Itm Power Plc · LSE:ITM
Itm Power — H1 2020 Earnings Presentation
24 slides from Itm Power's earnings presentation, February 2020
Slide 1: Interim Results Presentation
Interim Results Presentation: London | February 2020 Graham Cooley, CEO | Andy Allen, CFO 1
Slide 2: H1 2020 Overview
H1 2020 OVERVIEW HYDROGEN ENERGY SYSTEMS Strong commercial and operational progress in H1 2020 ▪ Transformative £58.8m fundraise and strategic investment by Linde ▪ Formation of JV with Linde focusing on large scale industrial projects ▪ Lease for new 1GW factory signed | Lead contractor appointed ▪
Slide 3: Revenue | Backlog | Tenders
REVENUE | BACKLOG | TENDERS HYDROGEN ENERGY SYSTEMS Tenders Backlog Income Strong upward trend: ▪ Tender pipeline £248m+ ▪ Backlog: £42.4m ▪ 2019 FY Revenue: £17.6m up 25% Revenue | Backlog | Tender Pipeline | All showing progress 3
Slide 4: Green Hydrogen | Commercial Rationale
GREEN HYDROGEN | COMMERCIAL RATIONALE HYDROGEN ENERGY SYSTEMS Commercial Rationale: ▪ RE reducing in cost significantly ▪ RE needs energy storage ▪ Green Hydrogen now cost competitive ▪ Multi £bn global addressable markets ▪ Refinery electrolyser market is ~€90bn* * ▪ Market pull for green hydrogen
Slide 5: UK Gov | Industrial Strategy Funds
UK GOV | INDUSTRIAL STRATEGY FUNDS HYDROGEN ENERGY SYSTEMS UK Gov | Industrial Strategy Funds: ▪ Clean Steel Fund | £250m ▪ BEIS Energy Innovation Programme | £505m ▪ Low Carbon H2 Production Fund | £100m ▪ Industrial Energy Transformation Fund | £315m ▪ Industrial Cluster Challenge Fund | £170m ▪ T
Slide 6: Market Offering | 2MW to 10MW
MARKET OFFERING | 2MW TO 10MW HYDROGEN ENERGY SYSTEMS Building Housed Products: 10MW refinery electrolyser Containerised Products: 3MW refuelling hub Skid Mounted Products: 8MW train refuelling station Building a profitable business through scale, volume and partnerships 6
Slide 7: Linde Strategic Partnership
LINDE STRATEGIC PARTNERSHIP HYDROGEN ENERGY SYSTEMS Who are Linde? ▪ World’s largest speciality gas company ▪ Revenue: $28bn | 80k employees (2018) ▪ Linde world leader in hydrogen Build Own & Operate Scope of JV ▪ Focussed on large scale industrial hydrogen (10MW+) ▪ JV generates sales to fill the
Slide 8: Scaling Operations
SCALING OPERATIONS HYDROGEN ENERGY SYSTEMS 10MW Potential JV project 10MW PEM electrolyser systems ▪ Flagship 10MW project with Shell ▪ Largest PEM electrolyser in the world at deployment ▪ Largest refinery in Germany ▪ Benefit of Shell engineering & permitting rigour ▪ Excellent reference plant & c
Slide 9: Shell Collaboration
SHELL COLLABORATION HYDROGEN ENERGY SYSTEMS Shell | Refhyne ▪ Permit to commence site construction granted (record time) ▪ £1.9m write down due to EPC overspend ▪ Project team continue to push ITM hard ▪ Refinery seniors very positive about progress ▪ FAT of 2MW modules & control system are rate lim
Slide 10: 100MW Capability
100MW CAPABILITY HYDROGEN ENERGY SYSTEMS Feasibility in Progress | FEED study needed ▪ FEED studies bid by the Linde JV ▪ Linde to lead projects as EPC ▪ Sales channel from Linde and ITM Power ▪ Strong existing customer base ▪ World leading positioning ▪ Low cost energy storage and green hydrogen 10
Slide 11: 5MW Module Development
5MW MODULE DEVELOPMENT HYDROGEN ENERGY SYSTEMS 5MW Module Development 5MW Module Development: ▪ Provisional spec is 2.1 tonne of H2 per day ▪ Developed in parallel with manufacturing processes ▪ From 15 stacks to 4 stacks for 10MW module ▪ Design integration techniques reduce BoP costs ▪ Developed f
Slide 12: Bessemer Park
BESSEMER PARK HYDROGEN ENERGY SYSTEMS Bessemer Park progress: ▪ Prime contractor selected | Clegg Construction ▪ Contract to be signed 14th Jan 2020 ▪ Timescales are currently on target 12
Slide 13: Volume & Scale Driving Efficiencies
VOLUME & SCALE DRIVING EFFICIENCIES HYDROGEN ENERGY SYSTEMS ITM Electrolyser Cost Projections ▪ Based on standardised modular system Enablers for cost reduction: ▪ Manufacturing volume ▪ Factory semi-automation ▪ System sizes to grow over time ▪ Continuous technology improvements <€1,000/kW today @
Slide 14: Interim Results
Interim Results ▪ Summary of H1 2020 Results ▪ P&L Bridge ▪ Employees ▪ Cash Bridge ▪ Pipeline Analysis ▪ Tender Pipeline Analysis £42.4M Under Contract or in Negotiation 14
Slide 15: Financial Snapshot
FINANCIAL SNAPSHOT | FINAL RESULTS HYDROGEN ENERGY SYSTEMS Total income: £3.8m (£5.0m), comprising: ▪ Revenue: £2.4m (£1.2m) ▪ Grant income plus grants receivable for capital projects: £1.4m (£3.8m) ▪ As in previous years, revenue is expected to be weighted towards the second half Loss from operatio
Slide 16: P&L Bridge
P&L BRIDGE HYDROGEN ENERGY SYSTEMS P&L Bridge: ▪ Gross losses: Learning in deployment ▪ Case for the Joint venture ▪ Other: Investing in future resources (Payroll) ▪ Grant gap: sharper decline than anticipated: ▪ Transition to a sales organisation ▪ Funding still sought for product roadmap Financial
Slide 17: Investing in Skills
INVESTING IN SKILLS HYDROGEN ENERGY SYSTEMS Employee Analysis ITM Power Employee Analysis: ▪ A changing workforce representing skills investment: ▪ Driven by scaling production ▪ Senior production appointment ▪ Project management has also increased ▪ Other areas have remained unchanged Financial per
Slide 18: Cash Bridge
CASH BRIDGE HYDROGEN ENERGY SYSTEMS Cash Bridge: ▪ Working capital movement ▪ Inventory received and processed as WIP ▪ Receivables decreased as product built ▪ Revenue recognised from deferred income ▪ Increase in provisions ▪ Factory related ▪ Shell Refhyne contract ▪ Investing in assets: ▪ Develo
Slide 19: Contracts Pipeline | Summary
CONTRACTS PIPELINE | SUMMARY HYDROGEN ENERGY SYSTEMS Total Under Contract or in Negotiation: £42.4M ▪ Reporting the number up to 4 times per year ▪ As of today, total backlog of £42.4m (£33.6m) ▪ £16.3m (£23.2m) of projects are under contract ▪ A further £26.1m (£10.4m) are in the final stages of ne
Slide 20: Contracts Pipeline | By Sector
CONTRACTS PIPELINE | BY SECTOR HYDROGEN ENERGY SYSTEMS Sector Negotiation/Contract Industrial £14.6M Fuel £11.2M P2G £2.2M Maintenance £0.4M Other £5.1M Total Under Contract or in Negotiation: £42.4M 20
Slide 21: Tender Opportunity Pipeline
TENDER OPPORTUNITY PIPELINE HYDROGEN ENERGY SYSTEMS Assessment and qualification process: ▪ Must have been tendered in the last 12 months ▪ Project ready to go with finance in place ▪ Currently £248m ▪ Representing 37 commercial tender responses ▪ Average project size of £6.7m (£6.0m) ▪ Reflects str
Slide 22: Tender Opportunity Pipeline
TENDER OPPORTUNITY PIPELINE HYDROGEN ENERGY SYSTEMS Assessment and qualification process: ▪ Commercial Tenders only ▪ P2G energy storage is most tendered ▪ Benelux, France and Nordics ▪ Reflects strong demand for larger systems Tender Opportunity Pipeline reported up to four times pa 22
Slide 23: Equity Investment | Summary
EQUITY INVESTMENT | SUMMARY HYDROGEN ENERGY SYSTEMS £58.8m fundraising to address the remaining three main barriers to growth ▪ Working capital ▪ Manufacturing Working Capital: New Premises Identified: De-risked Balance Sheet to provide: ▪ Balance sheet strength • Required for large orders • Increas
Slide 24: Interim Results Presentation
Interim Results Presentation: London | February 2020 Graham Cooley, CEO, ITM Power Andy Allen, CFO, ITM Power 24