Ceres Power Holdings Plc · LSE:CWR
Ceres Power — FY2010 Earnings Presentation
38 slides from Ceres Power's earnings presentation, Sep 29, 2010
Slide 1: CHP demonstration, site visit and preliminary results for year ended 30 June 2010
Alternative energy products for global markets CHP demonstration, site visit and preliminary results for the year ended 30 June 2010 29th September S t b 2010
Slide 2: Disclaimer
Disclaimer This presentation is directed at institutional investors in Ceres Power Holdings plc (the “Company”). The presentation does not constitute a recommendation regarding the shares or other securities of the Company or any of its subsidiaries nor a representation that any dealing in those sha
Slide 3: Introduction
Introduction Brian Count Chairman, Ceres Power © Ceres Power 2010 3
Slide 4: Overview
Overview • Significant progress in a challenging year • Key achievements: - First funded international CHP contract secured with Bord Gáis, Ireland - Initial fuel cell manufacturing line installed & operating in Horsham factory - CHP units being built & tested, tested able to meet key Beta performan
Slide 5: Results
Results Rex Vevers Finance Director, Ceres Power © Ceres Power 2010 5
Slide 6: Financial Highlights - Summary
Financial Highlights - Summary £m FY ‘10 FY ‘09 ∆ ‘09 Revenue from customers 08 0.8 10 1.0 (17%) Other operating income 0.6 0.5 16% p g costs Operating ((14.5)) ((10.7)) 35% Loss for the financial year (11.7) (8.0) 47% Capex (net of grants) 2.6 2.1 23% Equity-free cash outflow1 (12.3) (4.4) 180% Net
Slide 7: Financial Highlights (P&L)
Financial Highlights (P&L) Revenue from customers - £0.8m (down 17%) - Revenue recognised based on ‘costs incurred’ during the programme (revenue is ‘back-end loaded’) - Total milestone cash payments received to date from customers* = £5.3m - Total revenue* recognised to date in P/L = £2.1m - Deferr
Slide 8: Financial Highlights (Cash Flow)
Financial Highlights (Cash Flow) Net cash used in operating activities - £10m (up £6.5m) - Increase in operating expenses ~£3.8m - £3.9m favourable working capital movement in 2009, not repeated in current year Capex - £2.6m (up £0.5m) - Investment in cell manufacturing scale-up and test infrastruct
Slide 9: Technology Update
Technology Update Dr. Phil Whalen Technology Director, Ceres Power © Ceres Power 2010 9
Slide 10: Unique Metal-Supported Fuel Cell
Unique Metal-Supported Fuel Cell Ability to fabricate dense CGO electrolyte on steel has enabled: 9 Fuel Cell that operates below 600 0C 9 Metal-supported, mechanically strong cell design 9 Robust stack sealing using well-proven welding techniques 9 Rapid load-following & thermal cycling without deg
Slide 11: Fuel Cell Module & Integrated CHP Product
Fuel Cell Module & Integrated CHP Product Wall-mounted CHP Product Fuel Cell Module (‘FCM’) Condensing Boiler Sub assembly F l Cell Fuel C ll Stack St k • Main burner • Heat exchanger FCM Integrated CHP System Controller & Power Electronics Module Fuel Processing Assembly Fuel Filter Unique FCM enab
Slide 12: Unique Technology Enables Mass Market CHP Product
Unique Technology Enables Mass Market CHP Product Ceres’ CHP product is a robust, practical wall-mounted appliance that replaces a conventional gas boiler and delivers enduring energy and carbon savings in an unsubsidised low-carbon world CHP product requirements Met by Ceres technology capability M
Slide 13: Metal-Supported Design Enables Stack Sealing Robustness
Metal-Supported Design Enables Stack Sealing Robustness Cell Welded cell thermal cycling test 700 600 500 TTemperature (⁰C) Cell 1 400 Cell 2 Cabinet 300 200 100 Infrared Heater 0 0 17 33 50 67 83 100 117 133 150 Cold Hot Ti Time (Mins) (Mi ) Metal-supported cell design enables robust stack sealing
Slide 14: CHP Thermal Cycling Robustness
Independently assessed by CHP Thermal Cycling Robustness Start-up calibration test 1000 Load following 1000 Load Following Cycles detail CHP net AC P Power (degC) deg C) Stack Temperature 1 800 800 Powere((W) erature (d mperature 600 600 Stacck Tempe r (W)/Tem net AC C 400 400 HP Power 200 200 CH 0
Slide 15: Rapid Load-Following Capability
Independently assessed by Rapid-Load Following Capability 1000 800 C Power (W) W) CHP net AC Power (W 600 No Power degradation or CHP net AC loss in performance from Cycle 1 to 7: 400 Power points returned at identical voltage and current Demand Power Demand Power : Cycle Power1 C 200 Demand Power :
Slide 16: High Energy Conversion Efficiency
High Energy Conversion Efficiency Heat to Electrical Principal Source Power Ratio Efficiency* of Loss Cell / Stack 17.5 W 7.3 W Heat Diluted† H2 10.2 W DC Electrical • Fuel Utilisation 0.72 58% Power • Electronic leakage Unused fuel (recycled) Fuel Cell Module (FCM) 1311 W • Fuel Proc. 2340 W • Tail
Slide 17: Unique Technology Meets Residential CHP Requirements
Unique Technology Meets Residential CHP Requirements Demonstrated core technology at cell, stack, FCM and CHP product level • Repeated start-up, shut-down and rapid dynamic response without loss of performance • Validated cycling robustness of metal metal-supported supported core technology • Rated
Slide 18: Independent Confirmation of CHP Performance
Independent Confirmation of CHP Performance Based on the information and data independently reviewed by AEA on the 17th and 21st September 2010 AEA validated that: 9 A Ceres Power integrated wall-mounted CHP unit sequentially thermal cycled 7 times on methane: With no measureable power degradation
Slide 19: Independent Confirmation of Integrated CHP Boiler Performance
Independent Confirmation of Integrated g CHP Boiler Performance Enertek International validated the following thermal performance characteristics of the main burner element of Ceres Power Power’s s integrated CHP product: 9 Maximum thermal rating of 25 kW on demand 9Thermal cycling between maximum r
Slide 20: Key Areas of Focus in Beta Phase
Key Areas of Focus in Beta Phase Challenge Challenge Risk Risk reduction reduction actions actions System S t Reliability R li bilit •• Power Power Electronics and System Electronics and System Controller Controller software software de- de- de System Reliability -- Unplanned bugging Unplanned shutd
Slide 21: Business Update
Business Update Peter Bance Chief Executive Officer, Ceres Power © Ceres Power 2010 21
Slide 22: Techno-Economic Modelling Approach
Techno-Economic Modelling Approach • Ceres has developed a rigorous ‘real-life’ computer model to predict the economic savings g from CHP p products using g data from actual UK houses Key requirement Met by Ceres model capability Real world energy gy usage g Extensive data sets ggathered from UK rea
Slide 23: Energy Bill Savings For a Typical UK House
Energy Bill Savings For a Typical UK House • Predicted energy bill and CO2 savings for a Ceres CHP product installed in an actual UK home Annual electricity demand 4,618 kWh1 CHP power generated 3,463 kWh CHP p power exported p 107 kWh Grid power imported (4,618 – 3,463 + 107) 1,262 kWh Baseline ann
Slide 24: Factors Included in Techno-Economic Model
Factors Included in Techno-Economic Model • Predicted annual energy bill savings incorporate: - Energy gy used for as-needed stop p / start cycles y of the Fuel Cell Module - Electrically-led, thermally capped control strategy to maximise displacement of imported retail electricity • Economic case i
Slide 25: Go-to-Market Commercial Partners
Go-to-Market Commercial Partners Ceres has established commercial channels for mass market uptake of CHP products 9Partners paying in aggregate >£9m for development and trialling programmes 9 Volume forward orders placed for >70,000 Ceres Power CHP products 9 Market-leading partners supplying energy
Slide 26: British Gas CHP Programme – Status of Beta Phase
British Gas CHP Programme – Status of Beta Phase Key activities 9 Beta design iteration for integrated, wall-mounted wall mounted CHP product 9 ‘Go-to-market’ volume supply agreements for key components for Beta phase 9 Procurement and manufacture of parts for up to 100 CHP products 9 Site selection
Slide 27: Example CHP Product Installation
Example CHP Product Installation Conventional flue Wall mounted CHP Product Conventional plumbing connections Fully integrated CHP product designed for boiler replacement mass market © Ceres Power 2010 27
Slide 28: Beta Field Trials Programme – Next Steps
Beta Field Trials Programme – Next Steps • Preparations for commercial field trials in occupied homes - CE marking for completion in Q4 ‘10 10 - First wave of 5 CHP products to be installed following achievement of CE marking - Second wave of 15 CHP products to be built in Q2 ’11 (incl. learnings fr
Slide 29: Preparation for Initial Sales
Preparation for Initial Sales • Beta Phase completion process: - Demonstration of Beta performance specification on CHP products 9 Compact wall-mounted 9 Net electrical efficiency ≥30% HHV (~33% LHV) 9 CHP p product delivering g rated p power ≥ 0.7kW net g grid-connected AC 9 Rated thermal output fr
Slide 30: Preparation for Volume Sales
Preparation for Volume Sales • Gamma Phase - Design, procure & build sub-phases conducted in parallel with Beta field trials - Gamma products incorporate Beta phase learnings (e.g. control strategy optimisation, software upgrades, incremental performance improvement to target level electrical effici
Slide 31: CHP Roadmap
CHP Roadmap 2010 2011 2012 H1 H2 H1 H2 H1 H2 CE M Marking ki I Beta Beta Phase field trials – Wave 1, Wave 2 Gamma Phase - design, procure, build, & CE Gamma Gamma Phase – Manufacturing ‘Initial Sales’ (~ 00’s Sales units) ramp up to volume launch = Trigger for initial sales • Revised CHP roadmap en
Slide 32: Centrica and British Gas: Energy for a Low Carbon World
Centrica and British Gas: Energy for a Low Carbon World Gearoid Lane Managing Director, British Gas Communities and New Energy 32
Slide 33: Centrica Overview & New Energy Focus
Centrica Overview & New Energy Focus • C t i corporate Centrica t overview i – Operating in UK and North America – Britain’s biggest energy supplier – Business units: British Gas, Centrica Energy, Centrica Storage, Direct Energy • British Gas – Provides gas/electricity/services to 50% of all homes i
Slide 34: British Gas & Residential CHP
British Gas & Residential CHP • Decarbonising our homes is essential – UK 2050 target of 80% reduction in CO2 emissions requires step change in energy efficiency – Our target is to cut the average carbon footprint of our customers’ homes by 35% within 10 years • Residential CHP C can really help – B
Slide 35: Commercial Preparation for Volume Sales
Commercial Preparation for Volume Sales • Substantial market opportunity – British Gas is aiming to be the UK’s leading installer of microgeneration • Policy tail-wind – Challenging UK carbon targets – Feed-in tariffs introduced April 2010 to incentivise low carbon electricity such as domestic CHP –
Slide 36: Ceres Manufacturing Strategy
Ceres Manufacturing Strategy • Designs complete CHP products • Co-develops BoP components • Optimises CHP design for volume assembly & ease of • Manufactures cells, stacks, FCMs service & maintenance • Sells complete CHP products • Manufactures CHP boiler • Earns E ‘product-level’ ‘ d l l’ revenues
Slide 37: Manufacturing Operations - Horsham
Manufacturing Operations - Horsham Ceres Power – Horsham, UK - Manufactures fuel cells and assembles fuel cell stacks and fuel cell modules - Uses volume manufacturing equipment - Process automation being selectively deployed where and when appropriate - Capacity of initial manufacturing line suffic
Slide 38: Manufacturing Operations - Tiel
Manufacturing Operations - Tiel Daalderop – Tiel, Netherlands - Well established company (> 50 years), privately owned - Purpose built boiler manufacturing facility in 2004 Purpose-built - Total production capacity for heating appliances of 200,000 p.a. - Achieved c e ed go go-to-market o a e coscos