Ceres Power Holdings plc · LSE:CWR
Ceres Power — H1 2010 Earnings Presentation
25 slides from Ceres Power's earnings presentation, Mar 25, 2010
Slide 1: Interim Results for six months ended 31 Dec 2009
Distributed generation products for global energy markets Interim Results for six months ended 31 Dec 2009 25th March 2010
Slide 2: Disclaimer
Disclaimer This presentation is directed at institutional investors in Ceres Power Holdings plc (the “Company”). The presentation does not constitute a recommendation regarding the shares or other securities of the Company or any of its subsidiaries nor a representation that any dealing in those sha
Slide 3: Highlights
Highlights Financial - Successfully raised £30m net in share placing, British Gas invested £3.1m - Secured £1.2m of new grant funding* - Capex investment up 57% to £1.0m - £46.1m in net cash and financial assets as at 31 Dec 2009 Commercial - First international mains gas CHP contract with Bord Gais
Slide 4: Financial Highlights (half year to Dec 2009)
Financial Highlights (half year to 31 Dec 2009) £m H1 ‘09 H1 ‘08 ∆ ‘08 Revenue from customers 0.3 0.5 (39%) Other operating income 0.1 0.1 - Loss for the financial period (5.9) (3.3) 79% Capex 1.0 0.6 57% Equity free cash outflow1 (7 2) (7.2) (3 2) (3.2) 125% Net cash & financial assets 46.1 24.4 89
Slide 5: Financial Highlights (half year to Dec 2009)
Financial Highlights (half year to 31 Dec 2009) Revenue from customers - £0.3m (down 39%) - Revenue recognised based on ‘costs incurred’ during the whole programme (revenue is ‘back-end loaded ) loaded’) - Year-on-year comparison impacted by £1m recognised as revenue in Alpha phase of British Gas pr
Slide 6: Energy Market Context Favouring Micro CHP
Energy Market Context Favouring Micro CHP • The Global Energy Challenge - Rising electricity demand - Major investment required in new power generation and grid infrastructure - Need to focus on more efficient use of energy resources like natural gas - Need to reduce carbon emissions from power gene
Slide 7: New Feed-in Tariff Incentive Introduced in UK
New Feed-in Tariff Incentive Introduced in UK • UK Government has announced a Feed-in Tariff (FIT) for small-scale low carbon generation - Starts in April 2010 - FIT is guaranteed for the first 10 years following installation of the product - Household receives 10p/kWh for electricity generated and
Slide 8: Feed-in Tariff – Worked Example
Feed-in Tariff – Worked Example Annual electricity generated by mCHP unit† (kWh) 3500 kWh % of mCHP unit electricity generation exported to the grid‡ 10 % Generation Tariff (p/kWh on all electricity generated) 10 p/kWh Export Tariff (p/kWh on electricity generated and exported) 3 p/kWh Annual genera
Slide 9: Ceres 'go-to-market' Commercial Partners
Ceres ‘go-to-market’ Commercial Partners • Ceres has secured commercial partners that provide: • Funding for development and trialling programme • M k t l di channels Market-leading h l ffor mass market k tddeployment l t • Volume forward orders for mass market uptake of Ceres CHP product with minim
Slide 10: First International CHP Contract Secured
First International CHP Contract Secured • New contract with Bord Gáis Éireann (BGE) to bring Ceres Power fuel cell residential CHP product to natural gas customers in the Republic of Ireland and Northern Ireland - First international volume CHP contract for Ceres - Market similarities to UK allow s
Slide 11: Ceres Product Development - Strategy
Ceres Product Development - Strategy • Ceres has adopted industry best practice for new product development - Designed to minimise business risk, time to market and cost - Parallel development of product design design, manufacturing processes and supply chain - Three stage process • Alpha phase (per
Slide 12: British Gas CHP Programme – Status of Beta Phase
British Gas CHP Programme – Status of Beta Phase Key activities 9 Beta design iteration for integrated, wall-mounted CHP product 9 ‘Go-to-market’ Go-to-market volume supply agreements for key components for Beta phase and beyond 9 Procurement of components for Fuel Cell Module (FCM) and CHP units 9
Slide 13: Beta Phase Field Trials Structure & Process
Beta Phase Field Trials Structure & Process • Beta CHP field trials programme structure • Sheltered field trials in houses (unoccupied) • Commercial field trials with British Gas in customer homes • Accelerated CHP life testing in Horsham test facility • Parts for up to 100 CHP units manufactured fo
Slide 14: Beta Phase I – Sheltered Field Trials Underway in Q1 '10
Beta Phase I – Sheltered Field Trials Underway in Q1 ‘10 • Integrated CHP units installed & operating in ‘typical’ UK houses • Three bedroom semi-detached houses (unoccupied) • Brick-lightweight block construction • Thermal insulation levels in line with modern requirements under Building Regulation
Slide 15: Beta Phase I – Sheltered Field Trials Underway
Beta Phase I – Sheltered Field Trials Underway • Sheltered field trials enable • Learnings from operation in houses to be captured • Optimisation of control systems under ‘real-life’ operating conditions • Validation of logistics chain and customer support model including installation, service and m
Slide 16: Beta Phase II – Commercial Field Trials
Beta Phase II – Commercial Field Trials • Initial wave of field trial homes selected (20 homes) 9 Site surveys conducted by British Gas and Ceres Power engineers in mid 2009 9 Homes selected to give representative distribution and meaningful sample size of typical homes (e.g. house type, size, occup
Slide 17: Beta Phase II – Commercial Field Trials
Beta Phase II – Commercial Field Trials • In home preparations completed for commercial field trials in homes • Each home has full package of remote monitoring equipment installed • Electricity usage usage, gas consumption and room temperatures monitored real time • Capturing complete ‘before & afte
Slide 18: Ceres Manufacturing Strategy Maximises Value Capture
Ceres Manufacturing Strategy Maximises Value Capture Value capture maximised through Ceres: • Ownership and control of complete CHP design • Selling complete CHP products (earning ‘product-level’ revenues) • Manufacturing high value fuel cell technology in-house • Leveraging existing boiler supply c
Slide 19: Fuel Cell Manufacturing Operations Commenced in Q4 '09
Fuel Cell Manufacturing Operations Commenced in Q4 ‘09 Initial volume fuel cell manufacturing operations underway at Horsham factory - Using core processes and machines tested at Crawley pilot plant - Current capacity sufficient to deliver beta & gamma phase requirements with incremental investment
Slide 20: Ceres Mass Manufacturing Facility
Ceres Mass Manufacturing Facility Exterior of Horsham factory Cell manufacturing Ink formulation Stack and Fuel Cell Module assembly © Ceres Power 2010 20
Slide 21: Compact Fuel Cell Module Enables Wall-Mounted CHP Product
Compact Fuel Cell Module Enables Wall-Mounted CHP Product • Fuel cell module weight and size optimised, meeting ‘go to market’ specification - Compact, thermally integrated fuel cell stack / heat exchange / fuel processing - F l cellll stack Fuel t k heat h t tto power ratio ti < 0 0.7 7 - Part coun
Slide 22: Volume CHP Boiler Assembly Capability Secured
Volume CHP Boiler Assembly Capability Secured • Ceres entered into volume assembly agreement in Q3 ’09 with Daalderop - Ceres’ CHP boiler assembly designed for volume manufacture - Extensive use of pre-assembled sub-systems to optimise assembly speed and cost • a key element of the design iteration
Slide 23: Ceres 2010 CHP Outlook
Ceres 2010 CHP Outlook Time Product / Technology Manufacturing / Supply Chain Q1 2010 9 Commence Beta Phase sheltered field trials 9 Procure key components for in houses in UK Beta Phase commercial field 9 Commence expansion of CHP test trial units infrastructure to support Beta trials 9 Manufacturi
Slide 24: Summary
Summary CHP Programme - Beta phase sheltered field trials of CHP units underway in UK houses - ‘CE’ certification process underway - In home preparations with British Gas for Beta phase commercial field trials completed - CHP product market launch with British Gas in UK in H2 ’11 Commercial - Secure
Slide 25: Ceres Power Limited
Ceres Power Limited Unit 18 Denvale Trade Park Haslett Avenue East Crawley RH10 1SS United Kingdom Phone: +44 ((0)) 1293 400 404 Fax: +44 (0) 1293 400 482 E-Mail: info@cerespower.com www cerespower com www.cerespower.com © Ceres Power 2008 25