Ballard Power Systems Inc. · TSX:BLDP
Ballard Power Systems — Investor Day (October 2015)
137 slides from Ballard Power Systems's investor day presentation, Oct 1, 2015
Slide 1: Investor & Analyst Day
Page 1 WELCOME TO October 1, 2015 INVESTOR & ANALYST DAY Omni Berkshire Place Hotel New York City
Slide 2: Welcome & Agenda
Page 2 Welcome & Agenda Tony Guglielmin, CFO
Slide 3: Today's Agenda
Page 3 Today’s Agenda 9:00AM Welcome and Agenda Tony Guglielmin, CFO 9:10 Ballard Strategic Direction Randy MacEwen, President & CEO 9:30 Power Products Overview Steve Karaffa, CCO 9:45 Heavy Duty Motive Market Paul Cass, COO 10:05 European Bus Market Paul Jenne, Coordinator of EU Fuel Cell Bus Proj
Slide 4: Today's Agenda (Cont'd)
Page 4 Today’s Agenda (Cont’d) 12:10PM LUNCH BREAK (Buffet) 12:45 Perspective on the Fuel Cell Sector Andrew Hinkly, Executive Head of Marketing – Anglo American Platinum 1:15 Technology Solutions Overview Dr. Kevin Colbow, VP Technology Solutions 1:45 Fuel Cell Technology and Product Dr. Christophe
Slide 5: Forward Looking Statements
Page 5 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 6: Ballard Strategic Direction
Page 6 Ballard Strategic Direction Randy MacEwen, President & CEO
Slide 7: Macro Context
Page 7 Macro Context MACRO DRIVERS Energy Security Climate Change Air Quality Severe Weather EMERGING NEEDS Clean Energy Distributed Generation Smart Grids & How to Manage & Energy Storage Microgrids Grid Stability
Slide 8: Ballard – Who We Are
Ballard - Who We Are BALLARD lm i) DA |. THE POWER OF FUEL CELLS, SIMPLY DELIVERED.
Slide 9: Ballard Vision, Mission & Values
Page 9 Ballard Vision, Mission & Values • VISION: to be the leading global provider of innovative clean energy solutions. • MISSION: to use our extensive fuel cell and systems know-how to profitably deliver innovative clean energy solutions to our customers, create rewarding opportunities for our te
Slide 10: Keys to Winning the Long Game
Page 10 Keys to Winning the Long Game • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 11: Keys to Winning the Long Game
Page 11 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 12: Keys to Winning the Long Game
Page 12 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 13: Keys to Winning the Long Game
Page 13 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 14: Keys to Winning the Long Game
Page 14 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 15: Keys to Winning the Long Game
Page 15 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 16: Keys to Winning the Long Game
Page 16 Keys to Winning the Long Game (Cont’d) • Customer focus • Best technology, products and services • Brand • Diversification • Scale and scalability • Profitability • Balance sheet strength
Slide 17: Growth Platforms
Page 17 Growth Platforms POWER PRODUCTS TECHNOLOGY SOLUTIONS • Meet the power needs of • Help customers solve difficult customers through delivery of technical and business MANDATE high value, clean energy challenges in their PEM fuel products that reduce customer cell programs costs and risks • Hea
Slide 18: M&A Strategy
Page 18 M&A Strategy • Driving organic growth and evaluating M&A opportunities • Key M&A criteria o Leaders in their markets o >$15M+ in revenue o Strong growth o Complementary additions to Power Products growth platform o Attractive gross margins o Accelerates profitability and positive cash flow o
Slide 19: Protonex Acquisition
Page 19 Protonex Acquisition Deal Overview • June 29, 2015 announcement to acquire Protonex Technology Corporation o Deal closed October 1st, 2015 • Ballard will report Protonex results as “Portable” segment on the Power Products platform • Benefits to Ballard: o Diversification – adds power managem
Slide 20: Ballard Investment Highlights
Page 20 Ballard Investment Highlights • Industry leadership • Sustainable competitive advantages • Diversified business model • Solid growth • Embedded optionality Ballard is well-positioned to capitalize on the large scale potential of commercial fuel cell applications
Slide 21: Questions?
BALLARD QUESTIONS?
Slide 22: Power Products Overview
Page 22 Power Products Overview Steve Karaffa, CCO
Slide 23: Power Products Platform
Page 23 Power Products Platform • Mission: Meet customers’ power needs through delivery of high value, clean energy products that reduce customer costs and risks MARKETS Heavy Duty Motive Portable Material Handling Telecom Backup Motive Modules Portable Systems Fuel Cell Stacks Stationary Systems PR
Slide 24: New Commercial Organization
Page 24 New Commercial Organization Market Regional Team cover Management, all products in their Biz Ops & geography Strategy Post Sales Service and Support Objectives • Three geographical sales teams • Seasoned professionals; deep experience in relevant markets • Front-end of the business linked &
Slide 25: Commercial Strategy
Page 25 Commercial Strategy Value Proposition Go-To-Market Build the Sales Definition Strategy EcoSystem • Market • New Commercial • Regional Fueling Requirements Organization Strategies Lead Generation Documents • New Success • Fuel Partner Lead Qualification • Value Metrics Network Needs Propositi
Slide 26: Sharpening Value Propositions
Page 26 Sharpening Value Propositions Value Proposition Go-To-Market Build the Sales Definition Strategy EcoSystem • Drive technology substitution TCO Analysis • Demonstrate fuel cell leadership • Build the lowest Total Cost of Ownership Objectives • Accelerate technology substitution versus incumbe
Slide 27: Refining Go-to-Market Strategy
Page 27 Refining Go-to-Market Strategy Value Proposition Go-To-Market Build the Sales Definition Strategy EcoSystem Objectives • Accelerate penetration of markets, applications and accounts • Improve growth of the opportunity pipeline, sales forecast and realized revenue • Synchronize activities to
Slide 28: Building the Fuel Cell EcoSystem
Page 28 Building the Fuel Cell EcoSystem Value Proposition Go-To-Market Build the Sales Definition Strategy EcoSystem Objectives • Eliminate commercial adoption barriers • Realize FC value: higher reliability, lower OpEx and increased efficiency • Improve customer satisfaction with Ballard
Slide 29: Driving Sales
Page 29 Driving Sales Value Proposition Go-To-Market Build the Sales Definition Strategy EcoSystem • Build a robust opportunity pipeline Lead Generation • Convert Sales Forecast into a reliable revenue stream Lead Qualification • Position for long-term supply agreements Needs Assessment Proposal Sal
Slide 30: Questions?
BALLARD QUESTIONS?
Slide 31: Heavy Duty Motive Market
Page 31 Heavy Duty Motive Market Paul Cass, COO
Slide 32: Bus Program Evolution
Page 32 Bus Program Evolution PHASE 7 – Lower-Cost, Longer-Life Power Module 2015 – Introduced in June at UITP in Italy PHASE 6 - Hybridization of Fuel Cells 2009-2014, Whistler, Canada PHASE 5 - Serial Production 2002-2009, 5 Continents, CUTE (30), Perth (3), California (3), Beijing (3) PHASE 4 - F
Slide 33: Value Proposition
Page 33 Value Proposition Market Drivers Value Proposition Countries/regions with zero • Fuel Cell Buses & Trams deliver required mix of emission policies / emission reduction, refueling speed, range & mandates in support of: route flexibility • Air quality improvement • Fuel Cell electric propulsio
Slide 34: Go-to-Market Strategy
Page 34 Go-to-Market Strategy Driving to Commercialization 2003 2008 2011 2015 P5 HD6 HD6 (v2) HD7 FC Stack Life 4,000 hours 6,700 hours >15,000 hours >25,000 hours Expectancy 30% 15 – 20% 35 – 40% FC Module • Leveraging • Enhanced • Should enable a Price Reduction automotive Membrane fuel cell bus
Slide 35: Go-to-Market Strategy
Page 35 Go-to-Market Strategy • Customer demand for new product architectures o Up to and including P5 • Non-Hybridized architecture • Demonstrate FC technology feasibility in revenue service o HD6 • Designed for ease of integration in any hybrid drive platform • Enabled regenerative braking to cons
Slide 36: HD Motive Module Products
Page 36 HD Motive Module Products 200kW+ Heavy Duty Fuel Cell Module • Designed for high power tram drives • Easy installation/integration • Modular design • Safety features • High performance • Cost reduction 90kW Heavy Duty Fuel Cell Module • Optimized for fuel cell hybrid drives • Easy installati
Slide 37: Building the FC Bus EcoSystem
Page 37 Building the FC Bus EcoSystem Service Centres Air Suppliers BAE Systems Burnaby, Canada Air Products Flyer Industries California (2016 launch) ElDorado National Liers, Belgium Air Liquide Van Hool Cologne, Germany Linde Gas VDL Solaris Hobro, Denmark ITM Jiangsu GreenWheel China (2016 launch
Slide 38: Customers & Partners
Page 38 Customers & Partners System Integrators Bus OEMs Transit Operators Transit Agencies SinoHytec Co. Ltd. Feichi Bus
Slide 39: Ballard Update – Europe
Page 39 Ballard Update – Europe • FCH:JU 2016 call will be announced Q1/2016 – expect funding for 100 fuel cell buses • Van Hool – Contract signing with bus operators in progress – expect to ship 20+ modules in 2016 • TFL service contract – Extended operation of fuel cell buses by additional 5 years
Slide 40: Ballard Update – North America
Page 40 Ballard Update – North America Strategy: Module Sales to System Integrator and OEMs 20+ Ballard-powered buses operating in the • 5 ElDorado/BAE Systems buses U.S. by end-2016 operating in Coachella Valley; 5 more to be delivered 2016/17 • 7 buses to be delivered to Stark Area Regional Transi
Slide 41: Ballard Update – China
Page 41 Ballard Update – China Strategy: • Near Term – Product Sales • Mid Term – Technology License & Manufacturing Localization • Long Term – Stack Supply & Recurring Royalties Phase 1 Phase 2 Phase 3 Phase 4 8 Fuel cell buses in 25 fuel cell buses Substantial Pre-commercial Rugao Nantong in Yunfu
Slide 42: Ballard Update – China (Cont'd)
Page 42 Ballard Update – China (Cont’d) • Largest-ever global deployment of fuel cell buses announced Sept. 25, 2015 o Deal for planned deployment of 300 buses signed with Guangdong Synergy Hydrogen Power Technology Co., Ltd. (“Synergy”) • $17M revenue through 2016 for fuel cell modules & ready-to-a
Slide 43: Competitive Positioning
Page 43 Competitive Positioning • Since 1991 ~ 100 fuel cell buses have been deployed o Today there are 48 fuel cell buses in operation • 34 in Europe; 10 in United States; 4 in Brazil o We are now manufacturing 33 HD Modules for delivery in China and have orders for 21 modules in Europe and 10 modu
Slide 44: Questions?
BALLARD QUESTIONS?
Slide 45: Coffee Break
Page 45 COFFEE BREAK October 1, 2015 INVESTOR & ANALYST DAY Omni Berkshire Place Hotel New York City
Slide 46: Portable Power Market
Page 46 Portable Power Market Dr. Paul Osenar, Protonex CEO
Slide 47: Protonex Overview
Page 47 Protonex Overview • Founded in 2000; 53 people; Southborough, Massachusetts Organization • Wholly owned subsidiary of Ballard Power Systems (~September 2015) • Exceptional team with deep roots in fuel cell technology and power management • Leading provider of 100 – 2,000 watt high-performanc
Slide 48: Portable Market Focus
Page 48 Portable Market Focus Power / Energy Management • Stand alone devices to manage energy / power systems o Software, power electronics and user interfaces o Plug and Play • Inputs: batteries, solar, fuel cells + • Output: configurable without user intervention • Scalable platform for a wide va
Slide 49: Portable Market Focus (Cont'd)
Page 49 Portable Market Focus (Cont’d) • Power and Energy are fundamental to improving capability o Persistence o Carry load, volume o Sensor utility o Logistics • Improving what you’ve got o Improve utility of the energy already present on the battlefield o Enable new sources: solar, vehicle sold
Slide 50: Military Market
Page 50 Military Market • U.S. Military is an ideal early-adopter for compact, light weight intelligent energy solutions o Transitioning to the “digital battlefield” proliferation of electronic technologies & devices (sensors, radios, GPS systems, cell phones, computers) o Legacy solutions (such a
Slide 51: Relationship With The Military
Page 51 Relationship With The Military Strong track record of support from U.S. Military • Successfully developed long-term relationships with military customer base • Contracts >$75M in program value with U.S. military & government agencies • Provided solution to U.S. military’s challenges, by impr
Slide 52: Power Management Products
Page 52 Power Management Products Squad Power Manager SPM 622 • Improved access to energy in all situations • Know your energy status and historical usage • Battery savings provide <1 year payback • Over 4,500 kits deployed to date Vest Power Manager VPM 402 • Extend mission critical uptime • Provid
Slide 53: Program Of Record: The Holy Grail
Page 53 Program Of Record: The Holy Grail Squad power manager programs will hit Milestone C in CY16
Slide 54: Enabling New Capability for the 'Digital Battlefield'
Page 54 Enabling New Capability for the ‘Digital Battlefield’ • Protonex has focused ‘power generation’ products on enabling new capability • Fuel cell products to deliver: o Low-noise signature o Low-heat signature o High energy density o Extended runtime o Superior fuel-to-electricity efficiency o
Slide 55: Unmanned Systems Propulsion
Page 55 Unmanned Systems Propulsion • Insitu (a Boeing Company) o Integrating a fuel cell into the ScanEagle Platform to replace current engine systems o Improve system reliability, decrease operational cost • Lockheed Martin o Integrating a fuel cell into next-gen Desert Hawk o Extending platform d
Slide 56: Remote Power – Solid Oxide Fuel Cell Product Platform
Page 56 Remote Power – Solid Oxide Fuel Cell (SOFC) Product Platform P200i – Industrial Power • Runs on propane • Fast Cycling / high cycle life • Weatherproof • Pole or external wall mounting • Separate battery box (or existing batteries) Target Applications • Remote monitoring • Surveillance syste
Slide 57: Questions?
BALLARD QUESTIONS?
Slide 58: Material Handling Market
Page 58 Material Handling Market Karim Kassam, VP Bus. & Corp. Development
Slide 59: The Problem with Batteries
Page 59 The Problem with Batteries • Battery powered fork truck technology has limitations that fuel cell systems overcome o Batteries can take up to 30 min to charge in the middle of a shift o Batteries experience “power droop” over single shift limiting the function of the lift truck between charg
Slide 60: Fuel Cell Value Proposition
Page 60 Fuel Cell Value Proposition 15% Increased Productivity Reduced Operational Expenses • Enable lift trucks to operate at • Economic lifetime up to 1.5x – Increase consistent full speed and 2.0x longer than lead acid productivity power at all times batteries up to 15% • Refuel in < 2 minutes ve
Slide 61: Ballard's Lift Truck Experience
Page 61 Ballard’s Lift Truck Experience • Strategic supplier to Plug Power • 8,500 fuel cell stacks deployed • 107 million hours of runtime • Leverage auto, stack and systems integration experience Plug Power GenDrive® unit on a Class 3 pallet jack Ballard has deep understanding of the business mode
Slide 62: Ballard's Materials Handling History
Page 62 Ballard’s Materials Handling History 1. Decades spent focused on motive technology IP (leverage automotive) 2. Providing stacks to Plug Power for “After Market” battery replacement systems 3. Developing After Market battery replacement systems (air-cooled) via Plug Power 4. Future driven by
Slide 63: Ballard's Go-to-Market Strategy
Page 63 Ballard’s Go-to-Market Strategy • Ballard accesses the fuel cell material handling market using a two-pronged approach: Power Products Technology Solutions • Strategic supplier to Plug • Technology enabler for Power with air-cooled and OEMs in the development of liquid-cooled fuel cell stack
Slide 64: Fuel Cell Forklifts Gaining Ground with End Users
Page 64 Fuel Cell Forklifts Gaining Ground with End Users • Major distributors and manufacturers are deploying fuel cell fleets • Overall, the U.S. lift truck market moved about 200,000 units in 2013, with fuel cell lift trucks comprising about 1,500 of those units
Slide 65: Power Products for Material Handling Applications
Page 65 Power Products for Material Handling Applications • Ballard is leveraging our experience across applications to deliver scalability, cost and durability o Air-cooled FCgen®-1020ACS stack is also used in the ElectraGen™ backup power systems (>3,000 units deployed in the field) o Liquid-cooled
Slide 66: Plug Power Products
Page 66 Plug Power Products • Plug Power GenDrive® o Lower Power (class 3): uses Ballard’s FCgen®-1020ACS (air-cooled) o High Power (class 1, 2): uses Ballard’s FCvelocity®-9SSL (liquid-cooled) GenDrive Series 1000 GenDrive Series 2000 GenDrive Series 3000 3-Wheel Sit-down Trucks Stand-up Reach Truc
Slide 67: Fuel Cell Lift Truck Momentum
Page 67 Fuel Cell Lift Truck Momentum • Public statements by 2 of the top 5 lift truck OEMs indicate fuel cell development efforts ramping up o Hyster-Yale acquisition of Nuvera Fuel Cells • $50 M investment in fuel cells • Goal to be a major supplier of fuel cell engines to power lift trucks • Phas
Slide 68: Technology Solutions for Materials Handling OEMs
Page 68 Technology Solutions for Materials Handling OEMs Stack • Technical expertise in designing custom products Development • Proprietary MEA and stack design solutions for materials handling applications System • Detailed design of custom prototype systems Development • BOP component and controls
Slide 69: Go-Forward Strategy
Page 69 Go-Forward Strategy • Focus on two streams: 1) Supply of stacks to after-market integrators 2) Supply of Technology Solutions and packaged solutions to OEMs Ballard is well-positioned to participate in both streams
Slide 70: Questions?
BALLARD QUESTIONS?
Slide 71: Telecom Backup Power Market
Page 71 Telecom Backup Power Market Steve Karaffa, CCO
Slide 72: Backup Power Video
Page 72 Backup Power Video Verizon Backup Power Commercial
Slide 73: Telecom Backup Power
Page 73 Telecom Backup Power Backup Power and Storage Investment Cumulative DG and ES System Power Capacity and Revenue for Telecom Networks by Region, World Markets: 2015-2024 This large and fast growing market is undergoing a technology shift Distributed Generation and Energy Storage in Telecom Ne
Slide 74: Telecom Backup Power
Page 74 Telecom Backup Power Fuel Cell Growth in the Telecom Market Fuel Cell System Power Capacity and Revenue for Telecom Network Infrastructure by Region, World Markets: 2015-2024 Fuel cells will lead this technology substitution… Sales of fuel cell systems are projected to grow at a >15% CAGR ov
Slide 75: Telecom Backup Power – Addressable Market
Page 75 What future ? Telecom Backup Power Stationary System Addressable Market Application Definition <2.5 kW 5 kW 7.5 kW <10 kW Total Prime Power 24x7 primary source of power for the user Supplemental Multiple hours per day Power source of power for user Extended Multiple hours per month Backup Po
Slide 76: Telecom Backup Power – Value Proposition Overview
Page 76 Telecom Backup Power Value Proposition Overview Market Drivers Value Proposition • Poor electrical grid supply • Improved site availability to Increase revenue • Network hardening generation • Network hardening to Improve customer Market Enablers satisfaction • Regions prone to natural • Low
Slide 77: Telecom Backup Power – Value Proposition Example
Page 77 Telecom Backup Power Value Proposition Example Vodacom - South Africa • > 250 ElectraGen™ systems deployed since 2011 • Some now >15,000 hrs of run time • EcoSystem in place • No fuel theft in 4 years • High reliability Value Proposition • Reduction of operating costs by 32% (maintenance and
Slide 78: Telecom Backup Power – Customer Portfolio
Page 78 Telecom Backup Power Go to Market Strategy - Customer Portfolio • Back-up Power Fuel Cells are moving into the early stages of commercialization • Technical hurdles have been cleared; economic and practical hurdles remain
Slide 79: Telecom Backup Power – Channel Partners
Page 79 Telecom Backup Power Geographical Focus - Channel Partners PPA Strategy • Focused on key geographies: o Existing Geographies: Indonesia; Philippines, Japan, USA, Caribbean, South Africa & India o New Geographies: Mexico; Chile, Vietnam, Myanmar, Thailand, Malaysia & Nigeria
Slide 80: Telecom Backup Power – EcoSystem Components
Page 80 Telecom Backup Power EcoSystem Components Channel Partners Fuelling Infrastructure Service Providers Channel Partners Sell Ballard products while providing Added Value: • Product integration (battery. Power management, cooling..) • Installation and commissioning • Product and part local stoc
Slide 81: Telecom Backup Power – EcoSystem Status
Page 81 Telecom Backup Power EcoSystem Status
Slide 82: Telecom Backup Power – Ballard Milestones
Page 82 Telecom Backup Power Ballard Milestones Competition Ballard Product Price General • Ballard shipped the 3000th ElectraGen™ Corporate Product system Stability Reliability • Over 50M cumulative hours of operation and 1M hours of runtime. • 13 cumulative MW produced # of Fueling Deployments Inf
Slide 83: Telecom Backup Power – 2016 Objectives
Page 83 Telecom Backup Power 2016 Objectives 1. Grow the opportunity pipeline 2. Improve the sales conversion yield 3. Sign multiple long-term supply agreements 4. Improve market access via channel strategy 5. Enhance and expand eco- systems 6. Improve customer experience Ballard is well positioned
Slide 84: Questions?
BALLARD QUESTIONS?
Slide 85: Lunch Break
Page 85 LUNCH BREAK October 1, 2015 INVESTOR & ANALYST DAY Omni Berkshire Place Hotel New York City
Slide 86: Technology Solutions Overview
Page 86 Technology Solutions Overview Dr. Kevin Colbow, VP Technology Solutions
Slide 87: Key Messages
Page 87 Key Messages TECHNOLOGY SOLUTIONS • Help customers solve difficult • Utilize unique key assets to technical and business create bundled solutions MANDATE challenges in their PEM fuel o Intellectual Capital cell programs o Intellectual Property o Testing and Prototyping • Automotive • Provide
Slide 88: Intellectual Capital
Page 88 Intellectual Capital • ~450 total employees o ~200 engineers, scientists and technologists • Strong post-secondary backgrounds • 11-years average tenure of core engineering staff • Low employee turnover rate of <5% in last 3-years PhD’s Diplomas 24 34 Masters 55 Degrees 121 Bachelor Degrees
Slide 89: Intellectual Property
Page 89 Intellectual Property • Ballard owns, licenses and has access to ~2000 patents/applications SOFC Power Managers 1% 1% MEA / Seals 21% Fuel Cell System 33% Plates 11% Stack 11% Fuel Reforming Balance of Plant 15% 7% Ballard’s extensive intellectual property represents $1B+ and over 30 years o
Slide 90: Testing and Prototyping
Page 90 Testing and Prototyping • World class fuel cell testing capabilities o 24/7 operation, 400,000+ hours of data collected annually o 50+ test stations, 10 environmental chambers o Testing capabilities <100W to 333kW o Proprietary test protocols and diagnostic tools Ballard Test Facility • Manu
Slide 91: Technology Solutions
Page 91 Technology Solutions • Bundled solutions featuring specialized technical expertise, a deep IP portfolio, and supply of technology to drive future opportunities o Integrated environment providing broad expertise, testing and manufacturing o Solutions to de-risk and accelerate fuel cell progra
Slide 92: Systems Interface
Page 92 Systems Interface Product Selection and System Design Guidance • System design and stack integration experience o Supported the development of >50 fuel cell P&ID Development Conceptual Design products • Engineering services to optimize integration of fuel cell products o Feasibility and trad
Slide 93: Testing Services
Page 93 Testing Services Fuel Cell Testing and Evaluation Methods • Conduct standard and custom test programs o Technology evaluation o Accelerated stress tests o Lifetime testing o Laboratory services Ballard Test Facility • Test stations and diagnostic tools offered to strategic partners o Customi
Slide 94: Product Development
Page 94 Product Development Integrated Product Design Services • 30+ years of fuel cell product design experience o >10 application-specific stack designs o Expertise from concept development to volume Volkswagen Golf HyMotion Car manufacturing • Leverage Ballard’s unique key assets to develop new p
Slide 95: Component Manufacturing
Page 95 Component Manufacturing Extensive Manufacturing and Prototyping Capabilities • Manufacturing and prototyping services to supply customized fuel cell components MEA Assembly o Membrane electrode assemblies o Catalyst layer coatings o Component prototyping o Materials supply (sheets and rolls)
Slide 96: Licensing and Technology Transfer
Page 96 Licensing and Technology Transfer Intellectual Property Licensing Program • Access to patents/applications, trade secrets and know-how related to design, test methods and manufacturing processes • Typical licensing models include Transaction for select automotive-related o Design and process
Slide 97: Experienced Automotive Fuel Cell Supplier
Page 97 Experienced Automotive Fuel Cell Supplier • Ballard has supplied >500 fuel cell products and 1,000s of engineering hours providing Technology Solutions to the top automotive companies
Slide 98: Ballard's Automotive Strategy
Page 98 Ballard’s Automotive Strategy • Provide technical expertise and access to IP to automotive partners in several areas of fuel cell technology – Product Design, Product Supply and Systems Interface Product • Design custom products to meet automotive specifications Design • Unique design soluti
Slide 99: Current Non-Automotive Landscape
Page 99 Current Non-Automotive Landscape Engineering Manufacturing Licensing Services • Supporting clean urban Bus transportation in China Trams • HD product line extension • Developing micro fuel cells for Portable portable electronics Material • Leverage MH experience to Handling s
Slide 100: Case Studies
Page 100 Case Studies • Volkswagen Group o Access to Ballard’s expertise for the design and manufacture of the next generation fuel cell – commenced in 2013 o Partnership deepened through the transfer of select automotive-related fuel cell IP and extension of engineering services in 2015 • Nisshinbo
Slide 101: Summary
Page 101 Summary • Unique key assets to offer high value, specialized bundled solutions • Extensive services to de-risk and accelerate all stages of technology development • Positioned to generate near-term, mid-term and long- term benefits in automotive and non-automotive applications
Slide 102: Questions?
Page 102 QUESTIONS?
Slide 103: Fuel Cell Technology & Product Evolution
Page 103 Fuel Cell Technology & Product Evolution Dr. Christopher Guzy, CTO
Slide 104: Innovation
Page 104 Innovation Key Technology Advancements • Robust stack designs capable of reliable operation with minimal sensors over a range of operating conditions o Anode design robustness with exceptional industry leading tolerance to challenging and off-spec conditions, without additional cost • Manuf
Slide 105: Innovation
Page 105 Innovation Key Technology Advancements (Cont’d) • Design and analysis tools o Proprietary diagnostic tools, with validated correlation between research results and full stack operation o Proprietary accelerated stress tests and durability tests validated against a range of applications and
Slide 106: Innovation
Page 106 Innovation • Ballard has a long history of innovation – a critical core competency o In the last few years innovation has become a priority due to: • Licensing and Technology Solutions contracts • Expansion of internal innovation initiatives such as CSIS (Challenge Solving Innovation Sessio
Slide 107: Innovation – CSIS
Page 107 Innovation CSIS – Challenge Solving Innovation Sessions • What is CSIS? o An effective, efficient, innovative, fun, team building event with considerable high-payback ideas generated and implemented! • Background o Originally introduced in the Research group, then expanded to include all te
Slide 108: Approach to Product Evolution
Page 108 Approach to Product Evolution • We seek product performance improvements and cost reduction through an efficient process that manages risk • Our product roadmaps are built on: o Market requirements, as defined by customers / markets o Years of in-house fuel cell project experience o Extensi
Slide 109: Product Roadmap Milestones
Page 109 Product Roadmap Milestones Product development activities are focused on performance improvement and cost reduction
Slide 110: Air-Cooled Fuel Cell Stack Cost Reduction
Page 110 Air-Cooled Fuel Cell Stack Cost Reduction (FCgenTM-1020ACS) • ~45% cost reduction over the past 6-years, driven primarily by: o New CCM & elimination of cathode GDB layer o Seal-on-plate design o Manufacturing process automation for MEA and stack assembly • ~25% cost reduction going forward
Slide 111: Liquid-Cooled Fuel Cell Stack Cost Reduction
Page 111 Liquid-Cooled Fuel Cell Stack Cost Reduction (FCvelocityTM-9SSL) • ~45% cost reduction over the past 6-years, driven primarily by: o Launch of lower-cost FCvelocityTM-9SSL liquid-cooled fuel cell stack design (including reduced costs of platinum & GDL) o Improved raw material utilization (r
Slide 112: Fuel Cell Bus Module Cost Reduction
Page 112 Fuel Cell Bus Module Cost Reduction (FCvelocityTM-HD) • ~65% cost reduction in past 6-years, driven primarily by: o Introduction of FCvelocityTM-HD7, with low-cost stack o Simplified balance of plant; decreased excess power factor o Manufacturability and assembly efficiencies • ~35% cost re
Slide 113: Methanol-Fueled Telecom Backup Power System Cost Reduction
Page 113 Methanol-Fueled Telecom Backup Power System Cost Reduction (ElectraGenTM) • ~15% cost reduction over next 2 years, driven primarily by: o New air-cooled fuel cell stack design, with focus on manufacturability and servicing improvements o Introduction of ‘Contract Manufacturing’ • ~15% cost
Slide 114: Questions?
Page 114 QUESTIONS?
Slide 115: Operations Review
Page 115 Operations Review Paul Cass, COO
Slide 116: Operations Video
Page 116 Operations Video BALLARD
Slide 117: Our Commitment to Quality
Page 117 Our Commitment to Quality • We deliver Quality in everything we do, without exception: o Commitment to Lean and Six Sigma o Implementing a culture of Continuous Improvement o Lean Manufacturing and High Performance Work Teams • Quality certifications: o ISO9001 registered o ISO14001 " o TS1
Slide 118: Our Manufacturing Footprint
Page 118 Our Manufacturing Footprint • Glenlyon, Burnaby – 65,000 ft² Ballard occupied o 10,000 ft² of manufacturing footprint o Continuous MEA production – coating, lamination, sealing o Stack, module and system integration Protect and grow core MEA capabilities • North Fraser, Burnaby – 40,000 ft²
Slide 119: Our Manufacturing Footprint (Cont'd)
Page 119 Our Manufacturing Footprint (Cont’d) • Tijuana, Mexico - 38,000 ft² o Leased facility – solely utilized by Ballard o Reformer production, ElectraGenTM system integration Leverage low cost manufacturing facility • Southborough, MA – 30,600 ft² (Protonex) o 17,000 ft² of manufacturing footpri
Slide 120: Our People & Work Environment
Page 120 Our People & Work Environment • Our people are committed to Ballard and the commercialization of fuel cells • We are committed to training them and equipping them with the latest manufacturing technology and providing them with a safe work environment • We have developed, grown and maintain
Slide 121: Our Accomplishments & Capacity
Page 121 Our Accomplishments & Capacity • In the last 30 years we have shipped over 215MW of power products! Units Shipped 7000 6000 5000 4000 3000 2000 1000 0 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 2015 F/C • Capacity to produce over 1,000,000 MEA’s per year o Currently at 30% capacity –
Slide 122: Our Proprietary Process Capabilities
Page 122 Our Proprietary Process Capabilities • Roll to roll direct coating of catalyst inks • State of the art catalyst ink mixing • Automated MEA production o Continuous roll good lamination o Pick and place o Quick turn discrete coating Continuous MEA production • LIM silicone sealing – edge, pla
Slide 123: Investment in Automation
Page 123 Investment in Automation • Over past 10 years we have made significant investment in developing automated MEA production processes o Ink mixing, catalyst coating, lamination • Going forward we will continue to advance leading edge manufacturing techniques that that will – o Drive cost benef
Slide 124: Global View for Manufacturing
Page 124 Global View for Manufacturing • We will leverage potential Contract Manufacturing solutions to: o Address global markets with in-country manufacturing o Take advantage of stronger assembly and integration capabilities • We will localize our products in strategic countries to: o Reduce cost
Slide 125: Looking Forward
Page 125 Looking Forward • We will retain and grow our MEA / CCM production capabilities o Currently capacitized for expected volumes through 2018 o We will maintain these capabilities close to home to both protect our core IP and to support Technology Solutions • Focus on reducing our manufacturing
Slide 126: Questions?
Page 126 QUESTIONS?
Slide 127: Ballard Financial Review
Page 127 Ballard Financial Review Tony Guglielmin, CFO
Slide 128: Ongoing Disciplined Financial Management
Page 128 Ongoing Disciplined Financial Management • Aggressively focus on growth and profitability • Four priorities: o Aggressive revenue growth (organic and non-organic) o Continued improvement in gross margin o Continued focus on management of operating costs o Rigorous management of cash ….while
Slide 129: Q2 2015 Revenue and Gross Margin
Page 129 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 130: Q2 2015 Cash Operating Cost Base and Adjusted EBITDA
Page 130 Q2 2015 Cash Operating Cost Base and Adjusted EBITDA Cash Operating Cost Base* (millions) Adjusted EBITDA** (millions) 2011 2012 2013 2014 YTD 2015 0 -5 ($8.2) ($9.9) -10 -15 ($18.6) -20 ($22.1) -25 ($27.9) -30 • Q2 2015 Cash Operating Costs of • Adjusted EBITDA $6.7M o Q2 2015 declined to
Slide 131: Liquidity
Page 131 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 132: "250 – 30 3" Plan
Page 132 “250 – 303” Plan Key targets by 2018 Revenue $250M CAGR 30% Gross Margin 30% Adj. EBITDA $30M • Requires both strong organic growth as well as non-organic growth o Protonex acquisition 1st non-organic deal o More to come….
Slide 133: Questions?
Page 133 QUESTIONS?
Slide 134: Summary and Q&A
Page 134 Summary and Q&A Randy MacEwen, President & CEO
Slide 135: Ballard Investment Highlights
Page 135 Ballard Investment Highlights • Industry leadership • Sustainable competitive advantages • Diversified business model • Solid growth • Embedded optionality Ballard is well-positioned to capitalize on the large scale potential of commercial fuel cell applications
Slide 136: Questions?
Page 136 QUESTIONS?
Slide 137: Thank-You for Participating at Investor & Analyst Day
Page 137 THANK-YOU FOR PARTICIPATING AT October 1, 2015 INVESTOR & ANALYST DAY Omni Berkshire Place Hotel New York City