Good morning, everyone, and welcome to Nel's second quarter 2022 results presentation. My name is Håkon Volldal, and I am the CEO of Nel. With me today, I have our CFO, Kjell Christian Bjørnsen, and head of investor relations, Wilhelm Flinder. The agenda for today is as follows. We will briefly recap Nel. We will go through the second quarter highlights with an emphasis on the commercial developments. We will touch on some of the political events that impact our business. We'll have a summary and outlook section, and then we will round it off with a Q&A session. Now, to recap Nel. Nel is a global dedicated hydrogen technology company that delivers optimal solutions to produce, store, and distribute hydrogen from renewable energy. We have a mission to unlock the potential of renewables and enable global decarbonization through green hydrogen. This is the reason why I decided to join Nel. I joined first of July and this purpose is what attracted me to the company. I think there are a few companies out there that can say they have as meaningful a purpose as this, and this in combination with Nel's boldness to be a leader in this emerging industry is really what speak to me. If you look at Nel and some facts, a pure-play hydrogen company listed on the Oslo Stock Exchange since 2014. We are the world's largest electrolyzer manufacturer. We have an installed base of more than 3,500 units in 80+ countries, and we have a 90-year legacy. We are also a leading manufacturer of hydrogen fueling stations with more than 120 units delivered across 14 markets. We have manufacturing facilities in Norway, the U.S., and Denmark, and we have a global sales network and offices. Right now, we are close to 550 employees. We are the preferred partner for industry leaders in various industries, so they come to Nel for Nel to help them realize their hydrogen projects around the world. Everything from technology companies to industrial companies to transportation companies. To fund our growth and make sure Nel has a leading position in this industry, we have NOK 3.6 billion in cash reserves, which gives us sufficient funding to pursue our growth strategy. Okay, so let's get to the beef, the second quarter highlights. Revenues up 12% year-on-year to NOK 183 million. EBITDA NOK -197 million, which is down from NOK 120 million in the second quarter last year. Order backlog is actually at a record high, NOK 1.4 billion, and it's up 33% year-on-year. Order intake in the quarter was NOK 236 million. Obviously, the big 200 MW order is not included in these figures. That happened in July. Still, the order intake was up 67% versus last year. As I said, cash balance of NOK 3.6 billion, up 19% from the corresponding quarter last year. Some of the main events in the second quarter, we received the purchase orders for an alkaline electrolyzer in Norway, alkaline electrolyzer in India. We had several fueling orders. We opened the Herøya production facility, the world's most modern and professional manufacturing plant for electrolyzers in April. We also decided to secure long lead items for a second line at Herøya, expanding potentially our production capacity from 500 MW to 1 GW. Following the closing of the second quarter, we announced a record purchase order for 200 MW of alkaline stacks from a US customer with a value of approximately EUR 45 million. We also received additional purchase orders for an alkaline system in Denmark, one system for PEM technology in Australia, and yesterday we also announced from an undisclosed customer in Europe an order for fueling stations with a value of around EUR 8 million. Today, we've also announced that we have made the final investment decision for the second line at Herøya, so we will now go ahead and make sure we have 1 GW production capacity, installed capacity as of beginning of 2024. The financial highlights, as I said, revenues up. We could expect stronger growth probably in the coming quarters based on the order intake and the backlog, but still it was up 12%. Operating expenses are up as we build our organization. We have ramp-up costs and scale-up costs related to new technology, new markets, new products that we are putting out. Consequently, EBITDA came in at around NOK -200 million. As I've commented on, the cash balance. This is important to us. This is what signals revenue growth going forward, and we are now at an all-time high order backlog, at NOK 1.4 billion. If we include the large order announced in July, we are close to. You include the order yesterday, we are close to NOK 2 billion in order backlog. The order intake in the quarter without any significant large orders was still up more than 60% year-over-year. It was up 17% from year-end 2021. I think as we see that contracts are getting bigger, the order intake will vary more from quarter- to- quarter. It takes longer time to negotiate some of these large contracts than to sign smaller contracts. There's more work involved. There is more process related to financing and signatures and all of that. It takes a bit more time, but at the end of the day, the large orders also give you real order intake and a boost in order backlog when they happen. We see that the pipeline continues to grow across all segments and industries, and I think we'll come back to that in the outlook section. If we recap some of the main commercial events in the second quarter, this project is actually interesting because it's a purchase order from Glencore in Norway to be delivered mid next year, value around EUR 3 million. This client was actually Nel's first commercial client. The initial system to Glencore was delivered back in 1961. Why is this important? Well, it's 60 years ago. If you take a look at competition, a lot of them have never, ever delivered a commercial installation. Most of our competitors don't even have a system that has been in the field for more than 4 or 5 years. This was sold 60 years ago. The system that they bought is something they are familiar with because what they have now is also a Nel installation. They will get the new alkaline electrolyzer system from Nel. It's a nice customer to have. The second order we got was from Skovgaard Energy in Denmark. Why is this important? It's EUR 4 million. That's nice, but it's also the world's first dynamic green ammonia plant, where actually renewable electricity from wind and solar will be connected directly to the electrolyzer. It's a demo plant. Could grow larger, but it will test how an ammonia reactor can fluctuate operations based on renewable power input, intermittent power. There are some interesting partners on this project, like Topsoe and Vestas. It's a true sort of Scandinavian setup with Nel, Topsoe, Vestas, and Skovgaard. We also received a purchase order for a PEM electrolyzer system in Australia. It's a containerized solution, EUR 4 million. The electrolyzer will be the biggest in Australia, and as you probably know, Australia will be one of the important hydrogen hubs, going forward. It's important for Nel to be present in this market. The system is a containerized solution with a production capacity of roughly 1,000 kilo per day, and it will supply fuel cell grade hydrogen directly on site to dedicated fueling station for vehicles in Australia. That brings me to the fueling side of the business. We received several purchase orders for fueling in the quarter, and we needed that. Revenues so far this year has been a bit on the low side, driven by low order intake in previous quarters. Demand is now picking up in several markets, and we expect to see more orders in the second half of 2022. To sort of demonstrate that, we sent a press release yesterday on the order from a European client, five stations for EUR 8 million. That's a nice add-on to our fueling backlog. Another important event in the second quarter was in Norway, in Nel's home turf. We have a government agency that distributes funding or financing to hydrogen projects in Norway. In June, Glomfjord Hydrogen was awarded NOK 150 million in support for its 20-MW hydrogen project, which is for the maritime sector. You might know that Nel owns 23% of Glomfjord Hydrogen, so it's natural for Nel to be involved in the rollout of this project with a 20-MW electrolyzer. 4 other hydrogen hubs in Norway also received support totaling NOK 669 million. Enova, which is this government body, also announced NOK 121 million to support Celsa in Mo i Rana for green reinforcement steel production. We have a letter of intent with the main players behind this project. Norway, actually, if you sum up across all these different projects, could be a very interesting market going forward for Nel electrolyzers, and we expect to be involved on these sort of mid-scale projects in the coming years. Now, what did we say six months ago? Well, I wasn't there, but apparently we said pipeline is booming, projects getting significantly larger, and we expect to break order size records in 2022. Then it's nice to see that we actually did that. In July, we received a record order for 200 MW of alkaline stacks. It's from an undisclosed customer in North America. Production of these stacks will happen from February next year until mid-2024. It's EUR 45 million, and it's for stacks only. The purchase order could double in value, depending on whether Nel is chosen or not, to provide the balance of plant equipment following a paid FEED study that we will conduct. The client has secured, and this is interesting, a 20-year green power purchase agreement, and even more importantly, a 20-year offtake agreement for 100% of the end product. Nel was chosen by this customer based on maturity, our technology, and installed production capacity. What do we mean by stack? We included this for educational purposes. There was some confusion around the value of the contract, and you calculate sort of the price per megawatt. It's important to bear in mind that for some orders, it's just the stack. For most systems it's the complete stack plus balance of stack. What you see on the left-hand side is a stack with, you know, surrounding equipment, which we call balance of stack. The order to North America is just this circular tube, this cylinder. That's the stack. Stack only. If you include the gas separation system, the lye system, and also look at the balance of plant where you have power supply, you have lye tanks, you have gas scrubbers and cleaners, compressors, et cetera, typically the value of a delivery doubles. The stack part is only 40%-50% of a total CapEx of a project. Bear that in mind. It's not. You cannot compare order sizes and then based on megawatts only. It's not always apples and apples. Now, what will this contract mean for Nel? Well, of course it will have a positive impact. It's an important reference project. It means that Nel plays in the Champions League of electrolyzers. It means that we will have a positive financial contribution. It's a standard product delivery, standard stacks, which we are perfectly set up to produce at Herøya with solid margins. We have pass-through on the most important input factors, which means, you know, even though raw material prices might go up, we're not that vulnerable to margin erosion based on commodity pricing. Herøya baseload is now secured. Volumes enable further cost reductions. Of course, a big part of driving the cost down and attracting additional customers is that you can fill the plant. This contract is actually a blueprint for future large scale projects in terms of how it's structured, financially, legally, and in terms of delivery. It's not gonna be a one-off, right? There will be more significant orders coming our way. The pipeline is still growing and projects are getting larger. What? A couple of years ago, a 5-MW installation was a large project. You know, now 20 is mid-sized. We're talking about hundreds of megawatts, even gigawatts, for single projects around the world. Customers are actually concerned about industry supply constraints. Whereas you might think that with all these announcements by electrolyzer manufacturers during the past quarters, there would be an abundance of supply. There would be oversupply, overcapacity. Most customers think it will be difficult to get supply for their projects. FIDs will happen faster. It will accelerate. The need to place orders and secure electrolyzers will grow. We have a documented installed capacity. It's one thing to announce plans to build capacity. Another is to have a real factory where you actually produce something, and it works without all the teething issues and initial startup problems. We were first out of the blocks to build the Herøya facility. We will expand it, and we're seen as a credible partner to deliver, you know, high volumes of electrolyzers going forward. What kind of projects will we pursue? It's not difficult to fill the factory, but you want to fill the factory with high-quality contracts. We will pursue contracts where we see that we have a suitable technology offering. You know, what the customer is asking for actually fits with what we can supply without too much rework, without too much customization. High-quality counterparties. High probability for project FID. It's possible to waste a lot of time on projects that will never happen. You have to be a bit picky. It's not only to, you know, announce a purchase order. The project has to happen. When you see all these orders announced in the industry, not all of them will happen. You need a high probability to win, and you need an acceptable risk profile. We're not gonna take just any order. As I said, we want a decent margin on what we deliver, and we want a contract where we're not exposed from a risk perspective. We're a bit picky when it comes to what kind of projects we pursue. It has taken a bit of time to announce the first big contract, but there will be more big contracts. Line two is expected to go live in April 2024. The CapEx for the equipment is estimated to be around EUR 35 million. It's not cheap, but it's not that expensive either to continue the expansion. Of course, line two will be based on the same production concept as we have for line one. We will reuse a lot of what we've done on line one, but we will also implement, you know, improvements based on what we've learned on line one. These two lines will be fairly similar. We have the setup to run it, and that's also why we can do it fairly fast. The reason it's not operational until 2024 is, of course, there's a lead time on certain items. But we also want to phase in capacity in connection with our planned deliveries. There is one main event on the political side. I guess you are familiar with some of the positive things that have happened in Europe with REPowerEU and the ambition of the European Union to produce 20 million tons of hydrogen, 10 million tons inside the EU and 10 million tons in neighboring countries, bringing the electrolyzer need to 300 GW. Now, finally, North America is following. Maybe not only following, they could also take the lead. With this Inflation Reduction Act that passed the Senate and is now supposedly getting through the House, involves a tax credit for hydrogen projects. The max tax credit you can get is equal to $3 per kilo of hydrogen produced. What does that mean? That means green hydrogen will become competitive with gray hydrogen in many applications and in many regions in the US. As a matter of fact, the U.S. could become the cheapest place to produce hydrogen. Who would have thought that a few months ago? The U.S. will become increasingly important for hydrogen production and also for Nel. We see a lot of inbound activity. We see a lot of accelerated plans for planned hydrogen projects in North America, and that's nice to see. We have both Europe and North America leading the way now in hydrogen, and we will capitalize on that development. Summary and outlook. I touched upon this, but if you look at the industry right now, the main triggers for large-scale green hydrogen projects are finally coming together. They're pushing projects towards final investment decisions. On the one hand, you have the political push to do something, and it's backed not. I mean, it's not only talk, it's backed by real financial incentives. A lot of projects get funding, not only loan guarantees, but direct investments to support hydrogen projects. We see that the financial markets are becoming better and more experienced when it comes to financing hydrogen projects. They understand the market better, they understand the drivers, they understand better how to package it, so it's easier to raise financing for hydrogen projects. We see that the equipment cost for electrolyzers, but also for balance of plant equipment and for other things is coming down. So the total CapEx need is coming down. Also, the OpEx is coming down in terms of you know, the efficiency of the equipment and also available energy. Even though we're, you know, in a period where energy prices are high, you are very often competing against fossil fuels, and the oil price is fairly high, and natural gas prices are not all-time low. Even though electricity prices are high, the relative difference is actually shrinking. Two other important factors. You have available intake of renewable power. All these solar plants and all these wind farms actually now deliver renewable energy. It's possible to buy renewable energy, either, you know, from the electricity supplier, from the grid, or you even include renewable power supply in your project. Because these projects we're talking about are not small. If you're building a steel factory or an ammonia plant, you need a tremendous amount of energy, and then it might make sense to even, you know, include the power supply in your energy supply in your project plans. You are able to secure offtake. The customer we had secured offtake for 20 years for 100% of the product. They don't need a marketing department. That's why it's also undisclosed. They don't want 200 people knocking on their doors to tell them about what they're doing. They're sold out for 20 years. When you can also do that, it's easier to get financing. These things reinforce each other and drive the industry towards large-scale green hydrogen project final investment decisions. Nel is uniquely positioned to capitalize on this. Why is that? Well, we have an unrivaled track record. Nobody can match us on this. We have decades of experience. We're not a PowerPoint company. We've been around for 90 years. We have the largest installed base with the operational experience in terms of how to handle hydrogen. We have, you know, learned from all the mistakes of the past. We know why certain designs work and why they don't and others don't work. We have proven technology. It's not just a concept. We have technology out there which is producing hydrogen molecules every day, and it's backed by performance guarantees. We can actually stand behind, you know, the performance. It's not just a fact sheet. It's a real performance guarantee. We have technology leadership. We are a leader in PEM, proton exchange membrane technology. We are a leader in alkaline technology, and of course, we're a leader also in fueling technology. We have optimal system efficiency and durability and lifetime, which means why is this important? Well, 70%-80% of the total cost of ownership or producing hydrogen is OpEx. So you need a highly efficient electrolyzer, right? And you need it to last for a long time. If you need to replace the stacks after five years, it's not gonna do it. You need to give the customer comfort that the equipment will last, you know, longer than just a couple of years. How can you do that when you haven't got one system out in the field for more than 2-3 years? We have world-class safety in terms of understanding how hydrogen should be treated in a responsible way, and we have cost and scale leadership. We are a front runner in cost reductions. We were the first to announce our $1.5 per kilo target. We're the market leader in installed production capabilities and capacity, and we continue to expand, and we have financing so that customers actually know that if they want more, we can invest and we can help them with the deliveries. Because most of the projects that we see, even the large projects for 100, 200 MW might be phase 1 of a big gigawatt project. If you go with one supplier for 100, 200 MW, you need to know whether that supplier can also back you when you want the next 500 MW or the next gigawatt. These are se—I mean, these are basically split up into different phases. You start with what was previously a pilot of 10, 20 MW. Now we are at a commercial, you know, rollout of 100, 200, 300 MW, and the next phase might be double of that. If you make all these investments into one supplier, understanding how the technology works, you do the FEED study, you figure out, okay, this is the blueprint for how we wanna do it, but can that supplier grow with us? Can they actually supply 500 MW or a gigawatt in 2-3 years? Well, we can. That concludes the presentation, so I will ask my colleagues to join me for a Q&A. Unless everything was crystal clear and you have no questions. All right. My name is Wilhelm Flinder. I am the head of investor relations here at Nel. I will facilitate this Q&A session. Before we kick off, just want to give a heads-up that we won't do a lot of comments on outlook and guidance, as well as framework conditions on specific contracts, as well as specifics on the individual market conditions. Also questions that already have been answered in the presentation we won't do here in order to not standing here repeating ourselves. In addition, I will try to aggregate questions on the same topic as best as possible. Before we take questions from the chat, I thought we can start with taking questions here from the room. Thank you. Gard from Pareto. It's possible to give a bit more color on the revenue update or the revenue figures, this quarter, given the decline, quarter-on-quarter. What was the main drivers, clients you delivered to, et cetera? It's if you look at the breakdown, electrolyzer is up and fueling is down. It's you know, basically related to low order intake in the previous quarters on the fueling side, which might also carry into the third quarter. If you have followed our announcements, you can see that we have announced few fueling orders. But with yesterday's announcement and also what we see in terms of the pipeline, we expect fueling also to pick up. But fueling has been soft in the quarter, and that's the reason why it's a bit low in total. Okay. Thank you. Also on the gross margin side, I mean, you delivered very good gross margins last quarter, and understandably it's down with the higher raw material prices. Given the significant drop, I think that some expectations of what we can expect ahead is in order. It's also driven by mix effects from quarter- to- quarter. You know, in this quarter we have been hit by raw materials and there's mix effect. We haven't guided on margins and won't do so for some time then, because it's so dependent on individual contracts. What we can say though is that there is a delay between raw material price increases and what we, you know, our external price lists. Especially, you know, if you look at the U.S. where you work with dealers and distributors, there's a lag effect. I think, you know, we get the negative impact now and you probably get the positive impact when raw materials prices come down again. Okay. Thank you. I have some more questions. On the stack side, what do you think will that be more common? You alluded to it a bit that you will deliver both just stacks only and also complete systems. How do you see that moving forward and what do you see in the market? What do clients prefer? I think for these, let's call them now, small projects, they used to be big projects, but up to 20 MW could be a fairly standardized solution where you deliver everything in one go. It could be a containerized PEM solution or a complete alkaline solution because these projects are rather small and they need to get everything from one supplier. They don't wanna do a separate FEED study, and they cannot afford that. For these large projects, I think what they want to do now is to secure supply. That's why they place the order for the standard component, which is the same regardless of what project you run. I think that will be common, that they place the purchase order for the stack, and then the balance of plant you decide on after you've done the FEED study. You can make design changes to the plant design. You can also decide on the local content, which might now be increasingly important to unlock, you know, funding mechanisms and get additional support from government grants, et cetera. I think, yes, what we see for this 200 MW project is at least what we are pushing in terms of the contract structure. We like it. Okay. I'll hand it over. Thank you. Thomas from SpareBank 1 Markets. Could you give us an update on the expansion plans beyond the Herøya, and the timeline for this? Yes. I think priority number one is to increase at Herøya. Now two lines. If we get additional really big contracts, I think, you know, it's natural to think about line three and four because ultimately we could get to 2 GW at Herøya. For our PEM production capacity, we have opportunity to expand that at the existing facility in the U.S., but I think we've also communicated previously that we are in a site selection process, where we want to establish additional production capacity in North America. Could be for both alkaline and PEM. That's sort of step number three then. Herøya, increasing existing capacity in the U.S. and then get a new site in North America. The reason it takes a little bit of time is to find the ideal location, both from a logistics point of view, a competence point of view, and grants. Okay. Thank you. Of the companies you mentioned today, some of them might be PowerPoint companies. I'm just curious to know kind of which companies you believe would fail in expanding their capacity because we find names such as ThyssenKrupp, Siemens, Cockerill Jingli, LONGi, Haldor Topsoe, et cetera. Just wanna know kind of what are the companies we should be afraid of in terms of competition, and what are the ones you consider as less likely to succeed? I think you mentioned more or less the serious ones. Okay. There could be additional. If you count the number of electrolyzer manufacturers, we probably have 20+, and then maybe half of them will be unsuccessful, and then maybe 10 will remain split on 2 different technology platforms, serving a market which is potentially, you know, hundreds times larger than it is today. You know, we should actually be happy that these competitors are serious. They are household industrial names, and I would rather compete against ThyssenKrupp and Siemens than some of these crazy startups, because they want to run a profitable business. It will be more discipline, and there will be higher quality, and it will be fair competition. Right now, I think we should celebrate also competition successes. I'm happy that, you know, a competitor, Shell, won in Holland. That project was actually FIDed not long ago because it means that we as an industry are growing. We cannot expect, even though we'd like to have 100%, I think it would be. You know, we need to be satisfied with something less than 100%. We want to be a top player, but it's more important that the cake is big and that we have a nice chunk of that big cake than to have everything of a little cookie. Okay. Thank you. One last question. I'm not sure if you will answer or not. Could you give some more insight on, you said that the order that you received this summer would double in size if you got double balance of stack, balance of plant. Could you give us some insight into how that would or how much the gross profit would increase? 'Cause I suppose you're not producing the additional equipment yourselves. It's kind of- Mm. reselling of compressors Yeah ...et cetera, et cetera, et cetera. Some of the designs are sort of Nel proprietary. You have to stop me now. Yeah Because I have too much. Stacks you probably have the highest margins on. Then you have balance of plant equipment that you produce externally based on your drawings and IP and whatnot. Then you have certain components which are just pass through. You know, with the cost plus X percent markup to handle it, you know, bought externally. I mean, we don't make our own transformers and rectifiers. So that is cost plus. Okay. No kind of insight into how much the gross profit depends between the stack-only contract and the- It is implicit in that. I think we've noted on that before that on the generic components we get basically a handling fee. There's lots of revenues and a little margin. It is not the major margin driver. The major margin driver is what we produce in-house and to some extent the things that we really design and is produced to our specification around it. Okay. Thank you. Thank you for your first presentation. I guess, big orders are coming as you came into the company. Which is not something I should take credit for. Okay. You know, I'm just lucky to be around to talk about it. Any more questions from the room? No. Then we can go over to the chat. A substantial amount of questions have come in. A bit on the side, not related to Q2 isolated, so regarding the unsponsored ADRs in the U.S. Oliver Lemke. Apologies for the pronunciation there. I know the ADRs in the U.S. under the ticker NLLSF and NLLSI are unsponsored and as such has very little to do with Nel ASA. Yet I would spare a thought for your U.S. shareholder space, which is currently mostly prevented from trading thanks to the ticker being moved from OTC to the expert markets. I'm hoping that you can informally engage with the sponsor of these programs so that the SEC information requirements can be met and the tickers can resume normal trading. Do you think this is too much to ask? We get this question now and then from the U.S. We note that several shareholders have found ways of trading indirectly in the share. We are listed in a regulated market in Europe and believe we have recent market coverage. With all the time and effort required to go for sponsored ADRs or secondary listings, that is not a priority at this point in time, unfortunately. We would encourage people to talk to their brokers and see if they can find some way of trading without ADRs. Good. Question from Peter Low from Redburn. How do you see the competitive environment evolving for electrolyzers? Can you compete with the likes of ThyssenKrupp and Plug Power, for instance, for orders? Yes. Short and sweet. I think we have covered that when I went through sort of Nel's strengths. You know, if you. Yes. A couple of questions regarding contracts that we are already producing on. Arthur Sitbon from Morgan Stanley asking, in your report you mentioned delivery delays. Can we still expect 100% recognition of the revenues linked to the Ovako, Statkraft, Nikola and Everfuel orders by the end of 2022? Which orders in particular are seeing delivery delays? If I may expand a bit on delivery delays. Delivery delays in particular on the small and many on the PEM side. You know, so because there you can't really pay expediting fees and send people to China to get components. On the larger projects, you can normally justify a bit extra cost to get it through. On the contracts mentioned, we did announce, or the customer has announced a finalization date when the contract was announced, and some of these go over into 2023. Not all of the contracts you mentioned will be fully recognized in 2022. We are there, you know, consistent with what has previously been mentioned. Anders Rosenlund from SEB is asking if you can give an update on Nikola deliveries. Well, that's according to plan, as we have said, the electrodes are being produced, shipped, delivered and paid for this year. So far, Nikola has not announced where they need the site, and before we have that, the part related to balance of plant components, the pass-through cost, we can't really order and therefore not recognize the revenue on. That's the same and unchanged from previous corporates. Good. James Hosie from Barclays. How should we think about Nel's ability to win balance of plant orders alongside electrolyzer stacks for large projects? Is Nel constrained by its size or purchasing power in this segment? I think, if we, you know, briefly touched upon it. The attractive margins are in the electrolyzers. For us, not so much on the balance of plant. It's not that Nel necessarily wants to have the balance of plant delivery for all projects. If we have a good design that can be reused with good profitability, we will do it. There's a reason why we have decided to work with EPCs, also, and why big EPCs are involved on the big projects, because they can handle it. I think our number one priority is to get the stack orders. When you get the stacks, you typically also deliver the balance of stack. Stack plus balance of stack is our main focus. If we get additional balance of plant deliveries, as Christian said, it's a lower margin. Really the interesting part, the filet mignon is the electrolyzer and the balance of stack coming. Good. A bit back to expansions. It has been touched upon in the room here, but there's still some questions on U.S. expansion in particular, related to IRA and hydrogen production tax credit if this process now is accelerated. Also, Patrick Jones from JP Morgan's said that the expansion in Norway came a bit as a surprise given the message around potential greenfield sites. Can we give an update on previous indication that Nel was considering greenfield site selection in the U.S. and potentially also alkaline greenfields in sites ex-Norway? Yeah, for short-term deliveries, meaning in the next, well, so mid-term then, next couple of years, Herøya is a natural choice. You have a production concept. You have a trained workforce. I mean, it's cheaper for us to sort of build a second line at Herøya than to start a process of finding a new greenfield site in Europe. From a cost point of view and from a timeline point of view, Herøya is unrivaled in terms of alkaline capacity. If we get big orders from North America and we see that this picks up, then it's natural to produce locally in the U.S. for the U.S. market or the North American market. Even Chile, which is becoming a big hub. That is in line with our site selection process, and we work hard to find an appropriate site. I have to say that I think we're extremely excited about the increasing momentum, but also we might have to, you know, accelerate our capacity plans based on what we see at the moment. Here, yeah, he says that that's number one. We can do more in the US at the existing site. That's number two. A new greenfield site in North America is probably step number three. If there's enormous demand in Europe, then yes, we need to find a second site also in Europe, but that's probably step number four. Good. Naveen Hammerstad asking, how does increased electricity prices affect the total expense for the company at its production facilities at Herøya? We don't go into details of the cost structure, but we have said earlier that raw materials cost, especially steel and nickel, are major cost drivers and then with electricity on a distant third. Good. Chris Leonard from Credit Suisse having three questions here. First, can you update us on pricing for electrolyzers? Do you still expect this to be around $400 per kW in 2023? Is there still strong pricing pressure? Well, I think if you again, what do you mean by an electrolyzer? Back to the picture that we showed. It's almost impossible to compare price per megawatt for announced orders because you don't know exactly what's included in the scope. If you look at the cost for a stack on the megawatt level, we're far below $400 already. If you include the balance of stack and other things, then you are above $400. We are planning to supply electrolyzer stacks with declining prices. I mean, prices will come down because that will also unlock a bigger market opportunity and customers expect it. That's why we focus on cost reductions. We want to have a healthy, nice margin, but in order to have that, you also need to pass on some of the savings to the customer. Otherwise, you're never gonna open up the market. There is room to keep a nice, good gross margin on electrolyzers going forward. Absolutely. Costs will come down. Exactly how fast they will come down, it depends. I thought they would come down faster than we see. I think, you know, customers are actually willing to pay a bit more to get capacity. So this has to do with supply and demand. Now the demand is so strong, I think, you know, prices will be really attractive for a period of time. Then it might be as new capacity comes online, there will be, you know, a sharper decline. This will not be a linear trend downward, it will be a step function downward. Good. Couple of questions going back to the 200-MW order, the educational slide from Eivind Garvik at Carnegie asking, did I understand you right that the 200-MW order only consists of number one part, i.e. only stacks. Yes On the 200 MW educational slide? Yes. Erwan Kerouredan from RBC asking 200 MW order, can you clarify again the share of stacks and balance of plant for the contract? That we don't know yet, right? That's the reason why we do the FEED study to figure out what is the expected CapEx on the remaining part. If you take typical figures for these large-scale installations based on previous FEED studies that we've done, the CapEx split is maybe 40-50% for stacks only. Let's make it easy, 50% for stacks and 50% for balance of plant. Good. Also had a follow-up question, dollar per megawatt for electrolysis stacks versus balance of plant, but I think that. Correct Answered that question. Back to Christopher Leonard. How many IPCEI projects are you associated with and how many gigawatts does it include? We have no updates there since the last one we gave a couple of quarters ago. We're still waiting for that wave of IPCEI projects to come through. Good. From Eivind Garvik again, Carnegie. Can you say something about the revenue achieved in the second quarter? It was way below market expectations. Yeah, I think we covered that. It's if you look at the electrolyzer side, it's up. But again, it depends on the projects, right? I mean, if you follow Nel and you track the orders and you know the expected delivery schedule, you have a fairly good view on what coming quarters should bring in terms of revenues. Order intake hasn't been, you know, strong enough to support higher revenue than we had in the second quarter. That's why, you know, the increase that we now see in order intake is important. We you know had a good second quarter with a book-to-bill that was nice, and it will be very nice in the third quarter. We're already, you know, at close to NOK 600 million based on 3 announced contracts in order intake. That will of course drive revenues in the coming quarters. It's fueling, as we said. You know, low order intake in previous quarters, low revenues on the fueling side. Revenues on the electrolyzer side actually good. Could have been a bit higher if we had enough components and parts. We're partly hit also by supply chain constraints, especially for the industrial products in the U.S. I think, again, what we have said earlier, is that on electrolyzer orders, typically 18-24 months, from order to final delivery, with the bulk of revenue recognition coming in the second half of that time period, and for fueling orders 12-18 months. We have commented specifically if there's deviation from that, either in quarterly reports or in the exchange notices themselves. Good. Deepa from Bernstein asking, can you clarify the proportion of electrolyzer stack and balance of stack, not balance of plant? Yeah. 40-10. If you take the 50% that is. What should we say here, Christian? If stack is 50 and then balance of plant is 50, then maybe balance of stack is 10 percentage points of the other 50%. So stack plus balance of stack would be 60 out of the total CapEx. Good. Again, I mean, it's important to say that, you know, these are figures that vary a lot, depending on what kind of project you're doing. Mm. How much you can consolidate the balance of plant equipment. You know, the ratios don't work between a small project and a large project because you consolidate the balance of plant equipment. For a small system, the balance of plant could be much higher than the electrolyzer. For a large system, it could be the other way around. It is a bit hard to sort of make it very schematic and give you know, rule of thumb figures. I would say 10 percentage points out of the 50% for balance of plant. Good. A bit back and forth there. Questions keep pouring in here. Back to Erwan Kerouredan from RBC regarding EU IPCEI funding. When is the next milestone, and how much can Nel expect? Earlier also commented that we are not policy experts, and that we of course would have loved the time from political ambition to money in the hands of project developers to be shorter. We've been waiting for this next important round of IPCEI since last autumn. We are still waiting. Indications are sometime this autumn. I think the decision to build in Norway doesn't really affect that. Norway is part of the EEA, so in that respect, part of the European internal market. When EU politicians call together European or EU electrolyzer manufacturers, Nel was an important contributor to that gathering. Good. From Felix Varak. Is the current production capacity sufficient for your order backlog? Yes. Very simple answer. From Lars Persson, are you moving in the same speed or faster as your competitors, or do you see them investing and building production capacity faster than Nel, thus securing the large orders that Nel was expecting to get? Well, they have announced plans, but you know, it takes a long time to build the capacity, and then you need to go from a theoretical capacity to a realized capacity, you know, a real actual capacity. That will take some time. I think we have a head start, and we're. That's also why we are now investing in the second line, to stay ahead. As I said, we have room to expand at Herøya to 2 GW. But we will have a disciplined approach to this. We're not just gonna install 5 GW of production just to have it. You know, we want to see the order intake coming, and then we follow with production capacity. We have a capacity now to handle our order backlog with the second line, and we have more capacity in the coming years. With the second line, we also have capacity to do lots of large-scale projects, which we expect to get. As we said, the 200 MW is not, you know, the first one. There will be more. That's why we are expanding. Unless we had been confident that we would get additional large orders, we would not invest in a second line. Good. On a bit wider market, could you update on Asia, what we're seeing there, especially India and Korea and Australia activities and market expectations? Yeah. Asia is interesting from the point of view that, I think long term, most reports conclude that Australia will be the hub for Asia in terms of bringing hydrogen to Asia, and that's because of the renewable power situation. There could be captive demand among big customers in Asia. They have big steel plants or methanol facilities or ammonia production plants that they want to turn into, you know, green facilities and use hydrogen for that. I think short term, there are few sort of attractive opportunities to pursue in Asia. Mid-term and definitely long term, Asia is a market where you need to be. I think right now the action is in Europe and North America. I don't know if you wanna add to that, Kjell Christian. No? We're almost done with the questions. One last one, more kind of modeling. How does the NOK 35 million CapEx for line two at Herøya phase? Could we comment on that? Well, about a quarter this year, about half next year, and about a quarter in the following year is the very short answer. These are preliminary figures, and we'll update in the quarterly reports as we go on actual spending. Good. I think we're through with most of the questions. We have gotten some other modeling type of questions. I will reach out to those later. One last one. We can take one last quick one from Christopher Leonard from Credit Suisse. Will they strategically look for another EPC partner to help flow more stack orders your way rather than just Nel working to convert studies to orders? Yeah, I mean, we're open for business. I think this market will become so big, so to be tied just to one strategic partner or two strategic partners. I think you need several. At the moment, you know, bear in mind that the EPC companies have limited experience with hydrogen, and that is why the end customer comes to Nel. This could change over time as the market matures. Then maybe, you know, an EPC partner is the natural speaking partner and contact point for a customer. Right now, you know, Nel. Who else has 90 years of experience in electrolysis? Nobody. No wonder they come to us, and we're happy to help. Then maybe some of the scope we pass on to an EPC. For the electrolysis stacks, nobody knows more about the electrolysis stacks than Nel. I sound like Donald Trump now, but I mean it. You know, nobody knows more about the electrolyzers than Nel. Very good. We are through. Before we wrap up, do you have any final remarks before we end this session? No, I think we just repeat our positive outlook. We're of course truly happy with the 200-MW order. There will be more nice orders coming our way, and that's why we are expanding our production capacity at Herøya. I see it as a very positive thing. It's a no-brainer to build a second line at Herøya compared to the other alternatives. We're happy to keep on pushing for more orders and more capacity and then more business in a growing market. Thank you for attending and listening to us. Hopefully we'll be back in a short while with a positive update on the business. Thank you.