Ceres Power Holdings Plc · LSE:CWR
Ceres Power — H1 2018/19 Earnings Presentation
32 slides from Ceres Power's earnings presentation, 2019
Slide 1: SteelCell Power for the Energy Transition
Our next generation SteelCell™ Power for the Energy Transition Interim Results for the six months ended 31 December 2018 Phil Caldwell CEO Richard Preston CFO 0
Slide 2: Interim results 6 months to 31 December 2018
Interim results 6 months to 31 December 2018 CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 1
Slide 3: Interim Highlights
INTERIM HIGHLIGHTS Commercial Licence revenue drives revenue growth • Strategic partnerships signed with Bosch and Weichai including 9.0 equity Investment and License deals • Revenue growth 168 % driven by high margin licenses 8.0 7.0 Financial 6.0 • Operating loss halved from £6.2 m to 3.0m 5.0 • £
Slide 4: Outlook
OUTLOOK • Strong revenue growth with strategic partners • Revenue to double for fourth consecutive year to £15 m 2019 @ > 50% gross margin • Order book >£30m Engineering services and license revenue • Healthy pipeline with new partners at evaluation stage • Target an additional strategic partner in
Slide 5: Financial highlights – income and margin
Financial highlights – income and margin Licence revenue drives revenue growth £m HY HY Change Change 9.0 2018 2017 £m % 8.0 Revenue and other operating income 8.3 3.1 5.2 168% 7.0 - Licence revenue 5.1 0.0 5.1 6.0 - Engineering services revenue 3.0 2.6 0.4 14% 5.0 £m 4.0 - Other operating income 0.
Slide 6: Financial highlights – income statement
Financial highlights – income statement £m HY HY Change Change % 2018 2017 £m Gross margin 6.7 1.2 +5.5 458% Operating costs 9.8 7.9 (1.9) (24%) Underlying operating costs ¹ 9.1 7.9 (1.2) (15%) Operating loss (3.0) (6.2) (3.2) 52% Income tax credit 0.9 1.0 (0.1) (10%) Loss for the financial period (
Slide 7: Financial highlights – cash flow
Financial highlights – cash flow £m HY HY Change £m Change % 2018 2017 Operating cash flows (2.0) (5.1) 3.1 (61%) Changes in working capital (1.2) (0.2) (1.0) 500% Cash used in operations (3.2) (5.3) 2.1 (40%) Capital expenditure (1.4) (0.7) (0.7) 100% Tax received in the period - 1.9 (1.9) (100%) U
Slide 8: Financial Summary
FINANCIAL SUMMARY New revenue streams and investment in the business and the new facility • New licence revenue drives increase in revenue and gross margin • Underlying opex increased 15% to build the business for new customers • Operating losses halved • Capex increased as invest in new facility •
Slide 9: Business update
Business update CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 8
Slide 10: Who we are and what we do
Who we are and what we do ▪ Unique Fuel Cell Technology - Imperial College ▪ High growth UK tech company ~200 employees ▪ High margin asset light license model ▪ ~£220 m Mkt cap AIM ▪ Fully funded £78 m cash and £30 m order book ▪ 50 patent families World leading developer of SteelCell® low cost, no
Slide 11: Global power system and engine customers
Global power system and engine customers • JV 2020 Electric Bus and stationary power market • Manufacturing scale up/ Data centre and commercial • Power systems for Data Centre CONFIDENTIAL COMMERCIAL • Commercial Scale CHP SCALE PARTNER • Electric Vehicle Range Extender • Stationary power applicati
Slide 12: Global drive for electrification and clean distributed energy
Global drive for electrification and clean distributed energy Air Quality Climate Change • Rise of Mega Cities • Challenge to decarbonise • Pollution from combustion energy system engine vehicles • Power, heat and transport Balancing renewables Electric vehicles • Renewable energy cheapest • Increas
Slide 13: Why is SteelCell the solution?
Why is SteelCell® the solution? • Affordable Solid Oxide Fuel Cell for mass adoption • Made from conventional steel with small amounts of PEM cell SOFC cell SteelCell® ceramic • Uses conventional high volume manufacturing Robustness equipment from Solar PV industry • Fuel flexible: operates on N
Slide 14: Ceres enables transition from combustion to electrification
Ceres enables transition from combustion to electrification De-centralised Power Electric vehicles Clean power for data • Balance renewables • Addresses air quality • Data centres use > 2 % global • Higher efficiency than centralised • Low to zero emission SOx / NOx power grid 30 % less energy and c
Slide 15: Applications for the SteelCell
Applications for the SteelCell® CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 14
Slide 16: 5 kW Stack, 1kW Stack, 1kW home
1kW Stack 5 kW Stack 1kW home system 5 & 10kW Commercial/ Data 30kW + for Hybrid EV Buses Centres 100kWs + Power generation CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 15
Slide 17: High efficiency distributed power competitive with grid
High efficiency distributed power competitive with grid…. 80 70 60 Efficiency %LHV 10 kW SteelCell™ (Data Centre/commercial) 50 1 kW SteelCell™ Distributed power 40 (Home) Competitive with grid Scale Gas Turbine 30 20 2010 2012 2014 2016 2018 2020 2022 2024 Axis Title CONFIDENTIAL A Fuel Cell in eve
Slide 18: Ready for a Hydrogen Future tomorrow
…and ready for a Hydrogen Future tomorrow Real experimental data with OEM partner CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 17
Slide 19: Commercial Progress
COMMERCIAL PROGRESS CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 18
Slide 20: Fuel cell for Data Centres with US DoE; Range Extension
Range Extension & Potential Fuel cell for Data Centres Charging for EVs with US DoE ▪ On-Board charging using CNG/Biofuel for long range Hybrid EV buses and ▪ Fuel Cells provide Primary Power commercial vehicles ▪ “Off power grid” using natural gas ▪ Charging points for EVs ▪ Diesel Eliminated, lowe
Slide 21: Home System Field Trial, Commercial Scale Development
Home System Field Trial Commercial Scale Development Generates ~80% of home power ▪ 5 to 10s kW power modules for + sufficient power to charge Electric Vehicle offices, convenience stores etc. ~30% Lower Energy Costs ▪ ~30% Lower Energy Costs ~30% Lower Carbon ▪ ~30% Lower Carbon ▪ Zero SOx and Zero
Slide 22: Bosch
Bosch Strategic collaboration • Expertise in manufacturing and product development • Bosch Invested £9m in Ceres for 4 % stake + £20m license and JDA revenues to 2020 Multiple market applications • Small power stations for cities, factories, datacentres and EV charge points Manufacturing capability
Slide 23: Weichai Power
Weichai Power Strategic collaboration • Invested £48m in Ceres for 20% of ISC • Licence Agreement and JDA for up to £39m • Establish manufacturing 49:51 JV in China 2020 Market opportunity Access to China - the fastest growing fuel cell market • One of the world’s largest automobile and equipment ma
Slide 24: Business Model
BUSINESS MODEL CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 23
Slide 25: How we work with Partners
How we work with Partners 1. Joint Product development 2. Technology Transfer License 3. Multiple applications across range of markets Engineering Services Up Front License Fees Future Royalties per kW (2 – 3 years) (~3 years) At start of production $ $$ $$ Recurring revenues 6 JDA partners 3 Tech T
Slide 26: Manufacturing License
Manufacturing License 1kW Stack 5 kW Stack Manu 1kW home system 5 & 10kW Commercial/ Data Centres 30kW + for Hybrid EV Buses System License 100kWs + Power generation CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 25
Slide 27: UK Manufacturing enables global licensees
UK Manufacturing enables global licensees R&D in Annual capacity equivalent in units: Horsham UK 2018 2019 2020 2021 UK Technical Centre develops next generation V5, V6 & V7 SteelCell® HOME WORK CLOUD ROAD 1kW 10kW datacentres 30kW CP2 Reference plant Phase 1 2 MW 2,000 200 - 60* Phase 2 3 to 10
Slide 28: UK's first SOFC Fab: CP2 Reference plant
UK’s first SOFC Fab: CP2 Reference plant £7.5 m Investment creating ~60 skilled jobs in UK Will provide near term capacity for customers Manufacturing tech transfer to partners eg Bosch ✓ Fitout completion Q1 2019 • Equipment installed Q2 2019 • Site training and validation H2 2019 • Phase 1 Launch
Slide 29: Global Multi Billion $ Opportunity
Global Multi Billion $ Opportunity ▪ Highly scalable business - OEM partner & licensing technology ▪ Replaces conventional engine and power generation ▪ Enabler for EV roll out and supports increase in renewable energy Up to 5% market share at up to Possible annual gross margin $140 gross margin / k
Slide 30: Outlook
Outlook ▪ Strong revenue growth with strategic partners ▪ Revenue to double for fourth consecutive year to £15m 2019 @ > 50% gross margin ▪ Order book >£30m Engineering services and license revenue ▪ Healthy pipeline with new partners at evaluation stage ▪ Target additional strategic partner in 2019
Slide 31: Appendix
Appendix CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 30
Slide 32: Licensing strategy
Licensing strategy Manufacturing License / JV System License by market application Core material Core SteelCell™ SteelCell™ stack China JV + Confidential Partner CONFIDENTIAL A Fuel Cell in every home and business Ceres Power Ltd. © 2019 31
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