REG - ITM Power PLC - Trading & Operational Update

ITM PowerAnnouncement

16/01/2023 07:00

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RNS Number : 7894M  ITM Power PLC  16 January 2023

16 January 2023

 

ITM Power PLC

("ITM" or the "Company")

 

Trading and operational update

 

Following the appointment of Dennis Schulz as new CEO on 1 December 2022, a
detailed review of the Company's operations is being undertaken. Whilst the
process is ongoing, it has become clear that the outcome for the financial
year ending 30 April 2023 will be materially different from the current
guidance, with lower revenue and a higher EBITDA loss.

 

Our balance sheet remains in a strong position with net cash as at 30 October
2022 of £318m.

 

Further details on guidance and importantly a strategic 12-month priorities
plan will be presented with the interim results announcement scheduled for 31
January 2023.

 

We anticipate the strategic update to cover three main areas:

·   Concentrating our portfolio on a core product suite, with robust
product validation, and preparing for manufacturing at scale

·    Our plans for future testing capabilities and automation

·    A rigorous approach to capital allocation and costs

 

ITM has been going through a rapid transition phase towards volume
manufacturing. Our core electrochemical technology works well.  At this
stage, we are testing and verifying the latest iteration of our
state-of-the-art MEP 30 bar stack which we expect to deploy into existing
projects.

 

The main factors which will impact the outcome for the financial year relate
to losses on customer contracts, legacy commitments for earlier product
generations causing on-site support costs, warranty provisions, and inventory
write-downs originating from iterations of product designs during
manufacturing. All the issues we have encountered are surmountable,
appreciating that the changes will require focus, time and diligence.

 

In terms of warranty provisions, which were discussed at the time of our
trading update in October 2022, uncertainty arises from the absence of
long-duration field data for first-of-a-kind technology and as such, we expect
to take a prudent approach.

 

Projects that are nearing contract closing are impacted as costs were
underestimated when prices were originally negotiated and committed to.

 

Crucially, our customers have been extremely helpful in jointly minimising the
impacts of delays to their projects and we are grateful for their support and
trust.

 

Dennis Schulz, CEO, said:

"This is the challenge I was expecting when I joined ITM. For the Company to
develop from an R&D and prototyping entity, to a mature delivery
organisation, we require firmer foundations. Our 12-month plan will make ITM a
stronger, more focused and highly 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."

 

For further information please visit www.itm-power.com
(http://www.itm-power.com/)  or contact:

 

 ITM Power PLC
 James Collins, Investor Relations                 +44 (0)114 551 1205

 Justin Scarborough, Investor Relations            +44 (0)114 551 1080

 Investec Bank plc (Nominated Adviser and Broker)  +44 (0)20 7597 5970
 James Rudd / Chris Sim / Ben Griffiths

 Tavistock (Financial PR and IR)                   +44 (0)20 7920 3150
 Simon Hudson / Tim Pearson / Charlie Baister

 

About ITM Power PLC:

ITM Power was founded in 2001 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 gas, using
renewable electricity and water.

 

Linde, the leading industrial gases and engineering company acquired a
minority stake in ITM in 2019 and currently holds 16.2% of the company. At the
same time, Linde and ITM Power formed a joint venture, ITM Linde Electrolysis
(ILE), bringing together ITM Power's expertise in PEM electrolysis and Linde's
world class engineering, procurement and construction (EPC) expertise to
deliver turnkey solutions to customers.

 

In March 2022, ITM Power's subsidiary, Motive Fuels, which builds, owns and
operates green hydrogen refuelling stations, formed a joint venture with Vitol
Holdings SARL, creating a partnership which will help facilitate the scaling
up of production, distribution and demand stimulation for Hydrogen to
Transportation.

 

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