ITM Power Plc

Good morning and welcome to the ITM Power Plc investor presentation. Throughout this recorded meeting, investors will be in listen-only mode. Questions can be submitted at any time by the Q&A tab situated in the right-hand corner of your screen. Just simply type in your question and press send. The company may not be in a position to answer every question received 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. I'd now like to hand you over to the team at ITM Power Plc. Good morning.

Good morning and welcome to our capital market update. Financial year 26 was a strong year for ITM Power, in which we delivered our highest ever annual revenues of £43.6 million, representing a 68% increase year-on-year and a more than 700% increase over three years. We have continued to strengthen our position as a leading supplier of electrolysers, underpinned by our proprietary stack technology, deep manufacturing expertise, strong reference plans and a product portfolio trusted by industrial customers. Today, Amy, Simon and I want to cover a wide range of topics. First, a bit of setting the scene and then a deeper dive into the market we operate in. Following a short recap of our business model, I would like to then draw attention to the Hydropulse project we announced last week. We will then continue with a project execution update before going into more details about our collaboration with Rheinmetall. Simon will then update on the UK government investment in ITM and on our Kronos program. Amy will report our FY26 results and provide guidance for FY27. Let's kick off with a look on the market and competition, which I will keep brief as the next slide is going into more detail. Macroeconomically, the conflicts in Ukraine and the Middle East continue to highlight the structural fragility of fossil fuel dependent energy systems. Geopolitical shocks, price volatility and supply chain disruptions underscore that energy security cannot be taken for granted. The strategic rationale for accelerating the energy transition has become clearer and more urgent. Scaling clean, sovereign and resilient regional energy systems enables to reduce dependence on imported fossil fuels. Electrolytic hydrogen plays a key role in these systems of the future. It offers critical grid balancing and energy storage capabilities and extends decarbonization into hard to bait sectors like steel, chemicals, fertilizers and synthetic fuels, including for defense purposes. As previously reported, Europe remains the most attractive market for green hydrogen and our products. With robust policy frameworks, substantial pipeline and wider infrastructure investments and a growing push for made in Europe. Of course, other regions are progressing their hydrogen ambitions as well, including, for example, Japan, South Korea, Australia and Canada. But Europe remains the focal point, with projects advancing at scale and at pace. From refineries replacing fossil-derived hydrogen to energy companies converting renewable power into hydrogen to supply industry, IDM has evolved into a trusted partner with proven performance and a strong reference plant situation. In an environment of fierce competition and market consolidation underway, operational data from sizeable reference plants with credible customers and execution experience do matter. As a result, we are seeing strong customer engagement, in particular for Alpha 50, Neptune 5 and Hydro Pulse. Operationally, we have never been in a stronger position, be it on core technology, project execution capabilities, or manufacturing. Our competitive and comprehensive product portfolio has enabled us to win important projects in the year, including a Neptune 5 project with Westnets in Germany, a Neptune 2 project with a cement producer in Spain, a Poseidon contract with Morgen in the UK, and a Neptune 5 contract with Octopus Energy Generation. We also secured important project supplier selections for opportunities progressing towards FID, including with Uniper for the 120 MW Humber project, with a confidential customer in Asia for a project larger than 300 megawatt and with the German stable grid for two projects totaling 710 megawatt. In addition, we entered into 150 megawatt capacity reservation with RWE. I will skip the UK government investment and our Rheinmetall partnership for now, as we will talk about that later in the presentation. Project execution has progressed at pace across multiple flagship projects, including RWE's 200 MW Lingen plant, Linde's Leuner project and Shell's 100 MW Refine II. Our list of high profile reference plants keeps growing. Next up is our financial position, which I will keep short because Amy will talk about it later in the presentation. It is worth highlighting, though, that we closed the year with more cash than we entered it. Our strong balance sheet remains a clear competitive advantage, particularly in light of the ongoing market consolidation. Our order backlog remained at a healthy level despite recognizing record revenues in the year and is now consisting of 83% profitable contracts, up from 60% at the start of the financial year. This brings us to our strategic priorities, which have proven right over the year and remain valid. Technology leadership and competitiveness continue to be central to our strategy. Full ownership of core science, IP, and manufacturing enables rapid innovation, supply chain resilience, and product differentiation. In October last year, we reinforced this leadership by the successful launch of Alpha 50, our scalable 50 megawatt full-scope hydrogen plant. Alpha has generated strong customer engagement as it aligns with the market's appetite for standardized, industrial-scale hydrogen solutions from trusted technology providers with convincing reference plans. In support of our long-term vision to build an integrated hydrogen company, we launched HydroPulse in 2025. Hydropulse is our new build on and operate business model which is poised to fundamentally transform the financial profile of our company. I will pause here because I am updating on Hydropulse later in the presentation. Let's now take a closer look on the market we operate in. The outlook for electrolytic hydrogen as an essential building block of the energy systems of the future remains compelling. with significant growth forecasted over the next years. That said, many final investment decisions, short FID, continued taking longer than anticipated. In contrast, the underlying fundamentals have strengthened. A phase like this is naturally favoring companies with the discipline to focus on project execution, the preservation of capital, and to relentlessly build the capabilities needed for the future. Just getting on with it, effectively and efficiently, this is how we build a resilient market leader. On this slide, I would like to focus on the bottom bit, which attempts to illustrate growth momentum by use case as we experience it right now. We are seeing the biggest demand pull from refineries today. Refineries are turning to green hydrogen to cut emissions and meet the binding red three targets, including 42% RFMBO use by 2030. Refineries require hydrogen to remove sulfur and impurities from oil products and to convert heavy hydrocarbons into diesel, petrol and jet fuel. Refine with Shell is such a project, as is Lingen with RWE, which will supply the total refinery in Leuna via pipeline. Refinery applications, whether directly or indirectly, dominate our sales pipeline today. The second growth area, although much less mature, is defense. meaning synthetic fuels which can be produced independent from fossil fuels and offer unparalleled sovereignty and resilience advantages. We will explain that in more detail later in the presentation. Interest in mobility-related applications has moderately declined, though, over the recent months. Looking back over the last couple of years, mobility-related applications were making up a big portion of our sales pipeline. These projects are typically small, say, 2 to 10 megawatts. And while there still are these projects, the trend is undeniably going for larger scale applications instead. Don't let the grey horizontal arrows fool you when it comes to the next three items. We are seeing continued but unchanged in trend demand from energy companies who aim to convert especially surplus renewable energy into hydrogen. The amount and cost of curtailed renewable energy are mind-blowing today. And it will continue to get worse from here. We expect an increasing demand from this segment in the future. Industry continues to offer a wide range of use case opportunities such as for steel, cement or chemicals. We are not seeing a major trend here in our sales pipeline, neither a material decline nor a material increase in demand. The same applies to derivatives such as ammonia for fertilizers. This is actually surprising as recent crises have exposed for example in the UK a dangerous dependence on imported fertilizers. Domestic green hydrogen based sovereign fertilizer production could strengthen food security, reduce geopolitical dependencies and cut emissions. We therefore expect the penny to drop in the future and demand to pick up substantially in this segment. In the Capital Market Update in January this year, I showed you this slide and explained our business model. I won't go through everything again, but want to highlight the Hydropulse model briefly once more. IDM is originally coming from the core technology and over the years we acquired the capability to design and manufacture market leading electrolyzer products which we sell to our customers. We also built the EPC capabilities required to integrate our technology into full plants and on customer sites. These capabilities form the basis for our strategic evolution into becoming a build, own and operate company as well. Under the brand Hydropulse we will invest, build, own and operate hydrogen production plants to serve industrial off-takers under long-term contracts. This business model is not only significantly profitable but also highly cash generative and it offers long-term contracted recurring revenue streams which will fundamentally transform the financial profile of our company. The introduction of HydroPlus represents an important strategic move, broadening our route to market and addressing key barriers to quicker hydrogen adoption. By eliminating customers' capex and mitigating perceived operational and technology risks, the model has resonated strongly with prospective customers. This market traction is evidenced by the signing of heads of terms for a large-scale green hydrogen project between Hydropulse and a leading oil refinery in the European Union. We announced the deal last week alongside a dedicated capital market video. At 150 MW capacity and with a planned 10-year contract duration for the operational phase, the project demonstrates the massive scale and potential of our BOO model. Our customer is planned to provide land and utilities, including power, mitigating our exposure to electricity price risk. A joint feed study is already underway and we are targeting FID in 2027, with hydrogen production targeted to start already in 2029. As explained last week, financing discussions are moving ahead constructively. If progressed through FID, it would represent by far the largest contract of ITM to date and establish a material long-term contracted revenue stream for the group. And this is just one of many Hydropulse projects we are progressing. For industrial customers to take you seriously for such massive projects like the Hydropulse One, you don't only need a robust technology but a track record of deployed reference plants of comparable size. We are beyond proud that we have written history by successfully deploying the largest PEM electrolyzer in the world and Europe's largest operational electrolyzer of any technology. The first 100 MW project in Lingen for RWE has marked an important milestone for us. The second 100 MW project for RWE on the same site is already in commissioning with 60 MW already done. Shortly, we will have delivered the biggest electrolyzer in Europe twice. And, most importantly, to a happy customer. This should also end the false debate about alkaline technology being the most suitable technology for large-scale deployments. As I said earlier, we are simply getting on with stuff and we are continuing to prove what's possible instead of just talking about it. And another happy customer. 101 year old family company Goodroth has been our first Neptune 5 customer and they have overseen us complete the unit and put it through extensive customer witnessed factory acceptance testing short FAT. FAT went smoothly and the unit's performance is exceptional with efficiency and hydrogen production rate better than contractually committed providing our customer with a valuable business case upside. We thank Goodrow for their trust and look forward to more joint projects, some of which are already in development. This brings us to another exciting topic, our strategic collaboration with German Rheinmetall. Together, we combine proven industrial-scale hydrogen technology with defense and Power2X integration to strengthen fuel security, military operational resilience, and supply chain sovereignty. We plan to achieve that by building decentralized synthetic fuel production plants, which will utilize locally produced green hydrogen with captured CO2. The result is drop-in diesel, jet and marine fuel fully compatible with existing NATO equipment including vehicles, aircraft, vessels and fuel infrastructure. Our collaboration focuses on the UK and Germany, the two most important nations for Europe's fuel backbone. Joint discussions are underway with both governments. These discussions are happening on the back of an increasing threat level to European security from the east. The conflicts in Ukraine and the Middle East have yet again demonstrated that fuel and energy infrastructure are primary military targets and that dependence on fossil fuel supply chains would severely limit our defense capabilities. The underlying program driven by Rheinmetall is called GigaPTX and it aims to partner with NATO members to build a distributed network of several hundreds of modular Power2X plants for synthetic fuel production across Europe. This makes the network inherently resilient and difficult to attack with no single point of failure. Rheinmetall works with selected technology champions to ensure local content where possible. I will now hand over to Simon who will explain new synthetic fuel and how it compares to conventional fuel.

Thank you, Dennis. The proposition Rheinmetall are pursuing is the production of conventional hydrocarbon fuels by using renewable power, water and carbon dioxide. Via the process we're all very familiar with, electrolysis uses renewable power to split the water into hydrogen and oxygen while the CO2 is made available from industrial or even ambient air sources. These are the two key ingredients which feed the Fischer-Tropsch process, which joins the hydrogen and carbon atoms together into long hydrocarbon chains which ultimately make up the fuels. Fuels that carry the benefits and convenience of the conventional diesel and aviation fuels that we're familiar with. This application is about bringing together established technologies to produce fuels that are already validated for use and in doing so it becomes feasible to produce conventional fuels in close proximity to where they're needed while distributing the fuel infrastructure and therefore making it far more difficult to attack and reducing the complexity and risk associated with fuel logistics. Put simply, electrolysis used as part of this process creates synthetic liquid fuels that go with the grain of existing engines while presenting strategic options for NATO. As you've heard from Dennis earlier in this presentation, we're demonstrating success in large-scale project execution. We're surpassing customer expectation during factory acceptance testing of our new Neptune 5 product and attracting a range of new opportunities. All of that is based on the leading performance delivered by our Trident Stack platform. But we're not complacent. Using the capabilities we've developed over our 25-year journey, we're progressing numerous core technology improvements and a larger stack platform called Kronos. Together, these bring cost, performance and footprint benefits, which all contribute to further reduce the cost of green hydrogen for our customers. By way of a quick reminder, we announced in April this year a government support package of 86.5 million pounds to underpin the validation of Kronos and to establish its manufacturing line to be capable of one gigawatt per year. This will be additive to our existing Trident manufacturing line. The £85.6 million came in the form of a £40 million investment in ITM by Great British Energy, together with a £45.5 million grant from the Department of Energy Security and Net Zero. This was the outcome of a long and detailed process, and we consider it a strong win-win position. It brings obvious advantage to ITM while being strongly aligned with the UK's hydrogen ambitions and its view of hydrogen as a key pillar to energy sovereignty and resilience. It also positions ITM as the natural partner for hydrogen projects in the UK. The Kronos program itself is progressing to plan. The core technology continues to offer outstanding performance and it's underpinned by over 20,000 hours of operation at component, cell and short stack level. The Kronos bill of materials is defined and the manufacturing processes are undergoing robust validation. A crucial process given the level of automation to be adopted. Kronos will be manufactured in our Sheffield facility, enabling us to take advantage of several synergies with existing Trident manufacture and testing processes. In developing the factory, we've given particular attention to make versus buy decisions. As you may know, I'm passionate about maintaining control over elements that define cost, performance and longevity of our core product. We'll continue to operate according to that philosophy. The flow of the factory is mapped and is being coded into a flexible digital twin and that will be used to fine-tune the layout and optimize material movements. The program as a whole benefits from strong and collaborative relationships with both GBE and Desnes. We've made a number of key appointments, in particular for the production engineering function which is leading the effort to realize the Kronos production line. Early on in my career, I was once told by a very experienced engineer that it's important to measure twice and cut once. This is the approach that we'll continue to adopt to ensure that Kronos is an industrialised and robust stack platform manufactured to the high quality standards our customers expect from ITM.