Company Update. November 2018

Transcription

1 Cmpany Update Nvember 2018 NASDAQ: FCEL

2 Safe Harbr Statement This presentatin cntains frward-lking statements within the meaning f the safe harbr prvisins f the Private Securities Refrm Act f 1995, including, withut limitatin, statements with respect t the Cmpany s anticipated financial results and statements regarding the Cmpany's plans and expectatins regarding the cntinuing develpment, cmmercializatin and financing f its fuel cell technlgy and business plans. All frward-lking statements are subject t risks and uncertainties that culd cause actual results t differ materially frm thse prjected. Factrs that culd cause such a difference include, withut limitatin, changes t prjected deliveries and rder flw, changes t prductin rate and prduct csts, general risks assciated with prduct develpment, manufacturing, changes in the regulatry envirnment, custmer strategies, unanticipated manufacturing issues that impact pwer plant perfrmance, changes in critical accunting plicies, ptential vlatility f energy prices, rapid technlgical change, cmpetitin, and the Cmpany s ability t achieve its sales plans and cst reductin targets, as well as ther risks set frth in the Cmpany s filings with the Securities and Exchange Cmmissin (SEC). The frward-lking statements cntained herein speak nly as f the date f this presentatin. The Cmpany expressly disclaims any bligatin r undertaking t release publicly any updates r revisins t any such statement t reflect any change in the Cmpany's expectatins r any change in events, cnditins r circumstances n which any such statement is based. The Cmpany may refer t nn-gaap (generally accepted accunting principles) financial measures in this presentatin. The Cmpany believes that this infrmatin is useful t understanding its perating results and assessing perfrmance and highlighting trends n an verall basis. Please refer t the Cmpany s earnings release fr further disclsure and recnciliatin f nn-gaap financial measures. The infrmatin set frth in this presentatin is qualified by reference t, and shuld be read in cnjunctin with, ur Annual Reprt n Frm 10-K fr the fiscal year ended Octber 31, 2017, filed with the SEC n January 11, 2018, ur Quarterly Reprt n Frm 10-Q filed with the SEC n September 6, 2018, and ur earnings release fr the secnd quarter ended July 31, 2018, filed as an exhibit t ur Current Reprt n Frm 8-K filed with the SEC n September 6,

3 Abut FuelCell Energy Delivering Clean Innvative Slutins fr the Glbal Supply, Recvery and Strage f Energy Glbal leader in fuel cell technlgy since 1969 Danbury, CT - Crprate, R&D Trringtn, CT Manufacturing, Service Germany Manufacturing, Service Suth Krea Manufacturing, Service Glbal Custmers Serving utilities, industrial and large municipal custmers with bth utility-scale and n-site pwer generatin Fuel cells are extremely efficient, nn-cmbustin technlgy that emit negligible Nx, Sx and particulate pllutants. Advanced Technlgies addressing needs in: Carbn capture Lcal hydrgen prductin fr transprtatin / industry Lng duratin energy strage Unmatched experience 8,018,430 Ttal MWH generated by SureSurce plants (As f September 2018) 3

4 Energy Trends Driving Demand Grid resiliency & Emissin reductins & Distributed hydrgen reliability De-carbnizatin Predictable n-site generatin enhances resiliency and reliability Avids csts and risks f interruptin and transmissin siting issues Highly efficient electrchemical prcess, n burning Scalable & cst effective carbn capture that als generates pwer Glbal Market Tri-generatin fr highpurity hydrgen plus pwer & heat Affrdable and significantly cleaner than steam refrming Supprting intermittent renewable deplyment Strage supprts intermittent pwer: shrt duratin (<4 hurs) & lng duratin (6+ hurs r days) 2 GW Equipment Market 16 GW Equipment Market 1 GW Equipment Market 3 GW Equipment Market $7 B Equipment Market $11 B Services Market $29 B 20-year fuel sales $49 B Equipment Market $73 B Services Market $215 B 20-year fuel sales $4 B Equipment Market $5 B Services Market $8 B 20-year fuel sales $10 B Equipment Market $15 B Services Market $70 B Equipment Market $104 B Services Market $252 B 20-year fuel sales Base Business Predictable distributed clean pwer generatin Advanced Technlgies Carbn capture fr pwer generatin and industry Distributed hydrgen fr transprtatin and industrial applicatins Lng-duratin strage supprts increased renewables penetratin 4

5 Strategic Fcus Areas * millins Execute n the $1.9 billin f existing backlg and awards (83.1 MW f new prject plant prductin) Grw the Generatin Prtfli business mdel delivers recurring and sustainable EBITDA Cmpete and win in the marketplace fr new prjects Cmmercialize big ideas: Carbn Capture Hydrgen Lng Duratin Energy Strage * Nte: Prject awards are prjects fr which the Cmpany has been selected but has nt yet entered int definitive agreements. Recurring Revenue & Generatin Prtfli Asset Grwth 5

6 Intense Fcus n Prject Executin Backlg and Prject Awards ttal $1.9 billin Derby, CT and Hartfrd, CT PPA s ttaling 22.2 MW executed in Octber LIPA prjects n schedule PPA in final stages f executin CMEEC (Grtn Sub Base) cnstructin cmmencing (2) SureSurce MW high electrical efficiency fuel cell plants with 60%+ electrical efficiency Bridgeprt Fuel Cell Park acquisitin will add 14.9 MW t generatin prtfli $15+ millin in annual recurring revenue fr the life f the PPA 45 years remaining n land lease with the city f Bridgeprt; significant prject value lng after the expiratin f the existing PPA in 10+ years. Significant / diversified interest in prject financing Will supprt prject executin and retentin AEP is new crprate partner with acquisitin f Trinity Cllege prject Executin / develpment f carbn capture installatins with ExxnMbil Tyta Lng Beach hydrgen prject mves frward 6

7 Building Sustainable Prfitability <---Cnstructin / Cmmercial Operatin Timing (Fiscal Year)---> Building Sustainable Recurring Cash Flw 11.2 MW existing generatin generates ~$7 - $8 millin per year in revenue 14.9 MW Bridgeprt Fuel Cell Park materially accelerates plan 83.1 MW under cnstructin wuld cntribute ~$70 - $80 millin per year in additinal revenue Apprximately 60 MW in generatin prtfli drives sustainable EBITDA prfitability and cash flw f entire Cmpany MWs n Balance Sheet MW 7

8 Bridgeprt Fuel Cell Park Acquisitin Backgrund Dminin Energy has wned the Bridgeprt Fuel Cell Park since it s cmmissining in 2013 FuelCell Energy has perated and serviced the fuel cell park ver it s entire perating histry Financial Impact fr FuelCell Energy Incremental Sales $15+ millin / year EBITDA margins Greater than 50% Strng financial prfile 10 Years remaining n a fixed price PPA with Eversurce. 45 years remaining n prperty lease with the city Fits with FCE s generatin asset strategy Financing being finalized: $15 millin frm restricted cash n FCE balance sheet Term debt CT Greenbank subrdinate debt supprting senir prject debt prcess Targeted clsing by end f

9 Value Drivers High Availability High availability supprts ecnmics High level f Renewable Energy Credits (REC s) generated (3-5x the REC s f slar) Negligible Emissins Easy-t-site Accelerate RPS, CO 2 & NO x reductin gals Highly effiecient Cmpelling Ecnmics Avids transmissin (line lsses, cst & permitting) Minimal land use / cst Site in high ppulatin density lcatins Ecnmic Develpment Driver Urban renewal Prperty & sales tax revenue Jb creatin Mdest land usage Lw emissins and near-zer pllutants Gal: Meet RPS mandates (i.e. max. REC's) MW's Acres f land Annual MWh's FCE 10 1 ~83,000 Slar ~83,000 Challenge: Limited land availability MW's Acres f land Annual MWh's FCE 10 1 ~83,000 Slar ~220 9

10 Mdern Urban Distributed Energy These [fuel cell] prjects aren t just gd fr the envirnment, they are gd fr ur ecnmy. They create jbs. They help reduce asthma and breathing ailment rates fr kids. They grw ur tax base. Bridgeprt Mayr Bill Finch (term expired Jan-2016) Type: Size: Owner: Grid supprt w/ slar array 2.8 MW Utility rate base Type: Size: Owner: On-site CHP 1.4 MW Prject investr Sustainable and affrdable energy is an increasingly imprtant cmpnent f the new energy mix at the University f Bridgeprt. Neil A. Salnen President, University f Bridgeprt Type: Size: Owner: Grid supprt 14.9 MW Utility PPA structure The Dminin Bridgeprt Fuel Cell Park is anther imprtant step in ur effrts t identify and develp pprtunities t prduce clean energy that is reliable and cst effective." Thmas F. Farrell II, CEO, Dminin Purchasing these fuel cell pwer plants supprts ur gal f investing in renewable distributed generatin t enhance the reliability f ur pwer delivery system and ffer ur custmers cleaner energy. James P. Trgersn, President & CEO, Avangrid 10

11 Mre than 100 SureSurce plants in peratin at mre than 50 sites Mre than 350 MW f SureSurce mdules in peratin r n rder Mre than 8,000,000 MWh generated by SureSurce pwer plants Predictable Pwer Grid Supprt with CHP Pwer sld t grid Heat sld t district heating system 59 MW n nly 5.2 acres Only 14 m. installatin Wrld s largest fuel cell park Resiliency fr Pharma 5.6 MW with steam fr cmpany campus Predictable pwer slving grid quality issues Immediate savings vs. grid Sustainability Grid Supprt / Urban Redevelpment Pwer sld t grid Enhance resiliency Brwnfield revitalizatin 15 MW n 1 ½ acres Only 12 m. installatin Fuel Cell / Slar Integratin Utility-wned, rate-based Enhance resiliency 2.8 MW fuel cell n ¼ acre - ~23,000 MWh annually 2.2 MW slar n ~9 acres - ~3,000 MWh annually 11

12 Pwer Security 39.8 MW LIPA FUEL CELL PROJECTS WOODBRIDGE UTILITY MICROGRID -Pwer supplied with predictable n-island generatin aviding transmissin investments -Unused industrial land cnverted t incme generating prperty -State-f-the-art utility micrgrid applicatin supprting critical building lads with independent capabilities -Replicable mdel fr ther custmers evaluating similar structures Making the Pwer Grid Cleaner and Mre Resilient Adding Reliable Micrgrid t a Utility Energy Prtfli 12

13 Summary: Attractive Lng Term Mdel Revenue Grwth Increasing Prfit Margin $1.9 billin backlg & awards supprts tpline grwth Diverse revenue streams becming mre balanced with grwth f generatin prtfli (See graphs belw) Strng Generatin margins & grwing Services business Strng incremental margins frm increasing prductin vlume Advanced Technlgy benefiting frm private cntracts with industry leaders Leveraging stable perating expense Lng-Term Mdel Grw recurring Generatin & Service revenue Expand glbal installed base with new prjects Target Grss Margin: >25% EBITDA prfitability with better blend f Generatin revenue and Prduct sales Revenue Mix LTM Q Revenue Mix t Shift t Strng Margin Recurring Generatin Generatin t expand with prject executin in Cmplemented by prduct sales in Krea / U.S. Revenue Mix Future 13