Ceres Power Holdings plc (CWR) Earnings Call Transcript & Summary

It is now 9:00 a.m. and I'm please to welcome you all to the 2020 Annual General Meeting of Ceres Power Holdings PLC held at the offices of DAC Beachcroft in London. As a result of the ongoing coronavirus pandemic and in line with government advice, we adopted changes to the traditional running of the company's AGM. The company has made arrangements for a quorum to be present to transact the formal business of the meeting as set out in the notice of AGM with other shareholders attending by webinar. At this time, I call the meeting to order. Let me introduce myself and also my fellow directors. I am Warren Finegold, Chairman of the Board. This is my first AGM of the company, and I am delighted to have joined the Board at such an exciting time in the company's development and during a year of extraordinary achievement. You will hear more about this after the meeting when the Chief Executive presents his review of the business. With me in the room are Philip Caldwell, Chief Executive Officer; and Richard Preston, Chief Financial Officer; and Tim Anderson, Company Secretary; and participating by -- on the webinar are Steve Callaghan, our Senior Independent Director; Caroline Hargrove, non-Executive Director; Aidan Hughes, non-Executive Director; Uwe Glock, non-Executive Director; Powell Hao, non-Executive Director. We also have members of our executive team present, together with representatives of our legal and financial advisers. A few words about the agenda for this morning. First, we will address the business of the AGM. I will talk through the format and procedures to this circular. After the AGM, we will have a company presentation where we will read out and answer questions related to the general business of the company submitted in advance or posted live on the webinar. If you would like to ask questions relating to the AGM resolutions or the company presentation, you may submit them now via the Q&A box at the bottom of your screen, and we will address them at the appropriate time in this -- could everybody who's on the webinar go on mute, please? I think 1 or 2 people have got their microphones on. Now I shall return to the formal business of the meeting. The notice of this Annual General Meeting was sent to shareholders on the 30th of November 2020. I would like to note that in the notice that was sent out, there were 2 minor cross referencing errors, which were created on the final publication and print run of the notice. The 2 minor errors do not impact on the authorities sort in the resolutions. However, for completeness, they are in the introductory paragraph and in Resolution 8.2. These have been corrected on the notice of AGM made available on the company's website. Unless there are any objections, I will take the notice as read. Thank you. I will now briefly explain the procedures we will follow. I will go through each resolution in turn. After each resolution has been proposed, we will read out and answer questions related to that resolution received in advance and those posted live during the webinar. We will also publish the questions and answers on the company's website after the meeting. When posting questions on the webinar, please give your name and state whether or not you are a member or a corporate representative of a member. To be fair to everyone who wishes to ask questions, please restrict the number of questions you ask. We will only commit questions from members, corporate representatives of members and proxies. Due to the current restrictions, the voting for all resolutions at this AGM will be determined by way of a poll of proxy votes received rather than by a show of hands, and you will not be able to vote live on the webinar. When questions about a resolution are finished, I will share with you the proxy votes received, and I will then announce the results of each vote after it has taken. There are 8 ordinary resolutions and 2 special resolutions, which will go through the ordinary resolutions first. Resolution 1 is to reappoint BDO LLP as auditor of the company to hold office until the conclusion of the next AGM and to authorize the Board through the Audit Committee to fix their remuneration. For the information of the meeting, because the audit fees aren't available as we are not publishing an annual report yet, I set out BDO's planned fees for the period to December 31, 2020. The company is planning to pay a total of GBP 140,000 in fees to BDO for the audit of the group for the full 18-month period to December 2020 and the reviews of 2 sets of interim results. For comparison purposes, we paid KPMG, a total of GBP 89,000 for the audit and single interim review for the year ended June 2019. Any questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 1 carried. Pursuant to Article 54 of the company's Articles of Association, the Board is entitled to fill a vacancy or add to the Board so that the number of directors does not exceed 10. Any such director so appointed holds the office until the next following Annual General Meeting when they retire, but are eligible for election. Accordingly, Mr. Warren Finegold, Mr. Uwe Glock, and Mr. Powell Hao stand for election taking each in turn. Resolution 2 proposes to elect myself, Warren Finegold, to stand for election as a Director of the company. I was appointed a director by the Board on the 1st of March. As such, I now stand for election by the shareholders. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 2 carried. Resolution 3 proposes to elect Mr. Uwe Glock who will stand for election as a Director of the company. Mr. Glock was appointed a director by the Board on the 18th of June. As such, we now stand for election by the shareholders. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I am holding in relation to this resolution are now shown on the slides you can see. I therefore declare Resolution 3 carried. Resolution 4 proposes to elect Mr. Powell Hao who will stand for election as a Director of the company. Mr. Hao was appointed a director by the Board on the 18th of June. As such, he now stands for election by the shareholders. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies, I'm holding in relation to this resolution, are now shown on the slide you can see. I, therefore, declare Resolution 4 carried. The Articles of Association of the company require 1/3 of existing directors to retire and seek reelection at this AGM. Accordingly, Mr. Stephen Callaghan, Ms. Caroline Hargrove, and Mr. Richard Preston stand for reelection, taking each in turn. Resolution 5 proposes to Reelect Mr. Stephen Callaghan as a Director of the company. As the Senior Independent Director, Mr. Stephen Callaghan has offered himself up for reelection annually. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 5 carried. Resolution 6 proposes to reelect Ms. Caroline Hargrove as a Director of the company. Questions?

No questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 6 carried. Resolution 7 proposes to reelect Mr. Richard Preston as a director of the company. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I therefore declare Resolution 7 carried. We now come to the special business of the meeting, to resolve as an ordinary resolution. Resolution 8 requests the authority for the directors to be able to allot shares and securities up to an aggregate nominal amount of GBP 11,314,103, equating to just over 113.1 million shares. This resolution complies with the Investment Association share capital management guidelines and current practice. Questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 8 carried. Approval of Resolution 9 will enable the directors to issue for cash, equity securities up to an aggregate nominal amount of GBP 1,714,258, equating to just over 17.1 million shares without offering them pro rata to existing shareholders. The resolution is being proposed as a special resolution, and, therefore, must be passed by a majority of not less than 75% of members present in voting. Any questions?

There are no questions.

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 9 carried. Resolution 10 proposes the new articles will be approved and adopted in substitution for and to the exclusion of existing articles of association of the company. The resolution is being proposed as a special resolution and, therefore, must be passed by a majority of not less than 75% of members present in voting. I confirm it is the Board's intention to comply with best practice for future general meetings in virtual-only AGMs, which the changes in the articles enables will only be held in truly exceptional cases. Questions?

There are no questions?

There have been no questions received, so we will move to the results of the poll. The numbers of proxies I'm holding in relation to this resolution are now shown on the slide you can see. I, therefore, declare Resolution 10 carried. That concludes the formal business, and I now declare the 2020 Annual General Meeting closed. Thank you all for your interest and attendance. This AGM webinar has been recorded and will be made available on the company's website. The results of the meeting will be announced to the markets through our regulatory information service and posted on our website as soon as practicable. We now move on to a business review of the company, including a presentation from our Chief Executive, Phil Caldwell. At the end of his presentation, we will read out and answer questions relating to the business review, which have been posted over the webinar or received in advance. As a reminder, if you would like to ask a question, please do so via the Q&A box at the bottom of your webinar screen. Thank you.

Okay. Thank you, Warren, and thank you, everybody, for attending today. I'd just like to give you an overview of where the company is in implementing its strategy and also allow some questions. Next slide please, Richard. I think most people attending are familiar with the company, but just to remind ourselves, Ceres Power is a high-growth U.K. technology business, and we're very proud of that. We have world-leading solid oxide technology, which came out of Imperial College and that's protected by over 50 patent families and trade secrets. We now have approximately 350 employees, highly skilled scientists and engineers based in the U.K. And we have a very healthy financial outlook with over GBP 100 million of cash on balance sheet. And we need to -- beyond our previously published numbers, we've added to the order book and pipeline with recent contract wins with the likes of Doosan and Bosch and the others. So we have a healthy order book and pipeline of over GBP 100 million. We're listed on the AIM market, currently around GBP 1.8 billion market cap. And we are aiming to implement a high margin, capital-light licensing business model, very similar to what was achieved in the chip industry, we're doing the same thing with clean energy. Next slide. I think people are becoming more and more familiar with different types of fuel cells. And I just want to remind people, again, of the benefits of the solid oxide technology that we have at Ceres, which we call the SteelCell. So our technology is highly efficient. So over 60% efficiency from fuel into power out. It's fuel flexible, so it can run on natural gas, it can run on hydrogen, it can run on blends of hydrogen and natural gas, it can run on biofuels, it can potentially run on future fuels like ammonia. So it's an ideal technology for addressing this energy transition from the society we have today all the way through to achieving net-0 by 2050. And what's unique about the Ceres technology is the combination of ceramics and steel that enable us to produce a highly robust and cost-efficient SteelCell. So by weight of materials, over 90% of our fuel cell is conventional steel that you'll find in automotive supply chains like car exhausts, et cetera. And therefore, it's inherently low cost. We also use the most common of the ceramic materials, cerium, and that only constitutes a small percentage of our bill of materials. And once you have this technology being produced largely on ceramics printed on steel, we can also utilize manufacturing processes that have come out of the solar and the chip industry. So we have something that's highly scalable and highly mass manufacturable. Because of the robustness of the technology, we're also one of the few solid oxide technologies that can transition not just for stationary power applications, but into some of the transportation applications that we're starting to see like heavy-duty trucks and commercial vehicles, and potentially into future applications like marine as well. So it's a very broad range of applications for our technology. I'm often asked about what is the difference between Ceres technology and PEM technology. The PEM technology is very dynamic, it's very power dense and is often used for transportation, primarily transportation. Solid oxide is high-efficiency and fuel flexible and is used for stationary power. The advantage that we have is that combination of high efficiency, fuel flexibility and that robustness that allows us to play in both the stationary markets and the transportation markets. So we have this unique technology, but also the way that we bring this technology to market is also unique. And this slide illustrates the modular approach that we're taking. So from a common cell, a material set, we then produce stacks. Here, you can see 1-kilowatt and a 5-kilowatt stack, and you can think of these as being blocks. And then from those stacks, we can produce, with our partners, different systems for different applications. So right now, we have 4 partners at the licensing stage, Miura in Japan and the top unit you can see there is a 5-kilowatt system for combined heat and power. It's on sale in Japan now, targeting office blocks, buildings, et cetera. The next unit you can see is a 10-kilowatt prime power unit developed by Bosch, one of our key partners, who are also able to mass manufacture the 5-kilowatt stack that you can see in this slide as well. And we had the announcement earlier this week, very exciting announcement of Bosch, now moving on to scaling up of production in Germany. Weichai Power in China is obviously a very important customer for us as well. And Weichai is one of the world's largest commercial vehicle manufacturers and also produces something like 600,000 engines a year. The application that we're targeting primarily with Weichai is this commercial vehicle market, which is getting a lot of interest now in the fuel cell world. And what we've done so far is a 30-kilowatt system that you can see there, but we're looking at expanding that into 100-kilowatt or plus applications. And then finally, on here, we signed a deal last month with Doosan who are the world leaders in stationary power for fuel cells based in South Korea. And that's exciting for us because that takes this technology into hundreds of kilowatt scale up to megawatt scale. So here, you can see illustrated all the different applications that we're getting into with partners across the globe. And it's no accident that we have this strategy. If you look at all of the recent announcements post-COVID, you can see that most of the major economies in the world are intending to have some kind of green recovery. China has now announced it will be carbon neutral by 2060, which is a big step. Japan is one of the first countries to commit to adopting a hydrogen strategy. South Korea has a green new deal committing GBP 46 billion of green funding and very significantly targeting 15 gigawatts of fuel cell power generation by 2040. And just to put that into context, that's 5 Hinkley Points based on fuel cell power systems by 2040. Germany has announced EUR 9 billion of stimulus packages for hydrogen and fuel cells and obviously, we have our partnership with Bosch. And the EU, as a whole, has announced GBP 550 billion for green projects. And recently, the U.K. unveiled a 10-point plan with up to $12 billion, supporting green jobs and technology jobs in the U.K. And then we're waiting to stay put Joe Biden's recent Presidential win, we believe should start to move towards the U.S., hopefully, coming back into the Paris accord and therefore, a green stimulus as well. Now with our licensing model, we're able to play in most of these economies at the same time. So we're working, as you know, Weichai in China, Bosch in Germany, Doosan in South Korea, and Miura indiscernible] 00:23:46 in Japan. Next slide. When we see beyond where we are today, a huge opportunity for our technology. And if you think about Ceres Power is now one of the leaders in electrochemical technology, probably in Europe, if not globally. And you see the potential of our technology, we've significantly grown the business from our heritage of power systems, starting at single kilowatt level and now, as you can see from the previous slides, scaling into hundreds of kilowatts to megawatt scale. Now if you think about our purpose as a company, we're all about clean energy to hit decarbonization and to achieve carbon neutral by 2050, then we have to decarbonize all aspects of society. That's the buildings that we work and live in, that's transportation and that's industry. So as a company, we're investing now for growth. What that means is we're going up in power as you can see from tens of kilowatts to hundreds of kilowatts to megawatt scale. We're starting to also scale up applications on the transportation side from an initial 30 kilowatts to potentially over 100 kilowatts and starting to explore future applications like marine. And very excitingly, we are also starting to look at the application of this technology for electrolysis, where you run the technology in reverse, you can produce green hydrogen. And the advantages that we see of the Ceres technology in being high-efficiency and robust and low-cost also applies when you run the technology in electrolysis mode. So we see a huge opportunity for green hydrogen for industrial applications, such as green steel, ammonia, and petrochemicals in the future. So we see Ceres Power is growing, not just in the stationary power side, but into these other markets and applications as well. Next slide. And the way that we do this is through licensing agreements. And most of our license agreements follow the same path, where we work with our partners to do joint product development. And at this stage, we charge about 50% margin based on engineering man hours and time and materials, so acting very much like a consultancy at that stage. But we also give people access to our background IP, and we license. And for that, we charge a license fee, which is 100% margin. And then when our customers go to market, we receive a royalty per kilowatt. Now what that means is we can achieve very high margins to a licensing model and also we're able to play in different markets, in different applications simultaneously whilst leveraging the balance sheets of some of the world's leading companies. Next Slide. So I just want to say a little bit more about progress with key commercial partners. First of all, we'll talk about Bosch. Next slide, Richard. So we've been working with Bosch for over 2 years. And what's exciting that we've been able to announce this week is the successful conclusion of the technology transfer and the pilot scale over the past 2 years with Bosch in Germany has now led to Bosch announcing plans to scale up production to 200 megawatts by 2024 and invest hundreds of millions of euros in the process of actually establishing these products at the manufacturing scale. What's important for us is this is a commitment to scale, which then provides future recurring revenues to royalties for the company. In the near term, the value of the deal is worth GBP 23 million to us over the next few years. Now Bosch believes that the market for stationary power fuel cells could be worth EUR 20 billion by 2030. And the applications that they're looking at, you saw on the previous slide, is power systems that could provide decentralized power for buildings, factories, data centers, EV charging, et cetera. So they see multiple applications for this technology. And we're very proud of our relationship with Bosch, and we've built on the initial agreement that we signed in 2018 to develop the fire coat manufacturing in Germany, and this milestone shows the strength of the relationship and also the quality of the service technology and of our people to be able to work at such a high level. Next slide. Our next very important partner is Weichai. And we've been working hard with Weichai this year. Obviously, with COVID-19, we've not been able to work on-site as much as we would have liked to have done. But both teams are working remotely, but very effectively. And we have achieved the first prototype of a 30-kilowatt bus to demonstrate the technology. And now the joint teams are working on a small fleet of 5 buses with a 30-kilowatt range extender in China. We're due to complete that around the end of Q1 next year. And with the successful completion of that, we intend to move forward with a joint venture to produce those systems in China later in the first half of 2021. So we're still making good progress with Weichai, and that commercial vehicle market is a very exciting and very large market potentially for Ceres. Next slide. We signed a relationship with Doosan last year worth GBP 8 million, which was to develop a first system together. Again, as with lots of our partners, we've progressed to this next stage where Doosan have taken a license to also manufacture the core stack technology. And again, it's a big step to scale up to 50 megawatts initial capacity by 2024. The deal to the company in the near-term is worth up to GBP 43 million, of which GBP 7 million is contingent on performance. But again, it's really -- what excites us is the scale of the opportunity. Doosan may be less familiar to you, but as I mentioned, South Korea has very ambitious targets to be world leaders in fuel cells, and Doosan currently have 70% market share of the Korean market. With Doosan, we intend to jointly work together to scale our technology into 100-kilowatt plus power modules, which can then target this power utility scale market. So we're very excited about this opportunity with Doosan. And we see that as adding significant value to Ceres over the coming years. Next slide. And then this partnership, we've only announced this morning. So it's been an incredibly busy end of year for the company. What we wanted to do, if you think about Ceres, is we are starting to establish ourselves as the technology of choice or the world leader in solid oxide. And we see the market opportunity for solid oxide as we've only just begun. If you think about everywhere today that you're using conventional combustion engines or thermal power systems, there's potentially an opportunity to use the solid oxide technology. Therefore, we're very pleased to have signed a strategic partnership with AVL in Austria. They are one of the leaders in powertrain and system engineering globally with over 11,500 people in 26 countries. And the intention behind this is by partnering with AVL, we can significantly accelerate the markets and the partnerships that we can originate for the Ceres technology. And therefore, providing greater pull and greater demand for manufacturing of our core cells and stacks. Together, the companies have a significant intellectual property portfolios, AVL already have extensive knowledge of SOFC systems. And obviously, Ceres has a very strong portfolio as well. So together, we're combining forces on system engineering not on core selling stack but on system, and that should generate significant benefits in customer acquisition for Ceres going forward and helps us scale the business. Next slide. And just to illustrate the business strategy here. If you think about what we've done this year, on the left-hand side, we've started to have commitment from partners like Bosch, like Doosan, to scaling, manufacturing of cell and stack. But on the right-hand side, we've also starting to broaden out the system-level partnerships and the applications that we can get into for the solid oxide technology from Ceres, going open power from CHP into higher power data centers, heavy duty vehicles, distributed power generation going to utility scale. And we also announced the first development into marine on the back of our relationship with Doosan. So you can see the map on the right is broadening out in terms of more and more people wanting to use the service technology. And we think that the partnership with AVL will help accelerate this and also accelerate demand for the licensing of our core manufacturing. Next Slide. Just to give you a picture of what that means for the company, we're really in this middle stage here as you look at this graph. So over the past 4 or 5 years, we've significantly grown top line revenue moving from this engineering services into this licensing phase. And we can expect that to continue in the next few years as we -- as illustrated by some of the deals we recently signed. But what we have now is the commitment to scale from partners, and that gives us confidence of achieving royalties from 2024 onwards, and that's really where we get the recurring revenues and the scale of the business. So in the next few years, we expect to announce more applications for the technology and also more scale of the business in general through this licensing model. Next slide. And I think we've been -- there's a couple of things worth saying. I think we've been very fortunate at Ceres to be in such a growth area at a time where lots of parts of society are struggling, and we don't take that for granted. But I think also, it's been a fantastic year for the company. And what's really made that possible is our people. If you think about the resilience of the Ceres people to continue working both remotely and on-site in production and test, to deliver to these major partnership programs with some of the world's leading companies, it's a fantastic achievement. And we're very proud to say that we've actually grown as a company during COVID. We've actually on-boarded about 90 people into Ceres, which is no small achievement. So we're now 350 people. As I mentioned at the beginning, I think we're one of the world's most best and largest electrochemical technology teams anywhere. We grew revenue again to GBP 20 million. We've grown order book to over GBP 100 million. We had direct strategic investment from Bosch and Weichai, about GBP 88 million. We have over GBP 100 million of cash on balance sheet, and we now have a valuation that starts to be reflected in the market of GBP 1.8 billion. So it's been a fantastic year for us. And I think the recent developments and deals that we've just announced literally this week and in the past month really sets us up for a very strong 2021. Next slide. So just in terms of the outlook for the company. We've never seen so much demand for technology that addresses climate change. And you've seen from the previous slides, every developed country in the world post-COVID is targeting an acceleration of technologies that can address climate change. So the market for this is only growing. We now have 2 commercial partners as significant investors, which gives the company strength and stability in Bosch and Weichai. And we've had strong momentum with partners this year and particularly with recent announcements of Doosan and Bosch moving into mass production. I think it's fair to say that we are now establishing ourselves as the world leader in solid oxide technology. If you look at the partnerships that we're signing now, we're definitely becoming the technology of choice. And we are highly differentiated and able to practice this licensing business model very well, giving us a very high-margin business. But we do see a big opportunity. So we are investing for growth. We are expanding into higher power and other applications, as I mentioned. We have a new engineering partnership, which we announced today with AVL, which will help us to access new customers. And we are developing electrolysis technology. Having already invested over the past year in the initial stages of that, we're very confident with this technology in the solid oxide electrolysis application, and we're looking to invest and accelerate in that going into 2021. So just to leave you, we have a high-margin clean energy technology licensing business, which is at a very exciting stage for the company and well positioned for future growth. I'll now take any questions.

Thank you, Phil. The first question comes from Nick Roberts who asks, please can you provide details of the status of the Ceres Weichai joint venture in China, including a rough time frame for implementation of manufacturing capabilities?

I think we covered that question in the presentation. So as I mentioned, we are now producing the small fleet of trial buses in China, and we are due to complete that by the end of Q1 next year. We're also in discussions with Weichai on the business plan for the joint venture. And we hope that those 2 things will come together. And later in the first half of 2021, we're working towards forming the joint venture.

Thank you. James Barstow asks, has the relationship with Cummins diesel died completely following its takeover of Hydrogenics?

I think it's a good question. I wouldn't say it's died completely, but what we have pointed out before is where we have current joint developments. So we're just completing the program with Cummins in the U.S. Department of Energy, which was to develop a 10-kilowatt system. And that's going through a natural end. But we don't currently have a future contract with Cummins. I think Cummins have made the acquisition of Hydrogenics. So I think a lot of their attention is on making that work at this stage. But I think the relationship and the door is open for the future.

Thank you. Simon Ray asks, when do you think Ceres will make a profit? He adds, I appreciate there's been massive investment in SOC to date, but we've yet to see the license profits like ARM that you mentioned regularly?

Yes. So I think if we -- the slide that I showed, I think, probably illustrates what our expectation is there. So if you look at Ceres probably versus any of our North American quoted peers, we are currently generating gross margins of around 70%, whereas most of the industry operates at margins of around 20%. And we are growing revenue significantly, and we have a healthy order book. So on the power systems side, if we keep on growing revenue at a significant rate, then I think you can see a path towards profitability in the next few years based on further licensing as we get towards royalties. Now real profitability comes once we have market launch post 2024. And that's where you really get the model of our type license -- royalty revenues kicking in. But I think as a business, we are continuing to grow commercially, and we are choosing to reinvest most of that margin into growth in the company. I think it's an interesting point because I think this is a growth opportunity, probably the likes we've never seen before. And I think Ceres is one of only a handful of companies that can really exploit this opportunity. So I think we, as a Board, see this is the opportunity now to invest in this company to make sure that we remain as a world leader and grow significantly. So I think the model is working. I think that's illustrated with our financial track record, which I'm very proud of, and I think is second to none in the industry. And I think it's only a matter of time before we do actually see the realization of the model coming forward as our partners go to scale.

Thank you. David Cronin asks, could SteelCell work well in combination with heat pumps for space heating?

That's a good question, and probably one better for Mark, my CTO, but we have looked at this before. I mean the one thing about heat pumps, you have to appreciate is they will require power demand, but you do get a coefficient of performance. So the idea of combining fuel cells with heat pumps is not -- it's not a new one, it's been looked at before, and it could be actually quite complementary.

Thank you. Chris Hardstaff asks, under what circumstances would you consider moving from AIM onto the main market? And what difference would that make?

I think it's a question of maturity and timing. I think the -- I imagine there's pros and cons of both, but I think the main advantage of moving to main market would be higher liquidity, higher profile, particularly for international investment. So it might make sense at the appropriate stage to consider that, but that all depends on where we are as a company.

Thank you, Phil. There are no more questions. So there's one more question that's just come in from Michael Burton. Can I ask on your strategy versus others such as Plug Power, which is more pushing the vertical integration strategy. Which is the right approach over the vertical integration model spread you too thin at a time with such a steep growth trajectory?

I think that we have a very unique and highly differentiated technology. And I think there's very few companies that can actually issue a licensing model. When you look at the PEM technology that most of our peers have, it's a lot more established. It's a lot less differentiated. It's a lot more commoditized. So a vertical integration strategy obviously makes sense. But when you have something that's unique and well protected, such as the SteelCell, it does lend itself to the licensing model. And as we've discussed in this presentation, that enables us to scale the business in multiple verticals and multiple geographies simultaneously. And I think also, we -- in Ceres, we talk about scale and speed. And we believe that the licensing model is the best way for us to achieve scale and speed of adoption of our technology so that we are recognized as the industry standard. So there's pros and cons of both models but we believe that this is the right model for our technology.

Thank you. Steven Chapman would like to ask, do you see any future collaboration with ITM or similar green hydrogen opportunities?

Our goal in the value chain, we believe, is the technology provider. So in the same way that we have licensed this technology to a number of power system companies, some of which have moved from technology to technology. If you look at Doosan, they've gone from a lower efficiency technology with phosphoric acid and now selecting Ceres for higher efficiency solid oxide. That's a natural progression. Our aim with the electrolysis side would be to have an offering that we could also license to partners. We're not at that stage yet, but it might make sense for people who already have electrolyzed a technology to look at moving towards a higher efficiency technology in the future.

John Usis would like to ask, what are your intentions to address the opportunities in the United States?

I think that when you look at our partnerships, people sometimes may overlook the scale of some of our partners. So for example, Doosan fuel cell also operate Doosan Fuel Cell America,and are already a significant player in the stationary power market in the U.S. Similarly, Bosch has significant global scale and operations in the U.S. So I think already with some of the partnerships that we have, we are already starting to address the U.S. market. I think that maybe with the Biden administration you'll start to see more and more interest in these kind of technologies coming forward in the U.S. as well. So it's obviously a key market for us. And I think there's one where there's future opportunities, but already we can access part of that market through the partnerships that we've already established.

I have only one more question, which is more of a comment, which is from Roger Freeman, who says, as a shareholder from a class of 2006, can I congratulate all 350 of you for everything this year.

Thank you. Very much appreciate that.

Well, thank you very much, Phil. Thank you to everybody who's participated in this meeting and presentation. I know the circumstances are less than ideal for the way this is working this year. I hope next year, we will be able to physically get together in the same room and revert to a more traditional start of the AGM where we can all talk to each other in person. So I look forward to seeing you next year. Thank you.