Annual report
2024
The future belongs to
the frontrunners
The publication can be downloaded on
nelhydrogen.com
Title:
Annual report 2024
Published date:
Oslo, 26 February 2025
[email protected]
+47 23 24 89 50
Karenslyst allé 49, PB 199 Skøyen,
0212 Oslo, Norway
Table of contents
Annual report 2024
1 Letter from the CEO .................................................................................................. 5
2 Members of the board .............................................................................................. 9
3 Management ............................................................................................................... 10
4 Report from the Board of Directors ..................................................................... 13
4.1 Financial development ................................................................................... 16
4.2 ENVIRONMENT, SOCIAL AND GOVERNANCE (“ESG”) REPORT ..... 29
5 Board of Directors’ report in relation to the
Norwegian Code of practice for corporate governance ................................. 72
6 Consolidated financial statements 2024 Nel group .......................................... 78
7 Parent company financial statements ................................................................... 142
7.1 Notes to the financial statements parent company ................................. 150
8 Alternative Performance Measures ..................................................................... 165
9 Auditor’s report .......................................................................................................... 166
Nel ASA
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Annual report 2024
5
The future belongs to the frontrunners
More than 120 years ago, a Norwegian entrepreneur named
Sam Eyde laid the foundation for what would become an
essential part of Norwegian industry. At the beginning of the
twentieth century, the world faced a severe food shortage.
Traditional farming methods could not keep up with a
growing population. A true visionary, Eyde saw the urgent
need to increase food production and found that synthetic
fertilizer could be the solution.
Along the way, he faced many challenges. He needed to
figure out a viable way to make fertilizers, convince workers,
politicians, and partners that his ideas would work, and raise
sufficient capital to fund his projects. To put the last part into
perspective: Mr. Eyde needed more money than the entire
Norwegian national budget at the time.
In the end, he succeeded. Mr. Eyde’s pioneering efforts not
only led to the creation of Norsk Hydro but also paved the
way for other major companies such as Elkem and Yara.
I am proud to say that Nel’s history also starts with Sam
Eyde’s boldness.
Today, the world faces a new, immense challenge. Global
warming is already disrupting our climate and weather
systems, with storms, droughts, and wildfires becoming
the norm in many regions. Our generation has both the
knowledge of the irreversible climate risks caused by
delayed action and the opportunity to mitigate them. In
short, our generation has a choice - future generations are
bound to live with the consequences.
One way to cut carbon emissions would be to reduce
industrial activity and production. The world had a test
run of what this could look like under the global Covid
pandemic when the inability for society to function
well without a reasonable level of industrial activity and
employment was laid bare. Reducing the standard of
living in some countries and preventing many others from
improving theirs is neither desirable nor feasible.
A better option is to ensure industry provides goods and
services that customers and consumers can enjoy without
causing environmental harm. For this to happen we need
industry to be “clean”. The obvious solution is to switch
from fossil energy to renewable energy. In many cases this
transition is relatively easy.
But some industries, such as refineries, steel and ammonia
producers, shipping companies etc. face a more challenging
path toward zero emissions. These sectors cannot easily
electrify their operations. Instead, they need renewable
hydrogen or hydrogen derivatives to reduce and ultimately
eliminate their dependence on fossil energy.
Just like in Sam Eyde’s case, the hydrogen industry has
experienced plenty of headwinds in recent years. Inflation,
higher interest rates, and lack of standardization have driven
the cost of renewable hydrogen projects up. In 2022, the
most commonly asked question by green hydrogen project
developers, investors, and analysts was whether Nel and its
peers had sufficient production capacity to meet demand.
Today, the situation has reversed, and production facilities
throughout the industry are idling, waiting for demand to
pick up.
The near- and mid-term market is difficult to predict,
influenced by factors beyond the company’s control. This
year we will face the consequences of low order intake and
project delays or cancellations in 2023 and 2024. Although
2025 can still be a good year for winning new business,
we know from experience that it takes time from winning a
contract until it impacts Nel positively. Accordingly, we have
adjusted our production and organizational capacity to
reflect these new market conditions.
Despite a lower-than-expected order intake in the last two
years, the business has improved steadily. Since 2022, we
have nearly doubled our revenues, cut EBITDA losses by
60%, and significantly reduced the cash burn. With a cash
position close to NOK 2 billion, Nel remains a financially
robust company. When the market picks up again, we
will be in position to provide market-leading products
manufactured in the world’s best and only fully automated
facilities for both alkaline and PEM. We have a unique
position in our industry.
Our technology development efforts have been accelerated.
We continue to improve our existing technology platforms,
both with respect to cost and performance. In parallel we
advance our game-changing next-generation PEM and
pressurized alkaline platforms according to plan. Moreover,
in October 2024, we received news from the EU’s Innovation
Fund that Nel was awarded up to 135 million Euros in grants
to scale up manufacturing capacity of Nel’s new pressurized
alkaline technology.
1 Letter from the CEO
6
Letter from the CEO
Best regards,
Håkon Volldal, CEO
The rationale behind this and other grants awarded by
the EU and other countries is clear: they recognize that
achieving emission-reduction targets is impossible without
clean hydrogen. Globally, politicians and pioneering project
developers are promoting more sustainable societies where
emission reductions and industrial production go hand in
hand. This is also why I am confident that the hydrogen
market will shift and when it does, Nel will emerge as one of
the most respected and successful electrolyser OEMs.
In addition to the financial performance and progress in
technology development, I would like to highlight some
other key achievements in 2024:
• Improved safety statistics: We made safety our number
one priority for 2024 and I am pleased to report that
we are now performing better than relevant industry
benchmarks on Total Recordable Incident Rate (TRIR) and
Lost Time Injury Rate (LTIR). We will continue to put safety
first to ensure that all employees can return safely home
from work every single day.
• A more focused company: The fueling division was spun
off and listed on the Oslo Stock Exchange as Cavendish
Hydrogen. This allows us to focus all our efforts on what
we do best: develop and deliver world-class electrolysers.
• Proven business model: In quarters with sufficient
volumes, in our alkaline operations, our financials prove
that the business model works. We expect a similar effect
on our PEM operations and see a path to profitability with
our current manufacturing capacity.
• Efficient manufacturing at scale: We inaugurated
the 500MW PEM production line in Wallingford, USA.
Through automation and innovation, we can now
produce 10 times as many stacks at a 30% lower unit
cost. We also opened Line 2 at Herøya, Norway, in 2024,
bringing the annual production capacity for Alkaline to
1GW. In total, Nel now has 1.5GW of real, state-of-the-art
capacity.
• Signing of strategic partnerships: In 2024 and early
2025, we signed several agreements with companies
across the hydrogen value chain that strengthen
our position as a leader in the hydrogen industry.
Strategic partnerships reflect our experience that closer
collaboration and integration across the value chain are
crucial for reducing risk, lowering transactional costs, and
ultimately achieving success in the hydrogen industry.
One example is the Technology Licensing Agreement
where Reliance, India’s largest privately-owned company,
will manufacture and sell Nel’s alkaline technology in
India and for their own projects globally. This partnership
expands Nel’s market reach and supports Reliance’s high
ambitions in the global hydrogen market. It also gives
increased R&D leverage.
I find inspiration in Sam Eyde’s determination and boldness.
Where most people would have thrown in the towel, he
never gave up. It is encouraging to reflect on his fantastic
achievements, which laid the foundation for modern industry
development in Norway. I am proud that Mr. Eyde is the
founding father of Nel, and I like to think that it is in our DNA
to pursue bold ideas, overcome obstacles, and positively
impact society.
MORE THAN 90 YEARS OF HYDROGEN INNOVATION.
AND THAT’S JUST THE BEGINNING.
PROVEN TECHNOLOGY, TRUSTED PARTNER -
PIONEERING RENEWABLE HYDROGEN FOR
MORE THAN 90 YEARS
Opening of 500 MW line in Wallingford, Connecticut
Started development of next generation PEM electrolyser platform with General Motors
Signed the first large scale 200MW electrolyser contract
Starting up the Herøya plant, first line
Record order sizes within both Alkaline and PEM
Nel announces construction plans for the world’s largest electrolyser
manufacturing plant to accommodate multi-billion NOK orders
Nel acquires Proton OnSite, adding world leading PEM
electrolysis technology to product portfolio, becoming the
world’s largest electrolyser company
Nel becomes the first 100% dedicated hydrogen company
listed on the Oslo Stock Exchange
Our first pressurised electrolyser introduced to the market
The world’s first electrolyser supplier to provide non-asbestos
alkali electrolysers
Our renowned electrolyser technology made available for
other companies and other industries
Complete redesign of the electrolyser unit, forming the basis for
today’s atmospheric electrolyser from Nel
Starts up a second large scale hydropowered electrolyser plant for
supplying hydrogen to ammonia production, in Glomfjord, Norway
The largest installation in the world of water electrolysers at Rjukan, Norway,
with a total hydrogen production capacity exceeding 30.000 Nm3/hour, from
hydropower
The first small electrolyser installation at Norsk Hydro, Notodden, Norway. Testing for pure
hydrogen to fertilizer production
2024
2023
2022
2021
2020
2019
2017
2014
2001
1998
1974
1959
1953
1940
1927
Nel ASA
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Annual report 2024
9
OLE ENGER, CHAIR OF THE BOARD
Mr. Enger (born 1948) has worked as
CEO in Nordsilmel, Elkem, SAPA, REC,
REC Solar and he has been in the
executive management of Norsk Hydro
and Orkla. Ole Enger has an educational
background from Norwegian University
for Environment and Life Sciences, NHH
and IMDE Business School. He has board experience as both
chairman and board member of a number of private and listed
companies. Mr. Enger is a Norwegian citizen and lives in Oslo.
He has been a member of the board since 2017 and holds
149.462 shares directly and/or indirectly in Nel ASA.
HANNE BLUME, BOARD MEMBER
Ms. Blume (born 1968) is Executive
Vice President and Group CHRO in the
Danish DLG Group. Hanne Blume has
a Master of Science degree in Business
Administration and Commercial Law
from Aarhus School of Business. She has
also supplementary leadership training
from international schools INSEAD, IMD, London Business
School and Wharton. She has management experience and
board experience from both listed and private companies. Ms.
Blume is a Danish citizen and lives in Juelsminde in Denmark.
She has been a member of the board since 2019 and holds no
shares in Nel ASA.
CHARLOTTA FALVIN, BOARD MEMBER
Ms. Falvin (born 1966) serves as
a board member in several listed
companies within the technology and
communication industries. She has
previous management positions e.g.
as CEO in The Astonishing Tribe AB
which were sold to Blackberry in 2010.
Charlotta Falvin has a Master of Science degree in Business
Administration and Economics from University of Lund. She is
appointed Honorary Doctor at the Faculty of Engineering of
the University of Lund. Ms. Falvin is a Swedish citizen and lives
in Genarp, Sweden. She has been a member of the board
since 2020 and holds 46.000 shares directly and/or indirectly
in Nel ASA.
ARVID MOSS, BOARD MEMBER
Mr. Moss (born 1958), is an experienced
executive who has been a member of
Norsk Hydro’s corporate management
board since 2008. Moss served as EVP
for the Business Area Energy between
2010-2024. Since mid 2024 he is special
advisor to Hydro’s CEO and chair of
Hydro REIN, the renewable company owned by Hydro and
Macquarie Asset Management. Since 2022 Mr. Moss also is
the Chair of the Board in Norway’s Export Council (Norsk
Eksportråd). In Norsk Hydro, he has been responsible for
strategy and business development in the aluminium area
and on the corporate level for several periods. He also led
the process that resulted in the oil and gas merger between
Norsk Hydro and Statoil in 2006. Mr. Moss also served
as State Secretary and Chief of staff in the Norwegian
Prime Minister’s office (1989-1990). Mr. Moss has a MSc
in Economics and Business Administration (siviløkonom),
Norwegian School of Economics (NHH). He has been a
member of the board since 2023 and holds no shares in Nel
ASA.
BEATRIZ MALO DE MOLINA, BOARD MEMBER
Beatriz Malo de Molina (1972) has had
a 30 year career in M&A, finance and
capital markets, beginning in 1994 with
EY and including positions in Alvarez &
Marsal, Orkla, Kistefos, McKinsey, and
Goldman Sachs. Current board positions:
Chairman of Otovo, and Chair of the
Audit Committee of EMGS. Beatriz graduated summa cum laude
from Georgetown University in Washington D.C., and has a
Master’s degree from the University of Oslo. Ms. Malo de Molina
is a Spanish citizen and has been a resident of Norway since
2006. She has been a member of the board since 2017 and
holds no shares directly and/or indirectly in Nel ASA.
2 Members of the board
10
Members of the board
HÅKON VOLLDAL, CHIEF EXECUTIVE OFFICER
Håkon Volldal (born 1976) joined Nel
as CEO on 1 July 2022. Mr. Volldal
served as CEO of the traffic technology
company Q-Free ASA from 2016 to
2022. Prior to this he held various
positions during a 12-year career at
TOMRA, including EVP Collection
Solutions from 2013 until 2016. Mr. Volldal has also worked
as a management consultant for McKinsey & Company
and holds an MSc in Industrial Economics and Technology
Management from the Norwegian University of Science and
Technology (NTNU). He is a Norwegian citizen.
KJELL CHRISTIAN BJØRNSEN, CHIEF FINANCIAL OFFICER
Kjell Christian Bjørnsen (born 1976)
joined Nel as CFO on 1 March 2020.
Prior to this he served as Chief Financial
Officer of the Kavli Group from 2014.
Mr. Bjørnsen has also held positions
within business development, strategy
and finance in several global industrial
companies, including the CFO position of REC ASA. He
holds a MSc in Chemical Engineering from the Norwegian
University of Science and Technology (NTNU), and is a
Norwegian citizen.
MARIUS LØKEN, CHIEF TECHNOLOGY OFFICER
Marius Løken (born 1977) assumed his
role as Chief Technical Officer (CTO) of
Nel ASA in June 2023. Prior to this, he
honed his leadership at TOMRA Systems
ASA, ascending through positions like
Head of Europe Asia Pacific, Head
of Technology, and Head of Product
Management. In total, Marius spent over 23 years at TOMRA,
making significant contributions across various technological
and commercial facets. His academic foundation is rooted
in a Master of Science in Mechanical from the Norwegian
University of Science and Technology (NTNU), with the master
thesis conducted at Michigan Technological University.
TODD CARTWRIGHT, CHIEF COMMERCIAL OFFICER
Todd Cartwright (born 1966) joined Nel
as Chief Commercial Officer, effective
January 2nd, 2024. A US citizen with
a BS in Mechanical Engineering, he
brings over 30 years of energy sector
experience. Mr. Cartwright has held
key roles at CB&I and Technip Energies,
notably as Commercial Vice President at the latter. In this role,
he led business development, key account management, and
strategic partnerships, and was responsible for commercial
leadership of strategic projects across legacy and energy
transition markets such as CCUS, Hydrogen, Ammonia,
BioFuels, LNG, and Circularity.
3 Management
TOM RØTJER, BOARD MEMBER
Mr. Røtjer (born 1953), former Senior
Vice President, Head of Projects in
Norsk Hydro ASA until 2018. He served
as Executive Vice President Projects
(member of Corporate Management
Board) in Norsk Hydro from 2007-2012.
He has held previous board positions
in Aibel AS , Hæhre & Isachsen Gruppen AS (Akh Gruppen
AS), Det norske oljeselskap ASA (Aker BP ASA), Qatalum Ltd.,
and Green Energy Geothermal Ltd. Mr. Røtjer holds a master’s
degree in Mechanical Engineering from the University of
Trondheim, Norway. He is a Norwegian citizen and resides
in Oslo, Norway. He has been a member of the board since
2020 and holds no shares in Nel ASA.
JENS BJØRN STAFF, BOARD MEMBER
Mr. Staff (born 1967) is the Group CEO
in Skagerak Energi, a Norwegian utility
company, since 2020. Mr. Staff has
broad executive experience from Orkla
where he served as Group CFO for 6
years and Statkraft where he was Group
CFO for 3 years. He has also had several
executive positions in Statoil over the course of 6 years. He
has previously held board positions in Isola Holding AS,
Statoil, Orkla and corporate assembly in Jotun. Mr. Staff holds
an MBA from the Norwegian School of Economics (2002) and
an BA from the Norwegian Business School. In addition to
International Directors Program from INSEAD (2022) and the
Advanced Valuation program at NYU Stern School of Business
(2023). Mr. Staff holds no shares directly and/or indirectly in
Nel ASA.
Nel ASA
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Annual report 2024
11
STEIN OVE ERDAL, SENIOR VICE PRESIDENT LEGAL AND
GENERAL COUNSEL
Stein Ove Erdal (born 1979) joined Nel as
Vice President Legal and General Counsel
in May 2019. Erdal comes from a position
as an Associate General Counsel in
Nexans Norway AS where he worked for
nine years with complex offshore EPCI and
EPC projects. He also has experience from
working as a lawyer in the oil and gas division of Arntzen de
Besche, as a deputy judge and as a defence counsel. Erdal holds
a Cand. Jur., Qualifying Law Degree, from the University of Oslo,
and is a Norwegian citizen.
HANS H. HIDE, CHIEF PROJECT OFFICER
Hans H. Hide (born 1965) joined Nel in
March 2019. Mr. Hide has since 2012
held management positions in some of
Kvaerner’s largest projects within the oil
and gas sector. He has previously served
as Project Portfolio Manager in ALSTOM,
and as Vice President Projects in REC,
where he also held several management positions in the projects
covering REC’s expansion program within Solar and Silicon. He
holds an MSc in Process Technology and Process Control from
Telemark College of Engineering, and is a Norwegian citizen.
TUSHAR GHUWALEWALA, SVP PEM OPERATIONS
Tushar Ghuwalewala assumed the role
of Vice President of Operations for
the PEM Division in April 2020, and
assumed full responsibility for PEM
Operations in October 2024. Since
joining Nel in 2000, Mr. Ghuwalewala
has held positions across Engineering,
Technical Service, and various Leadership roles. Prior to his
tenure at Nel, he contributed to projects supporting NASA at
ABB Lummus Global. Mr. Ghuwalewala holds both a Bachelor
of Science and a Master’s degree in Mechanical Engineering
from Tulane University (US), and is a US citizen.
KAI RUNE HEGGLAND, SVP ALKALINE OPERATIONS
Kai Rune Heggland assumed his role
as Country Manager for Nel Hydrogen
Electrolyser AS and Vice President of
Operations for the Alkaline Division in
2022, taking full responsibility for Alkaline
operations in October 2024. Prior to
joining Nel, he served as Vice President of
Operations at Alcoa Aluminum for Europe, the Middle East, and
Australia from 2015 to 2020. His career spans from Production
Manager in Statkraft, Plant Manager in Elkem Aluminum and
different roles in Alcoa as well as different Country Manager
responsibilities and Board Member positions in various
companies. He holds a Master’s degree in Management from BI
Norwegian Business School (Handelshøyskolen BI), a Master’s
degree in Power Systems from the Norwegian University of
Science and Technology (NTH), and a Bachelor’s degree in
Electronics from Agder Ingeniør- og Distriktshøyskole, and is a
Norwegian citizen.
Report from the Board of Directors
13
Highlights
• Revenue of NOK 1 390 million in 2024, in line with 2023.
• Year-end cash balance of NOK 1 876 million (2023: 3 363).
The cash balance was reduced with NOK 625 million with
the spin-off of Cavendish Hydrogen ASA.
• In January 2025, initiated a process to adjust capacity to
demand by reducing workforce and temporarily halting
production at the Alkaline production facility in Herøya,
Norway.
• Order intake in 2024 was NOK 977 million (2023:
NOK 1 140 million) which resulted in an order backlog at
end of 2024 of NOK 1 614 million, down 23% from 2023.
– Alkaline electrolyser order and follow-on order from
Samsung C&T, each 10MW.
– PEM electrolyser received a follow-on equipment
order of more than EUR 7 million for a European
project
– Entered into a technology licensing agreement with
Reliance Industries Limited (RIL).
• Received significant government support for development
and industrialization
– EUR 135 million in grants from EU Innovation Fund
for industrialization of next-generation electrolyser
technology.
– USD 141 million in tax credits, cash incentives and
grants for the planned production expansion in
Michigan during 2024. In total, Nel has secured close
to USD 170 million in accumulated support.
– Nel and partners granted about USD 90 million in
funding from Department of Energy for seven research
and development projects. About 10 % of the work
under the program will be undertaken by Nel.
KEY FIGURES CONTINUING OPERATION
PERFORMANCE MEASURES 2024 2023 2022
Revenue 1 390 1 350 708
EBITDA -173 -272 -428
Operating loss -389 -444 -552
Pre-tax income (loss) -264 -574 -464
Net income (loss) -258 -566 -456
Net cash flow from operating activities -83 -464 NA
Cash balance end of period 1 876 3 363 3 139
Order intake 977 1 140 1 978
Order backlog 1 614 2 093 2 224
TRIR
1
5.2 19.7 11.5
Number of fatal accidents 0 0 0
Number of employees 409 418 334
Women in executive management 11.1% 11.1% 11.1%
GHG intensity (excluding scope 3) 0.8 0.9 1.6
Alkaline OEE
2
65% 67% 70%
Alkaline stack yield
3
97% 99% >90%
PEM stack yield
4
99% 94% 95%
1
Total recordable injuries rate (TRIR) is measured as total recordable injuries
per million hours worked.
2
Overall equipment effectiveness (OEE) considers all of availability,
performance and quality
3
Yield is defined as a complete product that is quality approved (without
repair and rework) and ready for the customer. Material from a not approved
product is reused.
4
Yield is defined as a complete product that is quality approved (without repair
and rework) and ready for the customer. Platinum is recovered.
4 Report from the
Board of Directors
Nel ASA
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Annual report 2024
14
Report from the Board of Directors
WHERE WE ARE
Nel consists of electrolyser production facilities in Norway and Connecticut, USA, supported by headquarters in Norway. Nel has
a sales and support network with global reach.
Nel has historically delivered a few electrolyser systems in Russia. We have sold electrolyser systems to Ukraine during 2021.
Business is currently limited in these geographical areas.
MARKETS WE SERVE - A PURPLE WORLD
In total, we have delivered over 3500 electrolyser solutions to over 80 countries.
PEM ELECTROLYSER
Wallingford, CT, USA
HEADQUARTER AND
ALKALINE ELECTROLYSER
Oslo, Norway
Our vision
Abundant clean energy for all
As the world’s population grows, everyone
should have the opportunity to enjoy a high
quality of life. Achieving this without increasing
carbon emissions requires clean, thriving
industries powered by renewable energy
and hydrogen. Our vision is a society with
abundant clean energy for all.
16
Report from the Board of Directors
4.1 Financial development
Group
FINANCIAL REVIEW
Amounts in NOK million
2024 2023 CHANGE
Revenue 1 390 1 350 3%
EBITDA -173 -272
Order intake 977 1 140 -14%
Order backlog 1 614 2 093 -23%
Number of employees 409 418 -2%
Total assets 6 304 7 046 -11%
REVENUE & ORDER INTAKE, ORDER BACKLOG AND EMPLOYEES
279
436
708
1 350
1 390
0
500
1 000
1 500
2 000
2 500
2020 2021 2022 2023 2024
Revenue
Order intake
621
937
2 224
2 093
1 614
0
500
1 000
1 500
2 000
2 500
2020 2021 2022 2023 2024
Order backlog
194
267
334
418
409
100
150
200
250
300
350
400
450
2020 2021 2022 2023 2024
Employees
INCOME STATEMENT
(comparable amounts in brackets, in NOK million)
Nel is adjusting organizational and production capacity to
meet expected market development, while simultaneously
delivering on larger and more complex projects. This
continues to impact the company’s profitability negatively.
While the company has made notable improvements in ability
and effectiveness, further developments are necessary to
secure margins and increase profitability.
Having sufficient scale is key to winning new orders and
reaching profitability. Nel has therefore over the last several
years invested in increased production and organizational
capacity. As expected, the increased alkaline revenues in
combination with solid gross margins had a positive EBITDA
impact in the year.
Final investment decisions on large target customer projects
were pushed out in time and existing orders were delayed or
became at risk of cancellation. During the year, cost reduction
and capacity adjustment measures were initiated with further
actions taken subsequent to the year end. These measures
include a temporary shut-down of the Herøya facility. As
a result of implementation time, including notice periods
for terminations and temporary lay-offs, the cost reduction
measures will reduce the cost base gradually over the first
half of 2025.
Nel reported revenue in 2024 of NOK 1 390 million, in line
with NOK 1 350 million in 2023. The growth is driven by 15 %
revenue increase in Nel Alkaline Electrolyser.
Order intake in 2024 was NOK 977 million (1 140) which
resulted in an order backlog at end of 2024 of NOK 1 614
million, down 23% from 2023. The backlog only includes
firm purchase orders with agreed price, volume, timing and
terms and conditions. The note on Alternative Performance
Measures quantifies the distribution of backlog over time
and quantifies the risk in the backlog. The decrease in order
backlog is mainly explained by lower order intake combined
with higher revenues from alkaline electrolyser equipment
from the Herøya production facility.
Nel ASA
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Annual report 2024
17
Raw materials expenses totalled NOK 504 million (715),
a decrease of 30% from 2023. The decrease is driven by
improved margin on ongoing projects, revenue with no
delivery of equipment (cancellation fees, technology licensing
and engineering hours) and product mix where equipment
produced by Nel has a lower material component than third
party equipment.
Personnel expenses amounted to NOK 646 million (546).
While the number of employees went down by 9 from
beginning to end of 2024, the average number of full-time
employees went up from 374 employees in 2023 to 423 in
2024. Other operating expenses also increased 18% and
totalled NOK 518 million (438) for the year. The high level of
personnel and other operating costs are the results of Nel’s
decision to continue to invest in growth and higher activity
levels through 2023 and early 2024.
EBITDA ended at NOK -173 million (-272), negatively impacted
by costs for scaling for growth. The EBITDA is also negatively
impacted by Nel’s customer projects often including new
geography, customer segments, technological components
and/or products leading to additional costs and risk.
Depreciation, amortisation and impairment increased to NOK
216 million (172).
As a result of all of the above, the operating loss amounted to
NOK -389 million (-444).
Net financial items amounted to NOK 125 million (-131).
Nel received NOK 128 million in interest from banks in the
current year in comparison to NOK 168 million in 2023, a
reduction caused by the lower cash balance. The negative
2023 financial items were driven by a negative fair value
adjustment of shareholdings in Everfuel, totalling NOK -304
million. Pre-tax loss totalled NOK -264 million (-574) and the
net loss for the year was NOK -258 million, compared to a
loss of NOK -566 million in 2023.
The results of the discontinued operation are presented
separately from the continuing operation as a single amount
of profit that amounted to NOK 13 million. The profit includes
the results of discontinued operations until distribution,
net of tax, which amounted to a loss of NOK 131 million.
Furthermore, a gain of NOK 144 million was recognised when
distributing the discontinued operation. The gain equals the
fair value of the discontinued operation less the book value of
the net assets distributed, adjusted for the cumulative foreign
currency translation reserve in Other Comprehensive Income
recycled to the income statement.
Net loss was NOK -244 million (-855).
Financial position
Total assets were NOK 6 304 million at the end of 2024,
compared to NOK 7 046 million at the end of 2023. Total
equity was NOK 4 977 million. Thus, the equity ratio was 79%.
Cash flow
Net cash flow from operating activities continuing operations
in 2024 was NOK -83 million, compared to NOK -464 million
in 2023. The development is positively impacted by the
increased volumes sold, offset by higher personnel expenses.
2023 also had an increased net working capital of NOK 458
million. Net cash flow from investing activities continuing
operations was NOK -548 million (-598). Nel has purchased
property, plant and equipment for NOK 527 (559) million
in 2024, mainly related to the alkaline expansion at Herøya,
Norway, and PEM expansion in Wallingford.
Nel’s cash balance at the end of 2024 was NOK 1 876 million
(3 363). The decrease from end of 2023 is mainly due to NOK
625 million in connection with the spin-off of Cavendish ASA
and expansion investments of about NOK 411 million.
The company estimates it has sufficient working capital
for the 12 months following the balance sheet date. In
accordance with section 3(3a) of the Norwegian Accounting
Act, the board of directors, therefore, confirms that the
financial statements have been prepared on the assumption
of a going concern.
18
Report from the Board of Directors
Nel Alkaline Electrolyser
Financial review
Amounts in NOK million
2024 2023 CHANGE
Revenue 1 009 876 15%
EBITDA 127 -29
Order intake 577 686 -16%
Order backlog 1 290 1 654 -22%
Number of employees 229 243 -6%
Total assets 2 508 2 028 24%
REVENUE & ORDER INTAKE, ORDER BACKLOG AND EMPLOYEES
72 53
339
72
53
876
1 009
0
500
1 000
1 500
2020 2021 2022 2023 2024
Revenue Order intake
387
564
1 681
1 654
1 290
0
500
1 000
1 500
2 000
2020 2021 2022 2023 2024
Order backlog
78
120
167
243
229
0
50
100
150
200
250
300
2020 2021 2022 2023 2024
Employees
Nel Alkaline Electrolyser reported strong growth, and
revenues were 15% higher than in 2023. Production of
electrolyser equipment at Herøya in Norway and sourced
third party equipment achieved major milestone deliveries
on contracts in the backlog, and a milestone was reached
on the technology licensing agreement with RIL. In addition,
Revenue and EBITDA this year include NOK 54 million from
renegotiation of the Nikola supply agreement.
The order backlog for Alkaline Electrolyser ended at
NOK 1 290 million. This was down NOK 364 million from
the end of 2023 due to low order intake in the past year.
The note on Alternative Performance Measures quantifies
the distribution of backlog over time and quantifies the risk
in the backlog. Nel has secured paid front-end engineering
and development studies for projects above 100 MW. These
activities lay the foundation for future order intake of firm
equipment orders. In 2023 and 2024 order intake was low as
final investment decisions on large target customer projects
were pushed out significantly in time.
As a result of renewable hydrogen projects taking longer time
to reach final investment decision than anticipated and existing
contracts being significantly delayed or cancelled as customers
fail to secure funding, Nel has an increased inventory of
finished goods and lower backlog for 2025 delivery. Nel’s cost
structure and the utilization of the Herøya production capacity
are therefore being adjusted to market demand. However,
increased fixed costs from higher production capacity will
continue to negatively influence results until more orders
have been secured. Number of employees decreased to 229,
compared to 243 at the end of last year.
Nel ASA
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Annual report 2024
19
-29
-200
-150
-100
-50
0
50
100
150
2020 2021 2022 2023 2024
EBITDA
-144
-184
127
-40
EBITDA for the year was NOK 127 million compared to
NOK -29 million last year. The EBITDA is improving, and the
Alkaline segment reported a positive EBITDA for the first time
full year. In addition to the NOK 54 million from renegotiation
of Nikola supply agreement, the EBITDA improved, compared
to last year, by NOK 102 million driven by higher revenues,
solid gross margins on equipment deliveries and technology
license milestone payments. Project margins are generally up
compared to previous years as contractual terms are more
favourable and execution has improved. EBITDA includes
R&D expenses of NOK 103 million (76) in 2024.
DEVELOPMENT AND KEY PROJECTS
Technology development
As the renewable hydrogen industry continues to develop,
Nel is at the forefront of the industrialization of electrolyser
production and of product development within several
electrolyser technologies. Nel is continuing to invest
in the development of large-scale industrialisation of
electrolyser products. Also, further development of the
current atmospheric alkaline technology towards larger
capacity solutions is ongoing. In addition, Nel is working to
develop a pressurized alkaline electrolyser. All of these three
development activities target increases in functionality and
decreases in levelized cost of hydrogen for our current and
future customers and are intended to increase demand for
our products globally.
Total technology spend for 2024 in Alkaline was NOK 225
million (152), of which NOK 121 million (76) and NOK 103
million (76) has been capitalised and expensed, respectively.
Pressurised alkaline electrolyser and EU grants
Nel has been developing its next-generation pressurized
alkaline technology for more than six years. The technology
is currently being prototyped with promising results, and the
potential industrialization is being planned for the Herøya,
Norway facility.
For the industrialization of this next-generation pressurized
alkaline technology, Nel has been selected for a grant from
the EU Innovation Fund of up to EUR 135 million. The EU
support will be phased with Nel’s own investments for up
to 4 GW of capacity for pressurized electrolyser equipment
in Norway. Decision to start building and later expand the
capacity depends on achieving successful testing, market
acceptance of the new technology and overall market
development.
Production capacity development
In an effort to meet the global ambitions for renewable
hydrogen, Nel initiated in 2022 a continued expansion
at Herøya in Norway with an additional 500 MW alkaline
production line. This line was operational from April 2024.
However, due to low order intake during 2024 and delays
and cancellations of projects in the order backlog, production
at Herøya has been temporarily halted as of January 2025.
There are no contractual commitments beyond December
2024 for the Herøya production lines. Restarting of the line
and any further capacity expansion will be closely aligned
with developments in our commercial backlog. Nel has
completed building modifications at Herøya and received
long-lead time items to prepare for further expansion when
the time comes
Key commercial activities
• Order intake in 2024 was NOK 557 million (2023: 686)
which resulted in an order backlog at the end of 2024 of
NOK 1 290 million, down 22% from 2023.
• Realigned the relationship with Nikola and will support
Fortescue on its 80 MW Phoenix hydrogen hub, for a total
consideration of approximately USD 20 million.
• Entered into a technology licensing agreement with RIL.
The agreement provides RIL with an exclusive license for
Nel’s alkaline electrolysers in India and for captive projects
globally.
• Nel Alkaline Electrolyser received purchase orders for:
– A 10MW alkaline electrolyser to Samsung C&T for
its off-grid green hydrogen production project
– Another 10MW alkaline electrolyser to Samsung
C&T for nuclear integration project
SUBSQUENT EVENTS
• About 73% of the net trade receivables past due in group
accounts note 6.2 are related to one customer. This year
includes no revenue from this customer. Nel has security
20
Report from the Board of Directors
for the unpaid net trade receivables from this customer
in the sold goods. Subsequent to the year, on 15 January
2025, the parties agreed that Nel use the collateral as
consideration for the receivables. The collateral value,
i.e. the payment for the goods, will offset the receivables
from this customer.
• Initiated a process to adjust capacity to market demand
by reducing the workforce and temporarily halting
productions at the Alkaline production facility in Herøya,
Norway
Nel PEM Electrolyser
Financial review
Amounts in NOK million
2024 2023 CHANGE
Revenue 381 474 -20%
EBITDA -165 -130
Order intake 400 454 -12%
Order backlog 324 440 -26%
Number of employees 150 145 3%
Total assets 1 755 1 591 10%
REVENUE & ORDER INTAKE, ORDER BACKLOG AND EMPLOYEES
0
100
200
300
400
500
600
2020 2021 2022 2023 2024
Revenue
Order intake
0
100
200
300
400
500
600
2020 20212022 2023 2024
Order backlog
0
20
40
60
80
100
120
140
160
2020 2021 2022 2023 2024
Employees
207
382
369
474
381
234
373
543
440
324
101
120
137
145
150
Nel PEM Electrolyser revenue in 2024 was 20% lower than in
2023 driven by lower sale of smaller systems.
The PEM segment has an order backlog of NOK 324 million,
down 116 million from 2023. The decrease in order backlog is
mainly explained by lower order intake in 2024. Towards the
end of the year, the overall demand for PEM seemed to be
increasing for 2-20MW projects.
The 500 MW expansion program for Wallingford facilities
remains on plan and the facility is expected to be fully
operational soon. The increased capacity will allow for a
significant continued growth in revenues and a significant
decrease in production cost per unit over time. Actual capacity
utilization depends on order intake. PEM continued its scaling
activities including a 3% increase in number of employees
during the year.
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Annual report 2024
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-200
-150
-100
-50
0
2020 2021 2022 2023 2024
EBITDA
-44
-66
-120
-130
-165
EBITDA for the year was NOK -165 million (-130). As for the
alkaline segment, project margins are in general up compared
to previous years due to more favourable terms and
conditions and better execution of production and delivery
projects. EBITDA includes R&D expenses of NOK 126 million
(76) in 2024.
DEVELOPMENT AND KEY PROJECTS
Technology development
As the renewable hydrogen industry continues to develop,
Nel is at the forefront of the industrialization of PEM
production and of product development within several
electrolyser technologies. Nel is continuing to invest in the
development of large-scale industrialisation of electrolyser
products. In order to meet new large-scale opportunities
within the PEM portfolio, Nel is developing a next generation
PEM platform. All of these development activities target
increases in functionality and decreases in levelized cost
of hydrogen for our current and future customers and are
intended to increase demand for our products globally.
Total technology spend for 2024 in PEM was NOK 140 million
(131), of which NOK 15 million (55) and NOK 126 million (76)
has been capitalised and expensed, respectively.
Production capacity development
In 2023, Nel initiated expansion and automation of the PEM
electrolyser production capacity in Wallingford, Connecticut.
The expansion will bring annual production capacity towards
500 MW in 2025. The carrying amount for the Wallingford
expansion is NOK 291 million as of 31 December 2024. Total
contractual commitments beyond December 2024 for the
expansion are NOK 55 million, including purchase contracts
for equipment.
Key commercial activities
• Order intake in 2024 was NOK 400 million (2023: 454)
which resulted in an order backlog at the end of 2024 of
NOK 324 million, down 26% from 2023.
• Nel and partners receive about USD 90 million in funding
from Department of Energy (DoE) for seven research and
development projects. Nel is the leading partner on one
of the seven projects. Approximately 10% of the work
under the R&D programs will be undertaken by Nel.
• The US Department of Energy (DoE) and the state of
Michigan have awarded a collective USD 75 million in
cash incentives and grants for Nel’s next electrolyser
production facility in Michigan. In addition, Nel has been
awarded up to USD 41 million in investment tax credits
for its planned manufacturing expansion in Michigan
as part of the Qualifying Advanced Energy Project Tax
Credit (48C) program. During 2024, including the two
mentioned supports above, Nel received USD 141 million
in tax credits, cash incentives and grants for the planned
production expansion in Michigan. In total, Nel has
secured close to USD 170 million in accumulated support
for the planned Michigan facility. The factory will be built
in stages in order to better align supply with demand,
and investment decision for initiating construction has not
been made.
• Nel PEM Electrolyser received large purchase orders for a
follow-on equipment order of more than EUR 7 million for
a European project.
• Other purchase orders during the year include multiple
smaller containerized electrolysers, and industrial
products.
SUBSEQUENT EVENTS
• On January 21, 2025, Nel received purchase order
for 5 MW of containerized PEM electrolysers for
approximately USD 7 million.
22
Report from the Board of Directors
Corporate developments
• On 7 February 2024, Nel was made aware that Iwatani
Corporation of America has filed a lawsuit with claims for
damages towards Nel and certain of its subsidiaries in
connection with certain agreements for delivery of fueling
equipment and services between Nel Hydrogen Inc. and
Iwatani Corporation of America. Nel and its subsidiaries
strongly reject the allegations made in the lawsuit by
Iwatani Corporation of America and will vigorously
oppose the allegations and the lawsuit. The lawsuit was
filed with the United States District Court in the Central
District of California. The relevant subsidiaries, now former
subsidiaries, are now fully owned by CAVEN.
• Nel completed the distribution (repayment of paid in
share capital) and separate listing of Cavendish Hydrogen
ASA (CAVEN) in June 2024. CAVEN and its subsidiaries
have historically been reported as a separate operating
segment, Nel Hydrogen Fueling, in Nel. On June 7,
2024, the distribution of the shares in CAVEN to the
shareholders in Nel ASA was initiated. The shares in
CAVEN were listed on the Euronext Oslo Stock Exchange
12 June 2024.
SUBSEQUENT EVENTS
• Nel ASA and its subsidiaries initiated a process to adjust
capacity to market demand by reducing the workforce
and temporarily halting production at the Alkaline
production facility in Herøya, Norway
SHAREHOLDERS AND
FINANCING
Nel’s shares are listed on the Oslo Stock Exchange under the
ticker “NEL”. At the end of 2024, the company had 1 671 325
304 issued shares, each with a nominal value of NOK 0.20 per
share. This comprised 1 670 907 271 outstanding shares and
418 033 treasury shares.
Euronext VPS recorded 23 941 known shareholders as of
31 December 2024. In addition, a substantial number of
unknown shareholders owning shares through custodians,
such as Clearstream Banking. The list of known shareholders
includes a considerable number of Nordic institutional
investors and private investors. Regarding the unknown
shareholders, Nel’s last investigation of investors owning
shares through custodians indicated a large number of
the shareholder base was located in Continental Europe.
According to new laws, a detailed shareholder overview will
be available no later than six weeks before the annual general
meeting and can be requested via the company’s website.
According to FactSet, which monitors filings from institutional
investors (not always visible on Euronext VPS), we find the
following top 20 shareholder overview (on an ultimate parent
level) as of 31 December 2024.
Distribution of known institutional shareholders
TOP 20 INSTITUTIONAL SHAREHOLDERS
% OF SHARES
OUTSTANDING
1 The Vanguard Group, Inc. 3.57
2 BlackRock Fund Advisors 2.16
3 Handelsbanken Fonder AB 1.90
4 DNB Asset Management AS 1.66
5 BlackRock Advisors (UK) Ltd. 1.28
6 Storebrand Asset Management AS 1.28
7 KLP Kapitalforvaltning AS 1.27
8 Legal & General Investment Management
Ltd.
1.06
9 Folketrygdfondet 1.05
10 Montpensier Finance SAS 0.99
11 Van Eck Associates Corp. 0.90
12 Global X Management Co. LLC 0.82
13 Deutscher Sparkassen-und Giroverband eV 0.39
14 Swedbank Robur Fonder AB 0.38
15 Alfred Berg Kapitalforvaltning AS 0.37
16 green benefit AG 0.35
17 Penserra Capital Management LLC 0.35
18 Dimensional Fund Advisors LP 0.28
19 BNP Paribas Asset Management Europe
SAS
0.28
20 DWS Investment SA 0.27
Source: FactSet, as of 31.12.2024
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Annual report 2024
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Country of known institutional shareholders/insiders
according to FactSet
United States
9 %
Norway
6 %
United Kingdom
2 %
Sweden
2 %
France
2 %
Other know
n
3 %
Unidentified
76 %
Source: FactSet as of 31.12.2024
The company has placed considerable emphasis on
providing shareholders, capital market participants and other
stakeholders with timely and relevant information about the
company and its activities in compliance with applicable laws
and regulations. Nel is committed to increasing awareness of
the share in Norway and abroad and believe in a transparent
and honest communication with the market.
STRATEGY
Nel has a history tracing back to 1927 and is today a leading
pure play hydrogen technology company with a global
presence. The company specializes in electrolyser technology
for production of renewable hydrogen. Nel’s product offerings
are key enablers for a renewable hydrogen economy,
making it possible to decarbonize various industries such as
transportation, refining, steel, and ammonia.
Governments and companies continue to focus on their energy
transition and greenhouse gas reduction roadmaps. For many,
renewable hydrogen is an integral part of the strategy. Nel is
working to meet this rising demand by investing significantly in
developing reliable, efficient, and affordable energy solutions
that support environmentally sustainable activities.
Nel’s analysis of the market is in line with the industry trend
reports, showing that investments in electrolyser projects
will continue to grow significantly in the coming years. While
today, some of Europe’s largest installed hydrogen plants are
approximately 20 MW in size, future production plants are
expected to scale to hundreds of MW and then to GWs over
the next years. Nel will pursue a broad market strategy, with a
view towards winning large-scale orders globally.
Nel is a leading global electrolyser supplier, offering both
AWE (alkaline water electrolysis) and PEM (proton exchange
membrane) technology globally. Nel’s electrolyser technologies
have improved continuously and set the industry standard
for performance and levelized cost of hydrogen. Key to Nel’s
strategy is to continue to improve and standardise current AWE
and PEM products for different operating conditions, as well as
to develop adjacent technologies.
The fully-automated production facility in Herøya, Norway
made Nel an early mover in the industrialization of electrolyser
production. This has been replicated on the PEM platform
in Wallingford, US in 2024. To enable future growth and
decrease cost through scale, volume and automation, Nel
Electrolyser plans to continue to align capacity to meet market
development.
Nel expects to sell and deliver directly primarily in Europe and
North America, as well as other selected regions, over the
next couple of years until larger projects in other projects start
to materialize. As many of the largest projects are likely to
be located in geographical areas with abundant resources of
wind and solar energy, reducing electricity prices and carbon
footprint, important export markets longer term is expected
to include Asia, Middle East and Australia. Nel Electrolyser has
24
a partnership strategy and a network of agents across the globe to
service other geographical markets.
In addition, for larger capacity projects Nel has narrowed its scope of
supply, concentrating on offering high-efficiency/low-cost cell stacks
and gas separation units. Working closely with selected EPC, energy
providers and downstream technology partners enables Nel to
respond to customer requests outside Nel’s preferred scope.
CLIMATE-RELATED SCENARIO RESILIENCE IN
NEL’S STRATEGY
Considering that 100 % of Nel’s revenue comes from renewable
hydrogen technology, the resilience of Nel’s strategy within the
different climate-related scenarios is robust. Key considerations
are how fast our customers’ industries will grow and develop, how
complex and price competitive this sustainable technology will
be, and developments within renewable energy and the related
grid. Nel’s strategy is stress-tested against different scenarios to
assess parity with both fossil energy, grey and blue hydrogen. The
hydrogen market is already large, but with only a fraction served by
water electrolysis there are significant opportunities to transition the
existing market into being increasingly renewable. In addition, we
see regulations supporting the transition across the globe, with the
EU and the US pledging hundreds of billions of dollars into zero-
emission programs where hydrogen is the energy carrier of choice.
Growth is expected not only to come from industrial applications,
but also from currently transitioning diesel-based heavy-duty
transportation, maritime and other hard-to-electrify applications
into zero-emission hydrogen. In order to meet cost-efficiency
comparisons with diesel, these developments will require low-cost
electrolysis combined with low-cost clean energy.
There is significant uncertainty associated with the timing and pace
of the growth expected in the hydrogen industry as it relates to
renewable energy (as storage or carrier) and the decarbonization
of industrial activity (such as refinery, steel or fertilizer production)
and transportation (airline, marine, vehicles). There is a risk that Nel
is moving either too quickly or too slowly, meaning we are either
over- or under investing in assets, technology and/or human capital
development. Nevertheless, the global focus on addressing climate
change through decarbonization is the megatrend that underpins
our current strategy, and which is being supported by our increasing
levels of revenue.
STRATEGIC ALLIANCES
Cooperation is vital in the renewable hydrogen industry. Combining
resources, expertise and knowledge is a key enabler that allows
us to improve our entire value chain effectively and rapidly,
from engineering and procurement through installation, service,
commissioning and aftersales. Strategic alliances can help shorten
the timeline to achieving full competitiveness for our technologies.
We are engaged in numerous strategic alliances, both domestically
Report from the Board of Directors
Nel ASA
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Annual report 2024
25
and internationally, with partners that share our values
and commitment to customer dedication. We are actively
pursuing new alliances in all areas of our business.
Some of our alliances include:
• EPC-partners: Enabling turnkey solutions for large scale
hydrogen production facilities with predictable project
execution.
• Energy sources: Working with solar, wind and other
technology providers to optimize the interface between
renewable energy and electrolysis and optimizing the
cost of renewable hydrogen production through seamless
operation between the power supply and the electrolysis
process.
• Downstream technology partners: Optimizing the total
offering through technical collaboration with specialists in
key customer segments such as ammonia, methanol and
local back-up power.
MEMBERSHIPS AND ASSOCIATIONS
Nel is member of several associations with a national,
European and global footprint. Our presence in these
associations enables us to communicate our position,
market our technologies and support the development of
appropriate hydrogen legislation and regulation.
Some of our memberships include:
MEMBERSHIP AND ASSOCIATION ROLE
Hydrogen Europe (EU) Corporate member
Fuel Cell & Hydrogen Energy Association,
FCHEA (US)
Corporate Member
Hydrogen Council (International) Corporate member
Norsk Hydrogenforum (Norwegian Hydrogen
Association)
Corporate member
Renewable Hydrogen Alliance (US) Corporate member
Clean Hydrogen Futures Coalition, CHFC (US) Corporate member
California Hydrogen Business Council, CHBC (US) Corporate member
Ammonia Energy Association (US) Corporate member
Risks and opportunities
Nel’s regular business activities entail exposure to various
types of risk. The company proactively manages such risks,
and the board of directors regularly analyses Nel’s operating
performance, and potential risk factors and takes steps to
reduce and mitigate risk exposure.
Nel places strong emphasis on quality assurance and has
implemented quality-assurance systems in line with the
requirements applicable to its business operations.
Nel is operating in a rapidly-evolving global industry, with a
long list of initiatives in many regions. The need to address
opportunities and make investments ahead of actual market
demand and revenue recognition, balanced with the need
to appropriately allocate capital and demonstrate a viable
business model, is a continual challenge.
In this phase of development, the risks associated with
technological change are higher than in more mature
industries. Competitors’ or new entrants’ innovations in the
hydrogen industry could make our current technologies,
and those under development, less relevant for the
future. Additionally, if competitors gain advantages in the
performance of current or in the development of alternative
electrolyser technologies, this could affect the competitive
position of the group.
Nel’s ability to grow depends to a substantial degree on its
ability to successfully acquire new customers, and to maintain
and grow its relationships with existing customers. A number
of Nel’s existing and potential customers are themselves
planning for substantial growth, and should these customers
fail to succeed with their business plans or fail to fulfil their
contracts with Nel, Nel’s sales to such customers may be
adversely affected.
Nel is also to a certain degree dependent on a limited
number of third-party suppliers for key production
components for its electrolyser products. To reduce sourcing
risk, Nel’s supply chain strategy is to have dual supply chains.
Nevertheless, Nel does have a few single-source components
and is at risk of temporary supply chain disruptions should
one or more suppliers fail to deliver. Another supply chain
risk is whether suppliers can continue to operate under the
uncertain market developments inherent in this industry.
In addition to making its current supply chain more robust,
Nel is working to facilitate volumes from important sub-
suppliers. The timing of addressing such elements and risks
is important, as there are risks in both overshooting and not
meeting market demand adequately.
26
Report from the Board of Directors
CLIMATE-RELATED RISK FACTORS
Nel assesses climate transition risks into two major categories:
(1) risks related to the transition to a low-carbon economy
and (2) risks related to the physical impacts of climate
change. No climate related risk has been identified to affect
our physical assets or operations in the short and mid-term.
Climate events may increase the requirements for product
safety or the water supply for production of hydrogen via
electrolysis. These risks are not considered to have a severe
impact to our operations, although consideration shall be
taken for alternative sources of water in water stressed
regions (such as water desalination) or increased product
safety test against climate event (such as flooding and
earthquake).
The climate transition will also allow customers and
governments to select the product technology that better suit
their need. Nel foresee an increased risk related to product
failure and technology obsolescence. The reputational
damage risk from product failure and failure to meet high
expectation from our customers may affect the eligibility of
our equipment technology. Nel prioritize investments in R&D,
allocating resources to meet regulation and market demands.
Lastly, the local authorities and governments have an
important role in the renewable hydrogen sector by enacting
legislations that support research and innovation and scalable
investments in production and infrastructure. Reduced
and/or delayed support from governments will delay the
developments of the renewable hydrogen industry. Political
incentive schemes such as the Inflation Reduction act in the
United States and the Hydrogen Bank in the EU are expected
to be important contributors to developing the industry.
Nel ASA
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Annual report 2024
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Outlook
SUSTAINABILITY FUTURE PROSPECTS
The growing urgency of shifting to a low-carbon economy
is set as a high priority for several governments following
the warmest year since pre-industrial era. Being accountable
for our environmental footprint is emerging as a pivotal
component in corporate transparency, and we aim to provide
information as expected by our key stakeholders. Nel strongly
believes that the renewable hydrogen market has a potential
of great magnitude, supported by a wide body of research.
Virtually every industry needs to realign their energy mix if
we are to stand a chance of achieving the UN Sustainable
Development Goals, where renewable hydrogen will be a
part of the energy mix that enables the transition. With an
ambitious strategy of drastically reducing the levelized cost of
hydrogen (LCOH) to customers, we have established a solid
framework for our technology, engineering and production
divisions for the years to come. We must ensure that
sustainable business practices are guiding our operations,
with scalability, cost-leadership and world-class safety at our
core. During the ramp-up stage of our business, taking a
precautionary principal approach is necessary to promote
sustainability within the organization. Moving forward, our
global presence, coupled with strong financing, will help us
remain the preferred partner.
FINANCIAL OUTLOOK
Nel’s strategy is to deliver reliable and energy-efficient
electrolyser stacks and balance of stack systems to mid- and
large-scale projects, initially in Europe and North America
and over time in other markets. To handle the scope Nel does
not cover, Nel has partnered with world-class EPC companies
like Saipem. Nel is well positioned to maintain a leading role
among electrolyser manufacturers. This approach allows
Nel to focus its efforts and resources on improving its core
technology.
The company is well positioned to maintain a leading role
among electrolyser manufacturers. A proven track record of
delivering working electrolyser systems over several decades,
a diverse product portfolio covering both alkaline and PEM
solutions, and automated GW-scale production facilities are
important differentiating factors. Nel also continues to make
significant investments in improving the performance of
current technology platforms and maturing next generation
technologies, for example a pressurized alkaline system and
a new PEM stack developed in collaboration with General
Motors.
Delays in announced government incentives, higher interest
rates, and higher than expected costs for building and
operating hydrogen facilities (outside of Nel’s core scope)
have led to lower than expected order intake for the industry
as a whole and for Nel in the last two years. Nel has a solid
cash balance that allows the company to fund its growth
plan even if order intake has been lower than expected and
there have been delays and cancellations of already signed
projects.
Following the spin-off of its former Fueling division (now
Cavendish Hydrogen), Nel’s operational cash burn-rate has
been significantly reduced. Investments will also come down
in 2025 compared to 2024 following the PEM plant expansion
program in Wallingford, USA, last year. Nevertheless,
to manage its cash balance responsibly and prolong its
runway, Nel has downsized its organisation and reduced its
manufacturing capacity utilisation. The alkaline production
facility in Herøya, Norway, was temporarily shut down in the
first quarter of 2025. The length of the shut-down will depend
on future order intake.
Several high-quality projects with reputable clients continue
to mature and get closer to final investment decisions. In the
near- to mid-term, Nel expects projects to be smaller than
what was anticipated a few years ago. Nel is well-positioned
to capture these near-term opportunities and scale with the
market as it grows. The Company’s reduced cost base and
reduced investment plan in 2025 can be achieved without
compromising on technology development and strategic
position as the company already has established significant
annual production capacity available can harvest prior
investments. Higher revenues in combination with more
efficient execution is expected to yield profitability over time,
as already been demonstrated in the alkaline segment in
quarters with solid capacity utilisation.
Our vision
We are bold
We lead the way in our industry, dare to place
calculated bets and turn what used to be
impossible into reality
We are honest
We do what we say and are open about what
we do, share knowledge and experiences
with our colleagues and customers, and hold
ourselves accountable if we make mistakes
We keep it simple
We always focus on our core business targets,
develop simple and time-efficient processes,
and move forward at great speed
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4.2 ENVIRONMENT, SOCIAL AND
GOVERNANCE (“ESG”) REPORT
ESG POLICY
At Nel, sustainability is an integral part of the identity. The
vision is to empower generations with clean energy forever.
This vision is driving ambitions and priorities. Combating
climate change is high on the corporate agenda, and
sustainability is always incorporated into the strategic
decision-making processes. The Board of Directors (BoD)
is responsible for sustainability at Nel and is the owner of
the ESG policy. The Board Audit, Risk and Sustainability
Committee (BARSC) is the preparatory body to assist the
BoD in exercising its oversight of ESG matters. Further, the
Chief Executive Officer (CEO) has delegated the authority
and responsibility to the Chief Financial Officer (CFO) for
implementation and execution of the key principles as
outlined in this policy. General follow-up and execution of
daily operations is conducted by a dedicated ESG committee,
consisting of members from group management and the
business line. The ESG policy is available on Nel’s website.
Visit www.nelhydrogen.com/sustainability.
GENERAL BASIS FOR PREPARATION
Nel is reporting on sustainability on a group level, and reports
on metrics and targets in an integrated annual report with
reference to, using certain concepts of, the GRI Sustainability
Reporting Standards (GRI Standards: Core option). The
report implements considerations found in Norwegian
Accounting Act, Task Force on Finance Related Disclosures
(TCFD), Euronext ESG Guidelines for listed companies, UN
Guiding Principles on Business and Human rights, the UN
Global Compact and the OECD’s Guidelines for Multinational
Enterprises.
In addition, this sustainability report aims to take the first
steps toward Nel’s upcoming reporting in accordance with the
EU Sustainability Directive (CSRD). The CSRD requirements
are expected to be fully implemented for the reporting period
starting as of 1 January 2025.
CSRD compliance considerations
The European Commission adopted legislative CSRD and its
European Sustainability Reporting Standards (“ESRS”) entered
into force for reporting periods starting as of 1 January 2024
in the European Union and in Norway. The date of application
of these sustainability reporting requirements varies
depending on the specific reporting requirement and on the
category of undertaking.
As these requirements are introduced by way of a Directive,
the specific rules that apply to listed companies are the ones
set out in the national legislation transposing the Accounting
Directive as amended by the CSRD, as well as by Commission
Delegated Directive (EU) 2023/277520 that has adjusted
the size criteria applicable to the definition of micro, small,
medium-sized and large listed companies.
CSRD regulation has been enacted for Norwegian listed
companies, applicable for reporting periods starting as of
1 January 2024, for large, listed companies with average
employees above 500 on a full-time equivalent (FTEs) basis
and revenue above NOK 320 million.
In June 2024, Nel spun-off its Fueling segment, and thereby
reducing the size of the group. This corporate action
impacts how average FTEs are counted in 2024 for Nel.
Reviewing relevant national rules in NRS 8 and IFRS 5, Nel
has concluded that relevant size of the Nel ASA group should
be considered on the basis of the operation it controls as 31
December 2024, i.e. the continuing operation. With reference
to note 2.5 in the annual accounts, the average FTEs in 2024
is far below 500. Consequently, Nel considers itself not being
part of the list of large companies on Euronext Oslo Stock
Exchange subject to application of the CSRD in 2024.
It is expected that the stepwise implementation of reporting
requirements in Norway will become applicable for Nel in
2025, being a large enterprise with average FTEs above 250.
Although Nel is not required to prepare the ESG report in 2024
in accordance with CSRD, the company has prepared an ESG
report inspired by the new framework, including conducting
the double materiality assessment and report on the material
sustainability-related impacts, risks and opportunities.
DOUBLE MATERIALITY
As a key element of the work to prepare for the CSRD
reporting, Nel have conducted a double materiality
assessment (DMA). To do this, the company built on the
approach previously taken to assess the materiality of
sustainability-related matters. The company’s second DMA
was conducted this year to capture learnings that will help
further improve the methodology next year. Nel has applied
the implementation guidance published by EFRAG and
developed a step-by-step process, scoring matrices, and a
model for aggregation and prioritisation.
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Environment, Social and Governance report Environment, Social and Governance report
The starting point was the impact assessment (inside-out) of Nel’s impacts
on the environment and society, which builds on how the company have
previously identified and assessed the sustainability-related impacts of our
own operations and value chain. The company also conducted a financial
assessment (outside-in) of the sustainability-related risks we are exposed
to as a business. Where possible, we quantified the effects of those matters
and supplemented with qualitative assessments.
Double materiality assessment methodology
Scope
For our own operations, we identified and assessed impacts on people
and the environment as well as potential risks to our business, focusing
on specific activities where impacts are not relevant across technologies.
Furthermore, we assessed our value chain impacts and risks for most topics,
primarily focusing on our upstream activities. Value chain assessments were
based on internal knowledge and mainly focused on the company’s first-tier
suppliers.
Scoring
As per the ESRS guidance, three parameters of ‘scale’, ‘scope’, and
‘irremediable character’ have been used in the scoring of the ‘severity’ of
our actual impacts:
• When scoring ‘scale’, we assessed how grave the negative impact is or
how beneficial the positive impact is for people or the environment
• When scoring ‘scope’, we assessed how widespread the negative or
positive impacts are. In the case of environmental impacts, the scope
may be understood as the extent of environmental damage or a
geographical perimeter. In the case of impacts on people, the scope
may be understood as the number of people adversely affected.
• When scoring ‘irremediable character’, we assessed whether and to
what extent the negative impacts could be remediated, i.e., restoring
the environment or affected people to their prior state
For potential impacts, an additional parameter of ‘likelihood’ was scored.
For negative actual impacts, each of the three dimensions above were
scored and weighted equally for severity. For negative potential impacts,
‘severity’ and ‘likelihood’ were weighted 50/50. For positive actual impacts,
‘scale’ and ‘scope’ were scored and weighted equally for severity. For
positive potential impacts, ‘likelihood’ was also considered as for negative
potential impacts.
The assessment also considered whether the topics, sub-topics and sub
sub-topics were human rights related, for which scoring has been assessed
the highest of scale, scope and irremediability.
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Photo: Ferenc Horvath
Stakeholder engagement
Nel’s double materiality is designed for increased dialogue
with stakeholders and a comprehensive due diligence
process to assess how the impacts, risks and opportunities
created by our business and its value chain affect people
and the environment. The preferred channels to engage with
stakeholders in 2023 and 2024 were meetings, conferences,
peer reviews, monitoring of media and publications of
organization classes and focus groups. Nel combined these
methods to evaluate the scale, impact and irremediability of
ESG topics that were identified during the engagement with
stakeholders. The table below summarizes key methods used
to engage with stakeholders in 2023 and 2024:
STAKEHOLDER GROUP: METHODS OF ENGAGEMENT:
MINIMAL FREQUENCY
OF ENGAGEMENT:
Customers
• Project meetings
• Site tours and audits
• Tender responses and presentation
Daily
Suppliers
• Site visits
• Screening and qualification processes
• Supplier Audit program
Daily
Employees
• Code of Conduct and compliance training
• Performance dialogues and reviews
• Town hall meetings
• Culture engagement through WinningTemp tool
• Negotiation with employee representatives (labor unions or equivalents)
Daily
Shareholders and capital market
participants
• Quarterly results presentations and capital market days
• Conferences, ad hoc meetings, and site visits
• Stock exchange filings, press releases
Quarterly, ad hoc
Governments
• Meetings
• Site visits
• Reports and websites
Ad hoc
Partners
• Joint projects
• Multi-stakeholder collaboration
Weekly, ad Hoc
In addition, an extensive ESG research was performed in
2023 assessing the impacts of our value chain on people
and environment as well as a financial materiality assessment
evaluating how our impact on people and environment that
can affect Nel’s profitability, access to capital and market
development.
In 2024, Nel implemented a new tool for soliciting regular
feedback from employees. In addition, workshops with
employees directly dealing with key stakeholder groups were
held. The ESG risk management process was embedded
into the Enterprise Risk Management (“ERM”) program for
consolidation of risk governance in a unified risk platform. As
part of the ERM, key performance indicators were designed
to measure and track the efficiency of ESG policies and
procedures for all material risks identified in our double
materiality assessment. The key performance indicators and
respective targets are disclosed on the sections for each
subtopic of this ESG report.
We have identified our impacts on the environment and
society (impact materiality assessment) as well as the
sustainability-related risks that we are exposed to (financial
materiality assessment). The outcome is aggregated per
ESRS topic, showing that E1, E5, S1, and S2 are our most
material sustainability matters. In addition, Nel identified
material topics within entity-specific as innovation and R&D,
sustainability in electrolyser production and cyber security.
The environmental impacts and risks we have within E1 and
E5 are closely linked to our strategic efforts to deliver a build-
out of electrolyser manufacturing capacity to provide for
equipment producing renewable hydrogen. The deployment
of new electrolyser capacity mitigates climate impacts but also
requires significant amounts of renewable energy sources, as
well as natural resources such as metals to produce steel with
indirect negative impacts on the climate and the environment.
The build-out of renewable hydrogen value chain also affect
people, which is reflected in the impacts and risks we have
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Environment, Social and Governance report
within S1 and S2. We focus our efforts on making the energy
transition just and inclusive, including for people working
across the renewable hydrogen supply chains.
The summary results of our preliminary Double Materiality
Assessment are disclosed in graphic format in a scoring scale
of 1 (not material) to 5 (most material) for the sustainability
matters:
Climate impact
Cyber security
Product Safety
Governance
Innovation and R&D
Environmental impact
Operational
Health and Safety
Well -being at work
Responsible Supply Chain
Sustainability in Electrolyser Production
Water
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Financial materiality
Impact materiality
Double Materiality assessment
Visit www.nelhydrogen.com/sustainability.
SOURCE OF ESTIMATE OR UNCERTAINTY
Stakeholder feedback for double materiality
assessment
The double materiality assessment relies on a streamlined
process to obtain feedback from key stakeholders that acted
as a sample stakeholder group communicating impacts, risks
and opportunities that affected their business relationship
with Nel. A sample methodology carries inherent risk of
misrepresentation. Nel has in place feedback mechanisms, such
as grievance mechanisms or the investor relation department,
aiming to identify material discrepancies arising from
inaccurate interaction with a stakeholder group representative.
The summary of the stakeholder feedback and the double
materiality test has been shared with and commented
on by employees that are in regular contact with external
stakeholders and with senior management.
Key accounting estimates and judgments
We use assessments and judgments for the reporting of
certain data points for KPIs and scope 3 emissions. As the
ESG reporting develop, such assessments and judgments are
reassessed based on experience. Changes in estimates are
recognized in the period in which the estimates in question are
revised. For adjustments to ESG data, judgments to whether
numbers should be restated is applied.
Measurement of Greenhouse Emissions
Nel adopts the GHG protocol as the framework for accounting
of Greenhouse Gas emissions. For some categories, such
as transportation and business travelling, Nel relies on CO2
emissions directly converted by vendors. In some instances, Nel
does not have access to the methodology applied by vendors
to convert its CO2 emissions. For some CO2 emissions, e.g.
capital goods, a spend-based method has been used.
Net Zero commitment
Nel is committed to achieve Net Zero emission before 2050.
The 2050 Net Zero commitment relies on a successful climate
transition of vendors operating in hard-to-electrify industries
(such as steel and shipping companies, which face a more
challenging path toward zero emissions). Nel does not have
sufficient control of when supply of low emissions goods and
services will be available for reduction of Greenhouse Gas
emissions classified in the scope 3 of its GHG inventory.
STAKEHOLDER DIALOGUE
Stakeholders are driving forces in Nel’s operations, and
frequent stakeholder interaction is important to account
for input across our value chain. Nel engages with a wide
range of stakeholders. Overall, Nel experiences continuously
rising expectations in all aspects of our work and we strive to
address concerns that are expressed. We aim to improve our
stakeholder dialogue by setting up a structured stakeholder
dialogue program.
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Nel’s activities show the following key stakeholders:
Employees
Employees generally express views related to occupational health and
safety, career development, and timely two-way communication as key
areas of concern. Employees are often the first to address risks and
opportunities, so efficient employee dialogue is important. Feedback is also
solicited electronically on a weekly basis using a combination of questions
open for rating and free text field. Feedback through this mechanism may
be given anonymously.
Shareholders and capital market participants
Our shareholders are vital contributors to the development of our company
and important stakeholders with the power to influence our operations.
As such, it is important to maintain regular stakeholder dialogue with
our shareholders as our business develops. Quarterly presentations,
annual reports, and investor relations activities are channels employed
to keep an open dialogue with this group. During the year, the company
arranged site visits in smaller groups for institutional investors and capital
market participants to the Herøya facility and engaged with investors and
capital market participants in non-deal roadshows after quarterly results,
conferences, events and forums.
Customers
Customers’ demands typically focus on product reliability, resilience, lifetime
performance and energy efficiency, while their concerns are generally
with product safety, cost of ownership, responsible supply chains, the
applicability of solutions, and general project execution. Our customer
relations are formed on a project basis and active communication is
required throughout the customer’s journey to deliver a satisfying product
to the client, and to take home learnings to the organization.
Suppliers
Through its supply chain screening and procurement efforts, Nel sets
requirements and requires insight into the ESG performance of suppliers.
Also, that Nel operates honestly in-line with rules and legislations is
important to our suppliers. Most of the topics Nel raised to its suppliers are
related to quality, cost, delivery concerns, and alignment on ESG related
topics. Another emerging topic relates to growth, and whether a supplier
can, or has, the ambition to grow with Nel.
Partners
As we develop and mature our technologies, strategic partners are
significant drivers of our progress. Their concerns are usually aligned with
those raised by suppliers and customers, and our dialogue with them
follows similar procedures.
Governments
Governments play a vital role as the regulatory body that forms policies
and procedures, awards grants, and presents roadmaps for the energy
transition. Regular dialogue and monitoring are necessary to ensure
our product development meets the requirements set by different
governments.
Photo: Unsplash.com
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Environment, Social and Governance report
UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
Nel supports the United Nations Sustainable Development Goals (SDGs), and we strive to document all actions made to meet
the targets. Presented in 2015, the 17 goals were developed to address the most prominent sustainability concerns the world
is facing. The SDGs are the most unifying and universally accepted set of goals and aspirations that are to be met by 2030, to
protect our planet and the people who inhabit it. Nel continues its commitment through investments and organisational changes
to optimise the company’s contribution to this transformative agenda. The company will contribute to the industrialisation of
the renewable hydrogen economy, paving the way for the development of a global hydrogen economy and the trading of
sustainable hydrogen as a global commodity. Nel is fully committed to the promotion and implementation of the United Nations
Sustainable Development Goals and limiting global warming to 1.5 degrees Celsius.
Nel supports all of the sustainability goals outlined by the United Nations. Given our corporate areas of focus, , we have selected
four SDGs where we can make a significant direct impact:
Our selected goals are:
Nel provides clean energy solutions to a vast range of industries and applications. Nel’s product offering
is an enabler of clean energy infrastructure, and contributes to increasing adoption of renewable energy.
Contributions towards SDG #7 are in line with Nel’s strategic ambitions of 1) leveraging the development of
renewable energy to enable increased production of green hydrogen, and 2) to significantly decrease Levelized
Cost of Hydrogen (“LCOH”) for renewable hydrogen production and enable decarbonization of heavy industry
and transport.
At Nel, employees should work in a safe and healthy environment, and we will never compromise on safety. The
company strongly believes that this is an absolute minimum to any successful long term sustainable business.
All Nel sites have management systems in place to safeguard employees’ health and safety. Nel aims to offer a
workplace free of harmful incidents and injuries, and to promote a culture that identifies and creates awareness
through incident reporting and self-accountability. The company has set a HQSE target of zero-tolerance for
discrimination of any kind, and grievance mechanisms are in place, both direct and anonymous, should such
instances occur.
Nel is committed to reducing the cost of renewable hydrogen production to enable affordable and easier
available renewable energy, and thus also adaptation. This is aligned with the company’s vision for abundant
clean energy for all. Nel is committed to offering market-leading equipment for water electrolysis. The company
is a frontrunner in technology development, efficiency, and cost reductions. Another key element is that Nel is
focused on at-scale manufacturing of our products, employing manufacturing concepts that allow for further
technological advancements in processes and materials over time.
Nel’s vision is “abundant clean energy for all”. Our business model is built on facilitating and enabling the
energy transition towards a more sustainable society, making renewable energy solutions commercially viable
for implementation. Nel’s product offerings are key enablers for a renewable hydrogen economy, making it
possible to decarbonize various industries such as transportation, refining, steel, and ammonia production and
other carbon-intensive industries. Our aim over time is to enable the replacement of fossil-fuel consumption in
a significant portion of global heavy industry.
MATERIAL ISSUES IMPACTING STAKEHOLDERS
Material topics have been identified by assessing relevant issues that are of importance to key stakeholders and how these
issues impact Nel’s operations and strategy. Nel defines material topics as areas that have potential to substantially impact
the enterprise value of the company. These material topics will be disclosed and elaborated in the following annual report
sections. The material topics have been categorized within the three main sustainability categories: Environmental, Social, and
Governance factors and presented in the matrix below:
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ESG UNIT OF MEASUREMENT PAG E SDGS
31
DECEMBER
2024
31
DECEMBER
2023 CHANGE
TARGETS
2025
E GHG Emissions 13
GHG intensity based on net revenue ktCOe2 (excluding scope 3)/net
revenue in NOK million
42 0.80 0.95 -0.15
E EU Taxonomy 7, 13
Revenue eligible to EU Taxonomy % 65 90% 93% -3% >90% aligned
Opex eligible to EU Taxonomy % 67 58% 44% 14%
Capex eligible to EU Taxonomy % 69 96% 95%
1%
E Energy 7, 13
Energy intensity based on net revenue
(MWh/MNOK)
MWh/net revenue in NOK million 43 13.2 10.0 3.2
E Water 7, 13
Water intensity based on net revenue Water withdraws m³/ net Revenue in
MNOK
42 7.2 5.0 2.2
E Pollution 7, 13
Ni particles in water – Herøya µg/m3 42 6.2 5.4 0.6 <6
Environmental incidents* Reportable event 42 None None - None
E Waste 7, 13
Recycled non-hazardous waste % 43 65% 48% 17% Recycling rate
above 50%
E/S Sustainability in electrolysers
production
9, 13
Overall equipment effectiveness (own
production) - Alkaline
% 46 65% 67% -2% NM
Overall equipment effectiveness (own
production) - PEM
% 46 48% 91% -43% ~90%
Product quality yield (alkaline) % 46 97% 99% -2% NM
Product quality yield (PEM) % 46 99% 94% 5% >98%
E/S Responsible supply chain 8, 9, 13
S/G Transparency Act 8
Supplier audits concluded within the
fiscal year
Supplier audits completed during the
reporting period
50 20 strategic
suppliers
23 strategic
suppliers
-3 30 strategic
suppliers
Integrity Due Diligences performed for
suppliers with active contracts
51 80% 99.8% -19.8% 100%
S Operational health and safety 8
Percentage of employees covered by
Nel's health and safety systems
% 49 100% 100% - 100%
Total recordable injuries rate (TRIR) TRI per 1,000,000 hours worked 49 5.2 19.7 -14.5 <4
Lost time injury rate (LTIR) LTI per 1,000,000 hours worked 49 2.7 11.2 -8.5 0
Fatality rate Recordable events in the last 12 months 49 None None - None
S Training programs 8
Cyber Security Training Awareness % 53 96% 100% -4% 100%
Safety program awareness % 49 100% 92% 8% 100%
G Innovation and R&D 9
R&D spend in % of annual revenue and
other income
% 60 24% 20% 4% >10%
G Ethical business conduct and
compliance
8
Total amount spent on fines for damages
as a result of violations regarding social
and human rights factors
NOK 59 0 0 - 0
Expenditure with lobby and donation to
political parties
NOK 59 0 0 - 0
G Payment practice 9
Confirmed incidents of corruption or
bribery
Reportable event - per incident 59 0 0 -
Number of contracts terminated due to
confirmed incidents related to corruption
or bribery
Reportable event - per contract 59 0 0 -
G Board composition 9
Non-executive board members** Board member 9 7 (100%
of board
members)
7 (100%
of board
members)
- (100% of board
members)
* Environmental incidents are defined as notice of violation, notice of non-compliance or release of pollutants beyond the limits set in the environmental permit.
**Members of the Board of Directors who does not have a role in the leadership team
Our mission
Make renewable hydrogen easy
While some industries can decarbonize with
clean electricity, sectors like steel, refinery, and
ammonia production face greater challenges.
These hard-to-electrify industries rely on
renewable hydrogen to reduce emissions.
Nel’s customers are game changers leading
this transition, and our mission is to make their
shift to renewable hydrogen easy.
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Environment
CLIMATE CHANGE OPPORTUNITY AND
EMISSIONS AVOIDED
Governments, companies, and researchers are increasingly
looking into ways to accelerate the climate transition and
achieve carbon neutrality in a safe and sustainable manner. In
recent years, companies and policy makers have been facing
increased expectations to identify viable solutions to replace
the legacy systems dependent on fossil fuels to operate.
Hydrogen is the most abundant element on Earth, a rich
source of energy. Hydrogen also has the unique ability to
carry energy. This combination of qualities places renewable
hydrogen as a pivotal element in the energy transition
with several possible applications. Hydrogen in its grey
form (produced from natural gas or methane) has been
traditionally applied on feedstock to produce ammonia,
methanol, or as a reducing agent to produce iron (DRI). Its
rich energy level and its ability to carry energy has allowed
new applications such as a fueling for transport, for high-
temperature heating in hard-to-electrify industries and for
storage and generation of electricity providing energy security
for renewables source with seasonal energy generation.
The broader scope for hydrogen in the climate transition
is forecasted to increase hydrogen demand from 95Mt in
2022 to up to 150Mt in 2030, with nearly 40% coming from
new applications
1
. In addition, traditional grey hydrogen has
accounted for 2.5% of global emissions in 2022, generating
more than 1Gt of CO2 emissions that could have been
avoided if replaced by renewable hydrogen
2
.
Market development
The market for electrolyser technology providers remained
slow throughout 2024, with several project cancellations
and delays seen. Purchase orders have been pushed out
in time as projects have become larger and more complex
and developers make more thorough assessments. Lack of
visibility on political processes and subsidy programs (initially
aimed to accelerate renewable hydrogen uptake) have also
caused delays. However, during the year, governments in key
markets for Nel continued to develop support mechanisms
that will be important for enabling more projects to reach
final investment decisions (FID). In the United States, work on
the implementation of the Inflation Reduction Act progressed,
with detailed rules and regulations announced in early 2025.
1 IEA (2023), Global Hydrogen Review 2023, IEA, Paris https://www.iea.org/reports/global-
hydrogen-review-2023, License: CC BY 4.0
2 IEA (2023), Hydrogen Patents for a Clean Energy Future, IEA, Paris https://www.iea.org/
reports/hydrogen-patents-for-a-clean-energy-future, License: CC BY 4.0
In the European Union, a second round of the Renewable
Hydrogen Bank was announced in September 2024, with a
budget of EUR 1.2 billion, where the selected projects will
receive a fixed premium in €/kg of renewable hydrogen
produced. In addition, national programs and auctions were
announced in several European countries. These important
developments support offtake agreements and investment
decisions, highlighting the potential of renewable hydrogen
as a key enabler for decarbonizing hard-to-electrify sectors
critical to society, such as personal and public transport,
freight logistics, industrial heating, and industrial feedstock.
The renewable hydrogen industry continues to navigate
through challenges related to the size of tax incentives
and unclarity of regulation for safety and infrastructure.
For the climate transition to meet the pace agreed in the
1.5 Cº Paris Agreement, policymakers will have to increase
the clarity of regulation in the coming years and adjust the
budget for tax incentives, so projects become economically
viable. Nel works at the forefront of the renewable hydrogen
industry challenges towards industrial scale, cost reduction
and supplying safe and efficient equipment for renewable
hydrogen producers.
EMISSIONS AVOIDED
Nel’s mission is to unlock the potential of renewables
and enable global decarbonization. Nel believes that the
emissions avoided from reference hydrogen products based
on comparative assessments to renewable hydrogen will be
substantial. According to IEA there was demand for 95 million
metric tons of hydrogen in 2022, hydrogen predominantly
derived from fossil sources. Current production of grey
hydrogen is responsible for more than 1 100 million tons of
CO2 emissions². Water electrolysis from renewable energy
can reduce these emissions substantially, a transformation is
relatively easy from a technical point of view. The generally
accepted accounting methodologies for measuring emissions
avoided in the next years (before climate related scenario of
abundance renewable energy) has not been readily available
to Nel. There are several challenges related to energy source
used for hydrogen production, as well as emissions from
equipment used for energy generation and transportation.
Nel has therefore not been able to report on the relative
emissions avoided for Nel’s customers globally current
year. The sections below showcase some of the significant
opportunities for renewable hydrogen, with emissions
avoided as the basis for such assumption.
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Environment, Social and Governance report
FOSSIL FUEL PARITY
To increase the distribution and adaptation of renewable
hydrogen it must be cost competitive with hydrogen
made from natural gas. The hydrogen market is already
massive. 94 million tonnes per year is already produced
and used in various applications. According to International
Renewable Energy Agency (“IRENA”), about 4% of hydrogen
production comes from electrolysis, though with a global
average renewable share of about 33%, about 1% of
hydrogen production was derived directly from renewable
sources. The rest is derived using fossil fuels, which create
carbon emissions and are damaging to the environment.
It will therefore be a lower hurdle for companies to reduce
emissions when renewable hydrogen reaches the same
price level as fossil-based hydrogen. Nel is committed to
continue with cost reductions and efficiency improvements
for its technology in order to enable a renewable hydrogen
economy.
Electrolyser climate-related opportunities
Everything Nel is involved in relates to renewable hydrogen,
and the energy transition. Nel’s capital expenditures and R&D
investments (Investments) and operating expenditures (Opex)
are all related to renewable hydrogen technology. Refer to EU
Taxonomy section for further elaboration on environmentally
sustainable economic activities in Nel.
Case 1: Decarbonizing ammonia (“industrial application”)
- How hydrogen is vital to sustainable farming
Renewable hydrogen production by electrolysis is proving
a viable pathway to sustainable ammonia, making fertilizer
manufacturing and modern agriculture green.
With hydrogen being a feedstock for ammonia production,
using renewable hydrogen is critical to sustainable ammonia
production. It can reduce costs, boost capacities, and achieve
decarbonization for the energy, mobility, and industrial
sectors.
This is to the benefit of the environment, as more than
235 million tons of ammonia produced globally every year
represent 1-2% of the world’s energy consumption and
around 1% of all human emissions.
Although hydrogen’s role in producing ammonia for
fertilizer manufacturing is just one of the hundreds of current
and coming uses of hydrogen, ammonia is exceptionally
interesting.
Apart from unlocking the decarbonization potential, it can
play an essential role as a life-sustaining commodity and
be a high-density carrier of hydrogen energy, allowing the
exportation of hydrogen and, thereby, cost-effective energy.
Furthermore, it is relatively easy to ‘crack’ the ammonia to
liberate hydrogen at the point of use for various applications.
Also easing the cost is the fact that a massive ammonia
distribution infrastructure is already in place.
Case 2: Decarbonizing refineries (“industrial application”)
- How hydrogen is transforming the refining industry
Refineries, major consumers of grey hydrogen, rely on
hydrogen as a critical process gas for processes such as
hydrocracking and desulfurization. They can reduce their
carbon footprint by switching to renewable hydrogen from
electrolysis. This transition lowers CO2 emissions from
energy-intensive processes, contributing to global climate
goals.
According to the International Energy Agency (IEA), global
hydrogen demand reached 95 million tons in 2022, with
refineries being one of the largest consumers. This presents
a significant opportunity to cut emissions, as grey hydrogen
production, through steam methane reforming, contributes
substantially to global CO2 emissions.
Existing hydrogen infrastructure allows seamless integration of
renewable hydrogen, making the shift from grey to renewable
hydrogen relatively straightforward. Since the fundamental
processes remain the same, refineries can utilize much of
their current equipment and distribution systems, minimizing
the need for extensive modifications. Coupled with declining
renewable energy costs and advancements in electrolyser
efficiency, durability, and scalability, refineries are well-
positioned to accelerate this shift. Nel’s advanced electrolyser
solutions support this transition with scalable, efficient, and
cost-effective renewable hydrogen production tailored to the
refining industry.
39
KEY PERFORMANCE INDICATORS UNIT OF MEASUREMENT
31
DECEMBER
2024
31
DECEMBER
2023 CHANGE
TARGET
2025
GHG Emissions
Scope 1 tCO2e 171 373 -202
Scope 2 - Market based tCO2e 8 002 5 905 2 097
Scope 2 - Location based tCO2e 938 1 247 -309
Scope 3 (without Capex emissions) tCO2e 13 363 15 509 -2 147
Scope 3 (with Capex emissions) tCO2e 23 259 30 344 -7 087
GHG intensity based on net revenue ktCOe2/net revenue in NOK million 17.5 19.0 -1.5
Energy consumption
Purchased gas for heating MWh 1 488 2 021 -533
Purchased electricity MWh 16 883 14 708 2 175
Energy intensity based on net revenue
(MWh/MNOK)
MWh/net revenue in NOK million 13.2 10.0 3.2
Water
Water discharge m³ 9 945 8 387 1 558
Water intensity based on net revenue Water withdraws in m³/net revenue in NOK million 7.2 5.0 2.2
Pollution
Nickel particles in water - Herøya µg/m3 6.2 5.4 0.6 <6
Environmental incidents* Reportable event None None -
Waste
Total waste Kg 2 480 084 2 561 089 -81 006
Hazardous waste Kg 2 260 154 2 405 670 -145 517
Hazardous waste treated by certified
outsourced partners
% 100% 100% 0%
Non-hazardous waste Kg 219 930 155 419 64 511
Recycled non-hazardous waste Kg 145 809 74 709 71 000
Recycled non-hazardous waste % 66% 48% 18% >50%
CLIMATE-RELATED RISK FACTORS
Climate scenarios
Nel’s climate-related risks are managed assessing the physical
impacts that climate events can have to the operations,
workforce, product safety, customer contracts, supply chain
and commercialized technology. Climate scenarios were
forecasted with the RCP8.5 (very high emissions) from the
Intergovernmental Panel on Climate Change (“IPCC”), fifth
assessment. Nel assesses climate events within time intervals
defined as short term (2024), mid-term (2025-2030) and long
term (2030-2040) in line with our expectations of market scaling
for the Electrolyser industry. Climate risks and opportunities
identified in the short and mid-term scenarios are incorporated
in the Enterprise Risk Management process for risk monitoring,
while a long-term scenario is forecasted for reference purposes.
In our forecast, workforce and safeguard of assets were critical
dependencies that could be affected by a climate event. Nel did
not forecast severe chronic climate events that could require
reallocation of assets nor result in constraints to its workforce.
Nel facilities are leased with contracts with termination options
around 2030 and located in areas with developed transport
access. In case of unprecedent climate events, Nel’s operation
could be reallocated to areas with higher resilience to climate
events or Nel could negotiate with lessors to increase the
climate resilience of the buildings. A reallocation of assets is
expected to affect our highly skilled workforce, supply chain
as well as could arise potential disputes with customers for
liquidation damages due to delays to deliver projects. However,
Nel expects the largest impact to be the opportunity to provide
viable technology for production of hydrogen with a product
technology that requires low carbon emission.
Current climate scenario forecasts have significant complexity
with a very high level of uncertainty in the outcomes for different
scenarios. The climate events in the high emission scenario (RCP
8.5) could have from no economic impact to up to two times
of our annual revenue invested in reallocation of assets and
40
Environment, Social and Governance report
employees, and potential losses from customer contracts and
production capacity. Nel has a catastrophe policy in place to
manage eventual climate acute event. Our insurance policy
aims to safeguard assets and resources in an efficient manner,
and it is expected to cover some or all losses in case of acute
climate events. The production capacity of our facilities and the
technology of our products are ready to support companies
in their climate transition before the long-term impacts of
conduct business as usual in a high emission scenario.
Policymakers, tax incentives and carbon tax schemes
Policymakers such as local authorities and governments have
an important role in the renewable hydrogen industry by
enacting legislations that support research and innovation
and scalable investment in production and infrastructure. The
implementation of Carbon Emission Tax (“CET”) or Carbon
Border Emission (“CBE”) will contribute to making renewable
hydrogen projects economically viable due to expected
increase in the cost of producing raw materials from energy
sources that relies on fossil fuels.
Critical minerals
Critical minerals are in the spotlight due to the risk of limited
available supply for crucial technologies in the climate
transition. Raw materials supply issues could surface when the
value chain experiences exponential growth driven by efforts
to abate climate change. For example, Iridium is important
for the manufacturing of PEM electrolysers. The total supply
is limited and a significant reduction of Iridium consumption
in PEM products and higher recycling rates will be necessary
to reduce the risk. In response, Nel encourages customers to
return PEM electrolysers for recycling, is gradually expanding
its recycling program and is a leading contributor to a
DoE-funded research initiative into recycling of electrolyser
materials including Iridium.
Nel continues to make significant strides in reducing precious
metal loadings in our PEM electrolysers. The company is
progressing well towards the 2030 target of 0.4mg PGM/W
set by the Clean Hydrogen Partnership, which comprises
three members: the European Commission, the hydrogen
industry represented by Hydrogen Europe, and the research
community represented by Hydrogen Europe Research.
Nel’s roll-to-roll manufacturing process, currently being
implemented at our state-of-the-art PEM production facility
is projected to be well within the target with a further
substantial reduction projected for the stack currently under
development in collaboration with General Motors.
PFAS ban in the European Union
In January 2023, authorities from Denmark, Germany, the
Netherlands, Norway and Sweden (the Dossier Submitters)
submitted a REACH dossier for a restriction proposal for
per- and polyfluoroalkyl substances (PFAS) in the EU to the
European Chemicals Agency (ECHA). PFAS are a group of
thousands of mainly man-made substances that are used in
numerous applications in the EU.
The basis for the proposed restriction is the fact that PFAS and
their degradation products may persist in the environment
for a very long period, longer than any other man-made
chemical. Further concerns are their bioaccumulation,
mobility, long range transport potential (LRTP), accumulation
in plants, global warming potential and (eco)toxicological
effects. The EU-wide risk arises from the continued emissions
of PFAS into the environment during manufacture, the use
phase, and the waste stage
The materials of most concern are fluorosurfactants, which
are persistent and bioaccumulate. High molecular weight
fluoropolymers such as membranes that are essential to the
use of Proton Exchange Membrane (PEM) electrolysers are
inert and non-toxic.
No alternative is foreseen to be able to substitute today or
in the near future these highly specialised materials, central
to the functioning of the hydrogen value chain. These PFAS
are produced and used in a highly controlled industrial
environment, where their emissions are negligible
In Nel, PFAS is directly included in the production of
electrolysers with Proton Membrane technology in the PEM
electrolyser segment, and the enactment of legislations
altering current PFAS regulation might affect our ability to
continue the development of these equipment.
Nel ASA
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41
Summary of climate adaptation risks and opportunities
Our most critical climate-related risks and opportunities in high emissions scenarios were summarized in the table below:
CATEGORY RISK AND OPPORTUNITIES 2024
2025-
2030
2030-
2040
Policy and legal
1 Carbon Emission Tax
• • •
2 Carbon Border Tax
• • •
3 Tax credits enacted to producers of hydrogen with low emission
• • •
4 Regulation on hydrogen production and its equipment (e.g. PFAS ban)
• • •
Market risk
5 Renewable Hydrogen certification
• • •
6 Insufficient supply of critical minerals n.i. n.i.
•
Technology risk
7
Disruption in supply of fresh water can affect market development of
Electrolysers
n.i. n.i.
•
8
Technology competition (preferred low carbon technology for production
of hydrogen)
• • •
Reputational risk
9 Product incidents related to extreme climate events n.i.
• •
10 Failure to reduce CO2 emissions n.i. n.i.
•
Physical climate
transition risks
11 Flooding affecting production facilities n.i. n.i.
•
12 Water scarcity on strategic markets n.i. n.i.
•
13 Product Safety incidents arising from climate acute events n.i.
• •
LEGEND FOR FINDINGS:
RISK OPPORTUNITY
RISK
CLASSIFICATION
• •
High
• •
Medium
• •
Low
n.i. n.i. No impact
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Environment, Social and Governance report
WATER
Water consumption
Nel consumes
3
low amounts of water for cooling,
production, cleaning and testing of equipment. Nel ensures
an appropriate discharge of the water consumed in the
operation with its Wastewater Treatment Plants installed
in Herøya, Norway and Wallingford, United States. The
QHSE department performs periodical water sampling and
laboratorial sampling to control the pollutants level on the
discharged water. Nel’s QHSE team works on the assumption
of best available technique to ensure the correct monitoring
and treatment of pollutants.
HERØYA WALLINGFORD TOTAL TARGET
2024 2024 2024 2025
Water discharge (m³)*** 5 954 3 991 9 945 -
Nickel Particles
in the water (µg/m3) 6.2 * n.a.**
<6
*Below 0.01 Nickel Particles per µg/m3
**Not applicable
***Water discharge refers to the volume of water that is released back into the environment
after it has been used in the manufacturing process, including wastewater that may contain
contaminants.
Water consumption and withdrawal in water-stress areas,
use of sold products
Based on the atomic properties of water, 1 kg of hydrogen
requires 8.92 litres of water. Comparing water consumption
for electrolysis with other energy processes, the water
footprint of certain fossil-based pathways exceeds that of
hydrogen. Crude oil recovery and diesel refining uses around
40% more water than the production of renewable hydrogen
per unit of energy.
4
From a circular economy perspective,
hydrogen technology does not consume water as water
is produced, in its purest form, at the end of the cycle. It
also avoids water contamination associated with various
fossil-fuel processes. Water is also produced as a biproduct
when hydrogen is used in mobility applications. However,
distribution of water could offer a challenge.
Currently, electrolyser technology uses highly purified water.
This does not mean, however, additional strain on freshwater
systems. The water needed for large-scale electrolysis, can
be provided by any water resource (sea water, wastewater,
etc.) once demineralised via reverse osmosis (RO) plants.
5
Continuous development of adjoint water desalination
plants, alternative modes of low-grade and saline surface
3 Water consumption/withdrawal refers to the total volume of water taken from natural
sources for use in the manufacturing process.
4 (PDF) Development of a Life Cycle Inventory of Water Consumption Associated with the
Production of Transportation Fuels (researchgate.net)
5 Quantification of freshwater consumption and scarcity footprints of hydrogen from water
electrolysis: A methodology framework - ScienceDirect
water electrolysis
6
, and water provision via wastewater
treatment plants provide evidence of their feasibility and cost-
effectiveness.
Water stress can also be minimised by adding desalination
plants at the electrolyser site. This investment acts as a
precautionary instrument to shield local population from
water resource deprivation. In fact, should the need exist,
water desalination plants for electrolysis could be planned
to produce water not just for the production of hydrogen,
but also for local use as a freshwater resource for human
consumption and/or irrigation, thus creating multiple benefits
to the local area.
GREENHOUSE GAS (“GHG”) EMISSIONS
Nel strives to be transparent with regards to our impact
on the environment and continue to improve the internal
process for collecting data that provides an overview of our
emissions and their origins. Data collection for accounting
of CO2 emissions occurs at report from supplier, in-house
conversion of CO2 emissions based on metrics of product
consumption or conversion of nominal expense into average
CO2 emissions. Nel’s accounting policies for GHG inventory is
inspired by the Greenhouse Gas protocol, with full compliance
to be achieved in the annual report of 2025.
6 Electrolysis of low-grade and saline surface water | Nature Energy
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Annual report 2024
43
PEM AWE CORPORATE
Scope 1 Yes Yes Ye s
Scope 2 Yes Yes Ye s
Scope 3 Yes Yes Ye s
Business travel Yes Yes Ye s
Capital goods Yes Yes Ye s
Waste Yes Yes Immaterial
Purchased goods and services** Yes Yes Immaterial
Transportation and distribution Yes Yes Immaterial
Use of sold products Yes Yes Immaterial
*yes = data points have been included in the reported scope 1-3 emissions, while blank means it has not been included. All other scope 3 emissions categories not listed has not been included
in the scope 1-3 GHG inventory reported in 2023. While there will be emissions in all categories, Nel is a global company with global distribution and therefore estimates that transportation
(inbound and outbound) is the main data point missing for complete data.
**Purchased goods and services includes the emissions from significant raw materials.
Greenhouse Gas accounting - consolidation
method
The Greenhouse Gas emissions disclosed in this report
were consolidated using the control approach. Under the
control approach, a company accounts for 100% of the GHG
emissions from operations over which it has control.
Subsidiaries with less than 10 employees have not been
consolidated as aggregated emissions from these legal
entities are estimated to have immaterial contribution to the
consolidated GHG inventory (estimated at lower than 1% of
total CO2 emissions inventory). Nel estimates its total CO2
emissions in the reporting period as follows:
Greenhouse Gas
emissions in ktCO2e 2024 2023 Change
Scope 1 0.2 0.4 -0.2
Scope 2 0.9 1.2 -0.3
Scope 3 23.3 30.3 -7.0
Total 24.4 32.0 -7.6
Scope 1
The emissions within scope 1 arise from the fueling of cars
and forklifts, and facility heating.
Scope 2
The majority of emissions from scope 2 of 937 t CO2e is the
use of electricity from grid connected production in company
owned or leased locations. The electrolyser division consumes
energy while performing tests on our products before they
are shipped to our customers. Nel’s absolute emissions the
next years will correlate with the activity level achieved. An
increase will occur if Nel continue to increase production
capacity. Nel’s goal is to decrease the CO2 footprint per
product produced. We will achieve this by improving the
stability and scalability of our production processes. In
addition, Nel pledges to become fully electrified and use
renewable energy to the extent available.
The measurement of the reported greenhouse gases is the
energy consumption multiplied with emissions factor for
the relevant connected grid. Nel’s manufacturing facilities
are connected to the grid in Norway, and Connecticut,
United States. Each grid has its own emission factor based
on location- and marked based emissions. These emissions
factors are updated regularly by the source provider.
Norway
The manufacturing facility in Herøya is connected to the grid
in price area NO1. Norway’s energy production mix comprise
of over 90% of hydro power, however Norway is connected
to the European continent by power cables resulting in a
lower percentage of renewable energy in the mix. Nel has
decided to not purchase green certificates for its electricity,
and has therefore used a ”Nordic Mix” to measure its CO2
emissions from energy consumption in Norway. The emission
factor for the energy use in Norway is measured at 0.0070
kgCO2/kWh.
Connecticut, United States
The facility in Wallingford, Connecticut, has an energy mix
that consists of approximately gas, nuclear, hydro, wind and
biomass. In total, about 20% of the fuel mix is renewable. The
emission factor for the energy use in Wallingford is measured
at 0.24519 kgCO2/kWh.
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Environment, Social and Governance report
TOTAL GHG EMISSIONS, EXCLUDING
EMISSIONS FROM CAPEX (IN TCO2E)
Scope 3 without CO2 emissions from Capital Goods (Capex)
Scope 2
Scope 1
0,4
0,1
0,4
1,2
1,2
0,9
7.3
15,5
13,4
0,0
2,0
4,0
6,0
8,0
10,
0
12,
0
14,
0
16,
0
18,
0
.
2022 2023 2024
Scope 3
Purchased goods
A significant portion of Nel’s greenhouse gas inventory stems
from purchased goods, such as metals, steel, nickel, platinum
and iridium.
Transportation
Nel engages freight forwarders to arrange transportation
of goods. Nel prioritizes rail and shipping transportation
types due to lower CO2 emissions. Currently, Nel has
limited intercontinental shipping of goods being most of the
emissions incurred in 2024 related to transport of goods
inside the European Union and the United States.
Capital goods
Nel accounts for the CO2 emissions from factory expansion
applying an average emission factor for each nominal capital
expenditure. The CO2 conversion in Wallingford, United
States was measured at 0.221 kgCO2/USD and 0.023 kgCO2/
NOK in Norway.
Nel expects to have seasonal peaks of emissions from
acquisition or construction of capital goods as a result of the
workings for expansion of production capacity to meet the
forecast for market demand before 2030.
Use of sold products
Energy consumption
The alkaline and PEM electrolyser equipment produced by
Nel have no emissions in use when connected to renewable
power sources like wind, solar, or hydro power, either grid-
connected or off-grid. Nel has no control over the renewable
energy mix in its customers production facilities, and this will
not be 100% emission free until there is sufficient energy
production from renewable sources. All customers producing
hydrogen from water electrolysis has its plan to produce from
renewable energy sources to reduce the carbon footprint
from its operations. Nel has in the scope 3 reporting assumed
zero emissions from use of sold products.
GHG intensity
The GHG intensity is presented excluding scope 3 as the
complete scope 3 has not yet been included. The scope 3
emissions increase annually from continuing completeness;
therefore, the intensity is not comparable between fiscal
years, if scope 3 is included.
The GHG intensity excluding scope 3 has decreased in 2024
compared to prior years as a result of increased revenue
in the group from particular the increased production in
Norway. Norway has low GHG emission, below the group’s
average. For GHG intensity, Nel calculates its turnover as the
sum of revenue from customer contracts as applied to its
Income Statements in accordance with IFRS 15.
Our products and projects are enablers of the climate
transition in hard-to-electrify industries. Nel has not
implemented internal carbon prices in its decision-making
process as everything we do is for a successful off taking of
renewable hydrogen industry.
1,64
0,96
0,80
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
1,60
1,80
2022 2023 2024
GHG intensity
(excluding scope 3)
tCO2e/MNOK turnover
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Annual report 2024
45
NET ZERO 2050 - GHG TRAJECTORY
The outlook for scope 1-3 in Nel includes several forward-
looking data points with significant estimation uncertainty and
involves risk of low reliability and/or comparability. Nel does
not provide any guiding on production volume or revenues,
therefore, Nel has not been able to show the detailed absolute
emission trajectory towards net zero. Nel reported that GHG
emissions this year is not significant, however, it is evident
that the renewable hydrogen industry will witness increasing
GHG emissions when going through industrialisation, while
the total absolute annual GHG emissions should be very
limited comparing to conventional technology. Thus, the
emissions avoided is significant, refer section “Climate change
opportunity and emissions avoided” above.
Nel’s ESG policy approved by the Board include a pledge to
reduce greenhouse gas emissions per produced unit by 25%,
50% and 100% within 2030, 2035 and 2050, respectively,
compared to 2020. Nel will monitor the reduction plan by
improved reporting procedures and data quality for material
scope 1, 2 and 3 emissions. The majority of GHG emissions
in Nel would be categorised as Scope 3 emissions, where
reductions will mainly come from purchased goods and
transportation. An example of significant purchased good
in Nel is steel. The timing of decarbonization of the steel
industry is uncertain but roadmaps already include likely
decarbonization from sustainable amendments in steel
production (hot direct reduced iron, hot briquetted DRI and
blast furnace). It is therefore expected that a certain volume
will be available before 2030. Nel’s GHG reduction trajectory
includes estimates that the volume of commercialised
renewable steel will increase from 2030-2040. The steel
production market is a climate-related opportunity for Nel. In
addition to reductions within purchased goods, Nel estimate
GHG reductions in the transportation industry when the
mobility fleets become more sustainable (electrification, e-fuels
and biofuels). Also in this spectrum, Nel’s GHG reduction
trajectory estimate the majority of these reductions become
visible beyond 2030. Nel also estimates that GHG reductions
per unit will be achieved by increased volumes produced, as
some GHG emissions are not fully variable and correlated to
the production volume. Our net zero commitment does not
forecast the use of carbon offset schemes.
Greenhouse gas emissions per GW capacity
Base year
Stability and scalability
Electrification
Green steel (5%-10%)
Green steel (50%-75%)
Green steel (5%-25%)
Transport (5%-25%)
Transport (75%-100%)
Transport (5%-10%)
2035
2050
2030
Stability and scalability
Electrification
Other emissions
Other emissions
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Environment, Social and Governance report
SUSTAINABILITY IN ELECTROLYSER
PRODUCTION
Nel is committed through its company ESG Policy to state-
of-the-art sustainable production facilities for both current
productions, committed expansions and potential further
scaling up. In 2024, Nel concluded the factory expansions at
Herøya, Norway and the manufacturing capacity expansion
in Wallingford, Connecticut will be completed in early
2025. These capacity expansions were designed with fully
automated manufacturing processes to enable efficient and
scalable production of electrolysers.
The environmental footprint of a product throughout its
lifetime, factoring the hydrogen output and production
costs, is markedly reduced by utilizing hydrogen solutions
compared to traditional energy sources. This does not mean
that the production of our applications is entirely carbon
neutral as CO2 is emitted with manufacturing of equipment
and its transportation.
Nel is certified on ISO 9001 and ISO 14001 in the Alkaline
business unit for the scope of Technology R&D, Product
Development, Procurement, Inbound and Outbound
Logistics, Manufacturing, Sales, Delivery Projects, Installation,
Commissioning and Servicing of Atmospheric Alkaline
Hydrogen water electrolysers and Hydrogen Plant system
solutions.
Nel is certified on ISO 9001, ISO 14001 and ISO 45001 in the
PEM business unit for the scope of Design, Manufacture and
Servicing of Proton Exchange Membrane Electrolysis Systems.
RESILIENCE IN ELECTROLYSER MANUFACTURING
FACILITIES
In 2023, Nel announced Plymouth Charter Township,
a suburb of Detroit, Michigan as the selected site for a
factory of Alkaline and PEM electrolysers with up to 4GW in
production capacity. The expansion is currently delayed due
to a slower than expected growth in the electrolyser market in
the United States.
The capacity expansion in Herøya, Norway to 1 GW and
Wallingford, United States to 500 MW are important steps
in preparation for large-order intakes and represent the first
industrial-scale production of the most efficient electrolysers
on the market, at a game-changing low production cost.
Sustainability in electrolyser production metrics and future targets:
KPI 2024 2023 CHANGE 2025 TARGET
7
Electrolyser production, Alkaline
Stack yield 97% 99% -2% NM
Overall equipment effectiveness 65% 67% -2% NM
Electrolyser production, PEM
Stack yield 99% 94% 5% >98%
Overall equipment effectiveness 48%
8
91% -43% >90%
7 Targets in Alkaline suspended for 2025 as production is temporarily halted.
8 The PEM operations had a low work load in the financial year. Costs and phasing in new production equipment was prioritized over achieving a high OEE.
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Social
ORGANISATION AND OCCUPATIONAL
HEALTH AND SAFETY
At Nel, Organisation and Occupational Health and Safety is a
top priority. Nel focus on safety is integrated in the company-
wide culture program to foster a zero-tolerance attitude
towards QHSE incidents. In 2024 we continued to have safety
as our number one priority and focus efforts to improve results.
Our overall goal was to significantly reduce the number of lost
time and recorded safety incidents in Nel.
• The Lost Time Injury Rate (LTIR), which measures the
number of incidents that result in time away from work,
dropped from about 11 at the beginning of the year to
2.7 at the end of the year, a reduction of almost 80%.
• The Recordable Incident Rate (TRIR), which measures
the number of lost time + restricted work + medical
treatment cases, dropped from about 20 at the beginning
of the year to 5.2 at the end of the year, a reduction of
almost 75%.
Nel recognises that ensuring i) workplace, ii) stakeholder
and iii) product safety in a diligent manner is a license to
operate within the Hydrogen industry.
The above three categories will have the following focus
areas:
1. Continue a “HSE-first” mindset and development of a
commitment culture
2. Ongoing development and implementation of a Nel
HSE management system
3. Standardization of programme activities where relevant
throughout the organization
4. Training and evaluation of the organization and system
effectiveness
The progress Nel made last year has not come down to
one single factor. It is rather the result of many reinforcing
initiatives:
• Putting safety first in terms of our priorities
• Finding ways to measure status and developing leading
safety indicators
• Implementing several company-wide programs such as
safety observation tours and digital reporting of hazards
(Short-Term Incentive scheme of employees qualifiable to
a financial bonus in 2024)
• Improving our safety training courses, including HSE
day at Herøya production facility with focus on practical
topics like behaviours, rescuing confined space, hazard
recognition and working environment
• Developing and distributing root cause analyses of lost
time incidents internally
Nel production facilities have dedicated QHSE resources
reporting to the VP of Operations about safety incidents,
preventive safety actions and implemented responses to
incidents occurred in accordance with Nel’s procedure
for incident handling. Nel requires that all employees and
contractors in the production sites receive appropriate safety
training and equipment. In addition, Nel imposes restrict
access to hazardous areas such as areas with handling of
harmful chemicals.
Nel’s Alkaline business unit is ISO 45001 certified within
the scope of Technology R&D, Product Development,
Procurement, Inbound and Outbound Logistics,
Manufacturing, Sales, Delivery Projects, Installation,
Commissioning and Servicing of Atmospheric Alkaline
Hydrogen water electrolysers and Hydrogen Plant system
solutions.
Nel’s PEM business unit is ISO 45001 within the scope of
Design, Manufacture and Servicing of Proton Exchange
Membrane Electrolysis Systems.
Organisation and Occupational Health and Safety targets for
2025:
• LTIR = 0
• TRIR <4
• 100% completion of obligatory safety training
• Four Safety Observation Tours to be completed for all
managers and above.
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Annual report 2024
49
Key Performance Indicators related to Health and Safety
KEY PERFORMANCE INDICATORS UNIT OF MEASUREMENT 2024 2023 CHANGE
2025
TARGETS
Percentage of employees covered by Nel's health
and safety management systems
% 100% 100% 0% 100%
Total recordable injuries rate (TRIR) TRI per 1,000,000 hours worked 5.2 19.7 -14.5 <4
Lost time injury rate (LTIR) LTI per 1,000,000 hours worked 2.7 11.2 -8.5 0
H1 – injury-related absence from work Recordable events in the last 12 months 2 12 -10 0
H2 – recordable injury events Recordable events in the last 12 months 4 21 -17 <4
Fatality rate Recordable events in the last 12 months None None None None
PRODUCT SAFETY
Safety is the number one priority in Nel. Management and all
employees are strongly committed to the company’s promise
of delivering fail-safe products to the customers. The product
safety risks include the risk range from major accidents to
near misses related to malfunctions in our products and/
or insufficient service during operations and maintenance.
Each division and legal entity in Nel are responsible for the
development, implementation and maintenance of risk
management framework and system within each discipline.
In our development of products, Nel diligently works to never
compromises on safety requirements, codes and standards.
Nel’s equipment follows a Failure Mode, Effects & Criticality
Analysis (“FMECA”) approach for risk assessment at product
level, and a Hazard and Operability Analysis (“HAZOP”) at
system level. The Engineering departments of each business
unit are responsible for the technology platforms and
product safety, supported by the QHSE/Product Compliance
department, ensure code compliant and safe product
development. The QHSE directors and their departments
are the primary resources involved with the investigation of
product defects and implement corrective measures where
applicable reporting to the VP of Operations. In addition,
a QHSE committee that works across the organizations
and consists of participants from each legal entity, as well
as the corporate function, ensures collaborative learning
and implementation of best practices to prevent incidents.
Where applicable, safety requirements include third-party
product certification for design and manufacturing. Third-
party experts are involved as subject matter experts when
applicable. External consultants are involved on regular tests
for emergency response. In case applicable, the Board of
Directors review the remediation plan for product safety
incidents involving leakage of hydrogen with explosions or
fatalities and/or material cost impact.
In 2024, our employees participated in product safety
trainings for basic knowledge of hydrogen risks, common
pitfalls on handling and storage of hydrogen, and best
practice to avoid incidents in the production and storage
of hydrogen. As mentioned in the section “Sustainability
in Electrolyser Production”, the R&D department works
on product designs and safety applications to reduce
the product safety risks such as explosion or hydrogen
leakage. During 2025, Nel will continue the collaboration
between R&D, Engineering and QHSE/Product Compliance
departments to increase the product safety program with
implementation of even more rigorous methodologies, e.g., a
review system where specific areas will be assessed to identify
areas of improvements.
Nel is certified at product level with several certifications,
including ISO 22734:2019 - hydrogen generators using water
electrolysis for the M-Series PEM electrolysers.
Product safety targets for 2025:
• Zero product-related incidents, including at sites with Nel
equipment
• Recognized safety leader within the industry, setting new
industry safety standards across the value chain
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RESPONSIBLE SUPPLY CHAIN
Upholding a responsible and efficient supply chain is pivotal
to our business resilience, sustainability agenda and goals. Nel
operates in a complex global market and ensuring business
resilience while at same time meeting the highest standards
of business integrity and human rights pose challenges to our
value chain and business partners.
During the reporting period, approximately NOK 1.8 billion
were spent across 40 countries in 5 continents. Despite the
global presence, Nel concentrates its supply chain near to
its production facilities or within the European Union where
business governance and human rights practices are well
developed and widely implemented. The continued effort
for transparency and resilience is done in conjunction with
reinforcing ties with existing partners. Suppliers that comply
to human rights frameworks are fundamental to cultivate a
resilient long-term relationship.
In 2025, our supply chain department will continue the
preparedness working anticipating the expected business
growth in the coming years.
Our approach
Nel expects that any business relationship with internal or
external partners are conducted with the highest standards
of business integrity. The pre-qualification of vendors is
performed with an integrity due diligence (“IDD”) check and
the review of a self-assessment prepared by our vendors.
Nel also sets clear expectations for our business partners with
respect to business integrity. Transparency is important when
setting the minimal compliance requirements expected in
our business relationships. Nel’s supply chain has in place an
awareness program to distribute Nel’s code of conduct and
Nel’s human right policy to business partners, and we also
have these policies available on our website. In addition, a
supplier quality, health, safety & environmental manual with
clear guidance on these areas is distributed to vendors where
relevant.
Furthermore, a Supplier Declaration formalizing the minimal
requirements for human rights, business integrity, compliance
with laws and regulations and health and safety are requested
from vendors with which Nel has substantial business activities
during the reporting period. The Supplier Declaration
is expected to cascade to business partners a formal
requirement of the lowest acceptable level of compliance in
critical business areas.
Ongoing monitoring
Through our Supplier Audit Program, we audit strategic
suppliers on aspects such as human rights, business
integrity, health and safety, quality management systems,
and operational matters. The Supplier Audit Program uses a
risk-based approach where vendors are classified based on
an evaluation of, inter alia, Nel’s business dependency on the
vendor, the effort required to replace the vendor if necessary
and any risks in respect of business integrity or human rights.
In 2024, Nel’s Supply Chain department audited 20 suppliers.
The supply chain department aims to increase the target to
30 supply audits of suppliers in 2025.
TRANSPARENCY ACT
According to the Norwegian Transparency Act which entered
into force July 1st, 2022, Nel has a duty to carry out a due
diligence assessment related to fundamental human rights
and decent working conditions in its own businesses and
supply chains. As referred to above, Nel conducts a thorough
pre-qualification process before entering a contractual
relationship with new suppliers. This prequalification
process includes an integrity due diligence (“IDD”) check
of the supplier. The IDD procedure is mandatory in Nel for
any contractual relationship and red flags are handled in
collaboration between the supply chain and compliance
departments. In severe cases, the procurement process may
be stopped, and the supplier disqualified from being part of
Nel’s supply chain. If the procurement process is not stopped
as a result of the finding, adequate measure will be put in
place to prevent, monitor and/or mitigate the risk.
Suppliers which Nel has substantial business activities
during the reporting period are required to sign a Supplier
Declaration. The Supplier Declaration formalizes the minimal
requirements we expect and demand all suppliers in our
value chain to meet, including respect for fundamental
human rights. The Supplier Declaration establishes specific
contractual obligations between Nel and the supplier within
the area of compliance. These obligations come in addition to
obligations in Nel’s supply chain contracts.
General Supply Chain Risk Assessment of Nel’s Supply
Chain
The supply chain department manages the Supply Chain
Due Diligence procedure with support from the compliance
department.
Nel has adopted a risk-based approach when it performs the
due diligence of its value chain as required by the Transparency
Act. The supply chain department performs a risk assessment
to evaluate our business dependency on the suppliers and
our ability to find suitable alternative suppliers. After initial
due diligence of suppliers, they are classified as non-critical,
bottleneck, leverage or strategic. When a supplier with high risk
of non-compliance is identified, the Supply Chain department
performs a thorough supply audit program including steps to
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assess Corporate Social Responsibility. A calibration process will be agreed for suppliers with high-risk findings, however no high-
risk finding have been identified in 2024.
Integrity Due Diligence
Check
High risk findings
Low risk findings only
Yes
No
High risk finding
s
Low risk findings
Findings Assessement Calibration process
Strategic Supplier? Sampled in the Supplier
Audit Program
No further action No further action
The due diligence is performed independently by each business unit. We have assessed country risk in the supply chain of each
business unit, across all business units and the result of this assessment is shown in the diagrams below.
Alkaline electrolysers:
• 75-100 88%
• 50-75 11%
• 25-50 1%
• 0-25 0%
PEM electrolysers:
• 75-100 99.6%
• 50-75 0.1%
• 25-50 0.3%
• 0-25 0%
The figures above show that overall Nel predominantly has suppliers from low-risk jurisdictions. About 99% of Nel’s suppliers are
within the top two intervals and there are no suppliers in the bottom interval. Based on an overall assessment of country risk,
risk of violations of fundamental human rights and decent working conditions in Nel’s Supply chain is considered to be low.
Top 5 country expenditure in 2024:
COUNTRY OF INCORPORATION %
CORRUPTION
INDEX (CI)
CI
RANK ITUC
United States 37% 69 24 Systematic violation of rights
Norway 29% 84 4 Sporadic violation of rights
Sweden 11% 82 6 Sporadic violation of rights
Denmark 5% 90 1 Sporadic violation of rights
Germany 5% 78 9 Sporadic violation of rights
Top 5 representation 88%
11 %
1 %
Supplier Expenditure – Alkaline Division
88 %
Top 25th percentile
25th-50th percentile
50th-75th percentile
75th-100th percentile
Supplier Expenditure - Proton Membrane Division
Top 25th percentile
25th-50th percentile
50th-75th percentile
75th-100th percentile
99.6%
0.1%
0.3%
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Labour rights
Some of Nel’s strategic suppliers operate in countries
classified with systematic violations or regular violations of
labour rights in accordance with the International Trade
Union Confederation (“ITUC”). Employees in our value chain
working in these specific countries have a higher risk to
be employed in companies that do not comply with the
minimal requirements required in Nel’s Human Rights policy
for employment security and reasonable working hours. Nel
monitors its value chain with site visits to strategic suppliers
and educate its value chain with policies and supplier
declaration available on Nel’s website.
Conflict minerals
Nel’s Alkaline electrolysers contain steel and nickel, the PEM
electrolyser contain steel, aluminium, nickel, copper, platinum,
titanium and iridium. Although none of these minerals are on
the European Union list of conflict minerals, Nel understands
that the value chain of mineral and steel suppliers has
particular complexity due to a complex cross border process
of production and transportation of minerals to Europe and
United States. These suppliers are continuously monitored by
our Integrity Due Diligence checks.
Overall assessment
No case of violation to Labour Rights, Code of Conduct or
Nel’s Human Rights policy have been identified in the due
diligence procedure performed during 2024.
General Supply Chain Risk assessment for own
operations
Nel has its production facilities and almost all its employees
in the United States, and Norway. Norway has historically
been assessed as having a low risk for Human Rights and
Corruption, ranked top 4 in the Corruption Perception Index.
The United States has also been assessed at low risk, placed
in the 24th position of Corruption Perception Index (“CPI”)
and 20th position in the HDI (“Human Development Index”).
During our review of internal risks that could affect Nel
business and its value chain, we have identified opportunities
of improvement for reduction of frequency of safety incidents
at workplace and implementation of a policy for diversity and
equality.
Safety at workplace
Nel’s operations have an inherent risk of incidents relating to
health and safety mainly caused by handling of chemicals,
weight handling or working at height. Health and safety
incidents are managed by the safety committee and local
QHSE departments and tracked in the LTIF (Lost-time
Incidents Frequency) and TRIF (Total Recordable Injuries
Frequency). Safety is our number one priority, and this is
reflected in our culture, training programs, and monitored by
the Nel’s safety program. The safety responses implemented
to address the risks and opportunities related to safety at
workplace is described in the section “Organisation and
Occupational Health and Safety”.
Diversity and equality
Nel has a diverse workforce strengthened by the knowledge
and experience from different working backgrounds, cultures,
beliefs, and races. Nel acknowledges the importance of a
culture that foster Diversity and Integrity providing equal
opportunity regardless of gender, culture background or race.
In response, Nel publicly commits in its job advertisements
to be an equal opportunity employer. The Human Resources
department is involved in the hiring process advising hiring
managers and ensuring that candidates are equally treated
in all steps of the recruitment process. Job advertisements
for our operations in Norway are posted in the English
language to ensure a broader outreach and welcome highly
skilled immigrants to apply to open positions. In 2024
Nel implemented a global Diversity and Equality policy in
accordance with the conventions of the International Labour
Organization consolidating the minimal procedures expected
from the local human resource departments.
Duty to provide information
Nel has a whistleblowing channel where concerns related
to our value chain can be submitted anonymously for
investigation. Contact details / instructions for how to report
a concern are found on our website’s Ethics and Compliance
section. No report was received in 2024.
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Key performance indicators for responsible supply chain:
KEY PERFORMANCE INDICATOR UNIT OF MEASUREMENT
31
DECEMBER
2024
31
DECEMBER
2023 CHANGE
KPI TARGET
FOR 2025
Supplier audits concluded within the fiscal
year
Supplier audits completed during
the reporting period
20 23 -3 30
Site visits during supplier audit program Reportable event 20 23 -3
Number of suppliers not renewed due to
breaches to compliance policy
Number of contracts not renewed
due to breaches of compliance
None None
Integrity Due Diligences ("IDD") performed
in suppliers with active contracts
IDD performed 80% 99.8% -19.8%
100% of active
suppliers shall
have IDDs
performed.
Total suppliers with active contracts
Suppliers with active expenditure
during the year
698 1 039 -341
Information Security
Cyber security threats have continuously increased in scale
and sophistication in recent years. Nel has established a
strong information security program designed to protect
the confidentiality, integrity, and availability of data. By
implementing advanced security protocols and conducting
continuous monitoring, we proactively address threats and
minimize vulnerabilities. Our approach is rooted in industry
best practices and a commitment to maintaining trust with
stakeholders.
To stay ahead of evolving cyber threats, we regularly assess
and enhance our security measures. Ongoing investments in
advanced technologies and regular audits ensure our defenses
remain resilient. This proactive strategy has been instrumental
in maintaining our record of zero data breaches, even as
global cyberattacks continue to rise. In 2024, we have further
strengthened our capabilities by hiring a Security Architect and
an operational technology (OT) Security Analyst to expand our
expertise and focus on emerging areas. In an effort to support
our customers with NIS2 compliance, all our security measures
have been implemented in alignment with NIS2 requirements.
Responding to information security threats
Acknowledging that some attacks may be unavoidable, Nel
has partnered with an industry-leading incident response
provider to ensure swift and effective handling of any potential
incidents. This collaboration gives us access to cutting-edge
expertise and tools, enabling rapid detection, containment,
and investigation of security events. Such measures are key to
minimizing impact and ensuring a swift recovery.
Culture and training
We emphasize the importance of human vigilance in our
security efforts. Nel security awareness program achieves
a participation rate of over 96%, reflecting its effectiveness
in fostering a culture of security. Regular training ensures
employees are equipped to recognize and respond to
potential threats, reinforcing our defences at every level of the
organization.
Looking ahead, we are committed to increasing adherence
to industry standards, such as ISO 27001 and IEC 62443, to
further strengthen our cybersecurity framework.
Directors & officers insurance
(D&O)
Based on requirements brought by the Norwegian Accounting
Act section 3-3a, information about our D&O insurance is
provided. Nel has entered into a D&O liability insurance. This
insurance is meant to prevent employees and members of
the Board at Nel from being held personally responsible for
decisions made by the company. The insurance applies to all
material decisions made by employees on behalf of Nel.
Human Capital
The workforce is the most valuable resource in Nel. The highly
skilled characteristic of our workforce makes employment
retention and well-being at workplace critical dependencies to
our operations. On the other hand, the ability to absorb skilled
personnel from industries highly related on fossil fuels is a
relevant opportunity to local communities and labour market
in a business scenario with Net Zero Emission. The global
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Corporate governance
human resource department is committed with the highest
HR standards for talent attraction and retention, and well-
being at workplace.
During 2024, our talent retention was tested in a competitive
labour market in the United States and Europe, recording the
lowest employment rates in the last two decade.
The turnover rate increased from 11% to 15%. In 2024,
Nel implemented a feedback calibration process ensuring
that employees received timely feedback during the year,
therefore allowing employee development before the annual
performance appraisal. All employees in Nel participated in
the appraisal process in 2024.
In 2025, Nel’s HR will develop a comprehensive talent
mapping system that provides a holistic overview of
organizational roles, job titles, and hierarchical levels. In
addition to implementing a manager program to enhance
leadership capabilities.
During 2024 it has been a high focus on safety training in
addition to other global mandatory trainings.
AVERAGE TRAINING HOURS, PER EMPLOYEE 2024 2023
Male 06:40 7:20
Female 06:40 7:20
In Nel, we prioritize an active two-way dialogue with our
workforce. The human resource department of each facility
engage in active feedback with employee’s representatives
and organization classes. The proactive engagement allows
Nel to better understand the concerns of its workforce and
to negotiate balanced resolutions to impacts, risks and
opportunities affecting employees. Nel’s leadership have
open communication with employees through several
mechanisms, including town-hall meetings with at least
quarterly occurrence. Employees are also encouraged to
anonymously report unmanaged concerns in one of the
grievance mechanisms available in Nel (whistleblowing
channel, ethics hotline, direct report to HR managers or
direct report to line manager). The grievance mechanisms
are promoted on Nel’s intranet, at workspace, commented
on mandatory trainings, and townhall meetings. The legal
and compliance department addresses the reports received
in the whistleblowing channel or ethics hotline, with summary
of cases reported to the Board Audit, Risk and Sustainability
Committee (“BARSC”). All whistle-blowers are protected
against retaliation under Nel’s Ethics Hotline policy.
In 2024, Nel’s HR implemented two initiatives to enhance
employee experience and integration across international
markets. First, the company introduced Winningtemp, an
engagement index survey tool, to assess and improve
workplace satisfaction. Concurrently, Nels HR successfully
launched a global onboarding process to efficiently integrate
new team members worldwide.
Nel is an equal opportunity employer and acknowledges the
relevance of integrate and represent its diverse workforce. In
all job advertised, Nel publicly states its commitment to be
an equal employer without discriminate employees due to
racial and ethnic origin, colour, sex, sexual orientation, gender
identity, disability, age, religion, political opinion, national
extraction or social origin, or other forms of discrimination
covered by Union regulation and national law. In 2025, Nel
plans to implement a policy for Diversity and Equality in
compliance with the conventions of International Labour
Organization.
Human Resources targets for 2025
• Develop and implement a manager training program
• Create an organizational overview with competency
matrices and succession plans
• Implement global policy for Diversity and Equality
WELL-BEING AT WORK
In 2024, Nel implemented a global onboarding program
where new hires are introduced company strategy and specific
challenges and characteristics of each business division. The
onboarding program is providing easier integration of new
hires promoting better adaptability to our workplace. After
implementing an engagement index survey tool, Nel has
achieved positive initial results, with satisfying workplace
temperature metrics. These promising early indicators suggest
a strong engagement and positive workplace sentiment among
Nel’s team members. In 2025, Nel will maintain a rigorous
approach to tracking and analysing these survey results.
WORKING HOUR POLICY
Nel strives to ensure that employees do not exceed
reasonable working hours to provide a balance between
work and personal life. All managers in Nel are responsible
for monitoring the working hours of their direct reports,
making sure these are within acceptable limits and complying
with statutory rights for holiday, parental leave, or any
other employee right for work-absence. In addition, Nel has
in-place a working hours policy describing the statutory
rights for employees, the policy in place for shift work,
overtime policy and requirements for passive service in case
of emergency issues. Although Nel’s workforce is placed in
countries with strong labour unions and statutory labour laws,
Nel has the ambition to increase steering on the working
hours in the coming years with implementation of a working
hours systems for improved reporting of work shifts.
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Employees are also encouraged to access the employee
handbook on Nel’s intranet containing a detailed description
of internal human resource policies and legislation guidelines
regarding employee benefits, expected working hours, labour
statutory rights and grievance mechanisms.
TALENT DEVELOPMENT AND RETENTION
PROGRAMS
Throughout 2024 Nel has onboarded approximately 64 new
employees. Nel’s Human Resource strategy is anchored on
talent attraction and retention. Among the actions for talent
attraction, Nel has implemented partnerships with well-known
universities, attended career fairs and events in relevant
institutions targeting a higher outreach of apprentices.
Nel has implemented a formal internship program with
a structured learning experience program, including the
allocation of a dedicated mentor with relevant expertise on
the subject covered during the internship.
For talent retention, Nel has a common HR-system, optimising
the HR processes and allowing increased learning and
comparison of results. The common HR-system support the
performance evaluation process, where targets are cascaded
from the department team-leader to its team members.
Employees are also encouraged by team leaders to contribute
with the definition of some targets describing areas of self-
development and career goals. The performance evaluation
program requires interim feedback ensuring both talent
development and corrective actions in appropriate time. In
Nel, managers have the mandate to monitor the needs for on-
the-job training, knowledge adoption and further competence
development needs through the new appraisal and goals
setting process. The purpose is to ensure that development
activities help employees in their current and/or future role.
Based on identified needs, some employees have been
assigned to specific external learning sessions.
In addition, the Human Resource department is delivering
behavioural trainings with dilemma situations to further
develop managers in their daily challenges to develop and
steer their team members.
Absolute number and rate of employment
Permanent and temporary employees, by region and gender
PERMANENT EMPLOYEES,
BY REGION AND GENDER
FEMALE (%)
FEMALE MALE TOTAL 2024 2023
Norway 50 198 248 20.2% 21.1%
United States 36 110 146 24.7% 23.4%
Other 1 2 3 33.3% 11.5%
Total 87 310 397* 21.9% 20.5%
*Employees that defines themselves as non-binary or undefined are excluded due to privacy concerns..
TEMPORARY EMPLOYEES,
BY REGION AND GENDER
FEMALE (%)
FEMALE MALE TOTAL 2024 2023
Norway 9 30 39 23.1% 44.4%
United States 2 5 7 28.6% 0.0%
Other 0 3 3 0.0% 0.0%
Total 11 38 49* 22.4% 44.4%
Permanent employees: Employees under work contracts that are renewed before a notice of termination.
Temporary employees: Employees with fixed-term work contracts.
*Employees that defines themselves as non-binary or undefined are excluded due to privacy concerns.
We strive to increase our gender balance across the different
locations, we have a focus on diversity through recruitment
ensuring we offer equal opportunity to all relevant applicants.
Women in executive management is 1, or 11.1%. Women in
the Board of Directors is 3, or 42.9%.
Gender pay gap
MALE-FEMALE PAY GAP PERMANENT
Norway 10%
United States 16%
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Corporate governance
The male-female pay gap is the difference between
average gross hourly earnings of male paid employees and
of female paid employees expressed as a percentage of
average gross hourly earnings of male paid employees. The
high discrepancy on temporary employees is caused by
the small population of temporary employees resulting in
disproportional comparison of salaries from senior positions
to junior positions.
2024 2023
Pay gap to highest paid individual and the median
remuneration for permanent employees (excluding
highest paid individual) 473% 480%
Nel’s remuneration policy was approved by the General
Meeting 15th of April 2021. Refer to remuneration report
2024 which describes how the policy has been applied during
2024.
Employee turnover and new employee hire
Diversity focus including gender balance is included in our
recruitment and sourcing activities.
TURNOVER RATES PERMANENT TEMPORARY
Employee turnover rate 17.2% 145.0%**
Voluntarily turnover rate 15.0% 100.0%**
** Nel has a small headcount of temporary employees with contract duration shorter than
12 months. The small population and the preference for short term contracts are the main
contributor to the high percentages identified in the report.
Movement in employee headcount by gender FEMALE MALE TOTAL
Total headcount end of 2024 87 310 397*
Opening count 2024 100 353 453*
Rate of change -15% -14% -14%
*Employees that defines themselves as non-binary or undefined are excluded due to privacy concerns.
AGE DISTRIBUTION OF WORKFORCE
PERMANENT EMPLOYEES, AGE GROUP <31 31-49 50+
31.12.2024 66 220 115
01.01.2024 85 241 127
Age group % of change -29% -10% -10%
TEMPORARY EMPLOYEES, AGE GROUP <31 31-49 50+
31.12.2024 15 6 4
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PARENTAL LEAVE
Nel facilitates for all female and male to take out parental leave and assure them to be employed after their leave as it is
important for our employees in terms of work-life balance and well-being.
MALE FEMALE
Took parental leave 14 4
Percentage of entitled employees that took parental leave 100% 100%
Returned to work after parental leave ended 11 1
SICK LEAVE
SICK LEAVE COVERAGE PERMANENT
Sick-leave rate 3.49%
Sick-leave days paid out to employees 63%
Coverage of employees 100%
Sick leave days paid to employees in Norway and US is 100% and 0%, respectively.
COLLECTIVE BARGAINING AGREEMENTS
COLLECTIVE BARGAINING AGREEMENTS 2024 2023
Norway 86% 86%
USA 0% 0%
Other 0% 0%
Nel operates in countries with strong social development, competitive labour markets and available benefits for social protection
in case of temporary unemployment, sick leave, or illness. Nel holds a group policy to financially support employees in case of
major life incidents including covering for medical disability, occupational disability, or death.h.
APPRAISAL DIALOGUE
APPRAISAL DIALOGUE 2024 %
Permanent employees 401 100%
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Governance
ETHICAL BUSINESS CONDUCT
AND COMPLIANCE
Nel conducts business on all continents and the demand
for Nel’s hydrogen solutions is growing. Through the
expanding portfolio of international projects, Nel has a
significant number of third-party relationships, and frequently
collaborates with other companies operating in the hydrogen
industry. For businesses with a significant international
footprint, a robust culture of compliance is vital to achieve
sustainable value creation and success.
In 2024, the Board of Directors and the executive
management team have continued their work to strengthen
Nel’s compliance system. The Board of Directors approves the
content of the overall compliance program and the individual
compliance policies. The individual procedures are approved
by the CEO. The Board of Directors and the executive
management team are enrolled in the compliance training
program and their training is monitored and followed up in
the same manner as for other employees.
The purpose of the compliance program is to prevent and
mitigate compliance risks by enabling all persons and entities
working for or on behalf of Nel to understand, observe, and
adhere to Nel’s governance framework. All Nel’s activities
must comply with national, regional, and international laws.
Through the Nel Code of Conduct, we stipulate the essential
requirement that all Nel’s activities should be conducted in an
ethical and sustainable manner.
Notable developments in 2024 include improving the
compliance training program by, inter alia, increasing the
course portfolio with courses which are more specifically
customized for Nel. Furthermore, the language options
for the compliance e-learning were expanded to include
Norwegian and the most common languages globally
allowing our employees to conduct training in their native
language. Although English is our working language, the
ability to conduct training in the employees native language
will increase our ability to efficiently train all parts of the Nel
organization.
Training of employees is crucial for an effective compliance
program, and in Nel we conduct our compliance training in
accordance with an Annual Compliance Wheel. The Annual
Compliance Wheel provides a yearly compliance training
program for the BoD and all employees, and the number of
courses and type of training will differ depending on the role
the employee has in Nel. Compliance e-learning courses are
supplemented by face-to-face training conducted by Group
Legal and Compliance. The compliance training covers topics
such as anti-bribery and corruption, sexual harassment,
economic sanctions, competition law and introduction to data
protection and privacy. All compliance training is mandatory
and closely monitored and a failure to complete compliance
training will result in a reduction in the employee’s variable
compensation. For 2024 compliance with the training
program can be summarized as follows:
• 94% of the employees have completed training in
accordance with the Annual Compliance Wheel. This is an
increase of 1% from 2023.
• 100 % of Nel’s executive management and Board of
Directors have completed the training in accordance with
Annual Compliance Wheel. This is an improvement from
2023 where the executive management and the BoD
combined for a 93% completion percentage.
Whistleblowing
The company’s whistleblowing channel – the Nel Ethics
Hotline – has been operational since September 2020. The
whistleblowing channel is operated by a third-party service
provider ensuring full anonymity for the reporter. In addition
to English, the channel is also available in Norwegian
ensuring a low language barrier for reporting a concern.
The whistleblowing channel is open for third parties/external
stakeholders as well as employees of Nel and a link to the
whistleblowing channel is published on Nel’s official website.
From the inception the vast majority of reports are received
from within the organisation, however, the fact that we
have also received reports from outside the organization
documents that there is awareness of the whistleblowing
channel also with external stakeholders.
During 2024 there has been no cases reported through
the whistleblower channel. This is a significant reduction
compared to the two previous years. 7 cases were reported
in 2023 and 15 cases were reported in 2022. Nel believes this
steady reduction in part can be ascribed to specific initiatives
in 2023 and 2024 which were targeted to improve the work
environment in Nel. An example of this is a customized
behavioural training program which was launched during the
first quarter of 2023. Furthermore, during 2024 the Human
Resources department also launched an initiative where all
employees are required to report weekly on issues related
to the work environment. The consequence is that potential
conflicts and issues are discovered early thereby facilitating
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early intervention by the Human Resources department
which prevents the conflict or issue from escalating. In
addition, the spin-off of Nel’s fueling division in June 2024
resulted in an approx. 35% reduction of employees, which
may also have contributed to the reduction of cases reported,
All reports of concerns received through Nel’s Ethics
Hotline are handled in accordance with Nel’s Ethics Hotline
Procedure and Nel’s Investigation Procedure. According to
the procedures all reports of concern are received by a team
consisting of three people – the ethics hotline team – which
will initiate the investigation of the report. Depending on the
category of the case, subject matter experts will be involved
on a case-by-case basis. All received reports are kept
confidential and investigated in accordance with fundamental
principles of due process. The extent of management
involvement in a specific case will be determined on each
case dependent on a specific risk assessment.
Compliance targets for 2025:
• 100% of relevant Nel employees to have completed
e-learning compliance training in accordance with the
Annual Compliance Wheel.
• 100% of Nel’s executive management team and Board
of Directors to have completed the anti-bribery and
corruption training during 2025.
Key performance indicators related to Governance:
KEY PERFORMANCE INDICATOR UNIT OF MEASUREMENT 31 DECEMBER
2024
KPI TARGET FOR
2025
Ethical business conduct and compliance
Compliance training (“Board of Directors and
Management”)
% 100% 100%
Compliance training (“Nel employees”) % 94% 100%
Total amount spent on fines for damages as a
result of violations regarding social and human
rights factors
NOK 0 0
Expenditure with lobby and donation to political
parties
NOK 0 0
Whistleblower channel
Total number of reported concerns – YTD
None
Not
applicable
Of which are related to business ethics and
corruption
Reportable event - per incident
None
Of which related to discrimination Reportable event - per incident
None
Others Reportable event - per incident
None
Investigations and inquiries initiated by compli-
ance team in the reporting year
Reportable event - per incident
None
Cases open at beginning of reporting period Reportable event under investigation
None
Cases open at end of reporting period Reportable event with investigation concluded
None
Payment practice
Confirmed incidents of corruption or bribery Reportable event - per incident None
Not
applicable
Number of contracts terminated due to con-
firmed
Reportable event - per contract None
corruption or bribery incidents Standard contract term 30-60days
Average payment term agreed with suppliers
Non-executive board members Board member 7 -
Executive board members Board member None -
Gender diversity (female board members) Female board members (%) 43% -
60
Corporate governance
INNOVATION AND TECHNOLOGY
FINANCIAL INVESTMENT CONTRIBUTION (NOK million)
AWE PEM GROUP
2024
Research and maintenance 103 126 229
Capitalised development 121 15 136
Total R&D spend (NOK millions) 225 140 365
R&D spend in % of annual revenue and other income 22% 29% 24%
2023
Research and maintenance 76 76 152
Capitalised development 76 55 131
Total R&D spend (NOK millions) 152 131 283
R&D spend in % of annual revenue and other income 17% 24% 20%
At Nel, being “number one by nature” will always be our
strategic ambition, and consistent R&D is necessary to
maintain and develop this position further. The technology
portfolio includes several development programs for current
and future generations of electrolysers.
Nel has an active IP protection strategy and has more than
100 active patents. Nel’s IPR strategy is managed and further
developed by a Nel IPR committee that works across the
organization and meets bi-weekly.
ELECTROLYSER
The Research and Development (“R&D”) team is the steward
of the product portfolio working to implement an eco-design
and the highest technology and safety standards. Electrolysers
can have increased acceptance in the climate transition if
achieving optimal utilization of physical space, and reduced
complexity on commission and transportation of equipment.
In 2023, Nel announced the development of a pressurized
alkaline technology with potential to unlock improvements to
critical indicators of stack cost, stack efficiency and a simplified
design. In the Proton Membrane division, the partnership
with General Motors continues to be a contributor to the
development of a new cell stacks series with improvements
on production efficiency, equipment durability and
consequential reduction of Levelized Cost of Hydrogen
(“LCOH”). The partnership was designed with a series of seven
milestones of which two of them were achieved in 2023, and
further expected to be achieved in 2025.
CIRCULAR ECONOMY
Nel has conducted analysis of eco-design in current products
and products under development. The analysis includes the
end-of-life treatment and recyclability of significant bill of
material items. Nel’s Alkaline technology is an electrolyser
consisting of nickel-coated steel plates. The nickel-coated
steel plates can be recycled. Nel’s PEM electrolyser contains of
platinum and iridium, both which can be recycled end-of-life.
All Nel’s electrolysers are designed for a lifetime of 7 years or
above depending on operational pattern. The surrounding
plant has a longer lifetime. Customers will therefore replace
stacks that reach the end of their economic life with new or
refurbished stacks or extend the life with replacing only a few
components depending on operational pattern, wear and
economic considerations. Nel has a history of supporting its
customers with such replacements and repairs across all its
product platforms and continues to develop its after-sales
business.
The concept of “decoupling” has gained significant attention
in recent years as a framework for promoting sustainable
resource management. Decoupling refers to the idea that
economic growth and increasing consumption do not
necessarily have to be accompanied by parallel increases
in resource extraction and the associated environmental
degradation. By making more efficient use of physical
materials, such as steel and other metals, through increased
recycling, it is possible to decouple consumption from
resource use. Recycling plays a key role in this decoupling
effort by reducing the need for resource extraction, requiring
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less energy consumption compared to processing virgin
raw materials, and resulting in lower emissions and other
environmental impacts
Recycling electrolysers is not a unique challenge. Nel provides
guidance to its customers for handling of end-of-life handling
of consumables and equipment. For the alkaline product,
the current assessment is that existing commercially available
recycling and end-of-life handling providers are the best way
of addressing the challenge. For the PEM platform, recycling
of especially Iridium still needs to be developed further. Nel
therefore offers to take back the core components for end-
of-life treatment and recycling. Nel participates in industry
initiatives to improve the material recycling supply chain for
electrolysers.
Innovation and technology targets for 2025:
• 10 % of revenue to be spent on Innovation and
Technology
• Five new innovative ideas and two new patent
applications/trade secrets to be developed in 2025.
EU Taxonomy
SUBSTANTIAL CONTRIBUTION TO
CLIMATE MITIGATION
The EU Taxonomy is the cornerstone of EU’s sustainable
finance framework and an important market transparency
tool to channel capital towards climate-friendly investments.
The Norwegian Parliament resolved to include the EU
Taxonomy Regulation in the EEA Agreement on 29 April
2022. The Norwegian government established the regulation
as part of Norwegian law as of 1 January 2023, which
imply mandatory reporting from the reporting period of
2023. Nel conducted a thorough assessment of revenue,
operational expenditure and capital expenditure to identify
the percentage of its operations aligned (contributing) to the
EU Taxonomy goals and complying with the EU Taxonomy
safeguards. For 2024, Nel decided to disclosure its potential
alignment to the EU Taxonomy before assurance from third
party specialists.
The EU Taxonomy is organized by economic activities where
revenue, operational expenditure and capital expenditure
are assessed if Taxonomy-aligned, Taxonomy-eligible, or
not eligible. The pivotal criteria to qualify the revenue
stream is to have substantial contribution in at least one
of the six environmental objectives listed in the Taxonomy
without cause significant harm to the criteria not addressed.
Moreover, the Taxonomy has safeguards related to human
rights, tax policy and fair competition.
Nel manufacture electrolysers for hydrogen production,
which is classified within EU Taxonomy economic activity 3.2
“Manufacture of equipment for the production and use of
hydrogen”. To achieve the criteria for this activity type, Nel’s
equipment must provide technology where the hydrogen for
the production of which equipment is manufactured complies
with the technical screening criteria
1
resulting in life cycle
GHG emissions lower than 3 tCO2e/tH2. Life-cycle emissions
is defined in the second act as well-to-gate emissions and
emissions from transportation type used for delivery of
hydrogen.
Nel’s electrolyser equipment produces hydrogen from
water electrolysis resulting in nearly nil emissions from the
utilization of the equipment when connected to renewable
energy sources and therefore demonstrating potential to
1 Technical screening criteria in hydrogen economic activity 3.10: The life cycle GHG
emissions savings requirement of 73.4 % [resulting in life-cycle GHG emissions lower
than 3 tCO2e/tH2] and of 70% for hydrogen-based synthetic fuels relative to a fossil fuel
comparator of 94g CO2e/MJ in analogy to the approach set out in Article 25(2) of and
Annex V to Directive (EU) 2018/2001 of the European Parliament and of the Council.
62
EU Taxonomy
the substantial contribution to the requirement of life-cycle
emissions lower than 3 tCO2e/tH2. The GHG emissions in
the production of renewable hydrogen is mainly linked to
the type of energy source used as electricity to operate the
hydrogen production plant and eventual CO2 emitted during
transportation of final goods (e.g., fuel, chemicals, fertilizers)
to end-users. Nel’s technology for electrolysers have nearly
no GHG emissions for hydrogen production and therefore
contributes to climate change adaption providing equipment
that enable hydrogen production without emitting CO2 in the
production process.
In addition, Nel provides engineering services in form of
FEED (“Front-End Engineering Design”) and pre-FEED studies
assisting customers in the development of Engineering,
Procurement and Construction (“EPC”) and Balance-of-Plant
activities for a complete renewable hydrogen plant. Nel
provides FEED studies to projects with installation of Alkaline
or PEM electrolysers. These scopes set the boundaries for
consulting projects with renewable hydrogen production.
Nel concludes that its FEED studies comply with the activity
“
9.1. Engineering activities and related technical consultancy
dedicated to adaptation to climate change
”.
DO NO SIGNIFICANT HARM (“DNSH”)
ANALYSIS
Climate change adaptation
Nel’s manufacturing facilities are in industrial parks with lease
term expiring in between 5 to 7 years. Nel have assessed and
confirmed resilience towards different chronic and extreme
climate hazards and their future development. Nel does not
forecast climate change risks affecting its operation within
this timeframe for its locations. It is also possible to reallocate
the assets and operations, should the risk become material,
to areas with lower climate risk, or negotiation with building
owners to implement climate security measures in accordance
with most recent climate forecast for the lease term. Facilities
located close to the sea have increased risk of flooding in
case the precipitation pattern suffers substantial increase in
the coming years. For now, the precipitation forecast does not
outcome in major risks of flooding, however, Nel has in place
an emergency policy for incident handling in case of an acute
climate catastrophe.
Nel did not identify any significant harm to the climate
change adaptation objective in accordance with the criteria
described in the EU Taxonomy. It is assessed that all relevant
eligible activities comply with the criteria set out in appendix
A to annex I of the Climate Delegated Act. Further reasonable
assurance will be acquired from external specialist during
2025.
Sustainable use and protection of water and marine
resources
Nel has a Wastewater Treatment policy in place aimed to
make the best possible usage of water resources and ensure
that its Wastewater Treatment Plants manage water discharge
within unharmful levels of contamination in line with local
laws, regulations and permits. Nel’s Wastewater Treatment
policy is mentioned in the criteria for “pollution prevention
and control”. Nel’s QHSE team has a thorough process of
water monitoring in place with periodical testing of water
samples in laboratorial analysis.
Nel does not have operational facilities in water-stressed
regions.
Nel did not identify any significant harm to the sustainable
use and protection of water and marine resources objective
in accordance with the criteria described in the EU Taxonomy.
It is assessed that all relevant eligible activities comply with
the criteria set out in appendix B to annex I of the Climate
Delegated Act. Further reasonable assurance will be acquired
from external specialist during 2025.
Transition to a circular economy
Nel’s technologies are developed prioritizing the lifetime of
the equipment, as well as applying state of art techniques
when applying raw materials and resources onto the
manufacturing of equipment. Nel’s electrolysers equipment
have a lifetime estimated between 7-10 years. The estimated
lifetime is factored in Nel’s Research and Development
(“R&D”) process as an important assumption for a net zero
benefit to customers and the environment. Nel is constantly
working to increase the durability and recyclability of its
products.
Nel’s Technology department aims to optimize products for
highest performance efficiency with reduced consumption of
raw materials and minerals, and optimal land utilization. Nel’s
products have steel as its primarily raw material which have
an active market for recycling. Nel encourages customers to
return end-of-life equipment for thorough recycling process
and R&D initiatives on the end-of-life cycle supporting a
circular economy.
Nel did not identify any significant harm to the transition to
a circular economy objective in accordance with the criteria
described in the EU Taxonomy. It is assessed that all relevant
eligible activities comply with the criteria set out in appendix
C to annex I of the Climate Delegated Act. Further reasonable
assurance will be acquired from external specialist during
2025.
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Pollution prevention and control
Nel complies with the environmental laws and regulations
in the countries where its facilities are located, working
to prevent that air, noise, and water pollution can affect
local communities, partners, or its workforce. Nel’s facilities
have local environmental policies for management of
water discharge and waste treatment. Nel’s QHSE teams
implement thresholds below the requirement imposed by
local environmental authorities aimed to preventively identify
deviations in water quality prior major catastrophes. Nel’s
environmental policies require application of best available
techniques to mitigate risks of major disasters in a preventive
manner.
Nel understands that the correct workforce to monitor and
prevent harmful release of pollutants is an important part of
the process to implement the correct environmental policies
and procedures. Nel facilities have an appointed QHSE
director reporting to the management about the compliance
and efficiency of environmental policies. Nel’s Alkaline and
PEM divisions are certified with ISO 14001.
Water discharge points have approval from environmental
authorities before release. Where relevant, Nel has in place a
Wastewater Treatment Plants to manage the water quality prior
the discharge points. Nel’s environmental assessment did not
identify material soil and noise pollution risks, such that could
affect local communities or neighbours outside the industrial
parks where our factories are located. Where Nel operates
chemical baths for production, a policy for air pollution
management is in place ensuring an appropriate process for
air filtering. Nel workforces must work with safety equipment to
protect from loud machinery or hazardous in the workplace.
The waste management process in Nel has in place
procedures to log and dispose waste accordingly to the
waste type. Local QHSE teams have in place procedures
to maximize the recycling of non-hazardous waste. The
management of hazardous waste is outsourced with
environmental certified partners.
Waste Management recommendations are sent to customers,
including classification of substances and mixtures in the
product based on the Classification, Labelling and Packaging
regulations in the EU.
Nel did not identify any significant harm to the pollution
prevention and control in accordance with the criteria
described in the EU Taxonomy. It is assessed that all relevant
eligible activities comply with the criteria set out in appendix
C to annex I of the Climate Delegated Act. Further reasonable
assurance will be acquired from external specialist during
2025.
Protection and restoration of biodiversity and
ecosystems
Nel’s facilities are in industrial parks selected due to their
location outside conservation areas, complying with
environmental laws and regulations. Nel does not operate
in locations within the red list from the International Union
for Conservation of Nature’s Red List of Threatened Species
(“IUCN”) or in natural areas protected by the UNESCO’s
World Heritage list. In addition, the environmental impact
assessment performed by the NGI (“Norwegian Geotechnical
Institute”) have not identified specific risks to biodiversity
and ecosystem in Herøya, Norway. Nel’s factories are in
industrial parks preventively located in areas outside of critical
biodiversity and ecosystems.
Nel did not identify any significant harm the protection
and restoration of biodiversity and ecosystems objective in
accordance with the criteria described in the EU Taxonomy.
It is assessed that all relevant eligible activities comply with
the criteria set out in appendix D to annex I of the Climate
Delegated Act. Further reasonable assurance will be acquired
from external specialist during 2025.
Minimum safeguards
Human Rights
The Norwegian Transparency Act entered into force in
July 2022 to establish and promote enterprises’ respect to
fundamental human rights and decent working conditions.
Nel has in-place a Human Rights Policy reassuring its
commitment to the most established Human Rights
framework, including UN Guiding Principles on Business
and Human Rights and OECD’s guidelines for multinational
enterprises, including the principles of the Declaration of the
International Labour Organization on Fundamental Principles
and Rights at Work and the International Bill of Human Rights,
both in our own operations and supply chain.
Nel’s supply chain teams, with support from the compliance
team, carefully screen suppliers and business partners before
engaging in commercial partnerships. Nel’s integrity due
diligence check is a continuous process aimed to identify risks
and implement suitable measures to prevent adverse impacts
based on the most established Human Right’s frameworks.
The complete list of Human Right’s framework can be found
in the Human Right’s policy available in the Ethics and
Compliance page of Nel’s website.
Nel believes to be compliant with the minimum safeguard
for Human Rights aligned to the EU taxonomy. Further
reasonable assurance will be acquired from external specialist
during 2025.
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EU Taxonomy
Corruption
Nel Anti-Bribery and Corruption Policy sets out requirements
and responsibilities relating to the prevention of bribery
and corruption in Nel’s business dealings. Employees and
representatives are obliged to follow the strictest anti-bribery
and corruption standards when making their business
decisions. Nel does not tolerate corruption in any form, and
we are committed to conduct our business in an honest
and ethical manner in accordance with applicable law. The
purpose of our Anti-Bribery and Corruption Policy is to
prevent bribery and corruption throughout Nel’s business
activities, and it applies to all employees and business
partners working for or on behalf of Nel. To foster a culture
of zero tolerance against bribery and corruption, Nel has in-
place an annual wheel of compliance training’s that includes
modules to increase awareness and prevention in this area.
Nel also have available an ethics hotline and a whistleblowing
channel where internal and external stakeholders can
anonymously report the cases of concern for investigation.
Nel believes to be compliant with the minimum safeguard for
corruption aligned to the EU taxonomy. Further reasonable
assurance will be acquired from external specialist during
2025.
Ta x
Nel has an international presence delivering projects in
Europe, Asia, Africa, and North America. Nel adopts a
responsible approach to taxation implementing its Tax
Policy in compliance with the local tax regulation and where
applicable, aligned with OECD Transfer Pricing guidelines. In
the fiscal year that ended 31 December 2024, Nel did not
operate in tax heavens nor countries where the domestic
legislation is not consistent with the OECD Transfer Pricing
guidelines. Moreover, Nel has a centralized tax accounting
team implementing tax risk strategies and processes aimed
at mitigating the risk of non-compliance with tax legislation
of countries where Nel’s holds employment, revenue, or
operations.
Nel believes to be compliant with the minimum safeguard for
tax aligned to the EU taxonomy. Further reasonable assurance
will be acquired from external specialist during 2025.
Fair Competition
Nel carries out its activities in a manner consistent with all
applicable competition laws and regulations, complying with
the requirements in the jurisdictions of commercial activity.
Nel requires all employees to read and comply with its Code
of Conduct which, inter alia, addresses fair competition
in such a way to foster in the corporate culture the best
behaviour towards business practice. Management prohibits
all type of anti-competitive practices, including agreements
on prices between competitors, bid rigging/market sharing,
or to limit or restrict supply to customers.
Nel believes to be compliant with the minimum safeguard
for fair competition aligned to the EU taxonomy. Further
reasonable assurance will be acquired from external specialist
during 2025.
EU TAXONOMY – ACCOUNTING POLICY
Turnover
EU Taxonomy eligible
Nel is a manufacturer of PEM Electrolysers and Alkaline Water
Electrolysers (collectively “Electrolysers”) for production of
renewable hydrogen. The technology of these equipment
enables the climate mitigation with supply of renewable
hydrogen. These equipment are EU Taxonomy eligible under
activity 3.2 (applying technical screening criteria in 3.10) due
to its substantial contribution to the climate mitigation of
energy-intense industries:
• Manufacture of equipment to produce renewable
hydrogen (“Electrolyser equipment”)
Nel provides consulting hours to design the concept of
renewable hydrogen projects. The income from engineering
consulting hours is covered within EU Taxonomy under activity
9.1
Engineering activities and related technical consultancy
dedicated to adaptation to climate change
dedicated to
adaptation to climate change:
• Engineering consulting hours (“FEED Concept Studies”)
dedicated for renewable hydrogen
EU Taxonomy non-eligible
Nel has not assessed whether related revenue to equipment
sales is eligible within economic activity 3.2, therefore,
reported as non-eligible in 2024.
• Framework termination fee
• Technology licence agreement
Turnover numerator
The turnover numerator has been determined excluding non-
operational activities listed as eligible by the EU Taxonomy.
For the reporting period ended as of 31 December 2024, Nel
scoped out income from government grants for technology
research and development, research study papers and other
income totalling NOK 105 million.
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Proportion of turnover from products or services associated with taxonomy-aligned economic activities
SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA
Absolute
turnover
Proportion
of turnover
Minimal
safe-
guards
Taxonomy
aligned
proportion
of tunover
Category
(enabling
activity)
mNOK %
% % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent E
A: TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
3.2 Manufacture of equipment for production and use of
green hydrogen
1 194 139 994 85,9% 100% - - - - - Y Y Y Y Y Y Y 85,9% E
9.1 FEED Concept Studies
63 013 991 4,5% 4,5% E
Total turnover of Taxonomy-eligible activities
1 257 153 985 90,4% 90,4% 90,4%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-noneligible activities (B)
132 755 015 9,6%
Total (A+B)
1 389 909 000 100 %
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EU Taxonomy
Capital expenditure (CapEx) and operating expenditure
(OpEx)
The EU Taxonomy defines the methods for calculating
Taxonomy-aligned proportions (KPIs). By analogy, Nel
allocates capital and operating expenditure that can be
aligned with EU taxonomy aligned with sales of the activity or
represent individual capital expenditure that is not associated
with an activity intended to be marketed under the delegated
regulation of the EU Taxonomy.
Operating expenditure (OpEx)
The denominator for operating expenditure is determined
with nominal value of the IFRS expenses for research and
development incurred on development of technologies
aligned with the EU Taxonomy, or expenses for building
renovation, short-term lease, maintenance and repair, and
any other direct expenditures relating to the day-to-day
servicing of assets of property, plant and equipment to ensure
the continued and effective functioning of such assets. This
approach scopes out of the analysis expenditures directly
related to the sale of equipment or services and depreciation
of assets to avoid double counting of expenses incurred to
generate income or from expenditure previously reported
within the capital expenditure KPI.
The numerator for operating expenditure includes
expenditure related to assets or processes associated
with Taxonomy-aligned economic activities, including
training and other human resources adaptation needs, and
research and development expenditure not capitalizable
under the IFRS requirements. Nel does not include in the
numerator corporate expenses directly linked to sales of
equipment or services, administrative activities, corporate
expenses, travelling expenses or meals and entertainment.
Although these expenditures have indirect contribution to
the development of technologies and income eligible in
accordance with the EU Taxonomy, Nel understands that
these expenditures may not be allocated to specific assets as
the benefits from administrative efforts are seen pervasively in
the business.
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Proportion of OpEx from products or services associated with taxonomy-aligned economic activities
SUBSTANTIAL CONTRIBUTION CRITERIA DNHS CRITERIA
Absolute
OpEx
Proportion
of OpEx
Minimal
safeguards
Taxonomy
aligned
proportion
of tunover
Category
(enabling
activities)
mNOK % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent E
A: TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxono-
my-aligned)
3.2 Manufacture of equipment for the production and use of
hydrogen
236 484 949 52 % 100 % - - - - - Y Y Y Y Y Y Y 52 % E
9.1 FEED Concept Studies
25 576 179 6 % 100 % - - - - - Y Y Y Y Y Y Y 6 % E
Total OpEx of Taxonomy-eligible activities
262 061 128 58 % 58 % 58 %
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-noneligible activities (B)
191 925 089 42 %
Total (A+B)
453 986 217 100 %
¹ Front-end Engineering Studies for Hydrogen plant projects
68
EU Taxonomy
Capital expenditure (CapEx)
The denominator of the Capital Expenditure KPI covers
additions to Property, Plant and Equipment and intangible
assets (including internally generated intangible assets)
during the financial year considered before depreciation,
amortisation revaluations and impairments. The denominator
includes increases in right-of-use assets for leases accounted
for in accordance with IFRS 16. The denominator covers
additions to tangible and intangible assets resulting from
business combinations. The additions should reconcile to
intangible assets in note 3.1, property, plant and equipment
in note 3.2 and right-of-use assets in note 3.3.
The numerator of the Capital Expenditure KPI equals the
capital expenditure included in the denominator that is
related to assets or processes associated with economic
activities aligned with the EU Taxonomy. The numerator
includes capitalised development expenditures disbursed
on Nel’s taxonomy eligible activities, such as purchase of
production tools and manufacturing equipment for expansion
of production capacity in Herøya, Norway and Wallingford,
United States, and costs capitalised for development and
quality enhancement of product related technologies.
.
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Proportion of CapEx from products or services associated with taxonomy-aligned economic activities
SUBSTANTIAL CONTRIBUTION CRITERIA DNHS CRITERIA
Absolute
CapEx
Proportion
of CapEx
Minimal
safeguards
Taxonomy
aligned
proportion
of tunover
Category
(enabling
activities)
mNOK % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent E
A: TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxono-
my-aligned)
3.2 Manufacture of equipment for the production and use of
hydrogen
645 437 076 96 % 100 % - - - - - Y Y Y Y Y Y Y 96 % E
Total CapEx of Taxonomy-eligible activities
645 437 076 96 % 96 % 96 %
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-noneligible activities (B)
30 302 924 4 %
Total (A+B)
675 740 000 100 %
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RESPONSIBILITY STATEMENT
We confirm that, to the best of our knowledge, the financial statements for the period from 1 January 2024, up to and including
31 December 2024, have been prepared in accordance with applicable accounting standards and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the company, and that the directors’ report includes a fair review of the
development and performance of the business and the position of the company as a whole together with a description of the
principal risks and uncertainties the company faces.
OSLO, 25 FEBRUARY 2025
THE BOARD OF DIRECTORS
Ole Enger Beatriz Malo de Molina Charlotta Falvin
Chair Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Arvid Moss Hanne Blume Tom Røtjer
Board member Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Jens Bjørn Staff Håkon Volldal
Board member CEO
(Electronically signed) (Electronically signed)
72
Corporate governance
5 Board of Directors’ report in relation
to the Norwegian Code of practice
for corporate governance
1. Report on corporate
governance
The Board of Directors (also, the board) and management
of Nel are committed to maintaining high ethical standards
and promoting good corporate governance. The company
believes that good corporate governance builds confidence
among shareholders, employees, partners, customers, and
other stakeholders, and thereby supports maximum value
creation over time. The equal treatment of all shareholders
lies at the heart of the company’s corporate governance
policy.
Nel’s Corporate Governance Report is based on the
Norwegian Code of Practice for Corporate Governance
(“the code” from NUES), dated 17 October 2018 and its
amendments. The code is available on www.nues.no
Observance of the recommendations is based on the “comply
or explain” principle. Nel’s board and management have
resolved to follow the recommendations of the Code to the
extent deemed reasonable in view of the company’s size and
stage of development.
2. Business
Nel ASA’s business purpose is defined in the company’s
Articles of Association, section 3: “The Company’s business is
to conduct business, invest in and/or own rights in production
and sale of hydrogen plants, hydrogen fueling stations, or
other related areas.”
Nel is a leading pure play hydrogen technology company
with a global footprint, developing optimal solutions to
produce, store and distribute hydrogen from renewable
energy. Our hydrogen solutions cover important parts of the
value chain: enabling decarbonization of industries such as
cement, steel and fertilizer production, while also providing
fuel cell electric vehicles with the same fast fueling and
long driving range as fossil-fuelled vehicles - without any
emissions. Nel is committed to create value for shareholders
in a sustainable manner.
3. Capital and dividend
The company’s registered share capital as of 31 December
2024 consisted of 1 671 325 304 shares, including both
outstanding shares and treasury shares, with a par value of
NOK 0.20 per share.
The company has in place a shareholder return policy.
The distribution of dividends and repurchase of shares are
subject to the discretion of the Board of Directors at Nel
ASA. Nel ASA is currently in a growth phase, with substantial
investments directed towards capacity expansions and
organizational development. Considering the company’s
state, shareholder returns in the form of dividends or share
buy-backs are currently not prioritized.
4. Equal treatment of
shareholders and transactions
with related parties
All shares in Nel carry one vote, and the shares are freely
transferable. The company has only one share class, and all
shareholders have equal rights. Existing shareholders are
given priority in the event of share capital increases unless
special circumstances warrant deviation from this principle.
At the annual general meeting on 23 April 2024, the board
was granted authorisation to increase the share capital
with up to NOK 33 426 506 through one or several capital
increases. In addition, a separate authorisation to increase
the share capital of up to NOK 3 342 651 for issue of shares
in connection with incentive programs for employees. The
board has also been granted authorisation to acquire shares
in Nel on behalf of the company, for a total nominal value not
exceeding 9% of the share capital at any given time.
Transactions between the company and related parties,
including members of the board or persons employed by the
company either personally or through companies belonging
to related parties, must be based on terms achievable in
an open, free and independent market, or on a third-party
valuation.
Nel ASA
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Annual report 2024
73
Major transactions with related parties must be approved by
the general meeting.
5. Free transferability
The company’s shares are listed on the Oslo Stock Exchange
under the ticker “NEL” and are freely transferable. The Articles
of Association contain no restrictions on transferability.
6. General meeting
Shareholders can exercise their rights at general meetings,
and the company wants general meetings to be a meeting
place for shareholders and the board. The company will seek
to enable as many shareholders as possible to participate in
general meetings. Meeting documents will be published on
the company’s website no later than 21 days before a general
meeting. The company endeavours to ensure that meeting
documents are sufficiently detailed to enable shareholders to
take a view on all matters to be considered. The deadline for
notifying attendance at a general meeting is set as close to
the meeting as possible.
Shareholders who are unable to participate themselves may
vote by proxy. The proxy form will be designed so that it can
be used to vote on all matters up for consideration, and on
candidates for election.
In 2024, the annual general meeting was held on 23 April and
11.84 percent of the total share capital was represented. The
annual general meeting was conducted digitally, with a live
webcast and electronic voting on each item.
The company encourages board members and nomination
committee to attend general meetings. The external auditors
are also invited to attend.
In accordance with the articles of association, general meetings
are chaired by the board chair if no-one else is elected to do
so. Minutes of general meetings are published in the form of
stock exchange notifications and on the company’s website.
7. Nomination committee
In accordance with Nel’s articles of association, the general
meeting shall establish a nomination committee comprising
of three to five members. These must be shareholders
or representatives of shareholders. The nomination
committee evaluates and proposes board members to the
general meeting and makes recommendations on director
remuneration. No board members or representatives of
company management are members of the nomination
committee. Nomination committee members are elected
for a one-year term. At the general meeting on 23 April
2024, the following persons were elected to the nomination
committee and serve until the 2025 annual general meeting:
• Eivind Sars Veddeng, chair
• Mai-Lill Ibsen, member
• Andreas Poole, member
• Nanna Sjaastad, member
8. Board composition
and independence
The board members and chair of the board are elected by
the general meeting. The board’s composition is designed
both to represent the interests of all shareholders and meet
the company’s need for expertise, capacity, and balanced
decision-making. The board should function as an effective
collegiate body.
The board is elected for a one-year term, and board
members may stand for re-election. The CEO is not a
member of the board. According to its articles of association,
Nel’s board must have between four and seven members.
At the annual general meeting 23 April 2024, Ole Enger, chair
of the board, Hanne Blume, Beatriz Malo de Molina, Charlotta
Falvin, Tom Røtjer, Arvid Moss and Jens Bjørn Staff were all
re-elected to the board.
Each of the board members are considered independent
from the company’s day-to-day management. The board
is qualified to assess the day-to-day management and
significant contracts entered into by the company on an
independent basis.
See also note 7.4 (group) and note 12 (parent company) for
transactions with related parties.
9. The work of the Board
A plan for the boards’ work is prepared every year. The board
has also adopted instructions for the board and CEO, detailing
the work and responsibilities of the board and CEO, respectively.
The board ensures the company’s business is properly organised
and that plans and budgets are prepared. The board’s plans
and rules of procedure ensure the board is kept informed of
the company’s financial position and that the business, asset
management, and accounts are subject to controls.
74
Corporate governance
Nel’s Code of Conduct includes guidelines for how conflicts
of interests that may arise should be handled with. The code
applies to all members of the board and employees of Nel.
The board are not aware of any transactions that were material
between the group and its shareholders, board members,
executive management or related parties in 2024, save any
listed under item 8 independence.
The chair of the board ensures the proper functioning of the
board. The chair of the board leads the board meetings and
prepares board matters in cooperation with the CEO. The CFO
keeps minutes of board meetings, which are approved and
signed by all board members. In addition to ordinary board
meetings, annual strategy meetings are held, devoted to the in-
depth assessment of major challenges and opportunities for the
company. The board manages the company’s strategic planning
and assesses its strategy regularly.
The board evaluates its composition and the board work at
least once per year. The evaluation may also cover the way in
which the board functions, at both individual and group level,
in relation to the objectives that have been set for its work. The
evaluation reports are presented to the nomination committee.
In 2024, the board conducted 12 board meetings with 100%
meeting attendance. The meetings were held at group
headquarters in Oslo, one meeting at the Norwegian subsidiary
and/or virtual meetings due to travel convenience, and also
treated a number of issues by circulation of documents.
The company has an audit committee consisting of 2 members
from the board, which is governed by the Norwegian Public
Limited Liability Companies Act. The audit committee assist
the board in exercising its oversight responsibility with respect
to the integrity of the company’s financial statements, financial
reporting processes and internal controls, risk management,
compliance system and the company’s environmental, social and
governance (“ESG”) reporting. With the broader mandate, the
committee is referred to as Board Audit, Risk and Sustainability
Committee. The members of the audit committee are appointed
by and from the members of the board, and currently consist
of Beatriz Malo de Molina as chair and Charlotta Falvin as
member. Current members are independent of the company’s
management. The audit committee conducted 7 meetings with
100% meeting attendance in 2024.
The company has a remuneration committee, which consist
of 2 members from the board. The committee shall assist the
board in exercising its oversight responsibility, in particular
to compensation matters pertaining to the CEO and other
members of the executive management, compensation issues
of principal importance and strategic people process in the
company, in particular related to succession, recruitment, talent
and diversity and inclusion. The committee currently consist
of Hanne Blume as chair and Ole Enger as member. The
committee has held 4 meeting with 100% meeting attendance
in 2024. The committee was also involved in discussions
related to the recruitment of strategic positions for Nel and key
organisational adjustments through the year.
10. Risk management and
internal controls
Risk management and internal controls are important to
Nel. They enable the company to achieve its strategic
objectives, and are an integral part of management decision-
making processes, the organisational structure, and internal
procedures and systems.
Nel’s enterprise risk management process is value driven
and aims to identify, assess and manage risk factors that
could impact the value of the company. The process is to
mitigate potential damages and loss, and to explore business
opportunities.
The enterprise risk management function has the
responsibility to facilitate the legal and operational risk
management activities and develop risk policies and tools as
well as maintaining an aggregated view of risk exposure. The
function reports to the CFO, with active involvement by Nel’s
General Counsel.
Risk management and internal control requirements have
been evaluated by management and the board, and a set
of appropriate procedures and our established framework
is inspired by the Committee of Sponsoring Organisations
of the Treadway Commission (COSO) ERM framework and
the ISO 31000 risk management standard. The materiality
of each risk factor is determined by assessing the likelihood
and consequence. Risks are evaluated to determine whether
the level is acceptable or unacceptable and to prioritise
those that have the greatest potential to impact our value.
We implement mitigating strategies to ensure that each
risk is optimally managed. Risk mitigation plans are based
on evaluations of the cost of control and potential impacts
relative to the benefits of reducing the risk. The operating
segments are responsible to maintain business continuity
plans. The post-mitigation residual risks are continually
monitored by the operating segments. The mitigation
strategies, residual risks and risk appetite are reviewed and
updated by the executive management during bi-yearly
dedicated business review meetings. The board believes that
expressing the company’s risk appetite within important areas
of its business activity helps to convey how the company
approaches and evaluates risk to investors, customers and
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75
society at large. The audit committee performs ongoing
evaluations of the Company’s Enterprise Risk Management
process.
In this context, emphasis is also given to ensuring that
the company operates in accordance with accepted
ethical guidelines and values, including guidelines on how
employees can communicate matters relating to illegal or
unethical behaviour on the company’s part to the board.
Nel believes that its values and control procedures meet
requirements found within the environmental, social, and
governance domain, and are proportionate to the scope and
nature of its business.
Nel’s regular business activities entail exposure to various
types of risk. The company proactively manages such risks,
and the board regularly analyses its operations and potential
risk factors and takes steps to reduce risk exposure. Nel places
a strong emphasis on quality assurance, and has quality
systems implemented, or under implementation, in line with
the requirements applicable to its business operations.
The full range of risk factors is discussed in more detail in the
notes 6.1-6.4 to the annual accounts.
The company’s financial reporting complies with the laws
and regulations applicable to companies listed on the Oslo
Stock Exchange. The board reviews the company’s financial
position frequently through reporting and reviews at board
meetings and reviews the financial statements at the end of
every quarter. At least once per year, the board assesses the
company’s risk profile by reference to strategic, operational,
and transactional factors.
As a listed company, Nel has a special responsibility relating
to the insider trading rules, the provision of information, and
share trading. The company has guidelines to ensure board
members, senior management, and other insiders comply
with relevant legislation and rules relating to insider trading in
the company’s shares.
11. Board remuneration
Nel’s general meeting determines the remuneration of the
board based on a recommendation by the nomination
committee. Board remuneration must reflect the board’s
expertise and time investment, as well as the complexity
of the business and the fact that Nel is a listed company.
Remuneration takes the form of a fixed annual amount and is
not tied to the company’s performance or share price.
An assessment regarding the independence of the directors
and chair of the board is set out in section 8 above.
The board remuneration for 2024 is outlined in note 7.4 to
the annual accounts.
12. Remuneration of senior
management
The board prepares guidelines on the remuneration of the
company’s senior management. These guidelines, as well as
details of the remuneration packages and incentive schemes of
the CEO and other senior executives, are set out in the note 7.2
to the annual accounts.
The guidelines on the remuneration of senior management
must be submitted to the general meeting. The remuneration
policy was approved by the shareholders at the general
meeting held in 2021. The board considers that the
remuneration paid to senior management reflects market
practice and that the remuneration packages do not include
any unreasonable terms, for example in connection with
resignation or termination of employment.
In accordance with section 6-16b of the Norwegian Public
Limited Liability Companies Act, the board has prepared a
report on salary and other remuneration to the executive
management. The remuneration report for 2024 will be
presented to the general meeting in 2025 for an advisory vote.
The remuneration report will become available during March
2025, on www.nelhydrogen.com.
The shareholdings of executive management are outlined in
note 7.2 (group).
13. Information and
communication
The company publishes a financial calendar on an annual
basis, which includes the dates of general meetings and dates
for the presentation of interim reports. Presentation of the
quarterly reports are broadcasted through webcasts. Press
releases and stock exchange notifications are typically posted
on the company’s website, www.nelhydrogen.com. All stock
exchange notifications are also available at www.newsweb.no.
The company complies with all applicable disclosure laws
and practice, including equal treatment requirements. The
ability to provide information about the company in addition
to published reports is restricted under stock exchange
regulations. Inside information is only released to persons
other than primary insiders when the company considers
it necessary, and then only in accordance with a system of
insider declarations and insider lists. The insider lists are
maintained by the CFO.
76
Corporate governance
Notice to general meetings of shareholders is sent directly
to shareholders with known addresses unless they have
consented to receive these documents electronically. All
information sent to the shareholders is made available on
www.nelhydrogen.com when distributed.
Nel wishes to maintain a constructive, open dialogue with its
shareholders, analysts, and the stock market in general. The
company holds regular presentations for investors, analysts,
and shareholders. The company’s CEO is responsible for
external communication and investor relations. The CEO and
chair of the board are both authorised to speak on behalf of
the company and may delegate their authority in this regard
as they consider appropriate.
14. Company takeovers
In the event of a takeover situation, the company’s board and
management will endeavour to ensure the equal treatment
of shareholders. The board will ensure that shareholders are
given information and time to evaluate any bona fide bid and
will endeavour to provide a recommendation to shareholders
as to whether or not the bid should be accepted. The
board and management will help ensure that there are no
unnecessary disruptions to the business in the event of a
takeover. Moreover, such a situation will be governed by the
provisions applicable to listed companies.
15. Auditor
The external auditor attends the board meeting at which
the annual financial statements are approved. As part of
the approval, the board should at least once a year review
the company’s internal control procedures with the external
auditor, including weaknesses identified by the auditor and
proposals for improvement. The external auditor participates
in all meetings of the audit committee. The auditor presents
an annual audit plan to the audit committee.
The board has adopted guidelines on management’s use of
the auditor for services other than auditing. The Public Audit
Act entered into force on January 1, 2021. Extended tasks
including purchase of non-audit services and follow-up of the
external auditor are considered by the audit committee. Non-
audit services are subject to pre-approval as defined by the
audit committee. The fee payable to the auditor is specified in
note 7.3 to the annual accounts and is categorised under the
items statutory audit, attestation and non-auditing services.
The board submits proposals regarding the fees payable for
the statutory audit to the general meeting for approval.
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77
OSLO, 25 FEBRUARY 2025
THE BOARD OF DIRECTORS
Ole Enger Beatriz Malo de Molina Charlotta Falvin
Chair Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Arvid Moss Hanne Blume Tom Røtjer
Board member Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Jens Bjørn Staff Håkon Volldal
Board member CEO
(Electronically signed) (Electronically signed)
78
6 Consolidated financial statements 2024
Nel group
Nel ASA
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79
Consolidated statement of comprehensive income ...................................................................................................................................... 80
Consolidated statement of financial position as of 31 December .............................................................................................................. 81
Consolidated statement of cash flows ............................................................................................................................................................... 83
Consolidated statement of changes in equity ................................................................................................................................................. 84
Note 1.1 Corporate information ................................................................ ....................................................................................................... 86
Note 1.2 Basis of preparation ............................................................................................................................................................................ 86
Note 1.3 Significant accounting policies......................................................................................................................................................... 87
Note 1.4 Changes in accounting policies ................................................................................................................................ ....................... 88
Note 1.5 Significant accounting judgements and estimation uncertainty ............................................................................................. 88
Note 2.0 Discontinued operation ................................................................ ..................................................................................................... 88
Note 2.1 Revenue from contracts with customers ................................................................................................................................ ....... 94
Note 2.2 Other income ................................................................ ....................................................................................................................... 98
Note 2.3 Segment information ......................................................................................................................................................................... 98
Note 2.4 Raw materials ....................................................................................................................................................................................... 101
Note 2.5 Personnel expenses ............................................................................................................................................................................ 101
Note 2.6 Other operating expenses ................................................................................................................................................................ 104
Note 2.7 Finance income and cost .................................................................................................................................................................. 104
Note 2.8 Income taxes ........................................................................................................................................................................................ 105
Note 2.9 Earnings per share .............................................................................................................................................................................. 107
Note 3.1 Intangible assets ................................................................ .................................................................................................................. 108
Note 3.2 Property, plant and equipment ....................................................................................................................................................... 115
Note 3.3 Leases .................................................................................................................................................................................................... 116
Note 3.4 Investments in associated companies and joint ventures ......................................................................................................... 120
Note 3.5 Non-current financial assets ............................................................................................................................................................. 121
Note 4.1 Inventories ............................................................................................................................................................................................ 122
Note 4.2 Trade receivables ................................................................................................................................................................................. 122
Note 4.3 Prepaid expenses and other current assets.................................................................................................................................. 123
Note 4.4 Cash and cash equivalents ............................................................................................................................................................... 123
Note 5.1 Share capital and shareholders ....................................................................................................................................................... 124
Note 5.2 Long-term debt ................................................................ ................................................................................................................... 125
Note 5.3 Deferred income ................................................................................................................................................................................. 125
Note 5.4 Other liabilities ..................................................................................................................................................................................... 126
Note 5.5 Provisions .............................................................................................................................................................................................. 126
Note 6.1 Operational risk factors ..................................................................................................................................................................... 127
Note 6.2 Financial risk factors ........................................................................................................................................................................... 130
Note 6.3 Market risk factors .............................................................................................................................................................................. 132
Note 6.4 Climate-related risks and opportunities ........................................................................................................................................ 133
Note 6.5 Hedge accounting .............................................................................................................................................................................. 133
Note 6.6 Financial instruments .......................................................................................................................................................................... 136
Note 6.7 Contractual commitments and commitments for future investments ................................................................................. 137
Note 7.1 Composition of the group ................................................................................................................................................................ 138
Note 7.2 Executive management remuneration .......................................................................................................................................... 138
Note 7.3 External audit remuneration ............................................................................................................................................................. 139
Note 7.4 Related parties ..................................................................................................................................................................................... 140
Note 7.5 Events after the balance sheet date ................................................................................................................................ ............... 141
Note 7.6 Going concern ..................................................................................................................................................................................... 141
80
Consolidated financial statements
Consolidated statement of
comprehensive income
(Amounts in NOK thousands) Nel group (01.01-31.12)
NOTE 2024 2023
1
Revenue from contracts with customers
2.1, 2.3
1 389 909 1 349 802
Other income 2.2 105 024 77 341
Total revenue and income
1 494 933 1 427 143
Raw materials 2.4 503 976 715 136
Personnel expenses 2.5 645 586 545 660
Depreciation and amortisation 3.1, 3.2 216 486 170 268
Impairment of tangible and intangible assets 3.1, 3.2 0 1 424
Other operating expenses 2.6 518 313 438 175
Total operating expenses
1 884 361 1 870 663
Operating loss
-389 428 -443 520
Finance income 2.7 132 076 173 755
Finance costs 2.7 -6 833 -300 787
Share of profit (loss) from associates and joint ventures 3.4 0 -3 714
Pre-tax income (loss)
-264 185 -574 266
Tax expense (-income) 2.8 -6 554 -8 162
Net income (loss) from continuing operation
-257 631 -566 104
Net income (loss) from discontinued operation 2.0 13 289 -289 092
Net income (loss) attributable to equity holders of the company
-244 342 -855 196
OTHER COMPREHENSIVE INCOME THAT ARE OR MAY SUBSEQUENTLY BE RECLASSIFIED TO PROFIT OR LOSS (NET OF TAX)
Currency translation differences 92 554 -1 253
Cash flow hedges, effective portion of changes in fair value 6.5 -52 108 -18 504
Cash flow hedges, reclassified 6.5 43 244 34 417
Comprehensive income attributable to equity holders of the company -160 652 -840 536
Earnings per share (NOK) attributable to Nel shareholders 2.9 -0.15 -0.52
Diluted earnings per share (NOK) attributable to Nel shareholders 2.9 -0.15 -0.52
The accompanying notes are an integral part of the consolidated financial statements.
1 The comparative information is restated due to a discontinued operation, refer to note 2.0 for additional information.
Nel ASA
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Annual report 2024
81
(Amounts in NOK thousands) Nel group
ASSETS NOTE 2024 2023
NON-CURRENT ASSETS
Technology 3.1 617 420 631 521
Customer relationship 3.1 0 8 220
Goodwill 3.1 411 753 375 305
Property, plant and equipment 3.2, 3.3 1 664 079 1 305 678
Investments in associates and joint ventures 3.4 100 100
Non-current financial assets 3.5 203 169 159 259
Total non-current assets 2 896 521 2 480 083
CURRENT ASSETS
Inventories 4.1 531 748 703 990
Trade receivables 4.2 700 679 812 407
Contract assets 2.1 24 155 49 767
Other current assets 4.3 275 529 447 342
Cash and cash equivalents 4.4 1 875 580 3 363 431
Total current assets 3 407 691 5 376 937
TOTAL ASSETS 6 304 212 7 857 020
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated statement of
financial position as of 31 December
82
Consolidated financial statements
(Amounts in NOK thousands) Nel group
EQUITY AND LIABILITIES NOTE 2024 2023
EQUITY
Share capital
5.1
334 265 334 265
Treasury shares 5.1 -84 -84
Share premium 5.1 7 598 563 8 661 090
Other capital reserves 5.1 68 647 65 928
Retained earnings 5.1 -3 242 343 -2 998 001
Other components of equity 5.1 218 228 134 538
Total equity
4 977 276 6 197 736
NON-CURRENT LIABILITIES
Deferred tax liabilities 2.8 34 813 38 436
Long-term debt 5.2 0 22 458
Lease liabilities 3.3 215 523 199 136
Deferred income 5.3 69 279 66 243
Other non-current liabilities 5.4 5 263 4 860
Total non-current liabilities 324 878 331 133
CURRENT LIABILITIES
Trade payables
110 742 204 863
Lease liabilities 3.3 44 479 38 067
Contract liabilities 2.1 583 392 715 288
Other current liabilities 5.4 173 795 238 216
Provisions 5.5 89 650 131 717
Total current liabilities
1 002 058 1 328 151
Total liabilities
1 326 936 1 659 284
TOTAL EQUITY AND LIABILITIES
6 304 212 7 857 020
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated statement of
financial position as of 31 December
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Annual report 2024
83
(Amounts in NOK thousands) Nel group
NOTE 2024 2023
1
CASH FLOWS FROM OPERATING ACTIVITIES
Pre-tax income (loss)
-264 185
-574 266
Net income (loss) from discontinued operation 2.0 13 289 -289 092
Adjustments for interest expense 2.7 16 481 15 461
Depreciation, amortisation and impairment 3.1, 3.2 216 486 225 785
Change in fair value equity instruments 2.7 2 650 342 213
Equity-settled share-based compensation expense 2.5 2 766 4 030
Change in provisions 5.5 3 044 -21 723
Change in inventories 4.1 -110 057 -199 395
Change in trade receivables and contract balances 2.1, 4.2 84 123 -262 120
Change in trade payables
-68 382 3 119
Changes in other balances 4.3, 5.4 -137 797 86 320
Net cash flow from operating activities
-241 581 -669 668
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
3.2
-534 230 -573 589
Payments for capitalised technology 3.1 -146 076 -166 242
Purchase of other investments 3.5, 4.3 -137 918 -92 219
Investments in associates and joint ventures 0 -973
Proceeds from sales of other investments 3.5, 4.3 236 314 186 211
Net cash flow from investing activities
-581 910 -646 812
CASH FLOWS FROM FINANCING ACTIVITIES
Interests paid
2.7
-16 481 -15 461
Gross cash flow from share issues 5.1 0 1 609 200
Transaction costs from share issues 5.1 0 -24 696
Dividends paid (spin-off) 2.0 -625 420 -
Payment of lease liabilities 3.3 -23 328 -25 773
Payment of non-current liabilities -759 -1 533
Net cash flow from financing activities
-665 988 1 541 737
Effect of exchange rate changes on cash
1 628 -376
Net change in cash and cash equivalents
-1 487 851 224 881
Cash balance as of 01.01 4.4 3 363 431 3 138 550
Cash balance as of 31.12 4.4 1 875 580 3 363 431
The accompanying notes are an integral part of the consolidated financial statements.
1 2023 has not been restated while Consolidated statement of comprehensive income has been restated due to a discontinued operation, refer to note 2.0 for additional information.
Consolidated statement
of cash flows
84
Consolidated financial statements
(Amounts in NOK thousands) Nel group
SHARE
CAPITAL
TREASURY
SHARES
SHARE
PREMIUM
OTHER
RESERVE
RETAINED-
EARNINGS
CURRENCY
TRANSLATION
DIFFERENCE
HEDGING
RESERVE
TOTAL
EQUITY
Equity as of 31.12.2022 312 665 -84 7 098 186 61 768 -2 142 805 128 512 -8 634 5 449 608
Total comprehensive income -855 196 -1 253 15 913 -840 536
Increase of capital 2023 21 600 1 562 904 1 584 504
Options and share program 4 160 4 160
Equity as of 31.12.2023 334 265 -84 8 661 090 65 928 -2 998 001 127 259 7 279 6 197 736
Total comprehensive income -244 342 92 554 -8 864 -160 652
Increase of capital 2024 0
Options and share program 2 719 2 719
Distribution of shares in Cavendish
Hydrogen ASA (Note 2.0) -1 062 527 -1 062 527
Equity as of 31.12.2024 334 265 -84 7 598 563 68 647 -3 242 343 219 813 -1 585 4 977 276
Consolidated statement
of changes in equity
OSLO, 25 FEBRUARY 2025
THE BOARD OF DIRECTORS
Ole Enger Beatriz Malo de Molina Charlotta Falvin
Chair Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Arvid Moss Hanne Blume Tom Røtjer
Board member Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Jens Bjørn Staff Håkon Volldal
Board member CEO
(Electronically signed) (Electronically signed)
86
Notes to the consolidated financial statements 2024
1.1 Corporate information
Nel ASA (Nel) is a global, dedicated hydrogen company,
delivering optimal solutions to produce, store and distribute
hydrogen from renewable energy. The company is domiciled
in Norway. The company specializes in electrolyser
technology for production of renewable hydrogen. Nel’s
product offerings are key enablers for a renewable hydrogen
economy, making it possible to decarbonize various industries
such as transportation, refining, steel, and ammonia.
The group has two divisions: Nel Alkaline Electrolyser and Nel
PEM Electrolyser.
The ultimate parent of the group Nel ASA (org. no 979 938
799) was formed in 1998, incorporated in Norway. Nel ASA
is a Norwegian public limited liability company listed on the
Oslo Stock Exchange. The group’s head office is in Karenslyst
allé 49, N-0279 Oslo, Norway.
1.2 Basis of preparation
The group’s consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU).
Accounts are based on the principle of historical cost, except
for certain financial instruments, which are measured at fair
value.
The consolidated financial statements are presented in
Norwegian kroner (NOK). The functional currency of Nel ASA
is NOK.
All values are rounded to the nearest thousand, unless when
indicated otherwise. As a result of rounding differences
numbers or percentages may not add up to the total. The
financial statements are prepared based on a going concern
assumption.
The consolidated financial statements were approved by
the Board of Directors and the Chief Executive Officer on
February 25, 2025.
DEFINITION AND APPLYING OF
MATERIALITY JUDGEMENTS IN
PREPARATION OF THESE CONSOLIDATED
FINANCIAL STATEMENTS
These consolidated financial statements aim to provide useful
financial information which increase the understandability of
Nel and its performance. To meet the information needs of
its primary users, Nel apply materi¬ality judgments which
are necessary to meet this objective, and Nel has made such
judgments related to recognition, measurement, presentation
and disclosures. Within these consolidated financial
statements information is considered material if omitting,
misstating or obscuring it could reasonably be expected to
influence decisions taken by primary users based on the
information provided. In practice this will lead to Nel omitting
certain information if it is assessed it will obscure the material
information. The materiality judgments are reassessed at each
reporting date and updated based on changed facts and Nel
specific circumstances.
BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial
statements of the parent company and its subsidiaries as
of 31 December 2024. Consolidation of a subsidiary begins
when the group obtains control over the subsidiary and
ceases when the group loses control of the subsidiary. Control
is achieved if, and only if, the group has power over the
investee, is exposed to, or has rights to, variable returns from
its involvement with the investee, and has the ability to affect
those returns through its power over the investee.
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when
the group has less than a majority of the voting or similar
rights of an investee, the group considers all relevant facts
and circumstances in assessing whether it has power over an
investee, including: i) The contractual arrangement with the
other vote holders of the investee, ii) Rights arising from other
contractual arrangements and iii) The group’s voting rights
and potential voting rights.
The group re-assesses whether or not it controls an investee
if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Assets,
liabilities, income and expenses of a subsidiary acquired or
Notes to the consolidated
financial statements
Nel ASA
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Annual report 2024
87
disposed of during the year are included in the consolidated
financial statements from the date the group gains control
until the date the group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive
income (OCI) are attributed to the equity holders of the
parent of the group. There are no non-controlling interests
in the Group as all subsidiaries are 100 % owned. When
necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with
the group’s accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating
to transactions between members of the group are fully
eliminated upon consolidation.
A change in the ownership interest of a subsidiary, without
a loss of control, is accounted for as an equity transaction.
If the group loses control over a subsidiary, it derecognises
the related assets (including goodwill), liabilities and other
components of equity while any transaction gain or loss is
recognised in the statement of comprehensive income.
FOREIGN EXCHANGE AND CURRENCY
Transactions and balances
Transactions in foreign currencies are converted to functional
currency to the exchange rate on the transaction date.
Exchange rate gains and losses are recognised within ‘finance
cost’ in the profit or loss. Foreign currency monetary items
are translated into functional currency using the balance
sheet closing rates. Non-monetary items that are measured
in terms of historical cost in a foreign currency continue to be
translated using the exchange rate that prevailed at the date
of the transaction. Non-monetary items that are measured
at fair value in a foreign currency are translated using the
exchange rates that prevailed at the date when the fair value
was measured.
All foreign currency translations are recognised in profit or
loss as finance cost except for foreign currency translations
where a hedging relationship exists, and hedge accounting
has been applied. Additional information is provided in note
6.2 and 6.5.
Consolidation of subsidiaries
The individual financial statements of a subsidiary are
prepared in the subsidiary’s functional currency. In preparing
the consolidated financial statements, the statement of
comprehensive income items from the subsidiaries are
converted to NOK using the respective monthly average
exchange rates, while statement of financial position items
is converted using the rate at year-end. Exchange rate gains
and losses are recognised net within Other comprehensive
income and accumulated in Currency translation differences
in ‘Other components of equity’.
STATEMENT OF COMPREHENSIVE
INCOME
The Group present a single statement of ‘Consolidated
statement of comprehensive income’ which comprise all
components of profit or loss, OCI and the comprehensive
income for the period.
STATEMENT OF CASH FLOWS
The Group uses the indirect method for the presentation of
the cash flow statement.
1.3 Significant accounting
policies
Accounting policies and estimate uncertainty are largely
incorporated into the individual notes.
Table of contents for where the significant policies are
elaborated.
Revenue from contracts with customers 2.1Research and development 3.1Goodwill 3.1Property, plant and equipment 3.2Leases 3.3Investment in associates and joint ventures 3.4Inventories 4.1Trade receivables 4.2Impairment of non-derivative financial assets 4.4Government grants 5.3Provisions 5.5Derivative financial instruments and hedge accounting 6.5
88
Notes to the consolidated financial statements 2024
1.4 Changes in accounting
policies
A few amendments to IFRS have been issued and effective
January 1, 2024. These are implemented for the first time in
the current year:
Amendments to IFRS 16 Leases— Lease liability in a sale-and-
leaseback
The amendments to IFRS 16 require a seller-lessee to account
for variable lease payments that arise in a sale-and-leaseback
transaction. Seller-lessees are required to reassess and
potentially restate sale-and-leaseback transactions entered
into since the implementation of IFRS 16 in 2019.
The adoption of the amendments to IFRS 16 did not have
any material impact in the group consolidated financial
statements.
Amendments to IAS 1 Presentation of Financial Statements
— Classification of liabilities as current or non-current and
non-current liabilities with covenants
The group has adopted the amendments to IAS 1 for the
first time in the current year. The group does not have any
liabilities with covenants and therefore, the adoption of this
definition did not have any material impact in the group
consolidated financial statements.
Amendments to IAS 7 Statement of Cash Flows and IFRS
7 Financial instruments: Disclosures — Supplier Finance
Arrangements
The group has no supplier finance arrangements and
therefore, the amendments to IAS 7 and IFRS 7 did not have
any material impact in the group consolidation financial
statements.
1.5 Significant accounting
judgements and estimation
uncertainty
The preparation of financial statements requires management
to make judgements and estimates that influence amounts
recognised in certain accounts for assets, liabilities, income
and expenses. The actual results may deviate from such
assumptions. Estimates and underlying assumptions are
subject to continuous assessment.
JUDGEMENTS
The following are Nel’s accounting policies that involves
significant judgement and complexity which have most
significant effect on the amounts recognised in the
consolidated financial statements, including reference to
where it is discussed:
Revenue recognition 2.1Deferred tax assets 2.8Development costs 3.1Leases 3.3
ASSUMPTIONS AND ESTIMATION
UNCERTAINTY
Revenue recognition 2.1Share-based payments 2.5Impairment of goodwill and intangible assets 3.1
2.0 Discontinued operation
Nel completed the distribution (repayment of paid-in share
capital) and separate listing of Cavendish Hydrogen ASA
(CAVEN) in June 2024. CAVEN and its subsidiaries have
historically been reported as a separate operating segment
within Nel, Nel Hydrogen Fueling. On June 7, 2024, the
shares in CAVEN were distributed to shareholders in Nel ASA.
Shareholders of Nel received one CAVEN share for every 50
shares held in Nel, with rounding to the nearest whole share.
The shares in CAVEN were listed on the Euronext Oslo Stock
Exchange on 12 June 2024.
Following the distribution, Nel’s ownership in CAVEN was
reduced from 100% to 0%. Considering a loss of control, the
CAVEN group is no longer consolidated as part of Nel group
from 7 June 2024. The comparative condensed consolidated
statement of comprehensive income has been restated to
show the discontinued operation separately from continuing
operations.
There was no public offering of shares in CAVEN in
connection with the listing that priced the non-cash dividend.
The fair value based on non-observable market assumptions
of the net assets distributed to the shareholders was NOK 1
063 million (approximately NOK 0.63 of non-cash dividend
distributed per share held in Nel), compared to a book
value of NOK 970 million. A gain from the distribution of
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discontinued operation of NOK 93 million was recognised
in 2024. The cumulative exchange differences related to a
foreign operation that have been included in the foreign
currency translation reserve are reclassified to profit or loss
when the foreign operation is distributed. A total exchange
gain of NOK 51 million has been reclassified from OCI to the
income statement on distribution of the foreign operations in
CAVEN.
RESULTS OF DISCONTINUED OPERATION
(Amounts in NOK thousands) 01.01.-07.06.2024 FULL YEAR 2023REVENUE AND INCOMERevenue from contracts with customers 157 220 331 269Other income 2 084 14 664Total revenue and income 159 304 345 933OPERATING EXPENSESRaw materials 73 048 141 788Personnel expenses 107 605 275 643Depreciation, amortisation and impairment 23 884 54 094Other operating expenses 84 854 130 391Total operating expenses 289 391 601 916Operating loss -130 087 -255 983Finance income 2 590 1 750Finance cost -3 685 -44 036Share of loss from associates and joint ventures 0 0Net financial items -1 095 -42 286Pre-tax income (loss) -131 182 -298 269Tax expense (income) -280 -9 177Results of discontinued operation, net of tax -130 902 -289 092Reclassification of foreign currency translation reserve 51 337 0Gain related to distribution of discontinued operation 92 854 0Net income (loss) from discontinued operation 13 289 -289 092
90
Notes to the consolidated financial statements 2024
CASH FLOWS FROM/(USED IN) DISCONTINUED OPERATION
(Amounts in NOK thousands) 2024 2023CASH FLOW FROM OPERATING ACTIVITIESContinuing operation -82 836 -463 931Discontinued operation -158 745 -205 737Net cash flow from operating activities -241 581 -669 668CASH FLOW FROM INVESTING ACTIVITIESContinuing operation -548 205 -597 734Discontinued operation -33 705 -49 078Net cash flow from investing activities -581 910 -646 812CASH FLOW FROM FINANCING ACTIVITIESContinuing operation -37 109 1 548 962Discontinued operation -3 459 -7 225Dividends paid (spin-off) -625 420 0Net cash flow from financing activities -665 988 1 541 737NET CHANGE IN CASH AND CASH EQUIVALENTSContinuing operation -666 521 486 921Discontinued operation -195 910 -262 040Dividends paid (spin-off) -625 420 0Net change in cash and cash equivalents -1 487 851 224 881Cash flows from discontinued operation includes consolidated cash flows until 7 June 2024.
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EFFECT OF DISTRIBUTION OF THE FINANCIAL POSITION AT THE DATE OF
DISTRIBUTION
(Amounts in NOK thousands) 7 JUNE 2024ASSETSTechnology -114 598Customer relationship -364Property, plant and equipment -131 180Non-current financial assets -11 736Inventories -248 292Trade receivables -78 231Contract assets -2 311Other current assets -38 706LIABILITIESDeferred tax liabilities 721Long-term debt 22 543Non-current lease liabilities 5 501Non-current deferred income 14 352Trade payables 13 394Current lease liabilities 4 467Current contract liabilities 125 570Other current liabilities 42 494Provisions 52 121Net assets and liabilities -344 253Cash distributed -625 420Equity impact -969 673Fair value dividend adjustment 92 854Fair value dividend paid 1 062 527
92
Notes to the consolidated financial statements 2024
ALTERNATIVE PERFORMANCE MEASURES (APMS) FROM DISCONTINUED OPERATION
(Amounts in NOK thousands) 2023Order intake 289 696Order backlog 364 205EBITDA -201 890
EFFECT OF DISTRIBUTION OF THE FINANCIAL POSITION OPENING BALANCE 2024
(Amounts in NOK thousands) ASSETS 2023 Non-current assetsTechnology 97 605 Property, plant and equipment 133 541 Non-current financial assets 11 637 Total non-current assets 242 783 Current assetsInventories 282 299 Trade receivables 80 777 Contract assets 10 325 Receivables group 72 521 Other current assets 29 742 Cash and cash equivalents 92 648 Total current assets 568 311 TOTAL ASSETS 811 094
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EQUITY AND LIABILITIES EquityShare capital 45 666 Share premium 1 728 013 Other capital reserves 35 605 Retained earnings OB (1 247 994)Retained earnings YTD (302 000)TOTAL EQUITY 259 289 Non-current liabilitiesDeferred tax liabilities 1 152 Long-term debt 22 458 Long term debt group 154 768 Non current lease liabilities 6 742 Non current deferred income 15 642 Other non-current liabilities 144 Total non-current liabilities 200 907 Current liabilitiesTrade payables 25 739 Short term liabilities group 87 935 Current lease liabilities 4 951 Current contract liabilities 169 781 Other current liabilities 17 381 Provisions 45 111 Total current liabilities 350 898 TOTAL LIABILITIES 551 806 TOTAL EQUITY AND LIABILITIES 811 094
94
Notes to the consolidated financial statements 2024
Significant accounting judgements – revenue recognitionThe Group applied the following judgements that The other important criterion is that an enforceable right significantly affect the determination of the timing of to payment exists in the contract between the group and revenue from contracts with customers: the customer. Right to payment entails that the group has a right to receive payment from the customer if the contract would be terminated. Upon termination at a certain time, Performance obligationsthe group should be able to recover costs incurred and a In determining whether revenue from a specific contract reasonable margin.can be classified as customised and in turn recognised using a progress-based measurement, several criteria must Determining whether revenue from a contract should be evaluated. The first criterion is related to alternative use. be recognised over time or at point in time could have a Manufacturing a customised product or piece of equipment significant effect on the financial statements and is to some for a specific customer that would require significant cost to extent dependent upon judgements from management. modify to be able to transfer it to another customer, then the contract would likely meet the criteria of no alternative use.
2.1 Revenue from contracts
with customers
The revenue in Nel is from sale of hydrogen electrolyser
equipment including installation, commissioning, and long-
term service agreements. Additionally, Nel earns revenue
from replacement parts and accessories in the aftermarket,
and from engineering studies. Project execution is key in Nel’s
large construction projects.
The group’s revenues result from the sale of goods or services
and reflect the consideration to which the group is and expect
to be entitled. IFRS 15 requires the group to assess revenue
recognition based on a five-step model. For its customer
contracts, the group identifies the performance obligations
(goods or services), determines the transaction price,
allocates the contract transaction price to the performance
obligations, and recognises the revenue when (or as) the
performance obligations are satisfied.
Revenue recognition is determined on a contract-by-contract
basis by determining the terms and performance obligations
given in a specific contract. Based on the specific contract and
its obligations, revenue under IFRS 15 is either recognised at
a point in time or over time, 31% (35%) and 69% (65%) of
revenue in 2024 (2023), respectively. Revenue is recognised
over-time using the method that best depicts the pattern of
the transfer of control over time. The method applied is the
cost-to-cost input method, adjusted as time and goods are
delivered to the customer. Contract costs are expensed as
incurred.
Revenue this year include NOK 54 million from renegotiation
of the Nikola supply agreement, and a milestone was reached
on the technology licensing agreement. Both which had no
expenses direct raw material expenses.
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Estimation uncertainty – revenue recognitionThe Group applied the following estimations that ii) Amountsignificantly affect the determination of the i) timing and ii) Liquidated damages (LDs)amount of revenue from contracts with customers:LDs are pre-defined penalties for breaches of contract. LDs are most commonly used with respect to delay. As i) Timingthe payment to the customer is not in exchange for a distinct good or service that transfers to Nel, LD’s must be Total contract costsaccounted for as a reduction of revenue. If a project does In a customised customer project, Nel uses cost-to-cost not meet the defined milestone in a contract, a provision input method when measuring progress; thus, the total reducing the transaction price is made unless it is highly cost estimates can significantly impact measured progress probable that LD will not be imposed. The estimated LD and revenue recognition. The total project cost comprises provision is highly judgmental. The assessment of the LD estimates on the ability to execute the planned engineering provision is based on experience from similar LD situations and design phase, the availability of skilled resources, in addition to client relationship, contractual position and performance of subcontractors, commodity prices, foreign status on negotiations. Nel estimates variable consideration currency and Nel’s manufacturing capacity, productivity and using the most likely amount.quality.
TYPE OF GOODS OR SERVICES
The group generates revenue from customer contracts
from two principal sources: i) Equipment and projects and
ii) Service and aftermarket. The equipment and projects
sales are generated from both standard and customised
equipment.
Standard equipment
The group recognises revenue at the point in time at which it
satisfies a performance obligation by transferring the control
of a good or service to the customer, generally this upon
agreed incoterms, which is mainly at shipment. The customer
has control of a good or service when it has the ability to
direct the use of and obtain substantially all of the remaining
benefits from the good or service. If customer acceptance of
products is not assured, revenue is recorded only upon formal
customer acceptance.
The point in time measurement basis for standard equipment
has been the main method of recognising revenue in
segment PEM Electrolyser and the aftermarket in the segment
Alkaline Electrolyser.
Customised equipment
Most of Nel’s revenue stems from standard equipment,
however, in certain contracts the customisation required
qualifies customised equipment. Customised equipment
occurs when Nel is creating a good that it cannot sell to
another customer without significant re-work and Nel
would incur significant economic losses to direct the asset
for another use. Such sale of customised equipment is
recognised as revenue over-time if Nel has an enforceable
right to payment for performance completed to date.
Projects
The project contracts typically comprise
• equipment (standard product or customised),
• supervision of installation and commissioning of the
equipment
• engineering services, sold separately or part of the project
Most projects are determined to be a bundle of goods where
all of the components constitute the combined output, i.e.
one performance obligation. The performance obligation is
satisfied over time and Nel recognise revenue over the period
the performance obligation is satisfied, using a cost-to-cost
input method that best depicts the pattern of the transfer of
control over time. The contracts have mainly firm contract
price including clauses for penalties (LDs). Additionally,
contracts usually include service agreement and extended
warranty for a specific period. Both service and extended
warranty are separate performance obligations satisfied over
12 months or more, refer service and aftermarket.
The progress-based measurement of revenue has been
the main method of recognising revenue from electrolyser
projects of large-scale electrolyser systems.
Service and aftermarket
Service and aftermarket comprise operations and
maintenance (O&M), extended warranty, repair, replacement
parts and accessories.
For separately sold operating and maintenance contracts
where the group has agreed to provide routine maintenance
services over a period of time for a fixed price, revenue is
recognised on a straight-line basis over the contract period as
the stand-ready obligation is time elapsed.
96
Notes to the consolidated financial statements 2024
For sales of replacement cell stacks and accessories, revenue is
recognised when performance obligation is satisfied, generally
upon delivery of the replacement parts and accessories.
The following table show the revenue from contracts with customers by type of goods or service:
2024 2023SEGMENTS PEM ALKALINE TOTAL PEM ALKALINE TOTALType of goods or serviceEquipment and projects 315,593 970,461 1,286,054 424,135 796,282 1,220,417Service and aftermarket 64,956 38,898 103,855 50,034 79,351 129,385TOTAL Revenue from contracts with customers 380,549 1,009,360 1,389,909 474,169 875,633 1,349,802Timing of revenue recognitionRevenue recognised at point in time 252,419 181,731 434,150 398,801 79,065 477,866Revenue recognised over time 128,130 827,629 955,759 75,368 796,567 871,935TOTAL Revenue from contracts with customers 380,549 1,009,360 1,389,909 474,169 875,632 1,349,802
Onerous contracts. In the circumstance that the unavoidable
costs directly related to project is expected to exceed the
economic benefits expected to be received under the
contract, the estimated loss on the contract will be recognised
in its entirety in the period when such loss is identified.
Additional information for onerous contracts is disclosed in
note 5.5 ‘Provisions’.
CONTRACT BALANCES
Equipment contracts with a customer will have milestone
payments with variable structures. The contract price will be
invoiced when certain criteria are met. A typical payment
structure could be at the milestones; contract acceptance,
placement of major supplier purchases, prior to delivery/
shipment of equipment and complete installation and
commissioning. The payment structure of the contracts
typically results in advance payments and progress billings
exceed the satisfaction of performance obligations in
progress. Consequently, creating a net contract liability.
In certain circumstances based on the order value, credit
worthiness of geographic location, the group may require
payment in advance of shipment. Expect for performance
requirements, agreed liquidated damages and warranty,
the group does not accept returns of product or provide
customers refunds or other similar concessions.
Contract assets
A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
group performs by transferring goods or services to a
customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned
consideration that is conditional. As of the balance sheet
date, the cumulative costs incurred plus recognised profit
(less recognised loss) on each contract is compared against
the advances and progress billings. Where the cumulative
costs incurred plus the recognised profits (less recognised
losses) exceed advances and progress billings, the balance is
presented as due from customers on construction contracts
within “contract assets”. When the contract assets become
an unconditional right to consideration they are reclassified
and presented separately as trade receivables, usually when
invoices are issued to the customers.
Contract liabilities
A contract liability is the obligation to transfer goods or
services to a customer for which the group has received
consideration (or an amount of consideration is due) from the
customer. If a customer pays consideration before the group
transfers goods or services to the customer, a contract liability
is recognised when the payment is made, or the payment is
due (whichever is earlier). Contract liabilities are recognised as
revenue when the group performs under the contract. Where
advances and progress billings exceed the cumulative costs
incurred plus recognised profits (less recognised losses), the
balance is presented as due to customers on construction
contracts within “contract liabilities”.
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2024 2023CONTRACT CONTRACT CONTRACT CONTRACT CONTRACT BALANCESASSETSLIABILITIES TOTALASSETSLIABILITIES TOTALRights to consideration on contracts in progress381 457 -159 913 221 545 382 621 910 532 1 293 153Less - advances and progress billings -357 303 -423 480 -780 782 -332 854 -1 625 820 -1 958 674TOTAL Contract assets (liabilities) 24 155 -583 392 49 767 -715 288CONTRACT LIABILITIES 2024 2023Balance as of 01.01. -715 288 -672 291Revenue from amounts included in contract liabilities at the beginning of the period 419 690 492 165Billings and advances received not recognised as revenue in the period -460 192 -554 127Discontinued operation 119 764 0Basis adjustment - effect of hedge accounting 52 634 18 966Balance as of 31.12. -583 392 -715 288CONTRACT ASSETS 2024 2023Balance as of 01.01.49 76796 322Transfers from contract assets recognised at the beginning of the period to receivables -35 778 -84 288Increases due to measure of progress in the period 22 175 46 747Revenue recognised in the period from performance obligations satisfied in previous periods -4 312 -5 793 Discontinued operation -10 325 0Revaluation 2 627 -3 221 Balance as of 31.12. 24 155 49 767
Order backlog
The performance obligations in contracts with customers
vary from a few months to 4 years. The order backlog
as of December 31, 2024, was NOK 1 614 million (2023:
NOK 2 093 million). The order backlog in Alkaline and PEM
is NOK 1 290 million and NOK 324 million, respectively. Refer
to the “Alternative performance measures” section for full
definitions of backlog and reconciliations. The transaction
price allocated to the remaining performance obligations is
illustrated in table below:
AS OF 31.12.2024 2025 2026 2027 2028 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations484 893 361 123 380 587 66 586 1 292 189Unsatisfied performance obligations115 408 0 79 503 126 910 321 821TOTAL backlog600 301 361 123 460 090 192 496 1 614 010AS OF 31.12.2023 2024 2025 2026 2027 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations1 469 651 363 735 54 748 0 1 888 135Unsatisfied performance obligations205 323 0 0 0 205 323TOTAL backlog1 674 974 363 735 54 748 0 2 093 458
98
Notes to the consolidated financial statements 2024
2.2 Other income
(Amounts in NOK thousands) OTHER INCOME 2024 2023Government grants4 570 2 953Research and design study reports93 593 69 891Insurance compensation0 4 078Other income6 861 419TOTAL Other income105 024 77 341
Research and design study reports comprise contracts with
Department of Energy in the PEM electrolyser segment. The
performance is delivery of research reports and has been
assessed as not part of ordinary course of business selling
electrolyser equipment. While the income from such services
can increase and decrease based on contracts and has been
somewhat recurring over several years, it does not have the
same characteristics as equipment sale and related services.
Therefore, the income is reported as other income.
Government grants within ‘other income’ SEGMENT COUNTRY 2024 2023Alkaline Norway4 570 2 953TOTAL4 570 2 953Government grants related to assets, amortised4 570 2 953TOTAL4 570 2 953
2.3 Segment information
Nel operates within two operating segments, Nel Alkaline
Electrolyser and Nel PEM Electrolyser. The identification
of segments in the group is made based on the different
products the division offers as well as geographical areas
the divisions have their production facilities and majority of
employees in.
The executive management group is the chief operating
decision maker (CODM) and monitors the operating results
of its operating segments separately for the purpose of
making decisions about resource allocation and performance
assessment. During 2024, the former segment Electrolyser
has been split into PEM Electrolyser and Alkaline Electrolyser.
Although both PEM and Alkaline electrolysers have the
same output, their production relies on different inputs
and production facilities have lines of production entirely
segregated. The disaggregated electrolyser segment is of
relevance to the CODM. Segment performance is evaluated
based on profit or loss and is measured consistently with
profit or loss in the consolidated financial statements.
Billing of goods and services between operating segments
are effected on an arm’s length basis.
NEL ALKALINE ELECTROLYSER
The Nel Alkaline Electrolyser division is a global supplier of
hydrogen production equipment based on alkaline water
electrolysis technology. Nel Alkaline Electrolyser currently has
production facilities in Herøya, Norway.
NEL PEM ELECTROLYSER
The Nel PEM Electrolyser division is a global supplier of
hydrogen production equipment based on PEM water
electrolysis technology. Nel PEM Electrolyser currently has
production facilities in Wallingford, Connecticut, USA.
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2024 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION 1)BASED ON CUSTOMER LOCATION PEM ALKALINE OTHER TOTALNorway1 98334 759 0 36 743United States 155 866 0 0 155 866North America ex United States 8 245 500 262 0 508 507Asia 52 935 142 621 0 195 556Europe ex Norway 95 604 319 380 0 414 984Middle East 9 771 0 0 9 771Africa 1 798 6 544 0 8 341South America 2 136 5 793 0 7 930Oceania 52 210 0 0 52 210TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 380 549 1 009 360 0 1 389 909Other operating income 99 655 3 177 2 192 105 024Operating expenses excluding depreciation, amortisation and impairment -645 088 -885 865 -136 922 -1 667 875EBITDA -164 884 126 672 -134 730 -172 942Depreciation and amortisation-99 045-110 188 -7 253 -216 486Impairment of tangible and intangible assets 0 0 0 0OPERATING LOSS -263 929 16 484 -141 983 -389 428Finance income 354 775 130 947 132 076Finance costs -3 662 -6 572 3 401 -6 833Share of loss from associates and joint ventures 0 0 0 0Tax income (expense) 5 861 0 693 6 554NET INCOME (LOSS) -261 376 10 687 -6 942 -257 631TOTAL ASSETS 1 755 003 2 508 284 2 040 925 6 304 212TOTAL LIABILITIES 404 971 854 859 67 106 1 326 936Capital expenditures 225 506 421 038 646 5441) Other comprises parent company, holding entity, excess values on intangible assets and related depreciation and tax expense (income) derived from the consolidation of the financial statements not allocated to the operating segments.
In 2024, the group recognised revenue from three single
customers which individually each is above 10% of total
revenues. The amounts recognised from the three customers
are NOK 339 million, NOK 145 million and NOK 144 million,
all related to delivery of Alkaline Electrolysers.
In 2023, revenue from single customers above 10% of total
revenues include NOK 430 million in revenues from a single
customer
100
Notes to the consolidated financial statements 2024
(Amounts in NOK thousands) 2023 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION CONTINUING 1)BASED ON CUSTOMER LOCATION PEM ALKALINE OTHER OPERATIONSNorway7 00435 575 0 42 579United States 274 495 469 163 0 743 657North America ex United States 15 180 0 0 15 180Asia 83 783 61 625 0 145 408Europe ex Norway 32 516 296 341 0 328 857Middle East 45 718 0 0 45 718Africa 1 271 11 312 0 12 584South America 7 648 1 616 0 9 264Oceania 6 555 0 0 6 555TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 474 170 875 632 0 1 349 802Other operating income 76 398 943 0 77 341Operating expenses excluding depreciation, amortisation and impairment -680 338 -905 389 -113 243 -1 698 970EBITDA-129 771 -28 814-113 243 -271 828Depreciation and amortisation-90 980-71 000 -8 288 -170 268Impairment of tangible and intangible assets 0 -1 424 0 -1 424OPERATING LOSS -220 751 -101 238 -121 531 -443 520Finance income 400 2 945 170 409 173 754Finance costs -8 096 -23 943 -268 746 -300 785Share of loss from associates and joint ventures 0 0 -3 714 -3 714Tax income (expense) 7 237 0 924 8 161PRE-TAX INCOME (LOSS) -221 210 -122 236 -222 658 -566 104TOTAL ASSETS 1 591 380 2 028 033 3 426 513 7 045 926TOTAL LIABILITIES 475 056 794 575 62 432 1 332 063Capital expenditures 251 811 439 098 0 690 9091) Other comprises parent company, holding entity, excess values on intangi-ble assets and related depreciation and tax expense (income) derived from the consolidation of the financial statements not allocated to the operating segments.
PROPERTY, PLANT AND EQUIPMENT GEOGRAPHICAL AREA 2024 2023Norway 1 147 001 906 172Denmark 0 114 157USA 517 078 282 856South Korea 0 2 493Balance as of 31.12. 1 664 079 1 305 678
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2.4 Raw materials
(Amounts in NOK thousands)2024 2023Raw material 503 355 705 086Freight expense 572 6 714Other consumables 48 3 336TOTAL 503 976 715 136
In addition to products produced internally, Nel also delivers
equipment produced using Nel’s design or sourced based
on a functional design. The ratio of raw material expense to
revenues will depend not only on improvements leading to
lower raw material spend or on the cost price of raw materials
used in production, but also on the share of revenue
generated by equipment sourced from third parties.
2.5 Personnel expenses
(Amounts in NOK thousands)2024 2023Salaries 545 753 442 823Social security tax 67 757 59 008Pension expense 26 710 18 5791)Other payroll expenses 34 925 38 596Capitalised salary to technology development -29 559 -13 346TOTAL 645 586 545 6601) Included here are expenses amounting to NOK 2.7 million (4.2 in 2023) related to the Group’s share option program.
2024 2023Average number of full time employees 423 374Hereof women 90 81
SHARE OPTION PROGRAM UNTIL END OF
2021
Nel compensate employees with share options as part of
a program to incentivize and retain key employees. The
share option program was distributed groupwide until end
of 2021 and granted shares to all employees employed in
the group during 2021 on certain tenure conditions. When
granted, there is only service-time based vesting conditions.
Vesting requires the option holder to still be an employee
in the Group. The share-based payment is equity-settled.
Each option, when exercised, will give the right to acquire
one share in the Group. The options are granted without
consideration. The share option program for all employees
was terminated in 2022 and was replaced by a Short term
incentive (STI) in the form of an annual bonus scheme linked
to employee performance and Nel’s financial performance.
Options granted July 2021:
A total of 7.8 million share options were granted. Pursuant to the
vesting schedule, 40% of the options will vest two years after the
day of grant, and 60% of the options will vest three years after
the day of grant. The exercise price is equal NOK 15.125 per
share based on the average price of the Nel ASA share price the
five trading days before grant date (NOK 14.00) and including
an 8% premium. Gain per instrument is capped at NOK 10.00
maximum per share option. The options that have not been
exercised will lapse 4 years after the date of grant.
Share option program beyond 2022:
All options have only service-time based vesting conditions.
Vesting requires the option holder still to be an employee in
the company. Specifically, options do not vest after the date the
employee serves his or her notice to terminate the engagement
with the company or has been notified in writing of the
termination of employment by the company. The strike price
102
Notes to the consolidated financial statements 2024
is a premium of 8 % over the highest of the closing share price
on grant date and the volume-weighted average price over the
past 5 preceding trading days.
Options granted 2023:
Options were awarded in 2023 based on 2022 employment for
a selection of employees. A total of 1.4 million share options
were granted, with a 3-year vesting period, 5-year expiry and a
cap on gain per option of 10 NOK per share.
Options granted 2024:
Options were awarded in 2024 based on 2023 employment for
a selection of employees. A total of 1.65 million share options
were granted, with a 3-year vesting period, 5-year expiry and a
cap on gain per option of 10 NOK per share.
CEO OPTIONS
The CEO was awarded 500.000 options. Each option vests
after three years of grant and may, subject to continued
employment, be exercised over a two-year period thereafter.
Each option entitles him to acquire one new share of the
Company at an exercise price equal to the listed price at the
date of grant plus 10%. A maximum profit level has been
implemented which limits the accumulated profit for all options
to NOK 25 million, and to NOK 30 per option.
Assumptions, costs and social security provisions
The Group uses the Black-Scholes-Merton option pricing
model at time of grant to determine the impact of stock
option grants in accordance with IFRS 2 - Share-based
payment. The model utilises the following parameters as
input:
• the company’s share price
• the strike price of the options
• the expected lifetime of the options
• the risk-free interest rate equalling the expected lifetime
• the volatility associated with the historical price
development of the underlying share
As all employee options granted are “non-transferable”,
and the gains are taxed with personal income tax (higher),
whereas gains on ordinary shares are taxed with capital gains
tax (lower), it is reasonable to assume that participants tend
to exercise early. Hence estimated lifetime of the options is
expected to be shorter than the time from grant until expiry.
However, exercise patterns are monitored and expected
option lifetime for future grants will reflect exercise behaviour.
To estimate the volatility in the option pricing model
comparable companies have been used. Nel has been
through a rapid development in recent years and the
assumption made at grant was that traded history the
previous years was not the best estimate for the future years.
Hence, volatility input to the Black-Scholes-Merton model is
based on a group of peer companies.
Further the total fair value of the share-based instruments
is amortised over the vesting period of the instrument. IFRS
2 presumes that the fair value of the services expected
to be received is the same as the fair value of the equity
instruments granted at grant date. Therefore, although the
services are recognised over the vesting period, they are
measured only once, at grant date, unless the arrangement is
modified.
Social security tax provisions are accrued on a quarterly basis
and becomes payable at exercise of the options. The social
security tax provisions are estimated based on the gain on the
share-based instruments multiplied with the relevant social
security tax rate.
The total expense recognised for the share-based programs,
excluding social security, during 2024 was NOK 2.7 (4.2)
million. The total social security accruals at the end of the
year are NOK 0.0 (0.0) million (social security costs are zero
because none of the options are in-the-money at the end of
2024). The total intrinsic value of the company’s share-based
instruments is NOK 0.0 (0.0) million as of 31 December 2024.
Key assumptions option pricing model per share option program2024 2023Volatility 65.86% 67.59%Interest rate 3.72% 3.56%Dividend 0.00 0.00
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ESTIMATION UNCERTAINTY - Share-based paymentsEstimating fair value for share-based payment transactions requires determination of the most appropriate evaluation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. The groups’ equity-settled share-based payments are measured at fair value at the grant date.
2)
(amounts in NOK thousands and number of options/shares in thousands)REMAINING SHARE OPTION OPENING CLOSING STRIKE CONTRACTUAL 1)PROGRAMBALANCE GRANTED EXERCISED FORFEITEDBALANCEPRICE VALUE LIFE2020 Share Option Plan7,9890 0 -7,989 0 7.80 - - 2021 Share Option Plan 5,693 0 0 -2,287 3,405 15.13 - 0.64 2023 Share Option Plan 1,220 0 0 -490 730 17.02 - 3.17 2024 Share Option Plan 0 1,650 0 -450 1,200 5.32 - 4.16 2023 CEO 500 0 0 0 500 13.85 - 3.50 2024 CEO 0 500 0 0 500 6.16 - 4.50 TOTAL 15,402 2,150 0 -11,217 6,335SHARE OPTIONS HELD BY MEMBERS OF GROUP MANAGEMENT2)EXPIRY VESTED EXPENSE FOR THE 3) NAME 2023 2024 2025 2026 2027 TOTAL 2025 2026 2027 2028 2029PERIOD Håkon Volldal00 0 500 500 1,000 0 0 0 500 500 694 Kjell Christian Bjørnsen 62 93 0 150 150 455 155 0 0 150 150 176 Marius Løken 0 0 0 0 150 150 0 0 0 0 150 48 Tushar Ghuwalewala 25 38 0 40 50 153 63 0 0 40 50 40 Kai Rune Heggland 18 27 0 40 50 135 45 0 0 40 50 51 Hans Hide 64 96 0 150 150 460 160 0 0 150 150 177 Stein Ove Erdal 64 96 0 150 150 460 160 0 0 150 150 177 Todd Cartwright 0 0 0 0 150 150 0 0 0 0 150 48 Other employees 1,763 1,060 0 200 350 3,373 2,823 0 0 200 350 1,308 TOTAL 1,996 1,410 0 1,230 1,700 6,335 3,405 0 0 1,230 1,700 2,7181) The value of the share options equals share price less strike price, capped at 10.0 for 2021, 2023. 2024 and CEO program.2) All share options are granted, vested and expired at the beginning of March in a given fiscal year, except for share option program 2021 which is August and CEO which is July.3) Cost of period does not include social security. The total social security accruals at the end of the year are NOK 0.0 (0.0) million as none of the options are in-the-money.
Share options program 2020 expired during the period, and
5 191 042 vested options expired during the period without
any payment. Next expiry date is 19 August 2025 for options
granted 2021.
Pensions
The group has defined contribution pension scheme for its
employees. This scheme is funded through payments to
insurance companies. A defined contribution plan is one under
which the group pays fixed contributions to a separate legal
104
Notes to the consolidated financial statements 2024
entity. The group has no legal or constructive obligations to pay
further contributions if the fund does not hold sufficient assets
to pay all employees the benefits relating to employee service
in the current and prior periods. For defined contribution plans,
the group pays contribution to publicly or privately administered
pension insurance plans on an obligatory, contractual or
voluntary basis. The group has no further payment obligations
once the contributions have been paid. The contributions are
recognised as a salary expense when they fall due. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
The parent company and the Norwegian subsidiaries have
pension plans that meet the requirements of the Pension Act
of Norway. The US subsidiary have pension plans that meet
their respective requirements.
2.6 Other operating expenses
(Amounts in NOK thousands) 2024 2023Research and development expenditure41 589 43 264Utilities21 344 23 031Professional fees98 919 84 703Travel expenses24 554 27 106IT and communication costs46 475 25 955Changes in provisions63 450 32 071Repair and maintenance13 724 15 030Premises costs 18 901 22 898Sub supplier services 127 699 62 472Freight19 433 28 387Other expenses42 224 73 256TOTAL Other operating expenses518 313 438 175
2.7 Finance income and cost
(Amounts in NOK thousands) 2024 2023Interest income 127 764 166 850Change in fair value financial instruments 0 592Other 4 312 6 313Finance income 132 076 173 755Interest expense 0 649Interest expense lease liabilities 16 481 14 251Net foreign exchange loss -13 566 -26 547Change in fair value financial instruments 2 650 311 559Other 1 269 875Finance cost 6 833 300 787Net finance income (cost) 125 243 -127 032
The change in fair value financial instruments in 2023 was mainly due to change in fair value of Nel’s shareholdings in Everfuel of
NOK -304 million. The shareholdings in Everfuel were also sold in 2023, and there are limited equity instruments in the group in
2024, therefore limited impact on the financial results.
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2.8 Income taxes
TAX
The tax expense in the statement of comprehensive income
comprises of the tax payable for the period and of the change
in deferred tax. Deferred tax is calculated at the prevailing tax
rate in the respective countries where the parent company and
subsidiaries are tax resident. Deferred tax is calculated based
on temporary differences that exist between accounting and
tax values, as well as any tax loss carry forward at the end of
the financial year. The deferred tax asset is recognised if it is
probable that the company will have a sufficient tax profit to be
able to utilise the tax asset.
Significant accounting judgements - Deferred tax assetDeferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.The group has NOK 2 332 million of tax amounts from tax losses carried forward (NOK 1 818 million in 2023). These losses relate to subsidiaries that have a history of losses, and to some extent may not be used to offset taxable income elsewhere in the group. While the losses do not expire, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward based on its history of losses. Deferred tax assets not recognised in the statement of financial statement amount to NOK 520 million in 2024 (412 in 2023) related to tax losses carry forward.
CALCULATIONS OF THE TAX BASE FOR THE YEAR 2024 2023 RESTATEDIncome (loss) before tax -264 185 -574 266Permanent differences 69 312 402 732Change in temporary differences -170 061 22 220Use of tax losses carried forward -143 689 -127 462The year's taxable income -508 623 -276 776RECONCILIATION OF TAX EXPENSE TO NORWEGIAN NOMINAL STATUTORY TAX RATE 2024 2023 RESTATEDNominal tax rate 22 %22 %Income (loss) before tax -264 185 -574 266Tax this years income (loss), estimated -58 121 -126 339Tax effect of: Tax rates different from Norway 2 863 2 386Permanent differences 10 366 83 904Change in deferred tax -6 554 -8 160Change in not recognized deferred tax assets (tax liabilities) 33 474 38 108Other differences 11 418 1 941Income tax expense -6 554 -8 162INCOME TAX EXPENSE COMPRISE 2024 2023 RESTATEDIncome tax payable00Change in deferred tax -6 554 -8 162Total income tax expense (income) -6 554 -8 162
106
Notes to the consolidated financial statements 2024
TAX EFFECTS OF TEMPORARY DIFFERENCES 2024 2023 RESTATEDTrade receivables and customers contracts-16 989-6 554Intangible assets 1 158 26 524Property, plant and equipment 46 962 23 204Inventories -206 558Accrued warranty -13 217 -11 233Leases -9 755 -8 047Deferred income -17 374 -13 478Other accruals -13 000 -38 506Tax losses carry forward -519 562 -411 854Deferred tax asset, net -515 983 -439 385RECONCILIATION TO STATEMENT OF FINANCIAL POSITION 2024 2023 RESTATEDDeferred tax asset, net -515 983 -439 385Deferred tax asset not recognised in statement of financial position 550 796 477 822Deferred tax liability in the statement of financial position 34 813 38 436CHANGES IN RECOGNISED DEFERRED TAX LIABILITY 2024 2023 RESTATEDBalance as of 01.01. 38 436 45 529Recognised in the income statement -6 554 -8 160Translation differences on deferred taxes 3 652 1 069Discontinued operation -721 0Balance as of 31.12. 34 813 38 436
Table below show net operating losses carried forward by country multiplied with the tax rate, the deferred tax asset from
historical losses not recognised.
TAX LOSSES CARRY FORWARD BY COUNTRY 2024 2023Norway 283 092 240 470United States 236 471 171 385Balance as of 31.12. 519 562 411 854
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2.9 Earnings per share
Earnings per share are calculated by dividing the profit/loss for the year by the corresponding weighted average of the number
of outstanding shares during the reporting period. ‘Diluted earnings per share’ is based on the same calculation as for earnings
per share, but it also considers all potential shares with dilutive effect that have been outstanding during the period. Potential
shares relate to agreements that confer the right to issue shares in future. Options are excluded if their effect would have been
anti-dilutive.
Earnings per share is calculated as profit/(loss) attributable to the equity holders of the parent company divided by the average
number of shares outstanding.
(Amounts in NOK thousands) 2024 2023Net loss attributable to the equity holders of the parent company and for the purpose of basic and diluted shares -257 631 -855 196Basic earnings per shareIssued ordinary shares at 1 January 1 671 325 1 563 325Share options exercised 0 0Share issued 0 108 000Issued ordinary shares at 31 December 1 671 325 1 671 325Effect of weighting (share options exercised and share issued during the year) 0 -19 500Weighted-average number of shares outstanding for the purpose of basic earnings per share 1 671 325 1 651 825Basic earnings per share for loss attributable to the equity holders of the parent company (NOK) -0,15 -0,52Diluted earnings per shareWeighted-average number of shares outstanding for the purpose of basic earnings per share 1 671 325 1 651 8251)Effect of share options on issue 0 0Weighted-average number of shares outstanding for the purpose of diluted earnings per share 1 671 325 1 651 825Diluted earnings per share for loss attributable to the equity holders of the parent company (NOK) -0,15 -0,521) As of 31 December, 2024, 6 335 431 weighted-average options were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive (earnings per share is negative).
108
Notes to the consolidated financial statements 2024
3.1 Intangible assets
RESEARCH AND DEVELOPMENT
Research
Research activities are defined as activities whose purpose is
to generate new technological understanding or knowledge.
Research costs are expensed as incurred.
Development
Capitalised development costs are recognised at historical
cost after the deduction of accumulated amortisations and
impairments. The capitalised value is amortised over the
period of expected future earnings from the related project
on a straight-line basis.
Technology
As an indication of the level of internal technology costs, Nel
currently has 69 and 47 full time employees working directly
with R&D in the Alkaline and PEM division, respectively.
Nel invests in development of large-scale industrialisation of
Electrolyser products.
ALKALINE
In its Alkaline division, Nel prioritizes the development of
a pressurized alkaline Electrolyser targeting 1000Nm3/h
single cell stack to increase product efficiency and safety. In
addition, Nel’s electrolyser divisions initiated the development
of product concepts to larger sized projects meeting
the requirements of a more sophisticated and complex
electrolyser system.
The Alkaline segment has recognised on the statement
of financial position, capitalized technology from internal
development of NOK 311.4 (211.8) million as of 31.12.2024.
PEM
In the Proton Membrane division, the R&D team focused on
the collaboration with General Motors applying the know-
how acquired from the development of fuel cells into the
development of a new electrolyser cell stack series.
The PEM segment has recognised on the statement of
financial position, capitalized technology from internal
development of NOK 104.5 (117.4) million as of 31.12.2024.
Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale• How the asset will generate future economic benefits• Its intention to complete and its ability and intention to use or sell the asset• The availability of resources to complete the asset• The ability to measure reliably the expenditure during developmentTo demonstrate technical feasibility and availability of resources, it should be a high certainty that Nel have the intention and ability to complete. Nel categorise its intention and ability to complete in a matrix with the overarching risk to complete buckets low, medium and high. In the phase of a project where the risk of completing is medium to high, then the development costs are expensed as incurred. A capitalised development project commence amortisation when a succesful pilot is demonstrated. After a succesful pilot, the technology is in the condition necessary for it to be capable of operating in the manner indented by management and enters ‘ramp-up’ stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2024 was NOK 364.7 (318.1) million, of which NOK 136.0 (118.3) million and NOK 228.7 (151.9) million has been capitalised and expensed, respectively.
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USEFUL LIFE, AMORTISATION PLAN
• Technology has a useful life of 3-7 years
• Customer relationship has a useful life of 7-10 years
• Goodwill has indefinite life
CUSTOMER RELATIONSHIP
Customer relationship is acquired through business
combinations. Customer relationship is initially measured at
cost and subsequently amortised over useful life, using the
straight-line method. At period end customer relationship
is recognised at historical cost after the deduction of
accumulated depreciation and impairments.
GOODWILL
Goodwill recognised in the statement of financial positions
has been acquired through business combinations. Goodwill
occurs as the residual in the business combination, being the
excess of the aggregate of the consideration transferred and
any previous interest held, over the net identifiable assets
acquired and liabilities assumed. Goodwill is initially measured
at cost which is net of tax amount.
Subsequent to initial recognition, goodwill is measured at
cost less any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the group’s cash-generating units (CGUs) that are expected to
benefit from the combination, irrespective of whether other
assets or liabilities of the acquire are assigned to those units.
(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALAcquisition cost as of 01.01.2023886 556 99 195 662 485 1 648 237Additions from internal development 163 940 0 0 163 940Additions acquired separately 2 302 0 0 2 302Disposals -34 356 0 0 -34 356Currency effects 22 651 1 039 9 725 33 415Acquisition cost as of 31.12.2023 1 041 094 100 234 672 210 1 813 538Additions from internal development 119 194 0 0 119 194Discontinued operation -210 341 -3 011 -213 352Currency effects 46 194 121 36 448 82 763Acquisition cost as of 31.12.2024 996 142 97 343 708 658 1 802 143Accumulated amortisation and impairment as of 01.01.2023 339 169 77 705 296 905 713 779Amortisation 96 175 14 308 0 110 483Reversed amortisation disposals -34 356 0 0 -34 356Impairment 1 424 0 0 1 424Currency effects 7 161 0 0 7 161Accumulated amortisation and impairment as of 31.12.2023 409 572 92 013 296 905 798 491Amortisation 72 167 7 843 0 80 010Discontinued operation -113 234 -2 513 -115 747Currency effects 10 215 0 0 10 215Accumulated amortisation and impairment as of 31.12.2024 378 721 97 343 296 905 772 970Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Carrying value as of 31.12.2024 617 420 0 411 753 1 029 173
Impairment loss NOK 0.0 (1.4) million, from categories
Technology and Goodwill, is included within “Impairment
of tangible and intangible assets” in profit or loss. The
impairment of technology in 2023 is related to not material
development projects in Alkaline segment.
110
Notes to the consolidated financial statements 2024
Specification of carrying amount
2024(Amounts in NOK thousands) TECHNOLOGY GOODWILL TOTALInternal development415 880 0 415 880Acquired separately35 763 0 35 763Acquired through business combinations165 777 411 753 577 530Carrying value as of 31.12.2024 617 420 411 753 1 029 1732023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development 446 220 0 0 446 220Acquired separately 209 0 0 209Acquired through business combinations185 092 8 220 375 305 568 618Carrying value as of 31.12.2023631 521 8 220 375 305 1 015 046
ESTIMATION UNCERTAINTY - Impairment of goodwill and intangible assetsImpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget and strategy forecasts for the next five years and do not include restructuring activities that the group is not yet committed to or significant future investments which has not commenced that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in this note.
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GOODWILL AND INTANGIBLE ASSETS
WITH INDEFINITE USEFUL LIVES -
IMPAIRMENT CONSIDERATIONS
Goodwill, and CGUs where goodwill has been allocated, are
required to be tested for impairment annually. The group
performed its annual impairment test in December yearly.
Impairment losses are recognised where the recoverable
amount is less than the carrying amount. The group has not
recognised goodwill impairment expense this year.
ANNUAL IMPAIRMENT TEST -
ASSUMPTIONS
CGU
The annual impairment test is performed for all the Group’
Cash Generating Units (CGUs). A CGU is defined as the
smallest group of assets that generates cash inflows
from continuing use that are largely independent of the
cash inflows of other assets or groups thereof. The way
management monitors operations assisted in the judgements
of identifying the CGUs.
The Group’ CGUs are
• Electrolyser Norway and
• Electrolyser US
SPECIFICATION OF ALLOCATED GOODWILL PER CGU 2024 2023Electrolyser US350 389 313 941Electrolyser Norway61 364 61 364Balance as of 31.12.411 753 375 305
Market capitalisation
The group considers the relationship between its market
capitalisation and its book value, among other factors, when
reviewing indicators of impairment. As of 31 December
2024, the market capitalisation of the group was about equal
to the book value of equity, indicating no impairment of
goodwill and impairment of the assets. In 2023 the market
capitalisation was 3 times above the book value of equity,
indicating a decline in value in the last twelve months.
Key assumptions
The calculations of value in use are sensitive to several
assumptions, the following are assessed key assumptions in
the measured value:
• Revenue growth and gross margin
• EBITDA margins
• Discount rate / Weighted average cost of capital (WACC)
Forecast period
For each CGU, a recoverable amount has been measured.
The impairment test has been based on the business and
strategy plans approved by the Board of Directors and
management’s best estimate of cash flows. The recoverable
amount is based on a discounted cash flow model
determined value in use, which are based on the following:
i) the future expectations reflected in the current budget
and strategy over the next 5-year period (forecast period);
and
ii) Terminal value beyond year 2029 applying a growth rate
of 2.0%
Discount rate
Discount rates represent the current market assessment of
the risks, taking into consideration the time value of money
and individual risks of the underlying assets that have not
been incorporated in the cash flow estimates. The discount
rate calculation is based on the specific circumstances of
the group and its operating segments and is derived from
its weighted average cost of capital (WACC). The WACC
considers the cost of debt and equity. The cost of equity
is derived from the expected return on investment by the
group’s investors. The cost of debt is based on the interest-
bearing borrowings the group is obliged to service. Segment
specific risk is incorporated by applying individual beta factors.
The beta factors are evaluated annually based on publicly
available market data. Adjustments to the discount rate are
made to factor in the specific amount and timing of the future
cash flows to reflect a pre-tax nominal discount rate. Pre-tax
nominal discount rate is in the range of 13.9 % to 14.3 %.
112
Notes to the consolidated financial statements 2024
ANNUAL IMPAIRMENT TEST – RESULTS AND SENSITIVITY
The impairment test has been prepared in accordance with IAS 36 impairment of non-financial assets following the discounted
cash flow methodology for value in use within the standard. The cash flows projections relate to the cash-generating unit in
the current condition which means future investments not commenced has not been included in the valuation. It excludes
cash inflows and investments forecasted to meet the market demand before 2030. In addition, the standard encourages a
conservative valuation to ensure that assets are not carried at more than their recoverable amount.
(Amounts in NOK thousands) ELECTROLYSER ELECTROLYSER USNORWAYGoodwill 350 389 61 364Other intangible assets 303 722 300 424Other invested capital 623 555 1 505 216Carrying value 1 277 666 1 867 004Recoverable amount 1 339 079 2 919 817Headroom 61 413 1 052 813Pre-tax nominal discount rate 14,3 % 13,9 %Terminal growth rate 2,0 % 2,0 %
ELECTROLYSER US
Electrolyser US is the Group’ segment for the PEM electrolyser technology. The CGU covers the production and manufacturing of
PEM electrolyser equipment in Wallingford, Connecticut, US. The operations consist of both assembly of electrolyser, marketing
activities and product development.
The table below show the sensitivity analysis for the range of +/-2 percentage points in WACC and +/-4 percentage points in
EBITDA margin.
Sensitivity in headroom(amounts in NOK million) PERCENTAGE POINT CHANGE IN EBITDA MARGIN-4,0%-2,0% 0,0% 2,0% 4,0%-2,0% -264 147 556 965 1 373 -1,0% -444 -81 279 640 999 0,0% -585 -261 61* 384 705 CHANGES IN WACC1,0% -699 -406 -114 177 467 2,0% -792 -524 -259 7 272 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment
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ELECTROLYSER NORWAY
Electrolyser Norway is the Group’ segment for the Alkaline electrolyser technology. The CGU covers the production,
manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Herøya and
Notodden, Norway. The operations consist of both assembly of electrolyser, marketing activities and product development.
The table below show the sensitivity analysis for the range of +/-2 percentage points in WACC and +/-4 percentage points in
EBITDA margin.
Sensitivity in headroom(amounts in NOK million) PERCENTAGE POINT CHANGE IN EBITDA MARGIN-4,0% -2,0% 0,0% 2,0% 4,0%-2,0% 1 003 1 643 2 278 2 911 3 544 -1,0% 479 1 036 1 589 2 140 2 691 CHANGES IN WACC0,0% 71 564 1053* 1 540 2 026 1,0% -253 188 625 1 060 1 495 2,0% -517 -118 277 670 1 063 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.
Additional sensitivities –assumptions
The sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.0%, all else
being equal. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage point:
KEY ASSUMPTION ASSUMPTION CHANGERevenue growth* -41 million -925 millionWACCGross margin** -1,7% -5,7%Free cash flow margin*** -0,4% -4,5%* If revenue assumption in terminal changes with the assumption change, the headroom is zero.**If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.***If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.
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Notes to the consolidated financial statements 2024
Further elaboration to the table above, for the CGU Electrolyser US:
The sensitivity table above shows that if the revenue assumption in terminal year 2030 in the impairment test is reduced by NOK
41 million, the headroom is 0 all other equal.
Additionally, the sensitivity in the impairment test shows that if the gross margin assumption in terminal year 2030 is reduced by
1.7%, the headroom is zero all other equal.
Finally, it shows that if the free cash flow margin assumption in terminal year 2030 is reduced by 0.4%, the headroom is zero all
else equal.
The following tables show the same sensitivities in scenarios where WACC is +/- 1.
KEY ASSUMPTION ASSUMPTION CHANGERevenue growth* 87 million -633 millionWACC +1%Gross margin** 3,6% -3,9%Free cash flow margin*** 0,9% -3,1%Revenue growth* -159 million -1 196 millionWACC -1Gross margin** -6,6% -7,4%Free cash flow margin*** -1,7% -5,8%* If revenue assumption in terminal changes with the assumption change, the headroom is zero.**If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.***If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.
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3.2 Property, plant and
equipment
Property, plant and equipment comprise owned and leased
assets.
Property, plant and equipment are measured using the cost
model; thus, recognised at cost price after deduction for
accumulated depreciation and any impairment. Cost prices
include purchase price and costs directly attributable to
bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended.
The assets are depreciated using the straight-line method
over the expected useful life of the asset. Costs of direct
maintenance on the operating assets are expensed as
incurred. Additional investments and improvements are
added to the asset’s cost price and depreciated in line with
the remaining useful life of the asset.
(Amounts in NOK thousands)OFFICE MACHINES RIGHT-OF-ASSET UNDER AND OTHER PRODUCTION TECHNICAL USE ASSETS CONSTRUCTIONEQUIPMENTEQUIPMENT BUILDINGSINSTALLATIONS(NOTE 3.3) TOTALAcquisition cost as of 01.01.202381 614 107 614 440 535 125 218 12 139 232 833 999 953Additions 482 427 60 420 22 173 3 778 4 791 31 397 604 986Disposals 0 -2 936 0 0 0 0 -2 936Reclassification -5 658 486 5 172 0 0 0 0Remeasurement 0 0 0 0 0 28 661 28 661Currency effects -6 200 4 545 -2 005 6 033 34 1 459 3 866Acquisition cost as of 31.12.2023 552 183 170 128 465 875 135 029 16 964 294 350 1 634 529Additions 362 760 37 321 125 491 1 107 672 29 196 556 546Disposals 0 -116 0 0 0 0 -116Reclassification -604 363 131 001 464 223 0 9 139 0 0Remeasurement 0 0 0 0 0 22 353 22 353Discontinued operation 0 -84 121 -9 638 -96 429 -546 -26 927 -217 660Currency effects 25 550 12 004 13 366 0 0 5 691 56 611Acquisition cost as of 31.12.2024 336 129 266 217 1 059 318 39 707 26 229 324 663 2 052 263Accumulated depreciation as of 0 49 562 82 656 18 001 2 343 61 902 214 46401.01.2023Depreciation 0 29 146 46 866 4 674 826 31 820 113 331Impairment 0 0 360 187 0 0 547Reversed depreciation disposals 0 -2 936 0 0 0 0 -2 936Currency effects 0 1 672 860 911 2 0 3 445Accumulated depreciation as of 0 77 443 130 742 23 774 3 171 93 722 328 85131.12.2023Depreciation 0 20 378 84 187 633 1 544 29 734 136 476Discontinued operation 0 -42 860 -7 317 -19 437 -58 -14 454 -84 127Currency effects 0 3 259 3 725 0 0 0 6 984Accumulated depreciation as of 0 58 219 211 337 4 970 4 656 109 002 388 18431.12.2024Carrying value as of 31.12.2023 552 183 92 685 335 134 111 255 13 793 200 628 1 305 678Carrying value as of 31.12.2024 336 129 207 997 847 981 34 737 21 573 215 662 1 664 079Useful life 3-5 years 3-8 years 30-40 years 15-20 years 2-10 yearsDepreciation plan Straight-line Straight-line Straight-line Straight-line Straight-line
Property, plant and equipment is included in ‘other invested capital’ allocated to the differenct CGU’s. See note 11 for
impairment considerations for other invested capital.
116
Notes to the consolidated financial statements 2024
USEFUL LIFE, DEPRECIATION PLAN
• Office machines and other equipment has a useful life of
3-5 years
• Production equipment has a useful life of 3-8 years
• Buildings has a useful life of 30-40 years
• Technical installations have a useful life of 15-10 years
• Right of use assets has a useful life of 2-10 years
Alkaline Herøya expansion
n 2024, Nel continued executing the expansion at Herøya in
Norway with the opening of an additional 500 MW alkaline
production line, to a total of 1 000 MW capacity. There is no
contractual commitment related to the production lines at
Herøya beyond 2024. Subsequent to 2024, the production at
Herøya is temporarily halted. A re-opening is dependent on
order intake for Alkaline electrolysers.
PEM Wallingford expansion
In 2024, Nel expanded its electrolyser manufacturing facility
in Wallingford, Connecticut. The expansion will bring annual
production capacity towards 500MW in 2025. The carrying
amount for the PEM expansion is NOK 291 million as of 31
December 2024. Total contractual commitments beyond
December 2024 for the PEM expansion are NOK 55 million,
including purchase contracts for all the physical equipment
needed.
Impairment
An assessment of impairment of property, plant and equipment
is made if there is an indication of impairment. If the impairment
test reveals that an asset’s carrying amount is higher than the
recoverable amount, an impairment loss will be recognised.
Property, plant and equipment is included in ‘other invested
capital’ allocated to the respective CGU’s for the annual
impairment test where goodwill is allocated. See note 3.1 for
impairment considerations for other invested capital.
3.3 Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right
to control the use of an identified asset, the Group uses the
definition of a lease in IFRS 16.
AS A LESSEE
At commencement date or on modification of a contract
that contains a lease component, the Group allocates the
consideration in the contract to each lease component based
on its relative stand-alone prices. The Group has not chosen
to follow the practical expedient to account for the lease and
non-lease components as a single component. Non-lease
components are treated separately in other standards than
IFRS 16.
The group recognise a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount
of lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs
incurred. The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement date
to the end of the lease term. In addition, the right-of-use
asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease,
or if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. Refer to
section significant accounting judgements – estimating the
incremental borrowing rate (IBR) for additional information.
Lease payments included in the measurement of the lease
liability comprise the following: i) fixed payments and ii)
variable lease payments that depend on an index, initially
measured using the index or rate as at the commencement
date. The lease liability is measured at amortised cost using
the effective interest method. It is remeasured when there is
a change in future lease payments arising from a change in
an index. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of
the right-of-use asset.
Payments for insurance, property tax and VAT are excluded
from the lease payments amount as they are defined as
variable lease payments.
The Group presents right-of-use assets in ‘property, plant and
equipment’ and the lease liabilities within ‘lease liabilities’,
divided into current and non-current portions.
Short-term leases and leases of low value assets
Nel have elected the practical expedient of treating short-
term leases and low value assets outside the scope of IFRS 16
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Significant accounting judgements - Estimating the incremental borrowing rate (IBR)The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its IBR to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions). The Group determines its incremental borrowing rate by considering various interest rates (risk free rate as 10-year government bonds, and risk premiums) and makes certain adjustments to reflect the terms of the lease, the type of the asset leased and certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).
The group has lease contracts for various items like
manufacturing facilities, offices, warehouse, parking, vehicles
and other equipment used in its operations. Leases of
manufacturing facilities generally have lease terms between
10 and 15 years, while offices, warehouse and parking have
about 5 years and motor vehicles, and other equipment
generally have lease terms between 3 and 5 years. The
Group’s obligations under its leases are secured by the lessor’s
title to the leased assets.
‘Manufacturing facilities’ comprise the Group’s two significant
leases in the manufacturing facilities at Herøya (Alkaline
Norway) and Wallingford (PEM US).
Right-of-use assets(Amounts in NOK thousands)OFFICE, MANUFACTUR-WAREHOUSE MOTOR ING FACILITIESAND PARKINGVEHICLES EQUIPMENT TOTALAs of 01.01.2023124 06144 839 1 608 423 170 931Additions 0 23 756 7 641 0 31 397Remeasurement 7 542 21 013 94 13 28 661Depreciation -14 487 -15 283 -1 913 -137 -31 820Translation difference 875 670 -116 30 1 459As of 31.12.2023 117 990 74 994 7 314 329 200 628Additions 5 137 24 059 0 0 29 196Remeasurement 18 208 4 145 0 0 22 353Depreciation -15 659 -13 905 -170 0 -29 734Discontinued operation 0 -5 368 -6 775 -329 -12 473Translation difference 2 711 2 975 5 0 5 691As of 31.12.2024 (note 3.2) 128 387 86 900 375 0 215 662
From June 2024, the group remeasured the lease term within
the lease agreement of Wallingford (US), as the lease was
extended by 7 years by exercise of options. The extension
was based on an evaluation of Nel’s plan to increase the
production capacity in the United States, including the budget
planned for capital expenditure in 2024 and 2025, and
economic incentives to not reallocate skilled staff and its fixed
assets to a new production facility. Nel has another option to
further extend the lease term beyond May 2031.
As of 31 December 2024, the economic incentives for the
extension due in May 2031 were considered unclear and not
118
Notes to the consolidated financial statements 2024
reasonably certain due to the uncertainties about the size of
the capacity expansion, total investment and location. Nel is
not reasonably certain to exercise such option, and potential
lease payments beyond May 2031 has not been recognised
as right of use assets or lease liabilities.
The remeasurements resulted in an increase of the right-of-
use assets and lease liabilities of NOK 15.0 million in 2024.
Lease liabilities
The table below show the carrying amounts of lease liabilities (both current and non-current portion) and the movements
during the period:
(Amounts in NOK thousands)2024 2023Balance as of 01.01. 237 203 200 615Additions 29 196 31 397Remeasurement 22 353 28 661Accretion of interest 16 481 14 812Lease payments -39 809 -40 585Discontinued operation -11 693 0Translation differences 6 270 2 304Balance as of 31.12. 260 002 237 203Current44 479 38 067Non-current 215 523 199 136Balance as of 31.12.260 002 237 203
Maturity analysis of undiscounted cash flow in lease liabilities:
2025 2026 2027 2028 >2028 TOTAL Lease liabilities 45 726 45 227 40 518 39 871 173 199 344 540
The difference between discounted cash flows and undiscounted cash flows (discount effect) is NOK 84.5 (86.5) million as of
31.12.2024. The discount effect is mainly related to manufacturing facility at Herøya, Norway, with included lease term until 2035
and manufacturing facility in Wallingford, US, with included lease term until 2031.
Reconciliation of liabilities arising from financing activities in statement of cash flows, split in cash flows and non-cash changes.(Amounts in NOK thousands)2024 2023Balance as of 01.01.237 203 200 615Cash flows principal amount-23 328 -25 773Cash flows interests-16 481 -14 812Non-cash changes:Additions and remeasurements51 549 60 058Accretion of interest expense16 481 14 812Discontinued operation-11 693 0Foreign currency effects6 270 2 304Balance as of 31.12.260 002 237 203
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Amounts recognised in profit or loss
(Amounts in NOK thousands)2024 2023Depreciation expense of right-of-use assets-29 734 -31 820Interest expense on lease liabilities-17 710 -16 041Expense relating to leases of low-value assets-146 -241Expense relating to short-term leases, excluding short-term leases of low-value assets-1 953 -885TOTAL amount recognised in profit or loss-49 544 -48 987
Other informationTotal cash outflow for leases as a lessee41 908 41 711Weighted incremental borrowing rate used as discount rate for the measuring of lease liabilities6,6 % 6,7 %
Extension and termination options
The Group has several lease contracts that include extension and termination options. These options are negotiated by
management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs.
Significant accounting judgements - Determining the lease term of contracts with renewal and termination options - Group as a lessee.The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.In general, the renewal periods for leases of manufacturing facilities, offices, warehouse and parking with longer non-cancellable periods (i.e. 6-10 years) are not included as part of the lease term as these are not reasonably certain to be exercised. In addition, the renewal options for leases of motor vehicles are not included as part of the lease term because the Group typically leases motor vehicles for not more than three years and, hence is not exercising any renewal options. The periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.
120
Notes to the consolidated financial statements 2024
Set out below are the material undiscounted potential future
rental payments relating to periods following the exercise
date of extension and termination options that are not
included in the lease term.
2025 2026 2027-2029 >2029Extension options not reasonably certain to exercise0 0 0 67 180Termination options expected to be exercised0 0 0 0TOTAL0 0 0 67 180
AS A LESSOR
The group have no leases as lessor except for sub-lease. All
sub-leases are office space that has been presented as right-
of-use assets as part of the property, plant and equipment.
When considering the lease term of the sub-lease and the
head lease a major part of the economic life of the asset is
retained by the Group. All sub-leases have been classified
as operating leases and the lease payments received is
recognised on a straight-line basis over the lease term as part
of ‘other operating income’.
3.4 Investments in associated
companies and joint ventures
An associate is an entity where the group has significant
influence, but not control or joint control.
A joint venture is an entity where the group has joint control
contractually together with one or several other parties,
whereby the Group has rights to the net assets of the
arrangement, rather than rights to its assets and obligations
for its liabilities.
The group’s investments in its associates and joint ventures
are accounted for using the equity method. They are initially
recognised at cost, which includes transaction costs. The
statement of profit or loss reflects the group’s share of the
profit or loss in equity-accounted investees. Any change in
OCI of those investees are presented as part of the group’s
OCI.
No dividends have been received during 2024 or 2023.
The group is not committed to financing the losses and has
not provided any guarantee of equity-accounted investees’
obligations. This means that if equity in any of the equity-
accounted investees are negative, Nel recognise book value
of shares as NOK 0 at the end of the year, without any
provisions for liabilities.
(Amounts in NOK thousands) ACQUISITION COST CARRYING VALUESCOUNTRY SEGMENT OWNERSHIP TYPE 2024 2023 2024 2023Sagim SAS France Alkaline 37.0% Associate 100 100 100 100SUM associated companies 100 100 100 100TOTAL associated companies and joint ventures 100 100 100 100
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3.5 Non-current financial assets
(Amounts in NOK thousands)2024 2023Investment in equity instruments 0 9 800Long-term investments 203 010 147 053Fair value of derivatives 0 407Prepayments 159 161Other non-current financial assets 0 1 837Balance as of 31.12. 203 169 159 259
LONG-TERM INVESTMENTS
Nel occasionally enters contracts with customers with specific
guarantee clauses that require Nel to purchase certain
performance bonds or advance payment guarantee products
from financial institutions. The products are secured by cash
collateral.
In addition, Nel has some lease agreements which require
deposits in a restricted bank account throughout the lease
term.
Both cash collateral and deposits are assessed as investments
(i.e. not cash or cash equivalents) as the maturity exceeds 3
months. Long-term investments include the investments that
exceed 12 months.
Performance and warranty bonds
NOK 96.3 (66.4) million relates to outstanding irrevocable
letters of credit used as assurance for bid and contract
performance, these letters of credit mature between 31
December 2024 and 31 January 2027. As of 31 December
2024, the customers have drawn NOK 0.0 (0.0) million on the
letters of credit.
Advance payment guarantee
Generally, in the contracts with customers, Nel receives
advance payments. As of 31 December 2024, Nel has NOK
54.3 (9.5) million as cash collateral for irrevocable letters of
credit issued for advance payment guarantees with financial
institutions. As of 31 December 2024, the customers have
drawn NOK 0.0 (0.0) million on the letters of credit.
Lease payments guarantee (deposits) and other
collateral
Deposits for lease payments comprise security for lease
payments throughout the lease terms for cars, office premises
and manufacturing facilities. In addition, collateral for bank
credit lines. As of 31 December 2024, the Group has NOK
44.9 (67.1) million in such deposits.
122
Notes to the consolidated financial statements 2024
4.1 Inventories
Inventories comprises purchased raw materials, work in
progress and finished goods. Obsolescence is considered for
inventories, and write-down is performed on obsolete goods.
Inventories are measured under the weighted-average cost
formula. The cost of each item is determined from the weighted
average of the cost of similar items at the beginning of a period
and the cost of similar items bought or produced during the
period. The average is calculated on a quarterly basis.
(Amounts in NOK thousands)2024 2023Raw material66 842 39 496Work in progress102 787 126 111Finished goods375 919 261 274Allowance for obsolete inventory-13 799 -5 189Discontinued operation0 282 298Balance as of 31.12.531 748 703 990
Inventories are measured at the lowest of cost and net
realisable value less costs to sell. In both 2024 and 2023, all
items of inventories are measured at cost.
The amount of inventories recognised as an expense was
NOK 584.0 (783.0) million during the period.
4.2 Trade receivables
Trade receivables are initially recognised at their transaction
price, i.e. the amount of consideration to which Nel expects to
be entitled for transferring the promised goods or services to
the customer. Trade receivables are subsequently accounted
for at amortised cost and are reviewed for impairment on an
ongoing basis. Trade receivables are generally not discounted.
Trade receivables are presented net of expected credit losses.
Changes in the expected credit loss are recognised within other
operating expenses in statement of comprehensive income.
(Amounts in NOK thousands)2024 2023Receivables from third-party customers777 685 843 964Receivables from a joint venture0 0Receivables from an associate0 0Gross trade receivables 777 685 843 964Allowance for expected credit losses-77 006 -31 557Balance as of 31.12.700 679 812 407
Trade receivables are non-interest bearing and are generally
on terms 30 to 60 days
Movements in the allowance for impairment in respect of
trade receivables
(Amounts in NOK thousands)2024 2023Balance as of 01.01.31 557 2 270Discontinued operation-22 408Net remeasurement of loss allowance67 857 29 287Balance as of 31.12.77 006 31 557
See Note 6.2 on credit risk of trade receivables, which explains
how the group manages and measures expected credit loss
of trade receivables that are neither past due nor impaired.
Nel recognises loss allowances for ‘Expected Credit Loss’
(ECL) on:
a) Financial assets measured at amortised cost; and
b) Contract assets
Loss allowance for trade receivables and contract assets are
always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial
asset has increased significantly since initial recognition and
when estimating ECLs, the Group considers reasonable and
supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment, that
includes forward-looking information.
MEASUREMENT OF ECLs
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to
Nel in accordance with the contract and the cash flows that
Nel expects to receive).
PRESENTATION OF ALLOWANCE FOR
ECL IN THE STATEMENT OF FINANCIAL
POSITION
Loss allowances for financial assets measured at amortised
cost are deducted from the gross carrying amount of the
assets.
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4.3 Prepaid expenses and other current assets
(Amounts in NOK thousands)2024 2023VAT net receivable32 034 41 623Short-term investments2 260 24 013Prepayments230 731 214 855Other current assets7 052 145 456Fair value of derivatives3 451 21 396Balance as of 31.12.275 529 447 342
SHORT-TERM INVESTMENTS
Performance and warranty bonds, advance
payment guarantee and lease payments
guarantee (deposits)
Guarantees are included as short-term investments with
NOK 2.3 (24.0) million. This is the short-term equivalent
to the long-term investments, see note 3.5 for additional
information.
4.4 Cash and cash equivalents
Cash and cash equivalents include cash, bank deposits and all other monetary items due within three months or less.
(Amounts in NOK thousands)2024 2023Cash and cash equivalents1 856 388 3 347 803Restricted bank deposits for employees' withheld taxes at 31.1219 193 15 628Balance as of 31.12.1 875 580 3 363 4312024 2023Norwegian Kroner 1 831 126 3 096 630US Dollars 55 827 132 411Danish Kroner -7 316 57 406Swedish Kroner -26 275 5 557Euro 10 835 54 429GB Pounds 11 379 11 174Korean Won 0 5 815Polish Zloty 6 9Balance as of 31.12. 1 875 580 3 363 431
Cash and cash equivalents are 98% (92%) in the Norwegian Krone (NOK) at the end of 2024. NOK 1 564 million is placed in
30-days locked interest accounts in a portfolio of banks.
124
Notes to the consolidated financial statements 2024
5.1 Share capital and shareholders
SHARE CAPITAL
The share capital comprises the number of shares multiplied by their par value and are classified as equity. Expenses which can
be attributed directly to the issue of new shares or options (less tax) are recognised in equity as a reduction in the proceeds
received.
As of 31 December 2024, the group’s share capital was NOK 334.3 (334.3) million, consisting of 1 671 325 304 (1 671 325 304)
shares each with a par value of NOK 0.20 (0.20).
The parent company has only one share class and no special regulations relating to the shares; thus, one share represents one
vote.
As of 31 December 2024, Nel ASA owns 418 033 treasury shares which are recognised at par value NOK 0.20 within ‘treasury
shares’ as a reduction of share capital and total equity.
SHAREHOLDERS AS OF 31.12.2024 COUNTRY NUMBER OF SHARES OWNERSHIPThe Vanguard Group, Inc. United States 63 343 459 3,79 %BlackRock, Inc. United States 58 407 373 3,49 %Svenska Handelsbanken AB Sweden 30 050 347 1,80 %Storebrand ASA Norway 21 355 002 1,28 %DNB Bank ASA Norway 20 509 252 1,23 %KLP Kapitalforvaltning Norway 20 930 000 1,25 %Mirae Asset Global Investments Co., Ltd. United Kingdom 18 551 741 1,11 %Legal & General Group Plc United Kingdom 17 658 530 1,06 %Folketrygdfondet Norway 17 505 000 1,05 %Montpensier Finance SAS France 16 611 599 0,99 %Van Eck Associates Corp. United States 16 355 528 0,98 %BNP Paribas SA France 10 794 117 0,65 %Deutsche Bank AG Germany 7 836 687 0,47 %SAS Rue la Boetie France 6 795 582 0,41 %Deutscher Sparkassen-und Giroverband eV Germany 6 534 530 0,39 %Swedbank AB Sweden 6 196 169 0,37 %green benefit AG Germany 5 789 841 0,35 %Penserra Capital Management LLC United States 5 781 371 0,35 %Dimensional Holdings, Inc. United States 5 207 156 0,31 %Assicurazioni Generali SpA Italy 4 018 000 0,24 %Total 20 largest shareholders 360 231 284 21,55 %Total remaining shareholders 1 311 094 020 78,45 %Total number of shares 1 671 325 304 100,00 %
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5.2 Long-term debt
(Amounts in NOK thousands) LONG-TERM DEBT - LENDER 2024 2023Discontinued operation 0 22 458Balance as of 31.12. 0 22 458
The reconciliation of lease liabilities arising from financing activities and maturity analysis for lease liabilities are disclosed in note
3.3 leases.
5.3 Deferred income
(Amounts in NOK thousands)2024 2023Government grants69 279 50 601Discontinued operation0 15 642TOTAL deferred income69 279 66 243
GOVERNMENT GRANTS
Government grants are recognised where there is reasonable
assurance that the grant will be received, and all attached
conditions will be complied with. When the grants relate to
an expense item, it is normally recognised as other operating
income on a systematic basis over the periods that the related
costs, for which it is intended to compensate, are expensed.
Grants received that relate to an acquisition or development
of assets has been presented “gross” in Nel’s financial
statements. A gross presentation entails that the grant
received is presented separately as deferred income. The
deferred income is presented as a non-current liability and
is amortised over the useful life of the related asset. The
amortised part of the deferred income is presented as other
operating income in the statement of comprehensive income.
(Amounts in NOK thousands)GOVERNMENT GRANTS 2024 2023As of 31.12. 66 243 64 049Grants received 23 247 9 280Income recognised within 'other income' in 2024 (note 2.2) -4 570 -2 953Discontinued operation -15 642 -9 075Translation difference 0 4 942As of 31.12. 69 279 66 243
The aging schedule shows the remaining governments grants divided in the year the grants was initially received.
DEFERRED INCOME AGING SCHEDULE <2021 2021 2022 2023 2024 SUMGovernment grants as of 31.12.202425 302 12 174 4 489 8 636 18 677 69 279Government grants as of 31.12.202325 302 12 174 4 489 8 636 50 601
The table below show the split of deferred income (government grant) per operating segment.
OPERATING SEGMENT COUNTRY 2024 2023Alkaline Norway 69 279 50 601Discontinued operation Denmark 0 15 642Balance as of 31.12. 69 279 66 243
The group is not aware of any unfulfilled conditions associated with these grants
126
Notes to the consolidated financial statements 2024
5.4 Other liabilities
OTHER CURRENT LIABILITIES
(Amounts in NOK thousands)2024 2023Vacation allowance and other salary related accruals 60 500 58 502Public duties payable 44 462 35 606Other current liabilities 59 596 127 985Fair value of derivatives 9 237 16 123Balance as of 31.12. 173 795 238 216
OTHER NON-CURRENT LIABILITIES
(Amounts in NOK thousands)2024 2023Contingent liabilities 5 263 4 860Balance as of 31.12. 5 263 4 860
5.5 Provisions
PROVISIONS, CONTINGENT LIABILITIES
AND CONTINGENT ASSETS
The group makes provisions when a legal or constructive
obligation exists as a result of past events, it is more likely
than not that a transfer of financial resources will be required
to settle the obligation, and the amount of the obligation
can be reliably estimated. When the group expects some
or all of a provision to be reimbursed, for example, under
an insurance contract, the reimbursement is recognised
as a separate asset, but only when the reimbursement is
virtually certain. When the effect is significant, provisions are
calculated by discounting expected cash flows at a pre-tax
rate that reflects the time value of money and if appropriate
the risks specific to the liability. Increase in provisions as a
result of time passing, is presented as interest expense.
Information regarding significant contingent liabilities
is disclosed. A contingent asset is not recognised, but
information is disclosed if there is a possibility that a
significant advantage will accrue to the group.
(Amounts in NOK thousands)ACCRUED EMPLOYEE SETTLEMENT ONEROUS WARRANTYBENEFITSAND CLAIMSCONTRACTS TOTALAs of 01.01.2023 68 546 21 792 21 762 41 340 153 440Additions 44 902 36 896 0 23 249 105 047Used during the year -40 056 -13 490 -1 000 -37 769 -92 315Reversal of unused provisions -15 131 0 -22 434 -2 441 -40 006Foreign currency translation 1 551 1 261 1 672 1 067 5 551As of 31.12.2023 59 812 46 458 0 25 446 131 717Additions 24 562 26 602 0 7 518 58 682Used during the year -15 721 -22 904 0 -18 818 -57 443Reversal of unused provisions 0 -1 519 0 0 -1 519Discontinued operation -24 355 -14 640 0 -6 164 -45 159Foreign currency translation 1 180 1 517 0 674 3 371As of 31.12.2024 45 478 35 515 0 8 657 89 650
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ACCRUED WARRANTY
The groups warranty to customers is limited to replacement
parts and services and generally expires one year from the
date of shipment or contract completion. Such warranties are
limited in time, for most products not exceeding 12 months.
Warranty is based on both contractual commitments and
caused by liability under background law.
Estimated warranty obligations are recorded in the period in
which the related revenue is recognised or when a project
is installed or commissioned. The group quantifies and
records an estimate for warranty related costs, which is
principally based on historical experience. The accounting
for warranties requires the Group to make assumptions
and apply judgments when estimating product failure rates
and expected material and labour costs. The group adjusts
accruals as warranty claim data and historical experience
warrant. If actual results are not consistent with the
assumptions and judgments used to calculate the warranty
liability because either failure rates or repair costs differ from
the groups assumptions, the group may be exposed to gains
or losses that could be material. Accrued warranty provision is
based on experience assumptions and provision comprises a
percentage of revenue from contracts with customers, in the
range of 3% to 5%.
EMPLOYEE BENEFITS
Nel has short term incentive bonuses in place for all
employees. The provision for bonus incurred in 2024 to be
finally measured and paid in 2025 is 35.5 NOK (46.5) million.
In addition, the employee benefits include provision for
social security on stock options for social security payable
in Norway, calculated at the intrinsic value at year end. The
provision fluctuates with the number of active options, timing
of exercise and Nel ASA share price. See note 2.5 for further
information on share option program.
SETTLEMENT AND CLAIMS
Settlement and claims comprise disputes, claims and fines
where cash outflow is assessed probable (more likely that
not to occur). At the end of 2024, Nel have no provisions for
settlement and claims.
Nel ASA is one of three corporate defendants in a law suit
initiated by Iwatani Corporation of America. The matter is
currently in an early stage of the discovery phase which is
expected to continue throughout 2025. Nel has so far seen a
limited amount of basis for the different claims, including but
not limited to evidence and witness statements. A potential
court case is expected at the earliest in the second half
of 2026. Nel and the other defendants strongly reject the
allegations made in the law suit. Based on the facts of the
matter, the chance of the future event occurring is remote to
reasonable possible. Nel has currently not made any provision
related to the claim.
ONEROUS CONTRACTS
An onerous contract is a contract in which the unavoidable
costs (i.e. the lower of the cost of fulfilling the contract and
any compensation or penalties arising from failure to fulfil it)
exceed the economic benefits expected to be received under
the contract. For all contracts that are onerous, the present
obligation under the contract is recognised and measured as
a provision.
6.1 Operational risk factors
OBJECTIVES, POLICIES AND PROCESSES
FOR MANAGING CAPITAL
The group’s objective is to manage the capital structure to
safeguard its ability to continue as a going concern, develop
the business to provide long-term returns for shareholders
and provide benefits for other stakeholders. The group
sets and adjusts the targeted size of capital based on
business strategy, risk and financial market conditions.
The risk assessment includes risk associated with market
development, product development and risk characteristics
of the underlying assets. In order to maintain or adjust the
capital structure, the group may adjust the amount of new
share issue or increase the debt by taking up loans. A failure
to adequately assess the capital structure requirements of
its business or inability to deliver on the targeted capital
structure may have a material adverse effect on Nel.
Technological change
The renewable hydrogen industry in which Nel operates
targets markets where abatement of climate emissions is hard.
While many applications currently have no credible alternative
for large-scale decarbonization other than through the use
of renewable hydrogen, there is a risk that other technologies
may emerge that better addresses climate change. The
renewable hydrogen market relies on continued availability of
renewable energy at acceptable costs. Disruptions in the value
chain for renewable energy assets or an insufficient build-out
rate of renewable energy may significantly delay the market
potential for renewable hydrogen.
Along with the significant market potential of the renewable
hydrogen market comes increased competition. This also
results in increased activity n research and development across
the hydrogen industry. Nel’s electrolyser technology consist
of both Alkaline and PEM. Currently, Nel’s Alkaline technology
platform presents the advantage of having the better solution
128
Notes to the consolidated financial statements 2024
for large scale installations based on lowest cost and the
highest efficiency. Nel’s PEM technology platform has the
advantage of being more compact and easier to integrate
into turnkey deliveries and having a dynamic response suitable
for intermittent operation, making it a better solution for
small- and mid-sized installations. Both technology platforms
require continued development and cost reduction efforts to
become commercially viable in large market segments without
government incentives.
It is a risk that one or both of the existing technologies in Nel
becomes obsolete, or that competitors develop fundamentally
better versions of PEM or Alkaline technology. In addition,
Nel continuously monitors the developments and possibilities
of a disruptive technology emerging. Today, Anion Exchange
Membrane (AEM) and Solid Oxide (SOEL) represent possible
disruptors. While all technologies can potentially co-exist, the
competing technology and sharing market potential, including
the required investment in new technology constitutes a
material risk for Nel.
There are risks associated with technological change, both
related to technology elements within the field of hydrogen as
well as technology elements outside the field of hydrogen that
potentially could make renewable hydrogen less relevant for
the future.
If any of these circumstances materialize in a negative direction,
it may have a significant adverse effect on the group’s business,
prospects, financial results or results of operations.
Expansion risk
The uneven pace of Nel’s anticipated expansion in facilities,
staff and operations may place serious demands on the
group’s managerial, technical, financial, and other resources.
The organisation is currently relatively small and there is no
guarantee that the group will be able to build a capable
organisation at a speed that is required to meet the demands
of its customers or potential customers. Nel’s failure to manage
its growth effectively or to implement its strategy in a timely
manner may significantly harm its ability to achieve profitability.
Dependence of third parties in manufacturing
The group’s electrolyser manufacturing operations rely
on external subcontractors and suppliers of services and
goods. This operating model inherently contains a risk to
the group’s ability to deliver to customers, its goodwill and
branding. If suppliers fail to deliver or to meet agreed or
generally accepted standards in areas such as environmental
compliance, human rights, labor relations and product quality,
this could have a significant adverse effect on the group’s
business, prospects, financial results and results of operations.
The company aims at addressing reputational risk through
supplier selection. The majority of the external spending is
directed towards large industrial companies with full ISO
compliance and smaller vendors that are in compliance with
local legislation. Further, Nel conducts regular quality reviews,
including production site visits for risk assessment.
Nel is dependent on a limited number of third-party
sub-suppliers for its electrolyser equipment. Contract
manufactured or purchased components are designed
and selected in order to reduce the risk of a critical supply
situation. However, if Nel fails to develop or maintain
its relationships with its suppliers or such suppliers are
prevented from supplying, Nel may be unable to deliver on
the agreed time, quality and cost and may experience order
cancellations, additional costs, customer claims and loss of
market share. To reduce the sourcing risk Nel’s supply chain
strategy is to have dual supply chains on all components. Nel
currently has few components with single source. Another
supply chain risk is whether the suppliers can follow the
expected growth of the industry. In addition to making its
current supply chain more robust, Nel is working to facilitate
increasing volumes from important sub-suppliers.
Project risk
Nel participates in large commercial projects. Large
commercial projects are subject to risks of delay and cost
overruns inherent in any large construction project from
numerous factors, including:
• unexpectedly long delivery times for, or shortages of, key
equipment, parts and materials;
• unforeseen design and engineering problems leading to
delays;
• labor disputes and work stoppages;
• HSE accidents/incidents or other safety hazards;
• disputes with suppliers;
• last minute changes to the customer’s specifications;
• adverse weather conditions or any other force majeure
events; and
• inability or delay in obtaining regulatory approvals or
permits
Failure to complete a commercial project on time may result
in delays, renegotiation or cancellation of the contract.
Further, significant delays could have a negative impact on
Nel’s reputation and customer relationships. Nel could also
be exposed to contractual penalties for failure to complete
the project and commence operations in a timely manner,
all of which would aadversely affect Nel’s business, financial
condition and results of operations.
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Key personnel
The successful development and performance of the group’s
business depends on the group’s ability to attract and
retain skilled professionals with appropriate experience and
expertise. Further, if the group loses the service of its senior
management or key personnel, it may not be able to execute
its business strategy. There is no assurance that the group
will be able to attract or retain such personnel on acceptable
terms or at all. Any failure to attract or retain such personnel
could have a material adverse effect on the group’s business
and operations.
Customer risk
Nel’s ability to grow and generate incremental revenue depends
on its ability to successfully acquire new customers, and to
maintain and grow its relationships with existing customers.
There can be no assurance that Nel will be able to secure new
customers, or maintain its relationships with existing customers,
in the future. Further, a number of Nel’s existing and potential
customers are themselves planning substantial growth, and
should these customers fail to succeed with their business
plans or fail to fulfill their contracts with Nel, Nel’s sales to such
customers may be adversely affected, and Nel’s revenues and
results may suffer as a result.
Intellectual property rights
Nel seeks to protect important proprietary manufacturing
processes, documentation and other written materials, and
other intellectual property primarily under patent, trade
secret and copyright laws. It also typically requires employees,
consultants and companies that have access to its proprietary
information to execute confidentiality agreements. The steps
taken by Nel to protect its proprietary information may not
be adequate to prevent misappropriation of its technology.
In addition, Nel’s proprietary rights may not be adequately
protected because:
• third parties may not be deterred from misappropriating
its technologies despite the existence of laws or contracts
prohibiting misappropriation:
• policing unauthorised use of Nel’s intellectual property
is difficult, expensive and time-consuming, and the
group may be unable to determine the extent of any
unauthorised use; and
• the laws and legislation of countries in which the group
sells or plans to sell its products may offer little or no
protection for its proprietary technologies.
Unauthorised copying or other misappropriation of Nel’s
proprietary technologies could enable third parties to benefit
from its technologies without paying for doing so. Any
inability to adequately protect its proprietary rights could
harm the group’s ability to compete, to generate revenue and
to grow its business. This could have a significant adverse
effect on the group’s business, prospects, financial results and
results of operations.
Some of the group’s patents are due to expire within the next
couple of years, which means that the group will lose the
sole right to certain technology in certain areas. Although
the company believes that this will have little effect on the
company’s competitive position, no assurance can be made
to this point.
The group may not obtain sufficient patent protection on
the technology embodied in its products and production
processes, which could significantly harm its competitive
position. Patents may provide only limited protection for its
technology and may not be sufficient to provide competitive
advantages. For example, competitors could be successful in
challenging any issued patents or, alternatively, could develop
similar or more advantageous technologies on their own or
design around the group’s patents. Also, patent protection in
certain countries may not be available, be limited in scope
and/or not be readily enforceable, making it difficult for the
group to effectively protect its intellectual property from
misuse or infringement. Any inability to obtain and enforce
intellectual property rights could have a significant adverse
effect on the group’s business, prospects, financial results and
results of operations. In addition, given the costs of obtaining
patent protection and the sometimes limited potential for
protection, the group may choose not to protect certain
innovations that later turn out to be important. There is also
a general risk that the group receives information subject to
confidentiality agreements, regarding other parties’ know-
how and trade secrets in relation to technology which may
hinder the group from development of similar intellectual
assets.
Adverse publicity and product liability
Product liability claims against the group could result in
adverse publicity and potentially monetary damage. It is
possible that its products could result in injury, whether by
product malfunctions, defects, improper installation or other
causes. The successful assertion of product liability claims
against the group could result in potentially significant
monetary damage, which could have a significant adverse
effect on the group’s business, prospects, financial results and
results of operations.
130
Notes to the consolidated financial statements 2024
6.2 Financial risk factors
The key financial risks the group is exposed to are related to
liquidity, currency, interest rate, and credit risk.
Liquidity risk
Liquidity risk is the potential loss that occurs when the group
fails to fulfil its contractual obligations when they fall due. Nel
is operating in a fast-growing, emerging market, with a long
list of initiatives in many regions. The need to address growth
opportunities ahead of actual market demand, balanced
with the need to conserve cash, is a continual challenge. The
timing of addressing such elements and risks is important.
Moving too fast could result in an unnecessarily high cost
level, with cash requirements beyond the current financing
plan.
However, the group has a strong liquidity position, NOK 1
875.6 million, as per 31.12.2024. The strong cash position
is a good basis for the group’s growth strategy. The group
monitors its risks associated with lack of capital up against the
company’s planned activities.
The group will, if necessary, attempt to raise capital through
private placements, debt financing, partnerships, and
strategic alliances or from other sources. The group may fail
to raise capital on acceptable terms, or not do it at all, and
this can result in a liquidation of the group.
Currency risk
Nel operates internationally and is subject to currency risks
arising from foreign currency transactions and exposures.
As the group presents its consolidated results in NOK, any
change in exchange rates between NOK and its subsidiaries’
functional currencies, primarily with respect to changes
in USD, affects its consolidated statement of income and
consolidated statement of financial position. As the group
expands its operations with projects in new markets the
currency risk exposure increases.
The group is on an overall level managed as a NOK company
for currency risk management purposes with primary focus
on NOK cash flow.
The group’s gross foreign currency risk exposure is significant,
with the majority of revenue and expenses denominated
in foreign currency. The group mitigates the currency risk
exposure by entering into forward currency contracts with
financial institutions. The group has a residual net currency
risk exposure considering hedging which is considered low to
medium.
(Amounts in thousands)PROFIT AND LOSS CHANGES IN EXCHANGE RATE NOK/FOREIGN CURRENCIESNET PROFIT IN VALUE IN VALUE IN FOREIGN CURRENCIESCURRENCYNOK-10% -5% +5% +10%DKK -1 180 -1 840 184 92 -92 -184 USD -6 747 -72 484 7 248 3 624 -3 624 -7 248 SEK -132 471 -134 776 13 478 6 739 -6 739 -13 478 GBP 4 150 57 020 -5 702 -2 851 2 851 5 702 EUR 33 020 383 938 -38 394 -19 197 19 197 38 394 Effect on net income (loss) -23 186 -11 593 11 593 23 186 STATEMENT OF FINANCIAL POSITIONNET RECEIVABLES/LIABILITIES IN FOREIGN CURRENCIESUSD 9 432 107 083 -10 708 -5 354 5 354 10 708 SEK -8 173 -8 413 841 421 -421 -841 GBP 934 13 289 -1 329 -664 664 1 329 EUR 53 528 631 368 -63 137 -31 568 31 568 63 137 Effect on net income (loss) -74 333 -37 166 37 166 74 333 Total effect on Net income (loss) and Equity -97 519 -48 759 48 759 97 519
The table shows the gross foreign currency exposure based
on each entity in the group’s functional currency, before
hedging. Nel’s hedging strategy and designated instruments
are elaborated and disclosed in note 6.5. The figures exclude
translation of intercompany loans in Nel ASA.
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Interest rate risk
The group does not have any interest-bearing long-term
debt. Due to the low amount of debt in the group it is
assessed that a change in interest rates will not have a
material effect on the financial statements.
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. Nel is exposed to credit risk from its
operating activities (primarily trade receivables and contract
assets) and from its financing activities, including deposits with
banks and financial institutions, foreign exchange transactions
and other financial instruments. The carrying amounts of
financial assets and contract assets represent the maximum
credit exposure.
Expected credit loss assessment
The Group uses an allowance matrix to measure the ECLs of
trade receivable from individual customers, which comprise
a very large number of small balances. Loss rates are
calculated using a factor method based on the probability
of a receivable progressing through successive stages of
delinquency to write-off. Roll rates are calculated separately
for exposures in different segments based on the following
common credit risk characteristics - geographic region, age
of customer relationship and type of products purchased.
The following table provides information about the exposure
to credit risk and ECLs for trade receivables from individual
customers as of 31 December 2024 and 2023.
Loss rates are based on actual credit loss experience over
the past two years. These rates are multiplied by a factor to
reflect differences between economic conditions during the
period over which the historical data has been collected,
current conditions and Nel’s view of economic conditions over
the expected lives of the receivables.
WEIGHTED-AVERAGE GROSS CARRYING 12024LOSS RATEAMOUNT LOSS ALLOWANCECurrent (not past due) 0,1 % 186 526 31 775 1-30 days past due 0,2 % 127 316 318 31-60 days past due 0,5 % 4 990 27 61-90 days past due 2,0 % 4 330 89 91 days to one year past due 30,0 % 51 269 15 381 More than one year past due 7,3 % 403 254 29 416 Total 777 685 77 006 9,9 %WEIGHTED-AVERAGE GROSS CARRYING 2023LOSS RATEAMOUNT LOSS ALLOWANCECurrent (not past due) 0,1 % 183 159 184 1-30 days past due 0,2 % 135 484 271 31-60 days past due 0,5 % 127 945 640 61-90 days past due 2,0 % 29 066 581 91 days to one year past due 8,1 % 368 310 29 881 More than one year past due 10,0 % - - Total 843 964 31 557 3,7 %
1 A customer of Nel entered administration in November 2024. A provision for expected credit losses has been recognised at the end of this year, adding to the loss allowance in the current
(not past due) bucket.
132
Notes to the consolidated financial statements 2024
6.3 Market risk factors
Market development risk
Significant markets for renewable hydrogen products or
renewable energy as a major source for hydrogen production
may develop more slowly than the group anticipates. This would
significantly harm Nel’s revenues and may cause Nel to be
unable to recover the expenditure it has incurred and expects
to incur in terms of the development and industrialization of its
products.
Regulatory issues
The group’s operations are subject to numerous environmental
requirements. Such laws and regulations govern, among other
matters, air pollution emissions, wastewater discharges, solid
and hazardous waste management, and the use, composition,
handling, distribution and transportation of hazardous
materials. Many of these laws and regulations are becoming
increasingly stringent. The cost of compliance with these
requirements can be expected to increase over time.
The group’s electrolyser production depends on discharge
permits. From time to time, breaches of the allowed emission
limits set out in such permits may occur. If such limits of the
relevant permits should be exceeded or the permits adjusted
or revoked, this may have a significant effect on the group’s
operations and result, as the group may be ordered to
permanently or temporarily halt production, be subject to fines
and/or need to take on additional costs to undertake corrective
measures.
The group cannot predict the impact of new or changed
laws or regulations relating to health, safety, the environment
or other concerns or changes in the ways that such laws or
regulations are administered, interpreted or enforced. To the
extent that any of these requirements impose substantial
costs or constrain the group’s ability to expand or change its
processes, the group’s business, prospects, financial results and
results of operations could suffer.
The renewable hydrogen industry is in its development phase
and is not currently subject to industry specific government
regulations in the European Union, Asia and the United States,
as well as other jurisdictions, relating to matters such as
design, storage, transportation and installation of renewable
hydrogen infrastructure products. However, given that the
production of electrical energy has typically been an area of
significant government regulation, the Company expects it
will encounter industry specific government regulations in the
future in the jurisdictions and markets in which it operates. For
example, regulatory approvals or permits may be required for
the design, installation and operation of Nel’s products. To the
extent there are delays in gaining such regulatory approval,
Nel’s development and growth may be constrained. Nel’s
business will suffer if environmental policies change and no
longer encourage the development and growth of clean power
technologies.
Nel depends substantially on government subsidies. Political
developments could lead to a material deterioration of the
conditions for, or a discontinuation of, the subsidies for its
technology. It is also possible that government financial support
for Nel’s technology will be subject to judicial review and
determined to be in violation of applicable constitutional or
legal requirements or be significantly reduced or discontinued
for other reasons. Without government subsidies, or with
reduced government subsidies, the availability of profitable
investment opportunities for Nel would be significantly lower,
which could have a material adverse effect on Nel’s business,
financial condition, results of operations and cash flows.
Competition
The group competes with a large number of competitors.
Many competitors are developing and are currently
producing products based on technologies that may have
costs similar to, or lower than, the group’s projected costs.
Many of the group’s existing and potential competitors may
have longer operating histories, greater name recognition,
structurally better cost positions through geographical
location or agreements with local authorities (including direct
and indirect subsidies), better access to skilled personnel,
better access to research and development partners, access
to larger customer bases and significantly greater financial,
sales and marketing, manufacturing, distribution, technical
and other resources than the group. As a result, they may
be able to respond more quickly than the group to the
changing customer demands or to devote greater resources
to the development, promotion and sales of their products.
The group’s business relies on sales of its products, and
competitors with more diversified product offerings may be
better positioned to withstand a decline in the demand for
products of the types that the group offers. It is possible that
new competitors or alliances among existing competitors
could emerge and rapidly acquire a significant market share,
which would harm the group’s business. If the group fails to
compete successfully, it could have a significant adverse effect
on the group’s business, prospects, financial results and results
of operations.
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6.4 Climate-related risks and
opportunities
Climate-related opportunities
Nel is a pure play renewable hydrogen company. Climate-
related opportunities are the driver for the revenue and
activity growth included in the company’s impairment tests.
In addition, the climate-related opportunities also impact
the assessment of probable future economic benefits from
capitalised technology development.
Climate-related risks
The company pursue solely climate-related opportunities;
therefore, the company does not have any transformation
of any legacy business negatively impacted by the climate-
related scenarios. Further analysis of the climate-related risks
below:
Regulatory risks and Geopolitics
While climate change is the megatrend, the anticipated role
of renewable hydrogen as a sustainable activity contributing
to climate change mitigation could change. How geopolitics
will impact and shape climate policies going forward
constitutes a risk for Nel. We would not be significantly
impacted by the introduction of a potential carbon tax or
restrictions on the use of carbon-intensive assets. Further,
we do not consume products from conflict areas and our
consumption of rare materials is limited. However, we identify
opportunities in the enactment of a low carbon economy.
Reputation Risk
Nel recognizes the importance of maintaining a strong brand
in the developing renewable hydrogen industry. Reputational
risk comprises: i) any damage to brand value that will cause
lost opportunities, ii) challenges in recruiting and retaining
talent that in turn could halt technology developments and
damage customer experience, and iii) challenges in attracting
investors due to damaged reputation which could affect the
going concern status of the group.
Physical Risk
None of our manufacturing facilities are located in
environments overly exposed to physical risks. Relatedly,
our facilities are not located in the areas most exposed to
sustained long-term shifts in climate patterns. However, our
delivered solutions require continuous access to water and
electricity, a shortage of which could impact our products’
performance.
6.5 Hedge accounting
DERIVATIVE FINANCIAL INSTRUMENTS
AND HEDGE ACCOUNTING
The Group holds derivative financial instruments to hedge its
foreign currency risk exposures. Derivatives are both initially
and subsequently to initial recognition measured at fair value,
and changes therein are generally recognised in profit or loss.
The group designates certain derivatives as hedging
instruments to hedge the variability in cash flows associated
with firm commitments and highly probable forecast
transactions arising from changes in foreign exchange
rates. At the inception of designated hedging relationships,
the Group documents the risk management objective
and strategy for undertaking the hedge. The group also
documents the economic relationship between the hedged
item and the hedging instrument, including whether the
changes in cash flows of the hedged item and hedging
instrument are expected to offset each other.
Cash flow hedges
For the purpose of hedge accounting, hedges are classified
as cash flow hedges when hedging the exposure to changes
in the fair value of a recognised asset or liability or a highly
probable forecast transaction. Nel accounts for a hedge of
foreign currency risk as a cash flow hedge, including also
exposures to an unrecognised firm commitment. When a
derivative is designated as a cash flow hedging instrument, the
effective portion of changes in the fair value of the derivative
is recognised in OCI and accumulated in the hedging reserve.
The effective portion of changes in the fair value of the
derivative that is recognised in OCI is limited to the cumulative
change in fair value of the hedged item, determined on
a present value basis, from inception of the hedge. Any
ineffective portion of changes in the fair value of the derivative
is recognised immediately in profit or loss.
The group designates the currency forward contracts on a
‘forward basis’, which includes both the spot element and
the forward element. Then the full fair value of the hedging
instrument is used in measuring ineffectiveness. The amount
accumulated in the hedging reserve is reclassified to profit or
loss in the same period or periods during which the hedged
expected future cash flows affect profit or loss.
If the hedge no longer meets the criteria for hedge accounting
or the hedging instrument is sold, expires, is terminated or is
exercised, then hedge accounting is discontinued prospectively.
When hedge accounting for cash flow hedges is discontinued,
134
Notes to the consolidated financial statements 2024
the amount that has been accumulated in the hedging reserve
remains in equity until it is reclassified to profit or loss in the
same period or periods as the hedged expected cash flows
affect profit or loss.
The Group is exposed to certain risk relating to its ongoing
business operations. In 2024, foreign exchange forward
contracts are designated as hedging instruments in cash flow
hedges of firm sale commitment in U.S. dollar, Euro and British
pound. In addition, highly probably forecast transactions in
Euro and Swedish Krona.
The foreign exchange forward contract balances vary in
particular with the magnitude of firm commitment foreign
currency sales and changes in foreign exchange forward rates.
As of 31 December 2024, the Group held the following
instruments to hedge exposures to changes in foreign currency.
MORE THAN MATURITY/HEDGING INSTRUMENTS 2025-Q1 2025-Q2 2025-Q3 2025-Q4ONE YEAR TOTALUSD forward contracts, net00 0 0 0 0Average NOK:USD forward contracts rate 0,00 0,00 0,00 0,00 0,00 0,00USDHedged NOK, net (nominal amount) 0 0 0 0 0 0Fair value USD forward contracts 0 0 0 0 0 0SEK forward contracts, net00 0 0 0 0Average NOK:SEK forward contracts rate 0,00 0,00 0,00 0,00 0,00 0,00SEKHedged NOK, net (nominal amount) 0 0 0 0 0 0Fair value SEK forward contracts 0 0 0 0 0 0GBP forward contracts, net0773 0 0 0 773Average NOK:GBP forward contracts rate 0,00 13,41 0,00 0,00 0,00 13,41GBPHedged NOK, net (nominal amount) 0 10 366 0 0 0 10 366Fair value GBP forward contracts -86 -631 0 0 0 -716EUR forward contracts, net52 6515 980 9 217 7 223 0 75 071Average NOK:EUR forward contracts rate 11,78 11,78 11,93 11,90 0,00 11,81EURHedged NOK, net (nominal amount) 619 997 70 447 109 951 85 959 0 886 354Fair value EUR forward contracts -1 755 -706 -74 -775 0 -3 310TOTAL hedged NOK, net (nominal amount)619 99780 813 109 951 85 959 0 896 720TOTAL fair value, NOK -1 841 -1 336 -74 -775 0 -4 026
The effects that hedge accounting has had on the statement
of financial position, statement of profit or loss and OCI and
statement of changes in equity
Hedging instruments are measured at fair value and
recognised in the statement of financial position as either an
asset or a liability depending on the whether the instrument
has a positive or negative value. The fair values recognised
represents unrealised gains/losses driven by the changes in
foreign exchange rates.
Statement of financial position
The table below show the fair value of forward exchange
contracts designated as hedging instruments in the statement
of financial position.
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(Amounts in NOK thousands)CURRENT NON-CURRENT OTHER CURRENT NON-CURRENT TYPE OF HEDGE ITEMSASSETSASSETSLIABILITESLIABILITIES TOTALRevenue11 877407 -16 123 0 -3 839Raw materials 6 070 0 0 0 6 070As of 31.12.2023 17 948 407 -16 123 0 2 232Revenue 3 452 0 -7 477 0 -4 025As of 31.12.2024 3 452 0 -7 477 0 -4 025
Profit or loss and OCI
The table below includes the reconciliation of movements in hedging reserve, cash flow hedges, in OCI during the year.
(Amounts in NOK thousands)PROPERTY PLANT AND REVENUE RAW MATERIALS FINANCE COSTSEQUIPMENT TOTALAs of 01.01.2023-6 502-2 132 0 0 -8 634Effective portion of changes in fair value -13 236 -3 938 -1 330 0 -18 504Reclassified to profit or loss 6 042 0 1 330 0 7 372Reclassified to statement of financial positions 27 045 0 0 0 27 045(basis adjustment)As of 01.01.2024 13 350 -6 070 0 0 7 279Effective portion of changes in fair value -47 623 10 084 -14 570 0 -52 108Reclassified to profit or loss -4 438 0 14 570 0 10 132Reclassified to statement of financial positions 37 126 -4 014 0 0 33 112(basis adjustment)As of 31.12.2024 -1 585 0 0 0 -1 585
During the year, a hedging gain of NOK 4.4 (-6.0) million has
been realised and reclassified to profit or loss within ‘Revenue
from contracts with customers’.
The timeline below illustrates when the unrealised changes
in fair value of the foreign currency forward contracts may
be reclassified to profit or loss and statement of financial
position.
(Amounts in NOK thousands)2024 2025 2026 2027 TOTALRevenue 12 943 407 0 0 13 350Raw materials -6 070 0 0 0 -6 070As of 31.12.2023 7 279Revenue -1 585 0 0 -1 585As of 31.12.2024 -1 585
136
Notes to the consolidated financial statements 2024
Economic relationship and effectiveness
The hedged item creates an exposure to buy a foreign
currency and sell the functional currency. The forward
contract is to sell foreign currency and buy the functional
currency. As the hedged exposure is exactly matched by the
currency leg of the forward contract (i.e. they are the same
amount of currency with the same payment date), there is a
clear economic relationship between the hedging instrument
and the hedged item. Hedging less than 100 % is considered
when natural hedge positions could occur during the hedging
period, or to limit the risk of over-hedging given the inherent
uncertainties in any estimated cash flow.
If there’s no change in the hedge item cash magnitude
(e.g. contract termination or amendment) the hedge would
be effective as long as the timing of the hedge instrument
and hedge item are aligned. The company has recognised
ineffectiveness in the income statement in 2024 of about NOK
2 (0) million in finance costs.
The Group does not have any fair value hedge or net
investment hedge.
6.6 Financial instruments
Nel uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: Inputs are quoted prices in active markets for
identical assets or liabilities that are accessible at the
measurement date.
Level 2: The fair value of financial instruments that are not
quoted in an active market is determined using valuation
techniques which maximise the use of observable market
price and rely as little as possible on entity-specific estimates.
Level 3: Unobservable inputs are used to measure fair value
to the extent that relevant observable inputs are not available,
thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at the measurement
date. Techniques that use inputs that have a significant effect
on the recorded fair value that are not based on observable
market data.
FINANCIAL INSTRUMENTS AND FAIR VALUES
2024CARRYING AMOUNT FAIR VALUEFAIR VALUE MANDATORILY FINANCIAL ASSETS - HEDGING AT FVTPL AND LIABILTIES AT INSTRUMENTS- OTHERSAMORTISED COST TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTALAssetsFinancial assets measured at fair valueForward exchange contracts used for hedging3 452 3 452 3 452 3 452SUM 3 452 3 452 3 452 3 452LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-7 477 -7 477 -7 477 -7 477SUM -7 477 -7 477 -7 477 -7 477
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2023CARRYING AMOUNT FAIR VALUEFAIR VALUE MANDATORILY FINANCIAL ASSETS - HEDGING AT FVTPL AND LIABILTIES AT INSTRUMENTS- OTHERSAMORTISED COST TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTALAssetsFinancial assets measured at fair valueForward exchange contracts used for hedging18 354 0 0 18 354 0 18 354 0 18 354Financial asset - equity instruments0 9 800 0 9 800 0 0 9 800 9 800SUM 18 354 9 8000 28 155 0 18 354 9 800 28 155LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-16 123 0 0 -16 123 0 -16 123 0 -16 123SUM -16 1230 0 -16 123 0 -16 123 0 -16 123Financial liabilities not measured at fair valueLong-term debt0 0 22 458 22 458 0 22 458 0 22 458SUM0 0 22 458 22 458 0 22 458 0 22 458
The management assessed that cash and short-term deposits,
trade receivables, other current assets, trade payables and
other current liabilities’ carrying amounts is a reasonable
approximation of their fair value largely due to the short-term
maturities of these instruments.
Nel enters into forward exchange contracts with financial
institutions, where the fair value of such instruments is
based on valuation techniques including market observable
inputs. The most frequently applied valuation techniques
include forward pricing and swap models using net present
value calculations. The models used incorporate various
inputs, including the credit quality of counterparties, foreign
exchange spot and forward rates and interest rate curves.
The valuation is performed by banks or external valuation
providers.
For recurring fair value measurements using significant
unobservable inputs (Level 3), the effect of the measurements
on profit or loss for the period has been 0.0 (0.0) million.
6.7 Contractual commitments
and commitments for future
investments
Nel is committed to future investments for PEM expansion
in Wallingford, Connecticut, see note 3.2 for additional
information.
138
Notes to the consolidated financial statements 2024
7.1 Composition of the group
The following subsidiaries are included in the consolidated financial statements:
COUNTRY OF CONSOLIDATED OWNERSHIP/ OWNERSHIP/ COMPANYINCORPORATION MAIN OPERATIONSFROM:VOTES 2024VOTES 2023Nel Hydrogen Electrolyser AS Norway Alkaline electrolysers 01.10.2015 100 % 100 %Nel Hydrogen A/S Denmark Hydrogen fueling stations 01.07.2015 0 % 100 %Nel Fuel AS Norway Investment/holding 01.07.2015 100 % 100 %Proton Energy Systems Inc United States PEM electrolysers 01.07.2017 100 % 100 %Nel Korea Co. Ltd South Korea Service of H2Station® 01.07.2018 0 % 100 %Nel Hydrogen Inc United States Service of H2Station® 01.01.2019 0 % 100 %Nel US Holding Inc United States Investment/holding 23.05.2024 100 % naNel Hydrogen Electrolyser Germany GmbH Germany Electrolysers sales office 24.10.2022 100 % 100 %Nel Hydrogen Electrolyser Belgium BV Belgium Electrolyser sales office 27.09.2021 100 % 100 %Nel Austria GmbH Austria Fueling sales office 30.03.2022 0 % 100 %Nel Hydrogen Chile SpA Chile Electrolyser sales office 01/06/2023 100 % 100 %Nel Electrolyser Inc United Stattes Electrolyser distributor 24.05.2024 100 % na
All subsidiaries are 100 % owned. There is no uncertainty about control and no restrictions on the ability to access or use assets
and settle liabilities in the group.
7.2 Executive management remuneration
Nel Executive Management Compensation and number of shares owned
2024(Amounts in NOK thousands)PENSION OTHER TOTAL NUMBER OF 1)REMUNERATION OF MANAGEMENT 2024 SALARY BONUSEXPENSEREMUNERATION REMUNERATIONSHARES2)Håkon Volldal, CEO 4 762 1 550 202 0 6 514 0Kjell Christian Bjørnsen, CFO 3 152 933 202 0 4 287 20 000Marius Løken, CTO 2 869 502 202 0 3 573 03)Esa Laukkanen, former COO 3 130 620 0 1 639 5 389 0Kai Rune Heggland, SVP Alkaline operations 2 104 103 115 0 2 322 8 766Tushar Ghuwalewala, SVP PEM operations 2 609 364 78 0 3 051 0Todd Cartwright, CCO 3 405 0 90 645 4 140 0Hans Hide, SVP Projects 2 362 419 202 0 2 983 30 000Stein Ove Erdal, Chief Legal Officer 2 569 619 202 0 3 390 04)Anne Liberg, CHRO 1 438 0 151 0 1 589 05)Caroline Duyckaerts, former CHRO 1 412 348 142 1 457 3 359 0TOTAL 29 812 5 458 1 586 3 741 40 597 58 7661) Other remuneration is mainly related to share option program and severance pay2) Has a six months notice period, plus is entitled to six months severence pay.3) Left Nel end of October 20244) Employed in Nel from April 20245) Left Nel end of May 20242023
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2023(Amounts in NOK thousands)PENSION OTHER TOTAL NUMBER OF 1)REMUNERATION OF MANAGEMENT 2023 SALARY BONUSEXPENSEREMUNERATION REMUNERATIONSHARES2)Håkon Volldal, CEO 4 364 589 201 0 5 154 0Kjell Christian Bjørnsen, CFO 3 011 116 201 0 3 328 20 0003)Marius Løken, CTO 1 432 0 102 0 1 534 04)Anders Søreng, former CTO 712 0 32 0 744 naEsa Laukkanen, COO 2 964 55 0 0 3 019 0Robert Borin, SVP Nel Hydrogen Fueling 3 231 106 304 0 3 641 05)Filip Smeets, former CCO 2 603 69 91 2 180 4 943 0Hans Hide, SVP Projects 2 268 85 201 0 2 554 30 000Stein Ove Erdal, Senior Vice President Legal and General Counsel 2 371 126 201 0 2 698 0Caroline Duyckaerts, Chief Human Resources Officer 1 937 67 201 0 2 204 0TOTAL 24 893 1 214 1 534 2 180 29 821 50 0001) Other remuneration is mainly related to share option program and severance pay2) Has a six months notice period, plus is entitled to six months severence pay.3) Employed in Nel from June 20234) Left Nel end of March 20235) Left Nel end of December 2023
The Board of Directors determines the remuneration of the
CEO based on a proposal from the Remuneration Committee
and approves the general terms of the company’s incentive
plans for Executive Management and other key employees.
The CEO determines the compensation to the other
members of Nel’s Executive Management.
Nel’s approach is to provide the CEO and other members
of Nel’s executive Management as well as employees with
a market competitive offer for our renewable industry. The
compensation should be:
• attractive to recruit and retain executives and other talents
to Nel;
• market competitive in the respective locations but not
market leading, fitting for our renewable industry;
• Support the creation of sustainable value to Nel’s
shareholders
Total compensation for each member of Executive
Management is compared to the relevant market on a regular
basis. Nel’s remuneration of the Executive Management
includes the Base Salary, Bonus, Share Option Program,
Pension (defined contribution plans) and other compensation
elements such as car, cell phone and internet connection.
7.3 External audit
remuneration
FEES TO THE GROUP AUDITOR 2024 2023Statutory auditing services 3 395 2 949Attestation services 218 103Non-auditing services 267 512TOTAL 3 880 3 564
In addition to the fees included in the remuneration table
above, the group incurred NOK 1.9 (1.2) million in 2024 of
attestation services and non-auditing services provided by
companies other than EY, the group auditor.
FEES TO OTHER AUDITORS ELECTED BY SUBSIDIARIES 2024 2023Statutory auditing services 0 0Attestation services 1 909 1 217Non-auditing services00TOTAL 1 909 1 217
140
Notes to the consolidated financial statements 2024
7.4 Related parties
EXECUTIVE MANAGEMENT
Information on key management compensation is disclosed in note ‘7.2 executive management remuneration’.
ASSOCIATED AND JOINT VENTURES
Nel’s significant transactions with associated companies and joint ventures are described in note 3.4 Investments in associated
companies and joint ventures.
Transactions with related parties are at arm’s length principles.
BOARD OF DIRECTORS
Members of Nel’s Board of Directors’ remuneration and share ownership are disclosed in the tables below.
2024BOARD AUDIT REMUNERATION NUMBER OF BOARD OF DIRECTORS 2024MEMBERCOMMITTEECOMMITTEE TOTALSHARES OWNERSHIPOle Enger - Chair of the Board 731 0 75 806 149 462 0,01 %Tom Røtjer 391 0 0 391 0 0,00 %Beatriz Malo de Molina 391 125 0 516 0 0,00 %Charlotta Falvin 391 90 0 481 46 000 0,00 %Hanne Blume 391 0 105 496 0 0,00 %Jens Bjørn Staff 391 0 0 391 0 0,00 %Arvid Moss 391 0 0 391 0 0,00 %TOTAL 3 075 215 180 3 470 195 462 0,01 %2023AUDIT REMUNERATION NUMBER OF BOARD OF DIRECTORS 2023 REMUNERATIONCOMMITTEECOMMITTEE TOTALSHARES OWNERSHIPOle Enger - Chair of the Board 672 0 65 737 149 462 0,01 %Tom Røtjer 366 0 0 366 0 0,00 %Beatriz Malo de Molina 366 115 0 481 0 0,00 %Charlotta Falvin 366 80 0 446 46 000 0,00 %Hanne Blume 366 0 95 461 0 0,00 %2)Jens Bjørn Staff 234 0 0 234 0 0,00 %2)Arvid Moss 234 0 0 234 0 0,00 %1),2)Finn Jebsen 131 0 0 131 na na2)Jon André Løkke 131 0 0 131 na naTOTAL 2 866 195 160 3 221 195 462 0,01 %1) Consisting of shares held through Fateburet AS2) At the Annual General Meeting in 2023, Jens Bjørn Staff and Arvid Moss were elected as board members, replacing Finn Jebsen and Jon André Løkke.
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7.5 Events after the balance
sheet date
Information about the group’s financial position that has
occurred after the balance sheet date is disclosed if the
information is considered to be significant for the group’s
current financial statements and future position.
• About 73% of the net trade receivables past due in group
accounts note 6.2 are related to one customer. This year
includes no revenue from this customer. Nel has security
for the unpaid net trade receivables from this customer
in the sold goods. Subsequent to the year, on 15 January
2025, the parties agreed that Nel use the collateral as
consideration for the receivables. The collateral value,
i.e. the payment for the goods, will offset the receivables
from this customer.
• Initiated a process to adjust capacity to market demand
by reducing the workforce and temporarily halting
productions at the Alkaline production facility in Herøya,
Norway
7.6 Going concern
The financial statement is presented on the going concern
assumption under International Financial Reporting
Standards. As per the date of this report the group has
sufficient working capital for its planned business activities
over the next twelve-month period.
Parent company financial statements
142
7 Parent company
financial statements
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143
Statement of comprehensive income ................................................................................................................................................................ 148
Statement of financial position as of 31 December ....................................................................................................................................... 149
Statement of cash flows ........................................................................................................................................................................................ 147
Statement of changes in equity .......................................................................................................................................................................... 148
Note 1 Company information ......................................................................................................................................................................... 150
Note 2 Basis for preparation and significant accounting principles ...................................................................................................... 150
Note 3 Revenue from contracts with customers ........................................................................................................................................ 153
Note 4 Personnel expenses ............................................................................................................................................................................. 153
Note 5 Property, plant and equipment......................................................................................................................................................... 154
Note 6 Other operating expenses ................................................................................................................................................................. 154
Note 7 Finance income and cost ................................................................................................................................................................... 155
Note 8 Subsidiaries, associates and joint ventures .................................................................................................................................... 155
Note 9 Income taxes ......................................................................................................................................................................................... 156
Note 11 Other investments ................................................................................................................................................................................ 157
Note 13 Cash and cash equivalents ................................................................................................................................................................. 160
Note 14 Share capital and shareholders......................................................................................................................................................... 160
Note 15 Lease liabilities ....................................................................................................................................................................................... 160
Note 16 Financial risk and derivatives ............................................................................................................................................................. 161
Note 17 Financial instruments ........................................................................................................................................................................... 162
Note 18 Guarantees ............................................................................................................................................................................................. 163
Note 19 Subsequent events ............................................................................................................................................................................... 163
144
Parent company financial statements
Statement of
comprehensive income
(Amounts in NOK thousands) Nel ASA
NOTE 2024 2023
Revenue from contracts with customers 3 103 396 77 757
Other operating income 2 192 2 010
Total revenue and operating income 105 588 79 767
Personnel expenses 4 75 715 67 541
Depreciation and amortisation 5 4 102 4 089
Other operating expenses 6 65 280 52 423
Total operating expenses 145 097 124 053
Operating loss -39 509 -44 286
Finance income
7
205 145 235 809
Finance costs 7 -876 204 -198 475
Net financial items -671 059 37 333
Pre-tax income (loss) -710 568 -6 952
Tax expense 9 0 0
Net income (loss) attributable to equity holders of the company -710 568 -6 952
Other comprehensive income 0 0
Comprehensive income (loss) attributable to equity holders of the company -710 568 -6 952
Appropriation of comprehensive income (loss) and equity transfers
Dividends proposed 0 0
Retained earnings -710 568 -6 952
Total appropriation -710 568 -6 952
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145
Statement of financial position
as of 31 December
(Amounts in NOK thousands) Nel ASA
ASSETS NOTE 2024 2023
NON-CURRENT ASSETS
Property, plant and equipment 5 7 949 11 857
Investments in subsidiaries 8 3 759 355 3 989 624
Non-current financial assets 10, 16, 17 158 750 104 076
Long-term receivables group 12 104 135 266 259
Total non-current assets 4 030 189 4 371 816
CURRENT ASSETS
Trade receivables 10 410 29
Other current assets 10, 11, 16, 17 9 502 49 150
Cash and cash equivalents 13 1 830 512 3 204 108
Receivables group 12 238 913 159 673
Total current assets 2 089 337 3 412 960
TOTAL ASSETS 6 119 526 7 784 776
146
Parent company financial statements
Statement of financial position
as of 31 December
(Amounts in NOK thousands) Nel ASA
EQUITY AND LIABILITIES NOTE 2024 2023
EQUITY
Paid in capital
Share capital 14 334 265 334 265
Treasury shares 14 (84) (84)
Share premium 14 7 598 562 8 661 089
Other capital reserves 14 68 645 65 927
Accumulated deficits / Retained earnings 14 (2 149 059) (1 438 491)
Total equity 5 852 330 7 622 707
NON-CURRENT LIABILITIES
Lease liabilities 15 3 610 7 025
Long-term debt group 12 186 944 72 447
Total non-current liabilites 190 554 79 472
CURRENT LIABILITIES
Trade payables 10 465 5 559
Lease liabilities
15
3 902 3 826
Provisions 7 659 8 047
Short-term liabilities group 12 13 146 29 551
Other non-current liabilities 10, 16, 17 41 470 35 615
Total current liabilities 76 642 82 597
Total liabilities 267 196 162 069
TOTAL EQUITY AND LIABILITIES 6 119 526 7 784 776
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(Amounts in NOK thousands) Nel ASA
NOTE 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
(710 568)
(6 952)
Adjustments for interest expense 7 536 532
Adjustments interests received 7, 12 (41 916) (69 806)
Equity-settled share-based compensation expense 4 481 1 080
Depreciation 5 4 102 4 089
Impairment of financial assets 7 876 031 233 390
Change in fair value equity instruments 11 (23 372) 7 387
Change in provisions (388) 5 647
Change in trade receivables, group receivables (89 621) (11 609)
Change in trade payable and group payables (11 499) 9 203
Changes in other current assets and other liabilities (681 675) (30 064)
Net cash flow from operating activities (677 889) 142 899
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
5
(34) (584)
Disposal of property, plant and equipment
12
220 -
Loan given to subsidiaries 7 (673 505) (1 528 531)
Investments in other financial assets 10 (137 918) (92 219)
Proceeds from sales of other investments 10 119 682 170 479
Net cash flow from investing activities (691 556) (1 450 854)
CASH FLOWS FROM FINANCING ACTIVITIES
Interests paid
7
(536) (532)
Gross cash flow from share issues
14
- 1 609 200
Transaction costs related to capital increases
14
- (24 696)
Payment of lease liabilities
15
(3 615) (3 415)
Net cash flow from financing activities (4 152) 1 580 556
Net change in cash and cash equivalents
(1 373 596)
272 601
Cash balance as of 01.01
13
3 204 108 2 931 508
Cash balance as of 31.12
13
1 830 512 3 204 108
Statement
of cash flows
148
Parent company financial statements
(Amounts in NOK thousands) Nel ASA
SHARE
CAPITAL
SHARE
PREMIUM
OTHER
RESERVE
TREASURY
SHARES
RETAINED
EARNINGS
TOTAL
EQUITY
Equity as of 31.12.2022 312 665 7 098 185 61 764 -84 -1 431 539 6 040 992
Increase of capital 2023 21 600 1 562 904 1 584 504
Options and share program 4 163 4 163
Total comprehensive income -6 952 -6 952
Equity as of 31.12.2023 334 265 8 661 089 65 927 -84 -1 438 491 7 622 707
Increase of capital 2024 0 0 0
Options and share program 2 719 2 719
Distribution of shares in Cavendish Hydrogen ASA -1 062 527 -1 062 527
Total comprehensive income
-710 568 -710 568
Equity as of 31.12.2024
334 265 7 598 562 68 646 -84 -2 149 059 5 852 330
Statement of
changes in equity
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OSLO, 25 FEBRUARY 2025
THE BOARD OF DIRECTORS
Ole Enger Beatriz Malo de Molina Charlotta Falvin
Chair Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Arvid Moss Hanne Blume Tom Røtjer
Board member Board member Board member
(Electronically signed) (Electronically signed) (Electronically signed)
Jens Bjørn Staff Håkon Volldal
Board member CEO
(Electronically signed) (Electronically signed)
150
Notes to the financial statements parent company
Note 1 Company information
Nel ASA (Nel) is a global, dedicated hydrogen company,
delivering optimal solutions to produce, store and distribute
hydrogen from renewable energy. The company is domiciled
in Norway. The company specializes in electrolyser
technology for production of renewable hydrogen. Nel’s
product offerings are key enablers for a renewable hydrogen
economy, making it possible to decarbonize various industries
such as transportation, refining, steel, and ammonia.
The group has two divisions: Nel PEM Electrolyser and Nel
Alkaline Electrolyser.
Nel ASA (org. no 979 938 799) was formed in 1998 and is a
Norwegian public limited company listed on the Oslo Stock
Exchange. The company’s head office is in Karenslyst allé
49, N-0279 Oslo, Norway. The parent company financial
statements were approved by the Board of Directors on 25
February 2025.
Note 2 Basis for preparation
and significant accounting
principles
STATEMENT OF COMPLIANCE
The financial statements of Nel ASA have been prepared and
presented in accordance with simplified IFRS pursuant to
section 3-9 of the Norwegian Accounting Act.
BASIS FOR PREPARATION
These financial statements have been prepared on a historical
cost basis, except for certain financial instruments, which are
measured at fair value.
ACCOUNTING ESTIMATES AND
JUDGEMENTS
In preparing the financial statements, assumptions and
estimates that have had effect on the amounts and
presentation of assets and liabilities, income and expenses
and contingent liabilities must be made. Actual results could
differ from these assumptions and estimates.
FOREIGN CURRENCY TRANSLATION
The functional currency and presentation currency of the
company is Norwegian kroner (NOK). Transactions in
foreign currency are translated at the rate applicable on the
transac¬tion date. Monetary items in a foreign currency
are translated into NOK using the exchange rate applicable
on the balance sheet date. Non-monetary items that are
measured at their historical cost expressed in a foreign
currency are trans¬lated into NOK using the exchange rate
applicable on the transaction date. Non-monetary items
that are measured at their fair value expressed in a foreign
currency are translated at the exchange rate applicable on
the balance sheet date.
CHANGES IN ACCOUNTING POLICIES
A few amendments to IFRS have been implemented for
the first time in 2024. The amendments did not have any
material impact for the parent company. In addition, several
amendments to IFRS are issued up to the date of issuance
of these financial statements but are not yet effective. The
company has not applied the new IFRSs and the impact of
applying the amendments is not expected to have a material
impact on the Company’s financial statements.
DEFINITION AND APPLYING OF
MATERIALITY JUDGEMENTS IN
PREPARATION OF THESE FINANCIAL
STATEMENTS
The financial statements aim to provide useful financial
information which increase the understandability of Nel and
its performance. To meet the information needs of its primary
users, Nel apply materi¬ality judgments which are necessary
to meet this objective, and Nel has made such judgments
related to recognition, measurement, presentation and
disclosures. Within these financial statements information is
considered material if omitting, misstating or obscuring it
could reasonably be expected to influence decisions taken
by primary users based on the information provided. In
practice this will lead to Nel omitting certain information if
it is assessed it will obscure the material information. The
7.1 Notes to the financial
statements parent company
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151
materiality judgments are reassessed at each reporting
date and updated based on changed facts and Nel specific
circumstances.
SEGMENT INFORMATION
Nel ASA operates with only one operating segments,
providing management services to subsidiaries. A separate
disclosure for segment information is therefore not applicable.
SIGNIFICANT ACCOUNTING JUDGEMENTS
AND ESTIMATION UNCERTAINTY
The preparation of financial statements requires management
to make judgements and estimates that influence amounts
recognised in certain accounts for assets, liabilities, income
and expenses. The actual results may deviate from such
assumptions. Estimates and underlying assumptions are
subject to continuous assessment.
REVENUE FROM CONTRACTS WITH
CUSTOMERS
In general, revenue comprises sale of intercompany services.
These are recognized when the services are delivered based
on intragroup allocation of costs.
PERSONNEL EXPENSES
Wages, salaries, bonuses, pension and social security
contributions, paid annual leave and sick leave are accrued
in the period in which the associated services are rendered
by employees of the company. The company has pension
plans for employees that are classified as defined contribution
plans. Contributions to defined contribution schemes are
recognised in the statement of comprehensive income in the
period in which the contribution amounts are earned by the
employees.
The company has an equity-settled share option program for
all employees. The Company uses the Black-Scholes-Merton
option pricing model at time of grant to determine the impact
of stock option grants in accordance with IFRS 2 – Share-
based payment. Refer to group financial statements note 2.5
for further accounting policies, including assumptions and
social security provisions.
For further information refer note 4 – Personnel expenses.
FINANCIAL INSTRUMENTS AND FAIR
VALUE
Nel uses the following hierarchy for determining and disclosing
the fair value of financial instruments by valuation technique:
Level 1: Inputs are quoted prices in active markets for identical
assets or liabilities that are accessible at the measurement date.
Level 2: The fair value of financial instruments that are not
quoted in an active market is determined using valuation
techniques which maximise the use of observable market price
and rely as little as possible on entity-specific estimates.
Level 3: Unobservable inputs are used to measure fair value
to the extent that relevant observable inputs are not available,
thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at the measurement
date. Techniques that use inputs that have a significant effect
on the recorded fair value that are not based on observable
market data.
The Company has assessed that cash and short-term deposits,
trade receivables, other current assets, trade payables and
other current liabilities’ carrying amounts is a reasonable
approximation of their fair value largely due to the short-term
maturities of these instruments.
The Company enters into forward exchange contracts with
financial institutions, where the fair value of such instruments
is based on valuation techniques including market observable
inputs. The most frequently applied valuation techniques
include forward pricing and swap models using net present
value calculations. The models used incorporate various inputs,
including the credit quality of counterparties, foreign exchange
spot and forward rates and interest rate curves. The valuation
is performed by banks or external valuation providers.
INTEREST INCOME AND EXPENSES
Interest income and expenses are recognised in the statement
of comprehensive income within ‘finance income’ and
‘finance cost’ as they are accrued, based on the effective
interest method.
INCOME TAX EXPENSE
Income tax expense in the statement of comprehensive
income for the year comprises current tax and changes
in deferred tax. Income tax expense is recognised in the
statement of comprehensive income.
152
Notes to the financial statements parent company
Current tax is the expected tax payable on the taxable income
for the year and any adjustment to tax payable in respect
of previous years. Uncertain tax positions and potential tax
exposures are analysed individually and the best estimate
of the probable amount for liabilities to be paid (unpaid
potential tax exposure amounts, including penalties) and
virtually cer¬tain amounts for assets to be received (disputed
tax positions for which payment has already been made) in
each case are recognised within current tax or deferred tax as
appropriate.
Deferred tax assets and liabilities are recognised for the
future tax consequences attributable to differences between
financial statements and their respective tax bases, subject
to the initial recognition exemption. The amount of deferred
tax provided is based on the expected manner of utilized on
or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantially enacted at the
balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilized. For a deferred tax asset to
be recognised based on future taxable profits, convincing
evidence is required.
SUBSIDIARIES
Subsidiaries are all entities controlled by Nel ASA. Control
is achieved when the company is exposed, or has rights, to
variable returns from its involvement with the investee and
has the ability to affect those returns through its power over
the investee.
Shares in subsidiaries are presented according to the cost
method. Shares in subsidiaries are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may exceed the fair value of the
investment. Indications may be operating losses or ad¬verse
market conditions. Fair value of the investment is estimated
based on valuation model techniques. If it is considered
probable that the fair value is below Nel’s carrying value,
the investment is impaired. The impairment is reversed if the
impairment situation is no longer present.
INVESTMENT IN ASSOCIATED COMPANIES
AND JOINT VENTURES
The company’s investments in its associates and joint ventures
are accounted for using the equity method. An associate
is an entity where the company has significant influence. A
joint venture is an entity where the company has joint control
contractually together with one or several other parties.
CASH AND CASH EQUIVALENTS
Cash includes cash in hand and at bank. Cash equivalents
are short-term liquid investments that can be immediately
converted into a known amount of cash and have a
maximum term to maturity of three months.
EVENTS AFTER THE REPORTING PERIOD
New information on the company’s financial position on the
end of the reporting period which becomes known after the
reporting period, is recorded in the annual accounts. Events
after the reporting period that do not affect the company’s
financial position on the end of the reporting period, but
which will affect the company’s financial position in the future
are disclosed, if significant.
STATEMENT OF CASH FLOW
The cash flow statement is prepared using the indirect
method.
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153
Note 3 Revenue from contracts with customers
(Amounts in NOK thousands)
REVENUES BY GEOGRAPHIC REGION BASED ON CUSTOMER LOCATION 2 024 2 023
Norway 58 549 34 665
United States 35 171 27 070
Denmark 9 345 15 299
South Korea 332 723
Total 103 396 77 757
All revenues in 2024 and 2023 are internal revenue from management services. Revenues are recognised over time based on
the cost-to-cost input method. Billings occur at the end of each year for all cumulative costs incurred plus recognised profit,
thus, there are no contract balances at year end. Both contract assets and the billings are recognised as current assets within
‘Receivables Group’ in the statement of financial position and is an unconditional right to payment.
Note 4 Personnel expenses
(Amounts in NOK thousands)
SALARIES AND PERSONNEL EXPENSES 2024 2023
Salaries 55 349 48 894
Social security tax* 11 432 9 072
Pension expense 6 162 4 686
Other payroll expenses** 2 773 4 889
Total 75 715 67 541
* Social security tax includes provisions for social security related to the share option program.
** Included in this amount are expenses amounting to NOK 1.3 (1.1) million related to the share option program.
Remuneration and direct ownership of shares of the Chairperson and of the Board of Directors are disclosed in Nel
Remuneration Report for 2024. The full report can be found at www.nelhydrogen.com. Remuneration to CEO and Nel
management are disclosed in the Nel Remuneration Report for 2024.
The company has a share option program for all employees. For information of the company’s share option program refer to
group accounts disclosure 2.5.
Average number of FTEs
30 32
Pension
The company has a defined contribution pension plan for its employees that meet the requirements of the Pension Acts of
Norway.
154
Notes to the financial statements parent company
Note 5 Property, plant and equipment
PROPERTY, PLANT AND EQUIPMENT COMPRISE
OWNED AND LEASED ASSETS
OFFICE MACHINES
AND OTHER
EQUIPMENT
TECHNICAL
INSTALLATIONS
RIGHT-OF-USE
ASSETS TOTAL
Carrying amount as of 31.12.2023 1 447 38 10 372 11 857
Carrying amount as of 31.12.2024 874 23 7 053 7 949
Useful life 3 years 5 years 5 years
Depreciation plan Straight-line Straight-line Straight-line
Note 6 Other operating expenses
SPECIFICATION OF OTHER OPERATING EXPENSES: 2 024 2 023
Hardware and common cost office premises 1 426 1 596
Administrative costs 19 848 15 216
Professional fees 40 019 30 816
Travel expenses 3 987 4 794
Total 65 280 52 423
Auditor fees
FEES TO THE AUDITOR 2 024 2 023
Statutory auditing services 1 754 1 612
Attestation services 0 25
Non-auditing services 0 225
Total 1 754 1 862
Amounts are exclusive VAT
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Note 7 Finance income and cost
2024 2023
Internal interest income 41 916 66 071
Internal guarantee premium 3 532 3 734
Interest income 130 948 164 468
Gain on sale of subsidiaries 23 372 -
Other 5 378 1 536
Finance income 205 145 235 809
Internal interest cost
(5 758)
(512)
Interest expense (166) (31)
Interest expense lease liabilities (371) (501)
Impairment shares in subsidiaries (876 031) (195 869)
Net foreign exchange gain/(loss) 6 435 43 547
Expected credit loss receivables from subsidiaries - (37 521)
Change in fair value equity instruments - (7 387)
Other (313) (201)
Finance cost (876 204) (198 475)
Net finance income (cost) (671 059) 37 333
Gain on sale of subsidiaries stems from the companies Nel Hydrogen A/S, which was fully distributed as part of the spin-off of
Cavendish Hydrogen ASA during 2024. Shares in subsidiary Proton Energy Systems Inc have been impaired in 2024 and an
impairment expense of NOK 876 million has been recognized as finance cost. The net foreign exchange gain(loss) is mainly the
unrealised currency exchange effectes related to internal loans.
Note 8 Subsidiaries, associates and joint ventures
SUBSIDIARIES
COMPANY NAME OWNERSHIP
REGISTERED
OFFICE
FUNCTIONAL
CURRENCY
TOTAL EQUITY IN
2024 (FUNCTIONAL
CURRENCY
THOUSANDS)
NET INCOME(LOSS)
2024 (FUNCTIONAL
CURRENCY
THOUSANDS)
CARRYING
VALUE 2024
(NOK
THOUSANDS)
CARRYING VALUE
2023 (NOK
THOUSANDS)
Nel Hydrogen Electrolyser AS 100% Norway NOK 1 345 274 (78 236) 2 412 300 1 912 006
Proton Energy Systems Inc 100% USA USD 71 874 (26 647) 1 310 000 1 721 703
Nel Fuel AS 100% Norway NOK 177 044 4 799 37 055 37 055
Total 3 759 355 3 670 763
Nel Hydrogen A/S
1)
100% Denmark DKK - - - 318 860
Nel Hydrogen Inc
1)
100% USA USD - - - -
Nel Korea Co. Ltd
1)
100% South Korea KRW - - - -
Total 3 759 355 3 989 624
The increase in book value of shares in subsidiaries are mainly debt conversions. Refer note 12 for additional information of
debt conversions. In addition, there is an increase in book value from the established group share option program. Shares in
subsidiary Proton Energy Systems Inc have been impaired in 2024 and an impairment expense of NOK 876 million has been
recognized as finance cost.
1) The companies Nel Hydrogen A/S, Nel Hydrogen Inc and Nel Korea Co.Ltd. were fully distributed as part of the spin-off of Cavendish Hydrogen ASA during 2024.
156
Notes to the financial statements parent company
Note 9 Income taxes
CALCULATIONS OF THE TAX BASE FOR THE YEAR 2024 2023
Income (loss) before tax
(710 568)
(6 952)
Permanent differences 854 266 242 299
Change in temporary differences -159 6 146
Use of tax losses carried forward (143 540) (241 492)
The year's taxable income (0) -
Tax rate 22 % 22 %
Income (loss) before tax (710 568) (6 952)
Tax this years loss, estimated (156 325) (1 530)
Tax effect of:
Permanent differences 187 939 53 210
Prior years adjustment (5 433) 43
Change in not recognised deferred tax assets (tax liabilities) (26 181) (51 724)
Total income tax expense (income) (0) -
Income tax expense (income) comprises
Income tax payable - -
Change in deferred tax - -
Total income tax expense (income) - -
Specification of temporary differences:
Property, plant and equipment and goodwill (442) (373)
Leases (459) (479)
Provisions for liabilities (10 454) (10 662)
Tax losses carry forward (14 539) (133 383)
Basis for deferred tax asset (25 894) (144 897)
Nominal tax rates for next year 22 % 22 %
Deferred tax asset (5 697) (31 877)
Deferred tax asset not recognised in Statement of financial position (5 697) (31 877)
Deferred tax asset in the Statement of financial position - -
The majority of the deferred tax assets are related to loss carry forward. As of 31 December 2024, it is considered not likely that
the tax loss carry forward will be fully utilised in the near future, therefore, the deferred tax assets are not capitalised.
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Note 10 Specification of balance sheet items
SPECIFICATION OF OTHER CURRENT ASSETS: 2 024 2 023
Other short-term investments 2 260 24 013
Prepayments 3 863 3 678
Fair value of currency contracts 3 451 21 396
Other current receivables (72) 63
Total 9 502 49 150
SPECIFICATION OF NON-CURRENT FINANCIAL ASSETS: 2 024 2 023
Other non-current investments 158 750 103 670
Fair value of currency contracts 0 407
Total 158 750 104 076
SPECIFICATION OF OTHER CURRENT LIABILITIES: 2 024 2 023
Vacation allowance and other salary related accruals 14 491 9 416
VAT net payables 17 116 6 834
Fair value of currency contracts 9 236 16 123
Other current liabilities 627 3 243
Total 41 470 35 615
Note 11 Other investments
The fair value of former shareholdings in Hyon AS was 0 million per 31.12.2023. The shares were disposed of on the 24th of
January 2023 for consideration of NOK 7.04 million with a gain in financial income presented in the 2023 comparable amounts.
158
Notes to the financial statements parent company
Note 12 Transactions with related parties
LONG TERM INTEREST BEARING
RECEIVABLES GROUP 2 023
LOAN
ISSUE
DEBT
CONVERSION
ACCRUED
INTEREST
FX TRANSLATION
EFFECTS OTHER 2 024
Nel Hydrogen Electrolyser AS 161 098 396 002 (500 000) 28 071 - - 85 171
Proton Energy Systems Inc 57 504 392 655 (464 080) 12 015 1 908 - 1
Nel Hydrogen A/S
1)
22 684 - - 1 439 - (24 123) -
Nel Hydrogen Inc
1)
- - - - - - -
Nel Korea Co. Ltd
1)
- - - - - - -
Nel Hydrogen Electrolyser Belgium BV 5 929 1 029 - 391 507 - 7 856
Total 247 215 789 686 (964 080) 41 916 2 414 (24 123) 93 027
In the course of ordinary business, intercompany financing is provided by Nel ASA to its subsidiaries. Long-term financing is an
interest bearing and priced at arm’s length terms using a risk-free rate in relevant currencies + 3%-point margin.
1) The companies Nel Hydrogen A/S, Nel Hydrogen Inc and Nel Korea Co.Ltd. were fully distributed as part of the spin-off of
Cavendish Hydrogen ASA during 2024.
LONG TERM INTEREST BEARING
PAYABLES GROUP 2 023
LOAN
ISSUE
DEBT
CONVERSION
ACCRUED
INTEREST
FX TRANSLATION
EFFECTS OTHER 2 024
Nel Fuel AS 54 503 116 181 - 5 435 - - 176 119
Total 54 503 116 181 - 5 435 - - 176 119
LONG-TERM RECEIVABLE FINANCIAL LIABILITY
FINANCIAL GUARANTEES 2 024 2 023 2 024 2 023
Nel Hydrogen Electrolyser AS 10 781 17 608 10 781 16 699
Proton Energy Systems Inc 326 262 44 106
Nel Hydrogen A/S - 89 - 862
Nel Korea Co. Ltd - 1 086 - 276
Total 11 108 19 045 10 825 17 944
Refer note 18 for additional information of financial guarantees.
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159
CURRENT ASSETS 2024 2023
Nel Hydrogen Electrolyser AS 189 783 103 317
Proton Energy Systems Inc 43 317 26 127
Nel Hydrogen A/S 0 18 912
Nel Hydrogen Inc 0 3 404
Nel Korea Co. Ltd - 7 478
Nel Fuel AS 5 813 435
Total 238 913 159 673
CURRENT LIABILITIES 2024 2023
Nel Hydrogen Electrolyser AS 10 566 21 354
Nel Hydrogen A/S - 4 347
Nel Hydrogen Electrolyser Belgium BV 2 581 3 850
Total 13 146 29 551
Current liabilities are mainly related to the fair value of hedging instruments offered to subsidiaries. See Note 16 for additional
information.
All related party transactions have been carried out as part of the normal course of business and at arm’s length.
Nel ASA has during 2024 charged NOK 103 (78) million for corporate services provided to its subsidiaries. The management
services are priced with the cost-plus method applying a 5 % mark-up for low value services. The management fee has been
allocated to the subsidiaries based on revenue, operating expenses and capital expenditure as allocation keys.
INTERNAL REVENUES 2024 2023
Nel Hydrogen Electrolyser AS 58 549 34 665
Proton Energy Systems Inc 33 694 23 712
Nel Hydrogen A/S 9 345 15 299
Nel Hydrogen Inc 1 477 3 358
Nel Korea Co. Ltd 332 723
Total 103 396 77 757
Board of Directors
Remuneration of the Board of Directors is disclosed in note 7.4 in the consolidated financial statements.
160
Notes to the financial statements parent company
Note 13 Cash and cash equivalents
2024 2023
Cash and cash equivalents 1 823 521 3 201 223
Restricted cash (witheld employee taxes) 6 991 2 885
Total 1 830 512 3 204 108
Cash and cash equivalents are 99% in the Norwegian Krone (NOK) at the end of 2024. Approximately NOK 1.6 billion is placed
in 30-days locked interest accounts in several different banks.
Note 14 Share capital and shareholders
For information on shareholders as of 31 December 2024, shares hold by executive management and the board of directors
please refer to Note 7.2 and 7.4, respectively, in the consolidated financial statements. For information of top 20 shareholders in
Nel ASA refer to note 5.1 in the consolidated financial statements.
Note 15 Lease liabilities
Set out below are the carrying amounts of lease liabilities (included under other long-term debt and other current liabilities) and
the movements during the period:
2024 2023
1. January 10 851 13 205
Additions - 106
Remeasurement 277 955
Accretion of interest 371 501
Lease payments (3 986) (3 916)
Balance as of 31.12. 7 512 10 851
Current 3 902 3 826
Non-current 3 610 7 025
Balance as of 31.12. 7 512 10 851
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Maturity analysis for lease liabilities (undiscounted cash flows)
2 025 2 026 >2026 TOTAL
Lease liabilities 3 539 292 - 3 831
(Amounts in NOK thousands)
2 024 2 023
Balance as of 01.01. 10 851 13 205
Cash flows principal amount (3 615) (3 415)
Cash flows interests (371) (501)
Non-cash changes:
Additions and remeasurements 277 1 061
Accretion of interest expense 371 501
Balance as of 31.12. 7 512 10 851
Note 16 Financial risk and derivatives
Financial risks in Nel and the use of derivative instruments are described in note 6.1 to the consolidated financial statement.
Nel ASA offers currency derivatives to subsidiaries using such instruments for risk management. The derivatives are measured
at fair value (level 2 in fair value hierarchy), using valuation techniques which maximise the use of observable market price. The
contracts with financial institutions are back-to-back with subsidiaries, thus, the contract has no P&L impact for Nel ASA. At the
end of 2024 and 2023, Nel is committed to the following outstanding forward foreign exchange contracts with subsidiaries:
FORWARD FOREIGN EXCHANGE CONTRACTS (NEL GROUP INTERNAL), NOTIONAL AMOUNT:
2024 2023
Current assets
3 451 21 396
Non-current assets - 407
Current liabilities (9 236) (16 123)
Total (5 785) 5 680
The contracts represent the subsidiaries exposure in US dollars, Euro, Swedish Krone and British pounds. The contracts mature
no later than 2025.
162
Notes to the financial statements parent company
Note 17 Financial instruments
Financial instruments and fair values
2024
CARRYING AMOUNT FAIR VALUE
FAIR VALUE
- HEDGING
INSTRUMENTS
MANDATORILY
AT FVTPL
- OTHERS
FINANCIAL ASSETS
AND LIABILTIES AT
AMORTISED COST TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Assets
Financial assets measured at
fair value
Forward exchange contracts
3 451 3 451 3 451 3 451
SUM 3 451 - 3 451 - 3 451 - 3 451
Liabilities
Financial liabilities measured
at fair value
Forward exchange contracts (9 236) (9 236) (9 236) (9 236)
SUM (9 236) (9 236) (9 236) (9 236)
2023
CARRYING AMOUNT FAIR VALUE
FAIR VALUE
- HEDGING
INSTRUMENTS
MANDATORILY
AT FVTPL
- OTHERS
FINANCIAL ASSETS
AND LIABILTIES AT
AMORTISED COST TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Assets
Forward exchange contracts 21 802 21 802 21 802 21 802
SUM 21 802 0 21 802 0 21 802 - 21 802
Liabilities
Financial liabilities measured
at fair value
Forward exchange contracts (16 123) (16 123) (16 123) (16 123)
SUM (16 123) (16 123) (16 123) (16 123)
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Note 18 Guarantees
Nel provides guarantees arising in the ordinary course of business including stand-by letters of credit, performance bonds
and various payment, financial guarantees and parent company guarantees. All commercial guarantees are on behalf of
subsidiaries.
Total financial guarantees recognised as financial liability are NOK 10.8 (17.9) million as of 31. December 2024. The financial
liabilities will be amortised over the lifetime of the guarantees, which is in the range of 1-7 years.
Note 19 Subsequent events
Nel ASA and its subsidiaries initiated a process to adjust capacity to market demand by reducing the workforce and temporarily
halting productions at the Alkaline production facility in Herøya, Norway.
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Nel discloses alternative performance measures (APMs) in addition to those normally required by IFRS. This is based on the
group’s experience that APMs are frequently used by analysts, investors and other parties as supplemental information.
The purpose of APMs is to provide an enhanced insight into the operations, financing and future prospect of the group.
Management also uses these measures internally to drive performance in terms of monitoring operating performance and
long-term target setting. APMs are adjusted IFRS measures that are defined, calculated and used in a consistent and transparent
manner over the years and across the group where relevant.
Financial APMs should not be considered as a substitute for measures of performance in accordance with the IFRS.
NEL’S FINANCIAL APMs
EBITDA: is defined as earnings before interest, tax, depreciation, amortisation and impairment. EBITDA corresponds to
operating profit/(loss) plus depreciation, amortisation and impairment.
EBITDA margin: is defined as EBITDA divided by revenue and income.
Equity ratio: is defined as total equity divided by total assets.
Order intake: is defined as firm purchase orders with agreed price, volume, timing, terms and conditions entered within a
given period. The order intake includes both contracts and change orders. For service contracts and contracts with uncertain
transaction price, the order intake is based on estimated revenue. The measure does not include potential change orders.
Order backlog: is order intake where revenue is yet to be recognised.
(Amounts in NOK thousands)
ALKALINE PEM SUM
Planned delivery 2025 276 324 600
Delivery 2026 or later 361 0 361
Significant risk of delay or cancellation 653 0 653
Order backlog as of 31.12.2024 1 290 324 1 614
8 Alternative Performance Measures
9 Auditor’s report
Statsautoriserte revisorer
Ernst & Young AS
Stortorvet 7, 0155 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
To Annual Shareholders' Meeting of Nel ASA
INDEPENDENT AUDITOR'S REPORT
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Nel ASA (the Company) which comprise:
The financial statements of the company, which comprise statement of financial position as at
31 December 2024 and the statement of comprehensive income, statement of cash flows and
statement of changes in equity for the year then ended and notes to the financial statements,
including a summary of significant accounting policies, and
The consolidated financial statements of the group, which comprise the statement of financial
position as at 31 December 2024, statement of comprehensive income, statement of cash flows
and statement of changes in equity for the year then ended and notes to the financial statements,
including material accounting policy information.
In our opinion:
the financial statements comply with applicable statutory requirements,
the financial statements give a true and fair view of the financial position of the company as at
31 December 2024 and its financial performance and cash flows for the year then ended in
accordance with simplified application of international accounting standards according to section
3-9 of the Norwegian Accounting Act, and
the consolidated financial statements give a true and fair view of the financial position of the
group as at 31 December 2024 and its financial performance and cash flows for the year then
ended in accordance with IFRS Accounting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the audit committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the Company and the Group in
accordance with the requirements of the relevant laws and regulations in Norway and the International
Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
Other matters
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for 2024. These matters were addressed in the context of our audit of the
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Independent auditor's report - Nel ASA 2024
A member firm of Ernst & Young Global Limited
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Revenue from sale of customised equipment and projects
Basis for the key audit matter
The Group derives a significant part of its
revenues from sale of customised equipment and
projects. Such projects involve revenue
recognition over time based on measuring the
progress towards complete satisfaction of the
performance obligation. The assessment of
measuring progress requires subjectivity and
professional judgement and is therefore subject
to uncertainty and potential misstatements. The
main risks include management’s use of
estimates and judgments in relation to measuring
progress, including determining the contract’s
total revenues, expected costs to complete and
estimated project margin. We consider this a key
audit matter because of the significant amounts
and the management judgement applied in the
estimates.
Our audit response
We assessed the application of accounting
principles and procedures for monitoring the
customised equipment and project sales. We
discussed the status of contracts with
management, finance and technical staff and
reconciled estimated revenues and cost to
budgets. For new contracts we tested the
estimated revenue against agreements. We have
also recalculated the measurement of progress
and performed test of details e.g., vouching to
invoices and hours incurred on the projects. We
refer to the Groups disclosures included in note
1.5 and 2.1 in the consolidated financial
statements.
Assessment of impairment of goodwill
Basis for the key audit matter
At 31 December 2024, the recorded amount of
goodwill was NOK 412 million, approximately 7
% of total assets. Estimating the recoverable
amount of the goodwill requires management
judgment including estimates of future sales,
gross margins, operating expenses, growth rates,
capital expenditures and discount rate.
Management’s annual impairment assessment is
a key audit matter because the assessment
requires significant judgment and includes
estimation uncertainties.
Our audit response
For each cash generating unit, we evaluated the
assumptions based on the development in the
market and compared the cash-flow projections
in the impairment calculation to board approved
budgets. We considered the accuracy of
management’s prior year estimates and
evaluated the level of consistency applied in the
valuation methodology from previous years.
Furthermore, we compared the risk premiums in
the weighted average cost of capital with external
data and considered management’s adjustments
for company specific factors. We also tested the
mathematical accuracy of the valuation model
and performed sensitivity analysis of the
assumptions used. We assessed the Group's
disclosures included in note 1.5 and 3.1 in the
consolidated financial statements about those
assumptions to which the outcome of the
impairment test is most sensitive.
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Independent auditor's report - Nel ASA 2024
A member firm of Ernst & Young Global Limited
Other information
The Board of Directors and the Managing Director (management) are responsible for the information in
the Board of Directors’ report and the other information presented with the financial statements. The other
information comprises the letter from the CEO, Report from the Board of Directors, Environment, Social
and Governance (“ESG”) report and the Board of Director's report in relation to the Norwegian code of
practice for corporate governance. Our opinion on the financial statements does not cover the information
in the Board of Directors’ report and the other information presented with the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the information in the
Board of Directors’ report and for the other information presented with the financial statements. The
purpose is to consider if there is material inconsistency between the information in the Board of Directors’
report and the other information presented with the financial statements and the financial statements or
our knowledge obtained in the audit, or otherwise the information in the Board of Directors’ report and for
the other information presented with the financial statements otherwise appears to be materially
misstated. We are required to report that fact if there is a material misstatement in the Board of Directors’
report and the other information presented with the financial statements. We have nothing to report in this
regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
is consistent with the financial statements and
contains the information required by applicable statutory requirements
Our statement on the Board of Directors’ report applies correspondingly for the statement on Corporate
Governance.
Responsibilities of management for the financial statements
Management is responsible for the preparation of the financial statements of the Company that give a
true and fair view in accordance with simplified application of international accounting standards
according to section 3-9 of the Norwegian Accounting Act, and for the preparation of the consolidated
financial statements of the Group that give a true and fair view in accordance with IFRS Accounting
Standards as adopted by the EU. Management is responsible for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or the Group, or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
4
Independent auditor's report - Nel ASA 2024
A member firm of Ernst & Young Global Limited
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s and the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company and the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirement
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Nel ASA we have performed an assurance engagement
to obtain reasonable assurance about whether the financial statements included in the annual report, with
the file name NELASA-2024-12-31-0-en.zip, have been prepared, in all material respects, in compliance
5
Independent auditor's report - Nel ASA 2024
A member firm of Ernst & Young Global Limited
with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single
Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities
Trading Act, which includes requirements related to the preparation of the annual report in XHTML format
and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material
respects, in compliance with the ESEF Regulation.
Management’s responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
Regulation. This responsibility comprises an adequate process and such internal control as management
determines is necessary.
Auditor’s responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material
respects, the financial statements included in the annual report have been prepared in accordance with
the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance
Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial
information”. The standard requires us to plan and perform procedures to obtain reasonable assurance
about whether the financial statements included in the annual report have been prepared in accordance
with the ESEF Regulation.
As part of our work, we perform procedures to obtain an understanding of the company’s processes for
preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial
statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL
tagging of the consolidated financial statements and assess management’s use of judgement. Our
procedures include reconciliation of the iXBRL tagged data with the audited financial statements in
human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Oslo, 26 February 2025
E
RNST & YOUNG AS
The auditor's report is signed electronically
Asbjørn Ler
State Authorised Public Accountant (Norway)
info@nelhydrogen.com
+47 23 24 89 50
www.nelhydrogen.com
Office address:
Karenslyst all é 49,
0279 Oslo, Norway
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