A CLEAN ENERGY FUTURE

Transcription

1 SMARTER SOLUTIONS O S FOR A CLEAN ENERGY FUTURE 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 FEBRUARY 2, 2011 COPYRIGHT 2011 BALLARD POWER SYSTEMS INC. ALL RIGHTS RESERVED

2 Forward Looking Statements This presentation contains forward-looking statements, including estimated revenue and cash flow from operations for 2010; and business outlook for 2011, including estimated revenue, operating costs, Adjusted EBITDA gross margins and anticipated market developments. 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 consolidated d to include Dantherm Power s results and are in U.S. dollars, unless otherwise noted. FEBRUARY 2, 2011

3 Content 1. About Ballard 2. Fuel Cells and Clean Power 3. Transformation Proof Points 4. Market Development Progress 5. Preliminary 2010 Results & 2011 Outlook 6. Our People 7. Summary FEBRUARY 2, 2011

4 About Ballard Founded in 1989 Listed on NASDAQ Q( (BLDP) and TSX (BLD) Cash reserves of $74.4M as of 12/31/2010 Market capitalization of ~$139M as of 1/31/2011 ~400 employees Ballard designs and manufactures clean energy fuel cell products, enabling optimized power systems for a range of applications FEBRUARY 2, 2011 P A G E 1

5 Fuel Cells and Clean Power Clean energy market growth will reflect a mix of energy technologies Wind Solar Clean Energy Mix Bio-energy Fuel cells PEM, SOFC, PAFC As fuel cell product costs continue to decline, fuel cells will play an increasingly prominent role in the clean energy space FEBRUARY 2, 2011 P A G E 2

6 PEM Fuel Cells Tem mperature High 600 C C Low 60 C- 120 C SOFC MCFC (Fuel Cell Energy) PAFC (United Technologies) PEMFC Increasing heat manageme ent requiremen nts 1kW 10kW 100kW 1MW 10MW Applications Ballard leverages leadership in PEM across multiple markets Compact & scalable Fuel flexibility Efficient, reliable and safe Fast start-up and low temperature Rapid response to changes in power demand Durable across wide variety of duty cycles FEBRUARY 2, 2011 P A G E 3

7 Ballard: Putting PEM Fuel Cells to Work 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 Developing a global customer base - CHANNELS Backup Power Distributed Generation Material Handling Bus System Integrators / OEMs BLUWAYS Downstream Customers FEBRUARY 2, 2011 P A G E 4

8 Transformation Proof Points Re-vectored from auto fuel cell R&D to commercial markets Divested automotive technology programs Divested Japanese cogeneration systems joint venture Significant commercial progress Product performance improvements Product cost reductions Reset the cost base by >50% Exited 2010 with cash operating expense base run-rate of ~$40M Augmented cash reserves Superior Plus tax transaction (Net: $34M) Monetized rights under Share Purchase Agreement (Net: $40M) Sale-and-leaseback on head office building (Net: $20M) Acquired controlling interest in Dantherm Power System integration capability for stationary power solutions Direct channel to end-user markets Complete transformation of Ballard over past 3 years FEBRUARY 2, 2011 P A G E 5

9 Fuel Cell Product Portfolio PRODUCT KEY ATTRIBUTES PRODUCT ASP END-2010* Backup power market Stack power 500W-2 kw Operating life 2,500-4,000 hours $650-2,600 / stack Distributed generation market Stack power 2-8 kw Operating life 20,000-30,000 hours $2,800-11,200 / stack Material handling market Stack power 4-20 kw Operating life 8,000-12,000 hours $2,000-10,000 / stack Bus market Module power kw Operating life 12,000 hours $337, ,000 / module * Dependent on power level & volume commitment Ballard s product portfolio includes fuel cell stacks, modules, as well as fully integrated system solutions Product ASPs shown here reflect aggressive cost reductions 40-65% over the past three years ( ) FEBRUARY 2, 2011 P A G E 6

10 Backup Power Initial focus on telecom Addressable market: ~$1B+ Compelling value proposition, driven by reliability and low cost Dual channel access - Dantherm Power system Direct via Recent Progress - Deployment of Dantherm Power systems in Wind Mobile network IdaTech sale of >250 systems to z Hutchinson Telecom in Indonesia IdaTech launch of methanol-fueled system, using Ballard fuel cell stacks Ballard sales to emerging system integrators Indirect via system integrators - FEBRUARY 2, 2011 P A G E 7

11 Distributed Generation 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 with by- product hydrogen and SGIP or FIT (feed-in tariff) programs CLEARgen TM systems or stacks CLEARgen TM Levelized Cost of Energy ~$0.06-$0.13 per kilowatt hour (reflecting available Federal and California state government incentives) 1 MW CLEARgen TM system Recent Progress 1 MW CLEARgen TM system for peak power requirements was delivered to FirstEnergy in Ohio K2 Pure Solutions supply agreement signed for 163 kw CLEARgen TM system, utilizing by-product hydrogen Sale of 1.25 MW s of FCgen stacks to Real Time Engineering, for deployment of 1 MW system in Singapore FEBRUARY 2, 2011 P A G E 8

12 Material Handling 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) Economics driven by improved productivity Focus Battery replacement in N/American high-volume distribution centers & manufacturing facilities Recent Progress Extension of supply agreement with Plug Power through 2014, with mutual exclusivity for North America Plug Power sales to Walmart, Sysco, Whole Foods, Coca-Cola, BMW Plug Power distribution agreement with Raymond Corporation 2010 shipments of 1,100 units, a 6-fold increase over 2009 FEBRUARY 2, 2011 P A G E 9

13 Bus Zero-emission public transit Government supported programs Canada, UK, Brazil, Germany, USA, The Netherlands Channel access through bus OEM s and system integrators Reasonable volume increase would achieve competitiveness vs. diesel hybrid & electric trolley buses BC Transit fuel cell bus fleet Recent Progress World s largest fuel cell bus fleet deployed in Whistler, BC; >815k km's (>500k miles) accumulated Sales to Tuttotrasporti (Brazil), Transport for London (UK), APTS (The Netherlands), SunLine Transit Agency (Palm Springs, CA) Participating in 4 Federal Transit Administration projects under the U.S. National Fuel Cell Bus Program FEBRUARY 2, 2011 P A G E 10

14 Strong Preliminary 2010 Results (Unaudited) Strong growth revenue up 39% (met guidance) & product shipments up 104% Met or exceeded 4 of 6 growth milestones; 2 not met Key market achievements: Backup Power established a direct channel with acquisition of a controlling interest in Dantherm Power. Distributed ib t Generation signed the company s first FCgen stack supply agreement, for 1 MW system in Singapore. Bus signed supply agreements for buses in London and Brazil; selected to power buses under the U.S. National Fuel Cell Bus Program. Material Handling extended supply agreement with Plug Power under a mutually exclusive relationship for North America through Major progress towards profitability 33% improvement in Adjusted d EBITDA 30% improvement in cash flow from operations on a comparable basis (excluding Dantherm Power and negative FX impact) - met guidance FEBRUARY 2, 2011 P A G E 11

15 Preliminary 2010 Results (Unaudited) USD Millions Q Q % Improvement FY 2010 FY 2009 % Improvement From Q From FY 2009 GROWTH Revenue Fuel Cell Stack Shipments 1 (units) 12-Month Rolling Order Book $21.1 $ % $65.0 $ % 1, % 3,014 1, % $35.0 $ % PROFITABILITY Gross Margin Adjusted EBITDA 2 24% 14% 16% 13% ($3.1) ($6.4) 52% ($26.0) ($39.0) 33% LIQUIDITY Cash Reserves $74.4 $82.2-9% 1 Total fuel cell stack shipments for backup power, distributed generation, material handling, bus and automotive applications 2 Adjusted EBITDA measures EBITDA adjusted for stock-based compensation, investment and other income, transactional gains and losses, acquisition costs and the non-controlling interest in Dantherm Power. FEBRUARY 2, 2011 P A G E 12

16 2011 Outlook Building on strong 2010 results Continued focus on growth and profitability Key priorities Significant revenue growth - continued execution of multi-market strategy Maintenance of the cash operating cost base at current run-rate (~$40M/yr) Continued improvement in gross margin towards a 30-35% 35% target - shift in product mix and incremental product cost reductions Guidance Revenue growth in excess of 30% from the 2010 level Adjusted EBITDA improvement of 40% from the 2010 level FEBRUARY 2, 2011 P A G E 13

17 Our People Strong senior leadership team John Sheridan, President & CEO President & COO Bell Canada; extensive experience in telecom and technology; Joined Ballard 2006 Chairman of Canadian Hydrogen & Fuel Cell Association (CHFCA); Chairman of BC Hydrogen Highway; Member of BC Premier Technology Council Paul Cass, Vice President - Operations Extensive engineering, project management and manufacturing experience; Joined 1997 Bill Foulds, President Ballard a Material a Products Experience in advanced material products, including Director of Carbon Products at Textron Systems; Joined 2001 Michael Goldstein, Chief Customer Officer President & CEO Actuality Medical; President ifire; 6 years at GE; Joined 2009 Tony Guglielmin, Chief Financial Officer CFO Canada Line Rapid Transit; senior financial management roles at Finning International & BC Hydro; Joined 2010 Christopher Guzy, Chief Technology Officer 17 years at GE; PhD in Chemical Engineering; Joined 2005 Supported by solid organization ~40 employees are inventors (Ballard & BMP patents and patent applications) PhDs: 13; Masters: ~40; Engineers & Scientists: ~120 FEBRUARY 2, 2011 P A G E 14

18 Summary Product leadership in fuel cell power solutions, based on proven proprietary technology Compelling value propositions Strong order book supporting revenue growth in excess of 30% in 2011 Well-financed runway no need to raise cash in public markets to execute on growth strategy Expect significant ifi adjusted d EBITDAimprovement of 40% Ballard Putting Fuel Cells to Work FEBRUARY 2, 2011 P A G E 15

19 SMARTER SOLUTIONS O S FOR A CLEAN ENERGY FUTURE 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 FEBRUARY 2, 2011 COPYRIGHT 2011 BALLARD POWER SYSTEMS INC. ALL RIGHTS RESERVED