Ballard Power Systems Inc. · TSX:BLDP
Ballard Power Systems — Gateway Conference 2015
23 slides from Ballard Power Systems's conference presentation, Sep 10, 2015
Slide 1: Gateway Conference
Page 1 San Francisco, CA Gateway Conference September 10, 2015
Slide 2: Forward Looking Statements
Page 2 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 3: Investment Highlights
Page 3 Investment Highlights • Leading position in PEM fuel cell technology • Proven technology, cost and brand leadership • Focused on near-term commercial applications • Diversified Power Products & Technology Solutions strategy • Solid organic growth supplemented by M&A scaling strategy • Catalys
Slide 4: Ballard Profile
Page 4 Ballard Profile History • 30+ years of experience in PEM fuel cells Focus • Power Products and Technology Solutions Scale • 2014 revenue of ~$69M Employees • ~400 including global sales team and 22 PhDs • ~200 patents & patent applications; license to Intellectual Property ~800 additional pat
Slide 5: Business Overview
Page 5 Business Overview Mandate Markets • Meet the power needs of • Telecom Backup Power customers through delivery of Power high value, clean energy products • Material Handling Products that reduce customer costs and • Heavy Duty Motive risks • Portable* • Automotive Technology • Help customers s
Slide 6: Power Products
Page 6 Power Products* Fuel Cell Stacks • 500W-2kW • 2-8kW • 4-20kW • 100kW • Up to 8k hrs • Up to 30k hrs • Up to 12k hrs • > 10k hrs Fuel Cell Modules • 75-150kW • 100 kW • Up to 20k hours • Up to 20k hours Complete • 2kW & 5kW Fuel Cell • Direct • 2.5kW & 5kW hydrogen • Methanol fuelled Systems •
Slide 7: Power Products: Telecom Backup Power
Page 7 Power Products: Telecom Backup Power • >2,900 systems (~12.6 MW’s) shipped to date • Market driven by 2 distinct needs: o Unreliable electricity grids; and o Crisis situations • Compelling lifecycle cost vs. traditional diesel generator or lead- Ballard ElectraGen™-ME fuel cell system rooftop
Slide 8: Power Products: Material Handling
Page 8 Power Products: Material Handling • >7,000 fuel cell stacks shipped to date … with 100M hours of runtime • Increases productivity vs. lead-acid Ballard FCvelocity®-9SSL Ballard FCgen®-1020ACS Liquid-Cooled Fuel Cell Stack Air-Cooled Fuel Cell Stack battery forklifts • LTSA with Plug Power Plu
Slide 9: Power Products: Heavy Duty Motive
Page 9 Power Products: Heavy Duty Motive • Ballard enjoys dominant global share of fuel cell bus market o And, next-gen FCvelocity®-HD7 module was Ballard FCvelocity®-HD7 launched commercially in Q2 2015 Fuel Cell Module • Agreement signed to power 33 fuel cell buses in China o First 3 modules shipp
Slide 10: Heavy Duty Motive: Progress in China
Page 10 Heavy Duty Motive: Progress in China • Heavy duty motive segment subject to macro drivers o Growing urban populations o Increasing need for urban mass transit o Heightened political will to address air quality & climate change • Ballard’s China partnerships contemplate – o Near-term sale of
Slide 11: Heavy Duty Motive: Progress in China (Cont'd)
Page 11 Heavy Duty Motive: Progress in China (Cont’d) • ~$10M agreement signed in June for Power Products and Technology Solutions to support 33 new buses in two cities o With Nantong Zehe New Energy Technology Company and Guangdong Synergy Hydrogen Power Technology Company o Ballard to be exclusive
Slide 12: Technology Solutions: Engineering Services + IP Licensing
Page 12 Technology Solutions: Engineering Services + IP Licensing • Delivering customized, bundled technology solutions, including world-class, specialized engineering services, access to deep IP portfolio and know-how, supply of technology components • Latest developments – o Recent $80M Volkswagen
Slide 13: Q1 2015 Technology Solutions Transaction
Page 13 Q1 2015 Technology Solutions Transaction • A landmark Technology Solutions deal • Key elements – 1) Automotive IP acquired from UTC in 2014 transferred to Volkswagen Group for $50M 2) Ballard retains right to use this IP in non-auto, bus and limited pre- commercial automotive applications 3)
Slide 14: Q1 2015 Technology Solutions Transaction (Cont'd)
Page 14 Q1 2015 Technology Solutions Transaction (Cont’d) • Benefits to Ballard – o Near term Deepens long-term partnership with Volkswagen Group Cash of ~$29M o Mid-term Cash of ~$9M by Q1 2016 Engineering services contract will generate ~$20M per year for next 4-years, with an optional 2-y
Slide 15: Automotive
Page 15 Automotive • Progress toward commercialization – o Technology improvements Including MEA and power density Improved density of high pressure H2 tanks o Reduced fuel cell stack cost Dramatic reduction over past 5-years o High operating performance Cruising range ~650 kms (400 miles) A
Slide 16: M&A Strategy
Page 16 M&A Strategy • Prioritizing strategic acquisition opportunities, in addition to execution focus on strong organic growth • Key M&A criteria – o Complementary to our customer-centric Power Products market opportunities and product portfolio o Adds $15M+ in revenue to support drive to achieve
Slide 17: Protonex Acquisition: Deal Overview
Page 17 Protonex Acquisition: Deal Overview • June 29 announcement of $30M transaction to acquire Protonex Technology Corporation o Expected to close by end-September o Assumed debt obligation of ~$4.4M, paying the balance with Ballard stock (11.2m Ballard shares at $2.28) • Strategic rationale and
Slide 18: Protonex Acquisition: U.S. Military Market
Page 18 Protonex Acquisition: U.S. Military Market • U.S. Military is an ideal early-adopter for compact, light weight intelligent energy solutions o Transitioning to the “digital battlefield”, with a proliferation of electronic technologies & devices including sensors, radios, GPS systems, cell pho
Slide 19: Protonex Acquisition: Meeting 'Digital Battlefield' Needs
Page 19 Protonex Acquisition: Meeting ‘Digital Battlefield’ Needs • Protonex is focused on ‘power management’ and ‘power generation’ products o Power management products to deliver network capability across multiple devices o Fuel cell products to deliver – Low-noise signature Low-heat signature
Slide 20: Q2 2015 Revenue and Gross Margin
Page 20 Q2 2015 Revenue and Gross Margin Revenue (millions) Gross Margin (%) $55.8* • Q2 2015 Revenue of $11.2M • Q2 2015 Gross Margin of 10% • YTD 2015 Revenue of $20.4M • YTD 2015 Gross Margin of 10% • Down year-over-year due to decrease in high- margin Technology Solutions revenue • Expect improv
Slide 21: Q2 2015 Cash Operating Cost Base and Adjusted EBITDA
Page 21 Q2 2015 Cash Operating Cost Base and Adjusted EBITDA Cash Operating Cost Base* (millions) Adjusted EBITDA* (millions) * Measures operating expenses excluding stock-based compensation expense, depreciation and amortization, impairment losses or recoveries on trade receivables, restructuring c
Slide 22: Liquidity
Page 22 Liquidity • End-Q2 2015 cash reserves of $41.2M o Subsequent to the quarter, cash bolstered by ~$13.6M in net proceeds from July equity offering o Also expect additional ~$9M cash by Q1 2016, from Q1 2015 IP transaction with Volkswagen Group
Slide 23: Gateway Conference
Page 23 San Francisco, CA Gateway Conference September 10, 2015