Slide 1: Q2 2016 Results Conference Call
Page 1 Q2 2016 Results Conference July 27, 2016 Call
Slide 2: Conference Call Participants
Page 2 Conference Call Participants Randy MacEwen President & CEO Tony Guglielmin CFO
Slide 3: Forward-Looking Statements
Page 3 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 4: Q2 2016 Overview
Page 4 Q2 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: Q2 +58%; 1H +
Slide 5: Key Strategic Initiatives
Page 5 Key Strategic Initiatives • Strategic collaboration framework agreement with Broad‐Ocean AND significant equity investment in Ballard • Landmark $168M fuel cell stack production line through a joint venture with Synergy • Completed two important Backup Power market transactions
Slide 6: Strategic Collaboration Framework & Equity Investment
Page 6 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 7: Landmark Fuel Cell Production Line Transaction
Page 7 Landmark Fuel Cell Production Line Transaction • Largest ever Ballard fuel cell deal – signed with Guangdong 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,
Slide 8: Landmark Fuel Cell Production Line Transaction (Cont'd)
Page 8 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 c) Ballard
Slide 9: Interrelated Deals Signed
Page 9 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) contract
Slide 10: Strategic Transactions in Backup Power Market
Page 10 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 11: Additional Items
Page 11 Additional Items • Two programs to develop fuel cell engines for use in CRRC light rail trains advancing on track relative to customer milestone schedules • Business development activity progressing in Japan • Protonex received $5.8M purchase order in Q2 for Squad Power Manager Special Opera
Slide 12: Q2 2016 Revenue and Gross Margin
Page 12 Q2 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 o +87% Power Products, to $11.8M toward higher margin Heavy Duty Motive, +643% Heavy Duty Mot
Slide 13: Q2 2016 Cash Operating Cost Base and Adjusted EBITDA
Page 13 Q2 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 Normalized Net
Slide 14: Liquidity
Page 14 Liquidity • Q2 2016 Cash Used By Operating Activities improved 26% to ($3.9)M • 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 fo
Slide 15: Q2 2016 Conference Call Q&A
Page 15 Q2 2016 Conference Call Q&A
Slide 16: Q2 2016 Results Conference Call
Page 16 Q2 2016 Results Conference July 27, 2016 Call