Ceres Power Holdings Plc · LSE:CWR
Ceres Power — FY2019 Earnings Presentation
30 slides from Ceres Power's earnings presentation, 2019
Slide 1: Full Year Results
Full Year Results For the year ended 30 June 2019 0
Slide 2: Business Overview
BUSINESS OVERVIEW CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 1
Slide 3: Technology to address climate change
Technology to address climate change • High growth UK technology licensing company with global world- class partners • World leading Solid Oxide fuel cell technology – Imperial College • Unique IP ~50 Patent families plus know how • 240+ highly skilled scientists and engineers based in UK • Fully fu
Slide 4: Fuel cell's role in energy transition
Fuel cell’s role in energy transition Air Quality Climate Change • Batteries & fuel cells key to • Path to Net Zero Zero emissions • Nat Gas to hydrogen • Pressure on charging infrastructure Balancing renewables Energy efficiency • Cheap renewable energy • Better than centralised disrupting centrali
Slide 5: Ceres licensing business model
Ceres licensing business model 1 Ceres develops fuel cell technology that is licensed to OEMs and manufacturing partners Product Sales 2 Ceres receives payments through engineering services and up front license fees 3 Ceres secures future royalties on every system and stack that uses Ceres technolog
Slide 6: Ceres partnerships in multiple applications globally
Ceres partnerships in multiple applications globally De-centralised Clean power Electric vehicles Power for datacentres Market size 1 ~100 GW >300 GW >50 GW Possible annual revenues for Ceres U$360m U$400m U$270m Rapidly growing • 1 kW residential to 10’s to 100 • Use as range extender for EVs in •
Slide 7: Commercial, Technology and Financial Progress
COMMERCIAL, TECHNOLOGY AND FINANCIAL PROGRESS CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 6
Slide 8: Financial and commercial highlights
Financial and commercial highlights • Strong revenue & income growth £16.4m (2018: 7.0m) at improved gross margin of 75% (vs target of >50%) • Operating loss down 33% to £7.9m (2018: £11.9m) and underlying cashflow reduced to £3.1m (2018: £9.5m) • Cash of £71.3m at 30 June 2019 • Strategic partnersh
Slide 9: Technology and operational highlights
Technology and operational highlights • Continuous development of core technology. V5 power density ~50% vs V4 • SteelCell® reached 60% net efficiency, greater than MW-scale gas turbine and twice that of a gas engine • Joint development completed with Weichai of first prototype 30kW range extender s
Slide 10: CP2: First global reference plant
CP2: First global reference plant • SteelCell® produced in small volumes proves scalability, facilitates new partnerships • £8m investment, ~60 skilled jobs. Phase 1 launch 2020 at 2MW annual capacity • Will provide near term capacity for customers and act as “blueprint facility” for technology tran
Slide 11: Partner Update
PARTNER UPDATE CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 10
Slide 12: How we work with Partners
How we work with Partners 1. Joint Product Development 2. System and manufacturing Licensing Royalties from multiple 3. products in global markets Engineering Services Up Front License Fees for technology transfer Future Royalties per kW (2 – 3 years) (~3 years) At start of production $ $$ $$ Recurr
Slide 13: Bosch – manufacturing partner progress
Bosch – manufacturing partner progress Strategic collaboration • Bosch Invested £9m in Ceres for 4 % stake + £20m license/JDA revenues to 2020 (Aug 2018) • Global ceramics manufacturing expertise in Germany/China/USA Multiple market applications • Small power stations for cities, factories, datacent
Slide 14: Weichai Power – system partner and manufacturing JV
Weichai Power – system partner and manufacturing JV Market opportunity Access to China - fastest growing fuel cell market, focus EV bus and truck • World-leading automotive/equipment manufacturer worth +£10Bn • Produces 600k engines per year, c.30k buses and 150k heavy duty trucks • Strong internati
Slide 15: Miura Co – system partner
Miura Co – system partner Miura • Japan’s leading industrial boiler manufacturer with US$1.3bn global revenues The market • Japan is one of the most advanced markets in the world for fuel cells and a key target market for Ceres • Approx. 300,000 residential units installed with government subsidies
Slide 16: Doosan – system partner
Doosan – system partner Major South Korean industrials business • Fortune 500, 39,000 employees and turnover +US$15bn • Leaders in energy, renewables, construction South Korean fuel cell market well established • Government targeting combined output from fuel cell technology of 15 GW by 2040, 300MW
Slide 17: Financial Summary
FINANCIAL SUMMARY CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 16
Slide 18: Financial highlights
Financial highlights Revenue and other operating Gross margin Operating loss Net cash used in operating income activities £16.4m 75% £7.9m £3.1m +133% (2018: 51%) (2018: £11.9m) (2018: £9.5m) Order book Pipeline Cash and short-term investments New equity raised £28.4m £50.0m £71.3m £77.1m (2018: £30
Slide 19: Revenue and gross margin
Revenue and gross margin • Licence and engineering services driving Annual growth of revenue and other income high margin revenue growth 18.00 41% 70% 57% 51% 75% • Revenue mix will change with low volume 16.00 14.00 hardware supply as CP2 comes on line Gross margin % 12.00 • Targeting sustained gro
Slide 20: Revenue evolution
Revenue evolution 2014-2018 Near-term growth Future Royalties Advance licence fees from manufacturers & OEMs 20 Advance licence fees from manufacturers and OEMs 15 £ million 10 Supply for Supply for customer programmes customer programmes 5 Engineering services Engineering services 0 2014/15 2015/16
Slide 21: Income statement
Income statement • Targeting gross margin consistently > 50% £m FY FY 2019 2018 • Investment in people and facilities to deliver Revenue 15.3 6.3 growth Gross margin 11.5 3.2 Gross margin % 75% 51% • Increased R&D investment to maintain technology leadership position R&D -13.8 -11.4 SG&A -6.7 -4.4 –
Slide 22: Cash flow
Cash flow • Cash used in Operating Activities down by 2/3 £m FY FY 2019 2018 • £7.3 m invested in Capex - majority at CP2 Operating cash flows -5.9 -9.9 • Development capitalised as company Changes in working capital 0.7 -1.5 commercialises technology Tax received in the period 2.1 1.9 • Fully funde
Slide 23: Summary and Outlook
SUMMARY AND OUTLOOK CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 22
Slide 24: Summary and outlook
Summary and outlook • Commercial launch with Miura in Japan (Q4 2019) • CP2 on track for first production (Jan 2020) • Bosch: Collaboration to establish pilot manufacture in Bamberg Germany • Weichai: Focused on developing the next stage systems for bus field trials in 2020. Commitment to form a JV
Slide 25: Questions
QUESTIONS CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 24
Slide 26: Appendices
Appendices CONFIDENTIAL Power for the energy transition Ceres Power Ltd. © 2019 25
Slide 27: Fuel cell technology
Fuel cell technology 1kW Stack A fuel cell is the most efficient way to convert fuel to power • Produces an electric current from a chemical reaction Air & • No combustion heat out Results in clean air and less CO2 • No particulates, SOx or NOx emissions • Low to zero CO2 produced depending on Exhau
Slide 28: Advantage of Ceres' SteelCell
Advantage of Ceres’ SteelCell® SteelCell® is a solid oxide fuel cell (SOFC) technology incorporating a proprietary process to Fuel Cell deposit very thin ceramic layers on micro- Technology Family perforated steel plates. PEM SOFC SteelCell® • Steel construction; low-cost and robust Efficiency ✓ ✓ •
Slide 29: UK Manufacturing enables global licensees
UK Manufacturing enables global licensees Annual capacity equivalent in units: R&D Scale Horsham 2018 2019 2020 2021 HOME WORK CLOUD ROAD UK Technical Centre develops next generation V5, V6 & V7 SteelCell® 1kW 10kW Datacentres 30kW CP2 Reference plant Phase 1 2 MW 2,000 200 - 60 Phase 2 3 to 10
Slide 30: For more information please contact
For more information please contact info@cerespower.com Ceres Power, Viking House, Foundry Lane Horsham, RH13 5PX UK 29