NILAR INTERNATIONAL AB INTERIM REPORT Q1 2021

NILAR EXECUTES ON REVISED STRATEGY

January – March 2022 in summary

• Net sales, MSEK -4.2 (5.4).
• Production MWh 0.0 (3.2).
• Delivered batteries 52 (992).
• Gross profit¹⁾ MSEK -40.8 (-69.6).
• EBITDA MSEK -48,1 (-78.0).
• Operating profit (EBIT) MSEK -63.5 (-96.0).
• Profit for the period MSEK -74.2 (-114.4).
• Earnings per share before/after dilution SEK -1.63 (-22,53).

Significant events during the first quarter

• Cost savings during the quarter have exceeded management expectations.
• The negotiations following the two redundancy notices issued in the fourth quarter have been completed, resulting in 48 people leaving the company.
• On an extraordinary general meeting held on 3 March 2022 Gunnar Wieslander was elected the new Chairman of the Board of Nilar. Michael Obermayer, Anders Gudmarsson and Peter Feledy left the board.
• Johan Önnesjö have been permanented as CFO during the quarter.

Significant events after the end of the period

• The Board of Directors in Nilar International has announced its intention to resolve on a fully guaranteed rights issue of shares equivalent to a value of approximately SEK 275 million. The net proceeds from the Rights Issue are expected to be sufficient to finance the Company’s business plan to the end of 2023. An extra General Meeting to be held on 18 May 2022 is proposed to authorize the Board of Directors to resolve on the Rights Issue.

CEO Review

Russia's invasion of Ukraine and the ongoing war there marked the first quarter and will continue to have major consequences for European security- and energy policies. The arguments for an accelerated energy transition are stronger and clearer than ever, and in March the European Commission launched its plan to make the EU independent of Russian fossil fuels well before 2030. The plan includes several measures to reduce the use of fossil fuels. An increased share of renewable energy sources such as wind and solar is one of the keys to achieving the goal.²⁾

In Germany, which in 2021 imported just over 30 percent of its gas from Russia, the expansion of wind and solar power is now accelerating. The target for replacing fossil energy with renewables was moved up at the end of February 15 years, from 2050 to 2035. New legislations have been proposed which would mean that the annual expansion of land-based wind and solar power is tripled.³⁾

The expansion of intermittent energy sources such as wind and solar power provides an increased need and demand for energy storage solutions that can stabilize the grid and deliver energy when it’s needed. In its latest forecast, Bloomberg NEF expects annual global growth for energy stocks of 30 percent by 2030.⁴⁾

Nilar is facing a market in strong growth with a strong offering. Our high-performance, safe, and sustainable batteries can be adapted to the customer’s specific needs and the advanced bi-polar Nickel Metal Hydride technology has several unique advantages compared to competing solutions. We are now following our plan to scale up our production in line with demand, starting in the third quarter of 2022. The savings measures introduced in 2021 have had a faster effect than expected and will be fully reflected in the result for the second quarter of this year. Our development projects are progressing according to plan with a focus to start deliver batteries with Nilar's new reoxygenating technology during the fourth quarter.

At an Extraordinary General Meeting on March 3rd, Nilar's shareholders elected Gunnar Wieslander as a new member and Chairman of the Board. At the same time, Michael Obermayer, former Chairman of the Board, Anders Gudmarsson and Peter Feledy announced that they were resigning as board members of Nilar. I look forward to working with Gunnar Wieslander and I am convinced that with his background and solid experience he will be an excellent chairman to continue to drive Nilar's exciting journey.

On April 7th, the Board announced its intention to decide on a rights issue whose purpose is to secure financing for Nilar's new strategy and business plan. The rights issue of approximately SEK 275 million is fully secured through a combination of subscription commitments and guarantee commitments. The condition is that the Extraordinary General Meeting, which is planned to be held on May 18th, authorizes the Board and that the Board subsequently decides to carry out the rights issue.

Nilar offers solutions that enable a rapid transition to the sustainable energy systems of the future. In addition to the existing business in the home and residential segment, growth will take place in larger energy storage installations in the European market. This means customer applications for commercial and industrial properties as well as for utility scale energy storage with solutions such as peak shaving, time shifting, backup, off-grid, UPS, islanding and frequency control. Our strategy involves a focus on developing batteries, battery management systems and Nilar's unique reoxygenating technology. Customized energy storage solutions are developed in close collaboration and partnership with selected system integrators.

I look to the future with great confidence and optimism. The market for energy storage is developing strongly, and based on Nilar's product advantages, we will, together with our partners, show the way in the ongoing transition to the sustainable energy system of the future.

Erik Oldmark, CEO Nilar
Täby May 10 2022

Sources:
¹⁾ Alternative key ratios. See page 18 for further explanations. Applies to this and all subsequent alternative key ratios in the report.
²⁾ EU-kommissionen, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1511
³⁾ Bloomberg, https://www.bloomberg.com/news/articles/2022-02-28/germany-brings-forward-goal-of-100-renewable-energy-to-2035
⁴⁾ Energy storage news, https://www.energy-storage.news/bloombergnef-predicts-30-annual-growth-for-global-energy-storage-market-to-
2030/