ballard power may 2010
TRANSCRIPT
COPYRIGHT © 2010 BALLARD POWER SYSTEMS INC. ALL RIGHTS RESERVED
B A L L A R D P O W E R S Y S T E M S
A CLEAN ENERGY GROWTH COMPANY TSX: BLD NASDAQ: BLDP
SMARTER SOLUTIONS FOR A CLEAN ENERGY FUTURE
MAY 4, 2010
MAY 4, 2010
This presentation contains forward-looking statements, including estimated revenue and cash flow from operations for 2010, and product pricing and economic payback models included in the Appendices. These forward-looking statements are based on the beliefs and assumptions of Ballard’s management and reflect Ballard’s current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition to the specific assumptions set out with those forward-looking statements, such assumptions relate to our financial forecasts and expectations regarding our product development efforts, manufacturing capacity, and market demand, and include matters such as generating new sales, producing and delivering the expected number of units and controlling our costs.
These forward-looking statements are being provided to enable stakeholders to understand Ballard’s expectations as at the date of this presentation with respect to its future performance and may not be appropriate for other purposes.
These forward-looking statements involve risks and uncertainties that may cause our actual results to be materially different, including, without limitation, the condition of the global economy, the rate of mass adoption of our products, product development delays, changing environmental regulations, our ability to attract and retain business partners and customers, our access to funding, increased competition, our ability to protect our intellectual property, changes in our customers’ requirements, foreign exchange impacts on our net monetary assets and our ability to provide the capital required for product development, operations and marketing. For a detailed discussion of these risk factors and other risk factors that could affect Ballard’s future performance, please refer to our most recent Annual Information Form. Readers should not place undue reliance on Ballard’s forward-looking statements and Ballard assumes no obligation to update or release any revisions to these forward looking statements, other than as required under applicable legislation.
All amounts are in U.S. dollars, unless otherwise noted.
Forward Looking Statements
MAY 4, 2010
1. Fuel Cells and Clean Power
2. Transformation Proof Points
3. Market Development Progress
4. 2010 Guidance and Results
5. Liquidity & Capital Structure
6. Our People
7. Summary
Contents
MAY 4, 2010
Fuel Cells and Clean Power
Clean energy market growth will reflect a mix of energy technologies
Clean Energy Mix
Bio-energy
Solar
Fuel cellPEM, SOFC, PAFC…
Wind
As product costs continue to decline, fuel cells will play key roles in the clean energy space
P A G E 1
MAY 4, 2010
Ballard leverages leadership in PEM across multiple markets… Compact & scalable
Fuel flexibility
Efficient, reliable and safe
P A G E 2
Fast start-up and low temperature
Rapid response to changes in power demand
Durable across wide variety of duty cycles
PEM Fuel Cells
1kW 100kW 1MW 10MW10kW
Tem
pera
ture Hig
h600°C
-1200°C
Low
60°C
-120°C
PEMFC
SOFC
MCFC (Fuel Cell Energy)
PAFC (United Technologies)Applic
atio
ns
Increasin
g h
eat
man
agem
ent
requirem
ents
MAY 4, 2010
Ballard leadership in PEM fuel cells is based on - Portfolio of proven commercial solutions
Fuel cell stacks, power modules and systems
Strong delivery capabilities Access to over 2,000 patents and licenses
High volume manufacturing facility
SI & channel partnerships
100MW+ of fuel cell products shipped
Ballard: Putting PEM Fuel Cells to Work
P A G E 3
Developing a global customer base -
System Integrators /
OEMs
Downstream Customers
Backup Power Supplemental Power
Material Handling
Bus Distributed Generation
MAY 4, 2010
Re-vectored from auto fuel cell R&D to commercial marketsDivested automotive technology programs
Divested Japanese cogeneration systems joint venture
Significant commercial progressProduct performance improvements
>30% product cost reductions in each of the past 2-years
Reset the cost base by >50%
Augmented cash reservesSuperior Plus tax transaction (Net: $33.8M)
Monetized rights under Share Purchase Agreement (Gross: ~$44.5M)
Sale-and-leaseback on head office building (Gross: $20.4M)
Acquired controlling interest in Dantherm Power
P A G E 4
Transformation Proof Points
Complete transformation of Ballard over past 3 years
MAY 4, 2010
Backup & Supplemental Power
Initial focus on telecom
Addressable market: ~$1B+
Compelling value proposition
Channel access primarily through system integrators
P A G E 5
z
Recent Progress - Dantherm Power acquisition to
accelerate backup power market development
IdaTech sale of 100+ systems to Hutchinson Telecom in Indonesia
FuelWorksTM established to advance fuel processing technology
MAY 4, 2010
Distributed Generation
Megawatt-scale power plant applications
Addressable market: ~$3B+ (based on ~1,000 MW of by-product hydrogen…ie. sufficient to power ~800k-1M homes for a year)
Focus on chemical plants (where there is by-product hydrogen available and a feed-in tariff program in-place)
P A G E 6
Recent Progress – Supply agreement with FirstEnergy Non-binding MOU with K2 Pure Solutions
MAY 4, 2010
Exclusive stack supplier to Plug Power….clear market leader
Addressable market –
Plug Power indicates ~380,000 trucks of an installed base of 1.7M trucks in N/America (market potential >$1.5B)
Focus –
• Battery replacement in N/American high-volume distribution centers & manufacturing facilities
P A G E 7
Material Handling
Recent Progress – Plug Power sales Walmart, Sysco, Whole Foods, Coca-Cola Orders to date represent >50% of Ballard’s 2010 guidance Plug Power distribution agreement with Raymond Corporation
MAY 4, 2010
Zero-emission public transit
Government supported programs
Canada, UK, Brazil, Germany, USA, The Netherlands
Channel access through bus OEM’s and system integrators
P A G E 8
Bus
Recent Progress – World’s largest fuel cell bus fleet deployed in Whistler, BC;
>300k km's (>180k miles) accumulated Sales to APTS in The Netherlands and SunLine Transit Agency
MAY 4, 2010
2010 Guidance
Revenue growth in excess of 35%; underpinned by growth milestones -
Begin shipments for supplemental power systems in India
Deploy Dantherm Power’s backup power systems in 1 major new network
Commission 1 MW DG system for FirstEnergy
Book first DG sale utilizing by-product H2
Material handling shipment growth in line with Plug’s 1,100 system target
Book new contracts to support deployment of >25 fuel cell buses
Improve cash flow from operations by 30% from 2009, pre-consolidation (excluding Dantherm Power)
With this trajectory in 2010, Ballard expects positive EBITDA performance during 2011
P A G E 9
MAY 4, 2010 P A G E 10
2010 Results
USD Millions
Q1 2010 Pre-Consolidation
(Excludes Dantherm Power)
% Chg Vs. Q1 2009
Q1 2010 Consolidated
GROWTH
Revenue $11.2 +38% $11.9
Fuel Cell Product Shipments (Units)
328 +73% 328
12-Month Order Book
$29.0 +29%1 $29.0
PROFITABILITY
Operating Expense $9.7 -25% $12.1
Cash Flow from Operations
($11.5) -33% ($14.2)
EBITDA Loss $7.6 -56% $8.6
Net Loss $9.0 -53% $10.0
1 Growth relative to December 31, 2009
MAY 4, 2010
Well-financed runway – no need to raise cash in public markets to execute on growth strategy
• Cash reserves of $86.9M (as of March 31, 2010)
• Debt free, excluding capital leases
~84M shares outstanding
Top 15 shareholders own ~20% of shares
P A G E 11
Liquidity & Capital Structure
MAY 4, 2010
Strong senior leadership teamJohn Sheridan, President & CEO
President & COO Bell Canada; extensive experience in telecom and technology; Joined Ballard 2006
Paul Cass, Vice President - Operations
Extensive engineering, project management and manufacturing experience; Joined 1997
Bruce Cousins, Chief Financial Officer
CFO at Xantrex, Aspreva and senior positions at Johnson & Johnson; Joined 2009
Michael Goldstein, Chief Customer Officer
President & CEO Actuality Medical; President iFire; 6 years at GE; Joined 2009
Christopher Guzy, Chief Technology Officer
17 years at GE; PhD in Chemical Engineering; Joined 2005
Supported by solid organization~30 employees are inventors (Ballard patents and patent applications)
PhDs: 11; Masters: ~50; Engineers: ~90
P A G E 12
Our People
MAY 4, 2010
Product leadership in fuel cell power solutions, based on proven proprietary technology
Compelling value propositions
Strong order book supporting 35%+ revenue growth
Positioned for positive EBITDA performance during 2011
Ballard – Putting Fuel Cells to Work
P A G E 13
Summary