Itm Power (LSE:ITM) — Interim Results Investor Presentation

0:01 Good morning, and welcome to the ITM POWER PLC Interim Results Investor Presentation. Question and press send. Due to the number of attendees on today's meeting, the company may not be in a position to answer every question received. However, the company review all questions submitted then. Published responses to our approach to do so on the investment company platform. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Dennis CEO and Andy Allen, CFO. Good morning.

0:33 Good morning, and and good morning, everyone, in the call. Thank you for taking the time to participate. I would like to start by introducing myself. My name is Dennis Schulz, and I took over the role as the new CEO of ITM POWER on 12/01/2022, which was two months ago. Doesn't doesn't feel like that. I have to say, just two months ago. I bring with me fourteen years of experience in the technology and EPC industry and related component manufacturing. I joined Linde in 2008 and had various positions in the company, among them as head of project execution services and as head of strategy and mergers acquisitions, both in the company's headquarters in Munich. Since 2017, I led the restructuring of one of the sizable EPC entities in Dresden, Germany, first as a CFO and then later as a managing director taking over from my predecessor in 2020.

1:29 During that time, I restructured and reshaped the company towards a new product portfolio focused on predominantly green technologies in the area of CCUS, which is carbon capture, utilization, and storage, and hydrogen predominantly blue and green. In that capacity, after Linna's investment into ITM, I was okay. No. No. We got the slide up. Thanks. In that capacity, after Linda's investment into ITM, I was closely involved in the strategic relationship of the two companies. And we had a great start by securing important customers, reference projects, and developing a 10 megawatt standard module, which will be deployed for the first time in the projects announced today, the two times 100 megawatt Lingen projects in Germany for RWE.

2:21 But after promising start on the sales side, and I have to mention that all the ITM projects which were running through Linde were in my profit and loss responsibility from sales to execution, we found that ITM's project performance was falling behind expectations. And after that, I was then closely involved in collaborative efforts to try to overcome the issues jointly and mitigate delays to customer projects. In my role as managing director at Linde Engineering, I was also working with other electrolyzer OEMs despite the most intimate relationship being with ITM. This certainly put me into a position where I have gained significant insight on the strengths and weaknesses of the different electrolyzed OEMs in the market.

3:10 Personally, I'm a strategist, passionate chess player. I have a track record in restructuring and in turnaround, leading organizations, and I'm well connected in the industry with customers and suppliers alike. I will now first hand over to Andy Allen, our CFO, to present you the interim numbers before I continue with the priorities going forward. Thanks, Dennis, and good morning, everybody. Thank you for joining us on the call this morning. So I will go through the interim results. The they they've been published this morning. They show a performance that's unacceptable and need some measures to address them, and that absolutely can be part of the twelve month priorities in Dennis' presentation. So I will also take you through the revised guidance for f y twenty three and give you a steer towards what we might expect in f y twenty four.

4:03 So in terms of some the the performance, the revenue for the half year was £2,000,000 against 4,200,000 the year before. Gross losses were 45,600,000 against 2.6 the year before. And adjusted EBITDA losses were 54,100,000 against 12.9 the year before. The important thing here, and we'll go into some detail here, is that the bulk of those losses are noncash movements, provisions based against project cost overruns and inventory costs, but we'll go into some more detail very soon. In terms of cash, we had 318,000,000 at period end against a 164,000,000 year before, a function of the capital market raise we did just over a year ago. In terms of cash flow, total cash outflow for the period was £48,000,000 against 12,000,000 the year before.

4:54 There's 42,000,000 associated with operating activities, and some of that is the build up of inventory. And in terms of investing activity, there was an outflow of 6,400,000, which includes 7,000,000 of expense for capital projects. So the summary is we raise money to pursue an aggressive expansion strategy. And in doing so, we underestimated the skills and competencies that we required as a company to really get that volume going quickly. So that's led us to where we are today and the numbers that we are seeing here. And we need to absolutely get from being an r and d company to a volume manufacturer of an industrial product. In the last two months, we've formed a deep dive into contributing factors, and I'll share some of those on the next slides, and you'll see more in Dennis' plan to follow. The vast majority of these actions will hit an impact f y '24 and and not necessarily make the guidance for this year change.

5:57 So in terms of a summary, the revenue was £2,000,000 against 4,200,000 a year ago. A year ago, though, we did have funded prototyping from base £2,800,000 for prototyping next generation stacks. You do see that actually product revenue is marginally up year year on year. In terms of a case study, the project is the flagship that we need to talk about. We have experienced both delays, and we've also seen a change in our delivery scope. What we're doing is we're splitting our deliveries. So the project consists of twelve two megawatt modules. In the first half of the year, we completed factory acceptance testing for two modules. But as we've had delays, we've worked with Linda and the customer to really get the best and optimized delivery schedule.

6:45 That means that we will split the delivery of the cubes and the stacks for the remaining 10 modules. So as of today, all the cubes are on-site. They are being installed, and they now await the stacks that we will produce and to send to site. So for us, revenue recognition is about finishing an obligation, and an obligation in LOINR is the testing of a module, so a cube and a stack. The first two modules tested at FAT as a complete module means we can recognize revenue. For the last 10, they need to meet on-site. We recognize revenue as they are deployed and tested on-site. What does that mean for us? Actually, revenue is gonna lag behind the work that we're completing for projects. And we're also gonna see we're now dependent on the wider SAT of the plant, so it's not fully within the control of ITM.

7:33 This may affect other key projects including Yara, and that's one for us to be aware of. So this is not revenue loss, but revenue deferred.

7:45 In terms of gross margin, the gross loss was £45,600,000 against a loss of 6.8 the period before. There are three contributing factors here, project cost overruns, inventory losses, and warranty provision uptick. And and this slide covers both warranties and the project cost overruns. So against the full portfolio of £49,000,000 worth of revenue, we've seen overruns in the period of 29,900,000. The contributing factors to that, if you look at the graph first, you see actual costs incurred in the period of £10,400,000. We see expected costs that are part of delivering projects of 9.4. And then you see a risk weighted provision for £8,500,000, which is about really being much more stringent and disciplined with our approach to risk.

8:41 The very bottom bit of the down there is our provisions for warranty. It's split into two bars. 2,300,000 is the warranty for and and against warranty provision for products on-site. The 1,300,000 will sit within contract loss provisions up to the point that the kit is deployed, and then at that point, it'll become a warranty provision. So what's driving these numbers? The big thing here is redesign work. We build products at a point where there was an unfinished design, and subsequent design changes have required rework of various products. We've also included customization at customer requests. And as a company, we haven't fully understood the impact of those customization exercises.

9:28 Also seeing the split of scope as talked about in the project, that's actually gonna increase cost for ITM, and we see that as something we need to do to maintain the customers' timelines as best as as possible. But it's more on-site work, more subcontract work, and more packing. And finally, in terms of testing, we had expected to see improvements within our testing timing, which have not yet materialized based on the fact we're not doing volume manufacture right now. So the costs are related both longer test durations, but also the impact of the energy prices for the company. The other contributing factor to the gross margin loss were inventory losses, and that's made up of a total cost in the p and l of £15,700,000.

10:15 Cost incurred, is write off and off lessons of £1,600,000, is one number, and the other component is £14,100,000 worth of provisions. This is against a generation of stacks, population of stacks that's ring fenced, and it's a 100% provision against those stacks.

10:33 What happened there is there was a legacy design which included the introduction of an extra component to make tolerances easier to manage within the manufacturing process. That ultimately led to us having a product that we did not want to to ship. So that prompted the need for a new tool modification, which was the RNS that we put put out in q four last year. So the tool modification has been done. Components are being manufactured. Stacks are started to be manufactured. It would be easy right now to say we are sprinting towards completing customer projects, but we're not doing that. We're taking it step by step and make making sure we validate the taxes we do so we avoid doing this again.

11:17 In terms of cash flow for the period, we had an adjusted EBITDA loss of £54,100,000. 32 of that were provisions, noncash movements, leaving us with cash outflow from the p and l of twenty two million pounds. We saw an uptick in inventory of £29,000,000. We've improved our working capital position with receivables and payables by 8,000,000, and then we spent money on CapEx, notably about 3,500,000 on assets with investment funds and a similar amount on product development. So our total cash outflow for the period was £48,000,000. I've got a little box on the left hand side, which just acknowledges that of the 28,900,000 inventory uptick, 14,100,000 was provided, and and that's that generation of stacks that we've just spoken about.

12:08 In terms of the guidance for FY '23 ending in April 30, so the result is very much baked in from decisions that we made in the first half of the year. And we're not gonna see the benefit of the twelve month priorities plan until FY twenty four. So the revenue guidance, in line with that change of product delivery project delivery, means that we expect revenue to be £2,000,000 for the full year. That's the same number as we announced today in the interims. In terms of the EBITDA loss guidance, we're expecting that to be in a range of 85 to £95,000,000. We're we're expecting to see some inventory provisions in the second half of the year, and that'll be about FAT success and volume of of products going through the shop floor. And we're also you know, we're applying contingency here, which is within that range about project cost overruns we don't know about.

13:01 It also includes the the costs associated with the RWE, in particular, the warranty. And finally, it includes the overheads at a similar runway to the first half of the year, but also we're gonna have one offs for redundancies and the impairments of discontinued products. In terms of cash flow, our cash flow guidance hasn't changed for the full year. We guided before 245 to 270,000,000. Actually, we ought to expect that to be towards the lower end of the range, partly because inflows from customer contracts have been deferred in line with delivery profiles. And out outflows are impacted by project overruns and an unwind of provision made into a to a a partial extent in the first half of the year.

13:51 Final slide from from me, the outlook for FY '24. So revenue is gonna be underpinned by site acceptance testing and a dependency on that, Particularly, our focus here is getting them down as pilot plant, as flagship plant that we can really use to to showcase what ITM can do. In terms of cash flow from operations, we'll start seeing the benefit of the twelve month priorities and headcount reductions and cost management. We'll also expect to see an unwind of some of the inventory buildup that we've had this year as we start to see products go out the door. Terms of investments for the future, we are expecting to invest in a power upgrade and fit out of a new unit, and there will also be incremental automation machinery as we bring that online in in in FY twenty four. I'll hand back to Dennis for the priorities plan.

14:48 Thank you, Andy. Let me pick you up where I left you, which is my introduction. Before I committed myself to ITM and knowing about the issues the company is facing, as I alluded to, I asked myself three questions which were important for my for questioning to join or not to join, I have to say. These three questions are, does ITM have a technology with the potential to outperform its competitors? Does ITM have a strong enough balance sheet, which means cash to support the necessary strategic and operational changes I was anticipating to strengthen the company's foundation? And does the market give us the time window needed to solve the growing pains ITM is encountering? And in short answer, yes.

15:35 I'm convinced that these critical preconditions are met as I wouldn't be sitting here in front of you today. On the technology side, as I also said, I do know what competitors are doing from my previous role at Linde, and I'm more than convinced that ITM has the right technology to compete in the field. I will shed some more light on answering the questions on the next slides. I know this is content heavy, and it's probably difficult to read, but bear with me. I will try to guide you through step by step. So first, high level business update. Discussions around climate change, decarbonization, and recently, especially around energy independence coming from the Ukraine Russia situation are further fueling the projected hydrogen demand increase.

16:26 And I can tell you they are real this time. Coming from the customer side of the industry, we would expect the demand to be sustainable this time. So we will see significant investments coming up. If we look at the landscape of hydrogen production today, you will see that 95% of that is still gray, which means it comes with a lot of c o two emissions, not really well aligned with the decolonization agenda. However, just the demand increase alone on top of the installed capacity is higher than what electrolyzer OEMs can supply today in terms of green hydrogen stacks. Even if you take all the announcements out in the market for new factories, gigafactories, which I have to say are, to a large degree, shaky. But even if you just believe in all of them, electrolyzer OEMs will still not be able to meet the demand at this point in time, so we will see significant investments in that industry going forward.

17:22 Even if electrolyzed OEMs were able to supply stacks in a sufficient amount, we would have another bottleneck, which is then the availability of green electricity because the the ramp up of renewable energy is lagging behind in most countries nowadays. But also there, I think we are gaining speed. Especially for the already installed base of steam reformers producing hydrogen, we will see a trend towards blue hydrogen for the interim, which means that we capture and store c o two and sequestrate it. And while this is an important interim step to also allow tackling the the next bottleneck, which is hydrogen infrastructure, I would expect new installations to tend towards green hydrogen.

18:07 When I say hydrogen infrastructure as a bottleneck, I mean transport possibilities from pipeline to last mile handling, shipping. I think you all know these discussions and also storage for energy buffering, especially when we talk about higher share of renewables in the energy grid we need we need buffer.

18:27 Current peak electricity prices and inflation, that's no secret, put electrolysis business cases under a lot of pressure, which leads to some delayed investments. That is a temporary effect, which is giving us, ITM, now the freezing time required to overcome our issues. The big demand spike is yet to come. We will see significant ramp up of projects in the next years, and we as ITM will be ready for that. While we are working on our foundations, I can tell you that almost all competitors in the market are facing similar issues. We were a little bit ahead of the pack in that. We won the first important and larger projects in the market, and we encountered the issues first. And I hope that we can also be the first ones to overcome the issues and emerge stronger out of that. When it

19:18 comes to product demand projection, order intake weighted today container business, so plug and play units and stack alone as we would supply for Lingen, are rather even today. While and this is illustrated in the bottom right graph of the slide. While we would expect container sales to see moderate increase, the demand for stack will be substantially larger, and we would expect an exponential growth given the larger scale of projects in the market, which you would you wouldn't buy containers for one gigawatt project, obviously. Right? Therefore, ITM will focus more and more on stacks going forward, which doesn't mean that we don't do containers, but it will mean that for containers, we will try to narrow ITM scope to where we can add maximum value and pursue partnering opportunities for the noncore scope of the balance of plant in the container.

20:18 In order to develop ITM from an r and d company to a professional delivery organization with volume manufacturing capabilities, We also need to take the inherent overconfidence in the business previously and replace it with what I would call industry realism. We have developed a twelve month priorities plan to achieve exactly that and to solidify our foundations. I clustered our plan into three focus areas. First one is that we need to concentrate on a core product suite to finalize the engineering of our technology, which is in itself performing well. But we need to get to repeatable and reliable volume products.

21:05 While the previously mentioned manufacturing issues are there, they mostly originate from engineering shortcomings.

21:13 And when I when I say that, I mean design freezes and not robust validation of product generations prior to release for purchasing and production. So it's not the technology on the electrochemical side, it's the engineering around that which is not mature enough.

21:30 Second point, the we need to stop the financial bleeding of of ITM. And you just alluded to the numbers. We will introduce a short term program to reduce cost and which addresses the key cost drivers of the business. I will say a few more words to that in one of the next slides. On top of that, we will review together with VITOL future for motor fuels with the aim to sell ourselves 28,000,000 of already committed investment and reroute it back to our core business where we needed to scale up production and focus on our core business. We will also work on substantially increasing the quality of our forecasts in order to build back market confidence in ITM. And please proceed today as being a first step in that direction.

22:18 I think the the degree of transparency we provide today is a step change for ITM. The third point is the bottleneck. De bottlenecking, we will ramp up fabrication and testing and invest into incremental automation. And you just mentioned that. I have a separate slide on that part. In parallel, we cannot overstate how important it is to deliver on our project commitments. We need to become a delivery organization. We are a commercial company, and we wanna grow into becoming profitable at a point on our journey.

22:50 And we have to learn from mistakes from the past. The today announced two Lingen 100 megawatt projects is a very important milestone on that journey, which allows us to scale our business with real contracts and not just towards a perceived demand, but with with a real demand. With these two projects, we have almost 270 megawatt of latest tech generation in actual project delivery today, which is significant for us.

23:21 I will now give you more details on these three focus areas on which you see in these these blue dots. On the left, this is a list of all the products which ITM is today working on in one or the other form in chronological order of development and existence.

23:46 I have to say that this this was a bit shocking to me after I joined. It's it's a lot to focus on, and we definitely need to narrow down focus in order to be better performing in our state of the art technology and products, which is those which we marked in green. The services we are still providing to support order generation technologies are disruptive to our engineering and manufacturing processes. They distract the organization, and they have become overall too costly and time consuming.

24:17 So what what do we do about that? We will discontinue product development and ongoing design improvement work for legacy products which are no longer considered state of the art. That's all the products on top of the of the green ones with the white background. We will stop marketing and selling of these products and, of course, our customers will and should be able to expect from us and we will live up to that to fulfill our remaining contractual commitments and warranty obligations. We would not back down from that. But

24:49 we will narrow after the after sales services to product to the later product generations to avoid distracting the organization too much. The green highlighted 30 bar MEP stack is the one we will scale and deploy in the current and larger installations to come.

25:12 You see there that cubes are light green colored. We still intend to sell cubes, but we would expect the market to develop in a direction with either a rather small decentralized installation tending towards plug and play containers, which is then a complete plug and play unit as opposed to a cube, or then going to the we have big large scale projects, which would then rely on the second skid supply together with a larger module. In that case, for example, now the 10 megawatt module developed with Linde. In in that sense, the strategic relationship with Linde is very important for us to take at the large scale projects to come. To allow us to narrow focus on on that, which is really important, we have consciously paused work on a completely new stack generation for the time being. As what I just said, the current stack is state of the art in the industry. There's no need to rush to the new project product generation instead of scaling up what we have.

26:15 And we showed you the numbers which have been disappointing for the first half year and which continue to be disappointing for the second half of the year. In order to stop the financial bleeding of ITM, we need to tackle the main cost drivers which are underlying. And

26:34 I tried to come up with a symbolic picture here a little bit. While the ship of ITM, which is a little it's it's not really horizontal right now, we are ship is uplifted by technology, which is great. Huge market demand. Right now, we could sell more than we do. We consciously try to not oversell in order not to overstress the organization at this point in time. It's not a problem that we couldn't sell, I can tell you.

27:00 And and a strong balance sheet and cash position. This is certainly an uplift. But we are at the same time also pulled down by project cost overruns and inventory losses, as Andy just explained, and also by overcapacity as a result of overoptimistic recruitment towards unrealistic expectations of fabrication member.

27:21 So we will have to cut off one or the other of these weights, if not if not all, in in order to steady the ship and and try to become faster and more capable company. Addressing the overcapacity as an important first step, we will restructure and right size our organization towards being leaner and better in hierarchy and with a structure that's reflecting the true nature of the business.

27:53 We will strengthen technology, and in particular, will strengthen engineering and product validation focus, which were the reasons for most of the issues we are encountering today. We are bundling our customer interface from sales to delivery in one customer facing organization, and we will closely integrate manufacturing and procurement, which is essential. We will also increase the oversight and governance function of the CFO organization,

28:22 especially with focus on getting to better forecast, as I alluded to earlier. Today, we also announced that doctor Rachel Smith will step down as a statutory director from the board. Let me thank her this time for the tremendous contributions she has brought to the company. Rachel will continue to work with ITM in in another role, and I'm looking forward to continue working as well. Coming back to the organization, we will reduce around twenty first 25 of headcount, which leads to a reduction of personnel cost of 9,000,000 year on year, which relates to or equates to 30%. We will over proportionately reduce in the non scaling functions, which means that these are sustainable savings.

29:12 And meaning that if the business is picking up again, these functions will not scale with the business going up. And implementation starting immediately is certainly subject to employee consultation starting in February. So how do we solidify our foundation? On on this slide, you see on the one on the on the left hand side, mitigation for future inventory losses, which Andy alluded to. And then on the right hand side, you see mitigation of future project cost overruns. And when I guide you through these points, now you will see that most of these are business basics, especially in the EPC and manufacturing industry when you look at mature organizations.

30:03 But this is the topic these are the topics which we really need to address now in order to become a capable volume manufacturing company with the required engineering professionalism. And by guiding you through these, I think what also comes to the surface is that, you know, these are the issues which we need to tackle. It's not an inherent technological issue per se. So let's go through that. In design, we will need to professionalize how we do engineering. This means we need to bring in new capabilities, amend the capabilities we have, and improve processes. Today, can announce that we will have a new head of engineering joining us, someone I know from my previous Linde career and someone who I am 100% convinced of that he can help me fix the issues we we have.

30:57 And as I said, he will start today, so things are underway. We will introduce design freezes, which is among the most important things we need to change in engineering, and very stringent management of change. We need to stop changing products while they are being produced. I don't need to explain you that this leads to additional procurement efforts, delays, and cost. The compliance and validation function and emphasis here is on validation with v two and sign off right to challenge the status we have. We need to properly validate products before releasing them for production and and purchasing and sending them to customers. And this is what we what we have changed immediately.

31:43 Then we will we will have to introduce state of the art calculation simulation tools. Also, from a tool landscape point of view, there's room for improvement. And so this will also lead to better engineering results. On the sourcing side, we will improve supplier audits. That is another inherent issue which we encountered. I would say full supplier quality on one of the other component and and by that rework to be done. And this will also include on on premise inspections at supplier premises and witnessing testing, which will then also reflect the risk profile of individual suppliers. We will strengthen also our standard t's and c's with volume and specification flexibility, and we need to strive towards back to back warranties with suppliers, which cover us especially for container business, cover us for the complete duration of warranties we give also to our customers in order to avoid having to provide too high warranty numbers.

32:39 On fabrication and warehousing, we will enhance parts traceability from incoming to shipping, and we will work to our newly implemented ERP system, which is which has been implemented and which is currently being set up for the complete organization. In terms of avoiding project cost overruns going forward, we if we look at the product portfolio and sales phase first, we will enhance discipline around setting standard products as opposed to customized solutions, and we mentioned that already. This is a typical theme which is leading to losses in such kind of organizations like ours. Certainly, we do we do strive to setting a standard product because it's really hard to estimate accepting clients, then it's in contracts, and then having to change for each and every client, every standard product you have. That's not a sustainable model. So this is one of our key priority areas.

33:34 Also, need to come to comprehensive costing and pricing, and we need to be more realistic on on schedule and risk estimation. When I look at the current project delays, certainly a lot of that has to do with what I just said on on the design and immaturity of designs, but it also has to do about being overoptimistic on the capability to deliver and, you know, not not seeing realistic roadblocks on the way. Contract terms, we need to strengthen that towards accepting lower liabilities. Customers will not be pleased to hear that, but that's where we are. And we need to scrutinize our performance guarantees and foreign obligations in the contracts going forward. Project governance. So during the project execution phase then, we will introduce a very stringent phase gate process model, which we will strictly adhere to, which means if we have not achieved all the steps required to pass a gate, we will not pass the gate, but we will make sure that we have a very stringent way of managing projects, products, and customer delivery from here onwards.

34:37 We will also strengthen accountability across the business, which is an, I would say, an inherent cultural issue at this point in time. It reflects an the r and d made nature of the company. We need to come to a point where accountability reflects that of a mature delivery organization. And we will also reset one or the other low profile expectation to roles, including those of project managers to be more accountable for the project performance. We will also substantially improve the quality of project cost and risk reporting. The basis for every forecast which which the finance organization can put to the market will be realistic realistic understanding of where projects stand and which risks are ahead of us. And by introducing that, we will take it as well the forecasting topic.

35:28 And we will also advance our project management processes and and very strict governance and improve also the way we manage contracts throughout projects in terms of how we address changes coming from customers throughout the contract execution period.

35:47 This brings me to number three of the focus areas, which is debottlenecking. I have now picked the three most important bottlenecks I see for the time being. The first one being testing and power supply. We anticipate and plan for a phased approach to increase test by capacity to satisfy the project needs on the contract, including the project, which is a step change for us. We will we will see a more than a doubling of our capacity in testing within the next twelve months, so until December 2023. From April onwards, we will have available 50% increased electricity supply from five to 7.5 MVA, and we will see a further increase, which we have already secured just at the beginning of the year now to 30 MVA in 2024.

36:40 On fabrication and automation, a topic which was oftentimes talked about at ITM, we are making we are making this happen now. So we do have an automation road map developed and in actual implementation. We will not be able to read now what's on that roadmap because it's really small here. I think it's not important to go into each and every step, but the what you see here as small bars, this is all. This relates to machines coming in, being validated, tested, and then released into production throughout the course of this year, this calendar year. So some improvements were achieved already, and a lot of others will come. This is a realistic assessment of when we will be able to introduce which change.

37:26 We will, as I said, incrementally deploy into production. We will not rush that. We will make sure that before we change a process that we have validated and verified that we can do that. One example is a machine on a process automation we will expect for October this year relating to automated screen printing of catalysts onto the membranes. Just to give you one example, this relates to precious metals. We will reduce waste by automating that process step, and we will reduce cycle time from ten minutes to six seconds. And by that increase production capacity by 300%. But especially also on the reduction of process waste when it comes to precious methods, that will be a game changer for us. That's just one of of a lot of examples of what we have in implementation.

38:18 On the very right, last but not least, r and d and validation. We are currently in negotiation to expand our shop floor space with a new fabrication just next to Bessemer Park where we are today. We do want to build up a dedicated r and d and product validation. So you see the topic validation comes up again and again. This is really important to me. This will host science labs and first of a kind product testing facilities, and we'll also share the electricity I just mentioned, power supply. This has not been signed, but we are in current negotiations, certainly also assessing other options as an alternative if that negotiation doesn't come to a successful conclusion. We do expect a decision still in Q1 this year.

39:09 My last slide, outlook. I talked a lot about the next twelve months. And because these are essential and decisive for ITM, I know that you have questions for the longer term strategic plans around what about more production volume? And let me answer that maybe in a way to be able to stay focused on the next twelve months. So, you know, ramping up stack output is not difficult for us, but it requires robust product validation. We need to make sure before we enroll into volume manufacturing that what we produce is right. If ITM has proven something in the last year, it was that ITM was able to produce really quickly a lot of stacks. As Andy alluded to, these stacks were then not fit for purpose. We cannot run into the same certification again. So product validation first and then volume, we will be able to do volume.

40:00 When it comes to new factories and markets, also a question which was often asked, building a new factory abroad or even different factories in parallel is also not difficult. It's it's rather straightforward once you have a suitable blueprint. But this requires that we do need to have a blueprint at hand, and we will make sure that we will get the current Bessemer Park facility with the plant extension to be a blueprint which we can then copy into different world regions, which is then much easier than trying to fix different factories and layouts, different places. Past the profitability, as I said, we do want to become a profitable company. Certainly, we will not be able to do that within twelve months, but that is our ambition for the future. But this requires a mature competitive product design, which we will get to. It will require incremental automation, which will improve bid quality and cycle time, rigorous cost management, which I alluded to, building up our after sales business, important for customers and us alike, and most importantly, volume.

41:01 You can only become profitable with volume. You see it here on the slide. We will get there. I'm I'm confident that that we will get there. What is what what does count now is though that we implement with discipline and focus our twelve months priorities to make ITM stronger, more reliable, and more capable company. As I said on the first slide or one of the first slides, the large scale opportunities in the market are yet to come. What we see now is first first projects being realized, but as I said, they will go up in scale quite significantly. And by putting these foundations in place, we will be ready on time for that market demand. Thank you very much.

41:48 This concludes the presentation piece, and I'm happy to take your questions. Fantastic. Dennis, Sandy, thank you very much indeed for the presentation. Ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated in the right hand corner of the screen. But just while the team take a few moments to review those questions submitted already, I'd like to remind you that the recording of the presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard. I'd now like to hand you over to James Collins to pose your questions to the ITM POWER team. James, could I please ask you just to read out the question where appropriate to do so and direct it to the relevant member of the team? Thank you. Okay. Thank you. Okay. Appreciate 2023 focuses UK manufacturing, but how many international sites do you envisage for ITM POWER by 2025 and 2030, please? And based on current incentives, what would be your preference in for either The USA, Germany, or Europe?

42:43 Should I take that one off you here? Okay. Yeah. Thank you for the question. As as I alluded to on my last slide, I think the first priority needs to be that we get our house in order right now, a customer park, and that we create a suitable blueprint. Certainly, once we have done that, we do want to expand to different world regions. I have not yet had the time over two months to come up with a strategic plan on how to address which world region, but maybe answering to that initial question, can tell you that The USA with the recent legislative changes is a quite interesting market for us and would be probably very high on the list. Okay. I think you've this in part. Could you please explain why ITM need over 400 staff when very little manufacturing is taking place? The use of company investors' cash seems to be treated with any respect and a lack of financial control.

43:35 Yeah. We don't. Right? That is why I announced today the headcount reduction program. The the current number of employees does not correlate to the short and midterm output within the next month. And we will right size now, also considering our obligations towards customers. But I also have to say that certainly we hope to be able to scale upwards again, not only product volume, but also employees once once we have solved the current issues of the organization and once we can really start scaling up manufacturing in a bigger scale. Okay. Can you explain the difference between cubes and stacks? Yes. So, yes, I can. So so I think we do not have a picture at hand. Right? But so you have to envisage a cube as being a mini container.

44:27 So which is like a housing for the stack. So whilst a plug and play container is like a complete electrolysis plant in a container, and the stack is what you have normally seen, you know, these these different plates on top of each other, which is then producing the hydrogen through the membranes, which is part of the container. The cube is somewhat in the middle. It's like a mini container version, much smaller than a container hosting parts of the balance of the plant. So the the stack is like the heart of the electrolyzer. Then from cube to container, you go more and more into the plug and play and and more scope of the balance of plant direction. I hope that answers the question. Okay. Thank you. Dennis, you mentioned automation is one of the key areas where you will focus across the next twelve months and beyond. Given your knowledge of ITM's peers, where do you think ITM currently stands, and what sort of ground would you like to cover first?

45:24 On automation? Yeah. So I think all of I would say, most most of our competitors, and I'm talking PEM now because this is what would be comparable, are looking into automating their state fabrication. I would say some are more advanced than others. I think IT to be honest, I think the ITM is not bad off at this point in time. But certainly, we have our own ambitions, and we don't want to be average or in the middle field. We want to be ahead of the pack. So when you ask me about priorities, I said that we do have a road map, which is addressing each and every area of the the fabrication process right now. And we will introduce these changes, these priorities around where do we need to improve in particular the quality of assembly. So I would say either adding manual assembly and by that improving the quality of that bit quality or fully automating certain process steps.

46:23 And as I also said, to reduce cycle times in particular bottlenecks when it comes to ramping up the production. Okay. Should we assume that all revenue deferred from Loin and Yara now falls into full year 2024? And when do we get full year '24 guidance? So the yes, the the short answer is yes. You know, there's a dependency there, which is about the whole plant with the full Lindoscope being SAT'd for us to recognize our revenue. But, yes, the and Yara plants, we are expected to be recognized in FY '24. In terms of guidance, we we will next be talking at this level of detail in the June trading update, and there'll certainly be some guidance for FY '24 there.

47:14 Okay. What can be the potential revenues associated with the two new RWE Linda orders announced today? Yeah. I think I think we're moving away from individual project pricing. It is a commercially sensitive topic, and we're actually keen to make sure that we don't detract from what we're doing in terms of commercial relationships with customers. So whilst we won't say that, it was bid competitively and and was won as part of a 10. Okay. And today, you announced a 25% reduction in headcount. How are you thinking about retaining top talent or hiring new talent a growing company like ITM require, especially when we look at the new large contracts just signed?

48:03 So the 25% head on production takes into account the award of Lingen projects, and these were under negotiation when we when we took that decision. And, certainly, we we considered that. When it comes to retaining talent, this is obviously important for us, and we will make sure not to lose too much talent as part of the process. I think that's that's nature, I would guess. Would I be worried to be able to scale up the company again in terms of of headcount once we scale up production? No, I wouldn't. I think we are a very attractive company to our employees and also to applicants. We do see that also in the market, and I think we are in a very good position going forward. Okay. Can you give an update on Yara delivery, please? Are we gonna get a project update generally?

48:50 A specific update for the Yara project? Do you want me to to start that? Yeah. Okay. So the the Yara project, we're doing a similar thing to the project. We're choosing a split delivery model so that we can get cubes out supporting customer time frames and stacks will follow. So the bulk of those cubes are in production right now and and will be shipping within this financial year, but the revenue will be dropping into next year. Okay. There's a big demand spike yet to come. Is it a a next year event? And what needs to happen for demand to unlock? Are you confident in a solid response from the EU versus the inflation reduction act in The US?

49:38 So as I as I alluded to on my market side, there are some bottlenecks which ranging from creating the necessary infrastructure, having renewable energy production in place, and so on and so forth. I think all of these areas are currently being addressed in the different world regions. The US USA is pushing quite strongly ahead right now. But I think the European Union is looking into ways to also speed up the process on the Central European continent. And I have to say that I'm pretty confident with what I see. I mean, the momentum is strong. It's huge. And I would not see these things to be critical roadblocks. I think it's it's all surmountable bottlenecks, but we need to address them one by one, certainly.

50:27 Okay. So planned reduction in testing hours did not materialize for current product. When can we expect it to materialize? You indicate costs are compounded by high energy prices. Can you quantify the magnitude of higher energy prices on cost overruns? So I'll I'll take that. So so there's there's a number of expectations here. At the at the point where we get to volume manufacturing, are happy with the product. Do we need to test every stack a 100%? No. We will start to see a validated product going out. So there's a route which is about how many tests we do, but there's also a route to shortening test times through various pretesting processes.

51:12 At the moment, because we are somewhat immature as we go through that process, testing and test bay activity includes some of the debugging that should also happen upstream. So we will see that improve as we get manufacturing processes in place and improve. So the the costs are associated with running a two two megawatt skid assembly with three stacks in it for a period of time. And and we run it at various levels. So the intention here is over time to reduce the levels we run at. So we're only running at a 100% for a small amount of time. So I I won't put a figure to it right now, but maybe we can we can answer that as we respond to the q and a.

51:57 Okay. Yeah. Maybe maybe adding to that. So, I mean, that that is absolutely right. It's about trying to reduce the time of testing, but also try trying to reduce the number of tests we need to perform by improving bit quality and and need and leading to lower failure rates, obviously, in testing. Right? Very good. I understand the focus on near term and simplifying as opposed to diversifying and and make it more complex. But do you exclude using alternative technologies such as alkaline in the longer term? I'm too much a strategist to to say that I do exclude any strategic option going forward, but I can tell you that we are confident in the PEM technology we have, and this is our focused product, which we will get right.

52:48 And by getting our house house in order and doing the homework, which we need to do, we will be a very important market player, if not the most important market player in the payment sphere. What the future will brings will bring the future will show. Okay. Can you provide an update on Refine two and GigaStack? So I think on GigaStack, I did provide an update on as part of the slide. I had on the products, we have paused development of a new generation stack in order to be able to focus on our state of the art three m 30 bar stack. When we talk about Refine two, Refine two would also be built with the same 10 megawatt standard modules based on the three MEP e 31 technology as the ArduinoLending project which we announced.

53:38 So these are two two separate topics. Alright. This project is is progressing. We are in very constructive discussions with Linda and and Kjell like, and the project is progressing in the current conception phase. Very good. So a question for you, Andy. Can you give more of a breakdown in the inventory increase of 29,000,000 for the period? What is this for? Sorry. Could you say that again, James? Can you give a more detailed breakdown of the inventory increase of 29,000,000 in the period? What is this for? So the project cost overruns is the 29,000,000. Inventory is 15,000,000. So the project cost overruns, I mean, as we said in the presentation, some of it is to do with design not having been settled as we started to build. Some of it is to do with change of scope and exactly when we're going be delivering to site.

54:37 And then some of it is also about reworks associated with on-site work, subcontracts and packing. To put actual numbers to it, I think the slide probably did enough. We've got a a weight a risk weighted eight and a half million pounds, and the balance is split across all of those categories. Very good. You stopped signing new contracts last autumn. Given that you've now signed the RWA contract, are you in a position to sign further contracts? And have you received any order cancellations in the meantime? So maybe I start answering the second question first. So, no, there were no cancellations, and we do not anticipate to receive cancellations. We are in very constructive collaboration with all our customers to mitigate the project delays and issues we face in the projects.

55:24 And we are also thankful for that, as I wanted to say. When it comes to selling, that is indeed true. We decided at a certain point to reduce selling activities and not sign new orders in order to get the breathing time and breathing space required to take out our issues. As we announced, we have now signed the world's largest PEM electrolyzers in execution, which is two of them at the same time with a phased delivery approach. I think from here onwards, we will very carefully select which projects we will load into our organization from various viewpoints. One is we need to make sure that we don't overstress the organization, in particular also looking at what we have in front of us for refine too.

56:12 And we will also need to look at profitability of projects going forward. I think we are at a point where we have sold enough reference plans, right, where I think we are able to prove deliverability of our product and reliability going forward. And I think we need to strive towards a realistic pricing and and costing scheme. And therefore, and we very carefully select new projects to sign. Okay. A question for you, Andy. Can you give more detail on the revenue recognition timing of the new 100 megawatt Linden projects? And when do you expect SAT to complete? So those projects are going to be delivered throughout 2024 and 2025.

56:57 So revenue, I'll I'll not split out exactly where it is, will be f y twenty five and f y twenty six with SAT potentially falling into f y twenty seven, depending on exact timing. So we'll we'll update more as that as that project develops. Okay. Is the 268 megawatts of latest generation stack mentions to be an actual project delivery same as the backlog number that you used to disclose previously? Could you please explain the difference? Should I do that? Yes. It's the backlog number. We've historically also included items in negotiation and preferred supplier status. And actually, we think that led to confusion.

57:43 And also, know, in terms of focus, what we focused on, we focused on delivering what we've contracted. So it's absolutely right to talk about a contracted backlog, which is that two sixty eight megawatts. Right. Maybe adding to that, I have to say, coming from the customer side of the industry, it was always a little bit funny to see that so many companies on the in the electrolyzer sphere were putting out MOUs, LOIs, study projects or study phases projects as as as big announcements. And I think what we need to narrow that down is to real contracts signed and real orders. So when we speak about these two LinkedIn contracts, this is now real projects. Right? This is not just an announcement. And I think the the new ITM way of disclosing information will be very much it's it's signed when it's signed, and it's real when it's real. And and I think we need to step away a little bit from from inflating bubble, not only as a company, but as a whole industry of, you know, that that there's more than there actually is. Right?

58:41 So let's be down to earth realistic about what's going on in the market. Okay. Given project costs have been so detrimental to the financial performance, will you be more selective on the projects that you tender for? Are you gonna target those that are already funded or where you can deliver product and recognize revenue? In line with what I just said on the on the other question. Right? So we we will definitely select projects carefully. We we are partnering with Linde for the sales through our joint venture, ITM Linde electrolysis. So we do have a very strong sales and sales and business development arm in place also to screen projects and to check financial viability of of customers and also of of funding programs. However, it it is very rarely the case that funding can be secured on time.

59:31 So normally, you have to engage in a pre phase of the project, call it FEED or whatever it is, but it it it's still to a certain degree again with which project then gets the funding. Right? It's the which rule it out completely that you engage in a project which is not receiving funding. But as a rule of thumb, think, Linda as an organization, together with us winning projects, I think we got pretty good at at identifying which projects are real and which aren't. Okay. Would ITM ever look at the licensing model for for stack technology? Yes. No. No. We wouldn't. Okay. So where are you on the level of trust that customers have right now for the product? Do you think order intake can materially increase across calendar year '23?

1:00:23 So when it come when it comes to trust, I think what customers are looking for right now, having been a customer myself, is customers want to see running plans right now. They wanna see that that us and also our competitors in the market actually deliver on the promises we put out, meaning creating reference plans which show good performance. I think it will be all about delivering reference plans, but this this will be the most important determinator for trust and increasing trust. And hopefully, by being able soon to deliver on the projects we have under contract, we can be in a position to actually outperform on the trust point because we do have a product then which is working, in which we can prove that it is working. Okay. Andy, a question for you. It's a cash question.

1:01:11 Do we have enough cash to get us to profitability? So we showed a slide on the FY '24 guidance where we start to see cash outflows decreasing, partly with the unwind of working capital, partly with the impact of the twelve month priorities plan. There will continue to be investments for debottlenecking and on that new facility. But I mean, short answer, yes, we have enough cash. Okay. A question on revenue. How should we think about full year 2324 revenue given given the significant deferral of full year 2223 revenue? Yeah. Our focus absolutely is on the LOINR and YARA projects as flagship pilot projects that show showcase ITM.

1:02:03 So if I was looking at revenue now, I would be pinning my revenue expectations on those two projects particularly. Okay. Will ITM continue their partnership with Linda? As I as I said in the presentation, the Linde partnership is of very strategic nature and really important for us to scale up our business. And by living up to the promises we made and with our project commitments and also living up to the Lingen challenge ahead of us of delivering two times 100 meter. But we were, I think, rebuild some of the confidence and and issues which we sort of build back some of the confidence lost over the last two or three years. I mean, as I said, I was on the receiving end as well.

1:02:53 However, I mean, the relation is intact. We are working very collaborative and closely together. We always like, throughout all the year, we had plenty of employees here in our factory and our engineering teams to support us on on the way. Me having joined ITM, certainly also a trust building measure right now in the sense of I think my my work does count at Linde as being reliable. So I think when when I state something, people will also trust me, which is which is building back confidence to a large degree, I think, and which will be important for a strategic relationship. So I mean, answer to your short question, right, but is the relationship intact? Yes. Is it under stress? Also yes because of the project delays we have.

1:03:40 Do I think we can get it fixed and regain the confidence? Absolutely. And we will strive for that. Okay. Can you give more details about the new hires of head of engineering, please? Deep details in the sense of? So the announcement of the the new head of engineering, can you give us a little bit more background? So the the head of engineering we who who starts today is my my previous head of product management at Linde Engineering and a very capable person who I know that he would exactly fit into the profile we need in order to overcome the issues I mentioned on one of my slides with regards to professionalizing engineering. So it's a trusted professional who I know for many years and who perfectly fits into their role profile.

1:04:32 And having said that, he was also engaged over the last three years heavily with all the projects of ITM, also with the development of the 10 megawatt standard module I I mentioned. So it's not that he needs to find his way into the company for six months. He knows exactly where ITM stands and can start taking the issues on day one. K. And on that, the the two megawatt stack, how deliverable is that for large projects? It is I mean, we we just signed a contract or two contracts for two times 100 megawatt, which is definitely a very large project. And and we will deliver exactly this stack, the 0.7 megawatt stack in in an assembly of three. That's why it's called three MEP at 30 bar as part of these 10 megawatt standard modules to these large scale projects. So, yeah, it's absolutely deliverable.

1:05:26 Okay. What sectors are you going to focus on? Will it be ammonia and oil refineries? I wouldn't say that we focus on a particular sector. I mean, our sector is selling selling plants which produce green hydrogen. And certainly, I will be happy to to sell that together with with Linde to any customer interested. I I wouldn't narrow that down to certain industries. And so a question on Motive. Is ITM moving away from Motive Fuels to create a closer link with Linda in the future? No. So these are two separate topics. Right? So as as we announced, and and us are in very collaborative and positive discussions about how we see the future of of motive. We had a section on that in our RNS.

1:06:19 It's not that ITM tries to exit something alone to to align better to Linde. That is not the case at all. Has also nothing to do with Linde. While reviewing the current situation of the business, VTOL and ITM came to the same conclusion that the original intent to build up a larger network of fueling stations in The U. K. Has limited outlook. And we admit or we see that it would need significant investments if we were to expand to other world regions potentially, for example, Europe. And I think for doing so, ITM would would not necessarily be the right partner given that we need to get our horse in order and focus our own cash on fixing the fundamentals of our core business.

1:07:08 We told and us, as I said, we are in good discussions. This is not a tough negotiation at this point in time, and and we are investigating all the options which which are at the table from selling the business as a whole to discontinue it in good faith. And we certainly look forward to maintaining a strong relationship with Vitrol also after after that exercise. K. Where do you see the business in five years? Where does ITM sit in comparison with other hydrogen tech companies? That is is it in the Premier League of such companies such that it could be the forefront of exposing the this commercial opportunity? You would perceive me to be very careful in giving commitments to future, especially when it comes to numbers. But, certainly, I wouldn't I wouldn't sit here today. And I wouldn't have joined ITM if I didn't think that ITM can become one or the front runner in the industry.

1:08:03 K. So a question here from Anthony. Has the screen printing technology been robustly verified? So the technology itself is is verified as a standalone technology, obviously. As I said, we expect to deploy it in October, which means that we will get it well ahead of time and that we will make sure that we verify and test the screen printing prior to actual deployment into the factory then and replacing the current machines we have, the current way of doing it. No, we we haven't received the machine. Right? But once it's it's being received, we will certainly do proper validation as we do for all incremental automation steps upcoming. Okay. The high cost of electricity appears to put electrolysis at a disadvantage compared with the cost of blue hydrogen. So do you see an opportunity to reduce the electricity cost by using the energy of waste steam?

1:09:04 This is a little bit mixing up two questions or statement. So so I wouldn't necessarily say that that high energy prices favoring blue hydrogen because you also need energy for capturing c o two and sequestrating it under the earth. Right? It's it's not as easy as that. As you say, you know, if you just green needs electricity and blue doesn't, I think that's that's not how it works. What was the second part of the question? Could you read that again, please? It's about using waste steam. Waste steam. So when it comes to hot steam, I mean, there's a certain electrolyzer technology which is aiming for utilizing hot off steam, which is the SOEC, solid oxide technology. This technology does perform well in particular when you have hot off steam.

1:09:53 PEM and alkaline are considered cold electrolysis. Okay. Can we have an up update on the Snam relationship? So the relationship do you wanna take it? Please, sir. Okay. So the relationship with with Snam is is intact. We we it's it's a strategic nature for for ITM, and we I mean, the the question is very broad. Right? So, I mean, it's an intact relationship. We hope that we will receive one or the other order from from SNAM, and we'd be happy to support their agenda on on green hydrogen certainly. I don't know if you wanna add any No. I think that's fine. Okay.

1:10:40 Do we do we have an update on the Glasgow Whiteley project, the 10 megawatts? So we are working on it. I I wouldn't be in a position to disclose details about where we stand in the discussion negotiation. Certainly, that's a sensitive topic also for our customer. So I I normally do not comment on on sales projects in particular, but it's it's still an an ongoing effort. Okay. And are you continuing to work with universities around The UK? You wanna take that? We're we're doing we're doing some work with universities around The UK, but actually, there's also an incredible in house capability in terms of developing the technology that we have.

1:11:26 So, yes, there is some work, but also there's a lot of work being done by ITM. Okay. So another question for you, Andy. Can you give us the firm orders, please, excluding Loin at Yara and RWE? Sorry. I'm not sure I understand the question, James. No. It's a question from Chris. So can you give us the firm orders, please, excluding the in order to be orders? I think he has a calculated 22 megawatts outside of those orders. That sounds sounds correct. Yes. That's that's exactly right. K. Sorry. One question here from Sky. What was the difference in the the GEP 30 stack skid produced versus the MEP?

1:12:17 The GEP, the giga stack, would have been a stack of 2.5 megawatts per stack, and the MEP is a 0.7 megawatt stack. We would we we do bundle three of these stacks for a three MEP module, which is then two megawatts worth of capacity. And the giga stack would have been two giga stacks bundled to five megawatts. Okay. And there's a question From a technology sorry, from a technology viewpoint, the stacks would have been would have been similar. So when it comes to membranes and electrochemistry, similar technology performance. Okay. There are a number of private investors that were far from happy with the previous CEO's reasons for production delays and numerous excuses as to the drain on cash. Does the new CEO recognize that he has to be more transparent and actually give honest opinions on whether ITM will, in fact, be in a position to supply electrolyzers to existing customers in the near future?

1:13:14 I could just say yes. Right? Sorry. Just say yes. Yes. No. I mean, let let's be honest. Right? I mean, I do see that as well. And the reason why we have I hope that you perceive that as a step change in transparency today. And this was also important for us. We will continue exactly in that way to provide you the transparency of the actual situation of the business and of how we see the market going forward because there's nothing to hide. I mean, let's just be open where we stand and let's improve the business from here on and sketch a successful story about ITM, we will be able to do so. So, yes, I do absolutely recognize the need for transparency towards shareholders. Okay. Will the new head of engineering be responsible for production and manufacturing?

1:14:05 No. No. We this this is a different topic. Right? So from an organization viewpoint, we have an engineering organization. We which so this is technology, the actual engineering, which we call product management, and the validation piece around engineering. And then we have a separate manufacturing and procurement organization, which is which is a normal way of how you would organize such kind of business. Okay. I think we're coming towards the end. Sorry. Some more questions coming in. Just one likely, it's this one for you, Andy, again. I think you covered it, but likely revenue recognition timings associated with the 200 megawatt orders. Dennis mentioned a phasing, but no timings.

1:14:52 Yes. So I said deployment calendar year is 2024, 2025. So that's financial years ending April 25, April 26, with the potential for some to go into '27, but we'll update more as the project develops. K. And a question from Roger. Generally speaking, do you anticipate that your plans on in the near term will be held back by the difficulty in recruiting? No. I don't expect that. Right now, it's about, as I said, rightsizing. It's not so much about the new recruitment efforts. Certainly, we will have to bring in new capabilities in in some critical areas of the company, but it's not that that there are no people who want to join or no capable people who want to join every 100 companies nowadays. It's a very attractive business for you to be in.

1:15:43 Okay. And do you foresee problems, resistance to change in the culture of the business? And if so, how will you address them? I mean, you you can never rule it out completely. Right? And and certainly, a certain percentage of the organization will will have issues. But overall, I have to say what what I have seen over the last two months was really promising. We have a hugely dedicated and motivated workforce. I think what what we need as a company now is a steer into the right direction and especially setting priorities and narrowing focus. It's not that, you know, people at ITM and implicit ITM didn't want to deliver what was sold. Was just the sheer amount of of topics to work on in parallel with with limited priorities being set. And I think we will definitely change that and and hopefully, by that, we know also the employees to embark on the journey together with with us.

1:16:33 Okay. And and perhaps if I if I could offer on top of that, we're already seeing a change in the last two months. I haven't been before and post Dennis' arrival. Excellent. Okay. I think we're probably running out of time on that front. Thank you very much. That's great, James. Thank you, and thank you indeed for the questions. Course, the company review all the questions submitted and we'll publish those responses on the Investor Meet company platform where appropriate to do so. Dennis, just before redirecting the investors to provide you with their feedback, which I know is particularly important to you and the team, may I just ask you just for a few closing comments, please? Yes. Thank you. I think all was said. All what we wanted to say, we did say. So this leaves me with maybe reinforcing again that we perceive this today as, to a certain degree, a reset of the way we we work with shareholders and we work with the market in terms of transparency and and openness, also being realistic about what we do. And certainly, we will keep you updated on the progress of delivering against our twelve months priorities plan. Thank you very much for taking the time dialing in today, and thank you for your very constructive questions.

1:17:43 We have a lot to do, lot in front of us, but we will get it done, and we will be ready on time for the big demand spike to be seen in the market. Thank you very much for your attention. That's fantastic. Dennis, Andy, thank you indeed for updating investors today. Can On I company. On behalf behalf of of the the management team of ITM POWER PLC, we'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good morning to you all. Thank you.