REG - AMTE Power PLC - Operational and Trading Update

Amte PowerAnnouncement

23/08/2022 07:00

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RNS Number : 8387W  AMTE Power PLC  23 August 2022

23 August 2022

AMTE POWER PLC

("AMTE Power", "AMTE" or the "Company")

 

Operational and Trading Update

"Powering ahead with battery cell production and strategic plans"

 

 

AMTE Power Plc, the developer and manufacturer of lithium-ion and sodium-ion
battery cells for specialist markets, is pleased to provide an update ahead of
announcing its full year results for the year ended 30 June 2022.

 

AMTE is a leading high-performance battery cell developer and one of the only
companies manufacturing battery cells in the UK today with established
commercial partnerships in place. The business operates at the heart of the
UK's drive towards net zero carbon emissions and has a range of
high-performance lithium and sodium ion cells along with an extensive IP
portfolio. AMTE is currently focused on the delivery of high-performance cells
into the energy storage and specialist automotive markets.

 

Highlights:

 

·      Automotive sector Ultra High Power cells:

o  Extensive on-going trials show the cells have consistently achieved a full
charge within six-minutes.

o  Cells manufactured on GigaFactory equipment at UKBIC delivering
exceptionally well against the Company's target specification at ever
increasing volumes.

o  Five non-binding MoUs signed with key automotive partners: Cosworth,
Viritec, MAHLE Powertrain, Sprint Power and BMW.

·      Energy storage sector Ultra Safe cells:

o  Cell development is nearing completion having reached its energy density
specification of 140 Wh/kg.

o  Planned to commence production at Thurso later this year for delivery to
customers for initial evaluation and project and supply validation.

·      Ultra Prime: initial sales expected to commence in FY24, with
production centred on Thurso.

·      Overall pipeline of opportunities in excess of £240m.

·      Focusing on the Thurso production facilities and UKBIC will
enable AMTE Power to leverage its competitive advantages and development
pipeline to drive the next stage of its growth towards the MegaFactory

·      AMTE Power plans to have its new, state of the art 0.5GWh
MegaFactory in Dundee ready within three years. The facility will be capable
of producing more than 8 million cells with a revenue stream in excess of
£200m.

·      Company is trading in line with the Board's expectations.

 

Operational successes

 

AMTE Power continues to make good progress in accordance with its plans across
its three core cell products: Ultra High Power, Ultra Safe and Ultra Prime.
These differentiated products are focused on the high power, specialist
automotive and energy storage sectors, with properties outpacing other cells
currently in the market. The business currently has a number of key commercial
opportunities for its products and a strengthening overall pipeline of
opportunities being discussed with an unweighted value in excess of £240m.

 

Ultra High Power

These cells are ideally suited to key automotive sectors of high-performance
electric vehicles, hybrid vehicles, and fuel cell electric vehicles, with an
increasing number of automotive original equipment manufacturers ("OEM")
committing to fuel cell electric vehicle production.

 

The Ultra High Power cells that are currently being produced on GigaFactory
production equipment at the UK Battery Industrialisation Centre ('UKBIC') are
delivering exceptionally well against the Company's target specification, at
ever increasing volumes. Testing shows a very low internal resistance, which
allows both very fast charging and exceptional power delivery.

 

Extensive trials have taken place and whilst tests are still ongoing, the
cells have consistently achieved a full charge within six-minutes in initial
testing, with further tests planned in the coming weeks. This builds upon
1,000 charging tests previously completed and supported by Imperial College.

 

The Company has currently signed five non-binding memoranda of understanding
for the cell with key automotive partners as it moves toward supply contracts
that will be supported by AMTE's Dundee MegaFactory scale up, as announced on
28 July 2022. Combined, these steps will significantly reduce risk of
delivery.

 

Ultra Safe

With the continued challenges on pricing of key materials for batteries, there
is significant interest in AMTE Power's sodium ion cell, Ultra Safe, for
energy storage systems. This cell uses no lithium, cobalt or copper and is
more cost effective, safer and sustainable than lithium cells. It is,
therefore, viewed as a natural alternative for many applications to
lithium-based battery products, with interest and engagements through much of
the value chain from major energy generators to home energy storage producers.

 

Cell development is nearing completion, with the cell having reached its
energy density specification of 140 Wh/kg. It has been designed for energy
storage applications and is planned to commence production at Thurso later
this year for delivery to customers for initial evaluation and project and
supply validation. In March 2022, the Company announced a contracted initial
order of 1,000 cells from AceOn for its portable energy storage unit. The
Board anticipates that further contracts will be entered into as AMTE prepares
to invest in its Dundee MegaFactory.

 

Ultra Prime

Ultra Prime is a non-rechargeable cell designed for use in some of the most
difficult environments on earth, with very high energy density and
high-temperature performance. This cell also has a low self-discharge, making
it well suited for applications where temperature, access and long duration of
charge retention are key considerations.

 

AMTE Power's Ultra Prime cell continues to progress to schedule and to
demonstrate the performance expected. AMTE Power has a contracted supply
agreement in place for this cell and is now progressing to initial supply and
trials with that customer.

 

Route Map to Commercial Sales

 

In order to execute on strong interest from customers of its Ultra High Power
cells, the Company is seeking to utilise the UKBIC where the UK Government has
invested £130m into a high-rate cell production facility. Discussions are
ongoing with the UKBIC in relation to this, with the expectation of initial
customer purchase orders being contracted later in the year, followed by
larger volume contracts, underpinning the construction of the Dundee
MegaFactory.

 

For its Ultra Safe cell, the Company will look to utilise its Thurso site to
initially supply product to customers, prior to moving to the Dundee
MegaFactory.

 

For its Ultra Prime cell the Company will look to utilise its Thurso site to
supply product to customers with initial sales expected to commence in FY2024.

 

Focusing on the Thurso production facilities and UKBIC will enable AMTE Power
to leverage its competitive advantages and development pipeline to drive the
next stage of its growth towards the MegaFactory.

 

MegaFactory

 

AMTE Power plans to have its new, state of the art 0.5GWh MegaFactory in
Dundee ready within three years. The facility will be capable of producing
annually more than 8 million cells with a revenue stream in excess of £200m.

 

Due to the high value nature of AMTE Power's products, a factory can be
profitable at a smaller scale than the size of factories at multiple GWh size,
benefiting from quicker commissioning time, more flexibility in location, less
investment and a faster path to profitability. AMTE Power considers this as a
strong stepping- stone towards building GigaFactories in the future.

 

AMTE Power has received an indicative offer letter from Scottish Enterprise
regarding a potential package of funding and business support and discussions
continue towards a final grant. The Company will provide further updates as
appropriate.

 

The Company's Australian joint venture company, Bardan Cells, continues to
pursue its commercialisation strategy to manufacture, leveraging the Ultra
Storage cell which is planned to be completed in the calendar year.

 

Commercial Market Backdrop

 

AMTE Power is working on new commercial partnerships, as well as progressing
existing commercial and development partnerships including with Cosworth,
Viritec, MAHLE Powertrain, Sprint Power and BMW, towards firmer commercial
agreements.

 

The Directors believe that installations of home energy storage batteries will
rise from 6GWh in 2019 to 155GWh annually by 2030 (Source: Bloomberg).
Currently only five per cent of the energy used to heat homes today comes from
low-carbon sources and massive growth is expected as part of the transition to
net zero in the next 15 to 20 years.

 

In the electric vehicle market, the UK Government has set a 2030 deadline to
end the sale of petrol and diesel cars. In addition, legislation is coming
into force in just two years' time which will stipulate that batteries for
electric vehicles made in the EU or UK need to be manufactured with at least
50 per cent of locally sourced materials by value in order to avoid tariffs.

 

Financial Performance & Notice of Results

 

The Company is trading in-line with the Board's expectations and expects to
announce its full year results for the year ended 30 June 2022 in November.

 

Broadening Management Team

 

As AMTE Power progresses towards commercialisation of its high-performance
advanced cells and building its MegaFactory, the Board is undertaking a
process to complement the senior executive and wider management team in order
to put in place additional skills and expertise for the next stage of the
business' growth.

 

AMTE Power's Chief Financial Officer, James Hobson, has advised the Board that
he has received an approach concerning a new role, which he is considering. He
would in any case not leave AMTE until 30 November 2022, and will play a full
and active role in the business and support a seamless transition.

 

Kevin Brundish, CEO, AMTE Power, said:

"It is an exciting time for AMTE Power. We are on the cusp of commercial
volume production for our high-value cells, and we continue to see a huge
amount of customer interest in our products. Our products and expertise will
play a fundamental part in the UK energy transition, and we remain passionate
about reaching a net zero economy.

 

We are today confirming that the business is trading in line with our
expectations. Looking ahead, the AMTE Power team is working incredibly hard on
all fronts to deliver on our range of products and strategic goals. We look
forward to keeping all stakeholders updated on our future successes."

 

 

 ENDS

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

 

Enquiries

 AMTE Power plc                                                            Tel: +44 (0)1847 867 200
 Kevin Brundish (Chief Executive Officer)
 James Hobson (Chief Financial Officer)

 Panmure Gordon (UK) Limited (Joint Broker)                                Tel: +44 (0)207 886 2500
 John Prior / James Sinclair-Ford / Harriette Johnson (Corporate Finance)

 Hugh Rich (Corporate Broking)

 WH Ireland (NOMAD and Joint Broker)                                       Tel: +44 (0)207 220 1666
 Chris Fielding / Ben Good

 Camarco                                                                   Tel: +44 (0)20 3757 4992
 Ginny Pulbrook / Tom Huddart / Rosie Driscoll

 

 

Notes to Editors:

AMTE Power was founded in 2013 and is a leading developer and manufacturer of
lithium-ion and sodium-ion battery cells for specialist markets. In March
2021, the Company listed on the AIM market of the London Stock Exchange. The
Company is focused on launching a series of next generation battery cells
based on new chemistries and cell structures that are designed to solve key
problems in power delivery, energy performance, and safety. These new products
are targeted at a range of specialist markets including the electric vehicle
industry and energy storage sector.

 

AMTE Power's purpose-built cell manufacturing facility in
Thurso, Scotland has the second largest cell manufacturing capacity in
the UK and the Company also has a product development team based in
Oxford. AMTE's proposed state-of-the-art MegaFactory in Dundee, Scotland is
expected to be operational and in production by Q3 2025 and will be capable of
producing over 25,000 high added value batteries per day enabling the Company
to rapidly scale up cell production.

 

MegaFactories vs GigaFactories

A gigafactory has become a common term to describe manufacturing facilities
producing cells at scale at a production rate of 1GWH or above.  A
megafactory refers to a similar facility producing cells at a scale of below
1GWH.

 

For further information visit the Company's website: www.amtepower.com
(http://www.amtepower.com/)

 

 

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