Hexagon Composites Asa · OSL:HEX
Hexagon Composites Asa — Q2 2020 Earnings Presentation
59 slides from Hexagon Composites Asa's earnings presentation, Aug 12, 2020
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Slide 2: Disclaimer and important notice
Disclaimer and important notice This company presentation (the “Presentation”) has been prepared by Hexagon Composites ASA (“Hexagon” or the “Company”). The Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The Comp
Slide 3: 2020 Second Quarter Half Year Interim Report
OSLO, 12 AUGUST 2020 JON ERIK ENGESET, CEO MORTEN HOLUM, PRESIDENT HEXAGON PURUS. DAVID BANDELE, CFO 2020 SECOND QUARTER HALF YEAR INTERIM REPORT 0 HEXAGON
Slide 4: Agenda
Agenda • Company update & market overview • Summary Group highlights and financials • Outlook • Q&A • Appendix: Segment financials & other material 4
Slide 5: COVID-19 Impact
COVID- 19 Impact • As of August 11, 2020 – 14 Cases YTD – 3 recovering – 11 recovered – 0 work related • Business impact – No major supplier disruptions – Several segments impacted in Q2, but high market activity points towards recovery from Q3 5
Slide 6: COVID-19: Moving from containment to recovery
COVID-19: Moving from containment to recovery “Governments have a once-in-a- lifetime opportunity to reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy future.” Dr. Fatih Birol, IEA Executive Director 6
Slide 7: IEA Sustainable Recovery Plan
IEA Sustainable Recovery Plan Over 3 years: • Invest USD 1 trillion annually • Produce 1.1 percent global economic growth annually • Create 9 million jobs each year • Reduce annual energy emissions by 4.5 billion tons 7
Slide 8: Funding the shift to clean energy
Funding the shift to clean energy • EU Recovery plan for Europe • US Department of Energy’s – H2@Scale • Germany allocated $10 billion of its recovery budget to “green hydrogen” • Italy has implemented an “ecobonus” program • France has pledged €15bn of “new” green funding • The California Air Resou
Slide 9: Hexagon is well positioned to capture the opportunities
Hexagon is well positioned to capture the opportunities g-mobility e-mobility LOW EMISSION ZERO EMISSON Compressed Biogas / Renewable Liquefied Hybrids Battery Electric Hydrogen Natural Gas natural gas petroleum gas 9
Slide 10: Hexagon is well positioned to capture the opportunities
Hexagon is well positioned to capture the opportunities g-mobility e-mobility LOW EMISSION ZERO EMISSON Compressed Biogas / Renewable Liquefied Hybrids Battery Electric Hydrogen Natural Gas natural gas petroleum gas 10
Slide 11: Multifaceted approach to low-carbon/no-carbon fuel adoption
Multifaceted approach to low-carbon/no-carbon fuel adoption “Trucking and logistics companies are incrementally adopting clean fuel technologies that reduce tailpipe pollutants and greenhouse gas emissions.” Mike Roeth, Executive director for the North American Council for Freight Efficiency (NACFE)
Slide 12: G-mobility is in the fast lane
G-mobility is in the fast lane In 2019, 25% of More than UPS natural gas 23 million Natural deployment was Gas Vehicles on renewable - by roads worldwide next year, 50% today Cummins The Climate Pledge – commits to commitment by reducing Amazon to have net emissions from zero carbon across new produ
Slide 13: Hexagon is well positioned to capture the opportunities
Hexagon is well positioned to capture the opportunities g-mobility e-mobility LOW EMISSION ZERO EMISSON Compressed Biogas / Renewable Liquefied Hybrids Battery Electric Hydrogen Natural Gas natural gas petroleum gas 13
Slide 14: Global leader in Type 4 cylinder technology
Global leader in Type 4 cylinder technology * High- Non- Light-weight Durable pressure corrosive 14
Slide 15: We deliver storage systems and e-drive integration
We deliver storage systems and e-drive integration eAxle Battery system Hydrogen system System System integration integration Complete Vehicle Integration Software Other vehicle systems
Slide 16: From vision to reality
Vision to reality From vision to reality 16
Slide 17: Part of Toyota's fuel cell heavy-duty truck proof-of-concept
Part of Toyota’s fuel cell heavy- duty truck proof-of- concept 17
Slide 18: Several ongoing H2 bus projects
Several ongoing H2 bus projects 18
Slide 19: Delivered 700 bar tanks to Mercedes GLC-F-CELL
Delivered 700 bar tanks to Mercedes GLC- FCELL 19
Slide 20: Highest capacity distribution module worldwide
Highest capacity distribution module worldwide 20
Slide 21: 1st hydrogen vessel in the U.S
1st hydrogen vessel in the U.S Photo: Switch Marine 21
Slide 22: World's 1st hydrogen powered regional train
World’s 1st hydrogen powered regional train 22
Slide 23: 1st hydrogen refueling station in Western Canada
1st hydrogen refueling station in Western Canada 23
Slide 24: In the push to decarbonize, hydrogen is ready for scale
In the push to decarbonize, hydrogen is ready for scale Average CO2 Hydrogen Hydrogen powered locomotives emission need to FCEV make up 20% replace 20% of decrease by 70% of total vehicle fleet diesel per passenger km locomotives * Targets by 2050 24 Source: «Path to hydrogen competitivness. A cost
Slide 25: Strong growth in FCEVs and hydrogen infrastructure expected in China
Strong growth in FCEVs and hydrogen infrastructure expected in China over the next decade 750,000 25% FCEVs in 2030 of new car sales to be zero- emissions by 2025 3,000 H2 refueling stations in 2030 “We will sort out the factors that have been hindering the development of fuel cell vehicles.” Wang G
Slide 26: EU H2 Strategy: Aims to be world leading region in Hydrogen
EU H2 Strategy: Aims to be world leading region in Hydrogen 6GW of renewable H2 integrated into Hydrogen hydrogen energy system. deployed at a electrolysers 40GW of renewable large scale H2 across all hard- 1 million tons of to-decarbonize renewable H2 10 million tons sectors renewable H2. Today - 2
Slide 27: June: Hexagon Purus awarded contract by Toyota
3 June: Hexagon Purus • June awarded 3 contract by Toyota for hydrogen powered electric heavy-duty trucks 27
Slide 28: July: Hexagon Purus receives first contract for US hydrogen transport modules
18 July: Hexagon Purus receives first contract to provide hydrogen transport modules in the US 28
Slide 29: July: Hexagon granted funding by the U.S Department of Energy
21 July: Hexagon granted funding by the U.S Department of Energy 29
Slide 30: July: Hexagon Purus to produce cylinders for aerospace customer
29 July: Hexagon Purus to • July 29produce high-pressure cylinders for a major new aerospace customer Photo: iStockphoto. For illustration purposes only 30
Slide 31: Hexagon Purus is well positioned to benefit from zero-emission mobility growth
Hexagon Purus is well positioned to benefit from the growth of zero-emission mobility Leading Trusted Established Extensive product customer operational track competence relationships footprint record Global leader in Type Established and Engineering centers Decades of 4 pressure vessel successful a
Slide 32: Financial Update: Impacts of COVID-19
FINANCIAL UPDATE IMPACTS OF COVID-19 32
Slide 33: COVID-19 Impacts
COVID – 19 Impacts Company position update • Deeper financial impacts in Q2 – Reduced Transit bus volumes in North America especially and Europe – Mobile Pipeline being project based also impacted – LPG so far robust though activities in Bangladesh are delayed • Difficult to assess or predict with p
Slide 34: Financials 2nd Quarter 2020
2nd QUARTER 2020 FINANCIALS 34
Slide 35: Highlights from Q2 2020
Highlights from Q2 2020 • Lower revenues and EBITDA for Agility due to impacts of COVID-19 ‒ Major new customer secured in logistics sector • Weak Mobile Pipeline volumes impacted by COVID-19 ‒ USD 7.3m order received in quarter • Low Purus CNG Light-Duty Vehicle volumes ‒ Mainly due to planned prod
Slide 36: Financial highlights Q2 2020
Financial highlights Q2 2020 Hexagon Composites Group Revenue EBITDA Profit after tax NOKm NOKm NOKm -199 -50 (-23%) 62 (+185%) 882 (7%) 683 -43.0 19 -27 (3%) -77 Q2’19 Q2’20 Q2’19 Q2’20 Q2’19 Q2’20 • Temporary C-19 driven top-line • C-19 impacts Group revenues weakness mitigated significantly by •
Slide 37: H1 2020 e-mobility & g-mobility financials
H1 2020 | e-mobility & g-mobility financials*, NOKm Solid base with profitable g-mobility business, supports major future growth in e-mobility PURUS HYDROGEN e-mobility ZERO EMISSION REVENUE EBITDA PURUS BEV 2 174M -68M PURUS MASTERWORKS -39% MARGIN PURUS CNG LDV H1 GROUP REVENUE: 1,508M HEXAGON HAS
Slide 38: Balance sheet | Q2 2020 vs Q1 2020
Balance sheet | Q2 2020 vs Q1 2020 Adjusted* Net Interest Bearing Debt NOK 1,316m (Unadjusted 1,380m) & Equity Ratio 43% Assets Liabilities & Equity NOKm NOKm 6 000 6 000 5 498 5 498 115 5 161 5 161 5 000 624 128 CASH AND CASH 5 000 856 EQUIVALENT 771 526 NOK 128m (NOK 115m) 881 405 863 325 363 4 00
Slide 39: Outlook
OUTLOOK 39
Slide 40: Agility Fuel Solutions
Agility Fuel Solutions Medium and Heavy-Duty Vehicles 40
Slide 41: Increased activity in Heavy and Medium-Duty g-mobility
Increased activity in Heavy and Medium-Duty g-mobility • Heavy-Duty Truck business picks up in second- half of 2020 ‒ Additional orders expected in Q3 ‒ Large number of deliveries to major logistics supplier to be made in Q3 - and additional orders received • European bus business expected to become
Slide 42: Hexagon Purus e-mobility
Hexagon Purus e-mobility 42
Slide 43: Distribution
Distribution • Signed first contract for hydrogen transport modules in the US – X-STORE transport modules to major US H2 fuel supplier and refueling station operator – Estimated value: USD 4.8 million (approx. NOK 45 million) – Includes additional purchase options - if exercised, will bring the tota
Slide 44: Battery Electric Vehicle Systems in demand
Battery Electric Vehicle Systems in demand • Toyota Motor North America doubles order for hydrogen systems for its prototype hydrogen- powered heavy-duty fuel cell electric trucks – Increased from 1 million to 1.9 million USD • Battery electric drivetrain deliveries continue to major OEMs in Q3: - D
Slide 45: CNG Light-Duty Vehicles
CNG Light-Duty Vehicles • VW production line ramp up starting in Q3 as expected – Supply levels returning to normal with call-offs to end of year – Run rate in 2H of the year estimated somewhat lower than 2019 level (due to COVID-19) For illustration purposes. Credit:Volkswagen AG 45
Slide 46: Diversified hydrogen project pipeline
Diversified hydrogen project pipeline LIGHT-DUTY MEDIUM & HEAVY DISTRIBUTION GROUND STORAGE, OTHER VEHICLES DUTY MOBILE REFUELING, MARITIME & RAIL More than 50 projects High number of hydrogen development projects across all segments 46
Slide 47: Hexagon Mobile Pipeline
Hexagon Mobile Pipeline 47
Slide 48: Focusing on opportunities in new segments
Focusing on opportunities in new segments • Continued COVID-19 and oil related impacts expected in Q3 – Low activity in onshore oil and gas sector in North America and general risk of project delays due to capital constraints • New opportunities with MicroCNG – Awarded X-Store module order for new s
Slide 49: Hexagon Ragasco LPG
Hexagon Ragasco LPG 49
Slide 50: LPG demand for leisure use increases
LPG demand for leisure use increases • Significant increase in orders from markets where LPG is used for leisure purposes – mainly Northern and Central Europe • Expect delays in orders for domestic use to countries significantly impacted by pandemic • Orders for cylinders from new market in the Cari
Slide 51: Outlook summary
Outlook summary 1 COVID-19 related disruption may have a negative impact to earnings for Q3 2020 Barring any unforeseen COVID-19 developments, we expect a stronger market outlook in the second half of the year 2 Strong liquidity and business resilience 3 Moving from containment to recovery – e-mobil
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Slide 53: Appendix
HEXAGON —~ APPENDIX
Slide 54: Q2 2020 and YTD 2020 Group income statement
Q2 2020 and YTD 2020 Group income statement QUARTER YEAR TO DATE YEAR TO DATE1 FULL YEAR NOK MILLION Q2 2020 Q2 2019 Variance YTD 2020 YTD 2019 Variance FY 2019 Revenue 682,9 882,1 (199,2) 1 508,0 1 703,9 (195,9) 3 416,1 Operating expenses (664,1) (820,2) 156,1 (1 452,5) (1 561,0) 108,6 (3 126,0) Ea
Slide 55: Revenue by segment Q2 2020
Revenue by segment Q2 2020 | Before Group eliminations* Revenue Q2’19 (Proforma after internal reorganizations**) Revenue Q2’20 NOKm, before group eliminations NOKm, before group eliminations 175 174 NOK NOK 121 931* 458 56 723* 409 million million 84 177 Agility Fuel Solutions (Heavy and Medium-Dut
Slide 56: Segment financial highlights Q2 2020 (1/3)
Segment financial highlights Q2 2020 | (1/3) Agility Fuel Solutions* Hexagon Purus* (e-mobility, incl. MW & CNG LDV) NOKm NOKm Revenue EBITDA Revenue EBITDA -22 -49 (-48%) -93 -21 (-11%) 46 (-52%) (+211%) 458 (10%) 177 409 24 (6%) 84 -10 (-6%) -31 (-36%) Q2’19 Q2’20 Q2’19 Q2’20 Q2’19 Q2’20 Q2’19 Q2’
Slide 57: Segment financial highlights Q2 2020 (2/3)
Segment financial highlights Q2 2020 | (2/3) Hexagon Purus CNG-LDV* Hexagon Purus Hydrogen* NOKm NOKm Revenues Revenues EBITDA EBITDA 71 129 124 57 47 51 100 43 39 41 22 14 22 -16 -2 -21 -29 -14 -32 -35 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 • Higher proportion of commercial hyd
Slide 58: Segment financial highlights Q2 2020 (3/3)
Segment financial highlights Q2 2020 | (3/3) Hexagon Mobile Pipeline & Other* Hexagon Ragasco (LPG) NOKm NOKm Revenue EBITDA Revenue EBITDA 6 -22 -1 (+19%) -65 (N/A) (-1%) 1 41 (-54%) 175 174 35 (24%) 121 (1%) (20%) 56 -21 (-37%) Q2’19 Q2’20 Q2’19 Q2’20 Q2’19 Q2’20 Q1’19 Q1’20 • Macro impacts from C
Slide 59: Group cash Q2 2020
Group cash Q2 2020 Stripping out effects of FX translations Cash NOKm +13.0 140 128 24 120 115 13 -46 100 -9 80 -33 88 60 -5 40 -19 20 0 Start of Q2’20 Underlying Ops Operating From Capex (net of Product Interest paid Drawings All FX End of Q2’20 working capital Operations FX effects) Development fr