Dear Shareholders, Partners and Colleagues,

2020 brought severe challenges, but also provided new opportunities to meet global climate targets. Ground-breaking initiatives were introduced, like the EU Green Deal, California Air Resources Board’s (CARB) first-in-the-world rule, the International Energy Administration’s (IEA) Sustainable Recovery Plan and China’s commitment to carbon neutrality by 2060 – all geared towards accelerating the transition to clean, renewable energy.

About us

Hexagon Composites ASA is a global leader in clean fuel solutions - solutions that range from LPG cylinders for domestic cooking and heating, compressed natural gas (CNG) and renewable natural gas (RNG) mobility, to hydrogen and battery e-mobility. Our solutions are here today, on cars and trucks, on ferries, trains and buses, in homes and even in spacecraft. Our solutions are working for customers and partners around (and above) the world. Hexagon is driven by a clear conviction: Clean air is a right, not a privilege.

The COVID-19 pandemic has tested our commitment. I am proud of how we responded. While taking swift measures to protect the health of our team-mates, we stepped up to keep critical industries running.

Our financials

We exited 2020 even stronger than we entered it. We recorded revenues of NOK 3,080 million and EBITDA of NOK 190 million, which was down from the previous year due to COVID-19 effects in the second quarter. Demand picked up again strongly in the third quarter.

In 2020, Hexagon’s technology was able to remove an estimated 730,000 tons of greenhouse gas (GHG) emissions, equivalent to saving over 960,000 acres of forest or removing 158,000 passenger vehicles from the roads.

In August we raised NOK 907 million in new equity. The year ended with the successful spin-off and public listing of Hexagon Purus, a pure-play hydrogen and battery electric e-mobility company. Separating and listing Hexagon Purus allowed us to pursue two parallel strategies (e-mobility and g-mobility) in the global push for a decarbonized transport sector. Maintaining a majority ownership in Hexagon Purus provides investors in the Hexagon Group exposure to the e-mobility market, where the addressable market is expected to exceed USD 7 billion in 2030.

g-mobility and e-mobility are equally key to driving the clean energy transformation

The total addressable mobility market is expected to grow by around four times, to approximately USD 8 billion in 2025. While the relative growth will be strongest in the e-mobility business, it is the g-mobility business that will grow the most in absolute terms in the next five years.

Significant growth in the years ahead – RNG a major driver

Renewable natural gas (RNG) is made from organic waste that would otherwise decompose as methane, causing environmental damage and contributing to climate change. To create RNG, the methane is captured and refined into natural gas. Using RNG takes carbon out of the environment, neutralizes waste and helps deliver net zero carbon emissions. It is a viable, scalable, long-term solution and it is ready to use today without investing in new vehicles.

CEO quote

Digitalization is a core part of the Energy Transformation

Driving energy transformation is not only about enabling the replacement of traditional energy sources and carriers; it is also about utilizing energy in smart and efficient ways.

Raising the bar with technology advancements will enable Hexagon to extend the life of its products. Introducing smart and connected systems will enable new business models, build customer loyalty, and create new revenue streams. Digitalization is the next big strategic step for Hexagon. Through Hexagon Digital Wave and Hexagon Ragasco, we are focused on turning these opportunities into realities.

Progress can’t wait

The backdrop for our business could not be better. The clean energy transformation is gaining massive momentum. We see that our customes in every sector have sustainability and clean energy at the top of their strategic agendas – and we have no doubt they will execute on their strategies. Meanwhile, there are few companies out there with proven solutions for multiple forms of clean energy. Hexagon is one of them.

Strengthening structure and brand

To prepare for this market opportunity, we made some changes in our structure at the start of this year. In addition to the spin-off and listing of Hexagon Purus, we lifted Hexagon Digital Wave into a separate business area with responsibility for developing digitalizing technologies and solutions for our mobility business. Hexagon Ragasco will continue with a renewed focus on smart digital solutions. In addition Hexagon Mobile Pipeline has been combined with Agility Fuel Solutions to form Hexagon Agility.

In light of the momentum of the market and these structural changes, we have chosen to revitalize the Hexagon brand to reinforce Hexagon’s position as a bold leader in clean fuel solutions - a broad group that collaborates with its customers and believes that progress can’t wait.

Optimistic and focused

As I write this, the world is cautiously optimistic. President Biden’s decision to rejoin the Paris Climate Agreement on the first day of the new administration is likely to be just the first step in a sharp shift in US climate policy. The EU Green Deal has been launched to build a more sustainable EU economy and foster a range of initiatives. In Hexagon, our strategic focus remains sharp on environmental impact – both our own and our customers'.

CEO LETTER Jon E Engeset IMG9464 v2 003

Thank you for your continued support and encouragement.

Be safe and be well,

Jon Erik Engeset sign

Jon Erik Engeset

Group President & CEO

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