Nel (NEL) Q4 2018 earnings summary

Executive summary

• Q4'18 revenue was NOK 124.9 million, up 8% YoY; reported EBITDA was NOK -41.9 million, including NOK 23.6 million of non-recurring and ramp-up costs.

• Order backlog was ~NOK 350 million, excluding commercial station orders from Nikola; the sales pipeline reached an all-time high.

• Growth initiatives, heavy-duty vehicle opportunities and major project tenders were priorities, with management cautioning that near-term EBITDA would be pressured.

Financial highlights

• Q4'18 revenue was NOK 124.9 million versus NOK 115.6 million in Q4'17; FY'18 revenue was NOK 489.1 million versus NOK 302.2 million in FY'17.

• Q4'18 EBITDA was NOK -41.9 million reported and NOK -18.3 million adjusted; Q4'17 EBITDA was NOK -23.9 million.

• Q4'18 EBIT was NOK -60.7 million reported and NOK -37.1 million adjusted; FY'18 EBIT was NOK -196.1 million versus NOK -117.2 million in FY'17.

• Q4'18 net loss was NOK 54.5 million reported and NOK 30.9 million adjusted; FY'18 net loss was NOK 189.0 million versus NOK 52.4 million in FY'17.

• Q4'18 operating cash flow was NOK -44.6 million versus NOK 2.7 million in Q4'17; FY'18 was NOK -142.6 million versus NOK -113.0 million in FY'17.

Outlook and guidance

• Ongoing growth initiatives and focus on long-term, high-value orders were expected to weigh on the ability to deliver positive EBITDA in the short term.

• Work continued on the planned 10x Notodden factory expansion to support deliveries to Nikola and other customers; expansion timing would align with commercial demand.

• Priorities included heavy-duty fueling, next-generation electrolyzers for industrial uses, China market penetration and the H2Bus Europe rollout.

• Larger electrolyzer and H2Station tenders remained active, with the pipeline continuing to strengthen.