#1Q1-F2024 Investor Presentation July 7th, 2023 VELAN#2Disclaimer The following investor presentation provides an analysis of the consolidated operating results and financial position of Velan Inc. ("the Company") for the quarter ended May 31, 2023. This investor presentation should be read in conjunction with the Company's audited consolidated financial statements for the years ended February 28, 2023 and 2022. The Company's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). The significant accounting policies upon which these consolidated financial statements have been prepared are detailed in Note 2 of the Company's audited consolidated financial statements. All foreign currency transactions, balances and overseas operations have been converted to U.S. dollars, the Company's reporting currency. This investor presentation was approved by the Board of Directors of the Company on July 6, 2023. Additional information relating to the Company, including the Annual Information Form and Proxy Information Circular, can be found on SEDAR at www.sedar.com. NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES In this investor presentation, the Company has presented measures of performance or financial condition which are not defined under IFRS ("non-IFRS measures") and are, therefore, unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company and are reconciled with the performance measures defined under IFRS. Reconciliations of these amounts can be found at the end of this presentation. The Company has also presented supplementary financial measures which are defined at the end of this presentation. FORWARD-LOOKING INFORMATION This investor presentation may include forward-looking statements, which generally contain words like "should", "believe", "anticipate", "plan", "may", "will", "expect", "intend", "continue" or "estimate" or the negatives of these terms or variations of them or similar expressions, all of which are subject to risks and uncertainties. These risks and uncertainties are disclosed in the Company's filings with the appropriate securities commissions. While these statements are based on management's assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that it believes are reasonable and appropriate in the circumstances, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements contained herein whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. VELAN#3Presenters Thank you for your attendance to our Q1 F2024 Financial Results Investor Call. Bruno Carbonaro CEO and President +1 438 817-7593 [email protected] Rishi Sharma Chief Financial Officer +1 438 817-4430 [email protected] www.velan.com f www.facebook.com/Velaninc @VelanInc in www.linkedin.com/Velaninc VELAN#4Our markets Navy Nuclear Process & Power Severe Service Oil & gas MRO & After-Market VELAN#5Key Highlights - Q1 ■$67.7 m sales, a decrease of $7.3 m or -9.8% vs Q1-F2023. ■ $(3.8) m EBITDA2 is $0.9 m lower than last year. The decrease is primarily attributable to a lower gross profit, partially offset by a decrease in administration costs. Sales ($m) 411 372 370 125 Q4 114 302 115 ■$8.3 m net loss¹ for the quarter. 86 ■$490.5 m backlog 2 → Increase since the beginning of the year due to strong book-to-bill ratio². 110 Q3 89 95 72 ■$58.6 m net cash → Net cash increase of $8.4 m since the beginning of the year due to continued improvements in operating cash flow generation. Q2 85 102 68 85 68 Q1 84 77 75 75 68 2020 2021 2022 2023 2024 1 Net income or loss refer to net income or loss attributable to Subordinate and Multiple Voting Shares 2 Non-IFRS and supplementary financial measures - additional specifications at the end of this presentation VELAN#6Backlog 1 Backlog ($m) $490.5 m backlog1. 700 ■$335.8 m shippable in the next 12 months. 600 1.36 book-to-bill ratio¹ for the quarter driven by strong bookings and partly caused by an increase in finished 500 goods not yet shipped. 400 1 year 300 Within 12 months backlog¹ comparable to previous year. 200 ■The backlog¹ was favorably impacted by the strengthening of the euro spot rate against the U.S. dollar since the beginning of the fiscal year which represented $2.6 m. < 1 year 100 1 Non-IFRS and supplementary financial measures - additional specifications at the end of this presentation 0 2019 2020 2021 2022 2023 2024 VELAN#7Sales Decrease in sales in Italy and France partially offset by increased volume in North America Q1 F2023 geographical sales* (in millions) Other 8,5 Q1 F2024 geographical sales* (in millions) Other 7,0 Italy 17,6 17,5 France North America 31,4 Italy 9,6 15,9 France 35,2 North America The decrease in sales for the quarter is primarily attributable to three main elements: 1) accelerated shipments in the fourth quarter of the prior fiscal year, 2) delays on certain shipments this quarter caused by customer readiness issues, and 3) a shortage of deliverable orders in the Company's Italian operations. *Geographical third-party sales are defined as the country where the sales was recorded. VELAN#8EBITDA 1 evolution Historic ($m) 18 16 14 12 Restructuring and 10 transformation income 8 6 4 2 0 -2 -4 -56 J 2019 2020 2021 2022 Adj. to asbestos provision 2023 2024 -2,9 1,8 Q1 Bridge ($m) -0,9 1,6 1,6 4,3 0,2 -3,8 Q1 F2023 Volume Mix FX Administration costs Other Q1 F2024 Q1 F2024 gross profit negatively impacted by a lower sales volume, a less efficient product mix delivered, and negative FX fluctuations compared to prior The decrease was partially offset by lower administration costs, primarily related to asbestos settlements costs, which were provided for in Q4 F2023. year. 1 Non-IFRS and supplementary financial measures - additional specifications at the end of this presentation VELAN 2 Primarily due to a $9.6 m gain on the disposal of a plant. See MD&A for more details.#9Net cash analysis Free Cash Flow² ($m) 13,5 0,6 31,2 2,6 9,6 1,1 50,3 Net cash bridge ($m) 9,6 0,9 0,4 58,6 -3,8 EBITDA 2 AR Inv Other Interest, tax Capex FCF 3 WC mov. and others End of Q4 F2023 FCF Repay. LTD Others End of Q1 F2024 Free Cash Flow generation driven primarily by increased collections partially offset by inventory build-up. Net cash and overall liquidity position (net cash + unused credit facilities) for the company remains strong at $58.6 m and $145.0 m respectively. 1 Non-IFRS and supplementary financial measures additional specifications at the end of this presentation 2 Free cash flow is defined as Cash provided (used) by operating activities less additions to property, plant and equipment (or Capex) 3 Includes net change in long-term provisions and customer deposits * Other adjustments are defined as loss (gain) on disposal of property, plant and equipment, minority interests, net change in derivative assets and liabilities and other long-term liabilities. VELAN#10Closing Comments Q1 F2024 ■The start to fiscal 2024 was impacted by temporary shipment delays, but we remain confident because: • Our backlog has improved during the quarter, highlighted by similar bookings1 than last year. • • • Our cash base increased during the quarter thanks to consistent focus on working capital management, continuing on the trend realized in Q4 F2023. We are still working on a large opportunity base of bookings1. Despite a tougher quarter, execution remains our top priority, and we will address issues encountered this quarter to improve and meet our on-time delivery commitments. We are dedicating all the necessary resources and efforts to prepare a successful closing of the transaction with Flowserve. 1 Non-IFRS and supplementary financial measures - additional specifications at the end of this presentation VELAN#11Presenters Thank you for your attendance to our Q1 F2024 Financial Results Investor Call. Bruno Carbonaro CEO and President +1 438 817-7593 [email protected] Rishi Sharma Chief Financial Officer +1 438 817-4430 [email protected] www.velan.com f www.facebook.com/Velaninc @VelanInc in www.linkedin.com/Velaninc VELAN#12NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") (in millions of USD) Q2 2019 Q3 2020 2021 2022 2023 2024 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net income (loss)1 (2.4) (0.2) 1.5 (5.8) 1.4 (0.8) (11.1) (1.9) (5.1) 9.5 0.3 (5.1) 5.0 4.5 (25.6) (7.4) (3.7) 2.7 (47.2) (8.3) Depreciation of property, plant and equipment Amortization of intangible assets and financing costs 2.9 2.6 3.5 2.6 2.6 2.9 2.8 2.5 2.5 2.5 2.6 2.4 2.4 2.4 2.4 2.2 0.4 0.4 0.7 0.4 0.5 0.5 0.7 0.6 0.6 0.7 0.7 0.7 0.5 0.6 0.8 0.6 06 20 2.0 2.1 2.5 2.1 0.6 0.6 0.6 0.5 Finance costs - net 0.6 0.1 0.0 0.3 (0.2) 0.7 0.5 0.3 0.0 0.2 0.3 0.5 0.5 0.6 0.7 0.2 0.4 0.4 0.5 1.2 Income taxes (0.1) 0.5 (1.9) (1.8) 0.9 (0.4) 9.9 1.1 (0.5) 0.9 (2.3) 0.6 2.3 5.2 38.3 1.5 2.1 0.3 4.1 0.7 Adjustment to legal provision 56.0 Adjusted EBITDA 1.4 3.4 3.8 (4.3) 5.2 2.9 2.8 2.6 (2.5) 13.8 1.6 (0.9) 10.7 13.3 16.6 (2.9) 1.4 6.1 16.5 (3.8) The term "EBITDA" is defined as net income or loss attributable to Subordinate and Multiple Voting Shares plus depreciation of property, plant & equipment, plus amortization of intangible assets and financing costs, plus net finance costs plus income tax provision. The terms "EBITDA per share" is obtained by dividing EBITDA by the total amount of subordinate and multiple voting shares. The forward-looking statements contained in this investor presentation are expressly qualified by this cautionary statement. Definitions of supplementary financial measures The term "Net new orders" or "bookings" is defined as firm orders, net of cancellations, recorded by the Company during a period. Bookings are impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the Company's sales operation performance for a given period as well as well as an expectation of future sales and cash flows to be achieved on these orders. The term "backlog" is defined as the buildup of all outstanding bookings to be delivered by the Company. The Company's backlog is impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the future operational challenges of the Company as well as an expectation of future sales and cash flows to be achieved on these orders. The term "book-to-bill" is obtained by dividing bookings by sales. The measure provides an indication of the Company's performance and outlook for a given period. The forward-looking statements contained in this investor presentation are expressly qualified by this cautionary statement. 1 Net income or loss refer to net income or loss attributable to Subordinate and Multiple Voting Shares VELAN#13Our Board of directors James A. Mannebach Chair of the Corporation St. Louis, Missouri, USA Director since: 2018 Suzanne Blanchet La Prairie, Québec, Canada Director since: 2021 Bruno Carbonaro Montréal, Québec, Canada Director since: 2022 Dahra Granovsky Toronto, Ontario, Canada Director since: 2019 Edward Kernaghan Toronto, Ontario, Canada Director since: 2021 Ivan Velan Montréal, Québec, Canada Director since: 1970 Peter Velan Montréal, Québec, Canada Director since: 2022 Rob Velan Vice-Chairman Montréal, Québec, Canada Director since: 2013 Tom Velan Former Chairman Montréal, Québec, Canada Director since: 1976 VELAN#14Q1-F2024 Investor Presentation July 7th, 2023 VELAN