- 30% Employee reduction & preparing for mass manufacturing.
Interim results summary
- Revenue £2.0m (H122: £4.2m)
- Adjusted EBITDA loss £54.1m (H122: £12.9m) *
- Net cash at the end of the H123 of £317.7m (H122: £164.2m)
- Majority of Leuna project revenue deferred due to delays and changed delivery model
* Adjusted EBITDA is a non-statutory measure. The calculation methodology is set out in the Note 3
Two 100 MW contracts signed with Linde Engineering
- Largest PEM electrolyser under execution in the world today
- Deploying the new Linde / ITM Power 10 MW standard modules based on state-of-the-art 3MEP 30bar stacks
- To be installed at RWE’s site in Lingen, Germany
Strategic update: 12-month priorities to solidify our foundations for growth
- Concentrating our portfolio on a core product suite, with robust product validation, and preparing for manufacturing at scale
- A rigorous approach to capital allocation and cost management, including a headcount reduction equating to a 30% (£9m) annualised saving on personnel cost, professionalising engineering and manufacturing, and increasing control over spend
- Plans for future testing capacity and incremental automation, improving cycle times, volume output and build quality
Agreement with Vitol to review strategic options for their joint venture Motive Fuels Ltd
- Options to be considered by the shareholders range from the sale of the business to discontinuing activities, and are subject to appropriate consultation
- This is intended to save ITM Power c.£28m to be rerouted to our core business
Financial guidance for FY23
- As previously announced, materially changing earlier guidance
- Full-year revenue now expected to be c.£2m with further revenue deferred into the next financial year
- Adjusted EBITDA loss expected to be in the range of £85m to £95m
- Net cash at year-end expected to be in the range of £245m to £270m
Board change
- Dr Rachel Smith to step down from the Board of Directors from 1 February 2023 and assume a new role in the Company
Sir Roger Bone, Chairman, said: “We raised capital to pursue an expansion strategy and in doing so underestimated the competencies and capabilities required to scale up and to transition from an R&D company to a volume manufacturer. As a consequence, we set unrealistic targets for project completion. This has produced an unacceptable financial performance.
“We have acted swiftly by appointing Dennis as our new CEO. During his 2 months at ITM, Dennis has developed a 12-month plan which lays out the underlying challenges of the business as well as the solutions which we will put into place. I have no doubt that the immediate actions being taken will provide strong foundations for the future which will enable ITM to move into its next phase of development and to play a leading role in the journey to net zero.
“On a separate note, Dr Rachel Smith will step down from the Board on 1 February. With her knowledge, expertise and passion for the Company, Rachel has been pivotal in the delivery of several key strategic projects for a number of years. On behalf of the Board, I would like to thank Rachel for her continued commitment to ITM as she works with the Company in her new role.”
Dennis Schulz, CEO, said: “As a former customer of ITM, I had a good understanding of the company’s situation before I took on the challenge of leading its transformation. Prior to committing myself, I questioned:
- Does ITM have a cutting-edge electrolyser technology with the potential to outperform its competitors?
- Does ITM have a strong enough balance sheet to support the necessary strategic and operational changes required to strengthen the company’s foundations?
- Does the market give us the time window needed to solve the growing pains ITM is encountering?
“In answer, I am confident these crucial preconditions are met.
“Having worked in close partnership with ITM, and selectively with competitors, I am convinced that ITM’s technology can outperform the competition. However, product focus must be narrowed significantly. Our balance sheet is robust, but we need a much more rigorous approach to managing cost. This requires scrutinising every aspect of the business for cost saving potential, and it will make difficult decisions necessary. One of those is the need to streamline our organisation via a headcount reduction programme.
“We need to transform ITM from an R&D culture company to a professional and credible delivery organisation ready for volume manufacturing – sustainably growing into a profitable business. Most issues today arise from immature engineering processes, which materialise during manufacturing and lead to project delays and cost overruns. As one key priority, we will change the way we engineer our products and control design changes.
“The market for green hydrogen is real, driven by climate change, and decarbonisation imperatives. Increasing carbon taxation in combination with green funding programmes make previously unattractive business cases viable. Recent energy independence considerations are further fuelling demand growth. However, peak electricity prices and inflation have temporarily slowed down customer investment decisions. This gives ITM time to have the breathing space required to focus on getting the fundamentals of the business in order, while delivering on our contractual customer commitments.
“Our detailed 12-month plan will make ITM a stronger, more focused and more capable company. The large-scale opportunities in the market are yet to come, and by putting these foundations in place ITM will be ready for the significant market demand ahead of us.”
A presentation for analysts and investors by Dennis Schulz, CEO, and Andy Allen, CFO, will be held at 9.00am GMT.
The presentation will be via the Investor Meet Company platform. Questions can be submitted pre-event via the Investor Meet Company dashboard at any time during the live presentation. Analysts and investors can sign up to Investor Meet Company for free via: https://www.investormeetcompany.com/itm-power-plc/register-investor. Those who already follow the Company on the Investor Meet Company platform will automatically be invited.
A recording will be made available on the Investor Relations section of the ITM website after the event.
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About ITM Power PLC
ITM Power was founded in 2000 and ITM Power PLC was admitted to the AIM market of the London Stock Exchange in 2004. Headquartered in Sheffield, England, ITM Power designs and manufactures electrolysers based on proton exchange membrane (PEM) technology to produce green hydrogen, the only net zero energy gas, using renewable electricity and water. www.itm-power.com
