Ultra-Clean, Efficient, Reliable Power

Ultra-Clean, Efficient, Reliable Power

First Quarter 2016 Earnings Call
March 10, 2016
Ultra-Clean, Efficient, Reliable Power
First Quarter 2016 Earnings
Today’s presenters:
Chip Bottone
President and Chief Executive Officer
Mike Bishop
Senior Vice President and Chief Financial Officer
Kurt Goddard
Vice President Investor Relations
NASDAQ: FCEL
www.fuelcellenergy.com
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Safe Harbor Statement
This presentation contains forward-looking statements, including
statements regarding the Company's plans and expectations regarding
the development and commercialization of fuel cell technology. All
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected. The
forward-looking statements speak only as of the date of this presentation.
The company expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect any
change in the Company's expectations or any change in events,
conditions or circumstances on which any such statements are based.
The Company may refer to non-GAAP (generally accepted accounting
principles) financial measures in this presentation. The Company
believes that this information is useful to understanding its operating
results and the ongoing performance of its underlying business.
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Q1 2016 Highlights
Affordable and Clean Energy for Multiple Stakeholders
Grid support benefitting
urban redevelopment
Fuel cell / Solar integration
Micro-grid with CHP
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Financial Summary
millions
• Total cash & financing
availability of $174 million
• 3rd quarterly sequential increase
in Backlog
Inventory & Project assets
• UCI plant operational
– Sale-leaseback with PNC
– FCE recognizing electricity revenue
•
Sales mix transition
increases margin
– Asia: Royalty offset w/
same volume
– Shared global supply chain
– Complete plants have
highest margins
millions
5
Financing Structures
• Financing structures
for FCE
Example: 1.4 MW CHP project
• Project finance outlook
Project sale
Sale to project
investor
FCE Retains PPA
Percentage of
completion + Service
100% upon sale +
Service
As power is sold
Products
Product revenue
Product margins
Sale / Leaseback
$7.5 - $8.5 million
low to mid-teens
$7.5 - $8.5 million
mid-teens
n/a
n/a
Cash Timing
Milestone Payments
Construction Debt /
Full Payment on COD
$8.0 - $9.0 million
Construction Debt /
Full Payment on COD
$9 - $12 million
$9 - $12 million
n/a
n/a
n/a
mid-teens
As Earned
mid-teens to low 20's
As Earned
$18 - $22 million
low to mid 20's
As Earned
Revenue recognition
Services (20 Year Term)
Service revenue
Sale of power
Services margins
Cash Timing
n/a
n/a
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Execution Progress
Preferred Resources for
Distributed Generation
On-site CHP
•
•
Utility scale
Emission Reductions
w/ Carbon Capture
Coal-fired
Distributed Hydrogen
Natural Gas
Combined
cycle plant
Transportation
Industrial
On-site CHP
$18 billion global
market potential
>$25 billion global
market potential
$7 billion global
market potential
Market opportunity for Equipment & Services in key
markets in N. America, W. Europe and select Asian
countries
Market opportunity for both Coal and Gas-fired
power plants assuming only 1% of existing plants in
select global markets
Opportunity in key markets for Equip. & Services for
Transportation & Industrial markets, assuming ¼%
of industrial hydrogen and est. transportation markets
Near term goals
Development activity acceleration
Continue to grow backlog
•
Near term goals
Announce multi-MW coal
plant application
•
•
Near term goals
Partner selection and H2 offtake agreement
Execute PPA’s
Common Technology Platform, Development
and Financing Models
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On-site Project Update
• Project sizes increasing
o
o
o
o
Today: Pfizer project of 5.6 MW
5 years ago: ~1 MW projects
10 years ago: 250 kW projects
Targeting 1.4 MW to 11.2 MW
• Micro-grid configuration is highly valued
o Unique capability to design, model & operate micro-grid
o Fuel cell-only or combine with other technologies
• CHP valued
o Steam for processes & heating/cooling
o Supports economics & sustainability
16+ MW currently
under installation
o 2 projects in CA
o 4 projects in CT
o 1 project in Germany
• On-site renewable biogas is a differentiator
o Enables 100% renewable hydrogen production for
transportation market
o Installing first FCE gas clean-up skid
• Financing options avoid customer capital
investment in power generation assets
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Utility-scale Project Update
63 MW Beacon
Falls Energy Park
Project owner & EPC:
Project Developer:
Equipment supply & service:
FCE potential contract size:
Revenue recognition:
Expected timing:
O&G Industries O&G website
Beacon Falls Energy Park B.F. LLC website
FuelCell Energy, Inc.
> $500 million (phased equipment & service)
% completion as plants shipped/installed
Service revenue over project life
Multiple phases beginning in 2016
Milestones attained
• Partners w/ gas-plant development experience
• Obtain site-control of land
• Gain local government support
• Undertake inter-connect study
• Siting Council approval
• Execute property tax stabilization agreement
• Contracts exchanged between partners
•
Bid submitted to Tri-state RFP website
2016 milestones
• Identify power off-taker (RFP award notifications to be
•
•
Product enhancements
for utility scale
o Advancing 3.7 MW utility/datacenter low-heat application
o Capacity support
o KVAR support
o Demand response utilizing
multiple plants
o Primary frequency response
o Black-start capability
63 MW Beacon Falls
Energy Park
made April 26 – July 26, 2016)
Close project financing (strong interest to date)
Commence construction
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Summary
• Access to project capital
o PNC project financing facility
supports future margin expansion
• Increasing Demand
o Third successive quarterly increase
in backlog
o Growing scale of behind-the-meter
applications
o Active utility-scale project
development
200
Phase 2
expansion to
add 100 MW
capacity
100
• Capacity in place to support
demand growth
EBITDA
break-even
70 MW
0
1
Net income
break-even
90 - 100 MW
2
Current
capacity
N. America
100 MW
3
4
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