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John Sheridan, Ballard Power Systems CEO presentation from his keynote address during the Opening Plenary Session of WHEC2012.

John Sheridan, Ballard Power Systems CEO presentation from his keynote address during the Opening Plenary Session of WHEC2012.

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Slides from keynote address - WHEC 2012 Presentation Transcript

  • 1. Hydrogen Fuel Cells: The New Paradigm NASDAQ:BLDP  TSX:BLD Putting Fuel Cells To Work John Sheridan, President & CEO June 4, 2012
  • 2. Overview NASDAQ:BLDP  TSX:BLD Hydrogen Fuel Cells: The New Paradigm Old Hydrogen & Fuel Cell Paradigm … circa 1995-2005 Transition Phase … circa 2006-09 The New Paradigm … today June 4, 2012  2
  • 3. Historical Industry View NASDAQ:BLDP  TSX:BLD Old Paradigm meant pre-occupation with long-term, ultimate future potential of fuel cells – limited focus on commercial execution: Unreasonable expectations for a ubiquitous hydrogen economy Focus on automotive market ‘prize’, ahead of technology readiness Belief that recognition of the need for clean energy is sufficient to drive the market Unrealistic valuations for fuel cell companies … despite no commercial products, no customers, no revenue RESULT: Customer value propositions not understood, market enablers not defined, business plans not delivered June 4, 2012  3
  • 4. Overview NASDAQ:BLDP  TSX:BLD Hydrogen Fuel Cells: The New Paradigm Old Hydrogen & Fuel Cell Paradigm … circa 1995-2005 Transition Phase … circa 2006-09 The New Paradigm … today June 4, 2012  4
  • 5. Corporate Restructuring& Repositioning NASDAQ:BLDP  TSX:BLD example - I. Shifted II. Re-Set III. Built Strong IV. Built Strategic Focus Cost Base Liquidity Position Commercial Capabilities•From: Long term, high •From: $75M in 2007 •$100M raised •Sales cost automotive fuel through monetization cell technology •To: current run rate of transactions •Product Line development <$35M Management•To: Clean energy, fuel •Marketing cell products for commercial markets •Customer Service RESULT: Re-vectored the business for commercial success June 4, 2012  5
  • 6. Product Cost Reductions NASDAQ:BLDP  TSX:BLD “All manufacturers have achieved large Relative Average Product Cost cost reductions over the past 2‐5 (compared to 2009) years. Cost reductions on the order of100 50% are the norm [over this period].” – Oak Ridge National Laboratory , 2011 75 ~60% 50 Cost reduction drivers - 25 Product design improvements Reduced sourcing costs 0 2009 2010 2011 2012E Manufacturing efficiencies Clear path to achieving positive margins and payback for customers June 4, 2012  6
  • 7. Strong Customer ValuePropositions NASDAQ:BLDP  TSX:BLD Products must deliver economic value propositions to customers first Example – use of Plug Power’s GenDrive® systems at Walmart DC near Calgary will drive operational savings of $1.3M over 5-years (without subsidy) Strong economic value propositions will drive fuel cell commercialization June 4, 2012  7
  • 8. Commercial Progress NASDAQ:BLDP  TSX:BLD Revenue (millions) Gross Margin (%) ~30% ~$85.0 $76.0 Material $65.0 Products 18% 16% $46.7 Contract 13% Automotive Fuel Cell Products 2009 2010 2011 2012E 2009 2010 2011 2012E Cash Operating Cost Base* (millions) Adjusted EBITDA* (millions) ~$75.0 2009 2010 2011 2012E * Measures operating expenses excluding stock-based ~$(5.0) compensation expense, depreciation and amortization, $42.1 restructuring charges $39.3 and acquisition costs. Low-$30’s * Measures EBITDA adjusted for $(26.2) $(22.3) stock-based compensation, transactional gains and Sales & Marketing losses, $(39.0) investment and other General & Admin income and acquisition R&D (net) costs. 2007 2010 2011 2012E June 4, 2012  8
  • 9. The Paradigm Shift NASDAQ:BLDP  TSX:BLD Commercially Disciplined Market Development … 1. Enhancing FC Product Performance 2. Continued reduction in Product Costs 3. Strengthening Customer Value Propositions 4. Development of Strong Channel Partners June 4, 2012  9
  • 10. Fuel Cell Sector Progress NASDAQ:BLDP  TSX:BLD Industry Fuel Cell Product Shipments Fuel Cell Product Shipments (MW) (units) +64% +108%300020001000 2008 2009 2010 June 4, 2012  10
  • 11. Back to the Future … NASDAQ:BLDP  TSX:BLD Corporate restructuring & repositioning PLUS ‘Tipping Point’ in Technical progress / product large-scale fuel cell performance improvements product deployment PLUS Sharp commercial discipline Underpinnings are now in-place to enable game-changing scenarios June 4, 2012  11
  • 12. Game-Changer:Home Generator NASDAQ:BLDP  TSX:BLD Program with AngloAmerican Platinum to develop reformate ‘home generator’ system To explore scope in electrification of rural South Africa > 4 million households with no grid connection Strong return for fuel cells vs. alternative off-grid solutions Flexible fueling options – LPG & methanol Ballard and AngloAmerican have partnered Resulting product could also address telecom supplemental power June 4, 2012  12
  • 13. Game-Changer: Automotive NASDAQ:BLDP  TSX:BLD Major progress in FCV programs over past 5 years Early-stage commercialization of fuel cell cars now attainable Projected in 2015-17 timeframe California leading the way with > 200 FCVs on the road now Projecting 50,000 FCVs in California by 2017, with ~70 hydrogen stations Expect to also see early fleets in Europe, Korea & Japan Mercedes-Benz F-Cell Vehicles June 4, 2012  13
  • 14. Summary NASDAQ:BLDP  TSX:BLD It has been a long journey for fuel cells – but, that’s generally the case for disruptive technologies … especially power technologies The old hydrogen and fuel cell paradigm ‘misread’ required underpinnings and timelines The past 5 years has seen a paradigm shift & tremendous progress … by Hydrogenics, FuelCell Energy, Ballard, Daimler, Ford, AFCC & others The new paradigm of ‘Commercially Disciplined Market Development’ is not just enabling profitability … it will also enable the big ‘game changers’ to come! June 4, 2012  14