Invinity Energy Systems (LSE:IES) — Full Year Results for the year ended 31 December 2025

0:01 Good afternoon, ladies and gentlemen, and welcome to the INVINITY ENERGY SYSTEMS PLC Results Presentation. Our apologies for the slight delay. Throughout today's recorded meeting, attendees will be in listen only mode. Questions are encouraged and could be submitted at any time just using the Q and A tab situated on the right hand corner of your screen. Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation. I'd now like to hand over to the presenting team. Good afternoon to you all. Thank you. Good afternoon, everybody. Firstly, I'm gonna start with a couple of apologies. Firstly, we're a few minutes late. And secondly, I recognize the visual here probably isn't as we'd anticipated. We were all in a different room, but for some reason, it couldn't cope with the bandwidth settings of all of us coming in separately. So we rapidly and hastily reconvened in the same room. So I hope you can hear us. I hope you can see us okay.

0:50 If for some reason this doesn't work, I'll make the decision that we will do a recording of this and send it to everybody. But I hope we'll be able to get through the next hour, And apologies if it's not quite as perfect as we first hoped for. Anyhow, if we can move on, this is the results presentation for the 2025 year. In a moment, I'll hand over to Adam to run through the numbers. I anticipate a lot of the questions and a lot of interest is probably a little bit further than just financially what we did in 2025. So I'll just briefly cover what we're gonna talk about in that regard. I recognize as well there are likely to be a few listeners to this call who haven't heard as much about INVINITY as others. So there will be a few slides on us. So forgive forgive me for those who've heard that before, I think it's useful to go through that.

1:39 So when we in the last couple of announcements we've made, there have been a number of strategic themes which we focused on, and that really is the basis for the success commercially that you started to see come through. And the first and foremost on that is product cost. This is fundamentally a technology. I don't think anyone can think about battery storage as an important technology when you look at the energy transition and what's needed globally. There are many different characteristics of many different batteries, but ultimately, what is important is product cost. And that's the thing which we have been most focusing on. And you'll see that we are well ahead of where we first thought we would be a couple of years ago. And we'll come on to this stat again, but within two years, we'll have taken a minimum of two thirds of the product cost out from VS3 to Endurium.

2:32 That is a great achievement from the team with further to go. That's exactly what's needed to accelerate the commercial development that we're seeing. The second thing which I am really, really proud of is the response we get back from our customers as well. We will cover that in some detail. But that leads to the track record you see there as well, nine gigawatt hours of energy dispatching our batteries and growing. That is the proof that our technology works. And we are very proud of continuing to to publish that stats, and we'll continue to do so when we talk to clients that makes a big big difference as well. And then scale. Yeah. The numbers for last year, which I was about to talk about, yeah, are a growth from previous years. But equally, I would suggest not representative of where I certainly as Chief Exec want to take this business and where we see the opportunities coming forward. So we need the manufacturing capability for that, and that's what we've been working on.

3:25 So very much, you know, what we said at the bottom is building those foundation and removing those barriers to scale, we believe we're accelerating into that next phase. So with that, Helen, I shall hand over to you. Okay. Thanks, Artisa. So I'll take you through the key financial highlights that we've reported through the year. So revenue and project grants of 17,800,000, so up to 4% year on year. That is principally Cockwood, which we've now completed. So that includes £9,000,000 of approved grant funding from DESNERS and the £8,000,000 of customer revenues that we reported there. You'll see reduction in the gross loss year on year, so 35 bps improvement in the gross profit margin. That's what we've been working on through AUSTRO starts to feed through in terms of project economics and our cost down initiatives start to take shape.

4:15 You've seen a reduction there in the net R and D that reflects the conclusion of the Gomesa joint development agreement following now that we've now fully commercialized, enduring, we started shipping that out to to customers. We start pulling down to an improvement in adjusted EBITDA of 7% year on year and starting to see that the reflexive scaling of our Enduring product platform. Next slide please. Looking through then what's happening on the balance sheet, our net operating position has decreased year on year by 18%. That's really a reflection of releasing that inventory for low debt onto the site and an increase in the trade payables there. Visions year on year from 2,000,000 to £2,400,000 and that's essentially legacy systems and a couple of elevated logistics on some remote project sites.

5:11 We rounded up the year with £28,800,000 very pleased to report a positive going concern assessment from BDO through to June 27, which was the basis of the opinion here. That, I'll pass back across to Jonathan and Matt. Thank you, Adam. So a couple of slides here are just as a refresher on INVINITY. And as a frontline, as a headline, we deliver what we feel is the world's most proven and most mature nonlithium energy storage technology. And we've said that for a while, and we've said that with, you know, our understanding and belief that's the case. We will talk in a few moments about FlexSpace. It was extremely reassuring to see after a very, very competitive and thorough RFP process that our technology came out on top. That was across flow batteries, not not just vanadium flow batteries. That was all flow batteries they've looked at and also some other non flow technologies that looked to get involved there. So we have demonstrably some external validation at scale and size there. So I think we can point to the fact that that is something which which we have achieved.

6:24 You can see that from the nine gigawatt hours of batteries dispatched by our customers, and that comes from over 2,000 individual battery modules that have been deployed. As a reminder, the previous product had six flow battery modules within a shipping container. And with those individual modules, there are over 2,000 now out in the field. We are a global business, and there's a couple of slides in the moment just to see and to remind everyone sort of how that presence is growing. That's from a customer perspective, but also from a manufacturing perspective. But what we like to think is, there is a well known retail bank that talks about being a global bank in local markets, and we see exactly that. We have local employees in on-site to make sure we deliver that local service. And that for us is really important.

7:16 And we deliver our products as a modular product, but we can build that in different ways depending on that local market. So we have building blocks that sit within that and gives us the flexibility to be able to pivot that to whichever market it might be. From a US perspective, you know, there are some strict requirements for projects to benefit from various tax accounts. We can do that in that US market from building a certain amount of the product there. We can do that within The UK. We can do that within Europe. We can do that within within China. That comes in the way we've architected that product. We have about 180 employees that is spread across both Vancouver, The UK, US and elsewhere. And we've got centers of excellence there. So we we manage those time zones, but it is appropriate when you look at where our supply chain, where our customers come from. And that twenty years investment in the product is now it's really starting to, you know, see the commercial traction from that.

8:15 And when you actually speak to our customers, they see us as a business that's got the technology right. They recognize that we have deliberately not, you know, shouted from the the ramparts as to how great we are because we wanted to be able to prove that is the case. Because that is the sort of customer we talk to. They want to see the data. They want to see their operating data. They want to see, you know, when there are problems. There are always problems. So it's like, how do we get out there? How do we fix that? And then you will now see the testimonies that come through that I think is what we have managed to achieve and is enabling us to progress further. So in terms of this technology, the best in class performance, the battery lasts for over thirty years. That comes from the inherent chemistry that sits within it.

9:01 We separate power generation and energy storage, and that means we don't have the degradation that other chemistries do. And that's really important because then, again, these are significant capital investments, and the customer wants to know that this product will be there for at least that period of time. They also don't want the restriction on how they use it. Yeah. The energy markets are changing very rapidly. Even when you look at data centers, everyone talks about data centers. We obviously have some data center customers. It is still not that clear as to what the power requirements will be for the future data center. With our battery, we do not mind how that battery is used. As that use case changes, our battery will continue to perform. Rather than having to perfect a solution around how our battery operates, we will charge with electrons and dispatch electrons, however you wish to do that, without any implication on our warranty.

9:53 That becomes very powerful selling point. It's fully configurable, fully scalable. Now in terms of our other advantages over specifically lithium, which we see as the competitor, there is absolutely no fire risk. And what that means particularly is really from a permitting perspective. And there are many, many areas where from a permitting perspective, you would not put a lithium battery, certainly parts of California, beneath the data center, near conurbations. And, you know, we regularly speak to customers who see that as a particularly USP because it's simply not possible to put a lithium battery there. You know, the fast response times, you know, there is sometimes a perception that a flow battery because of the pumps will not respond as quickly as a lithium system. That is not correct. We've got study from DMV. We've seen that from our data that shows that because of the the electrolyte sits within the stack, we can perform and react equally as quickly.

10:49 We are quieter than lithium, which makes a big difference as well. We don't have any air conditioning that sits within that, and therefore, you don't have the noise from that. And at the end of it, we are over we're 99% recyclable. You can take the electrolytes out, sits in the tanks, fully recycle that into another battery. Everything else, you can put through the usual recycling chains. So, again, some great some great performance that sits within the business the product. Sorry. And then moving on to our customer base. And this is a this is a site you may you may think you've seen before, but actually what I've done is asked to take out our manufacturing and take out our partners. And these are where projects we need either delivered to now or announced deliveries to. And you'll see there is a very significant number of projects within The US, and that's really interesting. You've seen Department of Energy projects there, two announced recently. You've seen support from the California Energy Commission.

11:46 And in terms of our credibility, that is very significant. And The US market is growing rapidly and is still very supportive of batteries and long duration storage batteries. So we are really, really excited about that US market. From a UK perspective, we'll talk in a minute about Cockwood. That is our UK site. That will be clear and hopefully operational within the next quarter, just as soon as that's actually connected to the grid. And that will be a fantastic reference site for us. Of course, you see flex space that sits there as well, and we'll talk about that in a moment, but as a wonderful reference site for us. But also across Asia and the Asia or Australia as well, we've got a number of projects to sit within there and a a growing pipeline that of those opportunities as well.

12:35 That is supported by the manufacturing base and partners, and that's why we're in Vancouver. That's why we have sales and customer support in The US, and we are fully intending to set up manufacturing in The US to be able to support existing and future customers there. We've got a wonderful facility in Scotland in both Bathgate and Motherwell. We are calling you here today from Bathgate. We've got a great delegation coming up from Desnos tomorrow. We have customers coming up and seeing us here all the time. We've got an enduring unit here. You know, this is a great site to show those customers. And then we've got partners in in India, in Taiwan, in China as well. And, you know, we bring all of that together to be that global business, but on a on a on a local marketplace.

13:22 So, Matt, if I may, I'm gonna hand over to you. So one of the one of the exciting things thanks thanks, Jonathan. One of the exciting things about having this global base of development facilities, manufacturing facilities, and and partnerships is that this entire team is today galvanized around one of the most important development aspects inside the business, which is our cost reduction program. We've talked extensively in the past about how we view cost reduction as one of the most important aspects of driving this business forward. As much as we've been very successful, you know, delivering batteries into specific projects, into specific applications up until now, unless we are able to continue to remain competitive with with the cost leaders in the market. You know, we're we're we're going to see our our our commercial traction stall.

14:12 What we have initiated about two years ago was a cost reduction program that we believed at the time and continue to believe would get us to a point where we will see that cost competitiveness enhanced and therefore enhancing our commercial opportunities over over over over the coming period. And what we're what we've announced in our results this year is that we're very pleased that that combination of partnerships and manufacturing capabilities and development capabilities has seen us accelerate against those cost structure plans to the point where we are significantly ahead of the plan that we had previously proposed and announced. We have achieved about a 66% reduction in our product cost for from where we were two years ago for projects that we are currently quoting or delivering for for the end of this year and beyond.

15:01 That's a combination really of three things. It's a combination of value engineering. So looking at how we how we design the individual components that go into the product. It's a it it brings in some higher volume, lower higher volume and lower cost manufacturing procedures and processes that are really being brought into play by different partners within that supply chain. And then finally, looking to outsource some of those activities to to to best cost regions using some of the new and existing strategic partnerships that we have both on the manufacturing and supply chain side. In the long term, our our cost target is is is to get even further even further below where we are currently quoted. And and and though we are laser focused right now on the constructions for our product to be delivered in immediate term, you know, that that more r and d focused, more development focused work is also going on in the background so that we will continue to hit those aggressive targets between now and the end of the decade.

16:04 I think if we were to think of the the pillars of excellence inside our company right now, really, reduction is a big part of them. The other one is how we support our customers. And and we've been thrilled over the last couple of years about the feedback that we've gotten from from from customers in the field. INVINITY have consistently been able to deliver the products that we've sold. We've been able to deliver the performance with those products that our customers need, and our customers have been able to turn around and operate those systems profitably. I in some cases, even over over and above the the way that they originally expected to be able to make use of those products. We've the the graph on the on the right is one of the simple ways that we track those metrics just by the number of the amount of energy dispatched out of our batteries. We've crested over nine gigawatt hours now.

16:56 That is a number that we expect is going to continue to grow aggressively as more and more of our batteries come online. That combination of proven experience and rapidly decreasing product cost is what's leading to probably the third most exciting thing, which is growing commercial momentum. We are seeing a much greater amount of inbound interest into the company driven by some of the big wins that we've had on the commercial side over the last last couple of months. But not only are we getting more interest, you know, when we start to get into customers and they start to look at, you know, what is this thing actually gonna cost me? And are there other people out there who are actually who are actually reinforcing INVINITY's ability to deliver? In both cases, we can answer yes. Yes. We have a competitive product. Yes. We can deliver value over and above what other companies are doing. And, we can prove that that that that that the product is is actually doing what it needs to get done.

17:52 We see that kind of traction increasing across the four different areas that we typically focus on for different market points. You know, standalone batteries, has long been one of our major focuses, renewable colocation where we are taking our batteries and using dispatch renewable generated power at the most appropriate time of day. Commercial and industrial applications, which especially as as energy consumers are looking to take more control of their electricity bills, is a large and and and growing segment within our overall overall product product base. And then finally, as we'll talk about in a minute, data centers where we see all over the world a tremendous need for appropriately managed flows and to to provide low cost power and very robust and reliable power for this digital infrastructure, and where we've seen we've seen some great growth in our in our both our pipeline and our project project mix over the last couple of years.

18:50 I think if we look at one specific instance of of those commercial segments on the in the behind the meter market, we announced earlier this week something called Project Vitality. This is a commercial and industrial opportunity or a commercial industrial project that we were doing in The US, partially funded by the US Department of Energy. This was a project that had been funded some three years ago or so. But with the change in in administration in The US, a lot of the approvals of these funds had been held back temporarily because of the benefit of projects like this to the overall US electric grid and US based domestic consumers. The DOE has has has sought it to to go forward with this and a great number of other projects, but, you know, we're obviously very happy about this one in particular.

19:43 This is going to see us deploy our batteries behind the meter with a new partner called MuGrid Analytics, who are a specialist in microgrids, to be able to deploy these batteries, not only in this particular site, but into a a larger and a larger and growing portfolio of microgrid projects in a way that fully maximizes the value that our our batteries deliver to those electricity end use customers. That is one of a number of projects we're very excited about. Jonathan, back to you to describe some of other ones. Great. I will then I'll move on to talk about the flex space project, which we announced some some days some some ten days ago or so. Maybe if I start by talking about Lauthenburg, which is probably not something which all of you on the call are familiar with, I would recommend having a look, do some research into the star of Lauthenburg.

20:30 The star of Lauthenburg is the birthplace of the European connected power grid. 1958, I was just checking my my dates. It was the first site to successfully connect the grids of Germany, France, and Switzerland. So it was basically the inception of one of the first super grids, And that now forms, obviously, the the backbone of some of the European power networks. It was the original building where Swiss grid were based were based. And even now, it forms a vital hub under Swiss grid. And the battery which is going to be installed here, yes, it's connected to a data center. That's obviously, you know, a a use case or something where we're looking to further deploy batteries across the world. But, actually, this is designed to be an asset which will form a critical part of Switzerland's energy power infrastructure.

21:26 If we take a step back, I am humbled by the fact that they an INVINITY designed battery, it has been assessed as being capable of achieving it. And I think from a credibility perspective, that is enormously, helpful to us when we talk to other customers, when we talk to suppliers, and when we look at where this business could be taken. The process to win this really took about a year. There was a lot of engagement upfront with the customer talking about our solution. They were looking across all flow batteries, not just vanadium flow batteries, and across across other technologies. And there was about a six month RFP process, which was very, very involved. It involved a lot of work, lot of lot of diligence on us as a business, our ability to scale, and how our projects have performed.

22:16 You know, there was an awful lot of getting to know the team as well to make sure they was comfortable that we could deliver this deliver this project. So where we are to date is we are now the sole party doing the engineering phase. That six month process involved us fully designing the battery. When I say fully designing the battery, certainly putting together a significant amount of design alongside our partners. We partnered with two very reputable Swiss fans, Equans and George Fisher. They were actively involved in our bid, and I think collectively, we brought together that concept of being a local party party. And I think that was one of the key reasons, again, why we won the bid. We listened to our customer and made sure we proposed a bid that works, and that's something again, which is an organization that we are good at. So that engineering phase, we would expect to last a year.

23:05 Their anticipation is that they will then move forward to full contracting for the battery with the idea that battery will be commissioned by 2029. Now I'm not sure the photos quite do do do it justice. This project is simply staggering staggering from a a just an infrastructure perspective. The the battery will sit in a hole that is now already dug. It is about 200 meters long. It's about 87 meters wide and about 25 meters deep. It is simply awe inspiring. And and the entirety of that hole will be filled by assuming we progress to that final stage, an INVINITY flow battery. There is a proposal to put another battery on top of that. And the hope would be that, obviously, if we do this good job, think we will do, that could step up to a further order from there. But I think for the moment, we are, as you would understand, very much concentrating on that proposal.

24:01 It's really interesting. That is effectively a two hour battery. We talk about us being a long duration storage business and technology, but two hours is not regarded as a long duration. So why have they picked a flow battery, a vanadium flow battery? There's really two key reasons for that. Again, it's the ability to cycle and the longevity that comes with that and the low restriction on warranties and, of course, the fire risk. You would not put a battery where there was a risk to thermal runaway beneath their data center or any form of infrastructure. So, again, a fabulous project for us and one we are very proud to be involved in. Back to what is still now Europe's biggest vanadium flow battery. This was the Melanes project.

24:48 And as you are aware, we had a number of nibbles at trying to get this delivered. And when I took over as cheap exec two years ago, I concluded we had to get this done because of the significance with our customers. So what you see there is an INVINITY owned site. We start to the batteries you see in the the top there. So the solar belongs to INVINITY. The batteries belongs to INVINITY. It is installed. Yeah. The bulk of the cabling work is done. We are just waiting for UK power networks to deliver the connection at the substation, and then we'll be able to commission that in the third quarter this year. That will start selling revenues for the business. But most crucially, we can take customers and investors down to that. We are already having institutional investors coming to see that. We're having customers coming to see it. And my absolute anticipation is we will have a retail event to bring retail shareholders and others down to have a look at it as well because we're very proud of this asset.

25:43 And this sort of gets to the heart of what we've been doing as a business for the past five years and beyond. We recognize that some of our revenues have been lighter than we wanted to, but what we needed to do is get batteries out there into the field that we can prove the technology. And the five, ten, twenty megawatt projects, when you look at what's in the pipeline going forward, you know, that is the stepping stone we need to some significantly bigger projects. And because it's a modular product that we deliver fully formed that gets delivered to site and connected, bigger systems can see the scale that can come with that and have the comfort in doing it. So that's why we've been adopting the strategy we have done and why we think we're really positioned for growth from here. And that really does lead me into this final slide, then we'll start to take some q and a. We have that stable, proven technology.

26:33 We have what we think is that market leading position. There is other competition out there, and we are delighted there's other competition out there, and we do really wish them every success. It is helpful for us for there to be other competition. People need to take a reference point to our pricing that comes from other competition. They need to compare our technology. You know, we will win some, we will lose some, and that's fine. The marketplace that is developing for the energy transition space is there is no market in the world that isn't looking at decarbonizing and building energy security most importantly. And, obviously, what's going on in The Middle East at the moment only provides an extra driver for that. And we think we've developed key strategic relationships to get there. National Wealthfront at the top supported us a couple of years ago and remain a very supportive investor and strategic partner. They give us a great support and great insight as to what's going on in The UK.

27:31 What was Gomesa Electric and is now ABB as a partner, a very well known firm, very supportive from a technology perspective, actually across India, Shaman c and d and UESNT in China, and then across South Africa, and and also in in China as well. There are plenty of others we are talking to from a partnership perspective that will come through in due course. That's across the supply chain commercially and elsewhere. So I think that's for the moment. We have done the half hour we thought we would do presentation. And now we can look at Q and A, and we'll try to get through as many as we can. That's great. Thank you very much indeed for you guys for the update. Can I please ask investors to continue to submit their questions just using the Q and A tab situated on the right hand corner of your screen? I'd just like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via the Investor Meet company dashboard.

28:34 Guys, you've had a number of questions from investors. So thank you, firstly, to everybody for engagement this afternoon. If I may just hand back to you, maybe, Joe, just to maybe moderate us through the Q and A. If I could ask you to read out the questions and hand them out, that'd be fantastic. I'll pick up from you at the end. Lovely. Thanks, Mark. Yeah. Lots of questions. Glad we've got plenty of time to go through them. There's a number of questions here, Jonathan, around the the cap and floor. So there's a specific question around timing when we might find out the results. Maybe we'll start there, and I and I can roll into some of the other ones from there. Okay. So we have I would say, arguably, no more insight than anyone else does on this. So I can only talk about what our clients are telling us and what we hear from the market. We believe that Ofgem notified all developers that there should be some further information by the end of this month.

29:27 I wouldn't suggest that there's any absolute guarantee, but that was the latest indication we came directly, we believe, from Ofgem. Okay. There's another question here around around scaling up into that into sort of whatever potential capacity that comes from. So could you give us maybe a bit of a minute on on on our plans to scale our current manufacturing manufacturing capacity and how that can build out, and then maybe we'll go to to Adam to talk a little bit more about how the working capital works through that process as well. Yeah. Absolutely. I think where do I start with that answering that question? We we have a lot of people who come up to Bathgate and Motherwell wanting to understand the question of how we scale. And what I would say is everybody comes away reassured that the scaling of this business is something that we have a plans for and should not feature very highly on the risk register.

30:19 And the reason for that is we have quite a lot of optionality in how we do this. The product comes together as a number of building blocks. You know, the core building block sits as a 20 foot steel container with motor mounted plastic tanks that sit within it and wiring and pumps. And, typically, that is a commodity as product that's scaling that comes from areas in the world, lower cost regions of the world that are capable of doing doing that. Typically China, but also we look to second source that potentially in in India as well. So, yeah, the ability to scale that is something that is very much within our partners' grasp. And so, you know, from what else sits within that, you've got the vanadium electrolyte itself, and there are there are many sources of that. And it's interesting. Now we have announced the the FlexBase deal, we are seeing pockets of pockets of supply that even we didn't know existed as well. So there's significant supply of that, not just within China, but across the world as well. There's some other interesting areas that we're seeing crop up as well, which we're quite excited about. Mhmm. So actually, the real question for us from a scale perspective is what does it mean from manufacturing stacks?

31:32 Mhmm. And what does it mean from a final assembly perspective? From a stack perspective, we are probably across the business around about half a gigawatt hour per year. And that is capable of scaling within about six months, and we certainly have plans to scale that. So, yeah, any order that comes through, we would typically have at any scale a longer lead time than that. And we have a proven semi automated line here, which that line can be extend expanded relatively low cost. And in fact, the new lines can be added at relatively low cost as well. Mhmm. And then you're looking at the the space to do the final assembly. Now we could, if we wanted to, deliver that entirely from China. We could deliver our stacks into China into into Arjuna, and they could deploy from there. So there's no limit there. But, actually, from The UK perspective, you know, the team didn't necessarily thank me, but they had two months from securing the size of motherboard to getting that operation.

32:28 So, again, what do we need there? Ultimately, we need a big space that is dry, relatively clean. Mhmm. And, ideally, with a crane that can carry 30 tons, but equally, that's not necessarily the case. So what we can do is scale quite easily for low low CapEx. We can do that potentially with partners, but equally, it's available to to us as well. Brilliant. And then, Adam, can you there's a couple of questions here around sort of working capital management through the sort of the order cycle and about how that how that works. Can you talk about that briefly? Yeah. So we are made to order. We take deposits from our customers upfront to manage our working capital judiciously, and we do plan to continue that. And I'm really pleased to to report very positive discussions with with NatWest and Engagement, our our house bank. When So it comes to a stage where there's the the the the the consistent order book that would allow us to hold some excess inventory to to to respond short notice to customers, we've had pretty positive discussions with our house banks around that. At the current stage, we will focus on minimizing our working capital as we go through this process.

33:36 And ultimately, what we get from capital flow, which as Jonathan mentioned, we're expecting this month and the timing of that final contract on flat base will inform us around those capital decisions. And I mean, we are roughly one tenth the capital intensity of a lithium plant, that is really helpful for us in terms of setting up local manufacturing. And that's very important in today's market, where having domestic manufacturing and local manufacturing is important to all of our customers and all the stakeholders. And I'm happy to the current current year on those two points. Brilliant. And you've you sort of touched on it slightly there around the capital intensity, but there's two two questions very similar here asking around a bit bit of a breakdown of the operating costs. If you could just briefly sort of call that out there.

34:23 In terms of the breakdown around sort of where our operating costs sit here? There's a lot of operating leverage within the business. We have invested in terms of our OpEx in Australia and our cost down process, and that's what what Matthew took us through early on. Ultimately, the most important point is we get down the cost curve. We have a significant team and product development professionals in Vancouver, which we have invested in to get that 66% cost down that you've you've seen there in numbers we reported early on. We're starting to see that bear fruit. You've seen that in today's numbers in terms of the gross margin. And then we are investing ahead of the order book as we need to generate that, and that's when you start to see the operating leverage in the business report through. Okay. If I can just add to that, Adam. The question was our OpEx is I think that's a significant I see that. And, you know, from my perspective, the sooner we can get to a position that the business is cash flow breakeven and generating profits, then the better. Without a shadow of a doubt, we do not think, you know, having cash outflows and making losses is a sustainable way of running running the business.

35:36 However, what I would say is that if you look across our competitor base from a development perspective and across, actually, most of the organization, we are quite lean from an OpEx perspective versus others. So I don't think we there is fact within that that we should have trimmed away. They are all working. You know, there are well over 50 individual line items of the product that people are looking at Mhmm. Across that r and d team. You know, we are develop delivering across the world. Look at those number of projects. We have to service those. And then we've got the infrastructure as a corporate company that comes with that. So, you know, we every penny we spend, we do think quite carefully about, but we have built built for the scale that we think is coming such that we can suddenly we can convert that into a cash flow positive and pro profitable business. Mhmm. The point is well made. We need to be make sure we get there as soon as we can.

36:29 K. Thank you. There's a question here around bankability and and what what we're doing to sort of build that as we as we go into things. And who wants to take that? That's you have great one. Okay. Yeah. Look. I mean, bankability comes back to really two things. Is the technology gonna deliver, and is it gonna get paid for over time? I I think what we've seen on the on the paid for side is an increased stability of of of revenues into some projects like ours so that people can believe the revenue is coming into them. And then the other part of it is is is is being sure that the product is actually going to continue to deliver on the as as as it was intended to do. We've had great feedback from customers, like, as I said earlier, on on the batteries actually performing the way that they are supposed to do.

37:21 We and and and the more that we can make that case, the more that we are able to stand with our customers alongside their financiers, their lenders, and and and and make the case that the that the batteries really are gonna be fit for purpose for the long term. Yeah. So we've got a third party technical study completed by DMV on Bankability. We're really pleased with the outreach from the The UK banks ahead of these announcements in June in order to understand the stream two technologies of which we are we are the largest there. So we've shared that report through The UK banks to get ahead of those discussions after after the cap and floor results are announced. And then the other part of this, then the key part around the bankability is is having contracts in place that take the motion risk off the table. And this is what cap and floor has done. It's twenty five year contract. The floor makes the bank supports the bank debt.

38:13 So then having projects with a very long term contract from from the government allows the banks to get comfortable with with the other parts of that. So great engagement from The UK banking market on on this topic, which we're we're pleased to report. From The UK. So we we talked a lot about the The UK. There's questions here around places not The UK, especially around partners. So there's a there's a specific question asking, you know, for an update. How are the partnerships going in in in China, India, and and Hong Kong? And and how how is that those relationships developing? What are our expectations for the future? Yeah. No. Good question. Look. There is there's a lot to tell about the INVINITY story. And and in some respects, we've got to sort of highlight where the most recent traction commercially is, and you can see that from the announcements we've we've made.

39:01 The partnerships we've got across China, India, and Hong Kong are really interesting, and they cover two areas. One of which is they cover supply chain and manufacturing. And a lot of what sits beneath that project to Austria and the cost down program involves those partners assisting us in taking that down there. So, you know, they are actively involved in that, but, you know, you see that behind the scenes. From a commercial perspective, it's it's quite it's quite interesting. From China has deployed a greater number of flow batteries by gigawatt hours than anywhere else in the world. Those are typically deployed via a sort of built in type approach to a flowback. It's more of a chemical rather than our containerized solution.

39:48 We believe our price points for Endurium at the times that we set out sets us as a lower price than our competitors are delivering in in China. Now that's really quite interesting because there are gigawatt hours deployed and gigawatt hours of opportunities there. I'm really excited about how that could develop. What I am, though, is cautious that those opportunities need to develop. So I would like to just state a bit before we're able to give more sort of visibility on that. But there was a lot of opportunity there. It is the same within India, albeit I would say that India is, you know, at a probably a less mature position than than China. But certainly, we've got a very active partnership from actually there. We are in regular dialogue with them. So, you know, we and then, yeah, Taiwan. We haven't mentioned Taiwan for a while. We still actively involved with the.

40:41 There's a couple of really interesting projects there. And the fact that we have a significant US operation is extraordinarily helpful when it comes to the business in Taiwan. So, you know, a lot of activity there. Yeah. As an aside, Matt and I are so committed that we somehow managed to be invited to run the marathon in Xiamen in January, which was a direct invitation from the mayor who controls that city. And when we turned up, we found out we were guests of honor at the the business launch of that. So we were yeah. We are held in high regard there because they wouldn't have invited everyone along to do that. And, actually, we were in a meeting yesterday with a partner who invited us, but he found that I had to do two other marathons. So if you're if you're looking to understand whether as an executive team, we do we all we can do to make sure we build relationships, we are we are doing that. Adam is only sorry he didn't do the Chinese one. Was promised to do the next one.

41:35 Thanks. The you mentioned The US. Another one of the questions on here is around US manufacturing and sort of a partnership strategy in in North America. Can you talk a little bit about that? Yep. We have a number of different opportunities there. The scale of what is needed in The US, mainly, we end up having a a blended approach across that, to be honest. I think to to begin with, we are making sure that we build manufacturing against the opportunities that are there. So we are waiting for, you know, a number of opportunities to contractually sign, and then we can be give a little bit more visibility on that. I think we were doing it's quite potentially a mixture of both. Yeah. US is also quite a big quite a big market. California in itself is a, yeah, fourth largest country in the world if it was if it was ranked ranked that way. It's also quite large by by geographical nature as well.

42:29 So, yeah, you can see over time us having a different approach in different areas. Okay. And and sticking with that theme, there's a question here asking about how we how we close the gap on some of the the other firms in in our in our sector there in in The US and looking at their valuations and the sort of the market there. We got Well, no. If I if I if I can say, specifically, when, you know, the question came in, you know, EOS is the obvious valuation to look at. I think their market cap today is $3,000,000,000. We have, you know, risen fortunately over the last few few weeks, which is great to see. They have a fantastic business in The US that is growing and a good reputation. We also have the same. You know, I'm confident that The UK capital markets, once we start to see some of those pipeline converting into contracted deals, come through with that valuation gap and close. There is plenty of space for us and IES to coexist happily.

43:25 We do so already on the, you know, the Frontier power cap and floor projects you see in The UK. And I think there is you know, we coexist on a project in California already. And, you know, we will compete against them in some projects, but, actually, we often find ourselves not competing against them, to be honest. And so I suspect we will win some, and I suspect we will lose some, but there's plenty of market for all of us. So, yeah, delighted, as I said, to have competitors alongside us as it provides usual usual reference points for our customers. Mhmm. Thanks. Matt, I'm gonna come to you on the next one. There's a there's a question here about to what extent well, it's it's more about IP protection. So maybe we'll start with that, how we're adequately protecting our IP given our global footprint and our partners in in China and India and various other places. And then there's a specific question around software and controls as a key differentiator within the market. Can you just briefly touch on that? Sure. Yeah. I mean, first of all, when we talk about the the the intellectual property that is sort of the core of how our products operate and how they operate well, really, a lot of it is built into some IP in the stacks and some IP in how we operate the system.

44:36 The IP in the stacks, we, you know, retain pretty tight control over by by manufacturing those devices in house. We've looked at whether we might have third parties manufacturing those for us, and I think there is a possibility to do that at the right scale and with appropriate IP protections around it. In terms of the operability of the system, really, it comes down to the point about the software control systems. You know, we have we have over the past two, three years, made some very exciting advances in how we actually operate one of these systems, and therefore, you know, getting more power and more energy out of the same volume of electrolyte, same amount of cell stack, doing so at much higher efficiency. All that is really built into the the the sort of the core operating software, the DMS that sits inside our battery.

45:22 That DMS, that software, those controls are not something we ever release outside of of of the company. We don't use external parties to develop that work. We don't use external software platforms to help make that to help implement those algorithms, those those strategies. So, yeah, hence hence, since the ability to maintain relatively tight control over the things that get that five to 10% better efficiency and 20 to 30% more energy out of our out of our batteries than than than some of our competitors. Brilliant. Thanks, Matt. The there's a shall I stick with you? There's a there's another question here around sort of it's more general sort of question around how we win against the sort of people in the elder space and our competitive advantages against them on a technical basis. So Yeah. How are we how are we competing on a competitive basis, put lithium to one side Mhmm. In the sort of emerging long duration of nonlithium space? Mhmm. And just give us a sort of top line on that. I mean, look. Top line on that, I think I think looking at looking at The UK carbon full program is a is a great example. Right? You know, that is a that is a program that attracted interest from suppliers all over the world. Mhmm. And where a relatively small number of of suppliers were were able to make it to the stage that we're currently at.

46:39 You know, we see that there are great opportunities for technologies other than ours. You know, there are there are, for example, some very, very long duration technologies, whether you're looking at zinc or iron or others that are designed to serve multiple day applications on the electric grid. Those may have a great place to play in the future. There are things like pumped hydro that are very, very well proven and can be, you know, very, very durable at very, very low cost over extremely long time frames, both in the of those projects and their application on the electric grid. We think that those are technology types and applications that are not gonna be directly competitive with our book of business. Mhmm. And so we feel pretty happy about where we're positioned right now for those immediately those immediate longer long duration storage opportunities.

47:25 Thanks. Going back to The UK, there's a question around Cockwood and the sort of long term plan around that as a as a business, is it what's our what's our long term vision on the Copwood project and and and plan for that, I guess? Yeah. I think in the in the short to medium term, we need to swap that asset. And by swap that asset, I mean, you know, use that battery, improve that it can be used as a workhorse. And so that's both operationally, and I want to prove it financially as well. So, you know, how should you use this battery when co located with solar? Yeah. We want to prove to our customers that we can do all of the use cases we talk about. And so I would see that taking place over short to medium term. Yeah. At some point in time, you know, if it is served its uses and and there is a financial benefit to do something different with it, then I'm sure we would look at that.

48:17 Okay. But for the moment, I think there is some great use we can get at. Fair enough. Mhmm. There's a question as well referencing the recent comments by the chancellor by Richard Reeves around buying British in key industries. Can't comment on that at all? Yeah. And actually, you know, she she has mentioned that, but we're we are also hearing that within government as as well. And, yeah, we have DESNESS coming up to see us tomorrow with a a group a sort of global group of interested parties in the long duration storage in general, so they're delighted to host that. We talk to anybody about the importance of supporting local manufacturing. It it is a frustration of mine that when I look across our portfolio across the world, there is a lot of support across countries for us moving manufacturing in that I don't always see directly within The UK historically, but I am seeing a bit of a shift in that regard. Do I think we could do more? I think, yes, we could do. You know, supporting manufacturing the jobs in The UK and us getting back to manufacture creating local jobs supporting local economies, the national economy is critically important, but you are starting to see that come through in the rhetoric across different government departments. So my hope is that when Ofgem are making their awards, that they take account of that.

49:35 And and sort of tangentially related, but more on the on the supply chain side. What's our we've been asked a question here about how we're mitigating things like tariff risk and the way changing geopolitics, let's say. Can you sort of comment on that? Look. We we don't get any visibility more than anyone else does as as to what is happening globally, but we try to make sure that we diversify our supply chain where we can do. So make sure that we are never single sourced across different areas of our supply chain and that we have manufacturing in different areas such that we can deliver from different areas as need be. I think the important thing is to make sure that we are not too reactionary because as you think things things change extraordinarily quickly, you know, in in in global politics at the moment, but we are well spread across Europe, The US, and Asia. So I think we've got as many bases covered as we recently could be expected to Yeah. I mean, it impacts us in the short term. And in the medium term, it's a great opportunity for the company.

50:37 Let's say we are a low capital intensity option compared to conventional short duration battery storage. So that allows us to set up local manufacturing. And the benefits in some of these markets like investment tax credit and the production tax credit in The US are significant. And so those some some of those incentives and tariffs that you see playing out today are playing into our benefit in the medium to long term. Okay. Thanks, Adam. Sticking with the sort of supply chain theme and noting that we're we're sort of coming up to last five minutes. There's a question here just obviously, we're being involved in in larger and larger projects. Just asking the obvious question about, you know, vanadium supply and how we're how we're managing that. Matt? Yeah. Sure. So, look, we're gonna be using about roughly 12,000 metric tons worth of vanadium in that project.

51:28 Global production of vanadium per year is about a 120,000 metric tons. So, you know, per year, we're gonna be consuming something like two to 3% of annual production. That may so it's relatively small as compared with what's being used globally. I think what's exciting for us is that and what's exciting for a lot of vanadium industry is that this is an industry that has not grown significantly in a very long time. And they you know, all around the world, a lot of the existing suppliers are very eager to do to do business with us because they see the battery space as one of the biggest growth factors for their industry overall. And this project that we are now gonna be doing is is is is probably the first instance of a single project that really will spread the development of new capacity and and some of the new some new partnerships.

52:16 Great. Possibly our final question, unless any any more come in while we're answering it. Jonathan, there's a question here about, you know, what what do we think that EVINITY EVINITY's key barriers to growth are? What what are we doing about it? I think bandwidth probably within the organization, to be honest. I mean, a 180 people sounds like quite a lot, but when you start to move that through and work out what it takes to deliver a a product of the size we have with the level of parts it touches on, it touches on software, it touches on, yeah, hardware from a technology perspective. We've got chemical engineering that goes within that. We've got heavy manufacturing. You know, we've got to have experts across those fields, and then we're doing it on a basis as well.

53:02 And so I think what we need to do is make sure we we grow quickly, but we don't do it in a way that we end up sort of gaining digestion along the way. So from my perspective, we need to make sure that we start to well, we do target increasingly focus on opportunities that we can close, and we are pretty ruthless about some things we won't cover. Yeah. At the moment, the phone is ringing, as you might expect, constantly from people wanting to come and see us, wanting to hear about us, wanting to partner with us, And we need to make sure we pick the right partners. Otherwise, we could end up in an awful lot of meetings and be very busy, but obviously achieving anything. And that's what I'm, you know, firm firmly focused on. Adam is firmly focused on making I'll make sure we set numbers into the market that are cautious for the next couple of years to have the growth that we can achieve. My job is to make sure we deliver opportunities that exceed that and that we can make sure we deliver against.

53:58 Brilliant. There's no more questions, so I'm gonna I'm gonna end with this one final one, which is what are you most excited about over the next six months, which is quite a good one to end on. And as we've got three minutes, maybe we've got time to go around the table. So gets to start. I'll I'll go last. I'll first. Look. From my perspective, my you know, a big part of my focus on the last the last year has been on the cost reduction. We've got those plans in place. We've got the teams working to finalize those details. Seeing all of those details come together in a final delivered product is is gonna be tremendously exciting for me. K. You you give me a second. Okay. I'm So I think, I mean, cap and floor, new game perspective, I think we're we're leading the world in long duration in in that respect.

54:46 And I think the announcements of that, as you said, expectations are are during the course of June are exciting. And I think having a site up and running and operational at the scale we have, biggest in Europe at the time that it's made, is really exciting to take both banks and customers around that and lead through through to gap and floor. So that'll be the biggest sign point of my my side. Thank you. I will answer, but also a final question has come in, which I think I want to answer as well. So one of my most excited about the biggest frustration for me historically has been knowing the commercial discussions we are having and not being able to be more forthcoming on those. And, you know, we we said before, you know, we are often entirely reliant on what's happening at the customer's perspective on a very complicated project to get those across the line.

55:33 Yeah. The we've seen now that we've started to, you know, flex space, perfect example. That was one of the projects I was always referring to, but not by name. Delighted now that we got to the stage where we won that. We could talk about it. Mhmm. You know? That is not the only one that sits there, but I'm really excited by. So what I'm most excited about the next six months is being able to show, hopefully, some of those coming through. We can't promise that, but I am very excited about what could come through from that. The final fund question that came through was on future funding. And I certainly don't want anyone to think we have ignored that. You know, we have raised capital before. We obviously have some significant growth prospects ahead of us. Adam has commented that BDN looked through from a going concern perspective, and they've given us a clean bill of health. We have very supportive strategic shareholders in both National Wealth Fund and in terms of the strategic Indian investors we brought in in September institutional as well. And there's a lot of excitement around the business. I am also conscious that there are lots of retail shareholders as well who support us on a daily basis, trading, buying, selling shares as well. And we will look to do the right thing by all of those and make sure we do it from a position of strength when needed.

56:48 Brilliant. Thanks for the questions. Mark, over to you. That's great. Well, look, thank you to everybody for their engagement this afternoon, tremendous amount of questions. And thank you to the team for your patience and your engagement as well. Ladies and gentlemen, that does conclude today's session. If I could please ask you not to close the webinar because we'll now redirect you so you can provide your feedback in order that the management team can better understand your views and expectations. On behalf of the management team of INVINITY ENERGY SYSTEMS PLC, thank you for your time this afternoon. Enjoy the rest of your day.