A transformational year for Intelligent Energy

Transcription

1 Intelligent Energy Holdings plc Full-year results for year ended 30 September 2014 A transformational year for Intelligent Energy 2014 Intelligent Energy Limited The information in this document is the property of Intelligent Energy Limited and may not be copied or communicated to a third party, or used for any purposes other than that for which it is supplied without the express written consent of Intelligent Energy Limited. This information is given in good faith based upon the latest information available to Intelligent Energy Limited, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Intelligent Energy Ltd or any of its subsidiary companies

2 Disclaimer This presentation has been prepared on behalf of Intelligent Energy Holdings plc (the "Company") for information and discussion purposes only. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness. The Company is not under any obligation to update or keep current the information contained in this presentation. No representation or warranty, express or implied, is given by or on behalf of the Company or its respective subsidiary undertakings, affiliates, respective agents or advisers or any of such persons affiliates, directors, officers or employees or any other person as to the fairness, accuracy or completeness of the information, or of the opinions, contained in this presentation and no liability is accepted for any such information or opinions. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER, INVITATION, PROMOTION OR RECOMMENDATION TO PURCHASE OR TO SUBSCRIBE FOR, OR ANY OFFER OR INDUCEMENT OR INVITATION OR COMMITMENT TO PURCHASE OR SUBSCRIBE FOR (OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR), ANY SHARES IN THE COMPANY OR ANY SECURITIES IN ANY OTHER ENTITY. Without limitation to the foregoing (and subject to certain limited exceptions) this presentation is not for use in the United States and may not be transmitted, published or otherwise distributed in the United States. The Company's securities have not been and will not be registered under the US Securities Act of 1933 or under any applicable securities laws of any state or other jurisdiction of the United States. Certain statements (or information) included in this document constitute, or may constitute, forward-looking statements and / or financial projections which can be identified by the use of terms such as may, will, should, expect, anticipate, project, estimate, intend, continue, target or believe (or the negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements and no reliance should be placed on such forward-looking statements. No statement in this presentation is intended to be nor may be construed as a profit estimate or profit forecast Intelligent Energy Limited 2

3 Agenda 1. Overview 2. Financial Highlights 3. Operating Environment i. Motive ii. Distributed Power & Generation iii. Consumer Electronics Dr Henri Winand Chief Executive Officer 4. Outlook 5. Q&A 6. Appendix John Maguire Chief Financial Officer 3

4 Intelligent Energy Holdings (IEH) 400 patents granted and 600 pending Scalable business model Flexible and efficient power systems Mass market products in high growth sectors One of a kind: quoted fuel cell company with blue-chip OEM partners that offers exposure to three non-correlated mass markets via a scalable, IP-based business model 4

5 Overview 2013/14, a transformational year Ended the year with strong balance sheet of 88.9 million, no debt Successful capital raising activities GIC acquired 11.6% of enlarged share capital of the Company with 54.4 million investment Admission to the London Stock Exchange Main Market in July million raised by the Initial Public Offering Two new divisions (DP&G and CE) have been launched to drive growth DP&G division has over 10,000 revenue generating telecom tower sites in India under contract, exit at 30 September equivalent to annualised revenue of circa 50 million CE division launched its Upp TM portable hydrogen fuel cell power solution, in UK Apple Stores on 19 November 2014 Motive division Added a new Japanese OEM customer (in addition to Suzuki) Signed a material option licence agreement with its European Premium Car Maker customer Top British patent applicant for energy and storage technologies in

6 Financial Highlights

7 Consolidated income statement * The Company uses adjusted EBITDA (Earnings before Interest, Tax, Depreciation, Amortisation, share of joint venture results, equity fund raising costs and IFRS2 sharebased payment charges) as an indicator of trading profitability and a proxy for operating cashflow, before any cash movements relating to investment, tax, funding and changes in working capital Accelerating H2 revenue (note: material one-off non-recurring costs associated with IPO) 7

8 Consolidated statement of financial position ( m) ( m) Non-current assets Cash and deposits balance Current assets Total assets Total liabilities (17.6) (29.7) Net assets Strong balance sheet of 88.9 million cash, no debt 8

9 Millions Year-on-year revenue % Year-on-year comparison distorted by an absence of IP-related revenues (upfront sale of access to IP to Suzuki now fully recognised) 10 Growth in non-ip revenues as two new divisions (CE and DP&G) began trading in H2 from a standing start Motive IP-related revenues are lumpy IEH s technical advantage, existing contracts and customer pipeline in the motive arena are expected to lead to more IP-related revenues with inherently uncertain timing Motive IP-related revenue Very substantial option value residing in the Motive division 9

10 Millions H1 and H2 2013/14 revenue 12 H H Motive 3.5m 5.1m 10 8 DP&G 4.9m CE < 0.1m Total 3.5m 10.1m CE H1 DP&G H2 Motive Significant growth in H2 vs H1 as DP&G and CE began to contribute DP&G and CE revenues driven off the back of launch investment in 2012 to 2014 DP&G exited the FY with over 10,000 sites, majority under interim contract, equivalent to an annualised revenue of circa 50 million Upp product officially launched in UK Apple stores 19 November 2014 Revenues at an inflection point 10

11 Highly profitable opportunities 11

12 IEH: Roadmap Intellectual Property Core IP Application IP Remote Monitoring IP IEH & Partner Funded Co-Funded by Partner IEH Owned Typically Owned by IEH IEH Funded IEH Owned TODAY Revenue Current/ Near Term Medium / Long Term Motive division (high margin, long term licences) Up-Front Co-Investment Development and Up-Front Licensing Revenues OEM & Tier 1 Licences DP&G division (long term: predictable revenues) Energy Generation at Scale Margin Expansion and Monetisation Migration to Higher Margin Licensing Model CE division (long term: royalty and IP related revenues) Upp Sales & Products Embedded Device Licences Commercialisation of technology now driving material revenue growth 12

13 Operating Environment

14 Motive Division

15 CO 2 Emissions (gco 2 / km) CO 2 Emissions (gco 2 / km) Drive to efficient clean power With Tightening Emission Legislation Global CO 2 emission targets FCEVs Provide a Compelling Solution Automotive drivetrains emissions and range 200 Global CO 2 Emission Targets 200 Global CO 2 Emission Targets Stage II & III Stage II & III Only FCEVs can deliver what both legislators and consumers want 15

16 Motive: Status Using our unique and proprietary cooling technology, IEH significantly exceeds the competition in power density Low Power: Air-Cooled Technology Intelligent Energy Benchmark IEH Competitor Power (kw) Volume (I) Weight (kg) Volumetric Power Density (kw/i) Gravimetric Power Density (kw/kg) IEH Client Own FC Technology European Premium Car Maker Japanese Car Maker 2014 Competition A (21kW) B (125kW) DoE Tech Targets (2017) C (100kW) D (102kW) E (130kW) No Known Proprietary FC Technology IEH: world leading fuel cell technology for a lower cost 16

17 Motive: Achievements Delivering on agreed milestones Added further blue-chip Japanese car manufacturer customer (in addition to Suzuki) Signed material option licence agreement (OLA) with existing European customer Further multi-year, joint development agreement signed with Suzuki Introduced a pre-production level, significantly more powerful FC power system (Gen4) Designed for easy integration into both two- and four-wheeled vehicles Reinforced world-leading power density across technology platforms Air-cooled (AC) technology (Gen 4), achieved 30% increase in stack power density over previous generation Evaporatively-cooled (EC) technology provides a corresponding improvement in excess of 15% from the baseline of the prior year as a result of technology development carried out in the year Further successes with EC technology in automotive applications Proven system-level performance at gross power levels in excess of 100kW Confirmed flexibility of application for both single-stack and twin-stack system configurations Successful delivery of a key customer milestone installation, operation and demonstration of twin-stack system in client s vehicle Ongoing refinements in technology and performance further enhances IEH revenue prospects 17

18 Motive: Future steps Progress existing customers along the development and commercial path Ongoing discussions with potential new customers who do not have their own FC technology Opportunities to address large platform of battery electric vehicles through introduction of fuel cell range extenders Other top-tier car makers have recognised the benefits of fuel cell technology and have publicly committed to launching FCEVs in the next one to two years FCEV launches will increase pressure on those without fuel cell technology to contract with IEH 18

19 Distributed Power & Generation

20 Drive to efficient distributed power Large centralised AC generation Smaller, distributed generation and beyond Power generation gets more distributed fuel cells have power-density advantage 20

21 DP&G: Achievements Announced agreement with Ascend, which has over 4,000 tower locations Announced agreement with Microqual: expected to deploy equipment on up to 5 10% of its 70,000+ electricity transmission towers over the medium-term In total more than 10,000 sites under contract Estimated invoiced revenue per site of 4,000 to 5,000 on average per annum Equivalent to an annualised revenue of circa 50 million Announced partnership with Hydro Industries Technology can be powered by IEH and deployed at selected sites over next five years Generated revenue during H2 2013/14, plus: Identified and delivered material improvements in power availability and fuel consumption at telecom tower sites under contract Business resourced with experienced Indian domiciled management Validated IEH s ability to operate and improve operations on existing sites DP&G: now generating substantial revenue and primed for growth 21

22 Diesel usage, Indexed Time of power outages, Indexed DP&G: Executing on the business plan Average Capex EBITDA Build-up: Telecom Tower Sites Not to scale Key driver for customer 25 Base EBITDA (diesel) Efficient diesel site Fuel cell site Additional customers 0 July August September October 100 Key driver for site economics 95 Step 1 Step 2 Step 3 Step 4 Buy existing cash generating diesel generator estates Asset financing Supply contracts for sale of primary power for telecom towers Outsource maintenance to existing providers Improve efficiency of operations via remote monitoring Sell energy on a usage basis Manage capex Build scale Gradually roll-out hydrogen fuel cells to replace legacy diesel generators Generate new revenues from sale of excess power (e.g. for ATMs, water purification) Minimal additional capital cost EBITDA margin of 50-55% in the mediumterm July August September October 22

23 DP&G: Next steps 2015 and beyond With first fuel cell field tests in India in 2011, the first fuel cell power systems are expected to be deployed in a phased roll-out from the end of Q2 and increasing throughout 2015 Ability to leverage the Suzuki-IEH, ready-to-scale, fuel cell manufacturing capabilities at the right point on the price/volume curve Exploring sites for addition of second customers per site e.g. Hydro Industries Medium-term target of 125, ,000 sites contracted remains on track a revenue opportunity of circa 650 million per annum Geographic expansion outside India and potential to apply know-how to other sectors e.g. ATMs A total addressable market worth many billions per annum 23

24 Consumer Electronics Division

25 Drive to efficient portable power 35% efficient Further 20-30% losses Further 2-25% losses 18-27% total efficiency Freedom from the grid, using efficient fuel cell technology 25

26 CE: Upp in UK Apple Stores from November

27 CE: Achievements Upp now available in UK Apple retail stores and online at BeUpp.com Consumer field trials in emerging markets revealing that Upp users increased their number of calls and data transferred by 31% and 37% respectively Upp supported by the Upp App available on ios and Android Joint acquisition of substantive CE-related IP with an International Electronics Company Significant development of metal hydride technology, if somewhat more time consuming than planned, off-shoring production to Asia and commercially, continue to recruit Cartridge Exchange points Upp received CE and CSA certification and declared fit for carriage on aircraft Laptop-embedded fuel cell demonstrated September 2014; evidences future direction and scale of opportunity for CE division 27

28 CE: Next steps 2015 and beyond 2014 Upp launch in UK Apple Stores Cartridge exchange partners signed 2015 Upp 2 launch Disposable cartridge launch Further refuelling partners Additional Upp distribution partners in new geographies Medium-term Embedded fuel cells with external fuels Production royalty agreements with third parties Medium-term Embedded fuel cells with embedded fuels Increased royalty revenues from IP Portable (bottled) energy: like bottled water, and worth 100s billions per annum 28

29 Outlook Progress for DP&G in India provides increased confidence that this division will grow strongly during the year ahead The CE launch of Upp in UK Apple retail stores on 19 November provides a sound platform for this new product category. The CE division plans to introduce further product refinements in the year ahead, as well as to expand Upp into new sectors and geographical areas Motive expects to add further to its blue-chip OEM customer base and to continue to work closely with its existing customers in order to secure next phase commitment with these customers Divisional outlook underpins confidence in strong year-on-year revenue growth and subsequent narrowing of losses, as past and current investments in the two new divisions start to yield results in the year ahead 29

30 Q&A

31 Appendix

32 Commercialisation Technology Validation General Developments IEH: History 1980s One of Europe s first R&D teams in PEM fuel cell technology at University of Loughborough Developed UK s first kw-level PEM fuel cell stack IEH formed and acquired IP from University of Loughborough Partnership with Boeing to produce fuel cells for prototype aircraft Acquisition of US IP and expertise of MesoFuel Inc. and Element One Enterprises Inc. IEH fuel cells successfully integrated into Boeing prototype aircraft (CAA approved) The Suzuki Burgman fuel cell scooter obtains whole-vehicle type EU approval IEH and Suzuki enter new partnership to develop prototype hydrogen fuel cell motorcycles IEH commences cooperation with EPCM IEH and Suzuki establish JV to develop and manufacture fuel cell systems 32

33 Commercialisation Technology Validation General Developments IEH: Today, beyond the tipping point 1980s GIC invests 37.8m in IEH, c. 10% of the Company IPO on LSE main market raising 55m and additional GIC investment of 16m Successful test of vehicle with integrated fuel cells for EPCM s Board of Directors Completion of ready-to-scale fuel cell production line in Japan in JV with Suzuki Successful trial of Upp Successful certification of Upp for aircraft use FC power target met for EPCM Demonstrated embedded FC for Consumer Electronics Acquisition of patent IP portfolio together with IEC Contract with Ascend Telecom Towers First Microqual site operational Agreement with JCM for FC development IEH and Etisalat announce energy device collaboration IEH and Microqual sign telecoms collaboration agreement Partnership with Hydro Industries in India to power water purification technology Launch of Upp in UK Apple stores and mobile app OLA signing with EPCM Technology innovation has accelerated; commercialisation now 33