BofA Securities Hydrogen Conference 2021
Corporate Presentation
June 23, 2021

Tokyo (Japan) with Texas (the United States)

Important Notice
For the purpose of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed by
NIPPON SANSO Holdings Corporation (“NSHD”) regarding this presentation. This presentation (including any oral briefing and any question-and-answer in connection with it) is notintended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, exchange, sell or otherwise
dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares or other securities are being offered to the public by means of this presentation. This
presentation is being given (together with any further information which may be provided to the recipient) on the condition that it is for use by the recipient) on the condition that it is for use
be the recipient for information purposes only (and not for the evaluation of any investment, acquisition, disposal or any other transaction). Any failure to comply with these restriction may
constitute a violation of applicable securities laws. The companies in which NSHD directly and indirectly owns investments are separate entities. In this presentation, “NSHD” is sometimes
used for convenience where references are made to NSHD and its subsidiaries in general. Likewise, the words “the Company”, “we”, ”us” and “our” are also used to refer to subsidiaries ingeneral or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.
●Forward-Looking Statements
This presentation and any materials distributed in connection with this presentation may contain forward-looking statements, beliefs or opinions regarding NSHD’s future business, future
position and results of operations, including estimates, forecasts, targets and plans for NSHD. Without limitation, forward-looking statements often include words such as “targets”, “plans”,“believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “ensures”, “will”, “may”, “should”, “would”, “could”, “anticipates”, “estimates”, “projects” or similar expressions or the negative
thereof. These forward-looking statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from thoseexpressed or implied by the forward-looking statements: the economic circumstances surrounding NSHD’s global business, including general economic conditions here and abroad;competitive pressures and developments; changes to applicable laws and regulations; the success of or failure of product development programs; decisions of regulatory authorities and thetiming thereof; fluctuations in interest and currency exchanges rates; claims or concerns regarding the safety or efficacy of marketed products or product candidates; the impact of healthcrises, like the novel COVID-19 pandemic, on NSHD and its customers and suppliers, including foreign governments in countries in which NSHD operates, or on other facets of its business;
the timing and impact of PMI (post-merger integration) efforts with acquired companies; the ability to divest assets that are not core to NSHD’s operations and the timing of any suchdivestment(s); and other factors identified in NSHD’s most recent annual Consolidated Financial Statements on Japanese Securities relevant acts and exchange commission, available on
NSHD’s website. NSHD dose not undertake to update any of the forward-looking statements contained in this presentation or any other forward-looking statements it may make, except as
required by law or stock exchange rule. Past performance is not an indicator of future results and the results or statements of NSHD in this presentation may not be indicative of, and are notan estimate, forecast, guarantee or projection of NSHD’s future results.
● Certain Non-IFRS Financial Measures
This presentation and materials distributed in connection with this presentation include certain financial measures not presented in accordance with International Financial ReportingStandards (“IFRS”), such as Core Operating Income, EPS (Earnings per share), Debt, Net Debt, Adjusted net D/E ratio and Free Cash Flow. NSHD’s management and executive officers
evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this presentation. These non-IFRS measures exclude certain income,cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. By including these non-IFRS
measures, management and executive officers intends to provide investors with additional information to further analyze NSHD’s performance, core results and underlying trends. NSHD’s
non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared inaccordance with IFRS. Investors are encouraged to review the reconciliation of non-IFRS financial measures to their most directly comparable IFRS measure, which are on the part of ourslide deck.
● Financial information
NSHD’s financial statements are prepared in accordance with international Financial Reporting Standards (“IFRS”).

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Group Overview
NSHD’s Group operating structure

Company name
Ticker (Tokyo Stock Exchange)

Nippon Sanso Holdings Corporation (NSHD)
4091.TGas businessin Japan

Thermos business
Established

October 30, 1910

Head office

1-3-26 Koyama, Shinagawa-ku Tokyo, Japan

President CEO

3

Thermos K.K. group

Taiyo Nippon Sanso
Corporation group

Nippon Sanso
Holdings
Corporation

Toshihiko Hamada

Employees [As of March 31, 2021]

19,357

Gas businessin Asia and Oceania

Gas businessin the U.S.

Revenue (￥bn.) [FYE2021]

818.2

Asia/Oceania region
group companies

Matheson Tri-Gas, Inc.
group

Operating income (￥bn.) [FYE2021]

88.8

OI margin [FYE2021]

10.9%

Contries Served

29 Countries and Areas

June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Gas business
in Europe
Nippon Gases
Euro-Holding S.L.U.
group

Global business network
Japan

North America

Revenue

Revenue¥ 338.9bn.

¥ 189.9bn.

Segment OI

Segment OI

OI margin
8.6%

OI margin
12.3%¥ 23.4bn.

¥ 29.1bn.
North
America

EuropeJapan

EuropeRevenueAsia¥ 160.0bn.
Segment OI¥ 21.2bn.
OI margin
13.3%

A&O
Revenue¥ 105.3bn.
Segment OI

Revenue

Oceania¥ 9.4bn.
OI margin
9.0%

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

¥ 23.9bn.
Segment OI¥ 5.2bn.
OI margin
21.8%

Our key businesses
Industrial Gases

Main Products

5Electronics－Oxygen－Nitrogen－Argon－Hydrogen, CO and syngas－Carbon dioxide－Helium

Main Products

Thermos

－AsH3
－B2H6
－CH3F
－HCL
－PH3
－SiH4

June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Main Products－Bottle－Mug－Tumbler－Frying-pan
－Pan
－Dish

Global HyCO•

Premier operational safety performance•

Structured leadership for global Hydrogen
and Syngas (HyCO)•

Responsibilities from technology andproduct development through strategy andalliances to business development andoperations•

Best-in-class design, operations, andHyCO supply solutions•

Leadership has over 200 years HyCO
experience•

Life to date supply reliability > 99.5%•

Global heritage and experience

North America

Global HyCO
Sales promotion

MarketingJapan

Engineering

EuropeAsia ＆ Oceania

6June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

HyCO/Hydrogen Production – Primary Technologies
Historically, there have been a large number of routes used for industrial hydrogen production• Hydrocarbon-based Technology Options• Reforming Technologies•

Steam Reforming of Hydrocarbons (1835+): Steam Methane Reforming (SMR) and Steam-Naphtha Reforming (SNR)•

Autothermal Reforming (ATR)•

Secondary Reforming, Pre-Reforming, Gas Heated Reforming, Combined Reforming• Gasification (1765/1870 +)•Partial Oxidation (POx) of gas feedstock•

Heavies, waste gasification• Electrolysis (1800/1888+)•

Alkaline Electrolysis•

Proton Exchange Membrane (PEM) based Electrolysis•

Solid-oxide Electrolysis• Other categories of Hydrogen/HyCO production include• By-product/co-product hydrogen from various industrial processes•

Some of these such as gas crackers and caustic chlorine can be very significant sources• Novel/emerging technologies for hydrogen production including various forms of pyrolysis

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

HyCO/Hydrogen – An “Owner-Operator” Perspective
Evolving Considerations
Evolving Technologies
Achieving Optimal Balance

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Hydrogen Production – Electrolysis and Hydrocarbon-based
Electrolysis Based

Hydrocarbon BasedElectrolyzer
Electricity

SMR
Hydrogen

Water

OxygenHydrogen

CnHm
Water

CO

Steam

CO2

(optional)

CO

Steam

CO2

Oxygen(optional)

POX/ATR

CnHm
Water

Key Considerations:
•
•
•
•
•

Electricity Consumption ~50-70 kwh/kg H2
Power Source (cost, carbon intensity,
availability)
Water availability
Potential co-product utilization (Oxygen)
Related CO2 emission depends on carbon
intensity of power source (from Zero toworse than SMR)

•
•
•
•
•
•

Hydro Carbon Energy Consumption*
SMR 51-60 kwh/kg H2 POX/ATR 48-58 khw/kg H2
Feed Source (cost, carbon intensity, availability)
Oxygen Source (for POX and ATR)
Potential co-product utilization (CO, Syngas, Steam)Potential CO2 utilization (CCS, CCU)
CO2 emission**
SMR 9.2-11.2 kg/kg H2 POX/ATR 8.8-11 kg/kg H2* Doesn’t include credit from steam export (5-10 kwh/kg H2 reduction)** Doesn’t include associated CO2 from electricity consumption or avoided CO2 from steam export

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

HydrogenHydrogen Production – Key Technologies & Benchmarking
Electrolysis

USD/MT H2

Steam Methane Reforming
6,000
5,000

Infrastructure
Feedstock & Util.

Hypothetical Case
25X today’s largest plant

4,513

4,212

4,171

4,000
3,000

2,535

2,000

1,347

Natural gas -50%
in North America

3,008

1,821
1,136

1,000
1,189
0
3,200 Nm3/h

CO2 Emissions
MT CO2/MT H2

3,008

+131%

1,114

+167%

449

30,000 Nm3/h

100,000 Nm3/h

1,504

1,203

1,162

3,200 Nm3/h

30,000 Nm3/h

100,000 Nm3/h(16 MW)(150 MW)(500 MW)

Break Even at>200 USD/MT “Carbon Tax”

USA 25.0 / 16.7 Europe Gridzero if 100% renewable

Nat gas: $20/MWh ($6/mmbtu), Power: $50 $/MWh, Grid Carbon intensity: USA 0.45, Europe 0.30 kg CO2e/kWh
10

3,008

1,563

685

9.3

+78%

June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Hydrogen Production Benchmarking– Key Considerations (Contd.)kg CO2/kWh

1

0.98

0.9

4.7x
0.88

0.8
0.7

0.71

0.6
0.5

2.4x

0.4

0.45

0.56

0.50

0.45

Break-evencarbon footprint
between SMR
and Electrolysis

0.38

0.3
0.2

0.22

0.20

0.1

0.25

0.04

0.13

0.01

0
UnitedCalifornia

Wyoming

CanadaMexico

China

India

Korea

France~0.186 kg
CO2/kWh

Germany

Spain

Great Britain

SwedenAustralia

States•Minimization of coal/heavy oil-based power and “cleaner” grids are the critical factor for HyCO production carbon
footprint management and cost-effective power to the economics
Grid data source: carbonfootprint.com

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

HyCO/Hydrogen Production Integrated with Utilization• Traditional, highly-proven HyCO production technologies can be integrated withdownstream to substantially reduce GHG
HyCO/H2 Production with CO2 Recovery/Use: “Blue” H2
HyCO Production integrated with Petrochemicals

Hydrogen Production integrated with Biofuel Manufacture
HyCO integrated with Steel and other downstream

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

“Blue” Hydrogen Production with Carbon-Dioxide Recovery
CO2 emissions (Blue H2 if captured)• Blue H2: bridge between (low cost, high emissions) gray H2and (high cost, scale limited, zero emissions) green H2.

H2 Plant

Feed(Hydrocarbon
source +H2O)• CO2 can be recovered and reused, e.g., Enhanced Oil
Recovery (EOR), use to make chemicals; or permanently

Steam byproduct

Gray H2- From fossil fuels+ Limitless production+ Low Cost
- Emissions

sequestered (geological or deep sea).

• Blue H2 production entails higher capex and variable costs for
CO2, capture, compression, storage, transportation andsequestration, although this can, for many cases represent the

deployment of blue H2 and governments and collaborative

Net CO2 emissions
300

efforts have a critical role.

June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Negative emissions, CO2:
• captured• from biological source

200
100
0
-100

Gray H2Blue H2

Gray H2Blue H2

-200
-300
(*)

13

Green H2
+ Renewable source- Limited production- Expensive+ No/little emissions- 24/7 limitations- Credits dependent

400

CO2, MTD

processing costs are essential for commercially viable

Blue H2+/- Fossil fuel w CO2
capture/sequestered+ Limitless
production+/- Moderate cost
+ less emissions

500

most balanced solution for the medium and even long term
• Carbon credits, availability of CO2 sequestration sites andH2 main product

Natural Gas
Feed

Biological/waste
Feed(*) Referential scale (actual number depends on plant size, and other factors)• Green diesel production of 150-180 Million Gallons/yr• Mid-sized H2 plant (25-30 mmscfd)• Evaluation of “gray” H2 vs (two options) “blue” H2• Higher capex and opex (equipment, chemicals, labor, etc.)• Variable cost difference (“blue” vs “gray” H2): ~ 0.25 to 0.65

Percentge of Increase in Capex/O&M“Blue” Hydrogen Production – Illustrative Economic Impacts

US$/kscf H2 higher cost for blue H2(compression, storage, transportation, sequestration)• Carbon credits (typically >50 $/tm CO2) required to makeup theprice difference (depend on multiple factors, e.g., feedstock &utility costs, CO2 sink source, geopolitics, etc.); EOR withultimate sequestration can have major benefits as applicable

50%

Capital

40%

O&M

30%
20%
10%
0%

Gray H2Blue H2Blue H2(CO2 from Syngas)(CO2 from flue Gas)

5.0

4.0
H2 Variable Cost, US$/kscf• CO2 handling after recovery excluded from the economics

60%

3.0
2.0

Feed

•

NG= 3 US$/mmbtu (HHV)

Fuel

•

Bio- Naphtha= 400 US$/mt

Steam

•

Power = 0.07 US$/kwh

Power
Others1.0
0.0
Gray H2-1.0

Blue H2Blue H2

CO2 from
SyngasBlue H2Blue H2

CO2 from

CO2 from

CO2 from

Flue gas

SyngasFlue gas

Natural Gas Feed
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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Gray H2

Biological Feed

HyCO/Hydrogen Production Integrated with Petrochemicals
Integrated HyCO facilities provide opportunities for decarbonization in the chemicals sector:• Product balance and integration to maximize economies of scale, synergies and carbon sinks(e.g. Methanol, Acetic Acid, Formaldehyde, Oxo-alcohols & derivatives)• CO2 Capture and recycling via dry reforming, CO2 electrolysis and other technologies
Integrated Syngas to Chemicals Concept
Methanol

CO2
NG
Syngas Generation

H2:CO

15

Hydrogen

H2

O2
Air Separation

CO2/H2 Processing

CO

N2

June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Ammonia synthesis

Ammonia

to Chemicals

Methanol synthesis

Hydrogen Production Integrated with Biofuels
FATS, OILS, GREASES, BIOWASTE CONVERTED TO
RENEWABLE DIESEL, NAPHTHA, JET FUELS•>50 green diesel/jet fuel projects developed/planned(operating, expansion, in planning, announced, underconstruction)… and more are announced almost daily•

Lucrative business - monetization of very low cost feed•

Nearly 10 billion gallons/yr of green fuels; with full market
allocation•

H2 need: ~1 to 2 billion scf/day (1.1-2.2 million Nm3/hr)•

H2 plants are typically 10-50 mmscfd (11-56 KNm3/hr)•

Renewable fuel byproducts can be smartly integrated withtraditional hydrogen plants to substantially reduce overall
carbon emission and economics.
•

Matheson/NSHD have developed conceptual designs andcompleted, firm lifecycle costs for multiple cases•

Unlike many others, option can be economic with limited subsidies

Source: DigestConnect presentation
February 2021

CO2 recovery options (syngas, flue gas) can be additionallyincorporated depending on site conditions, economics.

•

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Green Fuel Production Plant

Summary• Production and utilization of Hydrogen and co-products is a rapidly evolving arena• Technology and process optimization needs are accelerated by the combination of strong environmental (GHG)
drivers and increasing economic pressures• Traditional production options are continuously evolving and new/ novel technologies are emerging and necessary• Optimal solutions will continue to vary on a case-by-case basis, especially for medium-sized and largehydrogen/HyCO needs• Comparisons of alternate options must consider feedstock source(power, hydrocarbons) GHG to avoid environmental
degradation and economic impact caused by premature commercialization• Minimization of coal/heavies based power generation, or carbon capture from the same, is necessary to obtainwidespread environmental benefits from power dependent HyCO production• Integration across processes can enable economically effective carbon-mitigated solutions• Significant evolution across the renewables supply chain (power, bio-feedstock etc), pragmatic
governmental support, and fundamental advances in blue/green hydrogen technologies are required tohelp moderate economic impacts & harness environmental benefits in the HyCO production arena
versus the utilization of approaches that involve widespread commercial implementation of inefficienttechnologies and process schemes
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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

For further information, please contact:

Investor Relations for investors
Investor Relations, Group Finance & Accounting OfficeTel: +81 (0)3-5788-8512
E-mail：Nshd.ir@nipponsanso-hd.co.jp

Upcoming IR events
Q1 FYE2022 Earnings Call

July 30, 2021

www.nipponsanso-hd.co.jp/en/

NIPPON SANSO Holdings Corporation (Ticker:4091.T)
Headquarters：1-3-26 Koyama Shinagawa-ku, Tokyo 142-0062, Japan

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June 23, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities Hydrogen Conference 2021

Ⓒ 2021 NIPPON SANSO Holdings Corporation All rights reserved