Ballard Power Systems making fuel cells a commercial reality

Transcription

1 Ballard Power Systems

2 Forward Looking Statements This presentation contains forward-looking statements that 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 and Exchange Act of 1934, as amended. Such assumptions relate to our financial forecasts and expectations regarding our product development efforts, manufacturing capacity, and market demand. These statements involve risks and uncertainties that may cause our actual results to be materially different, including, without limitation, 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, and our ability to provide the capital required for product development, operations and marketing. 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. For a detailed discussion of the risk factors that could affect Ballard s future performance, please refer to our most recent Annual Information Form.

3 Overview 1 I. About Ballard II. Fuel Cell Market Commercialization Timelines III. Priority Markets III-1 Materials Handling III-2 Residential Cogeneration III-3 Backup Power III-4 Automotive IV. Financial Position V. Summary

4 I. About Ballard 2 Leading-edge PEM fuel cell technology and products Product sales in nearer-term commercial markets through lead customer relationships: materials handling residential cogeneration back up power Industry-leading automotive alliance with DaimlerChrysler and Ford to advance automotive fuel cell technology Focused on building a sustainable company by: revenue/margin growth in nearer-term markets continued optimization of cost base Significant longer-term option value in automotive markets

5 I. Ballard s Corporate Strategy 3 Strategic Direction Strategic Drivers Nearer-term markets: Build the leading market position for fuel cell stacks in each of the nearer-term markets of residential cogeneration, materials handling and back up power leverage technology, product and manufacturing expertise to develop leading fuel cell products establish commercial, go-to-market relationships with lead customers Longer-term automotive markets: Strengthen our automotive fuel cell stack technology leadership for longer-term commercialization work closely with Alliance partners and strategic suppliers to progress technology and optimize costs pursue profitable opportunities in bus demonstration programs and trials apply innovations to non-automotive markets

6 II. Fuel Cell Market Commercialization Timelines 4 materials handling backup power residential cogeneration automotive pre-commercial, positive gross margin sales commercial volumes market commercialization timelines based on Ballard projections

7 III.1 Materials Handling: Market Overview 5 Market opportunity: replace lead acid batteries in electric industrial vehicles forklift battery market: $1B+ in annual global sales target customers: multi-shift, electric forklift and industrial vehicle fleet operators Market drivers: improves end-user bottom line triples run time: eliminates need to replace/recharge batteries increased productivity: no loss of power over work shift revenue generating: frees up warehouse and factory capacity Market strategy: demonstrate benefits in end-user customer trials Cellex Power and General Hydrogen manufacture, market and sell fuel-cell powered battery replacement packs Ballard working to reduce fuel cell cost and increase reliability and durability

8 III.1 Materials Handling: Market Status 6 Progress in Goals shipments: 147 Mark 9 SSL TM fuel cell products lead customer relationships: Cellex and General Hydrogen positive feedback from field trials with Wal-Mart, Bridgestone, CAT and others strong fuel cell stack performance e.g. durability 7,000 + hours shipments: 700 Mark 9 SSL TM fuel cell products fleet conversions with field trial end users field trials with new end users broaden scope of applications reduce Mark 9 SSL TM cost by 25% manufacturing processes MEA & hardware components

9 III.1 Materials Handling: Market Development Timeline 7 BALLARD FUEL CELL PRODUCT SHIPMENTS (Target) (Potential) ,000-10,000 MARKET DEVELOPMENT ACTIVITY integration testing beta field trials fleet deployments and additional field trials commercial introduction STACK PRICE < $1,000/kW < $1,000/kW $700-$900/kW $500-$600/kW TARGET * * Dependent on power level & volume commitment Above data based on Ballard estimates.

10 III.2 Residential Cogeneration: Market Overview 8 Market opportunity: replace hot water boilers in Japanese homes with integrated fuel cell system market opportunity 1.8 million homes each year in Japan reduces need for high-cost grid electricity & eliminates conventional water heaters Market drivers: Japanese government subsidies, reduced energy consumption and greenhouse gases subsidies: 05: $26M / 06: $32M primary energy consumption cut by 20-30% (annual savings to homeowner ~ $600) cuts CO 2 emissions by 30-40% vs. conventional heat and electrical generation Market strategy: increase installations leading to commercial launch key partnerships with Ebara, energy companies Tokyo Gas, Nippon Oil, Toho Gas

11 III.2 Residential Cogeneration: Market Status 9 Progress in Goals shipments: 315 Mark 1030 fuel cell products top performance in energy and emissions reduction introduced 3 rd generation fuel cell stack with 40,000 hour durability and lower-cost design shipments: 400 Mark 1030 fuel cell products transfer Mark 1030 assembly to Japanese JV increase customer installations, improve reliability and reduce cost

12 III.2 Residential Cogeneration: Market Development Timeline 10 BALLARD FUEL CELL PRODUCT SHIPMENTS (Target) (Potential) ,000 12,500 MARKET DEVELOPMENT ACTIVITY integration testing & limited installation prove primary energy and CO2 reductions improve lifetime and reliability achieve 40,000 hours lifetime, continue cost reduction SYSTEM PRICE* ~ $50,000 ~ $45,000 ~ $35,000 $8,000 - $11,000 * Fuel cell stack accounts for 25-30% of total system price Above data based on Ballard estimates.

13 III.3 Backup Power: Market Overview 11 Market opportunity: replace lead acid batteries in telecommunications backup installations market potential: $2B + in annual battery sales wireless and wireline applications Market drivers: increased reliability / reduced emissions extended run time reduced maintenance requirements = lower lifecycle costs fewer moving parts wide operating temperature range Market strategy: demonstrate benefits in field trials working with OEMs and system integrators to implement initial field trials product development focus: reduce cost, increase lifetime and reliability

14 III.3 Backup Power: Market Status 12 Progress in Goals introduced air-cooled fuel cell product: Mark 1020 ACS joint development program with Plug Power for US Department of Homeland Security positive feedback from potential lead customers ship 100 Mark 1020 ACS fuel cell products one or more lead customer relationships end user field trials

15 III.3 Backup Power: Market Development Timeline 13 BALLARD FUEL CELL PRODUCT SHIPMENTS (Target) (Potential) ,000 12,000 MARKET DEVELOPMENT ACTIVITY integration testing beta field trials commercial introduction STACK PRICE TARGET * n/a $2,000-$3,000 /kw $1,000-$1,800 /kw * dependent on power level & volume commitment Above data based on Ballard estimates.

16 III.4 Automotive: Market Overview 14 Market opportunity: cars, buses and trucks fuel cell propulsion systems, fuel cell hybrids initial commercial introduction 2014/2015 Market drivers: reduced emissions improved performance electrification of vehicles government regulation and subsidies Market strategy: leverage partnerships and technology development programs optimize cost structure of automotive technology programs exploit profitable opportunities from sales for demonstration programs leverage IP into non-automotive products for nearer-term markets

17 III.4 Automotive: Market Development Timeline 15 vehicles technology development TBD technology demonstration customer acceptance cost reduction market introduction

18 IV.1 Financial Position: Key Financial Metrics 16 Forecasted 07 revenue: $55 to $65 million 2006: $49.8 million (up 18% from 2005) Forecasted 07 operating cash consumption: $40 to $50 million 2006: $51.4 million (down 38% from 2005) Year end 2006 cash reserves: $187.1 million no debt sufficient cash reserves to meet planned growth and development activities into 2010

19 IV.3 Financial Position: Operating Cash Consumption and Revenue 17 Operating Cash Consumption Reduction Revenue Growth USD (Millions) USD (Millions) cash consumption: up to 20% reduction over 2006 sale of edrive operations improves cost structure increased investment in product, technology and manufacturing 2007 revenues: up to 30% growth over 2006 higher product and engineering development revenues lower service revenues

20 V. Summary 18 Sharp focus on core fuel cell stack business strategic repositioning complete Advancing high-priority nearer-term markets: materials handling, backup power and residential cogeneration Committed to technology development and market leadership Leveraging key partnerships and lead customer relationships materials handling - Cellex and General Hydrogen Japanese residential cogeneration EBARA, Tokyo Gas, Nippon Oil automotive - DaimlerChrysler and Ford Strong execution focus and financial discipline