Invinity Energy Systems plc ($IES)

Good afternoon, ladies and gentlemen, and welcome to the Invinity Energy Systems plc Results Presentation. Our apologies for the slight delay. [Operator Instructions] Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation. I'd now like to hand over to the presenting team. Good afternoon to you all.

Thank you. Good afternoon, everybody. Firstly, I'm going to start with a couple of apologies. Firstly, we're a few minutes late. And secondly, I recognize the visual here probably isn't as we anticipated. We're all in a different room, but for some reason, we couldn't cope with the bandwidth setting as all of us coming in separately. So we rapidly and hastily reconvened in the same room. So I hope you can hear us. I hope you can see us okay. If for some reason this doesn't work, I'll make the decision that we will do a recording of this and send it to everybody. But I hope we'll be able to get through the next hour and apologies if it's not quite as perfect as we first hoped for. Anyhow, if we can move on, this is the results presentation for the 2025 year. In a moment, I'll hand over to Adam to run through the numbers. I anticipate a lot of the questions and a lot of the interest is probably a little bit further than just financially what we did in 2025. So I'll just briefly cover what we're going to talk about in that regard. I recognize as well there are likely to be a few listeners to this call who haven't heard as much about Invinity as others. So there will be a few slides on us. So forgive me if those who've heard that before, but I think it's useful to go through that. So when we -- in the last couple of announcements we've made, there have been a number of strategic themes, which we focused on. And that really is the basis for the success commercially that we started to see come through. And the first and foremost on that is product cost. This is fundamentally a technology, I don't think anyone can think about battery storage as an important technology when you look at the energy transition and what's needed globally. There are many different characteristics of many different batteries. But ultimately, what is important is product cost, and that's the thing which we have been most focusing on. And you'll see that we are well ahead of where we first thought we would be a couple of years ago. And we'll come on to this stat again. But within 2 years, we've taken a minimum of 2/3 of the product cost out from VS3 to Endurium. That is a great achievement from the team with further to go. That's exactly what's needed to accelerate the commercial development that we're seeing. The second thing, which I am really, really proud of is the response we get back from our customers as well. We will cover that in some detail. But that is the track record you see there as well, 9 gigawatt hours of energy dispatched from our batteries and growing. That is the proof that our technology works. And we are very proud of continuing to publish that stat and we'll continue to do so when we talk to clients, that makes a big difference as well. And then scale. The numbers for last year, which Adam is about to talk about, are a growth from previous years, but equally, I would suggest not representative of where I, certainly, as chief executive, want to take this business and where we see the opportunities coming forward. So we need the manufacturing capability for that and that's what we've been working on. So very much what we said at the bottom, it's building those foundation and removing those barriers to scale, and we believe we're accelerating into that next phase. So with that, Adam, I shall hand over to you.

So I'll take you through the key financial highlights that we've reported through the year. So revenue and project grants of GBP 17.8 million, so up 239% year-on-year, that is principally Copwood, which we've now completed. So that includes GBP 9 million of approved grant funding from DESNZ and the GBP 8 million of customer revenues that we reported there. You'll see a reduction in the gross loss year-on-year, so 35 bps improvement in the gross profit margin. That's what we've been working on throughout starts to feed through in terms of project economics and our cost down initiatives starts to take shape. You see a reduction there in net R&D that reflects the conclusion of the Gamesa Joint Development Agreement following now that we've now fully commercialized Endurium, and we started shipping that out to customers. So that's pulling down to an improvement in adjusted EBITDA of 7% year-on-year and we're starting to see the reflections of scaling our commercialization of our Endurium product platform. Next slide, please. So looking through then what's happening on the balance sheet. Our net operating position has decreased year-on-year by 18%. That's really a reflection of releasing that inventory for loads onto the site and an increase in the trade payables there. Provisions year-on-year from GBP 2.4 million, and that's essentially legacy systems and a couple of elevated logistics on some remote project sites. We rounded up the year with GBP 28.8 million. I'm very pleased to report a positive going concern assessment from BDO through to June '27, which was the basis of the opinion here. With that, I'll pass back across to Jonathan Marren.

So a couple of slides here are just as a refresher on Invinity. And as a straight line as a headline, we deliver what we feel is the world's most proven and most mature non-lithium energy storage technology. And we've said that for a while, and we've said that with our understanding and belief that's the case. We will talk in a few moments about FlexBase. It was extremely reassuring to see after a very, very competitive and thorough RFP process that our technology came out on top. That was across flow batteries, not just vanadium flow batteries, that was all flow batteries they've looked at and also some other non-flow technologies that look to get involved there. So we have demonstrably some external validation at scale and size there. So I think we can point to the fact that, that is something which we have achieved. You can see that from the 9 gigawatt hours of batteries dispatched by our customers, and that comes from over 2,000 individual battery modules that have been deployed. As a reminder, the previous product had 6 flow battery modules within a shipping container. And of those individual modules, there are over 2,000 now out in the field. We are a global business, and there's a couple of slides in a moment just to see and to remind everyone sort of how that presence is growing. That's from a customer perspective, but also from a manufacturing perspective. But what we like to think is there is a well-known retail bank that talks about being a global bank in a local markets or locals and we see exactly that. We have local employees on site to make sure we deliver that local service. And that for us is really important. And we deliver our products as a modular product, but we can build that in different ways depending on that local market. So we have building blocks that sit within that and gives us the flexibility to be able to pivot that to whichever market it might be. From a U.S. perspective, there are some strict requirements for projects to benefit from various tax comps. We can do that in that U.S. market from building a certain amount of the product there. We can do that within the U.K. We can do that within Europe. We can do that within China, and that comes from the way we've architected that product. We have about 180 employees that is spread across both Vancouver, the U.K., U.S. and elsewhere, and we've got centers of excellence there. So we manage those time zones, but it is appropriate when you look at where our supply chain, where our customers come from. And that 20 years investment in the product is now really starting to, you see the commercial traction from that. And when you actually speak to our customers, they see us as a business that's got the technology right. They recognize that we have deliberately not shouted from the parts as to how great we are because we want to be able to prove that is the case because that is the sort of customer we talk to. They want to see their data. They want to see their operating data. They want to see -- when there are problems, there are always problems on site, how do we get out and how do we fix that. And then you will now see the testimonies that come through that I think is what we have managed to achieve and is enabling us to progress further. So in terms of this technology, that best-in-class performance -- move on, please Joe, thank you. The battery lasts for over 30 years. That comes from the inherent chemistry that sits within it. We separate power generation and energy storage. And that means we don't have the degradation that other chemistries do. And that's really important because then again, these are significant capital investments and the customer wants to know that this product will be there for at least that period of time. They also don't want the restriction on how they use it. The energy markets are changing very rapidly. Even when you look at data centers, everyone talks about data centers, we obviously have some data center customers. It is still not that clear as to what the power requirements will be for the future data center. With our battery, we do not mind how that battery is used. As that use case changes, our battery will continue to perform rather than having to perfect a solution around how a battery operates. We will charge with electrons and dispatch electrons. However you wish to do that without any implication on our warranty. And that becomes a very powerful selling point. It's fully configurable, fully scalable. Now in terms of our other advantages over specifically lithium, which we see as the competitor, there is absolutely no fire risk. And what that means particularly is really from a permitting perspective. There are many, many areas where from a permitting perspective, you would not put a lithium battery, certainly parts of California, beneath a data center, near co-locations. And we regularly speak to customers who see that as a particular USP because it's simply not possible to put a lithium battery there. The fast response times, there is sometimes a perception that a flow battery because of the pumps will not respond as quickly as lithium system. That is not correct. We've got study from DNB. We've seen that from our data that shows that because of the electrolyte that sits within the stack, we can perform and react equally as quickly. We are quieter than lithium, which makes a big difference as well. We don't have any air conditioning that sits within that and therefore, you don't have the noise from that. And at the end of it, we are 99% recyclable. You can take the electrolyte out which sits in the tanks and fully recycle that into another battery and everything else you can put through the usual recycling chains. So again, some great performance that sits within the business -- the product, sorry. And then moving on to our customer base. And this is a slide, you may think you've seen before, but actually what I've done is asked to take out our manufacturing and take out our partners. And these are where projects we either delivered to now or announced deliveries to. And you'll see there is a very significant number of projects within the U.S. And that's really interesting. You've seen Department of Energy projects there, 2 announced recently. You've seen support from the California Energy Commission. And in terms of our credibility, that is very significant. And the U.S. market is growing rapidly and is still very supportive of batteries and long-duration storage batteries. So we are really, really excited about that U.S. market. From a U.K. perspective, we'll talk in a minute about Copwood. That is our U.K. site that will be hopefully operational within the next quarter, just as soon as that's actually connected to the grid, and that will be a fantastic reference site for us. Of course, you see FlexBase that sits there as well. We'll talk about that in a moment, but as a wonderful reference site for us but also across Asia and Australia as well. We've got a number of projects that sit within there and a growing pipeline of those opportunities as well. That is supported by the manufacturing base and partners, and that's why we're in Vancouver. That's why we have sales and customer support in the U.S. and we are fully intending to set up manufacturing in the U.S. to be able to support existing and future customers there. We've got a wonderful facility in Scotland in both Bathgate and Motherwell. We are calling you here today from Bathgate. We've got a great delegation coming up from DESNZ tomorrow. We have customers coming up and seeing us here all the time. We've got an Endurium unit here. This is a great site to show those customers. And then we've got partners in India, in Taiwan and in China as well. And we bring all of that together to be that global business on a local marketplace. So Matt, if I may, I'm going to hand over to you.

So one of the exciting things -- thanks, Jonathan. One of the exciting things about having this global base of development facilities, manufacturing facilities and partnerships is that this entire team is today galvanized around one of the most important development aspects inside the business, which is our cost reduction program. We've talked extensively in the past about how we view cost reduction as one of the most important aspects of driving this business forward. As much as we've been very successful delivering batteries into specific projects, into specific applications up until now, unless we are able to continue to remain competitive with the cost leaders in the market, we are going to see our commercial traction stop. What we have initiated about 2 years ago was a cost reduction program that we believe at the time and continue to believe would get us to the point where we will see that cost competitiveness enhanced and therefore, enhancing our commercial opportunities over the coming period. And what we've announced in our results this year is that we're very pleased that, that combination of partnerships and manufacturing capabilities and development capabilities has seen us accelerate against those cost reduction plans to the point where we are significantly ahead of the plan that we had previously proposed and announced. We have achieved about a 66% reduction in our product cost for -- from where we were 2 years ago for projects that we are currently quoting on delivering for the end of this year and beyond. That's a combination really of 3 things. It's a combination of value engineering. So looking at how we design the individual components that go into the product. It brings in some higher volume and lower cost manufacturing procedures and processes that are really being brought into play by different partners within that supply chain. And then finally, looking to outsource some of those activities to best cost regions using some of the new and existing strategic partnerships that we have, both on the manufacturing and the supply chain side. In the long term, our cost target is to get even further below where we are currently quoted. And though we are laser-focused right now on the cost reductions for our product to be delivered in the immediate term, that more R&D focused, more development-focused work is also going on in the background. So we will continue to hit those aggressive targets between now and the end of the decade. I think, if we were to think of the pillars of excellence inside our company right now, really cost reduction is a big part of them. The other one is how we support our customers. And we've been thrilled over the last couple of years about the feedback that we've gotten from customers in the field. Invinity have consistently been able to deliver the products that we've sold. We've been able to deliver the performance with those products that our customers need and our customers have been able to turn around and operate those systems profitably. In some cases, even over and above the way that they originally expected to be able to make use of those products. We've -- the graph on the right is one of the simple ways that we track those metrics just by the number of -- the amount of energy dispatched out of our batteries. We've crested over 9 gigawatt hours now. That is a number that we expect is going to continue to grow aggressively as more and more of our batteries come online. That combination of proven experience and rapidly decreasing product cost is what's leading to probably the third most exciting thing, which is growing commercial momentum. We are seeing a much greater amount of inbound interest into the company, driven by some of the big wins that we've had on the commercial side over the last couple of months. But not only are we getting more interest when we start to get into customers and they start to look at what is this thing actually going to cost me? And are there other people out there who are actually reinforcing Invinity's ability to deliver? In both cases, we can answer yes. Yes, we have a competitive product. Yes, we can deliver value over and above what other companies are doing. And yes, we can prove that the product is actually doing what it needs to get done. We see that kind of traction increasing across the 4 different areas that we typically focus on 4 different market points. Stand-alone batteries, which has long been one of our major focuses. Renewable co-location, where we are taking our batteries and using them to dispatch renewable generated power at the most appropriate time of day. Commercial industrial applications, which especially as energy consumers are looking to take more control over their electricity bills is a large and growing segment within our overall product base. And then finally, as we'll talk about in a minute, data centers, where we see all over the world, a tremendous need for appropriately managed flows and to provide low-cost power and very robust and reliable power for this digital infrastructure and where we've seen some great growth in our -- both our pipeline and in our project mix over the last couple of years. I think, if we look at one specific instance of those commercial segments in the behind-the-meter market, we announced earlier this week something called Project VITALITY. This is a commercial and industrial opportunity or a commercial industrial project that we are doing in the U.S., partially funded by the U.S. Department of Energy. This was a project that had been funded some 3 years ago or so. But with the change in administration in the U.S., a lot of the approvals of these funds have been held back temporarily, because of the benefit of projects like this to the overall U.S. electric grid and U.S.-based domestic consumers. The DOE has saw fit to go forward with this and a great number of other projects, but we're obviously very happy about this one in particular. This is going to see us deploy our batteries behind-the-meter with a new partner called muGrid Analytics, who are a specialist in microgrids to be able to deploy these batteries, not only this particular site, but into a larger -- a large and growing portfolio of microgrid projects in a way that fully maximizes the value that our batteries deliver to those electricity and use customers. That is one of a number of projects that we're very excited about. Jonathan, back to you to describe some of the other ones.

Great. I will then -- I'll move on to talk about the FlexBase project, which we announced some 10 days ago or so. Maybe if I start by talking about Laufenburg, which is probably not something which all of you on the call are familiar with, I would recommend having a look, doing some research into the Star of Laufenburg. Star of Laufenburg is the birthplace of the European connected power grid. 1958, I was just checking my dates. It was the first site to successfully connect the grids of Germany, France and Switzerland. So it was basically the inception of one of the first super grids and that now forms obviously the backbone of some of the European power networks. It was the original building where Swiss grid were based and even now it forms a vital hub under Swiss grid. And the battery which is going to be installed here, yes, it's connected to a data center. That's obviously a use case and something where we're looking to further deploy batteries across the world. But actually, this is designed to be an asset which will form a critical part of Switzerland's energy power infrastructure. If we take a step back, I am humbled by the fact that an Invinity design battery has been assessed as being capable of achieving that and I think from a credibility perspective, that is enormously helpful to us when we talk to other customers, when we talk to suppliers and when we look at where this business could be taken. The process to win this really took about a year. There was a lot of engagement upfront with the customer talking about our solution. They were looking across all flow batteries, not just vanadium flow batteries and across other technologies. And there was about a 6-month RFP process, which was very, very involved, a lot of diligence on us as a business, our ability to scale and how our projects have performed. There was an awful lot of getting to know the team as well to make sure they were comfortable that we could deliver this project. So where we are to date is we are now the sole party doing the engineering phase. That 6-month process involved us fully designing the battery. When I say fully designing the battery certainly putting together a significant amount of design alongside our partners. We partnered with 2 very reputable Swiss brands, Equans and Georg Fischer. They were actively involved in our bid. And I think collectively, we brought together that concept of being a local party. And I think that was one of the key reasons again why we won the bid. We listen to our customer and make sure we proposed a bid that works and that's something, again, which is an organization we are good at. So that engineering phase, we would expect to last a year. Their anticipation is that they will then move forward to full contracting for the battery with the idea that battery will be commissioned by 2029. Now I'm not sure the photos quite do it justice. This project is simply staggering from just an infrastructure perspective. The battery will sit in a hole that is now already done. It is about 200 meters long. It's about 87 meters wide and about 25 meters deep. It is simply all inspiring. And the entirety of that hole will be filled by assuming we progress to that final stage an Invinity flow battery. There is a proposal to put another battery on top of that. And the hope would be that obviously, if we do the good job we think we will do, and that could step up to a further order from there. But I think for the moment, we are, as you would understand, very much concentrating on that proposal. It's really interesting that is effectively a 2-hour battery. We talk about us being a long-duration storage business and technology, but 2 hours is not regarded as a long duration. So why have they picked a flow battery, a vanadium flow battery. There's really 2 key reasons for that. Again, it's the ability to cycle and the longevity that comes with that and the no restrictions on warranties and of course, the fire risk. You would not put a battery where there was a risk of thermal runway beneath a data center or any form of infrastructure. So again, a fabulous project for us and one we are very proud to be involved in. Back to what is still now Europe's biggest vanadium flow battery. This was the vanadiums project. And as you are aware, we had a number of nibbles trying to get this delivered. And when I took over as Chief Executive 2 years ago, I concluded we had to get this done because of the significance with our customers. So what you see there is an Invinity-owned site at least up to the batteries you see in the top there. So the solar belongs to Invinity. The batteries belongs to Invinity. It is installed. The bulk of the cabling work is done. We are just waiting for U.K. power network to deliver the connection at the substation and we'll be able to commission that in the third quarter this year. That will start earning revenues for the business. But most crucially, we can take customers and investors down to that. We are already having institutional investors coming to see that. We're having customers coming to see it. And my absolute anticipation is we will have a retail event to bring retail shareholders and others to have a look at it as well because we're very proud of this asset. And this sort of gets to the heart of what we've been doing as a business for the past 5 years and beyond. We recognize that some of our revenues have been lighter than we wanted to. But what we needed to do is get batteries out there into the field that we could prove the technology and the 5, 10, 20-megawatt projects when you look at what's in the pipeline going forward, that is the stepping stone we need some significantly bigger projects, because it's a modular product that we deliver fully formed that gets delivered to site and connected. Bigger systems can see the scale that can come with that and have the comfort in doing it. So that's why we've been adopting the strategy we have done and why we think we're really positioned for growth from here. And that really does lead me into this final slide, and then we'll start to take some Q&A. We have that stable proven technology. We have what we think is that market-leading position. There is other competition out there, and we are delighted there's other competition out there, and we do really wish them every success. It is helpful for us for there to be other competition. People need to take a reference point on our pricing and that comes from other competition. They need to compare our technology. We will win some, we will lose some, and that's fine. The marketplace that is developing for the energy transition space is, there is no market in the world that isn't looking at decarbonizing and building energy security most importantly. And obviously, what's going on in the Middle East at the moment only provides an extra driver for that. And when we think we've developed key strategic relationships to get there, National Wealth Fund at the top supported us a couple of years ago and remain a very supportive investor and strategic partner. They give us great support and great insight to what's going on in the U.K. What was Gamesa Electric and is now ABB, as a partner, a very well-known firm, very supportive from a technology perspective. Actually across India, Xiamen, C&D, UESNT in China, and then across South Africa and also Baojia in China as well. There are plenty of others we are talking to from a partnership perspective that will come through in due course. That's across the supply chain commercially and elsewhere. So I think that's for the moment. We have done the half an hour we thought we would do presentation. And now we can look at Q&A and we'll try and get through as many as we can.

That's great. Thank you very much indeed for you guys for the update. [Operator Instructions] I just like to you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed via the Investor Meet Company dashboard. Guys, you've had a number of questions from investors. So thank you, firstly, to everybody for your engagement this afternoon. If I may just hand back to you maybe, Joe, just to maybe moderate us through the Q&A, if I could ask you to read out the questions and hand them out, that would be fantastic. I'll pick up from you at the end.

Thanks, Mark. Yes, lots of questions. I'm glad we've got plenty of time to go through them. There's a number of questions here, Jonathan, around the cap and floor. So there's a specific question around timing when we might find out the results. Maybe we'll start there and I can roll into some of the other ones from there.

Okay. So we have -- I would say arguably no more insight than anyone else does on this. So I can only talk about what our clients are telling us and what we hear from the market. We believe that Ofgem notified all developers that there should be some further information by the end of this month. I wouldn't suggest that there is an absolute guarantee, but that was the latest indication which came directly, we believe, from Ofgem.

Okay. There's another question here around scaling up into that into sort of whatever potential capacity that comes from. So could you give us maybe a bit of a minute on our plans to scale our current manufacturing capacity and how that can build out. And then maybe we'll go to Adam to talk a little bit more about how the working capital works through that process as well.

Yes, absolutely. I think, where do I start with that, answering that question, we have a lot of people who come up to Bathgate and Motherwell wanting to understand the question of how we scale. And what I would say is everybody comes away reassured that the scaling of this business is something that we have a plans for and should not feature very highly on the risk register. And the reason for that is we have quite a lot of optionality in how we do this. The product comes together as a number of building blocks. The core building block sits as a 20 foot steel container with rotomolded plastic tanks that sit within it and wiring and pumps. And typically, that is a commodity product that scaling that comes from areas in the world, lower cost regions of the world that are capable of doing that, typically China, but also we look to second source that potentially in India as well. So the ability to scale that is something that is very much within our partners' grants. And so, from what else sits within that, you've got the vanadium electrolyte itself and there are many sources of that. And it's interesting. Now we have announced the FlexBase steel. We are seeing pockets of supply that even we didn't know existed as well. So there's significant supply of that, not just within China but across the world as well and some other interesting areas that we're seeing crop up as well, which we're quite excited about. So actually, the real question for us from a scale perspective is what does it mean from manufacturing stacks and what does it mean from a final assembly perspective. From a stack perspective, we are probably across the business around about half a gigawatt hour per year at the momentum. And that is capable of scaling within about 6 months, and we certainly have plans to scale that. So any order that comes through, we would typically have at any scale a longer lead time than that. And we have a proven semi-automated line here, which that line can be expanded relatively low cost. And in fact, the new lines can be added at relatively low cost as well. And then you're looking at the space to do the final assembly. Now we could, if we wanted to deliver that entirely from China. We could deliver our stacks into China, into Baojia, and they could deploy from there. So there's no limit there. But actually, from a U.K. perspective, the team didn't necessarily thank me, but they have 2 months from securing the size of mother well to getting that operational. So again, what do we need there? Ultimately, we need the big space that is dry, relatively clean, and ideally with a crane that can carry 30 tonnes, but equally, that's not necessarily the case. So what we can do is scale quite easily for low CapEx. We can do that potentially with partners, but equally, it's available to us as well.

Brilliant. And then Adam, can you -- there's a couple of questions here around sort of working capital management through the sort of the order cycle and about how that works. Can you talk about that briefly?

Yes. So we are made to order. We take deposits from our customers upfront to manage our working capital judiciously. We do plan to continue that. And I'm really pleased to report very positive discussions with NatWest Engagement, our house bank. So when it comes to a stage where there's a consistent order book that will allow us to hold some excess inventory to respond short notice to customers. We've had really positive discussions with our house banks around that. At the current stage, we will focus on minimizing our working capital as we go through this process. And ultimately, what we get from cap and floor, which as Jonathan mentioned, we're expecting this month and the timing of that final contract on FlexBase will inform us around those capital decisions. And I mean, we are roughly 1/10 the capital intensity of a lithium plant. And that is really helpful for us in terms of setting up local manufacturing. And that's very important in today's market where having domestic manufacturing and local manufacturing is important to all of our customers and all the stakeholders. So that'd be the currently on those two points.

Brilliant. And you sort of touched on it slightly there around the capital intensity, but there's 2 questions very similar here asking around a bit of a breakdown of the operating costs. If you could just briefly sort of call that out there. In terms of the breakdown around sort of where our operating costs sitting here?

Yes, there's clearly a lot of operating leverage within the business. We have invested in terms of our OpEx in Ostro and our cost down process, and that's what Matthew took us through early on. Ultimately, the most important point is we get down the cost curve. We have a significant team of product development professionals in Vancouver, which we have invested in to get that 66% cost down that you've seen there in the numbers we reported early on. We're starting to see that bear fruit. You're seeing that in today's numbers in terms of the gross margin. And then we are investing ahead of the order book as we need to generate that, and that's when you start to see the operating leverage in the business report through.

If I could just add to that, Adam, the question was our OpEx is, did I say, significant. Did I see that? And yes, from my perspective, the sooner we can get to a position that the business is cash flow breakeven and generating profits, then the better without a shadow of doubt, we do not think having cash outflows and making losses is a sustainable way of running the business. However, what I would say is that if you look across our competitor base from a development perspective and across actually most of the organization, we are quite lean from an OpEx perspective versus others. So I don't think there is fat within that, that we should have trimmed away. They are all working. There are well over 50 individual line items of the product that people are looking at across that R&D team. We are delivering across the world, look at those number of projects we have to service those. And then we've got the infrastructure as a corporate company that comes with that. So we -- every penny we spend, we do think quite carefully about, but we have built for the scale that we think is coming such that we can certainly -- we can convert that into a cash flow positive and profitable business. The point is well made. We need to make sure we get there as soon as we can.

Okay. There's a question here around bankability and what we're doing to sort of build that as we go into things and who wants to take that?

Matthew.

Great. Okay. Yes, look, I mean, bankability comes back to really 2 things. Is the technology going to deliver and is it going to get paid for over time? I think what we've seen on the paid for side is an increased stability of revenues into some projects like ours so that people can believe the revenues coming into them. And then the other part of it is making sure that the product is actually going to continue to deliver as it was intended to do. We've had great feedback from customers, as I said earlier, on the batteries, actually performing the way that they are supposed to do. We -- and the more that we can make that case, the more that we are able to stand with our customers alongside their financiers, their lenders and make the case that the batteries really are going to be fit-for-purpose for the long term.

Yes. So we've had a third-party technical study completed by DNB on bankability. I've been really pleased with the outreach from the U.K. banks ahead of these announcements in June in order to understand the streaming to technologies, which we are the largest there. So we've shared that report through the U.K. banks to get ahead of those discussions after the cap and floor results were announced. And then the other part of this and the key part around the bankability is having contracts in place that take the merchant risk off the table. And this is what cap and floor has done. It's a 25-year contract. The floor makes the bank supports the bank that's -- so then having projects with a very long-term contract from the government allows the banks to get comfortable with other parts of that. So great engagement from the U.K. banking market on this topic, which we're pleased to report.

So we talked a lot about the U.K. There's questions here around places that are not the U.K., especially around partners. So there's a specific question asking for an update, how are the partnerships going in China, India and Hong Kong? And how is those relationships developing? What are our expectations for the future?

Yes. Good question. Look, there's a lot to tell about the Invinity story. And in some respects, we've got to sort of highlight where the most recent traction commercially is, and you can see that from the announcements we've made. The partnerships we've got across China, India and Hong Kong are really interesting, and they cover 2 areas. One of which is they cover supply chain and manufacturing. And a lot of what sits beneath that project and the cost down program involves those partners assisting us in taking that down. So they are actively involved in that, but you see that behind the scenes. From a commercial perspective, it's quite interesting. From -- China has deployed a greater number of flow batteries by gigawatt hours than anywhere else in the world. Those are typically deployed by a sort of built-in type approach to a flow more like a chemical plant rather than our containerized solution. We believe our price point for Endurium and the times that we've set out at a lower price than our competitors are delivering in China. Now that's really quite interesting because there are gigawatt hours deployed and gigawatt hours of opportunities there. I'm really excited about how that could develop. What I am though is cautious that those opportunities need to develop. So I would like to just state a bit before we're able to give more sort of visibility on that. But there is a lot of opportunity there. It is the same within India, albeit I would say that India is probably a less mature position than China. But certainly, we've got a very active partnership from actually there. We are in regular dialogue with them. So we -- and Taiwan, we haven't mentioned Taiwan for a while. We're still actively involved with Everdura. There's a couple of really interesting projects there. And the fact that we have a significant U.S. operation is extraordinarily helpful when it comes to looking to do business in Taiwan. So, yes, a lot of activity there. As an aside, Matt and I are so committed that we somehow managed to be invited to run the marathon in Xiamen in January, which was a direct invitation from the mayor who controls that city. And when we turned up, we found that we were guests of honor at the business launch of that. So we were -- we are held in high regard there because they wouldn't have invited everyone along to do that. And actually, we're in a meeting yesterday with a partner who invited us that we found that out to do 2 other marathons. So if you're looking to understand whether as an executive team, we do, we all, we can do to make sure we build relationships, we are doing that. Adam is only, sorry, he didn't do the Chinese one, has promised to do the next one.

You mentioned the U.S. and another one of the questions on here is around U.S. manufacturing and sort of a partnership strategy in North America. Can you talk a little bit about that?

Yes, we have a number of different opportunities there. The scale of what is needed in the U.S., mainly we end up having a blended approach across that, to be honest. I think to begin with, we are making sure that we build manufacturing against the opportunities that are there. So we are waiting for a number of opportunities to contractually sign and then we can be give a little bit more visibility on that. I think we were doing quite potentially a mixture of both. U.S. is also quite a big market. California in itself is the fourth largest country in the world if it was ranked that way. It's also quite large by geographical nature as well. So you can see over time us having a different approach in different areas.

Okay. And sticking with that theme, there's a question here asking about how we close the gap on some of the other firms in our sector there in the U.S. and looking at their valuations and sort of the market there. We got...

If I can say specifically, the question came in, EOS is the obvious valuation to look at. I think their market cap today is $3 billion. We have risen fortunately over the last few weeks, which is great to see. They have a fantastic business in the U.S. that is growing and a good reputation. We also have the same. I'm confident that the U.K. capital markets, once we start to see some of those our pipeline converting into contracted deals will come through that valuation gap will close. There is plenty of space for us and EOS to coexist happily. We do so already on the frontier power cap and floor projects you see in the U.K. And I think there is -- we coexist on a project in California already. And we will compete against them in some projects, but actually, we often find ourselves not competing against them to be honest. And so I suspect we will win some and I suspect we will lose some, but there's plenty of market for us. So you delighted, as I said, to have competitors alongside us as it provides usual reference points for our customers.

Matt, I'm going to come to you on the next one. There's a question here about to what extent -- it's more about IP protection. So maybe we'll start with that, how we're adequately protecting our IP given our global footprint and our partners in China and India and various other places? And then there's a specific question around software and controls as a key differentiator within the market. Can you just briefly touch on that?

Sure. Yes. I mean, first of all, when we talk about the intellectual property that is sort of the core of how our products operate and how they operate well, really, a lot of it is built into some IP in the stacks and some IP in how we operate the system. The IP in the stacks, we retain pretty tight control over by manufacturing those devices in-house. We've looked at whether we might have third-parties manufacture those for us, and I think there is a possibility to do that at the right scale and with appropriate IP protections around it. In terms of the operability of the system, really it comes down to the point about the software control systems. We have, over the past 2, 3 years, especially made some very exciting advances in how we actually operate one of these systems and therefore, getting more power and more energy out of the same volume of electrolyte, the same amount of cell stack, doing so at much higher efficiency. All that is really built into the sort of the core operating software, the BMS that sits inside our battery. That BMS, that software, those controls are not something we ever release outside of the company. We don't use external parties to develop that work. We don't use external software platforms to help make that -- to help implement those algorithms, those strategies. So hence the ability to maintain relatively tight control over the things that get that 5% to 10% better efficiency and 20% to 30% more energy out of our batteries than some of our competitors.

Thanks, Matt. Shall I stick with you? There's another question here around sort of -- it's a more general sort of question around how we win against the sort of people in the elders space and our competitive advantages against them on a technical basis. So how are we competing on a competitive basis put lithium to one side in the sort of emerging long duration non-lithium space and just give us a sort of top line on that.

I mean, look, top line on that, I think looking at the U.K. capital flow program is a great example, right? That is a program that attracted interest from suppliers all over the world and where a relatively small number of suppliers were able to make it to the states that we're currently at. We see that there are great opportunities for technologies other than ours. There are, for example, some very, very long-duration technologies, whether you're looking at zinc or iron or others that are designed to serve multiple day applications on the electric grid. Those may have a great place to go in the future. There are things like pumped hydro that are very, very well proven and can be very, very durable at very, very low cost over extremely long time frames, both in the development of those projects and their application on the electric grid. We think that those are technology types and applications that are not going to be directly competitive with our book of business. And so we feel pretty happy about where we're positioned right now for those immediately -- those immediate long duration storage opportunities.

Going back to the U.K., there's a question around Copwood and the sort of long-term plan around that as a business, is it what's our long-term vision on the Copwood project and plan for that, I guess?

Yes. I think in the short to medium term, we need to sweep that asset and by sweep that asset I mean use that battery and prove that it can be used as a workhorse. So that's both operationally, but I want to prove it financially as well. So how should you use this battery when co-located with solar? Yes, we want to prove to our customers that we can do all of the use cases we talk about. And so I would see that taking place in the short to medium term. At some point in time, if it is served its uses and there is a financial benefit to do something different with it, then I'm sure we would look at that. But for the moment, I think there is some great use we can get out.

There's a question as well referencing the recent comments by the Chancellor by Rachel Reeves around buying British in key industries. Care to comment on that all?

Yes, and actually, she has mentioned that, but we are also hearing that within government as well. And we have DESNZ coming up to see us tomorrow with a group, sort of, a global group of interested parties in long duration storage in general. So delighted to host that. We talk to anybody about the importance of supporting local manufacturing. It is a frustration of mine that when I look across our portfolio across the world, there is a lot of support across countries for us moving manufacturing in, that I don't always see directly within the U.K. historically, but I am seeing a bit of a shift in that regard. Do I think we could do more? I think yes, we could do. Supporting manufacturing the jobs in the U.K. and us getting back to manufacturing, creating local jobs and supporting local economy is critically important, but you are starting to see that come through in the rhetoric across different government departments. So my hope is that when Ofgem are making their awards that they take account of that.

And sort of tangentially related, but more on the supply chain side. What's -- we've been asked a question here about how we're mitigating things like tariff risk and the way changing geopolitics, let's say. And can you sort of comment on that?

Look, we don't get any visibility more than anyone else as to what is happening globally. But we try to make sure that we diversify our supply chain where we can do so, make sure that we are never single-sourced across different areas of our supply chain and that we have manufacturing in different areas such that we can deliver from different areas as need be. I think the important thing is to make sure that we are not too reactionary, because as you think things change extraordinarily quickly in global politics at the moment, but we are well spread across Europe, the U.S. and Asia. So I think we've got as many bases covered as we reasonably could be expected to have.

It impacts us in the short term and in the medium term, that's a great opportunity for the company. As we are a low capital intensity option compared to conventional short duration battery storage, so that allows us to sort of local manufacturing and the benefits in some of these markets like investment tax credit and production tax credit in the U.S. are significant. And so some of those incentives and tariffs that you see playing out today are playing into our benefit in the long term.

Okay. Thanks, Adam. Sticking with the sort of supply chain theme and noting that we're sort of coming up to the last 5 minutes. There's a question here, just obviously, we're being involved in larger and larger projects. Just asking the obvious question about vanadium supply and how we're managing that. Matt?

Yes, sure. So look, we're going to be using about roughly 12,000 metric tons of vanadium in that project. Global production of vanadium per year is about 120,000 metric tons. So per year, we're going to be consuming something like 2% to 3% of annual production. That may -- so it's relatively small as compared with what's being used globally. I think, what's exciting for us is that -- and what's exciting for a lot of the vanadium industry is that, this is an industry that has not grown significantly in a very long time. And they -- around the world, a lot of the existing suppliers are very eager to do business with us because they see the battery space as one of the biggest growth vectors for their industry overall. And this project that we are now going to be doing is probably the first instance of a single project that really will spur the development of new capacity and some of the new partnerships.

Possibly our final question, unless any more come in while we're answering it. Jonathan, there's a question here about what do we think that Invinity's key barriers to growth are? What are we doing about it?

I think bandwidth probably within the organization, to be honest. I mean, 180 people sounds like quite a lot. But when you start to move that through and work out what it takes to deliver a product the size we have with the level of parts it touches on, it touches on software, touches on hardware from a technology perspective. We've got chemical engineering that goes with that. We've got heavy manufacturing. We've got to have experts across those fields and then we're doing it on a global basis as well. And so I think what we need to do is make sure we grow quickly, but we don't do it in the way that we end up sort of gaining digestion along the way. So from my perspective, we need to make sure that we start to, well we do target increasing focus on opportunities that we can close and we are pretty ruthless about some things we will cover. At the moment, the phone is ringing, as you might expect, constantly from people wanting to come and see us, wanting to hear about partner with us. And we need to make sure we pick the right partners. Otherwise, we can end up in an awful lot of meetings and being very busy, but not actually achieving anything. And that's what I'm firmly focused on, Adam is firmly focused on making sure we set numbers into the market that are cautious for the next couple of years to have the growth that we can achieve. My job is to make sure we deliver opportunities that exceed that, that we can make sure we deliver against.

Brilliant. There's no more questions. So I'm going to end with this one final one, which is, what are you most excited about over the next 6 months, which is quite a good one to end on. And as we've got 3 minutes, we've got time to go around the table. So...

Who gets to start. I'll go last.

I'll go first. Look, from my perspective, a big part of my focus is on, the last year has been on cost reduction. We've got those plans in place. We've got the teams working to finalize those details. Seeing all of those details come together in a final delivered product is going to be tremendously exciting for me.

You give me a second. So I think, cap and floor, new key perspective, I think we're leading the world in long duration in that respect. And I think the announcements of that, we said expectations during the course of June are exciting. And I think having a site up and running operational at the scale we have biggest in Europe at the time that it's made is really exciting to take both banks and customers around that and lead through to cap and floor. So that'll be the biggest exciting point on my side.

I will answer, but also final question has come in, which I think I want to answer as well. So one of my most excited about the biggest frustration for me historically has been knowing the commercial discussions we are having and not being able to be more forthcoming on those. And we said before, we are often entirely reliant on what's happening at the customer perspective on a very complicated project to get those across the line. You've seen now that we started to FlexBase is perfect example. That was one of the projects I was always referring to, but not by name, delighted now that we got to the stage where we won that we can talk about it. That is not the only one that sits there that I'm really excited by. So what I'm most excited about the next 6 months is being able to show hopefully some of those coming through. We can't promise that, but I am very excited about what could come through from that. The final question that came through was on future funding. And I certainly don't want anyone to think we ignored that. We have raised capital before. We obviously have some significant growth prospects ahead of us. Adam has commented that we look through from a going concern perspective, given us a clean bill of health. We have very supportive strategic shareholders in both National Wealth Fund and in terms of the strategic Indian investors we brought in, in September and institutional as well. And there's a lot of excitement around the business. I am also conscious that there are lots of retail shareholders well who support us on a daily basis, trading, buying and selling shares as well. And we will look to do the right thing by all of those and make sure we do it from a position of strength when needed.

Brilliant. I think that's all the questions. Mark, over to you.

That's great. Well, look, thank you to everybody for their engagement this afternoon, a tremendous amount of questions, and thank you to the team for your patience and your engagement as well. Ladies and gentlemen, that does conclude today's session. If I could please ask you not to close the webinar because we'll now redirect you so you can provide your feedback in order that the management team can better understand your views and expectations. On behalf of the management team of Invinity Energy Systems plc, thank you for your time this afternoon, and enjoy the rest of your day.