Ceres Power Holdings plc

Good morning ladies and gentlemen welcome to the SARES 2025 four-year results investor presentation for those joining online you will be in this in early mode and do please submit your questions at any time just using the Q&A tab situated on the right hand corner of your screen I'd now like to hand over to the management team Stuart, Phil good morning good morning everybody and thank you for joining us for the 2025 full year results presentation

I'll talk you through an update on the company and the strategy to begin with, and then Stuart will obviously talk you through the financial numbers and we'll obviously go into Q&A at the end, as usual. So, at Serres we're operating on three strategic imperatives. The first one is signing more licensees, so new manufacturing license partners is a key focus for us as a business. The second is once we have those partners, bringing those partners to market. So that's obviously assisting them as they scale up and put in capacity, but also actually helping to stimulate demand, which actually helps pull through the products that we're developing with partners. And the third is obviously technology leadership. We believe we have the best solid oxide technology in the world. We have a single staff platform, which we're actually going to be launching in April. And we need to maintain that technology leadership advantage because that's what our partners come to rely on from CERES. So over the last 12 months, we've made significant progress on all these activities. The first thing to say is there is an acute need for power driving the commercial interest in our technology right now. and particularly for SOFC technology in the wider landscape. As we go into partner progress, in the past 12 months, we signed a new manufacturing license agreement in China with Weichai, our partner. We'll give you a little bit more on that today, but that's going extremely well, extremely rapidly. In Taiwan, Delta is also scaling and starting to produce first prototype products and is also investing significantly in land and facilities to do that scale up as well. In South Korea, a big milestone for us in the past 12 months was Doosan starting production at their factory there, both for SOFC stacks and power systems. And that also generated first royalties for the company in this period. In Japan, our partnership with Denso on the electrolysis side began production of first hydrogen with Jira, and also led to government funding recently with an estimated value of about 35 billion yen, approximately 165 million, to continue the advancement of SOEC technology. Great progress in India with Shell. The megawatt-scale electrolysis demonstrator actually exceeded performance expectations High efficiency but capacity as well. And we're progressing now towards the pressurized systems as well with Thermax and Shell and Thermax developing a new pilot facility for testing of those systems. We also undertook a business transformation plan around those three strategic imperatives that we talked about. And we've restructured the business very much focused on accelerating the commercial opportunities. So after 25 years of developing this technology, we are now at that point of commercialization and the point of first production and scale-up. We'll talk more about this business transformation, but there's a cultural change there, but also it's anticipated it will drive cost savings around 20% this year compared to the 2025 cost base. And we finished the year with a very strong cash position of over $83 million at the end of the period. So again, we'll talk in more detail about financial management in the second half of the presentation. We had some news this morning as well, which is very pleasing. Partnership with SEMSCA here in the UK. It's fantastic to be able to actually bring this British technology to the UK. And this really is part of our second pillar of that strategy, which is how do we stimulate demand and how do we bring this technology forwards at scale? SEMSCA, as you all know, FTSE 100 leading energy integration company. The statement there is about a multi-gigawatt opportunity that we see in the UK. And that's on this gap that we're seeing as we have more need for electrification. We have a time to power need that's becoming quite acute. And this modular high efficiency technology can really service that market, both in terms of the data center needs, commercial and industrialization partners as well. The purpose of this is we're introducing our licensing partner network to Centrica, the whole ecosystem of manufacturing partners, and we will support Centrica in terms of bringing that forward. If you like, acting as their technical advisory arm, helping them to set up this model of how they go to market with this. So that will include our expertise in things like installation commissioning, remote monitoring, maintenance, recycling, all of those good things that we at Ceres know how to do. The initial focus will be the data centre market, commercial customers and industrial power. So that's a fantastic step forward for us today and we'll have more details on that. We have an upcoming capital market day on April 15th and we'll be able to provide you with more detail on that and from Centrica as well. But that's a Just in, very exciting development today. I mentioned also the single stack platform. So we're going to launch that also at our capital market today. One of the things that's unique about Ceres is this solid oxide platform, the same stack, the same cell technology can run in both directions, both for power generation and for green hydrogen. That's an amazing benefit to our partners because as they develop the supply chain, as they scale up, that investment that they're putting into factories now for power generation also has this dual-use aspect in the future for hydrogen as well. And as you can see in the chart here, that same stack technology is now going into products, Doosan, Waytri, Delta, but also we're using that on the hydrogen side with partners like Denso, Cermax, Shell, and Delta as well. Just wants to spend a little bit of time on what we're seeing as the emerging demand for power. Our estimate is we see an opportunity for power generation using solid oxide of around 22 gigawatts by 2030. And we see that market roughly split about 50% the data center opportunity, but also a very significant part in the industrial and commercial applications as well. So around 50-50 kind of split. Geographically, it's an interesting split as well. About 25% of that is the US market, which gets a lot of attention right now. I'm sure you're all covering data center applications in North America, but just under 20% of that is here in Europe as well. And the UK is a great market opportunity when you think, well, we have some of the highest power power prices anywhere in the world. This is a market that really lends itself well to this application. And then about 50% of that market we see is Asia, the wider Asian opportunity as well. And with our partnership network, we're able to access all aspects of this market. So our Our aim here is to really establish the service technology as the industry standard. And we're doing that by embedding it in these global partners that are accessing and servicing these different parts of the market. Why is that becoming a critical factor? Well, today, if you need power generation, you're waiting about six to seven years for a gas turbine. Small modular reactors are also coming down the pipeline, but they're about 7 to 10 years away. And then high voltage grid connections, 5 to 15 years away. So right now, with this acute need for power generation, behind the meter or on-site generation is becoming a really viable alternative because there just isn't the conventional power generation equipment available. I think it also opens a window for us in terms of The technology today is good enough. It's viable in terms of its lifetime, its performance, and its cost to actually enter the market. And as we scale, we anticipate these costs coming down significantly. Just to show you some of the progress that's being made. These are the first units developed by Delta. Took a license just under two years ago. So this is at Tai Power in Taiwan. So you can see here the first prototype units been made using Sarah's stacks, but all the systems done by Delta. Delta are fitting out their production as well, and they're on track. Delta is a very exciting partnership, folks, because when we talk about that data center market, Delta are already very much in that supply chain. I think by market cap now, they're the second or third biggest company in Taiwan after NVIDIA and Fox. And Where we fit in is they make solid state transformers, they make power conditioning, they make UPSs, et cetera. So by adding in the power generation capability of the solid oxide, they're developing a complete offering from fuel in all the way through to power out. And that power out can either be AC power or, in the data center application, 800 volt DC. So don't forget that the fuel cell technology is actually generating DC power. And the way that you actually combine stacks, you're very close to being able to match up that 800 volt DC power direct from the power generation unit, which is the SOFC. It's fuel flexible. So we run on natural gas today. We can run on biogas. We can run on hydrogen in the future. It lends itself extremely well to things like carbon capture. And also, if you want to, you can capture the heat or convert that heat into cooling through absorption chilling as well. So you have the option to go from low carbon all the way through to zero carbon and also push very high efficiencies. In Delta's case, the same market applications apply. It's microgrids, AI data centers, even for the semiconductor industry and manufacturing in general. So I think this is a really good illustration of how our partners take this technology and put it into a complete offering for these kind of market opportunities. Waychi is an exciting partner for us. We've been working with them on system level for about seven or eight years now. Their systems are very impressive, I have to say, and I'm expecting this year they'll launch their latest system, which is going to be a very impressive unit. We've taken the step with them. We've done the technology transfer, so we signed last November. Already, we're going very quickly, and there'll be more to come from Waychai this year, but they're probably going, I would say, faster than any of our partners have ever gone before. Doosan Factory. I was privileged to go around the factory. I've been a couple of times, but this was in July with Doosan Lee, the CEO of Doosan. First production was there. And when you actually get in there to see the realization, the single piece flow end to end, It's about the size of three football pitches, a semi-clean room. It's an impressive facility. And they've actually fulfilled their first capacity orders in the past few months. And that factory is now up and running. So that's a big, big milestone for us going full circle. So Doosan is the first. We expect Delta starting to come on stream and then Weichai. So we are building out this ecosystem. On the hydrogen side, I think it's been fair to say that over the past 12 months, there's been more headwinds on the hydrogen side. But at the same time, I think that opens up an opportunity for, again, higher efficiency technology like the Ceres technology. And as I mentioned, all of the investments that are going in now are directly applicable onto the hydrogen side of the business. So extremely pleased with our partnership with Shell. We've exceeded expectations there. We've met all the targets that we set. And that's leading on to the pressurized development, which is now underway. So taking this one, which was the first atmospheric SOEC that we did, and now actually putting that into a pressurized system that can be scaled to megawatt scale. And we're doing that engineering now. ourselves to begin with, but then in partnership with Thermax in India, who can really drive down costs. And India is one of the big markets that we see for this green hydrogen in the future. So we see green hydrogen particular opportunities in China and India as those areas come on stream. We also did this with Denso. Very quickly. So similar to the Shell container, Denso actually deployed this on site within 18 months of actually taking the license. And that's using CERES technology. That's putting in hydrogen into a thermal power station to reduce emissions from conventional power generation. And that's unlocked further funding for Denso as well. So great progress on all aspects of the hydrogen side as well. In terms of where we are as a business, we're building out this ecosystem of partners and really our aim is to be the technology provider of choice so we now have manufacturing in Korea we're seeing manufacturing being built now in Taiwan that will come on stream in China as well and with Denso in Japan so really strong ecosystem of partners Shell is more in the end user category and we can add Centrica to that list of partners today as well for UK and Europe So our aim is embed this technology to become the industry standard. So with that, I'm going to hand over to Stuart to give you the financial update for the past year.

Thanks, Phil. Morning, everyone. I'm just going to take you through a few slides, just give you a bit of an update on where we are from a financial position and financial planning position and some of the actions we've taken to put ourselves in a in a strong position to be able to execute the strategy Phil's laid out. So here's the headline numbers. You can see, as you all know, the revenues of Cero's are largely dependent on how successful we can be in terms of signing MLAs. We signed Weichi in 2025, but towards the end of the year, within sufficient time to recognize any revenue at all from that contract. So we're rolling that into 2026. But you can still see that the margins remain high. That's the asset line model we retain. And we have good financial discipline around that. The other thing to note here is cash. We're still very strong on the cash side. You can see that You know, the cash flow in the year was just under 20 million. And like I said, that was without the benefit of having an MLA. So we're pretty efficient now. I believe we've got the optimized cost base, which I'll take you through. And you can see that the restructuring that we've been going through in the last few years has fed through to the cost saving in 2025 from 2024. There's more to come on that, but we'll take you through that and be very clear. We now believe we have an optimized cost base. So the actions we took towards the end of 25 will flow through to 26. But we really do think now we've got the correct team to prosecute the strategy which we've chosen. So here's just a graphical representation of the revenue and gross profit. Gross profits remain industry leading with the asset line model we have. And of course, the success and the health of those are maintained by signing new MLAs. And we retain the confidence that we have the opportunities to keep on growing. chasing that pillar one on Phil's strategy of signing new MLAs and be successful in doing that in 2026. So Phil mentioned business transformation earlier. Very important to us. We now have that single stack platform commercially viable to get out into the market. And that started in earnest with Doosan with others to follow. And now we need to make sure that we are still innovating. Pillar 3 was keeping a technology lead very very important to a licensor and we'll continue to do that with one of the biggest solid oxide expertise pools in the world but now we believe we've reached a point where we need to just look at the focus of the company and be very, very commercially disciplined, commercially focused, and make sure we have the right people in the background giving the R&D sufficient attention that we have something to license in the future. And we believe during the end of Q4 2025, we've realigned the business to be able to do that. The flow through of that will be a 20% cost saving in 2026. But all the actions needed to do that have been taken and are now finished. So now we're into a business transformation for this year, which is all about culture, team, and making a case of units so we can make sure that we succeed and our team succeed at the same time. So this is all crystallizing, as Phil said, in the capital markets where we're launching this single stack platform. Very proud of it. And hopefully that will make sense to everyone when they see it. And it's something we can go out and actively, more actively sell into the marketplace. In terms of the cost base. So this is the optimized cost base we see for the next commercial phase. All the actions we've had to take have been taken. There'll be a natural flow through into 2026 of this cost saving. But we are essentially building from here. We've still got a world-class R&D team. They're very focused on the things we need to do to be successful. That's cost down. That's lifetime. And we've strengthened the commercial teams in order that we can make the biggest impact we can on the top line. So we really do think we've got the right team, the right place, the right assets in place to make a a real success for the next few years. And why are we doing that? Well, you can see that commercial momentum essentially over the last few years has reduced our cash outflows. And we're very clear we've now got the model of our business. If we can sign one MLA on average every 12 months on that sort of cadence, we will be very close to break even a cash flow neutral. And that's important. That gives us control of our own destiny without having to rely on the capital markets. And it's building that MLA base so we can become that industry standard that Phil talks about. And why is that important? Well, the end goal for any company that's ultimately a licensing company is to build your royalty streams. As Phil mentioned, we're just at this orange blob stage here today. You know, Doosan has fulfilled their first order at the very end of last year, led to our first royalty revenues, a big milestone after 20, 25 years of development of this project. But, you know, we need now to push on. If we can become industry standard, Essentially, have a portfolio effect of many, many partners building. We're really going to be able to build these royalty streams. Power first, hydrogen second, as Phil mentioned. This is the same technology, but you can attack two markets, one right and acute now, and the other coming several years after. So, you know, we're in this in order to keep on signing licensing agreements, which we know we can for the next few years. And then it's all about building the royalty base. So we like the model. Every time we make progress with Centrica and partners, we think it reinforces the success we need to have that model. But importantly, we need to show that we're financially disciplined to keep this asset like model, which we're doing. So with that, I'll hand back to Phil.