Invinity Energy Systems plc

Good afternoon, and welcome to the Infinity Energy Systems plc investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and could be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

and now that's hand over to Jonathan Marron CEO good afternoon sir thank you very much indeed good afternoon everybody we're also joined of course by my two colleagues Matt Harper and Adam Hallett we're all here in London delighted to be talking to you together we've got about an hour session here aim is to go through the presentation in about half an hour leave enough time for Q&A we've already had some really interesting questions come through so I'll leave as much time as possible to go through those and answer all of your questions so recognising that on this call we have a number of people who have been with us for many many years but also it's something new to the story so there's a few slides to go through just introducing the business and where we're up to and then we'll get into the interim results themselves but one thing I'd like to do for whether you are new to the story or whether you have been here for some time is just to talk about how we are describing the business at the moment and the reason being is that we thought long and carefully about how we tell people who we are and how we differentiate ourselves from the competition and that's not just to investors but that's also to the commercial space and what's reassuring is I think as you sort of hopefully hear the message now we're getting very good traction as we talk about this particularly with commercial customers and the reason being is that we're able to say what we offer is a flexibility is important is that markets are changing rapidly and we combine that with electrification the requirements from the grids are changing rapidly and there's a real risk that if you do buy an asset that doesn't have flexibility that it could quite quickly become a stranded asset and that obviously is quite a big danger there are examples of that across markets a particular one is in the UK where five or six years ago a lot of half an hour one hour batteries were put onto the grid quickly when that became saturated they became stranded. We have a flexible battery solution. It's flexible because there are no restrictions on cycles and it will last for 30 years and particularly as you start to talk about things such as the power requirements for AI data sensors that is a really difficult and changing market and we are offering a solution that really can change with the requirement from such an AI data to industrial businesses who are designing these solutions in, that is really, really exciting. So we do that across the globe, across all markets, but we do do it on a localised basis. And that is really quite attractive as well, because you're seeing across international markets a drive for localisation, which is being valued. And that's particularly true across the US, it's true across Europe, it's true across Japan and other markets. We'll come to the UK a little bit and there is obviously some good questions on the capital floor and I'll sort of comment on that and we'll be covering that in more detail. So if you look about our technology as well, we really are a proven mechanical technology. And mechanical, I say that because if you look at the assets that have typically put onto the grid over the last 100, 150 years, those are all mechanical assets. They're a gas asset, they're a coal-fired power station, they're a nuclear asset. what they're not necessarily is something that was really designed to go on a mobile phone or an EV and then has been sort of pushed forward and put onto the grid and therefore you know just like a car if something goes wrong with that car you can get in there and you can change that component part you can change the wheels you can change the oil you know with us it might be a valve it might be a pump or a pipe That's quite easy to go in and resolve. If you have something such as a mobile phone here, typically when that goes wrong you're throwing the entire cell away. And typically that can come with some quite complicated ramifications when you look to replace that across a wider field. And so therefore we are more akin to perhaps pumped hydro in a box. Pumped hydro separates your power and your energy storage in terms of your water that's used for gravity. and push down the health from the turbine that generates the power. For us, we do that via a chemical reaction, but ultimately it's the same. And so for a user looking at this, it's not a new technology at all. And then look back. Flow-back tubes were first patented in the 1880s. NASA did some good work accelerating that forward in the 1970s, and we've been working on commercializing this since the merger in 2020. And so when you talk to a commercial And then when we talk to what we are doing in some of the other areas, they get much more comfortable with that. And of course, we offer that in two separate areas. We offer that in the containerized solution, enduring, but also we're able to talk about the flexible solution at the bottom. Now what you'll note, if I haven't talked about LDS, if I haven't talked about but actually that's a use case that works very well for us and then in terms of non-lithium I've never liked saying we were a non-lithium business you don't go and buy a or you don't try and sell someone an SUV by telling them you're not a performance sports car tell them exactly what you are and I think that's really important so yeah that flexibility stories really resonates and then when I talk to customers we didn't want to talk about the track record because actually having those 2000 batteries installed in the field and working for our customers is a real differentiator we very recently announced that we had 10 gigawatt hours of power dispatched from our batteries that we were very proud of and you'll see in the interim yesterday that's not strong to 11 already and growing rapidly and that's important because all of the projects we talk to now they typically send in technical consultants to review where we are they need the track record they need a robust way and then the other point is that the most of all cost reduction results in the we can have characteristics of a battery that are attractive but if it's not at the right cost at some point you won't get through the financial gateways and the work we've been doing to bring cost down is really opening up that market and then finally we talk about where we are where we are particularly from a price point and we are having some really interesting and accelerated conversations that we haven't had before So just on this slide, we have 180 or so employees. To some people that sounds quite a lot, to others not very many at all. A lot of those are working on that cost down approach. It is a product that ultimately is steel, it is plastics, it is liquid, and it's component parts. But actually if you iterate those together, there is about 60 or 70 work streams the team is working on to take cost down. really is important so a reminder of why we win it really is that unlimited cycling that's where we focus on the unlimited cycling the lack of degradation the fact it will last for 30 years and those are characteristics which are really really valued by customers we do talk about the fact that there is no thermal runaway risk that is one of the reasons but not the only reason Yeah, anecdotally you'll see the Moss Landing lithium battery fire that closed the highway in California a number of years ago is back on fire over the weekend. These are really and can be really unstable assets and for us to be able to talk about the fact that there's no thermal runaway risk makes a real difference from that planning perspective. In terms of manufacturing, what we're able to do is localize that so that we can take advantage of those local programs as well. So domestic content is really important. There's a question coming up on that as to whether we can take advantage of that, particularly in the U.S. So I will not be just the answer to that, that will come on to us in a minute. What is really, really important to me is how our customers think about us. I mean, 11 people an hour is ultimately the result that you can't hide away from, and that will be a growing number. But what's really important to me is that customer journey from order through to pre-delivery, through to delivery and then commissioning, and then looking after customers afterwards. Dr. Craig Reiser there, who is from the APAS, that is just outside of San Diego, where there is our battery is connected to solar at the site of the Paranac Casino that asset has been worked extremely hard that was recently commissioned and Indian Energy are really relying on our battery to be providing the work at that site and look at the testimonial on the site we have no stronger part of the business than Indian Energy and that's really really positive one of the reasons why the funder of that project the Californian Energy Commission the CEC is again looking to push projects our way and you saw that from the announcement quite recently of Steel Group they were a funder of that and as you can see the results of the track record on that battery have been really positive towards us so we push the team very hard we do go the extra mile to look after our customers it is a small industry and they do talk and having that word of mouth referral is really really important to us From an international perspective, it's interesting how this slide has developed over the last couple of years. We do have a version of this that shows where we were two years ago. And this looks like quite an empty map two years ago. Now you can see we have a significant number of projects in the US, particularly on the West Coast. Again, in reference to the California Energy Commission that's supported to us. These are projects that are either working in the field at the moment or where we have signed contracts and are delivering. So that sits across both the east and west coast in the US, but also across Europe as well. You'll see we have the FlexSpace project which we'll talk about in a few moments time. The Cockwood Energy System which will be commissioned very soon. The connection to the grid has just been finalised at the moment, we're ready to go, we're just waiting and of course on the far right Spencer Energy that's the site that's been in the desert in Australia for a number of years now and it's probably our long almost our longest and best performing asset in some really harsh environments so again when someone says well how do you operate in the heat we can show them the data there and that's really important from a global manufacturing base. We continue to support the UK through Bathgate and Motherwell and FlexSpace project will continue to support those two factories will come onto cabin floor in a moment and how that potentially could change that or otherwise. the US as you've seen from where those projects are do require US content and that's one of the reasons why we will have the factory up and running by the end of this year and that will be really important in servicing those markets so we're well spread across making sure that we use China from a low cost perspective to deliver the heavy industry inputs that's the steel container that's the tanks and then sort of elsewhere we can put the balancer system we can put the electrolyte and of course specs manufacturing equipment And then finally, I've briefly mentioned about the cost before, and this isn't the first time I've mentioned it. We recently went back and just had a look actually about how much cost we took out of that BS3 product during its journey from when we first deployed a systems site, which was really around the Scottish water days, to the last system that we sent out, which was December 2024. And actually, we took about 60% of the product cost out on that BS3 journey. Now remember that was with some effort on cost down but not a significant effort on cost down because a lot of the R&D was going towards Mistral and now Endurium. But that came from development of the supply chain and from scale that went through that. But in a product which really was tough to iterate the cost because you did have the fixed batteries within the container and everything that went with that. Because you have to do that 60% with quite a hard product to try and take cost out of. You can see how Endurium which is designed that we can go much faster much further so that's a sharp line there when you see that 66% cost reduction we are basically in that position for all the product we are shipping in early 2027 and that's it looks like that cost reduction curve levels off and that's only because of the steepness of that graph we are still potentially looking at and the trajectory to get there opened up a very significant number of opportunities. When we talk about those price points, we get a really interesting reaction because most customers are very unaware that the vanadium flavor industry is heading in this way. A couple of anecdotes for you, and particularly one with Equans. Equans is our delivery partner on the FlexSpace project. We have hired them to do the EPC work. They were very keen to make sure that what they were getting involved with was robust, in terms of the technology and the partner and they actually had some exposure to one of our projects in Europe already and the head of business development said to me look you did the due diligence and the feedback he got back was that yours is the Rolls Royce of Canadian flow batteries and by that he meant two things he meant the quality of the product and also he meant the price in terms of where we work i.e. too expensive and that for me was fantastic feedback if he was talking which he wasn't aware we'd taken a significant cost out of. And then talking through where we were actually going to, this problem wasn't a fear, it was a much wider and deeper conversation with you. And then also, maybe six months before that, someone who was in charge of power solutions for a data center business said about palladium flow batches in general, the best storage technology there is, the most expensive. And again, at that point in time, he wasn't wrong. A lot of market commentators will say the same thing. They are not aware of where our price points are heading from the work, particularly in that we're leading. I think when we get there and we start delivering our products and people are able to order that in size, I think we will have a very different position commercially than we're heading into at the moment. So a really, really exciting on costs and on performance.

And with that, I want to hand over to Kevin to talk to the cameras.