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"s8_notes__6__5": {
"value": "1.1 Corporate informationNel 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, and hydrogen fueling equipment for road-going vehicles. Nel\u2019s 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 Hydrogen Electrolyser and Nel Hydrogen Fueling. 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\u2019s head office is in Karenslyst all\u00e9 49, N-0279 Oslo, Norway.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__12": {
"value": "Nel ASA (Nel) is a global, dedicated hydrogen company, delivering optimal solutions to produce, store and distribute hydrogen from renewable energy.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__14": {
"value": "Nel ASA",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__13": {
"value": "Nel ASA",
"dimensions": {
"concept": "ifrs-full:NameOfParentEntity",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__6": {
"value": "Nel ASA",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__8": {
"value": "ASA",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__9": {
"value": "Norway",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__7": {
"value": "Norway",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__11": {
"value": "Oslo",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__10": {
"value": "Karenslyst all\u00e9 49, N-0279 Oslo, Norway",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__15": {
"value": "1.2 Basis of preparationThe group\u2019s consolidated financial statements have been prepared in accordance with IFRS Accounting Standard 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 27, 2024.DEFINITION AND APPLYING OF MATERIALITY JUDGEMENTS IN PREPARATION OF THESE CONSOLIDATED FINANCIAL STATEMENTSThese 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 materiality 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 CONSOLIDATIONThe consolidated financial statements comprise the financial statements of the parent company and its subsidiaries as of 31 December 2023. 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\u2019s 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 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\u2019s 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 statement of comprehensive income.FOREIGN EXCHANGE AND CURRENCYTransactions and balancesTransactions in foreign currencies are converted to functional currency to the exchange rate on the transaction date. Exchange rate gains and losses are recognised within \u2018finance cost\u2019 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 subsidiariesThe individual financial statements of a subsidiary are prepared in the subsidiary\u2019s 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 \u2018Other components of equity\u2019.STATEMENT OF COMPREHENSIVE INCOMEThe Group present a single statement of \u2018Consolidated statement of comprehensive income\u2019 which comprise all components of profit or loss, OCI and the comprehensive income for the period.STATEMENT OF CASH FLOWSThe Group uses the indirect method for the presentation of the cash flow statement.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__16": {
"value": "The group\u2019s consolidated financial statements have been prepared in accordance with IFRS Accounting Standard as adopted by the European Union (EU).",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__17": {
"value": "The consolidated financial statements are presented in Norwegian kroner (NOK). The functional currency of Nel ASA is NOK.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__18": {
"value": "The consolidated financial statements were approved by the Board of Directors and the Chief Executive Officer on February 27, 2024.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__20": {
"value": "BASIS OF CONSOLIDATIONThe consolidated financial statements comprise the financial statements of the parent company and its subsidiaries as of 31 December 2023. 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\u2019s 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 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\u2019s 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 statement of comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__19": {
"value": "BASIS OF CONSOLIDATIONThe consolidated financial statements comprise the financial statements of the parent company and its subsidiaries as of 31 December 2023. 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\u2019s 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 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\u2019s 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 statement of comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__22": {
"value": "FOREIGN EXCHANGE AND CURRENCYTransactions and balancesTransactions in foreign currencies are converted to functional currency to the exchange rate on the transaction date. Exchange rate gains and losses are recognised within \u2018finance cost\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__21-1": {
"value": "FOREIGN EXCHANGE AND CURRENCYTransactions and balancesTransactions in foreign currencies are converted to functional currency to the exchange rate on the transaction date. Exchange rate gains and losses are recognised within \u2018finance cost\u2019 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.Currency riskNel 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\u2019 functional currencies, primarily with respect to changes in USD and DKK, 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\u2019s 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 -213 094 -306 472 30 647 15 324 -15 324 -30 647 USD -13 470 -126 623 12 662 6 331 -6 331 -12 662 KRW -6 708 336 -53 465 5 347 2 673 -2 673 -5 347 SEK -104 372 -106 730 10 673 5 337 -5 337 -10 673 GBP 40 439 -44 -22 22 44 EUR 4 244 45 504 -4 550 -2 275 2 275 4 550 Effect on net income (loss) 54 735 27 367 -27 367 -54 735 STATEMENT OF FINANCIAL POSITIONNET RECEIVABLES/LIABILITIES IN FOREIGN CURRENCIESDKK -16 229 -22 835 2 284 1 142 -1 142 -2 284 USD 17 444 148 841 -14 884 -7 442 7 442 14 884 KRW -2 804 -22 2 1 -1 -2 SEK -15 321 -15 987 1 599 799 -799 -1 599 GBP -10 -110 11 6 -6 -11 EUR 47 970 502 263 -50 226 -25 113 25 113 50 226 Effect on net income (loss) -61 215 -30 607 30 607 61 215 Total effect on Net income (loss) and Equity -6 480 -3 240 3 240 6 480 The table shows the gross foreign currency exposure based on each entity in the group\u2019 functional currency, before hedging. Nel\u2019s hedging strategy and designated instruments are elaborated and disclosed in note 6.5. The figures exclude translation of intercompany loans in Nel ASA.DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__23": {
"value": "Consolidation of subsidiariesThe individual financial statements of a subsidiary are prepared in the subsidiary\u2019s 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 \u2018Other components of equity\u2019.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__24": {
"value": "STATEMENT OF CASH FLOWSThe Group uses the indirect method for the presentation of the cash flow statement.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__25-1": {
"value": "1.3 Material accounting policiesAccounting policies and estimate uncertainty are largely incorporated into the individual notes.Table of contents for where the material 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 6.52.1 Revenue from contracts with customersThe revenue in Nel is from sale of both complete hydrogen electrolyser systems and hydrogen fueling stations, including installation, commissioning, and long-term service agreements. Additionally, Nel earns revenue from replacement parts and accessories in the aftermarket. Project execution is key in Nel\u2019s large construction projects.The group\u2019s 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, 44% (49%) and 56% (51%) of revenue in 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.Significant accounting judgements \u2013 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 Manufacturing a customised product or piece of equipment a significant effect on the financial statements and are for a specific customer that would require significant cost to to some extent dependent upon judgements from modify to be able to transfer it to another customer, then management. the contract would likely meet the criteria of no alternative use. Estimation uncertainty \u2013 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\u2019s 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\u2019s manufacturing capacity, productivity and using the most likely amount.quality.TYPE OF GOODS OR SERVICESThe 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 equipmentThe 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 Electrolyser US division, aftermarket segment in the Electrolyser Norway division and the Fueling divison.Customised equipmentMost of Nel\u2019s 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.ProjectsThe project contracts typically comprise \u2022 equipment (standard product or customised), \u2022 design, siting, installation and commissioning of the equipment,Electrolyser. Revenue from sale of customised equipment and projects is 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.Fueling. Sale of fueling equipment often include a standard installation service and commissioning, each assessed as individual performance obligation. Revenue recognition for equipment depends on assessment of standard or customised equipment. Revenue for installation and commissioning is recognised over-time measuring progress using input method cost-to-cost.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.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.CONTRACT BALANCESEquipment contracts with a customer will have milestone payments with variable structures. The contract price will be invoiced when certain criteria are met. A typical milestone structure could be contract acceptance, placement of major supplier purchases, delivery/shipment 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. The group does not accept returns of product or provide customers refunds or other similar concessions.Contract assetsA 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 \u201ccontract assets\u201d. 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 liabilitiesA 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 \u201ccontract liabilities\u201d.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\u2019 equity-settled share-based payments are measured at fair value at the grant date.PensionsThe 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 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 Danish and the US subsidiary have pension plans that meet their respective requirements.2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.3.2 Property, plant and equipmentProperty, 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\u2019s cost price and depreciated in line with the remaining useful life of the asset.USEFUL LIFE, DEPRECIATION PLAN\u2022 Office machines and other equipment has a useful life of 3-5 years\u2022 Production equipment has a useful life of 3-8 years\u2022 Buildings has a useful life of 30-40 years\u2022 Technical installations have a useful life of 15-10 years\u2022 Right of use assets has a useful life of 2-10 yearsImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.3.3 LeasesAt 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 LESSEEAt 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\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Refer to section significant accounting judgements \u2013 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 variable lease payments.The Group presents right-of-use assets in \u2018property, plant and equipment\u2019 and the lease liabilities within \u2018lease liabilities\u2019, divided into current and non-current portions.Short-term leases and leases of low value assetsNel has elected the practical expedient of expensing short-term leases and low value assets as incurred.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 \u2018would have to pay\u2019, 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\u2019s stand-alone credit rating).The group has lease contracts for various items of manufacturing facilities, offices, warehouse, parking, vehicles and other equipment used in its operations. Leases of manufacturing facilities generally have lease terms 10 years, while offices, warehouse and parking have 5 years and motor vehicles and other equipment generally have lease terms between 2 and 5 years. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets. \u2018Manufacturing facilities\u2019 comprise the Group\u2019 two significant leases in the manufacturing facilities at Her\u00f8ya (Norway) and Wallingford (US).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.3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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 liabilities4.1 InventoriesInventories 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.Inventories are measured at the lowest of cost and net realisable value less costs to sell. In both 2023 and 2022, all items of inventories are measured at cost. The amount of inventories recognised as an expense was NOK 943.1 (622.2) million during the period.4.2 Trade receivablesTrade 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.Nel recognises loss allowances for \u2018Expected Credit Loss\u2019 (ECL) on:a) Financial assets measured at amortised cost; andb) Contract assetsLoss 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\u2019s historical experience and informed credit assessment, that includes forward-looking information.MEASUREMENT OF ECLsECLs 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 POSITIONLoss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.4.4 Cash and cash equivalentsCash and cash equivalents include cash, bank deposits and all other monetary items due within three months or less.GOVERNMENT GRANTSGovernment 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 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 \u201cgross\u201d in Nel\u2019s 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 income in the statement of comprehensive income.PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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.ACCRUED WARRANTYThe 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 8%.EMPLOYEE BENEFITSNel has short term incentive bonuses in place for all employees. The provision for bonus incurred in 2023 to be finally measured and paid in 2024 is 46.5 NOK (21.8) 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 CLAIMSSettlement and claims comprise disputes, claims and fines where cash outflow is assessed probable (more likely that not to occur). At the beginning of 2023 the provisions for settlement and claims were mainly related to the Kj\u00f8rbo incident from 2019. During 2023, the company received a reduced notice of fine (no: forelegg) related to the Kj\u00f8rbo incident. This has resulted in a reversal of approximately NOK 15.0 million in unused provisions in 2023. At the end of 2023 there is no provision. ONEROUS CONTRACTSAn 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.DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency",
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"s8_notes__6__27": {
"value": "1.4 Changes in accounting policiesA few amendments to IFRS have been implemented for the first time in the current year:Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors\u2014 Definition of Accounting EstimatesThe amendments to IAS 8 replaced the definition of accounting estimates to \u201cmonetary amounts in financial statements that are subject to measurement uncertainty\u201d. The adoption of this definition did not have any material impact in the group consolidated financial statements.Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements\u2014 Disclosure of Accounting Policies The group has adopted the amendments to IAS 1 for the first time in the current year. The amendments replace the term \u2018significant accounting policies\u2019 with \u2018material accounting policy information\u2019. Accounting policy information is material if, when considered together with other information included in an entity\u2019s financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The adoption of this definition did not have any material impact in the group consolidated financial statements.Amendments to IAS 12 Income Taxes\u2014Deferred Tax related to Assets and Liabilities arising from a Single TransactionThe group has adopted the amendments to IAS 12 for the first time in the current year. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. It would require Nel to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12. The adoption of this definition did not have any material impact in the group consolidated financial statements.Other changes in IFRS related to \u201cAmendments to IAS 12 Income Taxes\u2014 International Tax Reform\u2014Pillar Two Model Rules\u201d and \u201dIFRS 17 Insurance Contracts (including the June 2020 and December 2022 Amendments to IFRS 17)\u201d did not affect any material transaction occurring in the reporting period.",
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"s8_notes__6__26": {
"value": "1.4 Changes in accounting policiesA few amendments to IFRS have been implemented for the first time in the current year:Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors\u2014 Definition of Accounting EstimatesThe amendments to IAS 8 replaced the definition of accounting estimates to \u201cmonetary amounts in financial statements that are subject to measurement uncertainty\u201d. The adoption of this definition did not have any material impact in the group consolidated financial statements.Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements\u2014 Disclosure of Accounting Policies The group has adopted the amendments to IAS 1 for the first time in the current year. The amendments replace the term \u2018significant accounting policies\u2019 with \u2018material accounting policy information\u2019. Accounting policy information is material if, when considered together with other information included in an entity\u2019s financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The adoption of this definition did not have any material impact in the group consolidated financial statements.Amendments to IAS 12 Income Taxes\u2014Deferred Tax related to Assets and Liabilities arising from a Single TransactionThe group has adopted the amendments to IAS 12 for the first time in the current year. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. It would require Nel to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12. The adoption of this definition did not have any material impact in the group consolidated financial statements.Other changes in IFRS related to \u201cAmendments to IAS 12 Income Taxes\u2014 International Tax Reform\u2014Pillar Two Model Rules\u201d and \u201dIFRS 17 Insurance Contracts (including the June 2020 and December 2022 Amendments to IFRS 17)\u201d did not affect any material transaction occurring in the reporting period.",
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"s8_notes__6__28-1": {
"value": "1.5 Significant accounting judgements and estimation uncertaintyThe 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.JUDGEMENTSThe following are Nel\u2019s 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 3.3ASSUMPTIONS AND ESTIMATION UNCERTAINTYRevenue recognition 2.1Share-based payments 2.5Impairment of goodwill and intangible assets 3.1Expected credit loss assessment 6.2Significant accounting judgements \u2013 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 Manufacturing a customised product or piece of equipment a significant effect on the financial statements and are for a specific customer that would require significant cost to to some extent dependent upon judgements from modify to be able to transfer it to another customer, then management. the contract would likely meet the criteria of no alternative use. Estimation uncertainty \u2013 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\u2019s 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\u2019s manufacturing capacity, productivity and using the most likely amount.quality.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\u2019 equity-settled share-based payments are measured at fair value at the grant date.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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.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\u2019s 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.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 \u2018would have to pay\u2019, 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\u2019s stand-alone credit rating).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.",
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},
"s8_notes__6__32-1": {
"value": "2.1 Revenue from contracts with customersThe revenue in Nel is from sale of both complete hydrogen electrolyser systems and hydrogen fueling stations, including installation, commissioning, and long-term service agreements. Additionally, Nel earns revenue from replacement parts and accessories in the aftermarket. Project execution is key in Nel\u2019s large construction projects.The group\u2019s 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, 44% (49%) and 56% (51%) of revenue in 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.Significant accounting judgements \u2013 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 Manufacturing a customised product or piece of equipment a significant effect on the financial statements and are for a specific customer that would require significant cost to to some extent dependent upon judgements from modify to be able to transfer it to another customer, then management. the contract would likely meet the criteria of no alternative use. Estimation uncertainty \u2013 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\u2019s 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\u2019s manufacturing capacity, productivity and using the most likely amount.quality.TYPE OF GOODS OR SERVICESThe 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 equipmentThe 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 Electrolyser US division, aftermarket segment in the Electrolyser Norway division and the Fueling divison.Customised equipmentMost of Nel\u2019s 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.ProjectsThe project contracts typically comprise \u2022 equipment (standard product or customised), \u2022 design, siting, installation and commissioning of the equipment,Electrolyser. Revenue from sale of customised equipment and projects is 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.Fueling. Sale of fueling equipment often include a standard installation service and commissioning, each assessed as individual performance obligation. Revenue recognition for equipment depends on assessment of standard or customised equipment. Revenue for installation and commissioning is recognised over-time measuring progress using input method cost-to-cost.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.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.CONTRACT BALANCESEquipment contracts with a customer will have milestone payments with variable structures. The contract price will be invoiced when certain criteria are met. A typical milestone structure could be contract acceptance, placement of major supplier purchases, delivery/shipment 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. The group does not accept returns of product or provide customers refunds or other similar concessions.Contract assetsA 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 \u201ccontract assets\u201d. 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 liabilitiesA 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 \u201ccontract liabilities\u201d.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__30-1": {
"value": "2.1 Revenue from contracts with customersThe revenue in Nel is from sale of both complete hydrogen electrolyser systems and hydrogen fueling stations, including installation, commissioning, and long-term service agreements. Additionally, Nel earns revenue from replacement parts and accessories in the aftermarket. Project execution is key in Nel\u2019s large construction projects.The group\u2019s 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, 44% (49%) and 56% (51%) of revenue in 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.Significant accounting judgements \u2013 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 Manufacturing a customised product or piece of equipment a significant effect on the financial statements and are for a specific customer that would require significant cost to to some extent dependent upon judgements from modify to be able to transfer it to another customer, then management. the contract would likely meet the criteria of no alternative use. Estimation uncertainty \u2013 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\u2019s 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\u2019s manufacturing capacity, productivity and using the most likely amount.quality.TYPE OF GOODS OR SERVICESThe 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 equipmentThe 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 Electrolyser US division, aftermarket segment in the Electrolyser Norway division and the Fueling divison.Customised equipmentMost of Nel\u2019s 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.ProjectsThe project contracts typically comprise \u2022 equipment (standard product or customised), \u2022 design, siting, installation and commissioning of the equipment,Electrolyser. Revenue from sale of customised equipment and projects is 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.Fueling. Sale of fueling equipment often include a standard installation service and commissioning, each assessed as individual performance obligation. Revenue recognition for equipment depends on assessment of standard or customised equipment. Revenue for installation and commissioning is recognised over-time measuring progress using input method cost-to-cost.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.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:2023 2022SEGMENTS FUELING ELECTROLYSER TOTAL FUELING ELECTROLYSER TOTALType of goods or serviceEquipment and projects 278 115 1 220 417 1 498 532 151 377 630 960 782 337Service and aftermarket 53 153 129 385 182 538 56 662 75 854 132 516TOTAL Revenue from contracts with customers 331 269 1 349 801 1 681 070 208 039 706 814 914 853Timing of revenue recognitionRevenue recognised at point in time 256 085 477 866 733 951 151 377 297 036 448 413Revenue recognised over time 75 184 871 935 947 119 56 662 409 777 466 440TOTAL Revenue from contracts with customers 331 269 1 349 801 1 681 070 208 039 706 814 914 853Onerous 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 \u2018Provisions\u2019.CONTRACT BALANCESEquipment contracts with a customer will have milestone payments with variable structures. The contract price will be invoiced when certain criteria are met. A typical milestone structure could be contract acceptance, placement of major supplier purchases, delivery/shipment 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. The group does not accept returns of product or provide customers refunds or other similar concessions.Contract assetsA 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 \u201ccontract assets\u201d. 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 liabilitiesA 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 \u201ccontract liabilities\u201d.2023 2022CONTRACT CONTRACT CONTRACT CONTRACT CONTRACT BALANCESASSETSLIABILITIES TOTALASSETSLIABILITIES TOTALRights to consideration on contracts in progress382 621 910 532 1 293 153 556 141 525 812 1 081 953Less - advances and progress billings -332 854 -1 625 820 -1 958 674 -459 819 -1 198 103 -1 657 922TOTAL Contract assets (liabilities) 49 767 -715 288 96 322 -672 291CONTRACT LIABILITIES 2023 2022Balance as of 01.01. -672 291 -360 821Revenue from amounts included in contract liabilities at the beginning of the period 492 165 251 205Billings and advances received not recognised as revenue in the period -554 127 -554 596Basis adjustment - effect of hedge accounting 18 966 -8 080Balance as of 31.12. -715 288 -672 291CONTRACT ASSETS 2023 2022Balance as of 01.01.96 322178 769Transfers from contract assets recognised at the beginning of the period to receivables -84 288 -167 774Increases due to measure of progress in the period 46 747 83 271Revaluation -3 221 2 056 Balance as of 31.12. 49 767 96 322Order backlogThe performance obligations in contracts with customers vary from a few months to 4 years. The order backlog as of December 31, 2023, was NOK 2 457.7 million (2022: NOK 2 612.6 million). The order backlog in electrolyser and fueling is NOK 2 093.5 million and NOK 364.2 million, respectively. The transaction price allocated to the remaining performance obligations is illustrated in table below:AS OF 31.12.2023 2024 2025 2026 2027 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations1 712 249 385 616 60 841 2 396 2 161 102Unsatisfied performance obligations251 341 41 763 3 456 0 296 560TOTAL backlog1 963 591 427 379 64 297 2 396 2 457 663AS OF 31.12.2022 2023 2024 2025 2026 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations1 166 434 989 315 66 529 11 596 2 233 875Unsatisfied performance obligations336 133 42 602 0 0 378 735TOTAL backlog1 502 568 1 031 917 66 529 11 596 2 612 6105.5 ProvisionsPROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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 01.01.202255 460701 23 770 8 176 88 106Additions 36 894 21 792 2 748 37 374 98 809Used during the year -15 544 -701 -4 182 -5 458 -25 885Reversal of unused provisions -11 426 0 -818 -211 -12 454Foreign currency translation 3 162 0 243 1 459 4 864As of 31.12.2022 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 717ACCRUED WARRANTYThe 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 8%.EMPLOYEE BENEFITSNel has short term incentive bonuses in place for all employees. The provision for bonus incurred in 2023 to be finally measured and paid in 2024 is 46.5 NOK (21.8) 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 CLAIMSSettlement and claims comprise disputes, claims and fines where cash outflow is assessed probable (more likely that not to occur). At the beginning of 2023 the provisions for settlement and claims were mainly related to the Kj\u00f8rbo incident from 2019. During 2023, the company received a reduced notice of fine (no: forelegg) related to the Kj\u00f8rbo incident. This has resulted in a reversal of approximately NOK 15.0 million in unused provisions in 2023. At the end of 2023 there is no provision. ONEROUS CONTRACTSAn 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__29": {
"value": "2.1 Revenue from contracts with customersThe revenue in Nel is from sale of both complete hydrogen electrolyser systems and hydrogen fueling stations, including installation, commissioning, and long-term service agreements. Additionally, Nel earns revenue from replacement parts and accessories in the aftermarket. Project execution is key in Nel\u2019s large construction projects.The group\u2019s 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, 44% (49%) and 56% (51%) of revenue in 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.Significant accounting judgements \u2013 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 Manufacturing a customised product or piece of equipment a significant effect on the financial statements and are for a specific customer that would require significant cost to to some extent dependent upon judgements from modify to be able to transfer it to another customer, then management. the contract would likely meet the criteria of no alternative use. Estimation uncertainty \u2013 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\u2019s 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\u2019s manufacturing capacity, productivity and using the most likely amount.quality.TYPE OF GOODS OR SERVICESThe 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 equipmentThe 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 Electrolyser US division, aftermarket segment in the Electrolyser Norway division and the Fueling divison.Customised equipmentMost of Nel\u2019s 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.ProjectsThe project contracts typically comprise \u2022 equipment (standard product or customised), \u2022 design, siting, installation and commissioning of the equipment,Electrolyser. Revenue from sale of customised equipment and projects is 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.Fueling. Sale of fueling equipment often include a standard installation service and commissioning, each assessed as individual performance obligation. Revenue recognition for equipment depends on assessment of standard or customised equipment. Revenue for installation and commissioning is recognised over-time measuring progress using input method cost-to-cost.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.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:2023 2022SEGMENTS FUELING ELECTROLYSER TOTAL FUELING ELECTROLYSER TOTALType of goods or serviceEquipment and projects 278 115 1 220 417 1 498 532 151 377 630 960 782 337Service and aftermarket 53 153 129 385 182 538 56 662 75 854 132 516TOTAL Revenue from contracts with customers 331 269 1 349 801 1 681 070 208 039 706 814 914 853Timing of revenue recognitionRevenue recognised at point in time 256 085 477 866 733 951 151 377 297 036 448 413Revenue recognised over time 75 184 871 935 947 119 56 662 409 777 466 440TOTAL Revenue from contracts with customers 331 269 1 349 801 1 681 070 208 039 706 814 914 853Onerous 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 \u2018Provisions\u2019.CONTRACT BALANCESEquipment contracts with a customer will have milestone payments with variable structures. The contract price will be invoiced when certain criteria are met. A typical milestone structure could be contract acceptance, placement of major supplier purchases, delivery/shipment 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. The group does not accept returns of product or provide customers refunds or other similar concessions.Contract assetsA 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 \u201ccontract assets\u201d. 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 liabilitiesA 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 \u201ccontract liabilities\u201d.2023 2022CONTRACT CONTRACT CONTRACT CONTRACT CONTRACT BALANCESASSETSLIABILITIES TOTALASSETSLIABILITIES TOTALRights to consideration on contracts in progress382 621 910 532 1 293 153 556 141 525 812 1 081 953Less - advances and progress billings -332 854 -1 625 820 -1 958 674 -459 819 -1 198 103 -1 657 922TOTAL Contract assets (liabilities) 49 767 -715 288 96 322 -672 291CONTRACT LIABILITIES 2023 2022Balance as of 01.01. -672 291 -360 821Revenue from amounts included in contract liabilities at the beginning of the period 492 165 251 205Billings and advances received not recognised as revenue in the period -554 127 -554 596Basis adjustment - effect of hedge accounting 18 966 -8 080Balance as of 31.12. -715 288 -672 291CONTRACT ASSETS 2023 2022Balance as of 01.01.96 322178 769Transfers from contract assets recognised at the beginning of the period to receivables -84 288 -167 774Increases due to measure of progress in the period 46 747 83 271Revaluation -3 221 2 056 Balance as of 31.12. 49 767 96 322Order backlogThe performance obligations in contracts with customers vary from a few months to 4 years. The order backlog as of December 31, 2023, was NOK 2 457.7 million (2022: NOK 2 612.6 million). The order backlog in electrolyser and fueling is NOK 2 093.5 million and NOK 364.2 million, respectively. The transaction price allocated to the remaining performance obligations is illustrated in table below:AS OF 31.12.2023 2024 2025 2026 2027 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations1 712 249 385 616 60 841 2 396 2 161 102Unsatisfied performance obligations251 341 41 763 3 456 0 296 560TOTAL backlog1 963 591 427 379 64 297 2 396 2 457 663AS OF 31.12.2022 2023 2024 2025 2026 OR LATER TOTAL BACKLOGPartly unsatisfied performance obligations1 166 434 989 315 66 529 11 596 2 233 875Unsatisfied performance obligations336 133 42 602 0 0 378 735TOTAL backlog1 502 568 1 031 917 66 529 11 596 2 612 610",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__37": {
"value": "2.2 Other incomeOTHER INCOME 2023 2022Government grants12 028 22 307Research and design study reports69 891 34 549Sub-lease0 2 205Insurance compensation4 078 0Other income6 009 19 667TOTAL Other income92 006 78 728Government grants within \u2018other income\u2019 SEGMENT COUNTRY 2023 2022Electrolyser Norway2 953 4 638Fueling Denmark9 075 17 668TOTAL12 028 22 307Government grants related to assets, amortised12 028 22 307TOTAL12 028 22 307",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__36-1": {
"value": "2.2 Other incomeOTHER INCOME 2023 2022Government grants12 028 22 307Research and design study reports69 891 34 549Sub-lease0 2 205Insurance compensation4 078 0Other income6 009 19 667TOTAL Other income92 006 78 728Government grants within \u2018other income\u2019 SEGMENT COUNTRY 2023 2022Electrolyser Norway2 953 4 638Fueling Denmark9 075 17 668TOTAL12 028 22 307Government grants related to assets, amortised12 028 22 307TOTAL12 028 22 3072.6 Other operating expenses(Amounts in NOK thousands) 2023 2022Research and development expenditure53 779 73 942Utilities24 603 23 809Professional fees117 601 116 108Travel expenses46 436 37 227IT and communication costs38 883 25 891Changes in provisions6 520 46 178Repair and maintenance 16 278 10 572Premises costs 29 074 29 147Sub supplier services81 312 76 337Other expenses154 080 84 611TOTAL Other operating expenses568 566 523 824",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__39": {
"value": "2.3 Segment informationNel operates within two operating segments, Nel Hydrogen Fueling and Nel Hydrogen 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 operate 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. Segment performance is evaluated based on profit or loss and is measured consistently with net income (loss) in the consolidated financial statements.Billing of goods and services between operating segments are effected on an arm\u2019s length basis.NEL HYDROGEN FUELINGNel Hydrogen Fueling is a manufacturer of hydrogen fueling \u00aestations for Fuel Cell Electric Vehicles. Nel\u2019s H2Stationmanufacturing plant is located in Herning, Denmark.NEL HYDROGEN ELECTROLYSERThe Nel Hydrogen Electrolyser division is a global supplier of hydrogen production equipment based on both alkaline and PEM water electrolysis technology. Nel Hydrogen Electrolyser currently has production facilities in Her\u00f8ya, Norway, and in Wallingford, Connecticut, USA. 2023 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION 1)BASED ON CUSTOMER LOCATION FUELING ELECTROLYSER OTHERTOTALNorway1 53742 579 0 44 116United States 145 950 743 657 0 889 607North America ex United States 17 348 15 180 0 32 528Asia 13 815 145 408 0 159 223Europe ex Norway 152 619 328 857 0 481 476Middle East 0 45 718 0 45 718Africa 0 12 584 0 12 584South America 0 9 264 0 9 264Oceania 0 6 555 0 6 555TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 331 269 1 349 801 0 1 681 070Other operating income 14 664 77 342 0 92 006Operating expenses excluding depreciation, amortisation and impairment -547 823 -1 585 729 -113 243 -2 246 795EBITDA -201 890 -158 586 -113 243 -473 719Depreciation and amortisation-53 547-161 979 -8 288 -223 814Impairment of tangible and intangible assets -547 -1 424 0 -1 971OPERATING LOSS -255 984 -321 989 -121 531 -699 504Finance income 1 751 3 345 170 409 175 505Finance costs -44 036 -32 039 -268 746 -344 821Share of loss from associates and joint ventures 0 0 -3 714 -3 714Tax income (expense) 9 177 7 237 924 17 338NET INCOME (LOSS) -289 092 -343 446 -222 658 -855 196TOTAL ASSETS 811 094 3 619 413 3 426 513 7 857 020TOTAL LIABILITIES 327 221 1 269 631 62 432 1 659 284Additions of property, plant and equipment and capitalised technology 48 921 690 909 0 739 8301) 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 2023, revenue from single customers above 10% of total revenues include NOK 430.3 million in revenues from an undisclosed US customer (electrolyser).In 2022, revenue from single customers above 10% of total revenues include Nikola Corporation (electrolyser), recognised revenue of NOK 164.8 million.(Amounts in NOK thousands) 2022 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION 1)BASED ON CUSTOMER LOCATION FUELING ELECTROLYSER OTHERTOTALNorway4226 073 0 6 495United States 103 498 337 544 0 441 041North America ex United States 8 760 9 131 0 17 891Asia 28 979 108 247 0 137 226Europe ex Norway 66 380 201 397 0 267 777Middle East 0 26 218 0 26 218Africa 0 13 206 0 13 206South America 0 3 487 0 3 487Oceania 0 1 512 0 1 512TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 208 039 706 814 0 914 853Other operating income 37 183 41 545 0 78 728Operating expenses excluding depreciation, amortisation and impair--596 925 -1 052 054 -124 475 -1 773 454mentEBITDA-351 703 -303 695-124 475 -779 873Depreciation and amortisation-47 448-116 372 -7 663 -171 483Impairment of tangible and intangible assets -327 298 0 0 -327 298OPERATING LOSS -726 449 -420 067 -132 138 -1 278 654Finance income 12 5 044 92 573 97 629Finance costs 3 417 -16 801 7 412 -5 972Tax income (expense) 8 318 6 586 924 15 828PRE-TAX INCOME (LOSS) -714 702 -425 238 -31 229 -1 171 169TOTAL ASSETS 1 005 347 2 427 284 3 517 881 6 950 512TOTAL LIABILITIES 456 231 977 392 67 282 1 500 905Additions of property, plant and equipment and capitalised technology 54 373 229 660 1 160 285 1931) 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.PROPERTY, PLANT AND EQUIPMENT GEOGRAPHICAL AREA 2023 2022Norway 906 172 562 761Denmark 114 157 111 225USA 282 856 107 959South Korea 2 493 3 543Balance as of 31.12. 1 305 678 785 488",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__38": {
"value": "2.3 Segment informationNel operates within two operating segments, Nel Hydrogen Fueling and Nel Hydrogen 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 operate 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. Segment performance is evaluated based on profit or loss and is measured consistently with net income (loss) in the consolidated financial statements.Billing of goods and services between operating segments are effected on an arm\u2019s length basis.NEL HYDROGEN FUELINGNel Hydrogen Fueling is a manufacturer of hydrogen fueling \u00aestations for Fuel Cell Electric Vehicles. Nel\u2019s H2Stationmanufacturing plant is located in Herning, Denmark.NEL HYDROGEN ELECTROLYSERThe Nel Hydrogen Electrolyser division is a global supplier of hydrogen production equipment based on both alkaline and PEM water electrolysis technology. Nel Hydrogen Electrolyser currently has production facilities in Her\u00f8ya, Norway, and in Wallingford, Connecticut, USA. 2023 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION 1)BASED ON CUSTOMER LOCATION FUELING ELECTROLYSER OTHERTOTALNorway1 53742 579 0 44 116United States 145 950 743 657 0 889 607North America ex United States 17 348 15 180 0 32 528Asia 13 815 145 408 0 159 223Europe ex Norway 152 619 328 857 0 481 476Middle East 0 45 718 0 45 718Africa 0 12 584 0 12 584South America 0 9 264 0 9 264Oceania 0 6 555 0 6 555TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 331 269 1 349 801 0 1 681 070Other operating income 14 664 77 342 0 92 006Operating expenses excluding depreciation, amortisation and impairment -547 823 -1 585 729 -113 243 -2 246 795EBITDA -201 890 -158 586 -113 243 -473 719Depreciation and amortisation-53 547-161 979 -8 288 -223 814Impairment of tangible and intangible assets -547 -1 424 0 -1 971OPERATING LOSS -255 984 -321 989 -121 531 -699 504Finance income 1 751 3 345 170 409 175 505Finance costs -44 036 -32 039 -268 746 -344 821Share of loss from associates and joint ventures 0 0 -3 714 -3 714Tax income (expense) 9 177 7 237 924 17 338NET INCOME (LOSS) -289 092 -343 446 -222 658 -855 196TOTAL ASSETS 811 094 3 619 413 3 426 513 7 857 020TOTAL LIABILITIES 327 221 1 269 631 62 432 1 659 284Additions of property, plant and equipment and capitalised technology 48 921 690 909 0 739 8301) 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 2023, revenue from single customers above 10% of total revenues include NOK 430.3 million in revenues from an undisclosed US customer (electrolyser).In 2022, revenue from single customers above 10% of total revenues include Nikola Corporation (electrolyser), recognised revenue of NOK 164.8 million.(Amounts in NOK thousands) 2022 OPERATING SEGMENTSREVENUES BY GEOGRAPHIC REGION 1)BASED ON CUSTOMER LOCATION FUELING ELECTROLYSER OTHERTOTALNorway4226 073 0 6 495United States 103 498 337 544 0 441 041North America ex United States 8 760 9 131 0 17 891Asia 28 979 108 247 0 137 226Europe ex Norway 66 380 201 397 0 267 777Middle East 0 26 218 0 26 218Africa 0 13 206 0 13 206South America 0 3 487 0 3 487Oceania 0 1 512 0 1 512TOTAL REVENUE FROM CONTRACTS WITH CUSTOMERS 208 039 706 814 0 914 853Other operating income 37 183 41 545 0 78 728Operating expenses excluding depreciation, amortisation and impair--596 925 -1 052 054 -124 475 -1 773 454mentEBITDA-351 703 -303 695-124 475 -779 873Depreciation and amortisation-47 448-116 372 -7 663 -171 483Impairment of tangible and intangible assets -327 298 0 0 -327 298OPERATING LOSS -726 449 -420 067 -132 138 -1 278 654Finance income 12 5 044 92 573 97 629Finance costs 3 417 -16 801 7 412 -5 972Tax income (expense) 8 318 6 586 924 15 828PRE-TAX INCOME (LOSS) -714 702 -425 238 -31 229 -1 171 169TOTAL ASSETS 1 005 347 2 427 284 3 517 881 6 950 512TOTAL LIABILITIES 456 231 977 392 67 282 1 500 905Additions of property, plant and equipment and capitalised technology 54 373 229 660 1 160 285 1931) 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.PROPERTY, PLANT AND EQUIPMENT GEOGRAPHICAL AREA 2023 2022Norway 906 172 562 761Denmark 114 157 111 225USA 282 856 107 959South Korea 2 493 3 543Balance as of 31.12. 1 305 678 785 488",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__40-1": {
"value": "2.4 Raw materials(Amounts in NOK thousands)2023 2022Raw material 837 765 557 149Freight expense 15 825 13 939Other consumables 3 336 13 728TOTAL 856 926 584 8154.1 InventoriesInventories 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)2023 2022Raw material114 657 51 478Work in progress169 713 120 846Finished goods431 290 346 434Allowance for obscolete inventory-11 670 -14 163Balance as of 31.12.703 990 504 595Inventories are measured at the lowest of cost and net realisable value less costs to sell. In both 2023 and 2022, all items of inventories are measured at cost. The amount of inventories recognised as an expense was NOK 943.1 (622.2) million during the period.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__46-1": {
"value": "2.5 Personnel expenses(Amounts in NOK thousands)2023 2022Salaries 701 119 581 677Social security tax 72 778 51 843Pension expense 35 904 29 5081)Other payroll expenses 48 378 41 584Capitalised salary to technology development -36 877 -39 796TOTAL 821 303 664 8151) Included here are expenses amounting to NOK 4.2 million (7.6) related to the Group\u2019s share option program. 2023 2022Average number of full time equivalent 631 580Hereof women 129 105SHARE OPTION PROGRAM UNTIL END OF 2021Nel 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. Refer below for additional information on share option program 2019, 2020 and 2021. The share option program for all employees was terminated in 2022 and was replaced by a STI bonus scheme linked to employee performance and Nel\u2019s financial performance.Options granted July 2020:A total of 12.8 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 21.72 per share based on the average price of the Nel ASA share price the five trading days before grant date (NOK 20.11) and including an 8% premium. Gain per instrument is capped at NOK 5.00 maximum per share option. The options that have not been exercised will lapse 4 years after the date of grant. 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 2022All 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 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 was 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. CEO OPTIONSThe 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 provisionsThe 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: \u2022 the company\u2019s share price\u2022 the strike price of the options\u2022 the expected lifetime of the options\u2022 the risk-free interest rate equalling the expected lifetime\u2022 the volatility associated with the historical price development of the underlying shareAs all employee options granted are \u201cnon-transferable\u201d, 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 frequently 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 does have sufficient traded history, however \u2013 the company 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 2023 was NOK 4.0 (8.3) 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 2023). The total intrinsic value of the company\u2019s share-based instruments is NOK 0.0 (0.1) million as of 31 December 2023.Key assumptions option pricing model per share option program2023 2022Volatility 67.59% na*Interest rate 3.56% na*Dividend 0.00 na*No new share options were issued in 2022.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\u2019 equity-settled share-based payments are measured at fair value at the grant date.(amounts in NOK thousands and number of options/shares in thousands)REMAINING SHARE OPTION OPENING CLOSING STRIKE CONTRACT UAL 1)PROGRAMBALANCE GRANTED EXERCISED FORFEITEDBALANCEPRICE VALUE LIFE2)July 2019 170 -17 0 0 7,80 0 - 2)July 2020 9 508 0 0 -1 519 7 989 21,72 0 0,52 2)July 2021 6 699 0 0 -1 007 5 693 15,13 0 1,63 March 2023 0 1 370 0 -150 1 220 17,02 0 4,17 CEO 2023 0 500 0 0 500 13,85 0 4,50 TOTAL 16 225 1 870 -17 -2 675 15 4023 080SHARE OPTIONS HELD BY MEMBERS OF GROUP MANAGEMENT2)EXPIRY VESTED EXPENSE FOR THE 3) NAME 2023 2024 2025 2026 TOTAL 2024 2025 2028PERIOD H\u00e5kon Volldal00 0 500 500 0 0 500 0 Kjell Christian Bj\u00f8rnsen 383 93 0 150 626 321 155 150 214 Marius L\u00f8ken 0 0 0 0 0 0 0 0 0Esa Laukkanen 0 0 0 150 150 0 0 150 0 Robert Borin 0 0 0 0 0 0 0 0 0 Hans Hide 380 96 0 150 626 316 160 150 216 Stein Ove Erdal 414 96 0 150 660 350 160 150 221 Caroline Duyckaerts 62 93 0 150 305 0 155 150 166 Other employees 9 093 2 973 0 470 12 536 7 003 5 063 470 3 213 TOTAL 10 332 3 351 0 1 720 15 402 7 989 5 693 1 720 4 0301) The value of the share options equals share price less strike price, capped at NOK 5.0 for 2019 and 2020 program, and 10.0 for 2021, 2023 and CEO program.2) 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. No share options expired during the period. Next expiry date is 1 July 2024 for options granted June 2020.PensionsThe 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 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 Danish and the US subsidiary have pension plans that meet their respective requirements.2.6 Other operating expenses(Amounts in NOK thousands) 2023 2022Research and development expenditure53 779 73 942Utilities24 603 23 809Professional fees117 601 116 108Travel expenses46 436 37 227IT and communication costs38 883 25 891Changes in provisions6 520 46 178Repair and maintenance 16 278 10 572Premises costs 29 074 29 147Sub supplier services81 312 76 337Other expenses154 080 84 611TOTAL Other operating expenses568 566 523 8242.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__41-1": {
"value": "2.5 Personnel expenses(Amounts in NOK thousands)2023 2022Salaries 701 119 581 677Social security tax 72 778 51 843Pension expense 35 904 29 5081)Other payroll expenses 48 378 41 584Capitalised salary to technology development -36 877 -39 796TOTAL 821 303 664 8151) Included here are expenses amounting to NOK 4.2 million (7.6) related to the Group\u2019s share option program. 2023 2022Average number of full time equivalent 631 580Hereof women 129 105PensionsThe 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 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 Danish and the US subsidiary have pension plans that meet their respective requirements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__42": {
"value": "2023 2022Average number of full time equivalent 631 580Hereof women 129 105",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__43": {
"value": "SHARE OPTION PROGRAM UNTIL END OF 2021Nel 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. Refer below for additional information on share option program 2019, 2020 and 2021. The share option program for all employees was terminated in 2022 and was replaced by a STI bonus scheme linked to employee performance and Nel\u2019s financial performance.Options granted July 2020:A total of 12.8 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 21.72 per share based on the average price of the Nel ASA share price the five trading days before grant date (NOK 20.11) and including an 8% premium. Gain per instrument is capped at NOK 5.00 maximum per share option. The options that have not been exercised will lapse 4 years after the date of grant. 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 2022All 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 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 was 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. CEO OPTIONSThe 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 provisionsThe 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: \u2022 the company\u2019s share price\u2022 the strike price of the options\u2022 the expected lifetime of the options\u2022 the risk-free interest rate equalling the expected lifetime\u2022 the volatility associated with the historical price development of the underlying shareAs all employee options granted are \u201cnon-transferable\u201d, 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 frequently 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 does have sufficient traded history, however \u2013 the company 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 2023 was NOK 4.0 (8.3) 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 2023). The total intrinsic value of the company\u2019s share-based instruments is NOK 0.0 (0.1) million as of 31 December 2023.Key assumptions option pricing model per share option program2023 2022Volatility 67.59% na*Interest rate 3.56% na*Dividend 0.00 na*No new share options were issued in 2022.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\u2019 equity-settled share-based payments are measured at fair value at the grant date.(amounts in NOK thousands and number of options/shares in thousands)REMAINING SHARE OPTION OPENING CLOSING STRIKE CONTRACT UAL 1)PROGRAMBALANCE GRANTED EXERCISED FORFEITEDBALANCEPRICE VALUE LIFE2)July 2019 170 -17 0 0 7,80 0 - 2)July 2020 9 508 0 0 -1 519 7 989 21,72 0 0,52 2)July 2021 6 699 0 0 -1 007 5 693 15,13 0 1,63 March 2023 0 1 370 0 -150 1 220 17,02 0 4,17 CEO 2023 0 500 0 0 500 13,85 0 4,50 TOTAL 16 225 1 870 -17 -2 675 15 4023 080SHARE OPTIONS HELD BY MEMBERS OF GROUP MANAGEMENT2)EXPIRY VESTED EXPENSE FOR THE 3) NAME 2023 2024 2025 2026 TOTAL 2024 2025 2028PERIOD H\u00e5kon Volldal00 0 500 500 0 0 500 0 Kjell Christian Bj\u00f8rnsen 383 93 0 150 626 321 155 150 214 Marius L\u00f8ken 0 0 0 0 0 0 0 0 0Esa Laukkanen 0 0 0 150 150 0 0 150 0 Robert Borin 0 0 0 0 0 0 0 0 0 Hans Hide 380 96 0 150 626 316 160 150 216 Stein Ove Erdal 414 96 0 150 660 350 160 150 221 Caroline Duyckaerts 62 93 0 150 305 0 155 150 166 Other employees 9 093 2 973 0 470 12 536 7 003 5 063 470 3 213 TOTAL 10 332 3 351 0 1 720 15 402 7 989 5 693 1 720 4 0301) The value of the share options equals share price less strike price, capped at NOK 5.0 for 2019 and 2020 program, and 10.0 for 2021, 2023 and CEO program.2) 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. No share options expired during the period. Next expiry date is 1 July 2024 for options granted June 2020.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__47-1": {
"value": "SHARE OPTION PROGRAM UNTIL END OF 2021Nel 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. Refer below for additional information on share option program 2019, 2020 and 2021. The share option program for all employees was terminated in 2022 and was replaced by a STI bonus scheme linked to employee performance and Nel\u2019s financial performance.Options granted July 2020:A total of 12.8 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 21.72 per share based on the average price of the Nel ASA share price the five trading days before grant date (NOK 20.11) and including an 8% premium. Gain per instrument is capped at NOK 5.00 maximum per share option. The options that have not been exercised will lapse 4 years after the date of grant. 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 2022All 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 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 was 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. CEO OPTIONSThe 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 provisionsThe 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: \u2022 the company\u2019s share price\u2022 the strike price of the options\u2022 the expected lifetime of the options\u2022 the risk-free interest rate equalling the expected lifetime\u2022 the volatility associated with the historical price development of the underlying shareAs all employee options granted are \u201cnon-transferable\u201d, 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 frequently 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 does have sufficient traded history, however \u2013 the company 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 2023 was NOK 4.0 (8.3) 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 2023). The total intrinsic value of the company\u2019s share-based instruments is NOK 0.0 (0.1) million as of 31 December 2023.5.5 ProvisionsPROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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 01.01.202255 460701 23 770 8 176 88 106Additions 36 894 21 792 2 748 37 374 98 809Used during the year -15 544 -701 -4 182 -5 458 -25 885Reversal of unused provisions -11 426 0 -818 -211 -12 454Foreign currency translation 3 162 0 243 1 459 4 864As of 31.12.2022 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 717ACCRUED WARRANTYThe 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 8%.EMPLOYEE BENEFITSNel has short term incentive bonuses in place for all employees. The provision for bonus incurred in 2023 to be finally measured and paid in 2024 is 46.5 NOK (21.8) 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 CLAIMSSettlement and claims comprise disputes, claims and fines where cash outflow is assessed probable (more likely that not to occur). At the beginning of 2023 the provisions for settlement and claims were mainly related to the Kj\u00f8rbo incident from 2019. During 2023, the company received a reduced notice of fine (no: forelegg) related to the Kj\u00f8rbo incident. This has resulted in a reversal of approximately NOK 15.0 million in unused provisions in 2023. At the end of 2023 there is no provision. ONEROUS CONTRACTSAn 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__48-1": {
"value": "SHARE OPTION PROGRAM UNTIL END OF 2021Nel 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. Refer below for additional information on share option program 2019, 2020 and 2021. The share option program for all employees was terminated in 2022 and was replaced by a STI bonus scheme linked to employee performance and Nel\u2019s financial performance.Options granted July 2020:A total of 12.8 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 21.72 per share based on the average price of the Nel ASA share price the five trading days before grant date (NOK 20.11) and including an 8% premium. Gain per instrument is capped at NOK 5.00 maximum per share option. The options that have not been exercised will lapse 4 years after the date of grant. 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 2022All 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 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 was 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. CEO OPTIONSThe 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 provisionsThe 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: \u2022 the company\u2019s share price\u2022 the strike price of the options\u2022 the expected lifetime of the options\u2022 the risk-free interest rate equalling the expected lifetime\u2022 the volatility associated with the historical price development of the underlying shareAs all employee options granted are \u201cnon-transferable\u201d, 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 frequently 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 does have sufficient traded history, however \u2013 the company 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 2023 was NOK 4.0 (8.3) 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 2023). The total intrinsic value of the company\u2019s share-based instruments is NOK 0.0 (0.1) million as of 31 December 2023.5.5 ProvisionsPROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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 01.01.202255 460701 23 770 8 176 88 106Additions 36 894 21 792 2 748 37 374 98 809Used during the year -15 544 -701 -4 182 -5 458 -25 885Reversal of unused provisions -11 426 0 -818 -211 -12 454Foreign currency translation 3 162 0 243 1 459 4 864As of 31.12.2022 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 717ACCRUED WARRANTYThe 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 8%.EMPLOYEE BENEFITSNel has short term incentive bonuses in place for all employees. The provision for bonus incurred in 2023 to be finally measured and paid in 2024 is 46.5 NOK (21.8) 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 CLAIMSSettlement and claims comprise disputes, claims and fines where cash outflow is assessed probable (more likely that not to occur). At the beginning of 2023 the provisions for settlement and claims were mainly related to the Kj\u00f8rbo incident from 2019. During 2023, the company received a reduced notice of fine (no: forelegg) related to the Kj\u00f8rbo incident. This has resulted in a reversal of approximately NOK 15.0 million in unused provisions in 2023. At the end of 2023 there is no provision. ONEROUS CONTRACTSAn 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__53": {
"value": "2.6 Other operating expenses(Amounts in NOK thousands) 2023 2022Research and development expenditure53 779 73 942Utilities24 603 23 809Professional fees117 601 116 108Travel expenses46 436 37 227IT and communication costs38 883 25 891Changes in provisions6 520 46 178Repair and maintenance 16 278 10 572Premises costs 29 074 29 147Sub supplier services81 312 76 337Other expenses154 080 84 611TOTAL Other operating expenses568 566 523 824",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__59": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__58": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__57": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__56": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__55": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__54": {
"value": "2.7 Finance income and cost(Amounts in NOK thousands) 2023 2022Interest income 167 834 72 201Change in fair value financial instruments 592 19 504Other 7 079 5 924Finance income 175 505 97 629Interest expense 2 758 693Interest expense lease liabilities 14 812 10 473Net foreign exchange loss -16 427 -56 459Change in fair value financial instruments 342 804 50 118Other 875 1 147Finance cost 344 821 5 972Net finance income (cost) -169 316 91 657The change in fair value financial instruments is mainly due to change in fair value of Nel\u2019s shareholdings in Everfuel of NOK -304.1 (Everfuel and Nikola in 2022 equals NOK 26.2 million) million. For additional information, refer note 4.3. Net foreign exchange gain is mainly unrealised effects from revaluing internal loans.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__70": {
"value": "2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).CALCULATIONS OF THE TAX BASE FOR THE YEAR 2023 2022Income (loss) before tax -872 534 -1 186 997Permanent differences 346 979 365 343Change in temporary differences 30 651 183 538Use of tax losses carried forward -89 145 -149 070The year's taxable income -584 049 -787 186RECONCILIATION OF TAX EXPENSE TO NORWEGIAN NOMINAL STATUTORY TAX RATE 2023 2022Nominal tax rate 22 %22 %Income (loss) before tax -872 534 -1 186 997Tax this years income (loss), estimated -191 957 -261 139Tax effect of: Tax rates different from Norway 3 189 2 833Permanent differences 71 637 78 196Change in tax rates recognised in temporary differences 0 -3 702Change in deferred tax -8 830 -8 103Change in not recognized deferred tax assets (tax liabilities) 115 233 163 930Other differences -6 609 12 158Income tax expense -17 338 -15 828INCOME TAX EXPENSE COMPRISE 2023 2022Income tax payable-8 508-7 726Change in deferred tax -8 830 -8 103Total income tax expense (income) -17 338 -15 828TAX EFFECTS OF TEMPORARY DIFFERENCES 2023 2022Trade receivables and customers contracts-6 131-12 949Intangible assets 43 490 38 663Property, plant and equipment 10 926 8 762Inventories 2 053 -147Accrued warranty -16 591 -16 726Leases -8 047 -6 530Deferred income -22 485 -15 700Other accruals -39 411 -30 500Tax losses carry forward -710 578 -497 326Deferred tax asset -746 774 -532 453RECONCILIATION TO STATEMENT OF FINANCIAL POSITION 2023 2022Deferred tax asset -746 774 -532 453Deferred tax asset not recognised in statement of financial position 785 211 577 982Deferred tax liability in the statement of financial position 38 436 45 529CHANGES IN RECOGNISED DEFERRED TAX LIABILITY 2023 2022Balance as of 01.01. 45 529 48 543Recognised in the income statement -8 830 -8 103Translation differences on deferred taxes 1 736 5 089Balance as of 31.12. 38 436 45 529The majority of the deferred tax asset is related to tax losses carry forward. As of 31 December 2023, it is considered not to be likely that the deferred tax asset can be utilised in near future, therefore no deferred tax asset has been capitalised. Table below show net operating losses carried forward by country multiplied with the tax rate, the deferred tax asset not recognised. TAX LOSSES CARRY FORWARD BY COUNTRY 2023 2022Norway 240 470 233 084Denmark 223 655 170 687United States 234 205 88 753South Korea 12 249 4 802Balance as of 31.12. 710 578 497 326",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__64-1": {
"value": "2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__63-1": {
"value": "2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__62": {
"value": "2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).CALCULATIONS OF THE TAX BASE FOR THE YEAR 2023 2022Income (loss) before tax -872 534 -1 186 997Permanent differences 346 979 365 343Change in temporary differences 30 651 183 538Use of tax losses carried forward -89 145 -149 070The year's taxable income -584 049 -787 186RECONCILIATION OF TAX EXPENSE TO NORWEGIAN NOMINAL STATUTORY TAX RATE 2023 2022Nominal tax rate 22 %22 %Income (loss) before tax -872 534 -1 186 997Tax this years income (loss), estimated -191 957 -261 139Tax effect of: Tax rates different from Norway 3 189 2 833Permanent differences 71 637 78 196Change in tax rates recognised in temporary differences 0 -3 702Change in deferred tax -8 830 -8 103Change in not recognized deferred tax assets (tax liabilities) 115 233 163 930Other differences -6 609 12 158Income tax expense -17 338 -15 828INCOME TAX EXPENSE COMPRISE 2023 2022Income tax payable-8 508-7 726Change in deferred tax -8 830 -8 103Total income tax expense (income) -17 338 -15 828TAX EFFECTS OF TEMPORARY DIFFERENCES 2023 2022Trade receivables and customers contracts-6 131-12 949Intangible assets 43 490 38 663Property, plant and equipment 10 926 8 762Inventories 2 053 -147Accrued warranty -16 591 -16 726Leases -8 047 -6 530Deferred income -22 485 -15 700Other accruals -39 411 -30 500Tax losses carry forward -710 578 -497 326Deferred tax asset -746 774 -532 453RECONCILIATION TO STATEMENT OF FINANCIAL POSITION 2023 2022Deferred tax asset -746 774 -532 453Deferred tax asset not recognised in statement of financial position 785 211 577 982Deferred tax liability in the statement of financial position 38 436 45 529CHANGES IN RECOGNISED DEFERRED TAX LIABILITY 2023 2022Balance as of 01.01. 45 529 48 543Recognised in the income statement -8 830 -8 103Translation differences on deferred taxes 1 736 5 089Balance as of 31.12. 38 436 45 529The majority of the deferred tax asset is related to tax losses carry forward. As of 31 December 2023, it is considered not to be likely that the deferred tax asset can be utilised in near future, therefore no deferred tax asset has been capitalised. Table below show net operating losses carried forward by country multiplied with the tax rate, the deferred tax asset not recognised. TAX LOSSES CARRY FORWARD BY COUNTRY 2023 2022Norway 240 470 233 084Denmark 223 655 170 687United States 234 205 88 753South Korea 12 249 4 802Balance as of 31.12. 710 578 497 326",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__61": {
"value": "2.8 Income taxesTAXThe 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 710.6 million of tax amounts from tax losses carried forward (NOK 497.3 million in 2022). These losses relate to subsidiaries that have a history of losses, do not expire, and to some extent may not be used to offset taxable income elsewhere in the group. On this basis, the group has determined that it cannot recognise deferred tax assets from the tax losses carried forward. Deferred tax assets not recognised in the statement of financial statement amount to NOK 746.8 million in 2023 (532.5 in 2022).CALCULATIONS OF THE TAX BASE FOR THE YEAR 2023 2022Income (loss) before tax -872 534 -1 186 997Permanent differences 346 979 365 343Change in temporary differences 30 651 183 538Use of tax losses carried forward -89 145 -149 070The year's taxable income -584 049 -787 186RECONCILIATION OF TAX EXPENSE TO NORWEGIAN NOMINAL STATUTORY TAX RATE 2023 2022Nominal tax rate 22 %22 %Income (loss) before tax -872 534 -1 186 997Tax this years income (loss), estimated -191 957 -261 139Tax effect of: Tax rates different from Norway 3 189 2 833Permanent differences 71 637 78 196Change in tax rates recognised in temporary differences 0 -3 702Change in deferred tax -8 830 -8 103Change in not recognized deferred tax assets (tax liabilities) 115 233 163 930Other differences -6 609 12 158Income tax expense -17 338 -15 828INCOME TAX EXPENSE COMPRISE 2023 2022Income tax payable-8 508-7 726Change in deferred tax -8 830 -8 103Total income tax expense (income) -17 338 -15 828TAX EFFECTS OF TEMPORARY DIFFERENCES 2023 2022Trade receivables and customers contracts-6 131-12 949Intangible assets 43 490 38 663Property, plant and equipment 10 926 8 762Inventories 2 053 -147Accrued warranty -16 591 -16 726Leases -8 047 -6 530Deferred income -22 485 -15 700Other accruals -39 411 -30 500Tax losses carry forward -710 578 -497 326Deferred tax asset -746 774 -532 453RECONCILIATION TO STATEMENT OF FINANCIAL POSITION 2023 2022Deferred tax asset -746 774 -532 453Deferred tax asset not recognised in statement of financial position 785 211 577 982Deferred tax liability in the statement of financial position 38 436 45 529CHANGES IN RECOGNISED DEFERRED TAX LIABILITY 2023 2022Balance as of 01.01. 45 529 48 543Recognised in the income statement -8 830 -8 103Translation differences on deferred taxes 1 736 5 089Balance as of 31.12. 38 436 45 529The majority of the deferred tax asset is related to tax losses carry forward. As of 31 December 2023, it is considered not to be likely that the deferred tax asset can be utilised in near future, therefore no deferred tax asset has been capitalised. Table below show net operating losses carried forward by country multiplied with the tax rate, the deferred tax asset not recognised. TAX LOSSES CARRY FORWARD BY COUNTRY 2023 2022Norway 240 470 233 084Denmark 223 655 170 687United States 234 205 88 753South Korea 12 249 4 802Balance as of 31.12. 710 578 497 326",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__71": {
"value": "2.9 Earnings per shareEarnings 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. \u2018Diluted earnings per share\u2019 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) 2023 2022Net loss attributable to the equity holders of the parent company and for the purpose of basic and diluted shares -855 196 -1 171 169Basic earnings per shareIssued ordinary shares at 1 January 1 563 325 1 460 799Share options exercised 0 4 487Share issued 108 000 98 039Issued ordinary shares at 31 December 1 671 325 1 563 325Effect of weighting (share options exercised and share issued during the year) -19 500 -25 202Weighted-average number of shares outstanding for the purpose of basic earnings per share 1 651 825 1 538 123Basic earnings per share for loss attributable to the equity holders of the parent company (NOK) -0.52 -0.76Diluted earnings per shareWeighted-average number of shares outstanding for the purpose of basic earnings per share 1 651 825 1 538 1231)Effect of share options on issue 0 0Weighted-average number of shares outstanding for the purpose of diluted earnings per share 1 651 825 1 538 123Diluted earnings per share for loss attributable to the equity holders of the parent company (NOK) -0.52 -0.761) As of 31 December 2023, 15 402 175 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).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__87-1": {
"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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.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\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__77": {
"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.",
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"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
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"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__76-1": {
"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.3.2 Property, plant and equipmentProperty, 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\u2019s cost price and depreciated in line with the remaining useful life of the asset.(Amounts in NOK thousands)MACHINERY AND EQUIPMENT BUILDINGSOFFICE RIGHT-OF- ASSET MACHINES USE UNDER CON-AND OTHER PRODUCTION TECHNICAL ASSETS STRUCTIONEQUIPMENTEQUIPMENT BUILDINGSINSTALLATIONS(NOTE 3.3) TOTALAcquisition cost as of 01.01.2022348 935 60 119 58 378 120 305 6 054 151 741 745 532Additions 86 653 32 211 41 097 405 120 35 961 196 447Disposals 0 -1 074 -2 738 0 -492 0 -4 304Reclassification -354 831 9 468 340 505 0 6 432 0 1 574Remeasurement 0 0 0 0 0 43 117 43 117Currency effects 857 6 890 3 293 4 508 26 2 013 17 587Acquisition cost as of 31.12.2022 81 614 107 614 440 535 125 218 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 529Accumulated depreciation as of 16 327 26 259 23 515 13 392 1 981 40 544 122 01801.01.2022Depreciation 0 20 703 42 055 4 078 667 21 358 88 860Impairment 0 0 0 0 0 0 0Reversed depreciation disposals 0 -1 017 -1 127 0 -306 0 -2 450Reclassification -16 327 217 16 051 0 0 0 -58Currency effects 0 3 400 2 162 531 1 0 6 094Accumulated depreciation as of 0 49 562 82 656 18 001 2 343 61 902 214 46431.12.2022Depreciation 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 936Reclassification 0 0 0 0 0 0 0Currency 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 85131.12.2023Carrying value as of 31.12.2022 81 614 58 052 357 879 107 216 9 796 170 931 785 488Carrying value as of 31.12.2023 552 183 92 685 335 134 111 255 13 793 200 628 1 305 678Useful 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-lineUSEFUL LIFE, DEPRECIATION PLAN\u2022 Office machines and other equipment has a useful life of 3-5 years\u2022 Production equipment has a useful life of 3-8 years\u2022 Buildings has a useful life of 30-40 years\u2022 Technical installations have a useful life of 15-10 years\u2022 Right of use assets has a useful life of 2-10 yearsAlkaline Her\u00f8ya expansionIn 2023, Nel continue executing the expansion at Her\u00f8ya in Norway with an additional 500 MW alkaline production line, expected to be operational from April 2024. The carrying amount for the Her\u00f8ya second line expansion is NOK 281 million as of 31 December 2023. Total contractual commitments beyond December 2023 for the second line are NOK 118 million, including purchase contracts for all the physical equipment needed.PEM Wallingford expansionIn 2023, Nel took final investment decision to expand the production capacity at its PEM 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 180 million as of 31 December 2023. Total contractual commitments beyond December 2023 for the PEM expansion are NOK 100 million, including purchase contracts for all the physical equipment needed.ImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.3.3 LeasesAt 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 LESSEEAt 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\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Refer to section significant accounting judgements \u2013 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 variable lease payments.The Group presents right-of-use assets in \u2018property, plant and equipment\u2019 and the lease liabilities within \u2018lease liabilities\u2019, divided into current and non-current portions.Short-term leases and leases of low value assetsNel has elected the practical expedient of expensing short-term leases and low value assets as incurred.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 \u2018would have to pay\u2019, 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\u2019s stand-alone credit rating).The group has lease contracts for various items of manufacturing facilities, offices, warehouse, parking, vehicles and other equipment used in its operations. Leases of manufacturing facilities generally have lease terms 10 years, while offices, warehouse and parking have 5 years and motor vehicles and other equipment generally have lease terms between 2 and 5 years. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets. \u2018Manufacturing facilities\u2019 comprise the Group\u2019 two significant leases in the manufacturing facilities at Her\u00f8ya (Norway) and Wallingford (US). Right-of-use assets(Amounts in NOK thousands)MANU- OFFICE, FACTURING WAREHOUSE MOTOR FACILITIESAND PARKINGVEHICLES EQUIPMENT TOTALAs of 01.01.202292 27215 841 2 563 522 111 197Additions 0 35 469 492 0 35 961Remeasurement 42 404 1 033 -320 0 43 117Depreciation -12 064 -7 940 -1 233 -121 -21 358Translation difference 1 449 435 108 22 2 013As of 31.12.2022 124 061 44 839 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 -73 200 15 958 58 671 30 1 459As of 31.12.2023 (note 3.2) 43 915 90 282 66 102 329 200 628In December 2022, the group reassessed the extension option within the lease agreement of Wallingford (US). The lease agreement expires in July 2024 with two extension options for 5-year periods exercisable in July 2024 (extending termination date to July 2029) and July 2029 (extending termination date to July 2034). The reassessment evaluated Nel\u2019s plan to increase the production capacity in the United States, including the expenditure in 2023, and economic incentives to do not reallocate skilled staff and its fixed assets to a new production facility. During 2023, Nel invested NOK 180 million in the capacity expansion reinforcing that reassessment performed in 2022. The conclusion is that Nel is reasonably certain to exercise the first extension option expiring in July 2024. As of 31 December 2023, the economic incentives for the extension due in July 2029 were considered unclear and not reasonably certain due to the uncertainties about the size of the capacity expansion, total investment and location.The reassessment resulted in an increase of the right-of-use assets and lease liabilities of NOK 42.4 million in 2022.Remeasurement in 2023 includes mainly extension of lease of storage facility in connection with production of alkaline electrolysers in Her\u00f8ya, Norway.Lease liabilitiesThe 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)2023 2022Balance as of 01.01. 200 615 133 421Additions 31 397 35 961Remeasurement 28 661 43 117Accretion of interest 14 812 10 473Lease payments -40 585 -24 873Translation differences 2 304 2 515Balance as of 31.12. 237 203 200 615Current38 067 30 438Non-current 199 136 170 177Balance as of 31.12.237 203 200 615The maturity analysis of undiscounted cash flow in lease liabilities is disclosed in Note 5.2. The difference between discounted cash flows and undiscounted cash flows (discount effect) is NOK 86.5 (73.8) million as of 31.12.2023. The discount effect is mainly related to manufacturing facility at Her\u00f8ya with included lease term until 2035Reconciliation of liabilities arising from financing activities in statement of cash flows, split in cash flows and non-cash changes.(Amounts in NOK thousands)2023 2022Balance as of 01.01.200 615 133 421Cash flows principal amount-25 773 -14 400Cash flows interests-14 812 -10 473Non-cash changes:Additions and remeasurements60 058 79 078Accretion of interest expense14 812 10 473Foreign currency effects2 304 2 515Balance as of 31.12.237 203 200 615Amounts recognised in profit or loss (Amounts in NOK thousands)2023 2022Depreciation expense of right-of-use assets-31 820 -21 358Interest expense on lease liabilities-16 041 -10 473Income from subleasing right-of-use assets0 2 205Expense relating to leases of low-value assets-241 -208Expense relating to short-term leases, excluding short-term leases of low-value assets-885 -32TOTAL amount recognised in profit or loss-48 987 -29 866Other informationTotal cash outflow for leases as a lessee41 711 25 113Weighted incremental borrowing rate used as discount rate for the measuring of lease liabilities6,7 % 6,9 %Extension and termination optionsThe 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\u2019s 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.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.2024 2025 2026-2028 >2028Extension options not reasonably certain to exercise0 0 0 44 706Termination options expected to be exercised0 0 0 0TOTAL0 0 0 44 706AS A LESSORThe 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 \u2018other income\u2019.",
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"s8_notes__6__75": {
"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.",
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"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.",
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"s8_notes__6__72": {
"value": "3.1 Intangible assetsRESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.USEFUL LIFE, AMORTISATION PLAN\u2022 Technology has a useful life of 3-7 years\u2022 Customer relationship has a useful life of 7-10 years\u2022 Goodwill has indefinite lifeCUSTOMER RELATIONSHIPCustomer 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.GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.",
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},
"s8_notes__6__80": {
"value": "RESEARCH AND DEVELOPMENTResearchResearch activities are defined as activities whose purpose is to generate new technological understanding or knowledge. Research costs are expensed as incurred.DevelopmentCapitalised 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. TechnologyAs an indication of the level of internal technology costs, Nel currently has 47 and 17 full time employees working directly with R&D in the electrolyser and fueling division, respectively. Of the 47 full time employees working with electrolysers, 33 engineers are dedicated to technology at Proton OnSite in Wallingford, U.S. and 14 are dedicated to the technology at Nel Hydrogen Electrolyser AS in Notodden, NorwayElectrolyserNel invests in development of large-scale industrialisation of Electrolyser products. 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 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 cell batteries into the development of a new cell stack series. In addition, Nel\u2019s electrolyser divisions initiated the development of product concepts to larger sized projects meeting the requirements of a more sophisticated and complex electrolyser system.The Electrolyser division has recognised on the statement of Financial Position Technology from internal development of NOK 359.1 (262.3) million as of 31.12.2023.FuelingNel continues to see the market of Heavy-Duty transportation move fast towards Hydrogen. Therefore, in the fueling division there will be a significant investment in the development of next generation HDV equipment like high-capacity station modules and dispensers. This is to serve customers who have a need for large capacity dispensing capability, enabling fueling of a heavy-duty truck in 10-15 minutes, to achieve a range of 1 000 km. In addition, there will be ongoing investments in factory and laboratory to be able to accommodate HDV fueling equipment.The Fueling division has recognised on the statement of Financial Position Technology from internal development of NOK 87.1 (71.9) million as of 31.12.2023.Significant accounting judgements - Development costsDevelopment expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:\u2022 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale\u2022 How the asset will generate future economic benefits\u2022 Its intention to complete and its ability and intention to use or sell the asset\u2022 The availability of resources to complete the asset\u2022 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 \u2018ramp-up\u2019 stage. Subsequent expenditure is maintenance of existing technology (expensed). Total technology spend for 2023 was NOK 393.2 (248.4) million, of which NOK 183.1 (118.3) million and NOK 210.1 (130.1) million has been capitalised and expensed, respectively.",
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"s8_notes__6__81": {
"value": "GOODWILLGoodwill 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\u2019s 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.",
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"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
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"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
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},
"s8_notes__6__79": {
"value": "GOODWILLGoodwill 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\u2019s 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.",
"dimensions": {
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"s8_notes__6__78": {
"value": "GOODWILLGoodwill 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\u2019s 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 01.01.2022748 807 96 777 615 651 1 461 235Additions from internal development 115 742 0 0 115 742Additions aqcuired separately 2 509 0 0 2 509Disposals -26 100 0 0 -26 100Currency effects 45 598 2 418 46 835 94 851Acquisition cost as of 31.12.2022 886 556 99 195 662 485 1 648 237Additions from internal development 131 897 0 0 131 897Additions aqcuired separately 34 345 0 0 34 345Disposals -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 538Accumulated amortisation and impairment as of 01.01.2022 252 228 64 395 467 317 091Amortisation 69 313 13 310 0 82 623Reversed amortisation disposals -20 772 0 0 -20 772Reclassification 1 632 0 0 1 632Impairment 30 860 0 296 438 327 298Currency effects 5 908 0 0 5 908Accumulated amortisation and impairment as of 31.12.2022 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 491Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 046Impairment loss NOK 1.4 (326.3) million, from categories Technology and Goodwill, is included within \u201cImpairment of tangible and intangible assets\u201d in profit or loss. The impairment of technology is related to not material development projects in electrolyser segment. Prior year, 2022, included impairment in Fueling of NOK 326.3 million. The assessment included uncertainty of future economic benefits from these products, both from actuals historical results and as Fueling develops new technology that will replace existing. Fueling will focus on developing its core technology with special focus on high-pressure compression, cooling and control. The fueling division will continue to invest in the development of next generation Heavy-Duty Vehicle (\u201cHDV\u201d) equipment such as high-capacity station modules and dispensers.Specification of carrying amount2023(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development414 177 0 0 414 177Acquired separately 32 252 0 0 32 252Acquired through business combinations 185 092 8 220 375 305 568 618Carrying value as of 31.12.2023 631 521 8 220 375 305 1 015 0462022(Amounts in NOK thousands) CUSTOMER TECHNOLOGY RELATIONSHIP GOODWILL TOTALInternal development334 176 0 0 334 176Acquired separately 881 0 0 881Acquired through business combinations 212 331 21 489 365 580 599 401Carrying value as of 31.12.2022 547 387 21 489 365 580 934 456ESTIMATION 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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) 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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"s8_notes__6__85-1": {
"value": "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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.ImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.",
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},
"s8_notes__6__84-1": {
"value": "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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.ImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.",
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},
"s8_notes__6__83-1": {
"value": "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\u2019s 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.GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES - IMPAIRMENT CONSIDERATIONSGoodwill, and CGUs where goodwill has been allocated, are required to be tested for impairment annually. The group performed its annual impairment test in December 2023. Impairment losses are recognised where the recoverable amount is less than the carrying amount. The group has not recognised goodwill impairment expense in 2023. In 2022, the group impaired the goodwill of NOK 296.4 million of the Fueling division recognized initially from the business acquisition of Fueling in 2015. The impairment charge was primarily supported by a reduced projection of growth for sales of light duties stations and an increased personnel cost, combined with high quality costs on delivered stations out in the field. In addition, the pre-tax nominal WACC rate increased to 14.0% in 2022 (8.5% in 2021) mainly due to the increase in the risk-free rate in response to raising inflation in Europe during 2022. ANNUAL IMPAIRMENT TEST - ASSUMPTIONSCGUThe annual impairment test is performed for all the Group\u2019 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\u2019 CGUs are \u2022 Electrolyser Norway, \u2022 Electrolyser US and \u2022 FuelingSPECIFICATION OF ALLOCATED GOODWILL PER CGU 2023 2022Electrolyser US313 941 304 216Electrolyser Norway61 364 61 364Fueling0 0Balance as of 31.12.375 305 365 580Market capitalisationThe group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing indicators of impairment. As of 31 December 2023, the market capitalisation of the group was approximately 3 times above the book value of equity, indicating no impairment of goodwill and impairment of the assets. In 2022 the market capitalisation was 4 times above the book value of equityKey assumptionsThe calculations of value in use are sensitive to several assumptions, the following are assessed key assumptions in the measured value: \u2022 Revenue growth and gross margin\u2022 EBITDA margins\u2022 Discount rate / Weighted average cost of capital (WACC)Forecast periodFor 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\u2019s 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) Growth rates of 2.5% growth rate has been applied from year 2029 to 2031, and in terminal value year, for the CGUs Fueling and Electrolyser Norway. For Electrolyser US a declining growth rate of -3.5% has been conservatively applied between 2029 and 2031 to consider cost reductions passing through to customers in the future.Discount rateDiscount 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\u2019s 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 13.5 % to 14.9 %.ANNUAL IMPAIRMENT TEST \u2013 RESULTS AND SENSITIVITYThe 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. Therefore, the measured enterprise value calculated does not fully consider the growth in the renewable hydrogen market, nor the expansion plans and strategy of Nel. 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 FUELINGUSNORWAYGoodwill313 94161 364 0Other intangible assets 314 882 212 313 97 605Other invested capital 492 854 1 005 354 243 940Carrying value 1 121 677 1 279 032 341 544Recoverable amount 1 448 376 2 718 029 341 544Headroom 326 699 1 438 997 0Pre-tax nominal discount rate 13,5 % 14,9 % 14,1 %Terminal growth rate 2,5 % 2,5 % 2,5 %ELECTROLYSER USElectrolyser US is the Group\u2019 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% 186 578 970 1 361 1 753 -1,0% -87 255 596 938 1 280 0,0% -297 7 310* 613 916 CHANGES IN WACC1,0% -462 -190 83 355 628 2,0% -596 -349 -101 146 394 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment. ELECTROLYSER NORWAYElectrolyser Norway is the Group\u2019 segment for the Alkaline electrolyser technology. The CGU covers the production, manufacturing and development of both atmospheric alkaline and pressurised alkaline electrolyser equipment in Her\u00f8ya and Notodden, Norway. A newly automated plant in Her\u00f8ya, Norway started operations in 2021 with further production expansion planned to be concluded in 2024. The operations consist of both assembly of electrolyser, marketing activities and product developmentThe 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% 1 118 2 055 2 992 3 929 4 865 -1,0% 500 1 302 2 104 2 905 3 707 CHANGES IN WACC0,0% 40 739 1439* 2 139 2 838 1,0% -313 306 926 1 545 2 165 2,0% -591 -36 519 1 074 1 629 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.FUELINGFueling is the Group\u2019 segment for the Hydrogen fueling technology. The CGU covers the production and manufacturing of hydrogen refueling stations in Herning, Denmark. The operations consist of both assembly of hydrogen refueling stations, marketing activities and product development. The Fueling segment offers H2Station\u00ae for fast fueling of fuel cell electric vehicles as well as services in relation to the supply of these stations. The objective to the segment is to deliver world class fueling stations offering a complete solution from sourcing and storage of hydrogen to fueling of vehicles.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% -428 -8 413 833 1 253 -1,0% -534 -180 174 529 883 CHANGES IN WACC0,0% -610 -305 0* 305 610 1,0% -667 -400 -132 135 402 2,0% -710 -473 -236 1 238 * Represents headroom in impairment calculation for the CGU. Negative numbers in the table indicate impairment.Additional sensitivities \u2013assumptionsThe sensitivities in the table show the change in assumptions that results in zero headroom, at perpetuity growth 2.5%, all else being equal. Additional sensitivities for the Fueling division has not been included as headroom in the valuation is zero. The table shows the sensitivities for the WACC used, but also for WACC +/- one percentage pointKEY WACC CHANGE ELECTROLYSER ELECTROLYSER ASSUMPTIONS PERIODS CHANGED(PPS)USNO1)Revenue growth multiple Total multiple growth in NOK from 2023 to terminal 1,0%-0,1 -1,10,0% -0,4 -1,3-1,0% -0,6 -1,52)Gross margin Perecentage points in terminal1,0% -1,1% -3,7%0,0% -3,6% -5,0%-1,0% -5,8% -6,2%3)Free cash flow margin Perecentage points in terminal1,0% -0,9% -2,9%0,0% -2,7% -3,9%-1,0% -4,4% -4,8%1) If revenue assumption in terminal is reduced with this year\u2019s revenue multiplied with this factor, the headroom is zero.2) If average gross margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.3) If free cash flow margin rate assumption in the CGU is reduced with this percentage point in the terminal, the headroom is zero.For the CGU Electrolyser Norway, the sensitivity table above shows, all other equal, that if revenue assumption in terminal value year 2031 is NOK 1 093 million lower than used in the impairment test, the headroom is 0. Additionally, the sensitivity in the impairment test shows that if gross margin in terminal value year 2031 is 5.0% lower, blended, the headroom is zero. Finally, it shows that if free cash flow margin in terminal value year 2031 is 3.9% lower than projected, the headroom is zero. The table shows all these sensitivities in scenarios where WACC is +/- 1. CGU Fueling is not included in the table as headroom is measured zero in the impairment test and any reducing changes in the assumptions would lead to negative headroom.ImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.",
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"s8_notes__6__91": {
"value": "3.2 Property, plant and equipmentProperty, 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\u2019s cost price and depreciated in line with the remaining useful life of the asset.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__89": {
"value": "3.2 Property, plant and equipmentProperty, 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\u2019s cost price and depreciated in line with the remaining useful life of the asset.(Amounts in NOK thousands)MACHINERY AND EQUIPMENT BUILDINGSOFFICE RIGHT-OF- ASSET MACHINES USE UNDER CON-AND OTHER PRODUCTION TECHNICAL ASSETS STRUCTIONEQUIPMENTEQUIPMENT BUILDINGSINSTALLATIONS(NOTE 3.3) TOTALAcquisition cost as of 01.01.2022348 935 60 119 58 378 120 305 6 054 151 741 745 532Additions 86 653 32 211 41 097 405 120 35 961 196 447Disposals 0 -1 074 -2 738 0 -492 0 -4 304Reclassification -354 831 9 468 340 505 0 6 432 0 1 574Remeasurement 0 0 0 0 0 43 117 43 117Currency effects 857 6 890 3 293 4 508 26 2 013 17 587Acquisition cost as of 31.12.2022 81 614 107 614 440 535 125 218 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 529Accumulated depreciation as of 16 327 26 259 23 515 13 392 1 981 40 544 122 01801.01.2022Depreciation 0 20 703 42 055 4 078 667 21 358 88 860Impairment 0 0 0 0 0 0 0Reversed depreciation disposals 0 -1 017 -1 127 0 -306 0 -2 450Reclassification -16 327 217 16 051 0 0 0 -58Currency effects 0 3 400 2 162 531 1 0 6 094Accumulated depreciation as of 0 49 562 82 656 18 001 2 343 61 902 214 46431.12.2022Depreciation 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 936Reclassification 0 0 0 0 0 0 0Currency 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 85131.12.2023Carrying value as of 31.12.2022 81 614 58 052 357 879 107 216 9 796 170 931 785 488Carrying value as of 31.12.2023 552 183 92 685 335 134 111 255 13 793 200 628 1 305 678Useful 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-lineUSEFUL LIFE, DEPRECIATION PLAN\u2022 Office machines and other equipment has a useful life of 3-5 years\u2022 Production equipment has a useful life of 3-8 years\u2022 Buildings has a useful life of 30-40 years\u2022 Technical installations have a useful life of 15-10 years\u2022 Right of use assets has a useful life of 2-10 yearsAlkaline Her\u00f8ya expansionIn 2023, Nel continue executing the expansion at Her\u00f8ya in Norway with an additional 500 MW alkaline production line, expected to be operational from April 2024. The carrying amount for the Her\u00f8ya second line expansion is NOK 281 million as of 31 December 2023. Total contractual commitments beyond December 2023 for the second line are NOK 118 million, including purchase contracts for all the physical equipment needed.PEM Wallingford expansionIn 2023, Nel took final investment decision to expand the production capacity at its PEM 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 180 million as of 31 December 2023. Total contractual commitments beyond December 2023 for the PEM expansion are NOK 100 million, including purchase contracts for all the physical equipment needed.ImpairmentAn 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\u2019s carrying amount is higher than the recoverable amount, an impairment loss will be recognised. Property, plant and equipment is included in \u2018other invested capital\u2019 allocated to the respective CGU\u2019s for the annual impairment test where goodwill is allocated. See note 3.1 for impairment considerations for other invested capital.",
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"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
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},
"s8_notes__6__92-1": {
"value": "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\u2019s cost price and depreciated in line with the remaining useful life of the asset.USEFUL LIFE, DEPRECIATION PLAN\u2022 Office machines and other equipment has a useful life of 3-5 years\u2022 Production equipment has a useful life of 3-8 years\u2022 Buildings has a useful life of 30-40 years\u2022 Technical installations have a useful life of 15-10 years\u2022 Right of use assets has a useful life of 2-10 years",
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"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
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},
"s8_notes__6__102-1": {
"value": "3.3 LeasesAt 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 LESSEEAt 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\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Refer to section significant accounting judgements \u2013 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 variable lease payments.The Group presents right-of-use assets in \u2018property, plant and equipment\u2019 and the lease liabilities within \u2018lease liabilities\u2019, divided into current and non-current portions.Short-term leases and leases of low value assetsNel has elected the practical expedient of expensing short-term leases and low value assets as incurred.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 \u2018would have to pay\u2019, 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\u2019s stand-alone credit rating).The group has lease contracts for various items of manufacturing facilities, offices, warehouse, parking, vehicles and other equipment used in its operations. Leases of manufacturing facilities generally have lease terms 10 years, while offices, warehouse and parking have 5 years and motor vehicles and other equipment generally have lease terms between 2 and 5 years. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets. \u2018Manufacturing facilities\u2019 comprise the Group\u2019 two significant leases in the manufacturing facilities at Her\u00f8ya (Norway) and Wallingford (US).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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__100-1": {
"value": "3.3 LeasesAt 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 LESSEEAt 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\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Refer to section significant accounting judgements \u2013 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 variable lease payments.The Group presents right-of-use assets in \u2018property, plant and equipment\u2019 and the lease liabilities within \u2018lease liabilities\u2019, divided into current and non-current portions.Short-term leases and leases of low value assetsNel has elected the practical expedient of expensing short-term leases and low value assets as incurred.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 \u2018would have to pay\u2019, 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\u2019s stand-alone credit rating).The group has lease contracts for various items of manufacturing facilities, offices, warehouse, parking, vehicles and other equipment used in its operations. Leases of manufacturing facilities generally have lease terms 10 years, while offices, warehouse and parking have 5 years and motor vehicles and other equipment generally have lease terms between 2 and 5 years. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets. \u2018Manufacturing facilities\u2019 comprise the Group\u2019 two significant leases in the manufacturing facilities at Her\u00f8ya (Norway) and Wallingford (US). Right-of-use assets(Amounts in NOK thousands)MANU- OFFICE, FACTURING WAREHOUSE MOTOR FACILITIESAND PARKINGVEHICLES EQUIPMENT TOTALAs of 01.01.202292 27215 841 2 563 522 111 197Additions 0 35 469 492 0 35 961Remeasurement 42 404 1 033 -320 0 43 117Depreciation -12 064 -7 940 -1 233 -121 -21 358Translation difference 1 449 435 108 22 2 013As of 31.12.2022 124 061 44 839 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 -73 200 15 958 58 671 30 1 459As of 31.12.2023 (note 3.2) 43 915 90 282 66 102 329 200 628In December 2022, the group reassessed the extension option within the lease agreement of Wallingford (US). The lease agreement expires in July 2024 with two extension options for 5-year periods exercisable in July 2024 (extending termination date to July 2029) and July 2029 (extending termination date to July 2034). The reassessment evaluated Nel\u2019s plan to increase the production capacity in the United States, including the expenditure in 2023, and economic incentives to do not reallocate skilled staff and its fixed assets to a new production facility. During 2023, Nel invested NOK 180 million in the capacity expansion reinforcing that reassessment performed in 2022. The conclusion is that Nel is reasonably certain to exercise the first extension option expiring in July 2024. As of 31 December 2023, the economic incentives for the extension due in July 2029 were considered unclear and not reasonably certain due to the uncertainties about the size of the capacity expansion, total investment and location.The reassessment resulted in an increase of the right-of-use assets and lease liabilities of NOK 42.4 million in 2022.Remeasurement in 2023 includes mainly extension of lease of storage facility in connection with production of alkaline electrolysers in Her\u00f8ya, Norway.Lease liabilitiesThe 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)2023 2022Balance as of 01.01. 200 615 133 421Additions 31 397 35 961Remeasurement 28 661 43 117Accretion of interest 14 812 10 473Lease payments -40 585 -24 873Translation differences 2 304 2 515Balance as of 31.12. 237 203 200 615Current38 067 30 438Non-current 199 136 170 177Balance as of 31.12.237 203 200 615The maturity analysis of undiscounted cash flow in lease liabilities is disclosed in Note 5.2. The difference between discounted cash flows and undiscounted cash flows (discount effect) is NOK 86.5 (73.8) million as of 31.12.2023. The discount effect is mainly related to manufacturing facility at Her\u00f8ya with included lease term until 2035Reconciliation of liabilities arising from financing activities in statement of cash flows, split in cash flows and non-cash changes.(Amounts in NOK thousands)2023 2022Balance as of 01.01.200 615 133 421Cash flows principal amount-25 773 -14 400Cash flows interests-14 812 -10 473Non-cash changes:Additions and remeasurements60 058 79 078Accretion of interest expense14 812 10 473Foreign currency effects2 304 2 515Balance as of 31.12.237 203 200 615Amounts recognised in profit or loss (Amounts in NOK thousands)2023 2022Depreciation expense of right-of-use assets-31 820 -21 358Interest expense on lease liabilities-16 041 -10 473Income from subleasing right-of-use assets0 2 205Expense relating to leases of low-value assets-241 -208Expense relating to short-term leases, excluding short-term leases of low-value assets-885 -32TOTAL amount recognised in profit or loss-48 987 -29 866Other informationTotal cash outflow for leases as a lessee41 711 25 113Weighted incremental borrowing rate used as discount rate for the measuring of lease liabilities6,7 % 6,9 %Extension and termination optionsThe 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\u2019s 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.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.2024 2025 2026-2028 >2028Extension options not reasonably certain to exercise0 0 0 44 706Termination options expected to be exercised0 0 0 0TOTAL0 0 0 44 706AS A LESSORThe 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 \u2018other income\u2019.Reconciliation of liabilities arising from financing activities (Amounts in NOK thousands)2023 2022Balance as of 01.01.22 431 23 191Payment of loan-1 533 -1 889Non-cash changes:Accretion of interest448 598Foreign currency effects1 113 530Balance as of 31.12.22 458 22 431The reconciliation of lease liabilities arising from financing activities is disclosed in note 3.3 leases.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__105-1": {
"value": "Lease liabilitiesThe 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)2023 2022Balance as of 01.01. 200 615 133 421Additions 31 397 35 961Remeasurement 28 661 43 117Accretion of interest 14 812 10 473Lease payments -40 585 -24 873Translation differences 2 304 2 515Balance as of 31.12. 237 203 200 615Current38 067 30 438Non-current 199 136 170 177Balance as of 31.12.237 203 200 615The maturity analysis of undiscounted cash flow in lease liabilities is disclosed in Note 5.2. The difference between discounted cash flows and undiscounted cash flows (discount effect) is NOK 86.5 (73.8) million as of 31.12.2023. The discount effect is mainly related to manufacturing facility at Her\u00f8ya with included lease term until 2035Reconciliation of liabilities arising from financing activities in statement of cash flows, split in cash flows and non-cash changes.(Amounts in NOK thousands)2023 2022Balance as of 01.01.200 615 133 421Cash flows principal amount-25 773 -14 400Cash flows interests-14 812 -10 473Non-cash changes:Additions and remeasurements60 058 79 078Accretion of interest expense14 812 10 473Foreign currency effects2 304 2 515Balance as of 31.12.237 203 200 6155.2 Long-term debt(Amounts in NOK thousands) LONG-TERM DEBT - LENDER LEGAL ENTITY MATURITY INTEREST RATE 2023 20222) Nykredit - Vejlevej 5 - Ejendom Nel Hydrogen A/S 2038 0,36 % 16 160 15 9953) Nykredit - Vejlevej 5 - Ejendom Nel Hydrogen A/S 2038 0,27 % 5 358 5 3534) Nykredit - Vejlevej 3 Nel Hydrogen A/S 2028 0,30 % 940 1 083Balance as of 31.12. 22 458 22 431Reconciliation of liabilities arising from financing activities (Amounts in NOK thousands)2023 2022Balance as of 01.01.22 431 23 191Payment of loan-1 533 -1 889Non-cash changes:Accretion of interest448 598Foreign currency effects1 113 530Balance as of 31.12.22 458 22 431The reconciliation of lease liabilities arising from financing activities is disclosed in note 3.3 leases.MATURITY ANALYSISMaturity analysis for long-term debt (undiscounted cash flows)20232024 2025 2026 2027 >2027 TOTAL Nykredit 1 510 1 551 1 593 1 637 16 169 22 458Lease liabilities (note 3.3) 39 670 41 570 40 226 35 342 162 388 319 1951)Estimated interest cost 495 459 459 459 2 743 4 614TOTAL long-term debt including interest 41 674 43 579 42 278 37 437 181 299 346 2671) Based on prevailing debt installment agreements and interest rates.20222023 2024 2025 2026 >2026 TOTAL Nykredit 1 378 1 415 1 454 1 493 16 691 22 431Lease liabilities (note 3.3) 31 903 28 926 31 427 30 392 164 469 287 1181)Estimated interest cost 504 464 430 430 2 571 4 399TOTAL long-term debt including interest 33 785 30 805 33 310 32 316 183 731 313 9471) Based on prevailing debt installment agreements and interest rates.(Amounts in NOK thousands)CARRYING AMOUNT OF ASSETS THAT ARE PLEDGED 2023 2022Other equipment0 92Building66 100 65 430TOTAL66 100 65 522GUARANTEES 2023 2022Bank guarantees167 492 267 748",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__116": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__115": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__114": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__112-1": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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 2023 2022 2023 2022Sagim SAS France Electrolyser 37.0% Associate 100 100 100 100Glomfjord Hydrogen AS Norway Electrolyser 23.2% Associate 0 2 786 0 2 786SUM associated companies 100 2 886 100 2 886TOTAL associated companies and joint ventures 100 2 886 100 2 886Shares in Glomfjord Hydrogen AS has been divested in 2023.SHORT-TERM INVESTMENTSH2NO ASDuring 2023, Nel received consideration for sale of all shares in the company of NOK 34.1 million. The total gain on sale of shares is NOK 11.6 million, which the majority is recognised as fair value changes in 2021 and 2022. A finance income of 0.4 million is recognised in 2023 from realisation of shares in H2NO AS.Performance and warranty bonds, advance payment guarantee and lease payments guarantee (deposits)Guarantees are included as short-term investments with NOK 24.0 (61.2) million. This is the short-term equivalent to the long-term investments, see note 3.5 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__111-1": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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 2023 2022 2023 2022Sagim SAS France Electrolyser 37.0% Associate 100 100 100 100Glomfjord Hydrogen AS Norway Electrolyser 23.2% Associate 0 2 786 0 2 786SUM associated companies 100 2 886 100 2 886TOTAL associated companies and joint ventures 100 2 886 100 2 886Shares in Glomfjord Hydrogen AS has been divested in 2023.7.1 Composition of the groupThe following subsidiaries are included in the consolidated financial statements:MAIN CONSOLIDATED OWNERSHIP/ OWNERSHIP/ COMPANY LOCATIONOPERATIONSFROM:VOTES 2023VOTES 2022Nel Hydrogen Electrolyser AS Notodden, Norway Alkaline electrolysers 01.10.2015 100 % 100 %Hydrogen fueling Nel Hydrogen A/S Herning, Denmarkstations 01.07.2015 100 % 100 %Nel Fuel AS Oslo, Norway Investment/holding 01.07.2015 100 % 100 %Proton Energy Systems Inc Wallingford, Connecticut, USA PEM electrolysers 01.07.2017 100 % 100 %Nel Korea Co. Ltd Seoul, South Korea Service of H2Station\u00ae 01.07.2018 100 % 100 %Nel Hydrogen Inc San Leandro, California USA Service of H2Station\u00ae 01.01.2019 100 % 100 %Nel Hydrogen Electrolyser Germany GmbH Munich, Germany Electrolysers sales office 24.10.2022 100 % 100 %Nel Hydrogen Electrolyser Belgium BV Brussels, Belgium Electrolyser sales office 27.09.2021 100 % 100 %Nel Austria GmbH Wien, Austria Fueling sales office 30.03.2022 100 % 100 %Nel Hydrogen Chile SpA Santiago, Chile Electrolyser sales office 01.06.2023 100 % -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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__110": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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 2023 2022 2023 2022Sagim SAS France Electrolyser 37.0% Associate 100 100 100 100Glomfjord Hydrogen AS Norway Electrolyser 23.2% Associate 0 2 786 0 2 786SUM associated companies 100 2 886 100 2 886TOTAL associated companies and joint ventures 100 2 886 100 2 886Shares in Glomfjord Hydrogen AS has been divested in 2023.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__109": {
"value": "3.4 Investments in associated companies and joint venturesAn 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\u2019s 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\u2019s share of the profit or loss in equity-accounted investees. Any change in OCI of those investees are presented as part of the group\u2019s OCI. No dividends have been received during 2023 or 2022.The group is not committed to financing the losses and has not provided any guarantee of equity-accounted investees\u2019 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 2023 2022 2023 2022Sagim SAS France Electrolyser 37.0% Associate 100 100 100 100Glomfjord Hydrogen AS Norway Electrolyser 23.2% Associate 0 2 786 0 2 786SUM associated companies 100 2 886 100 2 886TOTAL associated companies and joint ventures 100 2 886 100 2 886Shares in Glomfjord Hydrogen AS has been divested in 2023.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__117-1": {
"value": "3.5 Non-current financial assets(Amounts in NOK thousands)2023 2022Investment in Hydrogen Energy Network (HyNet) 9 800 39 110Long-term investments 147 053 208 066Fair value of derivatives 407 189Prepayments 161 159Other non-current financial assets 1 837 2 548Balance as of 31.12. 159 259 250 072HYDROGEN ENERGY NETWORK (HyNet) The group\u2019s shareholdings in Hydrogen Energy Network (HyNet) constitute a 4.75 % ownership interest. HyNet is structured as a Special Purpose Company and is principally engaged in expanding the hydrogen fueling infrastructure in South Korea.During 2023, the Group recognised negative fair value adjustment of NOK 30.6 million in the HyNet investment. The fair value adjustment is based on the financial situation in the company is strained and the company needs additional capital either through capital increases, investor loans or external loans. Therefore, a negative fair value adjustment is assessed prudent and unbiased. The accumulated cost of shares in HyNet is NOK 39.2 (33.9) million. The transaction and book value are in Korean Won, therefore, the shares are revalued to NOK 9.8 (31.9) million as of 31 December 2023. The shares are unquoted and there have not been any transactions of an identical or similar instrument. Fair value information has not been disclosed for the investment in note 6.6 because the fair value cannot be measured reliably.LONG-TERM INVESTMENTSNel 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 bondsNOK 66.4 (50.8) million relates to outstanding irrevocable letters of credit used as assurance for bid and contract performance, these letters of credit mature between 31 December 2023 and 31 January 2027. As of 31 December 2023, the customers have drawn NOK 0.0 (0.0) million on the letters of credit.Advance payment guaranteeGenerally, in the contracts with customers, Nel receives advance payments. As of 31 December 2023, Nel has NOK 9.5 (107.0) as cash collateral for irrevocable letters of credit issued for advance payment guarantees with financial institutions. As of 31 December 2023, the customers have drawn NOK 0.0 (0.0) million on the letters of credit. Lease payments guarantee (deposits) and other collateralDeposits 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 2023, the Group has NOK 67.1 (49.2) million in such deposits.6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__119-1": {
"value": "4.1 InventoriesInventories 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.Inventories are measured at the lowest of cost and net realisable value less costs to sell. In both 2023 and 2022, all items of inventories are measured at cost. The amount of inventories recognised as an expense was NOK 943.1 (622.2) million during the period.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__123": {
"value": "4.2 Trade receivablesTrade 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)2023 2022Receivables from third-party customers843 964 463 005Allowance for expected credit losses-31 557 -2 270Balance as of 31.12.812 407 460 735Trade receivables are non-interest bearing and are generally on terms 30 to 60 daysMovements in the allowance for impairment in respect of trade receivables(Amounts in NOK thousands)2023 2022Balance as of 01.01.2 270 1 177Net remeasurement of loss allowance29 287 1 093Balance as of 31.12.31 557 2 270See 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 \u2018Expected Credit Loss\u2019 (ECL) on:a) Financial assets measured at amortised cost; andb) Contract assetsLoss 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\u2019s historical experience and informed credit assessment, that includes forward-looking information.MEASUREMENT OF ECLsECLs 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 POSITIONLoss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__124-1": {
"value": "4.2 Trade receivablesTrade 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.Nel recognises loss allowances for \u2018Expected Credit Loss\u2019 (ECL) on:a) Financial assets measured at amortised cost; andb) Contract assetsLoss 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\u2019s historical experience and informed credit assessment, that includes forward-looking information.MEASUREMENT OF ECLsECLs 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 POSITIONLoss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__130": {
"value": "4.3 Prepaid expenses and other current assets(Amounts in NOK thousands)2023 2022Equity instruments0 450 296VAT net receivable41 623 34 040Short-term investments24 013 96 861Prepayments214 855 147 422Other current assets145 456 48 351Fair value of derivatives21 396 438Balance as of 31.12.447 342 777 408EQUITY INSTRUMENTSEverfuelThe carrying value as of 31 December 2022 was NOK 435.8 million. As of 12 December 2023, Nel has divested all its shares in Everfuel A/S. During the year, Nel divested shares for a total net consideration of about NOK 133 million.Everfuel A/S(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHARE HOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 12 359 109 1.12 38.18 471 871Fair value adjustment 2022 0 0 0 -26 215Sale of shares 2022 -218 854 0 0 -9 820Carrying value as of 31.12.2022 12 140 255 1.12 35.90 435 836Fair value adjustment 2023 0 0 0 -302 909Sale of shares 2023 -12 140 255 0 0 -132 926Carrying value as of 31.12.2023 0 0 0 0HyonThe carrying value as of 31 December 2022 was NOK 14.4 million. As of 24 January 2023, Nel has divested all its shares in Hyon AS for a total net consideration of about NOK 7 million.HYON AS(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHAREHOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 9 804 000 0.06 0.06 572Fair value adjustment 2022 0 0 1.42 13 889Carrying value as of 31.12.2022 9 804 000 0.06 1.48 14 461Fair value adjustment 2023 0 0 -0.75 -7 387Sale of shares -9 804 000 0 -0.72 -7 074Carrying value as of 31.12.2023 0 0 0.00 0SHORT-TERM INVESTMENTSH2NO ASDuring 2023, Nel received consideration for sale of all shares in the company of NOK 34.1 million. The total gain on sale of shares is NOK 11.6 million, which the majority is recognised as fair value changes in 2021 and 2022. A finance income of 0.4 million is recognised in 2023 from realisation of shares in H2NO AS.Performance and warranty bonds, advance payment guarantee and lease payments guarantee (deposits)Guarantees are included as short-term investments with NOK 24.0 (61.2) million. This is the short-term equivalent to the long-term investments, see note 3.5 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__129": {
"value": "4.3 Prepaid expenses and other current assets(Amounts in NOK thousands)2023 2022Equity instruments0 450 296VAT net receivable41 623 34 040Short-term investments24 013 96 861Prepayments214 855 147 422Other current assets145 456 48 351Fair value of derivatives21 396 438Balance as of 31.12.447 342 777 408EQUITY INSTRUMENTSEverfuelThe carrying value as of 31 December 2022 was NOK 435.8 million. As of 12 December 2023, Nel has divested all its shares in Everfuel A/S. During the year, Nel divested shares for a total net consideration of about NOK 133 million.Everfuel A/S(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHARE HOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 12 359 109 1.12 38.18 471 871Fair value adjustment 2022 0 0 0 -26 215Sale of shares 2022 -218 854 0 0 -9 820Carrying value as of 31.12.2022 12 140 255 1.12 35.90 435 836Fair value adjustment 2023 0 0 0 -302 909Sale of shares 2023 -12 140 255 0 0 -132 926Carrying value as of 31.12.2023 0 0 0 0HyonThe carrying value as of 31 December 2022 was NOK 14.4 million. As of 24 January 2023, Nel has divested all its shares in Hyon AS for a total net consideration of about NOK 7 million.HYON AS(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHAREHOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 9 804 000 0.06 0.06 572Fair value adjustment 2022 0 0 1.42 13 889Carrying value as of 31.12.2022 9 804 000 0.06 1.48 14 461Fair value adjustment 2023 0 0 -0.75 -7 387Sale of shares -9 804 000 0 -0.72 -7 074Carrying value as of 31.12.2023 0 0 0.00 0SHORT-TERM INVESTMENTSH2NO ASDuring 2023, Nel received consideration for sale of all shares in the company of NOK 34.1 million. The total gain on sale of shares is NOK 11.6 million, which the majority is recognised as fair value changes in 2021 and 2022. A finance income of 0.4 million is recognised in 2023 from realisation of shares in H2NO AS.Performance and warranty bonds, advance payment guarantee and lease payments guarantee (deposits)Guarantees are included as short-term investments with NOK 24.0 (61.2) million. This is the short-term equivalent to the long-term investments, see note 3.5 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__128": {
"value": "4.3 Prepaid expenses and other current assets(Amounts in NOK thousands)2023 2022Equity instruments0 450 296VAT net receivable41 623 34 040Short-term investments24 013 96 861Prepayments214 855 147 422Other current assets145 456 48 351Fair value of derivatives21 396 438Balance as of 31.12.447 342 777 408EQUITY INSTRUMENTSEverfuelThe carrying value as of 31 December 2022 was NOK 435.8 million. As of 12 December 2023, Nel has divested all its shares in Everfuel A/S. During the year, Nel divested shares for a total net consideration of about NOK 133 million.Everfuel A/S(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHARE HOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 12 359 109 1.12 38.18 471 871Fair value adjustment 2022 0 0 0 -26 215Sale of shares 2022 -218 854 0 0 -9 820Carrying value as of 31.12.2022 12 140 255 1.12 35.90 435 836Fair value adjustment 2023 0 0 0 -302 909Sale of shares 2023 -12 140 255 0 0 -132 926Carrying value as of 31.12.2023 0 0 0 0HyonThe carrying value as of 31 December 2022 was NOK 14.4 million. As of 24 January 2023, Nel has divested all its shares in Hyon AS for a total net consideration of about NOK 7 million.HYON AS(Amounts in NOK thousands)ACQUISITION COST NOK/FAIR VALUE NOK/BOOK SHAREHOLDINGPER SHAREPER SHAREVALUECarrying value as of 31.12.2021 9 804 000 0.06 0.06 572Fair value adjustment 2022 0 0 1.42 13 889Carrying value as of 31.12.2022 9 804 000 0.06 1.48 14 461Fair value adjustment 2023 0 0 -0.75 -7 387Sale of shares -9 804 000 0 -0.72 -7 074Carrying value as of 31.12.2023 0 0 0.00 0SHORT-TERM INVESTMENTSH2NO ASDuring 2023, Nel received consideration for sale of all shares in the company of NOK 34.1 million. The total gain on sale of shares is NOK 11.6 million, which the majority is recognised as fair value changes in 2021 and 2022. A finance income of 0.4 million is recognised in 2023 from realisation of shares in H2NO AS.Performance and warranty bonds, advance payment guarantee and lease payments guarantee (deposits)Guarantees are included as short-term investments with NOK 24.0 (61.2) million. This is the short-term equivalent to the long-term investments, see note 3.5 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__134": {
"value": "4.4 Cash and cash equivalentsCash and cash equivalents include cash, bank deposits and all other monetary items due within three months or less.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__133": {
"value": "4.4 Cash and cash equivalentsCash and cash equivalents include cash, bank deposits and all other monetary items due within three months or less.(Amounts in NOK thousands)2023 2022Cash and cash equivalents3 347 803 3 125 757Restricted bank deposits for employees' withheld taxes at 31.1215 628 10 833 1)Other restricted bank accounts0 1 959Balance as of 31.12.3 363 431 3 138 5501) Other restricted bank accounts comprise short-term deposits and short-term guarantee payments which are assessed equivalent to demand deposits and short-term highly liquid investments that are subject to an insignificant risk of changes in value. 2023 2022Norwegian Kroner 3 081 002 2 982 974US Dollars 132 411 107 413Danish Kroner 57 406 5 266Swedish Kroner 5 557 7 165Euro 54 429 7 061GB Pounds 11 174 3 014Korean Won 5 815 10 452Polish Zloty 9 2 411Balance as of 31.12. 3 347 803 3 125 757Cash and cash equivalents are 92% (95%) in the Norwegian Krone (NOK) at the end of 2023. NOK 2 684 million is placed in 30-days locked interest accounts in a portfolio of banks.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__132": {
"value": "4.4 Cash and cash equivalentsCash and cash equivalents include cash, bank deposits and all other monetary items due within three months or less.(Amounts in NOK thousands)2023 2022Cash and cash equivalents3 347 803 3 125 757Restricted bank deposits for employees' withheld taxes at 31.1215 628 10 833 1)Other restricted bank accounts0 1 959Balance as of 31.12.3 363 431 3 138 5501) Other restricted bank accounts comprise short-term deposits and short-term guarantee payments which are assessed equivalent to demand deposits and short-term highly liquid investments that are subject to an insignificant risk of changes in value. 2023 2022Norwegian Kroner 3 081 002 2 982 974US Dollars 132 411 107 413Danish Kroner 57 406 5 266Swedish Kroner 5 557 7 165Euro 54 429 7 061GB Pounds 11 174 3 014Korean Won 5 815 10 452Polish Zloty 9 2 411Balance as of 31.12. 3 347 803 3 125 757Cash and cash equivalents are 92% (95%) in the Norwegian Krone (NOK) at the end of 2023. NOK 2 684 million is placed in 30-days locked interest accounts in a portfolio of banks.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__137": {
"value": "5.1 Share capital and shareholdersSHARE CAPITALThe 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 2023, the group\u2019s share capital was NOK 334.3 (312.7) million, consisting of 1 671 325 304 (1 563 325 304) 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.SHAREHOLDERS AS OF 31.12.2023 COUNTRY NUMBER OF SHARES OWNERSHIPBlackRock, Inc. United States 66 211 666 3.96 %The Vanguard Group, Inc. United States 59 008 511 3.53 %Government of Norway Norway 50 947 702 3.05 %DNB ASA Norway 28 705 616 1.72 %Storebrand ASA Norway 25 897 839 1.55 %Legal & General Group Plc United Kingdom 17 658 530 1.06 %SAS Rue la Boetie France 14 829 747 0.89 %Svenska Handelsbanken AB Sweden 14 677 025 0.88 %AXA SA France 13 542 082 0.81 %Van Eck Associates Corp. United States 13 377 500 0.80 %Mirae Asset Global Investments Co., Ltd. United Kingdom 10 739 608 0.64 %Allianz SE Germany 10 734 575 0.64 %Argenta Bank en Verzekeringsgroep NV Luxembourg 7 736 650 0.46 %Deutscher Sparkassen-und Giroverband eV Germany 6 534 530 0.39 %New York Life Insurance Co. United States 6 313 608 0.38 %Erste Group Bank AG Austria 6 199 760 0.37 %Eika Gruppen AS Norway 6 174 271 0.37 %green benefit AG Germany 5 789 841 0.35 %BNP Paribas SA France 5 726 416 0.34 %FV Frankfurter Vermogen AG Germany 5 230 000 0.31 %Total 20 largest shareholders 376 035 477 22.50 %Total remaining shareholders 1 295 289 827 77.50 %Total number of shares 1 671 325 304 100.00 %As of 31 December 2023, Nel ASA owns 418 033 treasury shares. The par value NOK 0.20 per share is recognised within \u2018treasury shares\u2019 as a reduction of total equity, while excess consideration paid is recognised within share premium.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__136": {
"value": "5.1 Share capital and shareholdersSHARE CAPITALThe 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 2023, the group\u2019s share capital was NOK 334.3 (312.7) million, consisting of 1 671 325 304 (1 563 325 304) 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.SHAREHOLDERS AS OF 31.12.2023 COUNTRY NUMBER OF SHARES OWNERSHIPBlackRock, Inc. United States 66 211 666 3.96 %The Vanguard Group, Inc. United States 59 008 511 3.53 %Government of Norway Norway 50 947 702 3.05 %DNB ASA Norway 28 705 616 1.72 %Storebrand ASA Norway 25 897 839 1.55 %Legal & General Group Plc United Kingdom 17 658 530 1.06 %SAS Rue la Boetie France 14 829 747 0.89 %Svenska Handelsbanken AB Sweden 14 677 025 0.88 %AXA SA France 13 542 082 0.81 %Van Eck Associates Corp. United States 13 377 500 0.80 %Mirae Asset Global Investments Co., Ltd. United Kingdom 10 739 608 0.64 %Allianz SE Germany 10 734 575 0.64 %Argenta Bank en Verzekeringsgroep NV Luxembourg 7 736 650 0.46 %Deutscher Sparkassen-und Giroverband eV Germany 6 534 530 0.39 %New York Life Insurance Co. United States 6 313 608 0.38 %Erste Group Bank AG Austria 6 199 760 0.37 %Eika Gruppen AS Norway 6 174 271 0.37 %green benefit AG Germany 5 789 841 0.35 %BNP Paribas SA France 5 726 416 0.34 %FV Frankfurter Vermogen AG Germany 5 230 000 0.31 %Total 20 largest shareholders 376 035 477 22.50 %Total remaining shareholders 1 295 289 827 77.50 %Total number of shares 1 671 325 304 100.00 %As of 31 December 2023, Nel ASA owns 418 033 treasury shares. The par value NOK 0.20 per share is recognised within \u2018treasury shares\u2019 as a reduction of total equity, while excess consideration paid is recognised within share premium.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__138": {
"value": "As of 31 December 2023, Nel ASA owns 418 033 treasury shares. The par value NOK 0.20 per share is recognised within \u2018treasury shares\u2019 as a reduction of total equity, while excess consideration paid is recognised within share premium.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__140": {
"value": "5.2 Long-term debt(Amounts in NOK thousands) LONG-TERM DEBT - LENDER LEGAL ENTITY MATURITY INTEREST RATE 2023 20222) Nykredit - Vejlevej 5 - Ejendom Nel Hydrogen A/S 2038 0,36 % 16 160 15 9953) Nykredit - Vejlevej 5 - Ejendom Nel Hydrogen A/S 2038 0,27 % 5 358 5 3534) Nykredit - Vejlevej 3 Nel Hydrogen A/S 2028 0,30 % 940 1 083Balance as of 31.12. 22 458 22 431Reconciliation of liabilities arising from financing activities (Amounts in NOK thousands)2023 2022Balance as of 01.01.22 431 23 191Payment of loan-1 533 -1 889Non-cash changes:Accretion of interest448 598Foreign currency effects1 113 530Balance as of 31.12.22 458 22 431The reconciliation of lease liabilities arising from financing activities is disclosed in note 3.3 leases.MATURITY ANALYSISMaturity analysis for long-term debt (undiscounted cash flows)20232024 2025 2026 2027 >2027 TOTAL Nykredit 1 510 1 551 1 593 1 637 16 169 22 458Lease liabilities (note 3.3) 39 670 41 570 40 226 35 342 162 388 319 1951)Estimated interest cost 495 459 459 459 2 743 4 614TOTAL long-term debt including interest 41 674 43 579 42 278 37 437 181 299 346 2671) Based on prevailing debt installment agreements and interest rates.20222023 2024 2025 2026 >2026 TOTAL Nykredit 1 378 1 415 1 454 1 493 16 691 22 431Lease liabilities (note 3.3) 31 903 28 926 31 427 30 392 164 469 287 1181)Estimated interest cost 504 464 430 430 2 571 4 399TOTAL long-term debt including interest 33 785 30 805 33 310 32 316 183 731 313 9471) Based on prevailing debt installment agreements and interest rates.(Amounts in NOK thousands)CARRYING AMOUNT OF ASSETS THAT ARE PLEDGED 2023 2022Other equipment0 92Building66 100 65 430TOTAL66 100 65 522GUARANTEES 2023 2022Bank guarantees167 492 267 748",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__143": {
"value": "5.3 Deferred income(Amounts in NOK thousands)2023 2022Government grants66 243 64 049TOTAL deferred income66 243 64 049GOVERNMENT GRANTSGovernment 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 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 \u201cgross\u201d in Nel\u2019s 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 income in the statement of comprehensive income. (Amounts in NOK thousands)2023 2022As of 31.12.2022 64 049 69 537Grants received 9 280 15 291Income recognised within 'other operating income' in 2023 (note 2.2) -12 028 -22 307Translation difference 4 942 1 527As of 31.12.2023 66 243 64 049The aging schedule shows the remaining governments grants divided in the year the grants was initially received. DEFERRED INCOME AGING SCHEDULE <2020 2020 2021 2022 2023 SUMGovernment grants as of 31.12.202315 007 21 181 14 821 6 225 9 008 66 243Government grants as of 31.12.202219 972 23 039 14 923 6 116 - 64 049The table below show the split of deferred income (government grant) per operating segment.OPERATING SEGMENT COUNTRY 2023 2022Electrolyser Norway 50 601 42 908Fueling Denmark 15 642 21 141Balance as of 31.12. 66 243 64 049The group is not aware of any unfulfilled conditions associated with these grants.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__142": {
"value": "5.3 Deferred income(Amounts in NOK thousands)2023 2022Government grants66 243 64 049TOTAL deferred income66 243 64 049GOVERNMENT GRANTSGovernment 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 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 \u201cgross\u201d in Nel\u2019s 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 income in the statement of comprehensive income. (Amounts in NOK thousands)2023 2022As of 31.12.2022 64 049 69 537Grants received 9 280 15 291Income recognised within 'other operating income' in 2023 (note 2.2) -12 028 -22 307Translation difference 4 942 1 527As of 31.12.2023 66 243 64 049The aging schedule shows the remaining governments grants divided in the year the grants was initially received. DEFERRED INCOME AGING SCHEDULE <2020 2020 2021 2022 2023 SUMGovernment grants as of 31.12.202315 007 21 181 14 821 6 225 9 008 66 243Government grants as of 31.12.202219 972 23 039 14 923 6 116 - 64 049The table below show the split of deferred income (government grant) per operating segment.OPERATING SEGMENT COUNTRY 2023 2022Electrolyser Norway 50 601 42 908Fueling Denmark 15 642 21 141Balance as of 31.12. 66 243 64 049The group is not aware of any unfulfilled conditions associated with these grants.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__144": {
"value": "GOVERNMENT GRANTSGovernment 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 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 \u201cgross\u201d in Nel\u2019s 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 income in the statement of comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__147": {
"value": "5.4 Other liabilitiesOTHER CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Vacation allowance and other salary related accruals 58 502 41 438Public duties payable 35 606 24 110Other current liabilities 127 985 60 417Fair value of derivatives 16 123 7 740Balance as of 31.12. 238 216 133 704OTHER NON-CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Other non-current liabilities 4 860 4 919Fair value of derivatives (note 6.4) 0 2 182Balance as of 31.12. 4 860 7 102",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__146": {
"value": "5.4 Other liabilitiesOTHER CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Vacation allowance and other salary related accruals 58 502 41 438Public duties payable 35 606 24 110Other current liabilities 127 985 60 417Fair value of derivatives 16 123 7 740Balance as of 31.12. 238 216 133 704OTHER NON-CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Other non-current liabilities 4 860 4 919Fair value of derivatives (note 6.4) 0 2 182Balance as of 31.12. 4 860 7 102",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__149": {
"value": "OTHER CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Vacation allowance and other salary related accruals 58 502 41 438Public duties payable 35 606 24 110Other current liabilities 127 985 60 417Fair value of derivatives 16 123 7 740Balance as of 31.12. 238 216 133 704",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__148": {
"value": "OTHER NON-CURRENT LIABILITIES(Amounts in NOK thousands)2023 2022Other non-current liabilities 4 860 4 919Fair value of derivatives (note 6.4) 0 2 182Balance as of 31.12. 4 860 7 102",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__153-1": {
"value": "PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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.ACCRUED WARRANTYThe 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 8%.EMPLOYEE BENEFITSNel has short term incentive bonuses in place for all employees. The provision for bonus incurred in 2023 to be finally measured and paid in 2024 is 46.5 NOK (21.8) 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 CLAIMSSettlement and claims comprise disputes, claims and fines where cash outflow is assessed probable (more likely that not to occur). At the beginning of 2023 the provisions for settlement and claims were mainly related to the Kj\u00f8rbo incident from 2019. During 2023, the company received a reduced notice of fine (no: forelegg) related to the Kj\u00f8rbo incident. This has resulted in a reversal of approximately NOK 15.0 million in unused provisions in 2023. At the end of 2023 there is no provision. ONEROUS CONTRACTSAn 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__150": {
"value": "PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSThe 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 01.01.202255 460701 23 770 8 176 88 106Additions 36 894 21 792 2 748 37 374 98 809Used during the year -15 544 -701 -4 182 -5 458 -25 885Reversal of unused provisions -11 426 0 -818 -211 -12 454Foreign currency translation 3 162 0 243 1 459 4 864As of 31.12.2022 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 25 446 131 717",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__158-1": {
"value": "6.1 Operational risk factorsOBJECTIVES, POLICIES AND PROCESSES FOR MANAGING CAPITALThe group\u2019s objective is to manage the capital structure to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders. The group sets the size of capital in proportion to business strategy, risk and financial market conditions. The group manages the capital structure and adjusts it in the light of changes in economic conditions, perceived risk associated with 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. Technological changeAlong with the significant increase in the development of the hydrogen market comes increased competition. This also results in increased activity and pace in research and development across the hydrogen industry. Nel\u2019s electrolyser technology consist of both Alkaline and PEM. Currently, the Alkaline technology platform presents the advantage of having the lowest cost, the highest efficiency and of being the better solution for large scale. PEM technology platform has the advantage of dynamic response and intermittent operation. It is a risk that one or both of the existing technologies in Nel becomes obsolete. 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. In addition, we cannot know for certain whether green hydrogen emerges as the preferred technology as the world transitions into renewable energy. 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 green 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\u2019s business, prospects, financial results or results of operations. A higher price for renewable power could also negatively affect the demand for green hydrogen technologies.Expansion riskThe uneven pace of Nel\u2019s anticipated expansion in facilities, staff and operations may place serious demands on the group\u2019s 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\u2019s 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 manufacturingThe group\u2019s electrolyser and hydrogen fueling manufacturing operations rely on external subcontractors and suppliers of services and goods to varying degrees. This operating model inherently contains a risk to the group\u2019s goodwill and branding. If suppliers fail 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\u2019s business, prospects, financial results and results of operations. In general, the company aims at dual sourcing of critical components to limit risk. In addition, the majority of the 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 suppliers for key production components for its electrolyser and fueling equipment. All contract manufactured or purchased components are designed and selected in order to avoid a critical supply situation. However, in a worst case scenario, if Nel fails to develop or maintain its relationships with its suppliers or such suppliers are prevented from supplying, Nel may be delayed in manufacturing its products or its products may be available only at a higher cost which could prevent Nel from timely delivering its products to its customers and Nel may experience order cancellation, customer claims and loss of market share. To reduce the sourcing risk Nel\u2019s supply chain strategy is to have dual supply chains on all components. Nel currently has few components with single source and is at the risk of temporary supply chain disruptions should one or more suppliers fail to deliver. 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 riskNel 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:\u2022 unexpectedly long delivery times for, or shortages of, key equipment, parts and materials;\u2022 unforeseen design and engineering problems leading to delays;\u2022 labor disputes and work stoppages;\u2022 HSE accidents/incidents or other safety hazards;\u2022 disputes with suppliers;\u2022 last minute changes to the customer\u2019s specifications;\u2022 adverse weather conditions or any other force majeure events; and\u2022 inability or delay in obtaining regulatory approvals or permitsFailure to complete a commercial project on time may result in the delay, renegotiation or cancellation of the contract. Further, significant delays could have a negative impact on Nel\u2019s 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\u2019s business, financial condition and results of operations.Key personnelThe successful development and performance of the group\u2019s business depends on the group\u2019s 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, however, 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 and adverse effect on the group\u2019s business and operations.Customer riskNel\u2019s ability to grow and generate incremental revenue depends to a substantial degree 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\u2019s 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\u2019s sales to such customers may be adversely affected, and Nel\u2019s revenues and results may suffer as a result. Intellectual property rightsNel 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\u2019s proprietary rights may not be adequately protected because:\u2022 people may not be deterred from misappropriating its technologies despite the existence of laws or contracts prohibiting misappropriation:\u2022 policing unauthorised use of Nel\u2019s intellectual property is difficult, expensive and time-consuming, and the group may be unable to determine the extent of any unauthorised use; and\u2022 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\u2019s 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\u2019s ability to compete, to generate revenue and to grow its business. This could have a significant adverse effect on the group\u2019s business, prospects, financial results and results of operations.Some of the group\u2019s 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\u2019s 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\u2019s patents. Also, patent protection in certain countries may not be available or may be limited in scope and any patents obtained may not be as readily enforceable as in all jurisdictions, making it difficult for the group to effectively protect its intellectual property from misuse or infringement by other companies in these countries. Any inability to obtain and enforce intellectual property rights in some countries could have a significant adverse effect on the group\u2019s 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\u2019 know-how and trade secrets in relation to technology which may hinder the group from development of similar intellectual assets.Adverse publicity and product liabilityProduct liability claims against the group could result in adverse publicity and potentially monetary damages. 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 damages, which could have a significant adverse effect on the group\u2019s business, prospects, financial results and results of operations. As of the date of this annual report, the group is unaware of any current or pending product liability claims made against the group.6.2 Financial risk factorsThe key financial risks the group is exposed to are related to liquidity, currency, interest rate, and credit risk.Liquidity riskLiquidity 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 3 363.4 million, as per 31.12.2023. The strong cash position is a good basis for the group\u2019s growth strategy. The group monitors its risks associated with lack of capital up against the company\u2019s 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 riskNel 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\u2019 functional currencies, primarily with respect to changes in USD and DKK, 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\u2019s 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 -213 094 -306 472 30 647 15 324 -15 324 -30 647 USD -13 470 -126 623 12 662 6 331 -6 331 -12 662 KRW -6 708 336 -53 465 5 347 2 673 -2 673 -5 347 SEK -104 372 -106 730 10 673 5 337 -5 337 -10 673 GBP 40 439 -44 -22 22 44 EUR 4 244 45 504 -4 550 -2 275 2 275 4 550 Effect on net income (loss) 54 735 27 367 -27 367 -54 735 STATEMENT OF FINANCIAL POSITIONNET RECEIVABLES/LIABILITIES IN FOREIGN CURRENCIESDKK -16 229 -22 835 2 284 1 142 -1 142 -2 284 USD 17 444 148 841 -14 884 -7 442 7 442 14 884 KRW -2 804 -22 2 1 -1 -2 SEK -15 321 -15 987 1 599 799 -799 -1 599 GBP -10 -110 11 6 -6 -11 EUR 47 970 502 263 -50 226 -25 113 25 113 50 226 Effect on net income (loss) -61 215 -30 607 30 607 61 215 Total effect on Net income (loss) and Equity -6 480 -3 240 3 240 6 480 The table shows the gross foreign currency exposure based on each entity in the group\u2019 functional currency, before hedging. Nel\u2019s hedging strategy and designated instruments are elaborated and disclosed in note 6.5. The figures exclude translation of intercompany loans in Nel ASA.Interest rate riskThe group does not have a significant amount of 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 riskCredit 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 2022 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\u2019s view of economic conditions over the expected lives of the receivables.WEIGHTED-AVERAGE GROSS CARRYING 1)2023LOSS RATEAMOUNTLOSS 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 % 0 0Total 843 964 31 557 3.7 %WEIGHTED-AVERAGE GROSS CARRYING 2022LOSS RATEAMOUNT LOSS ALLOWANCECurrent (not past due) 0.1 % 207 178 208 1-30 days past due 0.2 % 118 921 238 31-60 days past due 0.5 % 22 145 111 61-90 days past due 0.8 % 21 822 164 91 days to one year past due 1.1 % 86 541 910 More than one year past due 10.0 % 6 399 640 Total 463 005 2 270 0.5 %1) During 2023, revenue from a single customer was about 26%. As of 31 December 2023, about 57% of the trade receivables past due are related to this customer. The total payment received from this customer to date equals the operating profit booked to date on the contract. Nel has security for unpaid receivables from this customer in the sold goods and can reclaim as inventory items in the event of default.6.3 Market risk factorsMarket development riskSignificant markets for fueling products, other hydrogen energy products or renewable energy as a major source for hydrogen production may never develop or may develop more slowly than the group anticipates. This would significantly harm Nel\u2019s revenues and may cause Nel to be unable to recover the expenditures it has incurred and expects to incur in the development of its products.Regulatory issuesThe group\u2019s 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 (and may contain \u201cstrict liability\u201d), and the cost of compliance with these requirements can be expected to increase over time. The group\u2019s electrolyser production depends on various discharge permits granted by various authorities. 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, this may have a significant effect on the group\u2019s operations and result, as the group may be ordered to temporarily halt production, be subject to fines and/or be ordered 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. The requirements to be met, as well as the technology and length of time available to meet those requirements, continue to develop and change. To the extent that any of these requirements impose substantial costs or constrain the group\u2019s ability to expand or change its processes, the group\u2019s business, prospects, financial results and results of operations could suffer. Any breach of such requirements could in addition result in fines or other substantial costs and/or constraint the group\u2019s ability to operate its production plant, which could have a significant adverse effect on its business, prospects, financial results and results of operations.The fuel cell and hydrogen industry are 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 fuel cell systems and 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\u2019s products. To the extent there are delays in gaining such regulatory approval, Nel\u2019s development and growth may be constrained. Nel\u2019s 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\u2019s 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\u2019s business, financial condition, results of operations and cash flows.CompetitionThe 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\u2019s projected costs. Many of the group\u2019s 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 can to the changing customer demands or to devote greater resources to the development, promotion and sales of their products. The group\u2019s 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\u2019s business. If the group fails to compete successfully, it could have a significant adverse effect on the group\u2019s business, prospects, financial results and results of operations.DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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.",
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"s8_notes__6__159": {
"value": "OBJECTIVES, POLICIES AND PROCESSES FOR MANAGING CAPITALThe group\u2019s objective is to manage the capital structure to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders. The group sets the size of capital in proportion to business strategy, risk and financial market conditions. The group manages the capital structure and adjusts it in the light of changes in economic conditions, perceived risk associated with 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.",
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"s8_notes__6__161": {
"value": "Liquidity riskLiquidity 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 3 363.4 million, as per 31.12.2023. The strong cash position is a good basis for the group\u2019s growth strategy. The group monitors its risks associated with lack of capital up against the company\u2019s 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.",
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"s8_notes__6__162-1": {
"value": "Currency riskNel 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\u2019 functional currencies, primarily with respect to changes in USD and DKK, 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\u2019s 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 -213 094 -306 472 30 647 15 324 -15 324 -30 647 USD -13 470 -126 623 12 662 6 331 -6 331 -12 662 KRW -6 708 336 -53 465 5 347 2 673 -2 673 -5 347 SEK -104 372 -106 730 10 673 5 337 -5 337 -10 673 GBP 40 439 -44 -22 22 44 EUR 4 244 45 504 -4 550 -2 275 2 275 4 550 Effect on net income (loss) 54 735 27 367 -27 367 -54 735 STATEMENT OF FINANCIAL POSITIONNET RECEIVABLES/LIABILITIES IN FOREIGN CURRENCIESDKK -16 229 -22 835 2 284 1 142 -1 142 -2 284 USD 17 444 148 841 -14 884 -7 442 7 442 14 884 KRW -2 804 -22 2 1 -1 -2 SEK -15 321 -15 987 1 599 799 -799 -1 599 GBP -10 -110 11 6 -6 -11 EUR 47 970 502 263 -50 226 -25 113 25 113 50 226 Effect on net income (loss) -61 215 -30 607 30 607 61 215 Total effect on Net income (loss) and Equity -6 480 -3 240 3 240 6 480 The table shows the gross foreign currency exposure based on each entity in the group\u2019 functional currency, before hedging. Nel\u2019s hedging strategy and designated instruments are elaborated and disclosed in note 6.5. The figures exclude translation of intercompany loans in Nel ASA.Interest rate riskThe group does not have a significant amount of 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.6.3 Market risk factorsMarket development riskSignificant markets for fueling products, other hydrogen energy products or renewable energy as a major source for hydrogen production may never develop or may develop more slowly than the group anticipates. This would significantly harm Nel\u2019s revenues and may cause Nel to be unable to recover the expenditures it has incurred and expects to incur in the development of its products.Regulatory issuesThe group\u2019s 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 (and may contain \u201cstrict liability\u201d), and the cost of compliance with these requirements can be expected to increase over time. The group\u2019s electrolyser production depends on various discharge permits granted by various authorities. 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, this may have a significant effect on the group\u2019s operations and result, as the group may be ordered to temporarily halt production, be subject to fines and/or be ordered 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. The requirements to be met, as well as the technology and length of time available to meet those requirements, continue to develop and change. To the extent that any of these requirements impose substantial costs or constrain the group\u2019s ability to expand or change its processes, the group\u2019s business, prospects, financial results and results of operations could suffer. Any breach of such requirements could in addition result in fines or other substantial costs and/or constraint the group\u2019s ability to operate its production plant, which could have a significant adverse effect on its business, prospects, financial results and results of operations.The fuel cell and hydrogen industry are 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 fuel cell systems and 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\u2019s products. To the extent there are delays in gaining such regulatory approval, Nel\u2019s development and growth may be constrained. Nel\u2019s 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\u2019s 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\u2019s business, financial condition, results of operations and cash flows.CompetitionThe 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\u2019s projected costs. Many of the group\u2019s 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 can to the changing customer demands or to devote greater resources to the development, promotion and sales of their products. The group\u2019s 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\u2019s business. If the group fails to compete successfully, it could have a significant adverse effect on the group\u2019s business, prospects, financial results and results of operations.6.4 Climate-related risks and opportunitiesClimate-related opportunitiesNel is a pure play renewable hydrogen company. The climate-related opportunities are the company\u2019s only opportunities. The assumption from climate-related opportunities in climate-related scenarios have impacted the financial statements. Specifically, the climate-related opportunities are the driver for the revenue and activity growth included in the company\u2019s impairment tests. In addition, the climate-related opportunities also impact the assessment of probable future economic benefits from capitalised technology development.Climate-related risksThe 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 GeopoliticsWhile climate change is the megatrend, the anticipated role of green 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 RiskNel 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 RiskNone 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\u2019 performance.",
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"s8_notes__6__164": {
"value": "Credit riskCredit 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 2022 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\u2019s view of economic conditions over the expected lives of the receivables.WEIGHTED-AVERAGE GROSS CARRYING 1)2023LOSS RATEAMOUNTLOSS 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 % 0 0Total 843 964 31 557 3.7 %WEIGHTED-AVERAGE GROSS CARRYING 2022LOSS RATEAMOUNT LOSS ALLOWANCECurrent (not past due) 0.1 % 207 178 208 1-30 days past due 0.2 % 118 921 238 31-60 days past due 0.5 % 22 145 111 61-90 days past due 0.8 % 21 822 164 91 days to one year past due 1.1 % 86 541 910 More than one year past due 10.0 % 6 399 640 Total 463 005 2 270 0.5 %1) During 2023, revenue from a single customer was about 26%. As of 31 December 2023, about 57% of the trade receivables past due are related to this customer. The total payment received from this customer to date equals the operating profit booked to date on the contract. Nel has security for unpaid receivables from this customer in the sold goods and can reclaim as inventory items in the event of default.",
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"s8_notes__6__165": {
"value": "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 2022 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\u2019s view of economic conditions over the expected lives of the receivables.WEIGHTED-AVERAGE GROSS CARRYING 1)2023LOSS RATEAMOUNTLOSS 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 % 0 0Total 843 964 31 557 3.7 %WEIGHTED-AVERAGE GROSS CARRYING 2022LOSS RATEAMOUNT LOSS ALLOWANCECurrent (not past due) 0.1 % 207 178 208 1-30 days past due 0.2 % 118 921 238 31-60 days past due 0.5 % 22 145 111 61-90 days past due 0.8 % 21 822 164 91 days to one year past due 1.1 % 86 541 910 More than one year past due 10.0 % 6 399 640 Total 463 005 2 270 0.5 %1) During 2023, revenue from a single customer was about 26%. As of 31 December 2023, about 57% of the trade receivables past due are related to this customer. The total payment received from this customer to date equals the operating profit booked to date on the contract. Nel has security for unpaid receivables from this customer in the sold goods and can reclaim as inventory items in the event of default.",
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"s8_notes__6__170-1": {
"value": "6.5 Hedge accountingDERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency.MORE THAN MATURITY/HEDGING INSTRUMENTS 2024-Q1 2024-Q2 2024-Q3 2024-Q4ONE YEAR TOTALUSD forward contracts, net4410 0 0 0 441Average NOK:USD forward contracts rate 10.28 0.00 0.00 0.00 0.00 10.28USDHedged NOK, net (nominal amount) 4 531 0 0 0 0 4 531Fair value USD forward contracts 53 0 0 0 0 53SEK forward contracts, net-20 968-82 871 -20 634 0 0 -124 473Average NOK:SEK forward contracts rate 0.97 0.97 0.97 0.00 0.00 0.97SEKHedged NOK, net (nominal amount) -20 341 -80 185 -20 024 0 0 -120 549Fair value SEK forward contracts 921 4 133 1 016 0 0 6 070GBP forward contracts, net1 9330 0 0 0 1 933Average NOK:GBP forward contracts rate 13.21 0.00 0.00 0.00 0.00 13.21GBPHedged NOK, net (nominal amount) 25 536 0 0 0 0 25 536Fair value GBP forward contracts 560 0 0 0 0 560EUR forward contracts, net29 31919 919 19 378 12 226 1 260 82 102Average NOK:EUR forward contracts rate 11.46 11.17 11.03 11.06 11.73 11.23EURHedged NOK, net (nominal amount) 335 880 222 565 213 685 135 184 14 776 922 089Fair value EUR forward contracts 5 944 -2 111 -5 351 -3 341 407 -4 452TOTAL hedged NOK, net (nominal amount)345 606142 380 193 661 135 184 14 776 831 607TOTAL fair value, NOK 7 479 2 022 -4 335 -3 341 407 2 232The effects that hedge accounting has had on the statement of financial position, statement of profit or loss and OCI and statement of changes in equityHedging 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 positionThe table below show the fair value of forward exchange contracts designated as hedging instruments in the statement of financial position.(Amounts in NOK thousands)CURRENT NON-CURRENT OTHER CURRENT NON-CURRENT TYPE OF HEDGE ITEMSASSETSASSETSLIABILITESLIABILITIES TOTALRevenue438189 -5 829 -50 -5 253Raw materials 0 0 -1 840 -2 132 -3 972As of 31.12.2022 438 189 -7 669 -2 182 -9 225Revenue11 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 232Profit or loss and OCIThe 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 01.01.20227 654-2 101 0 -439 5 114Effective portion of changes in fair value -7 876 -31 153 854 -6 900Reclassified to profit or loss -2 930 0 -153 0 -3 084Reclassified to statement of financial positions -3 349 0 0 -415 -3 764(basis adjustment)As 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 31.12.2023 13 350 -6 070 0 0 7 279During the year, a hedging loss of NOK -6.0 (2.9) million has been realised and reclassified to profit or loss within \u2018Revenue from contracts with customers\u2019. 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)2023 2024 2025 2026 TOTALRevenue -6 640 138 0 0 -6 502Raw materials 0 -2 132 0 0 -2 132As of 31.12.2022 -8 634Revenue - 12 943 407 0 13 350Raw materials - -6 070 0 0 -6 070As of 31.12.2023 7 279Economic relationship and effectivenessThe 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\u2019s 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. No ineffectiveness has been recognised in the income statement in 2023 or 2022.The Group does not have any fair value hedge or net investment hedge.6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__169": {
"value": "6.5 Hedge accountingDERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency.MORE THAN MATURITY/HEDGING INSTRUMENTS 2024-Q1 2024-Q2 2024-Q3 2024-Q4ONE YEAR TOTALUSD forward contracts, net4410 0 0 0 441Average NOK:USD forward contracts rate 10.28 0.00 0.00 0.00 0.00 10.28USDHedged NOK, net (nominal amount) 4 531 0 0 0 0 4 531Fair value USD forward contracts 53 0 0 0 0 53SEK forward contracts, net-20 968-82 871 -20 634 0 0 -124 473Average NOK:SEK forward contracts rate 0.97 0.97 0.97 0.00 0.00 0.97SEKHedged NOK, net (nominal amount) -20 341 -80 185 -20 024 0 0 -120 549Fair value SEK forward contracts 921 4 133 1 016 0 0 6 070GBP forward contracts, net1 9330 0 0 0 1 933Average NOK:GBP forward contracts rate 13.21 0.00 0.00 0.00 0.00 13.21GBPHedged NOK, net (nominal amount) 25 536 0 0 0 0 25 536Fair value GBP forward contracts 560 0 0 0 0 560EUR forward contracts, net29 31919 919 19 378 12 226 1 260 82 102Average NOK:EUR forward contracts rate 11.46 11.17 11.03 11.06 11.73 11.23EURHedged NOK, net (nominal amount) 335 880 222 565 213 685 135 184 14 776 922 089Fair value EUR forward contracts 5 944 -2 111 -5 351 -3 341 407 -4 452TOTAL hedged NOK, net (nominal amount)345 606142 380 193 661 135 184 14 776 831 607TOTAL fair value, NOK 7 479 2 022 -4 335 -3 341 407 2 232The effects that hedge accounting has had on the statement of financial position, statement of profit or loss and OCI and statement of changes in equityHedging 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 positionThe table below show the fair value of forward exchange contracts designated as hedging instruments in the statement of financial position.(Amounts in NOK thousands)CURRENT NON-CURRENT OTHER CURRENT NON-CURRENT TYPE OF HEDGE ITEMSASSETSASSETSLIABILITESLIABILITIES TOTALRevenue438189 -5 829 -50 -5 253Raw materials 0 0 -1 840 -2 132 -3 972As of 31.12.2022 438 189 -7 669 -2 182 -9 225Revenue11 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 232Profit or loss and OCIThe 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 01.01.20227 654-2 101 0 -439 5 114Effective portion of changes in fair value -7 876 -31 153 854 -6 900Reclassified to profit or loss -2 930 0 -153 0 -3 084Reclassified to statement of financial positions -3 349 0 0 -415 -3 764(basis adjustment)As 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 31.12.2023 13 350 -6 070 0 0 7 279During the year, a hedging loss of NOK -6.0 (2.9) million has been realised and reclassified to profit or loss within \u2018Revenue from contracts with customers\u2019. 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)2023 2024 2025 2026 TOTALRevenue -6 640 138 0 0 -6 502Raw materials 0 -2 132 0 0 -2 132As of 31.12.2022 -8 634Revenue - 12 943 407 0 13 350Raw materials - -6 070 0 0 -6 070As of 31.12.2023 7 279Economic relationship and effectivenessThe 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\u2019s 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. No ineffectiveness has been recognised in the income statement in 2023 or 2022.The Group does not have any fair value hedge or net investment hedge.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__175": {
"value": "DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
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},
"s8_notes__6__174": {
"value": "DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
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},
"s8_notes__6__173": {
"value": "DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTINGThe 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 hedgesFor 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 \u2018forward basis\u2019, 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, 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 2023, foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of firm sale commitment in U.S. dollar, Swedish krona, 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 2023, the Group held the following instruments to hedge exposures to changes in foreign currency",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__180": {
"value": "6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__179": {
"value": "6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__178": {
"value": "6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__177": {
"value": "6.6 Financial instrumentsNel 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 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 4582022CARRYING 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 hedging626 0 0 626 0 626 0 626Financial asset - equity instruments0 489 406 0 489 406 450 296 0 39 110 489 406SUM 626 489 4060 490 033 450 296 626 39 110 490 033LiabilitiesFinancial liabilities measured at fair valueForward exchange contracts used for hedging-9 851 0 0 -9 851 0 -9 851 0 -9 851SUM -9 8510 0 -9 851 0 -9 851 0 -9 851Financial liabilities not measured at fair valueLong-term debt0 0 22 431 22 431 0 22 431 0 22 431SUM0 0 22 431 22 431 0 22 431 0 22 431The management assessed that cash and short-term deposits, trade receivables, other current assets, trade payables and other current liabilities\u2019 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__184": {
"value": "6.7 Contractual commitments and commitments for future investments Nel is committed to future investments for Alkaline expansion in Her\u00f8ya, Norway and PEM expansion in Wallingford, Connecticut, see note 3.2 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__183": {
"value": "6.7 Contractual commitments and commitments for future investments Nel is committed to future investments for Alkaline expansion in Her\u00f8ya, Norway and PEM expansion in Wallingford, Connecticut, see note 3.2 for additional information.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__187": {
"value": "7.1 Composition of the groupThe following subsidiaries are included in the consolidated financial statements:MAIN CONSOLIDATED OWNERSHIP/ OWNERSHIP/ COMPANY LOCATIONOPERATIONSFROM:VOTES 2023VOTES 2022Nel Hydrogen Electrolyser AS Notodden, Norway Alkaline electrolysers 01.10.2015 100 % 100 %Hydrogen fueling Nel Hydrogen A/S Herning, Denmarkstations 01.07.2015 100 % 100 %Nel Fuel AS Oslo, Norway Investment/holding 01.07.2015 100 % 100 %Proton Energy Systems Inc Wallingford, Connecticut, USA PEM electrolysers 01.07.2017 100 % 100 %Nel Korea Co. Ltd Seoul, South Korea Service of H2Station\u00ae 01.07.2018 100 % 100 %Nel Hydrogen Inc San Leandro, California USA Service of H2Station\u00ae 01.01.2019 100 % 100 %Nel Hydrogen Electrolyser Germany GmbH Munich, Germany Electrolysers sales office 24.10.2022 100 % 100 %Nel Hydrogen Electrolyser Belgium BV Brussels, Belgium Electrolyser sales office 27.09.2021 100 % 100 %Nel Austria GmbH Wien, Austria Fueling sales office 30.03.2022 100 % 100 %Nel Hydrogen Chile SpA Santiago, Chile Electrolyser sales office 01.06.2023 100 % -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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCompositionOfGroupExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__185": {
"value": "7.1 Composition of the groupThe following subsidiaries are included in the consolidated financial statements:MAIN CONSOLIDATED OWNERSHIP/ OWNERSHIP/ COMPANY LOCATIONOPERATIONSFROM:VOTES 2023VOTES 2022Nel Hydrogen Electrolyser AS Notodden, Norway Alkaline electrolysers 01.10.2015 100 % 100 %Hydrogen fueling Nel Hydrogen A/S Herning, Denmarkstations 01.07.2015 100 % 100 %Nel Fuel AS Oslo, Norway Investment/holding 01.07.2015 100 % 100 %Proton Energy Systems Inc Wallingford, Connecticut, USA PEM electrolysers 01.07.2017 100 % 100 %Nel Korea Co. Ltd Seoul, South Korea Service of H2Station\u00ae 01.07.2018 100 % 100 %Nel Hydrogen Inc San Leandro, California USA Service of H2Station\u00ae 01.01.2019 100 % 100 %Nel Hydrogen Electrolyser Germany GmbH Munich, Germany Electrolysers sales office 24.10.2022 100 % 100 %Nel Hydrogen Electrolyser Belgium BV Brussels, Belgium Electrolyser sales office 27.09.2021 100 % 100 %Nel Austria GmbH Wien, Austria Fueling sales office 30.03.2022 100 % 100 %Nel Hydrogen Chile SpA Santiago, Chile Electrolyser sales office 01.06.2023 100 % -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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__188-1": {
"value": "7.2 Executive management remunerationNel Executive Management Compensation and number of shares owned2023(Amounts in NOK thousands)PENSION OTHER TOTAL NUMBER OF 1)REMUNERATION OF MANAGEMENT 2023 SALARY BONUSEXPENSEREMUNERATION REMUNERATIONSHARES2)H\u00e5kon Volldal, CEO 4 364 589 201 0 5 154 0Kjell Christian Bj\u00f8rnsen, CFO 3 011 116 201 0 3 328 20 0003)Marius L\u00f8ken, CTO 1 432 0 102 0 1 534 04)Anders S\u00f8reng, 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 20232022(Amounts in NOK thousands)REMUNERATION OF PENSION OTHER TOTAL NUMBER OF 1)MANAGEMENT 2022 SALARY BONUSEXPENSEREMUNERATIONREMUNERATIONSHARES2)H\u00e5kon Volldal, CEO 2 156 589 96 0 2 842 03)Jon Andr\u00e9 L\u00f8kke, CEO 2 297 1 563 68 1 500 5 428 550 000Kjell Christian Bj\u00f8rnsen, CFO 2 837 71 191 0 3 099 0Anders S\u00f8reng, CTO 2 381 62 191 894 3 528 135 0004)J\u00f8rn Rosenlund, CSO 1 185 0 66 911 2 161 05)Esa Laukkanen, COO 1 140 0 0 0 1 140 0Robert Borin, SVP Nel Hydrogen Fueling 3 084 79 257 0 3 419 0Filip Smeets, SVP Nel Hydrogen Electrolyser 2 173 58 0 0 2 232 0Hans Hide, SVP Projects 2 122 52 191 872 3 236 20 000Stein Ove Erdal, Vice President Legal and General Counsel 2 192 57 191 872 3 311 0Caroline Duyckaerts, Chief Human Resources Officer 1 866 50 191 0 2 107 0TOTAL 23 434 2 582 1 439 5 048 32 502 705 0001) Other remuneration is mainly related to share option program and severance pay2) Employed in Nel from July 2022. Has a six months notice period, plus is entitled to six months severence pay, if terminated by the company.3) Left Nel in June 20224) Left Nel in April 20225) Employed in Nel from August 2022The 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\u2019s incentive plans for Executive Management and other key employees. The CEO determines the compensation to the other members of Nel\u2019s Executive Management. Nel\u2019s approach is to provide the CEO and other members of Nel\u2019s executive Management as well as employees with a market competitive offer for our renewable industry. The compensation should be: \u2022 attractive to recruit and retain executives and other talents to Nel; \u2022 market competitive in the respective locations but not market leading, fitting for our renewable industry; \u2022 Support the creation of sustainable value to Nel\u2019s shareholders Total compensation for each member of Executive Management is compared to the relevant market on a regular basis. Nel\u2019s 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.EXECUTIVE MANAGEMENT Information on key management compensation is disclosed in note \u20187.2 executive management remuneration\u2019.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__189": {
"value": "7.3 External audit remunerationFEES TO THE GROUP AUDITOR 2023 2022Statutory auditing services 2 949 3 073Attestation services 103 160Non-auditing services 512 0TOTAL 3 564 3 233In addition to the fees included in the remuneration table above, the group incurred NOK 1.2 (1.4) million in 2023 of attestation services and non-auditing services provided by companies other than EY, the group auditor.FEES TO OTHER AUDITORS ELECTED BY SUBSIDIARIES 2023 2022Statutory auditing services 0 0Attestation services 1 217 1 435Non-auditing services00TOTAL 1 217 1 435",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__190": {
"value": "7.4 Related partiesEXECUTIVE MANAGEMENT Information on key management compensation is disclosed in note \u20187.2 executive management remuneration\u2019.ASSOCIATED AND JOINT VENTURESNel\u2019s 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\u2019s length principles.BOARD OF DIRECTORSMembers of Nel\u2019s Board of Directors\u2019 remuneration and share ownership are disclosed in the tables below.2023BOARD OF DIRECTORS 2023 REMUNERATION NUMBER OF SHARES OWNERSHIPOle Enger - Chair of the Board 672 149 462 0,01 %Tom R\u00f8tjer 366 0 0,00 %Beatriz Malo de Molina 366 0 0,00 %Charlotta Falvin 366 46 000 0,00 %Hanne Blume 366 0 0,00 %1)Jens Bj\u00f8rn Staff 234 0 0,00 %1)Arvid Moss 234 0 0,00 %1)Finn Jebsen 131 na na1)Jon Andr\u00e9 L\u00f8kke 131 na naTOTAL 2 866 195 462 0,01 %1) At the Annual General Meeting in 2023, Jens Bj\u00f8rn Staff and Arvid Moss were elected as board members, replacing Finn Jebsen and Jon Andr\u00e9 L\u00f8kke.AUDIT COMMITTEE 2023 REMUNERATIONBeatriz Malo de Molina - chair of the committee 115Charlotta Falvin 80TOTAL 195REMUNERATION COMMITTEE 2023 REMUNERATIONHanne Blume - chair of the committee95Ole Enger 65TOTAL 1602022BOARD OF DIRECTORS 2022 REMUNERATION NUMBER OF SHARES OWNERSHIPOle Enger - Chair of the Board 616 149 462 0,01 %Tom R\u00f8tjer 341 0 0,00 %Beatriz Malo de Molina 341 0 0,00 %Charlotta Falvin 341 0 0,00 %1)Finn Jebsen 341 50 620 0,00 %Hanne Blume 341 0 0,00 %Jon Andr\u00e9 L\u00f8kke 341 550 000 0,04 %TOTAL 2 659 750 082 0,05 %1) Consisting of shares held through Fateburet ASAUDIT COMMITTEE 2022 REMUNERATIONFinn Jebsen - chair of the audit committee 110Beatriz Malo de Molina 75TOTAL 185REMUNERATION COMMITTEE 2022 REMUNERATIONHanne Blume - chair of the committee 90Ole Enger 60TOTAL150",
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"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__192": {
"value": "7.5 Events after the balance sheet dateInformation about the group\u2019s financial position that has occurred after the balance sheet date is disclosed if the information is considered to be significant for the group\u2019s current financial statements and future position. On 7 February 2024, Nel was made aware that Iwatani Corporation of America has filed a lawsuit with claims for damages in an unspecified amount 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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
},
"s8_notes__6__193": {
"value": "7.6 Going concernThe 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 beyond the next twelve-month period.The Board of Directors confirmed on this basis that the going concern assumption is valid, and that financial statements are prepared in accordance with this assumption.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:549300G6XN5IXMRKEG37",
"period": "2023-01-01T00:00:00/2024-01-01T00:00:00"
}
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}
}