NOK 10 million and minus NOK 10 million impact on the cash. We continue to invest in Denmark and we capitalized some NOK 3 million of investments on the production line there in the quarter. And we have a total budget for that facility of NOK 60 million, whereof NOK 50 million is now as of end of the first quarter used for that.

But important to say the manufacturing line is fully operational. We are delivering on the SALCOS order and the remaining investments that are related now to further improvements to increase the manufacturing activity. The backlog stood at NOK 252 million at the end of the quarter, down from NOK 275 million at end of the fourth quarter.

I often show a slide to convey the message that cost discipline is really in the backbone of our company. Last year, we took out costs of more than NOK 50 million. And given, as Jarle also presented, given that the market is somewhat slower in terms of reaching FIDs, we are now continuing with new measures. So now with the OEM agreement with LONGi, we are downsizing our operations and cost base in China. In Europe, we have a salary freeze and also the management has taken a voluntarily takeout. On top of that, some employees has been temporarily laid off in Europe. And finally, we are executing group-wide cost measures, including reducing office rental costs, reduced use of consultants, travel costs, et cetera. All in all, these measures now, the additional measures, will have an annual savings impact of some NOK 20 million.

So with that, I will now give the word to Michael to give an update on the market.

Thank you, Martin. So as the first quarter of 2026 has now passed, it allows us to take a step back and just summarize some of the observations we see out there in the field from the first part of the year.

So to reflect a bit on what's happening now and what we see, it's a bit a continuation of what we presented for the last quarter in the sense that the market situation and the drive, the trends, they continue. It was back in the previous quarter, a tale of 2 stories, meaning that there are some opposite directed observations. That still holds true. We see that the projects are fighting and in some cases, struggling to meet FID timelines, the targets that are set, while also at the same time, bigger and more healthy projects are underway. And this is all across the board. It's in all the markets that we observe and we play in. So it's a general theme, but it both means that there are stories around projects waiting and projects progressing and being larger than they were before.

So we do see a more healthy project pipeline in general coming underway. And we do see that the hydrogen industry is showing these positive signs that we also started observing in '25. So although it's too soon to say that we're out of the woods with regards to maybe previous unrealistic expectations on the timeline shaping this industry, we feel and we see that this is heading forward and then progressing in a similar pace. So the net result is positive. It is moving forward and we see the sizes and the pipeline growing in general. These signals we observed are of different shapes and forms, but they do give us comfort that this net result is indeed great strides forward rather than standing still or even moving backwards as it was a few years ago.

There are mainly 3 overall clear signals that we can address here. So regulation is the main driver in our industry. So it's for decarbonization, but increasingly so, also for the theme of resilience in the energy systems worldwide. The situation in the Middle East, for example, is very much the one we have at present now. Not a short-term unlock, but it underlines the criticality of an alternative energy mix at hand. And it does spur also political attention to have resilience on broad energy solutions.

On the project side or the market side, projects have indeed fallen back in '23, '24, and continued into '25 to some degree. And there has been postponements and a few of these still happen in '26, but to a much lesser degree than before. There is a tectonic shift compared to a few years back towards healthy projects, where the fundamentals are really scrutinized in a different way now to build a solid business case. That's evident from our talks with our clients. You could say that there are more of the right questions being asked now and being discussed.

So in these discussions, our clients increasingly talk about when things will happen rather than if. And that's a shift in the narrative compared to these maybe a few years back. Obviously, our clients still look to optimize every bit of possible revenue on project level. So that very much focuses on reaping the benefits of the regulatory upsides and potential stacking of financial support that comes out of it. That's probably the main reason for some of these shifts.

But we do see when that happens as well, it opens up for new opportunities and new prospects and opportunities are also entering our pipeline, and they do this in this quarter. So counting only for the start of 2026. This happens across all our key regions from East to West. So it's the markets that we play in and that we focus on. It's the Americas, it's the Europe, it's the MENA region, and it's specific locations in Asia. So that is all very, very positive indeed. And even they come from some unexpected angles. And we are in a favorable lead position still, as mentioned before, on around this NOK 1 billion on already established positions. They are still active. They are still in play. And they are counting on a 12-months rolling forecast. I'll come back to this in just a second.

But to dive a bit into the different factors and signals that we see here. The political agenda first and foremost, it's important for our industry to shape a functional market design, that needs to happen. We can draw some analogies here made to other green industry that has maybe on the timeline happened before us and progressed. So other green industries where regulation helps to form a level playing field where a free market and competition can then take its course.

You could mention wind in the '90s and the '00s. You can mention biogas in the 2010s, 2020s. They are good examples of something that is decade-long establishment of efficient and mature markets and even still maturing. Regulation, I said it is already, it's the main driver of the industry. And it is, therefore, very encouraging to see that, especially with Europe as the frontrunner, we keep taking steps forward for functional hydrogen ecosystem. So just this quarter, there has been uplifting news.

On the production side, this is where EU has supported the strongest and focused most in the previous years. The European Hydrogen Bank ran its third auction with grants to support more than a gigawatt of electrolyzer capacity. That has, for sure, been needed to promote on supply side and has been happening so throughout the last couple of years. Now, however, offtake maturity is what we identify as the main gating factor for reaching financial close. And there are very good and practical examples now that how we can mention Germany probably is now one of the front runners here on how end users can now obtain indeed very favorable terms for signing off on renewables and green hydrogen to using their energy consumption on a daily level and do so without a loss. So in this regard, Germany is now one of the locations that we see really pushing this agenda and making it concrete.

The match mechanism helps connect supply and demand in a structured manner and increasing transparency. This is new and it helps to surface both price levels and gaps between the supply and demand side, so they can be optimized in a commercial setting. And this is new and this is very positive, that's needed to close the delta that has been existing and is still existing. There is also a sense of pragmatism from the European Union, which I personally find extremely encouraging. So we show or it's being shown to decision-makers that the decision-makers are actually taking market feedback into consideration.

And to be clear, the jury is out on this, but an early review of the RFNBO requirements related to RED III, the Renewable Energy Directive, is on the board. And this is a clear signal and a way to lessen the restrictions on the industry in order to make and facilitate more easy project development. So pragmatism, I believe, is something that EU has perhaps not been the most known for, but this I find very positive. All in all, very clear signals that the EU wants the industry to succeed and some measures that will inevitably lead into impact in the market. There is no turning back at this point, no backtracking.

I want to turn attention now towards the global picture of how projects are developing. So if we consider the global hydrogen pipeline, there is better coverage before -- than before on project information, so down to project level on the characteristics and how they're set up and the infrastructure, et cetera, et cetera. So that gives us more insights. And there are some noteworthy findings here. For projects that are in the near FID stage, so shorter term, closer to higher maturity, it's all been about China for years and to some extent, still is. China is leading on this front.

But midway through the pipeline, there begins to be a bit of a rearrangement. Europe takes over as the lead. But otherwise, we also start to see more fragmentation. So a broader range of locations that come into play. And even earlier in the funnel, that feature is only enhanced. So other locations that actually have really great fundamentals for low-cost hydrogen production could become more prominent. And now the early part of the funnel naturally also lies further out in time as a general rule of thumb. And so there is time to adapt to this situation, however that evolves over the years as the first part of it.

But overall, if this outlook here, outline, is any view for a proxy of how the green hydrogen landscape is evolving over the coming years, then HydrogenPro is really well positioned on the short, medium-term here, playing active roles in the major markets. So meanwhile, the dominating role of China evens out and spreads out, we will be ready to take our fair share of the market in a global market setting.

Before moving on, one thing I want to dwell on a bit is the particular slice of the pie here with rest of APAC. So there's already now taking up a good portion of the advancing projects. There are different locations in play here. But specifically, I want to draw attention to one of the fastest-growing markets with probably the highest potential, and that is India. What makes India interesting and worth noting and worth having a high interest in for HydrogenPro is big ambitions on governmental level. It's great fundamentals for low hydrogen cost production, including a buildup of renewables to support it. And it's a vast potential as well for an internal market. So you have a lot of the ingredients needed in order to build a really sufficient and promising production hub for green hydrogen, whatever the use case is. So in other words, really, India have expressed a really need for a turnaround. So that's the driving force here, and it's strong. It's really strong.

And the question becomes, of course, if this will actually be realized to the fullest, and we don't know. We will have to see. But even if we only for the 2030 vision that is mentioned here, if we only even get halfway there, this is the place to be, then it's a really big potential. Because the project pipeline in India, it's been progressing. And HydrogenPro is now also in contest for projects that are well into several hundred megawatts. That's happening right now as we speak, in the first rollout wave of projects in India.

As a contender in this market, we believe that we are well positioned for the next wave subsequently also. So there's a timing element here and there is a strategic rationale behind focusing closely on this market. And we've setup through our partnership with Thermax in a way that we now, in a combined manner, have a really compelling offering in India. So we are best-in-class on the offering around the price and performance ratio, on quality that we bring in from Europe, locally for Thermax and their knowledge in the market. And this also goes with a local delivery and a support model from a local strong EPC player that has a track record. So it's the best of 2 worlds and it's what our clients in the end often highlight as one of the upsides in general for our partnerships.

If you have a chance to shortcut some of these frictions that could occur between the OEM and the EPC players, why wouldn't you go for that? So -- but in India, we have a focused approach towards the high momentum applications. And these are closer to being bankable and these are in demand. We mentioned here refinery and e-fuels as the 2 big buckets that are probably having the highest momentum. These are just a few mentions and there are further of them. But India is moving, and we have a role to play there. So for this reason, India and Indian prospects are naturally also part of our pipeline now and is actually helping indeed to grow the volume of our pipeline in general.

As I mentioned, we are in the race for specific opportunities for 2026. So this is a 0 to 6, 6 to 12 kind of timeline here. And of course, no guarantees for a new player in the market. But with the offering we have on the table, we feel very well positioned and that we bring true value to potential clients.

In general, on the pipeline, I want to just reiterate a few observations that is related to the overall view and buildup of our pipeline. So I've mentioned briefly, but opportunities that we have seen coming in just in 2026 now, these emerge all over geographically. It's from East to West and it's portraying a much stronger commercial standing than what we saw some years back where there were often some real question marks around the bankability for whatever reason. So geographically coverage, I think, is a positive thing.

We are able to and have been able to grow our pipeline with both early stage naturally, but also with projects that are further into stage where we enter competition later down the road. So near FID or somewhere between FEED and FID potential. So that's in a timeframe that is not years away. And as I just mentioned, in some situations are on the 2026 horizon.

So compared also to when we exited 2025, our pipeline has increasingly diversified. So it's in terms of our partner outreach and coverage. That is a true factor here as well that I find very positive and gives us resilience and lower our risk in general. All the partnerships that we now have, have concrete commercial opportunities to pursue. That was different from a year ago or even exiting 2025. So that makes it possible for us to grow the pipeline in volume and in relevant segments and locations. So it's from a broader range of solutions. And this is all the way from small containerized solutions up to several hundred megawatts like the ACES project that you saw before. So it opens up for a broader set of use cases and applications that also require different solutions. And we can then play that game better than before.

If we zoom in on the end stage of the funnel here, we are still at the late negotiation stages for the previously mentioned project, this cluster of a handful of projects that amounts to around NOK 1 billion on the next 12-month timeframe. Here it should be noted, we're not accounting for new and for other existing opportunities that have progressed since then from earlier. So everything else beyond this cluster within the next 6 to 12 months' timeframe is actually excluded here and considered a potential upside. This may be for the reason that technology supply is yet to be chosen. We participate, but there's still a round or 2 to go.

And finally, as a final note to some of the questions that we often have, what -- it's just worth restating here what we guide on and what we do not guide on. We, of course, help to give an overview broadly of the direction of the potential of our pipeline in general to assess the commercial state, but we do not hand out details around specific projects or partnerings or specific clients along the stages.

So with that in mind, that basically concludes our discussion and our presentation for now. And we will hand over and open for a Q&A session.

Yes. So audience has come up with some questions. The first one, what are the conditions for the EUR 16.5 million grant for electrodes of EU Innovation Fund, and was October 2024 news fulfilled? And when do you expect to receive the grant?

Okay. So that grant is then subject to a completion of a new investment in Denmark, which I presented in previous quarterly presentations. So that will then -- if sort of we decide to go ahead with that, that will have -- that will sort of be a leap in terms of our future manufacturing capacity of our electrodes. That particular grant is then, well, sort of the funds flow on that is then subject to completion of that investment will need to be paid afterwards. So for sort of for that facility to be built, we will need to prefund that through other sources.

Next one. What was the headcount as of Q1 2026?

As of the end of the first quarter, we were around 90 people in the company. I think the exact number was 91. We presented some cost measures that we are sort of now executing on and that will mainly impact the number of employees in China, right, connected to the OEM agreement with LONGi. So our headcount in Tianjin will now go down significantly during the quarter in line with sort of the upscaling of that new contract with LONGi. On top of that, we also presented that we have made some temporary layoffs. So you will start to see sort of the impact of the staff reduction now from this quarter and onwards during this year.

So what is the current operating cost base after downsizing in China and the temporary layoffs in Europe? What cash burn do you expect for Q2 and Q3?

So we're not sort of guiding specifically on the cash burn. But that said, I think sort of starting point is that when you look into our Q1 report, that gives a fair representation of the, both the activity level in the company and the cash burn as well. So looking there at sort of the personnel expenses of NOK 30 million in the quarter and then the operational -- other operating costs that was at NOK 11 million in the quarter. That gives sort of a fair representation of the underlying, call it, fixed cost base, but it also includes some of the cost measures, right? There are some workers in Denmark included in the payroll who are now of course delivering on the SALCOS order and the downsizing in China in addition to also the salary reductions in Europe. So the totality is that we are sort of targeting an annual cost saving in excess of NOK 20 million or, say, NOK 2 million per month. So if the starting point in the first quarter was some NOK 40 million, NOK 45 million, you can then take out NOK 2 million approximately per month.

A question regarding DG Fuels. DG Fuels seem to use blue hydrogen for its first project. Is there any potential with DG Fuels with combined blue and green hydrogen as the Samsung FEED study implied? If so, how advanced?

So the DG Fuel project is still in the application stage at the Department of Energy in the United States in order for to loan certificates. The planning is to use a mix of gray and green hydrogen. So they have been approved access of some 200 megawatts of green energy supply, electricity, which will go into green energy production. So approximately 200 megawatts of green energy is planned for the Louisiana project.

I think Jarle meant to say blue hydro in combination with wind.

Yes, sorry.

And could you also shed more light on the new OEM agreement with LONGi?

So LONGi has invested in a very, I would say, modern and efficient and automated production facility. As we know, there is a lot of capacity for electrolyzer production. So it makes sense to consolidate the capacity and get a higher utilization. So what we are then gaining here is that we get access to a more optimized operation, needing less operators per electrolyzers being produced. We are installing our quality systems, which is well recognized by customers visiting us. We are implementing our standard operating procedures for how to do things. And we are also posting signs and HydrogenPro logo in the production facility. So the customers coming visiting, they will experience HydrogenPro site. But we are taking advantage of the cost optimizations. And we are also not sharing the technology as such and certain part of the operations are in separate locked areas for only HydrogenPro qualified people to enter. So I would say, it's basically a contract where we have lower investments, asset light, more efficient, and lower cost production, and access to more capacity so we can deliver faster.

A technical question. What are the different lines on the right-hand side on Page 11 of the presentation? So that was the hydrogen product development side.

So on the Y-axis, you have what we call the specific energy consumption. In other words, how much of the electricity put in to hydrogen production goes to hydrogen. There are always losses in the system, and there's also a barrier basically physically how high you can go. So you cannot go to 100% and getting beyond 95% is very challenging. So there will be some losses. So this is the specific energy consumption you are using for producing the hydrogen.

On the X-axis, you have the load, energy load that you put in. So basically, an electrolyzer is designed for a certain energy load it can take. And for the -- it was a little bit small but for maybe some of the viewers saw that it was not stopping at 100% load. It was also going to 110% and 115%. It means that you have the capability, the possibility of putting more energy into the system than what is normally defined as the ideal 100% stage. But you will not always have full availability of energy according to the design. So you are slowing down the amount of energy put in. It's a little bit like when you're driving the car, how hard are you pressing the speeder when you are driving a fuel-based car.

So the point I was trying to make is that as you go down in load, the efficiency will also go down. You will lose the specific amount of energy you are using. And this is what we are doing with our new development. There are also other ways, obviously, to measure both the energy consumption and the efficiency in terms of current, excuse me, I'm losing my -- specific current, yes, consumption and shunt current, of course. But this is a simple way of demonstrating the effect of the electrodes. Maybe I should ask if you will -- you have a PhD in hydrogen production.

Yes. So I think exactly this is the situation. We always look to move further on the load side to produce more as efficient as we can. And when we are connected to more and more renewables down the line, overnight or during the day, there will be specific needs during the 24 hours to go down the load, either because the sun is not shining, the wind is not blowing, for whatever reason. That's why it's so critical to talk about the lower load percentages and why it's important for us to keep it high. So how flexible can the system in general run. And maybe just add to the setup of the graph itself. So the different lines and the different curves, we're representing different versions or development stages from the very bottom of it and increasingly upwards towards newer product versions and generations. So that's what you see the lift step-by-step from one system development to the next one and where we can push it into the high end of the 90s plus, 95% in this case. So that's what you also get from this graph.

And how much of the expected SALCOS revenue do you expect to come?

Yes. On the SALCOS project, it's been talked, we have, of course, now delivered most of it as of the first quarter. We are continuing to deliver now with -- from Denmark during the second quarter, and there will be some revenue recognition related to that. But it's in excess of 90% already recognized now as of first quarter.

As for the LONGi partnership, what does LONGi getting in return from this partnership?

LONGi gets a better utilization of their current plant. So this is a win-win situation for both of us. We are together filling more capacity in their plant.

So if the green hydrogen is used for DG Fuels, will HydrogenPro be the supplier of the equipment?

HydrogenPro has in connection with the loan agreement, which was presented several years ago, an exclusive agreement with hydrogen to deliver electrolyzers.

Okay. So thank you all for joining us today. We appreciate your continued interest in HydrogenPro. If you have any follow-up questions that are not addressed during the Q&A session, please feel free to reach out to our team directly. And we look forward to updating you again next quarter. Have a nice day.

Good morning, and welcome to HydrogenPro's Fourth Quarter Presentation. Today, I'm as usual, accompanied by CFO, Martin Holtet, who will present the financial results; and our still new CCO, Michael Caspersen, who has been with us for 3 months and will give us a market update. And I will take you through the highlights of our recent developments.

As we always start with, for new viewers, HydrogenPro is an original equipment manufacturer company, focusing on the core technology, which is well suited for renewable energy. It's a pressurized alkaline electrolyzer and a gas separation unit. I noticed other OEMs are bringing pressurized electrolyzers to the market now. Well, we have delivered 220 megawatts and are on our way with the next 100 megawatts of pressurized electrolyzers. We address markets for decarbonization of selected large-scale industry segments already using gray hydrogen or where decarbonization is hard to achieve through electrification.

Of the recent highlights, in 2025, we saw several projects being canceled or postponed. During the latter part of the year, however, several projects were activated and new ones even added. We see now a maturation of the pipeline and projects where we are in negotiations. Of these, we expect FIDs of projects to be taken at a value of around NOK 1 billion. Michael will address this and our position to further in this market update. We are both pleased and proud of one of the world's largest hydrogen projects, the ACES project, now coming to finalization and start-up.

Our electrode manufacturing in Aarhus continued during the fourth quarter, its production ramp-up delivering to Salzgitter. Organization was streamlined with reduced costs. We completed the transaction of acquiring the 25% minority share in our Tianjin factory. And Michael was engaged as new CCO as of December 1, and I'm happy to present him here today.

The ACES project is now coming to completion. It has taken time, but this is technologically groundbreaking work and very complex and thus, a long commissioning period. It is 40 electrolyzers and 20 gas separation units working together and producing gas as they should. Compressors have started filling caverns. And due to the long distance and preparedness, we have also delivered 4 additional electrolyzers. And there are no exchanges or replacement of electrolyzers or gas separation units. The ACES 1 project will be capable of storing hundreds of gigawatt hours of energy in its 2 hydrogen salt caverns. The current project is using 30% hydrogen in the gas turbine power generation. And now the Los Angeles Department of Water and Power and Intermountain Power project have started the preparation for next stages going to first 67% and then later 100% hydrogen.

After concluding the commissioning phase, it's now open for selected customers to visit the plant as reference, seeing 220-megawatt plant operating. For customers, it's all about having references for capability to deliver on large-scale projects, seeing them in operation and have documented performance. For the Salzgitter project, the construction of the hydrogen building is in good progress. For HydrogenPro, all components have been delivered to Erfurt, where we are assembling. 10 electrolyzers are now assembled, and we are currently delivering our Gen 3 electrodes to be included in the remaining of the electrolyzers.

We see now a lot of initiatives and policies for incentivizing use of hydrogen in Europe. That is good and will contribute to low cost. See what happened in the solar industry development, how it was driving down production costs. Bridging the cost gap versus fossil energy remains the main hurdle for green hydrogen market scale up. And cost competitiveness is key to decarbonize Europe. But at the same time, we are also seeing initiatives from manufacturers, which are supposed to limit competition, but protectionism will slow industry pace by driving up levelized cost of hydrogen.

Over the last year, we have seen projects in Europe being postponed or even canceled due to cost increases. HydrogenPro's answer is being a European OEM with cost competitive position. That is with high efficiency in the electrolyzer and the electrodes, which is also why we are focusing on R&D and engineering. But we diversify our supply chain through flexibility and cost competitive manufacturing by producing certain elements in China and through partnerships for manufacturing in Europe and India. a partnership model in the market for a full scope offering and maintaining a lean cost and efficient organization.

And I will now hand over the presentation to Martin.

So in the quarter, HydrogenPro generated revenues of NOK 17 million. The EBITDA came in at minus NOK 49 million, and the net loss was NOK 44 million. So important to note, the quarter is negatively impacted by costs on the ACES project. But as Jarle now mentioned, the commissioning is now close to completion. We are continuing to deliver on the SALCOS order and also doing some on-site work at the ACES project, and those are the 2 main drivers of the revenue in the fourth quarter. Personnel expenses was down with NOK 6 million compared to Q3 and other OpEx was down by NOK 12 million compared to Q3. So this is driven by continued cost reduction measures mainly.

Then let's look at the development in the liquidity position in the quarter. So the cash balance at the start of the fourth quarter was NOK 121 million and ended at NOK 102 million. So looking at the changes, the EBITDA, as mentioned, came in at minus NOK 49 million. We had changes in net working capital of NOK 37 million, a positive impact, mainly then driven by a reduction of trade receivables. We invested NOK 5 million during the quarter, mainly then in the production line in Denmark. And then we had the financing mainly leasing of NOK 2 million, so ending then at NOK 102 million.

The total budget of the manufacturing of the electrodes, the manufacturing line there is still sort of unchanged at NOK 60 million. Where we, as of end of 2025 have invested some NOK 47 million, meaning that there is NOK 13 million left to invest. But the manufacturing line is fully operational. So those remaining investments are related to further improvements. And as of the end of the year, the backlog stood at NOK 275 million.

Then let me give an update on the cost savings program. So at the start of the year, meaning -- or actually late 2024, we set a target to reduce our cost base with some NOK 40 million, equating to approximately 20% of the fixed cost base. And please note that the cost program then excludes all the project-related expenses. So we completed that cost-saving measure program already in the third quarter last year, and we have now made even further measures in the fourth quarter, bringing then the total cost savings on an annual basis to in excess of NOK 50 million or 24% of the starting point.

So we have a very lean cost base with our strategic partners, and that is enabling us to win contracts on a global scale. So we combine that then with keeping a lean organization. But still, we need to keep sort of the core competence in the company in order to have the delivery capacity on large-scale orders.

So with that, I will give the word to Michael to give an update on the market side.

Thank you, Martin. As said, I'm Michael Caspersen, and I was recently announced as Chief Commercial Officer for HydrogenPro. I will share today a snapshot of how I see the hydrogen industry today and moving forward, what we see in the field and share our latest commercial update. First, I'll share just a brief on my background and what got me here to HydrogenPro. I'm what you can probably call a bit of an incumbent from the hydrogen industry. Since the start of my career, I worked in this industry and around it. My background is technical. I come with a master in material science and a PhD in hydrogen technology specifically. So since the very start, I worked hands-on with components, with stack technology maturation, scaling, industrializing alkaline technology.

Since then, I've worked practically nonstop more or less with hydrogen in various capacities, the latest with Boston Consulting Group coming from a handful of years, we had the responsibility for everything that was Greentech offers, which means basically electrolyzers and fuel cells. So I've seen ups and downs in this industry. I've worked up and down the value stream and firsthand experienced a lot of, let's say, beliefs and discussion and frankly, also misconceptions that surround this industry.

Now joining HydrogenPro, it feels to me like a coming full circle. So I'm happy to be here and happy to be in a company that basically have already great achievements and help pushing this forward.

But let's look at the market now and get into the commercial side of it. I'll kick it off with a little bit of backdrop. So looking back just a few years. is probably not lost in anyone that hydrogen has taken longer time to cement the true potential for decarbonization that it holds. The reasons are many. But at the essence, establishing a whole new and complex value chain takes time, more so than was expected. The industry is now reorganizing following these recent years of slowdown. Projects have been rolled back or put on hold, and we see that and everyone see that. We're not out of the woods yet, but we do see definite and concrete positive trends. And I'll come back to this just in a minute.

But moving forward, there is a large consensus on market expectations that have been communicating broadly and widely, more so than before, just even a few years back. It seems now that everyone is looking at the same market and the same picture, which is actually different from before and very positive. What is communicated around these 5 million to 7 million, 5 million to 10 million of tons of clean hydrogen, of which some will be green, some will be other -- follow other production paths. It also comes with a higher certainty than previously. These are more rigid, solid numbers. And importantly, this is to be considered more of a floor than an actual ceiling.

A reason for this is a change in focus on delivery capability rather than the technical potential of hydrogen for various applications. There has been some turmoil and has been discussion back and forth where to use hydrogen, where to use it more efficiently and where it actually belongs. I truly believe now that this is for the better for our industry, and it's a welcome chance for stabilization. But -- so let's look at just a bit into what these numbers actually contain underlying here. For the last handful of years, the hydrogen industry is, for me, a tale of 2 opposite directed tails. One is broadening out the technical potential across a wide range of applications and use cases, potential, some high, some low. And the other side, undeniable project cancellations and rollback due to high cost and length of certain bankability.

Looking into the underlying dynamics, there has been both headwinds on a project level, but also tailwinds on industry level, which is why some things are experienced as moving forward, while some are experienced as moving backwards. It's been a bit of a chicken and egg situation. And all actors across the supply chain has basically been shouting for steadiness, for transparency and for predictability in order to make sound business decisions that last into the future. This is all the way from technology providers as ourselves, project developers, financiers and so on and so on.

And they are starting to get that now. The noise that has been surrounding us from these 2 dual tails is fading away and business fundamentals can then take over. So despite of what is being conveyed from opposing lobbyist and trying to convey that everything is just bad and glooming, there is real progress, and we see it in the numbers. policy support is growing in the key markets, and it's moving forward and it has been year-by-year.

We see an increasing volume of investments. It's actually quite steady and moving forward. We also see innovation on technology. And we do see, as also highlighted here, that these project rollbacks is actually part of a weeding out of less profitable projects that do not belong and never really had a fighting chance. This is not a sign of illness, but of increasing health. The result at the very end is higher certainty on industry level for HydrogenPro as well as an electrolyzer OEM and to our shareholders. When the noise -- this noise and the uncertainty is fading away, the industry can then focus on where it's needed the most, and that's driving down cost. And cost is coming down.

As an electrolyzer manufacturer, HydrogenPro plays part of this, but we also recognize the great efforts that are made when we look outside the window and see our partners and our customers down the value chain also fighting hard to lower the levelized cost of hydrogen. And we see and we meet a wide range of projects with very different circumstances with quite different characteristics. And it's more clear than ever which ones are effectful.

And hence, these examples goes a little to -- a little bit on archetype level on some of the ones where it works and where it doesn't work. And this is maybe a little bit sketched up. That's true. But the recipe for addressing both the CapEx and the OpEx side to the contributions of the levelized cost of hydrogen are clear. We need lower cost of the hardware, and we need efficient systems. And then we need, of course, further the externalities to play its part on infrastructure development, on policymaking and so on. So these decision-makers are working with us.

These are indeed archetypical in nature, I'd admit that, but we can have a look at where the latter one of these plays out in reality and where it reaches even the very low end of the green bar you see here for green hydrogen. And this is -- keep in mind that the 2030 bar, the estimate for 4 to 5 years from now. So if we keep that in mind, that these estimates is somewhat around $3 to $8 per kilo in 2030. We can see that can be beaten because even while unhealthy projects have been rolled back, we're seeing the emergence of new projects. They appear in new locations. They're also growing in size. And if we go 3, 4, 5 years back, only a few select OEMs could claim to actually deliver electrolyzer systems in a 3-digit megawatt scale. HydrogenPro is one of them.

Now there's a growing number of projects in this size range. They're big, they're significant as well as there is in the double-digit range, and they're more healthy. And we owe that to the industry itself, but equally to these decision-makers in the political landscape. So we list here a few examples from our key regions of where clean hydrogen is actually moving towards. And they are observing and experiencing favorable terms on political and regulatory level. And that's a big part of it because it is clear and it is communicated from policymakers that hydrogen is needed for decarbonization in the energy mix.

The European hydrogen mechanism is just one example, brought it here because it highlights one of the very critical aspects that needs to be fixed in the industry, basically connecting supply and demand. It's a very, very important part of securing offtake for the future. We will see the efficiency of this kicking. But we do see already industry in turn responding to this. We're seeing recent bids falling down to or even below the $3 per kilo of produced hydrogen in India that's observed in the start of this year. And granted, these examples here are the best conceivable circumstances, pointed out here for now, but they won't continue to be. This will be moving. And it's a testament to the progress that is happening in our industry.

And many industry professionals would likely have struggled with the likelihood of reaching $5 per kilo around Europe by 2030 or before this. These numbers that we collect here are from 2024. We definitely see progress. And this progress that we also meet it out in the field. It's converting into practical opportunities for HydrogenPro. And what is probably clear is that we're working in an industry with big capital projects, sales cycles are long, and that gives a natural latency period for refilling the pipeline.

And it is no secret that with the rollback in the global hydrogen pipeline, a chunk of our previous opportunities roll back to. But we do see great potential moving forward, both from existing and from new opportunities. This is across a wide range of interesting segments where the hydrogen business case is now coming into fruition and actually being competitive. We see that across the entire pipeline in the geographies that we are present and we're opening in.

So we have believed in our model during the last couple of years, we've stayed consistent in our mission to deliver low-cost and efficient electrolyzers. And by staying true to this, we've been able to manifest an attractive pipeline across hydrogen relevant markets. It's in North America, EU, the Middle East and Asia with this range of attractive applications. So we believe that we are as good as we can set up for success. So more specifically, for the most mature opportunities, we see very promising signs moving towards realization on the short term.

These 4 projects marked here are entering a final contract stage. So it's advanced now. And together, they hold a potential around NOK 1 billion. It's significant. We're confident that these projects are moving ahead, and we are in the pole position to take a good portion of this value. So we feel good about that and 2026 will be an interesting year for HydrogenPro. As a final mark on this, what makes us positive that we will stay in pole position for more opportunities to come is positive feedback that we received from market when we do sounding and ask for feedback from our clients, from customers and other professionals. And these testimonies, they convince us that we are on track. We're perceived from their side with their eyes to be strongly positioned, which means we get feedback on being cost competitive, being high on performance, having a real-life track record. Jarle mentioned the 220-megawatt project. That's a real-life asset that we can showcase and that we have delivered, and we will also take learnings from.

And besides this, on the more softer side of things, we are a flexible partner and with our partners, optimizing for the layout and delivery of full scope that we can deliver together with them across regions. So the flexibility in this partnership is something that we also get as good feedback. So I repeat, 2026 will be an interesting year for the industry and for HydrogenPro. Thanks for now. That concludes our presentation.

So I will welcome Jarle and Martin back on stage now for a brief Q&A session.

Yes. So audience has come up with some questions. The first one is your order backlog is NOK 275 million. Which profit margin do you expect from this backlog?

Yes. So just firstly, the backlog then mainly consists of a service and support contract on the ACES project, mainly related to overhaul some years down the road and some remaining revenues on the SALCOS order. So those are the 2 main elements of that. And with regards to margin, unfortunately, we're not guiding on margin. So I'm not able to give exact figures on that.

And do you expect any projects in India to be started in 2026?

Maybe I can go first on that. We are very active in India now in process with several projects in the pipeline. Exactly when the projects will start, it might be a little bit harder to predict. But there are definitely a mix of projects that we are in discussions with on a shorter-term horizon and then obviously, of the larger one, which we have seen in the press being further out on the time line.

And next one. Can you elaborate the service agreements on ACES and Salzgitter? And what can we expect of the income?

Maybe Martin.

Yes, I think that was more or less the question I replied to before. But again, yes, so the majority of the backlog is related to the ACES service agreement and then a larger overhaul after some years of operation. So that again, out of the NOK 275 million, that is the majority of the backlog.

Another financial related question. Do you have enough liquidity to take you through 2026?

Yes. So as you will also see in our quarterly report in Note 10, where we have done sort of a going concern consideration, we have concluded that we have sort of the adequate liquidity resources given the market uptick we see now and sort of the high probability of FIDs during the year. So that's our conclusion on that based on today's assessment.

Regarding the market dynamics, could you comment on the current competitive dynamics? Specifically, have competitors secured projects that you were involved in? And if so, what do you believe are the key differentiating factors in those awards?

Yes. Well, we're not claiming the entire market. So I'm sure there will be competitors that grab projects that we are either in or have not been in. So that's a very broad picture there. The dynamics are very different per region. And I think they are developing across regions. So we actually see in general across the market, a lot of competition moving across regions, which used to be maybe more regional, more local, is becoming more of a global competitive business and competitive situation.

And in some markets, it's pushed harder than in others. And some markets are just more advanced than others, probably a result of the first point. So I think what sets us apart is nothing unusual, and it's the business fundamentals. So it's helping to drive down the cost for our customers in the end. The end result is the cost of produced hydrogen, and we play a part in that. And we do that by delivering our cost-efficient electrolyzers, integrating them with our partners and making them efficient so that once in actual operational mode, they also deliver the lowest possible LC rates for our customers.

And then, of course, there's how do we make these projects come through, come alive and operate under more and more advanced situations and circumstances. But that's pushing the envelope on innovation all the time. But there's no secret sauce to it. It's hard work and it's business fundamentals.

Let's say, if one of the hot leads ending a order, does the company have capital to execute and deliver the order without the need for a capital raise?

I don't think we can answer specifically on that. The base position is that, yes. Obviously, contract is structured with a certain prepayment and then payment milestones throughout the delivery period. But as you can appreciate, we cannot go into the details of the contracts in that way.

And further to that, of course, with our sort of partnership strategy, offering sort of the full scope and on the EPC side and also bankability, it's, of course, very important for us in order to be able then to deliver on the contracts. And as a sort of a principle, we typically then enter into contracts where we seek a net positive sort of working capital through the project.

The expected FIDs in 2026, are they typically more back-end loaded in the second half of the year or are expected to spread out throughout the year? And what are the main risks for these projects?

I think we come back to that question when we get to a point, obviously, of announcement and refer to it at that time.

Yes, they are spread across the year, but more specifics on that is we are waiting for further notice on the contracting side.

And to the risk element, there's always a risk. And the clue is, of course, for the customers to take the final investment decisions. And offtake has been the key constraint up to now, but we see that is coming more and more to reality. Offtake contracts are coming in place. We see it being signed in Europe. We see that being signed also in other parts of the world. India was mentioned.

And could you elaborate a little bit on any developments around the strategic partnership with Longi and specifically around the use of the next-generation electrodes?

I'm not sure the -- should we say, connection here in terms of the electrodes and the partnership with LONGi. LONGi is a good equity partner for us. We act independently in the market. We are exploring all the possibilities of streamlining the manufacturing structure in China, most of all. And obviously, we are also looking at other areas of cooperation.

And given the current cost structure and prices of equipment, how much megawatts of capacity do you have to secure or deliver per year to go EBITDA breakeven?

Again, we don't guide on that. Yes, there are some equity analysts covering us. So I think it's more of a question to raise to them. But I think what's fair to say is that we are in the industry with at least with a headquarter in Europe or the Western Hemisphere, the lowest sort of breakeven player in this industry.

And so one audience says, first, thanks for a very good presentation, and welcome to Michael. And any news that you would like to say about H2 Giga projects in Denmark?

H2-GIGA is still in a study phase. I think I'll repeat what we have said all along that investment will be taken when we see that the delivery schedule and the order situation allows for it.

All right. So thank you for all your questions and for joining today's session. If you have further follow-up questions or inquiries, please feel free to reach out to us, and we appreciate your time, and this concludes our webcast.

Good morning, and welcome to HydrogenPro's third quarter presentation. As usual, I'm accompanied by my excellent CFO, Martin Holtet, who will present the financial results. I will take you through the highlights and our recent developments, market updates and our partnership strategy. For those of you who do not know us yet, HydrogenPro is an OEM company focusing on core technology, which is well suited for renewable energy sources. Our products are pressurized alkaline electrolyzers and a gas separation unit kit.

Addressing market for decarbonization of selected large-scale industry segments, which are already using gray hydrogen or where decarbonization is hard to achieve through electrification. HydrogenPro is delivering to 2 of the largest projects in the world. Right now, a 220-megawatt project, which is starting up these days and a 100-megawatt project, which we have delivered, all the main components, and now we are producing our third-generation electrodes in our new factory in Denmark. A few other electrolyzer OEMs are delivering to projects of the same scale.

Of the recent highlights, our revenue last quarter ended at NOK 35 million with a gross margin that improved to 55%. We continue our strong focus on technology improvement -- establish a foothold in the Middle East is making very good progress. And last, but not least, I'm very happy to announce the embarkment of a new Head of Sales and Commercial. Martin, please.

Thank you, Jarle. Then I will walk you through the Q3 financials. So in the quarter, revenues came in at NOK 35 million, and those revenues are mainly related to deliveries on the ACES project. On top of that, deliveries of electrodes to the Salzgitter project also had commenced in the quarter. Gross margin came in at 55% versus 22% in the second quarter. If you recall, in the second quarter, the gross margin was negatively impacted by some cost provisions on the Salzgitter project in particular. So we could say that it's now -- now we're back more to normalized levels.

Personnel expenses was up NOK 4 million, and that increase is due to -- we have made the severance payments, which is then related to the reduced activities at our factory in Tianjin. The number of FTEs is considerably lower with a lower payroll now going forward. Other operating expenses increased by NOK 9 million in the quarter compared to the second quarter. And the main driver behind that is first and foremost, project deliveries, where we then accrue more costs when we make a delivery, which is then also then sort of accounted for us in our financials with revenues. So we have revenues and costs simultaneously.

In addition to that, we had also some lower level of grants, which means we have then a reduction in the deduction of expenses compared to the second quarter. So the EBITDA came then in at minus NOK 45 million in the quarter. Then let's look into the development in the liquidity position in the quarter. The cash balance at the start of the first quarter was at NOK 107 million, and it ended at NOK 121 million. So the changes in the cash position were as follows: we had an EBITDA then of minus NOK 45 million, changes in net working capital of minus NOK 3 million. NOK 6 million was spent on investments mainly in the production line in Denmark.

So on the production line in Denmark, we have a total budget of NOK 60 million where we, as of -- and those September have spent NOK 42 million. And that line is fully operational. And meaning that the remaining investments which we are now taking will be then related to further improvements on the line. Financing of NOK 68 million, mainly reflects the LONGi's equity investment that was settled in July this year. And last here, the backlog then decreased from NOK 284 million to NOK 252 million, a function -- recognition in the quarter and no order intake.

On the cost side. So at the start of the year, we set a target to reduce our cost base with NOK 40 million of annual costs or, call it, roughly 20% of our cost base when we do not include project-related costs. We have now completed that cost program. The number of employees in the quarter were reduced from 147 at the end of the second quarter to 89 at the end of the third quarter. And that is mainly then due to a reduction of the staff in China.

So please be aware, the cost program that excludes all project-related expenses and it's important for us to keep now some competence -- the core competence in the organization in order to deliver on projects. One of our competitive advantages is to maintain a low cost base and we will, of course, assess further measures going forward in line with the market activity. But our business model with strong partnerships enable us to have a global reach, win contracts on a global scale, but at the same time, remain a lean organization with a low cost base.

So with that, I'll give the word to Jarle to give an update on the market.

We have to ascertain that the year has been more challenging than what we saw at this time last year. So a slower growth than most expected. Only 30% of green hydrogen projects has advanced -- have advanced. However, some completions and feasibilities, we do see going forward to feed and into approvals. But again, 90% of the 2023 and 2024 CODs projects are delayed with more than a year, but we can also see that the delays are getting shorter year-by-year as we're coming up to 2025 and 2026. As said, we must ascertain that growth is slower than expected.

And -- but according to global hydrogen review, the underlying growth is showing strong progress. Installed capacity grew with as much as 145% from 2024 to 2025. Much of the growth is driven by China, but we also see significant growth in other parts of the world, among others, HydrogenPro's project Utah, United States. Another positive trend is the number of countries developing a hydrogen strategy is going, which again supports continued growth in project development. So despite a slower growth than expected, a solid progress shows strong underlying fundamentals. Well, this is a busy slide, and I do not intend to go through this in detail, but it is available for the interested reader on our website.

The table, as such is not exhaustive, but it is a snapshot of some selected regulations in markets which are in focus for HydrogenPro. And what we see is that more and more of regulations are introduced as well as adaptations of existing regulations like in Europe, where not all regulations have worked according to its intent, but now being adjusted or amended. IEA just issued its annual World Energy Outlook for 2025. Here, they expect the green hydrogen production to increase 70 times during the next 10 years. Their forecast is based on adopted policies, proposed measures backed by a market and infrastructure support.

The train might be rolling slower than previously expected, but it is, for sure, rolling. The stated policies are charting the path to a large potential of green hydrogen. And I am very pleased to now introduce Michael Caspersen as new CCO in HydrogenPro. Michael has a strong background, both technically and commercially. He comes from Boston Consulting Group, where he has led several projects along the hydrogen value chain. In addition to several years in Siemens, where he had a key role in starting up and commercializing their electrolyzer business.

Michael holds a PhD in hydrogen technology and will with his background and experience, bring great value to HydrogenPro's management team. His extensive technical and commercial experience will be instrumental in delivering our future growth. Erik Bolstad will continue assuming the role as Director of Partnerships and key account according to our strategy. The commissioning of the ACES project is progressing well. All trains have been through the initial start-up. A train here means 2 electrolyzer connected to 1 gas separation unit. And the electrolyzers are doing their job as the project goes into next phase of operation.

On the SALCOS project, we are now delivering the Generation 3 electrodes from our new production line in Denmark. I was recently a few weeks back in India, and I met with several potential customers. And we are now building up a pipeline by submitting firm quotations to project owners, having won in India's hydrogen auctions. Also on the technology side, we are supporting Thermax in developing their gas separation assembly station, and we are progressing well on the Indian market rollout. Based on our strategy, we are also progressing on establishing a foothold in the Middle East.

We see that Middle East, together with India, having the lowest cost for producing green hydrogen and are expected to have the lowest cost in 2030. On the way of getting a foothold, we are working together with selected partners and governments where we are building a good relations. As an example, we have appointed now Sheikh Rashid Al Maktoum's Sustainability Adviser, Claudia Pinto as also adviser to HydrogenPro. The market is driving more and more in the direction of customers requesting total EPC and a complete solutions from power in one end of the plant to direct compressed gas in the other hand. This is much driven by strong industrial project developers.

HydrogenPro is focusing on core hydrogen equipment. But the customers, they are also occupied with hydrogen equipment and its performance, but then bundled in a total EBC. And together with partners, we fulfill the scope demand, meeting all customers' selection criteria. The electrode coating line in August is in full operation, producing electrodes for Salzgitter project. We have expanded our testing and development capacity and are now testing electrodes in various conditions, new enhanced materials and long-time effects. And it gives results.

As we are developing new and even better coatings, combined with technology and design for reducing chances. We are testing out and proving better results with lower energy consumption for producing hydrogen. The goal is to get the power consumption with as little kilowatt hour per cubic meter produced hydrogen with as high current density as possible. The red line in the graph, which is already a very good compared to general market. But as you can see, with a shape which is common for electrolyzers, the bottom green line shows the results of our latest development, which we will now continue to develop for commercialization.

The technology strategy and roadmap is to continue to reduce power consumption, commercialize the 30-barg solution, lower the cost by reducing weight of the electrolyzer and optimized the hydrogen production train with increased current density. We have a clear and detailed plan for development and maintaining a forefront position technologically. During the year, projects in our pipeline have been postponed and with further delays. But the pipeline projects, they are -- and also India, we are now seeing a buildup of a strong pipeline, which we expect some to FID in 2026.

2025 has been a slow year. But based on the pipeline projects, we are remaining optimistic for 2026. And with that, I thank you and invite Martin also for the Q&A session.

Here comes some questions from the audience. The first one, why does -- so much of his shares and stocks?

We have no influence or saying on shareholders buying or selling shares. Obviously, we welcome every shareholder who is buying shares and are equally sad with those selling. But there are several motivations for selling and buying shares. And obviously, we're also dependent on the volatility in the shares. To the explicit of -- that question has to be asked to him, but we know that, for instance, in Norway. We are burdened with, what do you call, you have Fortune tax, which can be 1 reason. But this will be a speculation from our side. I don't know his personal situation.

What deliveries remain to ACES project excluding the service agreement? And do you expect any deliveries to the project in Q4? Martin, would you...

No. So with regards to deliveries, of course, we are doing now some on-site work still, but that as Jarle explained earlier today, the project is now soon to start up. And of course, then it will be sort of the, call it, the final handover of the project to our clients from our side.

But with regards to equipment, everything is deliver from our side.

And is it possible to disclose how much of the order backlog that consists of the service agreement with ACES project?

Yes. So we do not provide sort of a breakdown of the backlog on projects. But I think we have previously indicated some sizes of that. And the majority -- the far majority of the backlog is related then to the service agreement on the ACES project. While the -- call it the other remaining part of the backlog is related now to the outstanding deliveries on our remaining deliveries on the SALCOS order, which is then the electrodes now being produced in Denmark.

There are several questions regard in the LONGi partnership. So how is the partnership progressing?

The partnership is progressing very well. We are in good discussions and planning of consolidation of the manufacturing capacity in China. We also have discussions on the technology side and share of experience and also developing cooperation in other areas. But things like this does take time, but we have an excellent cooperation with LONGi.

And one question is with all the future optism and growth prospect you see, where the insiders not buying stocks to show a commitment.

Well, there are several reasons. First of all, there are some programs of options that has been running. Some has now what we call it been running out in time.

Expired.

Expired. Thank you. And also, we are often confronted with positions of being an insider position, a small company like HydrogenPro with being the being negotiations with customers, future orders. It could be other strategic discussions, are limiting the windows for buying shares.

And what would you highlight as the main explanations for the delays in FIDs in Europe?

It's several. And I think we have touched upon it in also previous presentations in previous quarters. But unclarity in regulations is clearly one major reason. Another reason is that it does take time to build the value chain. So the offtake side, which, again, also dependent on the regulation side has also cost delayed. And then we have had behind us, as we know, a period with high inflation and cost increase, increases in energy prices, which has made a lot of the project owners having to recalculate their investment projections and calculations.

And all this together basically has caused much of the delays.

And how are the contract values allocated between you and the Thermax for potential orders in India under your current partnership? And would -- with your electrolyzers carry the same pricing and the margin profile as in other markets?

Good question. Well, in terms of the revenue profile, I think we could say that it's a bit similar profile as you would see with our partner -- in Europe, where Thermax will take the full EPC and basically sell the total plant more or less in turnkey setting. We will then sell our part of the equipment to Thermax. Now India is a very price-competitive market. No question about it. We have yet to finalize obviously, final contracts with customers in India, although we are in good discussions, but until then, we will see.

But I think we have to be realistic to also see that India is competitive.

And do you -- to the recent project that awards in this market represent kind of early signs of recovery of green shoots in your opinion?

Well, recent there has been some -- I don't know if the question refers to some of the announcements here in Norway. It's very small projects, although giving a positive sign that project owners are taking the steps toward FID. We see also the same kind of movements on larger projects in some places of Europe and also other parts of the world that we have mentioned. So I think we see that project owners are getting more confident and ready to take FID.

One big news is the recruitment of CCO. So what does this indicate about HydrogenPro's ability to attract strong competence?

I think if you look at the recent recruitment, but also not just that, if you look at the recruitment we have done over the last 1 or 2 years, you see that it's very high quality and good competence that we have been able to attract. And I'm very proud that a company like HydrogenPro is able to attract competence several people with PhD and also Masters, but also on the engineering side, commissioning engineers, et cetera, that we have attracted over the year shows that we are attractive. I think it also shows that a lot of people are still looking into -- going into sustainable energy in the green sector and wanted to make a better world and therefore, coming to companies like HydrogenPro.

And some detailed questions about the projects. So how many projects with LONGi and Thermax are in FID, if we are able to disclose?

Now we do not disclose details of our pipeline. And we will announce projects that's being avoided in due course.

Okay.

Thank you very much.

Thank you.

Thank you.

Good morning, and welcome to HydrogenPro's second quarter presentation. Today, I'm accompanied by CFO, Martin Holtet, who will present the financial figures. And I will take you through the highlights and our recent developments, market updates and our partnership strategy.

About HydrogenPro. I know many of you have seen this before. But for those of you who do not know us so well what we call a pure play OEM company focusing on core electrolysis technology, which is well suited for the renewable energy sources. We deliver high-pressure electrolyzers and the gas separation skid. We are addressing market for decarbonization of selected large-scale industry segments already using gray hydrogen for or where decarbonization is hard to achieve through electrification. HydrogenPro is delivering to 2 of the largest projects in the world, a 220-megawatt project starting up now, and 100-megawatt project, which we have delivered main components and now producing our third-generation electrodes in our new factory. Few other electrolyzer OEMs are delivering to projects of the same scale.

Of recent highlights, HydrogenPro announced last Tuesday, a partnership with Indian EPC and technology company Thermax. Our new production line in ACES is now fully operational, producing generation 3 electrodes to the SALCOS project. And three, under its inaugurated its giga assembly plant for HydrogenPro electrolyzers in Erfurt, Germany. We completed the last transaction in the NOK 140 million equity raise by our partner, LONGi, finalizing their contribution of NOK 70 million. We have improved and continue to lower the energy consumption for our electrode technology based on the full-scale testing and new production line in [indiscernible].

In second quarter, we saw several European projects receiving EU funding from various programs and now initiating engineering studies and inviting to tender process. Health and safety being on top of our agenda. It is satisfying to see the good trend continuing. The ACES project, as we call it, is now ready for hot commissioning and ready to start the first electrolyzers. I must say things are going in the right direction at site and we will, for sure, hear more from them as they are progressing towards full operation in the next coming weeks and months. On the SALCOS delivery, we have delivered all components and assembly of the generation 2 electrolyzers coming to completion.

As some of you might remember, approximately 50% of the electrolyzer consists of generation to electrodes and 50% of generation 3 electrodes. And we have now started production of generation 3 electrodes in Aarhus, which will be produced and delivered during the next months. ANDRITZ is demonstrating their commitment to the energy transition and having invested in a giga capacity line for assembly of HydrogenPro electrolyzers. The [indiscernible] electrolyzers are currently being built now in the airport plant. The new coating line, which is actually called Line 1, despite we having one former a smaller line, is now in operation. We are currently producing the Generation 3 electrodes for SALCOS, as I mentioned.

And it is encouraging to see the quality results from that line. It's high consistency and very good uniformity, which improves performance in the electrolysis process. The full-scale test last spring, we saw significant improvements with some variations between electrodes, but true is in the old production line. Now we are eliminating any variations. We're focusing on increasing productivity, but at the same time, expanding quality control and developing new and even better recipes for enhanced electrolysis performance. And I'm happy to see that the new line is actually giving us a great platform for further improvement, driving down the levelized cost of hydrogen.

Comparing various electrolyzer OEMs, few are documenting performance data based on physical measurements of energy consumption and produced gas oil we have to recognize that measuring gas volume is difficult. As hydrogen is a very light gas, and it's difficult to accurately measure the volume. And this is one of several reasons why we, together with ANDRITZ conducted a comprehensive full-scale test of the electrolyzer as we informed last quarter. The good results was physically measured and well documented as to where we stand. It has also given us a unique insight in areas we can improve further to put HydrogenPro in the absolute forefront.

With a combination of full-scale testing and a stable and uniform production of electrodes in the new Line 1, I will show you something very interesting. The main cost factors when producing hydrogen is the energy consumption per gas volume unit measured in either cubic meters or kilos. The energy consumption is measured by the voltage in each cell. The graph I'm showing is illustrating the constantly measured cell voltage over time. There are 3 things we can observe. The first, you see a big gap between the upper curve and those below. The upper gray line is showing the cell voltage of what we call Generation 2, and what we have delivered to, for instance, ACES project. They are uncoated.

The red line marked full-scale test is the result of the test I just showed you and produced on the original coating line, the old one, so to speak. And there's a difference of 17% in energy consumption. The second thing you see is that oil curves start quite low and are increasing in the beginning for them to flatten out. This is an immediate degradation effect. You will see in any electrolyzer. And here, it is a matter of getting the curve as low as possible and to flatten out as quickly as possible. The third thing we can observe is under the red line, there are several lines close to each other a purple and green. Each representing an improved new coating recipe for electrode plating.

We will not produce all these, but are now testing them out in lab scale for further and larger testing in September, October in our stack test center in Postcon. With these improvements, together with [indiscernible] improvements we have developed, we will get down to record 4.5 kilowatt hour per cubic meter and hopefully, even better. We will update you as soon as we continue our performance improvements. And this concludes my first part of the highlights and recent developments.

And I will now give the word to Martin.

Thank you, Jarle. Then I will go through the financials for the second quarter this year. So revenues in the quarter came in at NOK 30 million, and these revenues mainly relates to the deliveries to the SALCOS project to ANDRITZ, which is our customer. We are now ramping up the manufacturing in Denmark and the remaining share of our deliveries now to the South Coast project will be delivered from Denmark during the second half of this year.

Gross margin in the quarter was 22%, negatively impacted by some issues related to transport and storage on our delivery to the SALCOS project. Personnel expenses were down NOK 7 million versus the second -- sorry, versus the first quarter, mainly due to the fact that we now start to see an impact of the cost-saving measures. The EBITDA came in at minus NOK 48 million compared to minus NOK 50 million in the first quarter. Net financial expenses are driven by an NOK 18 million impairment of the convertible note to DG Fuels.

DG Fuels has suffered some delays on their first project in Louisiana and a feral assessment has resulted then in this impairment. The net loss in the quarter ended at NOK 6 million. Then let's look at the development in the liquidity position in the quarter. So the cash balance at the start of the first -- of the second quarter was NOK 165 million and ended at NOK 107 million. So the changes in the cash position were as follows: the EBITDA was minus NOK 48 million. Changes in net working capital of minus NOK 6 million, driven by an inventory buildup.

And in the quarter, we recognized NOK 2 million of investments. The investment budget [indiscernible] then related to the going expansion in Denmark. And the investment budget was originally at NOK 70 million. We have reduced it to now NOK 60 million. And by end of the second quarter, we had recognized some NOK 35 million out of that meaning that there is a remaining NOK 25 million to be paid during the second half of 2025. And important to say, the equity investment from LONGi is not reflected in the cash balance at the end of second quarter as that transaction was completed in July this year.

The backlog was decreased from NOK 38 million to NOK 287 million. Cost discipline is very important to us, and we have initiated a cost-saving program, consisting of, call it, 3 main elements: 1 being downsizing in Europe, reduced use external consultants and number three, reduced cost in our China operations, both in Tianjin and in Shanghai. We have previously guided that we will take out more than NOK 40 million annually, and we are on track to deliver on that. We -- as of end of the second quarter, we have achieved more than NOK 25 million. And in the second half of this year, we then plan to take out an additional NOK 15 million, mostly related to reduced activity in our operations in China. So that will place us in a position by end of the year to take out more than NOK 40 million of annualized savings.

I'll now give the word back to Jarle, who will go through the market update.

Thank you, again, Martin. In the last quarterly presentation, quarter 1, I highlighted the 3 market geographies we are focusing on. We have a foothold in the U.S., which we maintain together with Mitsubishi Power America. But since the last quarter, we see that the projects are moving quite slow towards possible FID. The so-called 4B in the IRA policy was expanded with 2 more years, which is good. But with the effect that the already granted project FIDs are being pushed out in time. as they have 2 more years to break ground and get -- still get the incentives.

The market is by no means dead, but developing slowly. Europe remains our main focus, together with [indiscernible]. On Tuesday this week, I announced our cooperation with Thermax and thereby getting a foothold in India. Our next step is to get a foothold in the Middle East, and I'll give you a bit further on the rationale for the 3 main focus areas. This is a business slide but in essence, describing the regions with most attractive prerequisites for hydrogen production. The world map in the background picture paints the attractiveness for high-end production based on cost-effective renewable resources.

The green areas we see countries and regions like India, Middle East, North Africa and South America and Australia as the most attractive. In addition to points of Scandinavia. But on top of the attractiveness, based on renewable resources, there are 3 main drivers as based for Hydrogen production. Economics obviously, being one, that is production cost and competitiveness in the country or region itself, regulatory incentives and obviously, offtake. Based on these drivers, we see that China having the strongest prerequisites for hydrogen economy with all 3 drivers in green. All the other areas are coming up much driven from low renewable energy in own region, but based on offtake markets in Europe.

Looking closer at Europe, infrastructure and distribution are key factors for driving demand and 122 gigawatt of pipeline of projects has been announced with COD by 2030. And also resulting in a compounded annual growth rate around 30%. This means that the projects are going into pre-engineering and tender requisites. We see competitive energy prices in countries like Spain and the Nordics. But higher production costs than, for instance, Middle East and Africa. Europe has also the strongest regulatory regime to support the energy transition. And developers and strong EPCs like our partner, [indiscernible] are taking position in this development. Regulatory incentive schemes and funding programs have for long been unclear.

But they are now taking shape. And as we have seen during the last 6 to 9 months. We see more developers initiating engineering studies and tender invitations with Spain and parts of Northern Europe in the forefront, together with Germany. India, after China is emerging as the fastest-growing hydrogen market with some of the lowest levelized cost of Hydrogen due to attractive renewable energy prices Hydrogen becomes competitive to other energy sources are 2 other regions with attractive prerequisites for Hydrogen production in the world, if not the lowest, although the Middle East fossil energy-driven economy, we are seeing strong drivers for utilization of renewable energy with an offtake not only for export on low levelized cost of hydrogen, but also for domestic consumption, for instance, in refineries. After India, our next ambition is to establish a foothold in the Middle East.

Thermax is a very good fit for HydrogenPro when entering the Indian market. We wanted to enter the Indian green hydrogen market through a midsized asset-light partner but also with an already strong project pipeline and short time lines for execution. We have targeted partners open to a fair deal, enabling viability and also even under tough conditions as we see in India. But also having shared that we share the same common values and compliance. We preferred one with potential to evolve in a low-cost manufacturing hub outside China and leverage current restrictions on Chinese suppliers in public tenders, we can also use assembly in Europe, but private projects remain open also to Chinese importers. The main collaboration spectrum, the key highlights that we see together in our cooperation agreements is, number one, exclusive rights in India for alkaline electrolyzer system, including aftersales and upgrade. That means that Thermax will now supply on an exclusive basis or electrolysis that we are manufacturing.

On the after sales, they will provide the service, but we will then provide the upgrade and the electrodes are coming from Denmark. We are, together with local manufacturer and co-development of our gas separation units. As some of you know, we are not producing the gas operator unit ourselves. It has been outsourced earlier in earlier deliveries. But we are the technology owner. We design it and we develop it. And now we will -- based on our technology, modify it to the Indian market. We also have a deep technical collaboration on engineering and localization of other subsystems and components. And we also have a provision in the agreement to possibly set up a stack assembly facility in India. And there's a life cycle support with O&M and refurbishment facilities, if needed.

And also right now, Thermax is setting up what we call a short stack test station, and that will be established to jointly develop advanced solution for India and also possibly other emerging markets. The LONGi equity investment was completed in July this year, which enabled us to fully engage in the cooperation process. And we are now together with Longi working on a comprehensive strategic partnership program, which will cover all complementary areas from a manufacturing footprint to optimize the supply chain, so throughout the whole value chain. With this cooperation, HydrogenPro will now have gigawatt delivery capacity from an expanded manufacturing footprint. But at the same time, we are able to reduce our fixed cost base and avoiding more capacity into the market.

LONGi has a broader scope of balance of plant delivered than hydrogen Pro currently has -- which offers an area we see potential of an expanded product offering. HydrogenPro on the other side, offers high-performing electrodes in ours and European local content solutions together with hundreds. As presented in my initial slide, HydrogenPro is focusing on core deliveries, which is marked with square number one in the picture. Through our partners, it puts us in a stronger position and addressing the market, but also developing the technology. So when HydrogenPro is focusing in development and offering of its core technology and equipment, the partners provide the full project scope for Hydrogen production and risk sharing at levels that HydrogenPro would not be able to alone. And to illustrate the type of partnership we are developing.

Common for all partners, is that they are committed to energy transition and to Hydrogen. They represent a broader delivery scope and gives bankability towards the customers and having strong technical and engineering resources. And we will continue to maintain and develop all of our partnerships, foremost by broadening market and customer reach. But also on a broadened project offering and technology development beyond what we could have done alone. The model we have with Mitsubishi, Andritz and LONGi is an objective for all partnerships we are entering.

And with this, I would like to invite Martin back on the stage and opening for questions. Thank you.

So revenues from field studies are 0 now. Is it just a temporary or part of the strategy that only partners are responsible for getting projects and the HydrogenPro delivers the electrolyzers? What is the strategic rationale for long to take stake in HydrogenPro?

On the FEED study revenue, it's clearly our partners being in the forefront. They are addressing the customers and they are also having large staff of engineers and service functions for FEED studies. It's natural that we share parts of it and we will see that coming in the future, but not going into specifics right now. There was -- no more to that question.

The strategic rationale for LONGi to take stake in HydrogenPro.

I think we have explained both at the time of announcing the whole equity transaction back in January this year and further also in the previous quarterly presentations, the rationale is that we see that there are synergies, as I explained, that we can take out. We see that we can optimize on the manufacturing footprint. We see that long, for instance, from our side, is strongly engaged in solar project, which we also see some of them expanding into hydrogen projects downstream. And for LONGi part, they also see that HydrogenPro has a strong brand and a good foothold in Europe and good possibilities for cooperation in that aspect.

In addition, they value the technology and the development we have at our coating factory, electrode factory in Denmark. So this is probably not an exhaustive list of rationales for the cooperation and the equity injection, but some of the most important.

Next question. What do you consider long-term reasonable gross margin for HydrogenPro?

Yes. So of course, as you know, we don't guide on financials. But to put it in perspective, in the second quarter, we had a gross margin of 22% and that was negatively impacted by some additional costs mainly on the [indiscernible] cost project that was mentioned in the presentation. So we had adjusted for those costs, the gross margin, which is calculated revenues minus raw material cost, then that would that ended that 62%. Of course, the numbers in the quarter with activity level is very low. But that tells at least that we are aiming for a considerably higher gross margin level than what we delivered in the second quarter.

And also, can you talk a little bit about the incremental DG Fuel's convertible notes? Are there anything to recover?

Yes. So of course, when we publish financials, we do a fair value assessment of that note. That was a convertible note that arena entered into back in late 2021. to be part of to fund their first project in Louisiana. That project has suffered some delays. We have now reviewed it one more time. and concluded that there is now a need to do an impairment of NOK 18 million. So there is a nominal value of that of NOK 3 million, which we invested and we have then made impairment. So in our book space stands at USD 1.2 million. And we believe that's a fair assessment of the current situation where they're at. .

And what is the latest status on the electrolyzer commissioning and the start-up at the ASIS project?

Thank you. As I mentioned in the presentation, we are now right at the start-up. So it's taking place actually these days as we speak.

And what is the status on the potential megawatt new order from Andritz?

The potential is there. We believe that this project will materialize.

And could you also give a short update on the status megawatt project where the FIT was due in June this year?

Well, that was the same we just answered.

Another question is related to Thermax. And could you talk a little bit more on the test station with Thermax were the electrodes be produced in India or...

Yes. Now the testation that we mentioned, that's like on a relatively smaller [Audio Gap] and see if either obviously giving increased improvement. It's part of our 30 bar development project that we have commented on before. and also on the cost position if we -- as a supply chain matter. However, there will be no electrodes produced in India. The electrodes will be produced in [indiscernible], and we will never outsource that type of production. What could be in the future when we see the market growing, and we see also orders being placed, being placed that we could, as we have in Europe, possibly set up an assembly entity in India.

So we have time for 2 more questions. One is related to -- what do you see for HydrogenPro's business model going forward?

Well, what I see as the [indiscernible] model is that we have the technology. We developed the technology. Going to market, we or delayed so long that we do not count them anymore. But at the same time, as I mentioned in my presentation, there are projects now that we see coming in request for tenders where we have given tenders and where we are in further discussions. But plus and minuses are remaining basically the same and which is the reason why we didn't show a time pipeline figure this time. Anything more?

Yes. As Jarle said which translates a bit into our business model as well. I think I alluded a bit to it through the presentation today. But we are still sort of with a lean setup at HydrogenPro, we still able then to reach to actually to pursue projects on a global scale. And that's why we see now some call it tailwind and rise activity on tenders in Europe. But our business model allows us also to go into new markets. Now we announced with Thermax. We believe that the Indian market is extremely -- it's extremely -- it could be a very attractive during the next few years, maybe even shorter as well. I'm now also moving into Middle East. We see significant opportunities in the Middle East, and we believe with our call partnership strategy. We are in a very good position to also then move into that region to take a large position there.

So thank you. In case you have further questions or your questions are not directly answered in [indiscernible] you are welcome to contact us.