Slide 1: Capital market update & interim results
Capital market update & interim results 31 Jan. 2023
Slide 2: Introduction: Dennis Schulz
CAPITAL MARKET UPDATE JAN’23 Introduction: Dennis Schulz ▪ Joined ITM on 1st Dec 2022 as new CEO ▪ 14+ years of experience in Technology/EPC and component manufacturing industry ▪ Held various positions at Linde, among them as Head of Project Execution Services and Head of Strategy and M&A, both at
Slide 3: Interim results
(©) ITM POWER Interim results
Slide 4: Summary financials
CAPITAL MARKET UPDATE JAN’23 Summary financials Summary ▪ We raised capital to pursue an aggressive expansion H1 23 £m H1 22 £m strategy Revenue 2.0 4.2 ▪ In doing so we underestimated the competencies and Gross losses (45.6) (2.6) capabilities required to transition from an R&D Adjusted EBITDA loss
Slide 5: Summary revenue
CAPITAL MARKET UPDATE JAN’23 Summary revenue Leuna: Delays and split delivery change ▪ Project consists of 12 x 2 MW Cube modules H1 23 £m H1 22 £m Revenue 2.0 4.2 ▪ In H1 23 we completed Factory Acceptance Test (FAT) for 2 modules Of which: ▪ In order to mitigate project delays, Linde requested spl
Slide 6: Gross margin: Project cost overruns
CAPITAL MARKET UPDATE JAN’23 Gross margin: Project cost overruns Against a contracted 2.0 portfolio of £49m PeriodH1 to23 £m‘22 £m Oct. PeriodH1 to22 £m‘21 £m Oct. Gross loss (45.6) (6.8) 10.4 Redesign work ▪ Products built to an unfinished design ▪ Subsequent design changes required rework of built
Slide 7: Gross margin: Inventory losses
CAPITAL MARKET UPDATE JAN’23 Gross margin: Inventory losses H1 23 £m H1 22 £m Gross loss (45.6) (6.8) 1.6 Inventory losses, made up of: ▪ Obsolescence & write off £1.6m ▪ Provisions against stacks manufactured to legacy design provided at 100%: £14.1m Inventory losses £15.7m Legacy design 14.1 ▪ Pro
Slide 8: Cash flow in period £m
CAPITAL MARKET UPDATE JAN’23 Cash flow in period £m Adjusted Materialised Increase in Receivables/ EBITDA Loss Less provisions losses inventory payables CAPEX Other Cash flow H1 -54.1 2.1 -48.1 7.9 7.2 32.1 £3.5m assets at 28.9 Bessemer Park Inventory provided at £14.1m £3.7m product development -22
Slide 9: FY23 outlook
CAPITAL MARKET UPDATE JAN’23 FY23 outlook Revised full year guidance ▪ The result had been ‘baked in’ from decisions made in the first half of the year ▪ Benefit of the 12-month priorities to be recognised in FY24 Revenue guidance £2.0m ▪ In line with change of project delivery (recognition on SAT)
Slide 10: FY24 outlook
CAPITAL MARKET UPDATE JAN’23 FY24 outlook Revenue ▪ Underpinned by focus on Site Acceptance Testing (SAT) at Yara and Leuna Cash flow from operations affected by ▪ Will start to see benefit of 12-month priorities ▪ Headcount reductions and cost management ▪ Working capital: unwind of inventory to be
Slide 11: 12-month priorities
(©) ITM POWER 12-month priorities
Slide 12: Introduction
CAPITAL MARKET UPDATE JAN’23 Introduction ? 1. Does ITM have a cutting-edge electrolyser technology with the potential to outperform its competitors? 2. Does ITM have a strong enough balance sheet to support the necessary strategic and operational changes required to strengthen the company’s foundat
Slide 13: High-level business update
CAPITAL MARKET UPDATE JAN’23 High-level business update Market environment: ▪ Climate, decarbonisation and energy independence imperatives are further fuelling projected hydrogen demand increase. ▪ Today, >95% of hydrogen produced is grey. Demand rise is higher than can be supplied via (announced) e
Slide 14: 12-month priorities plan
CAPITAL MARKET UPDATE JAN’23 12-month priorities plan ▪ ITM needs to transition from an R&D company to a professional delivery organisation with volume manufacturing capabilities. This relates also to superseding previous overconfidence with industry realism. ▪ The next 12 months will be decisive to
Slide 15: Product portfolio: Focus must be narrowed
CAPITAL MARKET UPDATE JAN’23 1 Product portfolio: Focus must be narrowed Product Description Hpac LAM 15bar stack, 5 KW, Cabinet LEP 1 Container 20 bar LEP 20bar stack, 100 KW, Plug & Play Legacy products: LEP 1 Container 30 bar LEP 30bar stack, 100 KW, Plug & Play › The services we provide to suppo
Slide 16: Key cost drivers
CAPITAL MARKET UPDATE JAN’23 2 Key cost drivers 16
Slide 17: Restructuring and rightsizing
CAPITAL MARKET UPDATE JAN’23 2 Restructuring and rightsizing › Leaner and flatter in hierarchy, new structure reflecting the nature of the business › Strengthened technology, engineering and product validation focus › Bundled customer interface from sales to delivery › Closer integration of Manufact
Slide 18: Solidifying our foundation (selected examples)
CAPITAL MARKET UPDATE JAN’23 2 S o l i d i f y i n g o u r f o u n d a t i o n (selected examples) Mitigation of future inventory losses Mitigation of future project cost overruns Design Product portfolio and sales governance ▪ Professionalise engineering (capabilities and processes) ▪ Enhance disci
Slide 19: De-bottlenecking
CAPITAL MARKET UPDATE JAN’23 3 De-bottlenecking Testing and power supply Fabrication and automation R&D and validation 2023 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Process one Bars indicate start of use in production Repeatable build quality after validation and change control Process two Re
Slide 20: Outlook
CAPITAL MARKET UPDATE JAN’23 Outlook I know many of you are keen to learn about our longer term strategic plans: › More production volume? Ramping up stack output is not difficult but requires robust product validation › More factories and markets? Building additional factories (abroad) is straightf
Slide 21: Thank you for your attention
(©) ITM POWER Thank you for your attention