Ballard Power Systems Inc. · TSX:BLDP

Ballard Power Systems — Q2 2011 Earnings Presentation

17 slides from Ballard Power Systems's earnings presentation, Aug 2, 2011

  1. Slide 1: Second Quarter 2011 Update

    August 2, 2011 Smarter Solutions for a Second Quarter 2011 Update Clean Energy Future © 2011 BALLARD POWER SYSTEMS SYSTEMS, INC. INC ALL RIGHTS RESERVED. RESERVED

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements This presentation contains forward-looking statements, including: estimated revenue; cash operating costs; gross margins; product cost reductions; adjusted EBIDTA, funding requirements; market growth projections; and expected product shipments. These forward-looking statem

  3. Slide 3: About Ballard

    About Ballard ƒ Total transformation 2007-09 (company incorporated 1989) ƒ Listed on NASDAQ (BLDP) and TSX (BLD) ƒ Market capitalization of ~$134M (as of 6/30/2011) POSITION MARKET FOCUS STRATEGY • Global leader in PEM fuel • Multi-market Multi market growth focus • Leverage product leadership cell

  4. Slide 4: Competitive Advantage – Unrivalled IP Portfolio

    Competitive Advantage – Unrivalled IP Portfolio ƒ Extensive R&D development work over past 15 years – including joint development programs with Daimler & Ford • Over 2,000 patents / applications owned and licensed in strategic areas • MEA designs • Plate designs • Catalyst Coated Membranes • Gas Dif

  5. Slide 5: Product Portfolio

    Product Portfolio Fuel Cell Stacks ƒPower 500W-2kW ƒ Power 2-8kW ƒPower 4-20 kW ƒ Power 100 kW ƒ Operating life 2,500-4,000 ƒ Operating life 20,000- ƒ Operating life 8,000- ƒ Operating life >5,000 hrs hours 30,000 hours 12,000 hours ƒContract manufactured for ƒASP $650-2,600/stack* $650 2 600/stack*

  6. Slide 6: Multi-Market Growth Focus

    Multi-Market Growth Focus ƒ Multi-market focus provides: ƒ Commercialization timeline: • Greater revenue/margin potential… and • Lower risk ƒ Fuel cell applications are expected to broaden considerably in the medium term ƒ Ballard’s current focus is sharply on backup power, di t ib t d generation, d

  7. Slide 7: Backup Power

    Backup Power ƒ Focus on backup power for wireless telecom industry ƒ Dual channel access – FCgenTM-1020ACS 1. Direct via Dantherm Power Fuel Cell Stack 2. Indirect via system integrators (including IdaTech, M- Field, Palcan) ƒ 2011 Expectations – • Significant growth • Drive sales through IdaTech &

  8. Slide 8: Distributed Generation

    Distributed Generation ƒ Focus on applications with available low-cost hydrogen in markets with FIT and/or SGIP support FCgenTM-1300 Fuel Cell Stack ƒ CLEARgenTM ‘Levelized Cost of Energy’ ~$0.06-0.13 / kWhr (reflecting available Federal and California state government incentives) ƒ Dual channel acc

  9. Slide 9: Material Handling

    Material Handling ƒ Focus on battery replacement in forklift trucks, in North American high volume FCvelocityTM-9SSL Fuel Cell Stack distribution centres & factories ƒ Exclusive stack supplier to Plug Power (85% market share) ƒ 2011 Expectations – • Significant f growth in shipments, in line with Pl

  10. Slide 10: Bus

    Bus ƒ Focus FCvelocityTM-HD6 Fuel Cell Module • Government supported zero-emission transit programs • North America, South America, European markets ƒ Market access through bus OEMs and system i t integrators t ƒ 2011 Expectations – • Important market for 2011 – large revenue opportunity, driving hi

  11. Slide 11: Q2 2011 Results

    Q2 2011 Results USD Millions Q2 2011 Q Q2 2010 Q % Improvement YTD 2011 YTD 2010 % Improvement GROWTH Revenue $19.1 $15.5 23% $34.4 $27.4 26% Fuel Cell Stack Shipments1 (units) 820 790 4% 1,318 1,212 9% 12-Month Rolling Order Book $36.4 $31.0 PROFITABILITY Gross Margin 17% 9% 17% 11% Cash Operating

  12. Slide 12: Path to Profitability - Revenue Growth

    Path to Profitability - Revenue Growth Revenue ƒ 39% growth in 2010 – met guidance $100 $84.5 ƒ Guidance >30% in 2011 $75 $65.0 • Successive revenue improvements each quarter; $46.7 $M $50 stronger second half of the year $25 ƒ Underpinned by strong 12- month rolling order book of $0 $36.4M, as of J

  13. Slide 13: Path to Profitability - Gross Margin

    Path to Profitability - Gross Margin ƒ 2010 Progress • 16% in 2010; 3-point 3 point gain from 2009 and 6-point 6 point gain from 10% in 2008 • Significant improvement in Q4 2010 to 24% - reflects shift in product mix ƒ 2011 Focus • Continued Co t ued improvement p o e e t in 2011, 0 , with t biggest

  14. Slide 14: Path to Profitability - Cash Operating Cost Base

    Path to Profitability - Cash Operating Cost Base Cash Operating Cost Base * 80 $74.4 ƒ 44% reduction in 2010 cash 44% operating cost base (despite (d it consolidation of Dantherm Power in 2010 60 >5% and stronger C$) $41.9 <$40 ƒ Drive to cash operating cost base $M 40 run rate below $40M in 2011 by

  15. Slide 15: Path to Profitability - Adjusted EBITDA

    Path to Profitability - Adjusted EBITDA Adjusted EBITDA $0 2009 2010 2011F ƒ 33% improvement in 2010 Minimum ƒ Guidance of >40% ($15) i improvement t in i 2011 ($15.6) • >30% revenue growth ($M) • Improved gross margins ($30) ($26 0) ($26.0) ƒ Growth, opex and gross margin trajectories would ($39.0)

  16. Slide 16: Path to Profitability - Liquidity & Cash Reserves

    Path to Profitability - Liquidity & Cash Reserves ƒ Solid liquidity position: cash reserves of $51.6M at June 30th ƒ Remain focused on maintaining strong liquidity • Tight focus on managing cost base and working capital • Continued margin improvement • Secured C$10M bank line in Q2 to assist in fina

  17. Slide 17: Summary

    Summary ƒ Building on strong 2010 results ƒ 2011 priorities for aggressive focus on growth and profitability - • Significant revenue growth through multi-market focus • Maintenance of annual ‘cash operating cost base’1 at current run-rate ( (below $ $40M)) • Continued improvement in gross margin, to

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