Nilar International AB Interim Report Q1 2023

Step by step, we continue to deliver according to the new strategy.

January – March 2023 in summary

• Net sales, MSEK 3.1 (-4.2).
• Delivered batteries 144 (52).
• Gross profit MSEK -30.2 (-40.8).
• EBITDA MSEK -44.9 (-48.1).
• Operating profit (EBIT) MSEK -64.8 (-63.5).
• Profit for the period MSEK -70.9 (-74.2).
• Earnings per share before/after dilution SEK -0.22 (-1.63).

Significant events during the first quarter

• During the quarter, Nilar entered a new strategic partnership with Dutch Indutecc Renewable Solutions, part of the industrial group Schuurman Group, to jointly develop smart energy storage solutions for major industries and commercial properties. The agreement is Nilar's third integration cooperation. This collaboration will start with a development project to test and integrate Nilar's battery into Indutecc's own energy storage solutions with a capacity of 50-500 kWh per system.
• In March, Nilar's factory in Gävle was visited by Sweden's Minister of Education Mats Persson. In connection with the visit, the Minister expressed the importance of Swedish research-intensive companies such as Nilar and the growing importance of battery technology for Sweden.
• In connection with an extraordinary general meeting on March 13, John Häger was elected as a new board member.

Significant events after end of period

• Nilar International AB has signed an offtake agreement with Indutecc Renewable Solutions to supply ReOx^® batteries for integrated energy storage. The new agreement entails an order worth EUR 10 million or approximately SEK 110 million, corresponding to over 13 MWh in battery capacity.

CEO's comments: Step by step, we continue to deliver according to the new strategy

Nilar continues to develop the business in line with our new strategy. During the first quarter of the year, several milestones were reached, which both confirm Nilar's prominent position in innovation and that our solutions are attractive for new integration projects. Together with new partners, we will continue to drive the development of smart energy storage solutions, while broadening our market segments. During the first quarter, the high pace of change work that characterized the previous year continued.

Dutch Indutecc chooses Nilar for new integration project
In February, we announced that Nilar is initiating a long-term collaboration with Indutecc Renewable Solutions, where we together will develop smart energy storage solutions for major industries and commercial properties. The collaboration is Nilar's third integration collaboration and an important step in our strategic plan. Thus, Nilar has strong partners in all our prioritized market segments. Indutecc will also acquire a number of energy storage systems from Enequi, which include Nilar's batteries. The goal is to sell around thirty ready-made solutions already in 2023.

In May Nilar International AB signed an offtake agreement with Indutecc Renewable Solutions to supply ReOx® batteries for integrated energy storage. The new agreement entails an order worth EUR 10 million or approximately SEK 110 million, corresponding to over 13 MWh in battery capacity.

Minister of Education Mats Persson visits the factory in Gävle
As CEO of Nilar, I am proud to have received Minister of Education Mats Persson at Nilar's factory in Gävle, where he learned more about the company's circular battery and innovative power. Sweden is a country with a strong engineering and technology culture, where investments in technology and research such as Nilar´s are crucial to ensure the country's competitiveness and continued growth. One of the minister's messages during the visit was that battery technology is a particularly important part of this as it is necessary for the continued electrification of society and the expansion of the grid.

The Swedish battery contributes to robust energy systems and increased sustainability
In an environment where high energy prices and geopolitical uncertainty dominate the news flow, the need for efficient battery solutions and robust production chains is clearer than ever. The EU's high targets for accelerating the green transition mean a major increase in global demand for batteries. Wood McKenzie's report (December 2022) notes that the energy storage market in Europe and the US is being driven by higher energy prices that are becoming increasingly volatile. Already in 2023, a doubling of the installed energy storage capacity is expected compared to 2022. The growth rate of energy storage capacity in GWh is expected to be about 28% per year until 2031. With a rapidly growing demand for batteries, the sustainability perspective and resource use will become increasingly critical issues.

Nilar's battery technology is distinguished using nickel metal hydride (NiMH) electrochemistry with a water-based electrolyte, which provides a high level of safety. In addition, all Nilar products in Sweden are produced with 100% renewable energy. The battery is built in a way that allows materials to be separated mechanically without energy-intensive processes, allowing components to be reused in new Nilar batteries. In addition, our products do not contain the harmful substances cadmium, mercury, and lead.

At an extraordinary general meeting in March, we strengthened the company's board. We welcome John Häger, President of Duroc AB with many years of experience from Sandvik Coromant.