ITM Power Plc ($ITM)

Good morning indeed, and thank you for the interest in the great news we are delighted to announce today. From our RNS this morning, you would have seen that the U.K. government has decided to back ITM Power with a combination of an equity investment and a grant, which is a strong vote of confidence in our technology and delivery credibility. It demonstrates the government's commitment to promoting the U.K.'s sovereign technology and manufacturing capability in clean energy infrastructure. Amy, Simon and I will provide you an overview of Project Horizon, including the U.K. government's rationale. A look at the market and our product offering will then lead into our next-generation stack platform, Chronos, and how we plan to manufacture it. We will close today's presentation with our upgraded guidance for FY '26. The U.K. government has ambitious plans for hydrogen. Through its energy company, Great British Energy, in short GBE, they aim to power Britain with clean, secure homegrown energy. DESNZ, the Department for Energy Security and Net Zero is a ministerial department of the U.K. government and is awarding funding to projects under the hydrogen allocation rounds, in short, HAR program. Their mission is to make the U.K. a clean energy superpower. Together, they have decided to back ITM Power as the U.K.'s electrolyzer champion. In turn, we are helping the U.K. government to reach their decarbonization and energy resilience targets and offer the creation of new well-paid jobs and boosting the economy. Their support package amounts to GBP 86.5 million, consisting of a GBP 40 million equity investment from GBE and a GBP 46.5 million grant from DESNZ. The grant is currently going through the usual subsidy control review, which is expected to be completed in June upon which the grant would be contracted. The funds will enable the establishment of large-scale domestic manufacturing capability for our next-generation stack platform, Chronos. We have been working on Chronos for over 2 years now. And once launched, our new stack will represent a step change in electrolyzer technology. Chronos is incorporating the latest technological developments and valuable lessons from our commercial projects and field data. It will deliver significant improvements in cost effectiveness and energy efficiency, enhancing our product offering and further substantiating our tech leadership. Chronos will help us increase our market share, speed up the industrial adoption of hydrogen and accelerate our growth and path to profitability. Importantly, as part of the transaction, our Chronos program has undergone rigorous technical and commercial due diligence by an independent third party to assess the effectiveness and likely impact of Chronos. Against the backdrop of recent geopolitical developments, clean power underpinning energy sovereignty and resilience has become increasingly critical to long-term economic success. We are grateful for the confidence and support demonstrated by the U.K. government, firmly establishing ITM Power at the very center of the U.K.'s hydrogen economy and positioning us as a natural partner for projects in the U.K. Let's talk about ITM. With 26 years of innovation and experience, we have developed into an established leader in electrolyzer technology and hydrogen plants. Our involvement in some of the largest and most prestigious PEM electrolyzer projects worldwide, strong reference plants, our vertically integrated manufacturing and IP leave us well positioned in an expanding market. Our robust manufacturing, supply chain and quality systems underpin our proven capability to deliver for repeat blue-chip customers, including the likes of Shell, RWE and Linde. Today, we have around 500 megawatts of plants built or under contract and more than 550 megawatts of additional capacity reservations plus a strong sales pipeline. Including the financial year ending this month, we will have seen revenue grow by more than 700% over 3 years. And despite these record revenue numbers, firm contract backlog has continued to grow as well, demonstrating strong order momentum. Our capital discipline has helped us maintain a healthy cash position and balance sheet, which is a sign of long-term resilience and eases project bankability for our customers as recently demonstrated as well in the North Field project FID with Octopus Energy in the U.K. Our continued revenue growth leads us on to the market we are operating in and how it is expected to develop from here. Whichever market study we take, whether bold or conservative, they all forecast continued and massive growth. By default, market forecasts will never be accurate, but they can at least give us a sense of direction. The International Energy Agency, short IEA expects an 11-fold increase to 77 gigawatt in 5 years worldwide without China. If we look at Europe alone as our main target region, Hydrogen Europe forecasts a growth of more than 400% over the next years. This market expansion is carried by strong policy support in key markets such as more than EUR 20 billion of EU funding, additional investments in pipeline and storage infrastructure, for example, in Germany, the transposition of RED III into national law of EU member states and many more programs such as HAR in the U.K. We expect approximately 70% of future demand to originate from the decarbonization of existing hydrogen use cases like refining and ammonia and the remaining 30% from new use cases like grid balancing, natural gas blending and others. Our strong order momentum is also reflected in our sales pipeline, which has grown from below 1 gigawatts to over 20 gigawatts of projects today. While a growing number of our peers is struggling to compete in the market, we are winning through our reference plants, real-world product performance data, customer confidence demonstrated by repeat business with leading industrial and energy companies and our comprehensive and competitive product portfolio. Our strategic alignment with the U.K. government and their strong backing will help us to build on our strength and open the next exciting chapter on our journey in a fast expanding market.

Thank you, Dennis. Many of you will be familiar with our product range. Each product is standardized, providing modular building blocks ranging from 2 megawatts to 50 megawatts, enabling us to engage with projects of any size. NEPTUNE II and V are fully autonomous containerized systems. Everything needed is in the box, meaning deployment is straightforward, the site only needing flat ground with access to water and electricity. The output is a reliable supply of high-pressure, high-purity hydrogen. NEPTUNE containers can be ganged together as necessary to achieve higher capacities. For reference, NEPTUNE V, the 5-megawatt container, is priced at EUR 5 million all in and widely recognized as best-in-class. It's currently our most popular product being routinely inquired for projects up to 50 megawatts in size. The most recent announced sale was to Octopus Energy for 3 units. POSEIDON is a 20-megawatt process module. Again, it is a repeatable building block. It includes the stacks together with the associated process equipment designed for integration into wider plants. POSEIDON is the product of choice for MorGen Energy. The West Wales project was announced in March. ALPHA is the world's first full scope 50-megawatt plant. Based on skid-mounted standardized and prefabricated modules, ALPHA is the most cost-effective solution for large-scale green hydrogen production. It can be scaled in 10-megawatt steps, enabling it to be sized to suit the application without needing to reinvent the wheel. Launched in October last year with a sales price of EUR 50 million for the 50-megawatt system, we've had tremendous reaction from the market. Two aspects that customers find particularly valuable are full scope of supply from one source and elimination of costly on-site construction and integration. All ITM products have Trident stacks at their heart. Trident is the leading PEM stack platform today. It has the highest current density and the highest efficiency available on the market. It also enables high response speeds, a capability that is often required for load balancing applications. Hundreds of Trident stacks have been manufactured and tested in the U.K. and supplied to commercial projects. Our previously published infield performance data from a demanding industrial application that demonstrates a degradation rate, which already beats the EU target for 2030, and that's for both PEM and alkali technologies. Chronos is our next-generation 2-megawatt stack platform, and it marks a genuine step change. ITM is an electrolyzer OEM that has invested deeply in research and development, and we have systematically in-sourced key technologies and processes. While this has generated significant value and know-how, it has also been an important differentiator that has enabled the pace of technology improvement to be accelerated. Looking back over our history, ITM has had several stack platforms, each better performing and higher capacity than the last. Chronos is not simply an upgraded version of Trident, however, it's a game changer, and here's why. The part count has been reduced by over 50%, making it significantly easier and faster to assemble. The footprint has been reduced by over 50%, achieving an unmatched power density of 2.5 megawatts per square meter. The weight has been reduced by over 50%, making it easier to handle and transport. We are targeting a 40% cost reduction and a further 10% efficiency improvement. This includes further reduction in precious metal loading, building on the 80% reduction already achieved in Trident. We've also ensured that Chronos is ready for the future technology improvements so that they can be implemented rapidly without the need for reengineering. Finally, the stack has been designed with material recovery and recyclability in mind from the start, meaning over 90% of components can be recycled or reused. These are all meaningful improvements, which draw on the experience we have accumulated to date across technology, manufacture, automation, project execution and operation. To appreciate the impact, it's important to understand that stacks account for approximately 30% of electrolyzer CapEx and over 90% of electrolyzer energy consumption. Therefore, improvements to the stack have a disproportionately large impact on the competitiveness of the complete product portfolio, reducing the cost of green hydrogen production. The development and validation of Chronos is well underway and continues to progress to plan. We have deliberately not guided for a specific release date because we're doing this thoroughly and do not intend to interfere with existing projects. I can say, however, that we have begun engagement with existing customers regarding field trials for next year. Before I hand over to Amy, I'd like to add a few personal remarks. The backing from U.K. government that we're announcing today represents a clear and compelling endorsement of ITM's technology as well as our capability to implement and execute. It follows an in-depth and rigorous assessment, including extensive technical and commercial due diligence across key areas such as technology, supply chain, manufacturing, intellectual property, cost structure and commercial impact. This work was conducted by an independent third party, and it was a significant undertaking, and I'm extremely proud of the whole ITM team and the outcomes achieved.

ITM is currently operating out of 3 strategic locations, supporting both manufacturing scale and proximity to our customer base. In the U.K., our 2 co-located facilities in Sheffield form the core of our business. This site brings together R&D, manufacturing, testing and support functions. It is also the world's first and largest PEM electrolyzer gigafactory in commercial operation, which provides a strong platform for scalable growth. In Germany, our Linden site supports European delivery, housing sales, EPC capability and aftersales services. Alongside this, spare parts and stacks are kept there to enable rapid response to our customers. Our Hydropulse business is headquartered in Berlin, positioning us at the center of a key European hydrogen market. Both German locations are supported by embedded functions as we continue to expand our EU footprint in line with demand. Looking ahead, the Chronos manufacturing line is planned to be in Sheffield alongside our existing Trident production. This ensures we can leverage our established infrastructure while efficiently serving both European and global markets. We plan to establish the Chronos manufacturing line within our existing Sheffield facilities, leveraging processes and operational learnings developed over the past 5 years on Trident. The project represents an investment of up to GBP 120 million, focused on scaling capacity while maintaining quality, efficiency and reliability. Placing this alongside our current Trident manufacturing lines allows us to make the best use of synergies, skills and processes while reducing risk and allowing an efficient and reliable manufacturing process. We will continue to progress our deep in-house value add, along with additional in-sourcing of processes, which will enhance quality, control and scalability. This will allow us to manufacture efficiently and to further control product costs. The majority of the investment, approximately 63% will be directed towards bespoke automated production and testing equipment. This includes catalyst coated membrane manufacturing, electrode welding, platinum coating and stack assembly. Fitout and cleanroom facilities, which are essential to ensure product quality, will make up a further 13% of estimated costs. The purchase of all validation materials, which are the materials that validate the manufacturing process for Chronos, make up a further 13% of the projected costs. The remaining projected spend is for other costs such as project delivery and cost inflation. We target commercial operation in 2028. Trident, our current stack platform, will remain an important part of our stack technology suite. We will continue to manufacture Trident to serve our existing customers and long-term service agreements. Importantly, we will continue to innovate our Trident stack, including adopting features from Chronos, allowing current customers to take advantage of compatible improvements and the increased energy efficiency and cost competitiveness that they will bring. This means that we will be operating the 2 different manufacturing lines together. There will be no requirement to write off existing assets. Aftersales, including replacement stacks, is a profitable revenue stream for us. When all our current contracts are complete, we will have more than 700 stacks in operation, and we will continue to sell Trident over the coming years. This is why it's very important that not only do we keep manufacturing Trident, but that we keep improving it. The DESNZ grant of GBP 46.5 million is currently going through subsidy control. Now just to explain what that means, that means that the grant is referred to the subsidy advice unit, which sits within the Competition and Markets Authority. This is a requirement for all grants or grant schemes. The unit's role is to evaluate the grant against the subsidy control requirements and to publish a report. The unit's function is advisory only. It does not have the power to prohibit the making of a grant. The process takes 30 working days. We expect to take a final investment decision in June, which is when we expect the grant to formally conclude. And now on to our guidance for our current financial year, which ends on the 30th of April 2026. Both revenue and EBITDA guidance remain in line with our last update. In February, we increased our revenue guidance to be between GBP 40 million and GBP 43 million, and we held our EBITDA loss guidance to be between GBP 27 million and GBP 29 million. We are pleased to announce that our FY '26 cash guidance has now increased from between GBP 170 million and GBP 175 million to be between GBP 210 million and GBP 215 million. This is due to the GBP 40 million cash injection from Great British Energy. This further strengthens our balance sheet and underpins our ability to execute on growth. That concludes our presentation for today. We thank you for your attention and for your continued support.