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Plug Power Inc. - Infinite drive - May 2017
- 1. Copyright 2017, PlugPower Inc. May 2017 Infinite Drive
- 2. 2 Safe Harbor Statement Thiscommunication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties about Plug Power Inc. (“PLUG”), including but not limited to statements about PLUG’s expectations for 2016 and 2017, including GAAP revenue, number of GenDrive shipments, number of GenFuel sites, number of ProGen modules, GAAP gross margin, bookings and net cash use, future product cost reduction, PLUG’s growth in multi-site customers, PLUG’s entry into new markets and products, including but not limited to ProGen and the electric vehicle market in China and the viability and growth of such market. You are cautioned that such statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will have been achieved. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. In particular, the risks and uncertainties include, among other things, the risk that we continue to incur losses and might never achieve or maintain profitability; the risk that we will need to raise additional capital to fund our operations and such capital may not be available to us; the risk that our lack of extensive experience in manufacturing and marketing products may impact our ability to manufacture and market products on a profitable and large-scale commercial basis; the risk that unit orders will not ship, be installed and/or converted to revenue, in whole or in part; the risk that pending orders may not convert to purchase orders, in whole or in part; the risk that a loss of one or more of our major customers could result in a material adverse effect on our financial condition; the risk that a sale of a significant number of shares of stock could depress the market price of our common stock; the risk that negative publicity related to our business or stock could result in a negative impact on our stock value and profitability; the risk of potential losses related to any product liability claims or contract disputes; the risk of loss related to an inability to maintain an effective system of internal controls or key personnel; the risks related to use of flammable fuels in our products; the cost and timing of developing, marketing and selling our products and our ability to raise the necessary capital to fund such costs; the ability to achieve the forecasted gross margin on the sale of our products; the risk that our actual net cash used for operating expenses may exceed the projected net cash for operating expenses; the cost and availability of fuel and fueling infrastructures for our products; market acceptance of our products, including GenDrive, GenSure and GenKey systems; the volatility of our stock price; our ability to establish and maintain relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; the cost and availability of components and parts for our products; our ability to develop commercially viable products; our ability to reduce product and manufacturing costs; our ability to successfully expand our product lines; our ability to successfully expand internationally; our ability to improve system reliability for our GenDrive, GenSure and GenKey systems; competitive factors, such as price competition and competition from other traditional and alternative energy companies; our ability to protect our intellectual property; the cost of complying with current and future federal, state and international governmental regulations; risks associated with potential future acquisitions; and other risks and uncertainties referenced in our public filings with the Securities and Exchange Commission (the “SEC”). For additional disclosure regarding these and other risks faced by PLUG, see disclosures contained in PLUG's public filings with the SEC including, the "Risk Factors" section of PLUG's Annual Report on Form 10-K for the year ended December 31, 2015. You should consider these factors in evaluating the forward-looking statements included in this presentation and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and PLUG undertakes no obligation to update such statements as a result of new information.
- 3. 3 Our Mission Changing theway the world moves by developing industry-leading hydrogen fuel cell energy solutions for high growth markets around the globe
- 4. 4 Plug Power isthe Leader in Hydrogen and Fuel Cell Technology 1st to create a market for HFC technology 150 HFC patents 5.8MM+ Hydrogen fuelings 15K+ units in the field 122MM+ operating hours 70% reduction in cost profile since 2013 >3x revenue growth since 2013 80% Blue Chip Customer Base
- 5. 5 Success in OurFirst Market: Growing Share in Material Handling Applications • Plug Power owns 95% of current market share for hydrogen fuel cells • Plug Power’s technology drives productivity and streamlines operations for our customers ❖ Constant power and improved performance drives improved operator efficiency ❖ Reduced downtime due to battery changes/charging ❖ Space savings ❖ IoT proactively identifies issues to maximize uptime The global material handling market represents a $30 billion total market opportunity Technology drives performance Reputation attracts new clients Growth enables re-investment in our business
- 6. 6 44 installed sites 150+hydrogen dispensers 10k fuelings/day, 5M+ total Fueling infrastructure and fuel delivery Completesolutiondrivescustomeradoption 15,000+ units in the field Drop-in replacement 122M+ operating hours Hybrid electric fuel cell solution for forklifts 98+% uptime performance IoT data collection, monitoring and control driving efficiency and uptime Complete service and maintenance Full Suite of Products Accelerates Customer Adoption Industry-leading high-power and air-cooled designs Lower cost / higher performance 35+ years of Plug Power IP Hybrid fuel cell engines for a variety of applications
- 7. 7 Success in OurFirst Market: Loyal and Repeat “Blue Chip” Customers M u l t i - multi-site & repeat customers
- 8. 8 Case Study: Walmart 2014 •Initial GenKey contract signed Pottsville, PA • GenKey installed in 6 distribution centers • 1,700 GenDrive units 2015 • 9 GenKey sites added • >1 million fuelings over the year 2016 • Total of 27 sites commissioned • 2,500 GenDrive units deployed • >5,500 trucks in service across North America 2017 and beyond • Partnering to continue expansion • >80 uninstalled sites Pre-2014 • 580 GenDrive units in the field Plug Power’s relationship with Walmart represents the largest hydrogen enabled fleet in the world “We are pleased with the performance of the hydrogen fuel cells that we have been operating and are excited to expand our program with Plug Power.” – Jeff Smith, Senior Director for Walmart Logistics
- 9. 9 Background • Plug Powerand Amazon actively engaged in Spring, 2016 • Amazon recognized Plug’s value proposition, including the ability to enhance warehouse productivity First Site Success • Under GenKey contract, units were shipped to a site in Q3’ 2016; site went live in Q4 • Completed system installation in 8 weeks Multi Site Agreement Announced • $70 million estimated revenues in 2017 Investment in Plug Power • Warrant structure connected to cash payments; full vesting of warrant upon $600 million aggregate spend Plug Power Signs Strategic Agreement with Amazon Amazon establishes multi-year, multi-site customer agreement with Plug Power
- 10. 10 Plug Power is… Leadingthe commercialization of hydrogen fuel cell technology Leveraging our proprietary and flexible ProGen fuel cell engine platform Expanding our market position in material handling applications Replicating success achieved in first market Delivering strong and predictable revenue and bookings growth
- 11. 11 The global electricvehicles market is expected to reach $334 billion by 20241 The Future of Mobility is Electric Robotics & Drones Autonomous Vehicles Commercial Trucks Commercial Buses Industrial Mobility Industrial and commercial electric vehicles today represent 60% of the value of the electric vehicle market2 1. IDTechEx Market Research: “Electric Vehicles Change the World 2017-2037” 2. Research and Markets: “Industrial and Commercial Electric Vehicles on Land 2017-2027" EV Use Cases Will… ✓Have high utilization ✓Require long run times ✓Be fully sensored ✓Be constantly connected ✓Have zero emissions ✓Leverage renewable fueling options ✓Connect and interact with the grid
- 12. 12 Fuel Cells willbe a Viable Player in Addressing the Trends Shaping the Motive Industry Seeking Efficiency Through Vehicle… Electrification Fuel Cells: Range is not compromised, reduced emissions, shorter charging times ❖ Plug fuel cells will replace batteries in the forklifts used in multiple Amazon distribution centers Asset Utilization Fuel Cells: Consistent utilization to meet consumer demand; fuel costs scalable over larger fleets, centralized fueling, automation ❖ Plug Power services the BMW fleet, which has its trucks in operation 24/7 Autonomy Fuel Cells: Sensor-equipped, range, persistent use ❖ Plug Power is powering automatic guided vehicles at P& G factories Last Mile Fuel Cells: Ability to use within delivery vans, robots, drones, hastening delivery times ❖ FedEx delivery vans incorporating ProGen engines, save time spent on fueling, and without compromising range Asset Utilization Last MileAutonomy Electrification Hydrogen Fuel Cells Are a Logical Enabler Each trend is driven by the value individuals place on time, reliability, convenience, predictability, and cost savings
- 13. 13 China Represents aMassive Opportunity Plug Power’s experience and expertise is directly translatable to this growing market • >$100B of new investment in 2015 – more than US, UK and Japan combined • Large push to combat pollution and reduce global carbon footprint • Fuel cells have been identified as a part of their 5 year plan with significant subsidies proposed for FC vehicles at state and provincial levels The world leader in investing in new energy technologies • 10x increase in EVs from 2013 to 2015, driven by commercial vehicles • Fuel cells provide longer range, faster fueling and better energy density for high-performance and commercial/industrial applications Building on momentum of battery EV expansion 2. Bloomberg New Energy Finance 8 7 10 36 128 0 100 200 300 400 500 2011 2012 2013 2014 2015 North America Europe China Japan RoW Electric Vehicle Sales (Thousands)2 • Three-way MOU signed in November, 2016 with Furui (leader in CNG and LNG infrastructure), and a “Big Three” Chinese vehicle manufacturer • Scalable rollout with attractive margin profile • Continuing conversations with other potential partners with a focus on new markets, manufacturing and technology R&D Plug has made significant progress in this market 8.3 39.6 102.9 0 20 40 60 80 100 120 2005 2010 2015 China New Investment in Renewable Energy ($Bn)1 1. Global New Investment in Renewable Energy by Region, 2004-2015, $BN United Nations Environment Program
- 14. 14 New Application: Range ExtenderProduct Development Plug Power leverages product expertise to share similar designs and components FedEx • More than double current battery-only range of 60 miles to 150 miles • First ProGen modules shipped for integration into truck in February 2016 • 19 additional units expected to be deployed (2017-2018) Leading Chinese vehicle manufacturer delivery truck • Will increase range of current battery-only truck from 90 miles to 160 miles • Prototypes in May of 2017 • Success leads to first order of 500 units • Three-way MOU to deploy ~13,500 commercial fuel cell vehicles over three years
- 15. 15 Total GenKey InstallsCumulative GenDrive Units Daily Hydrogen Fuelings (Thousands) Bookings (Millions) Rapidly Growing Sales & Deployments - 8 26 42 44 2013 2014 2015 2016 Q1 2017 4,400 6,700 10,600 14,800 15,200 2013 2014 2015 2016 Q1 2017 $75 $150 $205 $280 $65 2013 2014 2015 2016 Q1 2017 150 1,200 4,600 5,800 2014 2015 2016 TODAY Note: 2017 estimates are available in the guidance posted in our latest 10Q filing
- 16. 16 $21.5 $9.4 $24.0 $31.4 $38.4 $15.3 $20.5 $17.6 $32.6 $15.2 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 Q4 '14 Q1'15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 GAAP Quarterly Revenue Commenced utilization of new Power Purchase Agreement (“PPA”) financing in 1Q’16 Increased Visibility with Recurring Revenue Mix
- 17. 17 Improving Performance inPPA Deployments $14.8 $17.4 $17.3 $16.6 $8.9 $11.2 $11.7 $11.5 $10.7 $7.3 $- $5.0 $10.0 $15.0 $20.0 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 PPA Systems Deployed (1) Value Cost (1) Value of PPA Systems is a metric showing the value of the systems shipped under PPA contracts calculated as if they were financed similarly to structures used in 2015. We provide this metric to show a relative comparison of activity year over year.
- 18. 18 R² = 0.99 13% 25% 50% 100% GenDriveUnit Cost Over Time Cost Controls and Economies of Scale Drive Margin Expansion Many factors will continue to support steady cost reduction • Volumes − Multi-year sourcing allows us to take advantage of lower pricing associated with higher volumes • Dual source strategies − Risk mitigation − Cost reduction and supplier innovation • Integration − Functional & Vertical • Tooling, Automation • Industry leverage of key components − Sector expansion drives component pricing − Examples include membranes, batteries, etc Cost Reduction is the Key to Success Additional ~40% cost reduction Expected
- 19. 19 2017 Guidance: ImprovingOperational and Financial Performance Metric 2017 Guidance Revenue (GAAP) Total: $130 million Shipments GenDrive GenFuel Sites ProGen Mods. Total 5,600 25 100 PPA 1,800 9 N/A Gross Margin (GAAP) • 8% - 12% Bookings • $325 million Cash • $25-$35 million of net cash used in operating and investing activities
- 20. 20 Plug Power Success Continuingto lead the commercialization of fuel cells • Our experience remains unmatched with more than 122 million hours of fuel-cells in service; this is significantly higher than any competitor Leveraging the ProGen fuel stack in our new designs • We have achieved ~15% cost reduction from prior models through the use of our proprietary stacks • The modularity of the ProGen platform has enabled us to work with OEM’s, leading to the 3-way MOU signed with Furui for delivery vans Expanding our market position • Adding new names to our book of business in the US and abroad, including top retailers Amazon and Carrefour, is a testament to our strong value proposition Replicating success in material handling • Our technology is adaptable across a range of power and energy needs: we have deployed multiple units of ground support equipment (GSE), and developed the FedEx range extender, both powered by our fuel cells Paving a path towards profitable revenue growth • We have significantly driven down costs, reflected in the growth of our margins • The future predictability of revenue and deployments through new contracts will have a meaningful impact on our financial performance
- 21. Corporate Headquarters 968 AlbanyShaker Road, Latham, NY 12110 West Coast 15913 E. Euclid Avenue, Spokane, WA 99216 plugpower.com Andy Marsh, President and Chief Executive Officer Paul Middleton, Chief Financial Officer Investor Relations investorrelations@plugpower.com