Slide 1: Investor Presentation, August 11, 2016, New York City
Page 1 AUGUST 11, 2016 INVESTOR PRESENTATION NEW YORK CITY
Slide 2: Forward Looking Statements
Page 2 Forward Looking Statements This presentation contains forward‐looking statements, including: estimated revenue; cash operating costs; gross margins; product cost reductions; adjusted EBITDA; liquidity; market size and growth projections; customer value propositions; and expected sales and pro
Slide 3: Introduction to Ballard
Page 3 Introduction to Ballard Ballard Power Systems – making a meaningful difference with our fuel cell technology, that will continue long into the future… • 37 years of experience • 23 years listed on TSX & 21 years on Nasdaq • 450 employees • 2,000 patents/applications • 250MW of fuel cell produ
Slide 4: Investment Highlights
Page 4 Investment Highlights • Industry leadership • Sustainable competitive advantages • Diversified business model • Strong performance against a record 2016 order book • Strong balance sheet • Embedded optionality Ballard is well‐positioned to capitalize on the large scale potential of commercial
Slide 5: Growth Platforms
Page 5 Growth Platforms POWER PRODUCTS TECHNOLOGY SOLUTIONS • Meet the power needs of • Help customers solve customers through delivery difficult technical and MANDATE of high value, clean energy business challenges in their products that reduce PEM fuel cell programs customer costs and risks • Heav
Slide 6: Power Products Platform
Page 6 Power Products Platform • Mission: Meet customers’ power needs through delivery of high value, clean energy products that reduce customer costs and risks MARKETS Heavy Duty Motive Portable Power Material Handling Backup Power Motive Modules Portable Systems Fuel Cell Stacks Stationary Systems
Slide 7: Recent Key Strategic Initiatives
Page 7 Recent Key Strategic Initiatives • Strategic collaboration framework agreement with Broad‐Ocean AND significant $28.3M equity investment in Ballard (announced July 26, 2016) • Landmark $168M fuel cell stack production line through a joint venture with Synergy (announced July 18, 2016) • Two i
Slide 8: Strategic Collaboration Framework & Equity Investment
Page 8 Strategic Collaboration Framework & Equity Investment Strategic Collaboration Framework Agreement • ‘Zhongshan Broad‐Ocean Motor Co., Ltd.’ is a leading global manufacturer of motors for EVs – produces 50M motors annually for King Long, BAE Systems, Dongfeng, www.broad-ocean.com/en/index.html
Slide 9: Landmark Fuel Cell Production Line Transaction
Page 9 Landmark Fuel Cell Production Line Transaction • Largest ever Ballard fuel cell deal – signed with Synergy • Value at least $168M over 5‐years • Key deal elements: a) $18.4M Technology Solutions revenue, to equip Synergy for manufacture of FCvelocity®‐9SSL fuel cell stacks in Yunfu, China b)
Slide 10: Landmark Fuel Cell Production Line Transaction (Cont'd)
Page 10 Landmark Fuel Cell Production Line Transaction (Cont’d) • Key deal benefits: a) Localization enables production of lower‐cost fuel cell stacks, thru local component sourcing and use of local labor b) Ballard will have exclusive right to buy stacks from the JV for sale outside China FCvelocit
Slide 11: Interrelated Deals Signed
Page 11 Interrelated Deals Signed • On July 18th these interrelated contracts were signed at the same time in China – Ballard and Synergy contract for production of fuel cell stacks through a joint venture Synergy, Broad‐Ocean and Chinese automotive OEMs (Dongfeng Special Vehicles & FAW) contrac
Slide 12: Strategic Transactions in Backup Power Market
Page 12 Strategic Transactions in Backup Power Market Methanol Telecom Backup Power • Closed sale of Telecom Backup Power business assets to CHEM, major Taiwanese power equipment company, for up to $6.1M • $3M received on closing in Q2, plus up to $3.1M based on sales objectives during 18‐month earn
Slide 13: Portable Power (Protonex)
Page 13 Portable Power (Protonex) • 4,500 SPM’s in the field with U.S. military • $5.8M SPM purchase order received for U.S. Army in Q2 2016 … incremental to $2.8M order received late‐2015 Squad Power Manager – SPM 622 Squad • Currently at ‘Milestone C’ with Vest and Squad Power Manager, moving towa
Slide 14: Material Handling
Page 14 Material Handling • >10,000 fuel cell forklift trucks in N/America today, >107M runtime hours Sample of Fuel Cell Forklift Truck Customers • Ballard focusing on two streams: 1) Supply of stacks to after‐market integrators, including Plug Power 2) Supply of Technology Solutions and packaged s
Slide 15: Technology Solutions Platform
Page 15 Technology Solutions Platform • Mission: help customers solve difficult technical and business challenges in their PEM fuel cell programs through customized technology solutions • YTD Technology Solutions revenue +28%, to $11.9M o Volkswagen Group contract commitment to 2019; program current
Slide 16: Q2 & YTD 2016 Overview
Page 16 Q2 & YTD 2016 Overview • Record full‐year 2016 order book & sales pipeline positioned Ballard for growth and improved performance this year o $58M order book for 2016 deliveries; exceeding 2015 revenue • Continued momentum reflected in strong top line Q2 2016 results o Revenue Growth: Q1 +76
Slide 17: Q2 & YTD 2016 Revenue and Gross Margin
Page 17 Q2 & YTD 2016 Revenue and Gross Margin Revenue (millions) Gross Margin (%) • Q2 2016 Revenue $17.6M • Q2 2016 Gross Margin 29% • Q2 +58% growth, comprised of: • Q2 +19‐points due to shift in product mix toward higher margin Heavy Duty Motive, o +87% Power Products, to $11.8M Portable Power &
Slide 18: Q2 & YTD 2016 Cash Operating Cost Base and Adjusted EBITDA
Page 18 Q2 & YTD 2016 Cash Operating Cost Base and Adjusted EBITDA Cash Operating Cost Base* (millions) Adjusted EBITDA# (millions) • Q2 2016 Cash Operating Costs $8.4M • Q2 2016 Adjusted EBITDA ($2.9)M, 40% improvement • Q2 +25% primarily to inclusion of Protonex operating costs • Q2 2016 Normalize
Slide 19: Liquidity
Page 19 Liquidity • End‐Q2 2016 cash reserves of $41.3M, including: o $3.0M received on close of methanol Telecom Backup Power asset sale to Chung‐Hsin Electric & Machinery Manufacturing Corporation (“CHEM”); and o $2.5M received for license to assemble and sell direct hydrogen H2PM systems in China
Slide 20: Investor Presentation, August 11, 2016, New York City
Page 20 AUGUST 11, 2016 INVESTOR PRESENTATION NEW YORK CITY