INVESTOR PRESENTATION MARCH 13, Page 1

Transcription

1 INVESTOR PRESENTATION MARCH 13, 2017 Page 1

2 Page 2 Forward Looking Statements This presentation contains forward looking statements, including: estimated revenue; gross margin; cash operating costs; adjusted EBITDA; product cost reductions; liquidity; market size and growth projections; customer value propositions; and expected sales and product shipments. These forward looking statements reflect Ballard s current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any such forward looking statements are based on Ballard s assumptions relating to our financial forecasts and expectations regarding our product development efforts, manufacturing capacity, and market demand. These forward looking statements involve risks and uncertainties that may cause our actual results to be materially different, including, general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard s future performance, please refer to our most recent Annual Information Form. Readers should not place undue reliance on Ballard s forward looking statements and Ballard assumes no obligation to update or release any revisions to these forward looking statements, other than as required under applicable legislation. All amounts are consolidated to include Ballard Power Systems Europe A/S and Protonex Technology Corporation results and are in U.S. dollars, unless otherwise noted.

3 Page 3 Investment Thesis 1. Global Leadership Position in Fuel Cells 30 years in PEM technology; unrivalled field experience; brand strength 2. Converging Macro Trends GHG reduction; air quality improvement; electrified propulsion systems BALLARD INVESTMENT RATIONALE 3. Diversified Business Model Multiple growth platforms & applications; geographic reach 4. High Growth Trajectory Organic growth ($87M committed orders for 2017 delivery) + M&A 5. Capital Efficiency China strategy; gross margin expansion; strong liquidity 6. Embedded Optionality Long-term exposure in automotive, UAV s & military

4 Ballard s Global Leadership Position in Fuel Cells Page 4 WHAT WE DO Ballard is a changing force in clean energy through global market leadership in PEM fuel cell technology & products SELECT FUEL CELL PRODUCTS CORPORATE BACKGROUND 38 years experience 24 years on TSX, 22 on Nasdaq 475 employees 2,000 patents & applications Most recognized brand globally in PEM fuel cells 4 strategic shareholders UNRIVALLED EXPERIENCE Liquid-cooled fuel cell stack 30kW fuel cell engine Air-cooled fuel cell stack Ballard HQ facility Vancouver, B.C., Canada 3.0M MEAs manufactured 320MW fuel cells shipped 10M kilometers bus revenue service 120M hours forklift run time 1M hours stationary system backup power run time

5 Strategic Shareholders Validation from Market Leaders Page % of Ballard shares held by 4 leaders in their respective industries. % O/S* 9.9% 2.9% 2.7% 1.9% Zhongshan Broad Ocean Motor Co. Ltd. invested $28.3M in August 2016 (2 year hold period) Leading global manufacturer of motors and vehicle powertrain parts for EVs and other applications o Produces 50M motors annually for blue chip customers that include King Long, BAE Systems, Dongfeng, General Motors, TATA, Caterpillar, Trane,. o Exports to 39 countries on 5 continents United Technologies Corporation acquired 5.1M shares in April 2014 Anglo American Platinum Ltd. acquired shares valued at $4M in March 2014 Nisshinbo Holdings Inc. acquired shares valued at $5M in October 2015 * Total O/S = 174.1M shares as of end-q3 2016

6 Tailwinds In Our Sails Timely Convergence of Macro Trends Page 6 Increased Focus on Climate Change, Air Quality & Energy Security Ratification of UN Convention on Climate Change (Paris Accord) Growth of Clean Energy Options Major cities looking to ban diesel including London, Paris, Madrid, Athens, Mexico City, metro centers in China Complementary Role for Fuel Cells in Electrified Propulsion Including mass transit & commercial vehicles in China, Europe and U.S. Resurgence of Interest in Fuel Cell Cars Global automotive OEM s pursuing fuel cell programs including Toyota, Hyundai, General Motors / Honda, Daimler, VW Group, China OEM s

7 Diversified Business Model Multiple Growth Platforms Page 7 POWER PRODUCTS Delivering high value, clean energy products that reduce customers costs and risks Cross- Leveragable TECHNOLOGY SOLUTIONS Solving difficult technical and business challenges in customer s PEM fuel cell programs Unnamed Global Auto OEM s

8 Diversified Business Model Extensive Applications & Geographic Reach Page 8 $85.3M 2016 REVENUE. APPLICATIONS GEOGRAPHIC REACH Backup Power ($4.9M = 6%) POWER PRODUCTS PLATFORM ($55.7M = 65%) Other ($4.8M = 6%) TECHNOLOGY SOLUTIONS PLATFORM ($29.6M = 35%) Heavy Duty Motive ($26.5M = 31%) EUROPE ($18.8M = 22%) CHINA ($33.4M = 39%) Material Handling ($12.9M = 15%) NORTH AMERICA ($28.3M = 33%) Portable Power ($11.4M = 13%)

9 Penetrating High Growth Markets Greenshoots + Longer Term Opportunities Page 9 $85.3M 2016 REVENUE. SCALING THE BUSINESS: Organic growth (2017 record committed orders) POWER PRODUCTS +51% Y-Y Revenue Growth +122% +236% $85.3M $26.5 $11.4 Heavy Duty Motive Portable Power APPLICATIONS AND +2% $12.9 Material Handling Complementary M&A transactions (Q4 15 Protonex acquisition) TECHNOLOGY SOLUTIONS -15% +31% $4.9 $29.6 Backup Power Technology Solutions

10 Page 10 Ballard s China Strategy Supply Chain Localization: Risk adjusted Capital light IP protected Addressing Accelerating Demand for Green Energy with a Compelling Solution MEA Production Remains at N/A HQ Fuel Cell Stack Manufacturing Localized in China Licenses For Fuel Cell Engine Assembly Membrane Electrode Assembly ( MEA ) represents 60%+ of fuel cell value IP embedded in manufacturing MEAs to be sold to JVCo in China China FCvelocity TM 9SSL JVCo in place (90% Synergy / 10% BLDP for $1M, no BLDP capex or opex) $170M revenue to Ballard over 5 years (min. annual MEA take or pay volumes for $150M) Operation on track to begin late 2017 Technology transfer, license & supply deals, including Broad Ocean in 3 cities with $25M estimated value to Ballard over 5 years Broad Ocean deal expected to close in Q LARGE ADDRESSABLE MARKET Aggressive climate change targets in China s 5 Year Plan Significant subsidies for fuel cell products & infrastructure (fuel cell bus cost approx. equal to diesel bus) Largest mass transit bus market globally (~300,000 units built in 2015) SIGNIFICANT EARLY DEMAND Ballard order for engines to power >300 fuel cell buses Broad Ocean order for 10,000 commercial fuel cell vehicles Ballard development program with CRRC, largest global train OEM

11 Ballard s China Strategy Revenue Streams Page 11 Accelerating demand for clean energy transportation will drive growth in revenue to Ballard from MEA sales, licensing & recurring royalties. REVENUE Fuel cell stacks & engines from N/A HQ until production line at JVCo is operational (expected late 2017) Technology transfer to JVCo & other customers MEA shipments from N/A HQ to JVCo. once operational License fees for engine assembly MEA shipments from N/A HQ to JVCo high volumes Recurring royalties on assembled engines Potential additional licenses for engine assembly Tech transfer fees License fees MEA shipments from N/A HQ to JVCo high volumes Recurring royalties on assembled engines TIME

12 Embedded Optionality Page 12 Longer term opportunities in future growth areas include Automotive Currently working with 4 global auto OEMs, including Volkswagen Group / Audi AG Audi's H tron Quattro concept vehicle Unmanned Aerial Vehicles (UAV s) Testing our fuel cell propulsion system with Insitu, a Boeing company, plus another major aerospace customer Insitu Scan Eagle UAV Military Power Manager products enable optimized power utilization by soldiers in the field, while reducing battery weight Squad Power Manager SPM 622

13 Quarterly & Full Year Revenue ($M) and Gross Margin (%) Page 13 REVENUE GROSS MARGIN $ % 30% 29% 30% 28% 25% $ % 19% 18% $ % 10% $9.3 $16.1 $11.2 $17.6 $20.6 $16.0 $20.0 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year

14 Quarterly & Full Year Adjusted EBITDA ($M) Page 14 ADJUSTED EBITDA Q1 Q2 Q3 Q4 Full Year $1.8 $(2.9) $(2.4) $(1.5) $(2.9) $(5.1) $(4.8) $(7.2) $(9.9) $(4.9) ex restructuring charges $(15.3) $(7.6) ex restructuring charges

15 Quarterly & Full Year Operating Leverage (%) Page 15 CASH OPERATING COSTS AS PERCENT OF REVENUE 85% % 60% 48% 51% 42% 41% 39% 40% 27% Q1 Q2 Q3 Q4 Full Year

16 Liquidity Page 16 Full Year 2016 Cash Used by Operating Activities improved 85%, to ($3.9)M End 2016 cash reserves of $72.6M, +81% from end 2015 o No debt CASH RESERVES ($M) $72.6 $23.7 $40.0 End-2014 End-2015 End-2016

17 Page 17 Investment Thesis 1. Global Leadership Position in Fuel Cells 30 years in PEM technology; unrivalled field experience; brand strength 2. Converging Macro Trends GHG reduction; air quality improvement; electrified propulsion systems BALLARD INVESTMENT RATIONALE 3. Diversified Business Model Multiple growth platforms & applications; geographic reach 4. High Growth Trajectory Organic growth ($87M committed orders for 2017 delivery) + M&A 5. Capital Efficiency China strategy; gross margin expansion; strong liquidity 6. Embedded Optionality Long-term exposure in automotive, UAV s & military

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