VANCOUVER, BC, March 11, 2022
/CNW/ - Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) today
announced consolidated financial results for the fourth quarter and
full year ended December 31, 2021.
All amounts are in U.S. dollars unless otherwise noted and have
been prepared in accordance with International Financial Reporting
Standards (IFRS).
"2021 was an important year for Ballard as we made significant
progress against our strategic plan and continued to position
Ballard as a leading fuel cell player in the decarbonization of
medium- and heavy-duty mobility. In 2021, we deepened our customer
base in our target markets and made marked progress with existing
and new partnerships. This progress is critical as we begin to
transition various customer programs and pilots into long-term
supply agreements, order book growth, and series production," said
Mr. Randy MacEwen, President and
CEO. "The increased global alignment around addressing climate
change and energy security support the expected proliferation of
hydrogen fuel cell technology and our long-term outlook for a
significant revenue ramp."
Mr. MacEwen continued, "We are encouraged by the unprecedented
capital inflows we are seeing drive the hydrogen economy forward.
We have developed our business model to capitalize on the growing
hydrogen economy by using the same core competencies and fuel cell
technology across multiple applications and markets. We believe our
strategy to invest ahead of the hydrogen growth curve in our
capabilities, technologies and products, as well as targeted market
expansion, position us competitively against our peers and allow us
to provide the best zero emissions solution to our customers at
scale."
Q4 2021 Financial Highlights
(all comparisons are
to Q4 2020 unless otherwise noted)
- Total revenue was $36.7 million in the quarter, up 28%
year-over-year. This increase was driven by growth in Power Product
sales, more than offsetting the decline in Technology Solutions
revenue.
-
- Power Products generated revenue of $26.6 million in the quarter, an increase of
77%, driven by higher shipments of fuel cell products.
-
- Heavy-Duty revenues of $22.5 million increased 89%, due to higher
sale to customers primarily in China, Europe, and North
America. European and North American Heavy-Duty Motive
revenue increased 92% and 268%, respectively.
- Material Handling revenues of $1.3 million increased 36%, primarily as a
result of higher shipments to Plug Power.
- Backup Power revenues of $2.7 million increased 30%, supported by an
increase in sales of backup power fuel cell stacks, products, and
service revenues in Europe.
- Technology Solutions generated revenue of $10.1 million in the quarter, a decrease of
26% due primarily to decreased amounts earned as a result of the
completion of certain customer programs.
- Gross margin was 13% in the quarter, a decrease of 7-points,
driven by a combination of a shift in revenue mix and increased
labor, supply, and freight expenses.
- Operating Expenses and Cash Operating Costs were $32.3 million and $26.6 million in the quarter, respectively,
an increase of 65% and 62%, respectively. Increases were driven
primarily by higher expenditure on research, technology and product
development activities, including the development of
next-generation fuel cell stacks and modules for target markets, as
well as increased continuation engineering investments in existing
fuel cell products. Costs were also higher as a result of
increased general and administrative expenses and sales and
marketing expenses.
- Adjusted EBITDA was ($25.5)
million, compared to ($14.5)
million in Q4 2020, primarily a result of the decrease in
gross margin and increase in Cash Operating Costs.
- Ballard received approximately $21.2
million of new orders in Q4, and delivered orders valued at
$36.7 million, resulting in an
Order Backlog of approximately $93.1
million at end-Q4.
- The 12-month Order Book was $67.3
million at end-Q4, a decrease of $12.1 million
from the end of Q3 2021.
Order
Backlog ($M)
|
Order Backlog
at End-Q3 2021
|
Orders
Received
in Q4 2021
|
Orders
Delivered
in Q4 2021
|
Order Backlog
at End-Q4 2021
|
Total Fuel Cell
Products & Services
|
$108.5
|
$21.2
|
$36.7
|
$93.1
|
Full Year 2021 Financial Highlights
(all
comparisons are to full year 2020 unless otherwise noted)
- Total revenue was $104.5 million in 2021, approximately flat
year-over-year. The slight year over year increase of 1% was driven
by growth of 16% in Power Product sales, more than offsetting the
decline in Technology Solutions revenue.
-
- Power Products generated revenue of $68.0 million in the year, an increase of 16%,
driven by higher shipments of fuel cell products.
-
- Heavy-Duty revenues of $51.7 million increased 8%, due to higher
shipments of fuel cell products to customers primarily in
North America and Europe which more than offset declines in
China. European and North American
Heavy-Duty Motive revenue increased 54% and 302%,
respectively.
- Material Handling revenues of $8.1 million increased 53%, primarily as a
result of higher shipments to Plug Power.
- Backup Power revenues of $8.2 million increased 47%, supported by an
increase in sales of backup power fuel cell stacks, products, and
service revenues in Europe.
- Technology Solutions generated revenue of $36.5 million in the year, a decrease of 19%
due primarily to decreased amounts earned as a result of the
completion of certain customer programs.
- Gross margin was 13% in 2021, a decrease of 7-points, driven by
a combination of a shift in revenue mix and increased labor,
supply, and freight expenses.
- Operating Expenses and Cash Operating Costs were $102.1 million and $83.8 million in 2021, respectively, an
increase of 68% and 67%, respectively. Increases were driven
primarily by higher expenditure on research, technology and product
development activities, including development of next-generation
fuel cell stacks and modules for target markets and increased
continuation in engineering investment in existing fuel cell
products, including activities related to product cost reduction.
Costs were also higher as a result of increased general and
administrative expenses and sales and marketing expenses.
- Adjusted EBITDA was ($82.2)
million in 2021, compared to ($38.9)
million in 2020, primarily as a result of the decrease in
gross margin, increase in Cash Operating Costs and higher equity
loss of investment in the joint venture and associates.
- Cash reserves were $1.1 billion
at December 31, an increase of 47%
from the end of Q4 2020 and a decrease of 8% from the end of Q3
2021.
Post-Quarter Commercial Update
- On January 13, 2022, Ballard
announced orders for a total of 31 modules totaling 3MW of hydrogen
fuel cell power, to an undisclosed leading global construction,
electric power, and off-road equipment manufacturer for testing and
deployment in a variety of end-use applications. The modules are
expected to be delivered in 2022 and 2023.
- On January 19, 2022, Ballard
announced an order for eight additional 200kW fuel cell modules to
support the expansion of Canadian Pacific's (TSX: CP; NYSE: CP)
Hydrogen Locomotive Program.
- On February 1, 2022, Ballard and
Chart Industries, Inc. ("Chart") (NYSE: GTLS) announced the
successful test of a fuel cell powered by liquid hydrogen. The
demonstration confirms that heavy-duty vehicles powered by Ballard
fuel cells will be able to employ Chart HLH2 vehicle fuel systems
that utilize liquid hydrogen as a fuel.
- On February 2, 2022, Ballard
announced the delivery two, 200 kW FCwaveTM modules to
Norled A/S, one of Norway's
largest ferry and express boat operators. The fuel cell modules
will power the world's first liquid hydrogen-powered ferry, the MF
Hydra, later this year.
- On February 22, 2022, Ballard
announced it signed a non-binding Memorandum of Understanding
("MOU") with the Adani Group (NSE: ADANIENT), the largest and
fastest-growing portfolio of diversified businesses in India, to evaluate a joint investment case for
the commercialization of fuel cells in various applications in
India, such as truck, mining
equipment, marine vessels, off-road vehicles, and critical
industrial power. Under the MOU, both parties will examine various
options to cooperate, including potential collaboration for fuel
cell manufacturing in India.
- On February 23, 2022, Ballard
announced with ABB (SIX Swiss Ex: ABBN) – a leading global
technology company that energizes the transformation of society and
industry to achieve a more productive, sustainable future – that
they have received a groundbreaking approval in principle ("AiP")
from leading classification society DNV for a jointly developed
fuel cell concept capable of generating 3 megawatts, or 4,000 HP,
of electrical power. DNV is an international accredited registrar
and classification society headquartered in Høvik, Norway.
2022 Outlook
In 2022, Ballard plans to increase investments in the business
ahead of the hydrogen growth curve, including expanding product
offering and capabilities across the value chain. Ballard's 2022
outlook includes:
Total Operating
Expenses4:
$140M – $160M
|
Ballard has initiated
total operating expense guidance, with 2022 total operating
expenses expected to be between $140 million and $160 million
(compared to $102.1 million in 2021) as it continues to invest in
research and product development ahead of the hydrogen growth curve
by advancing new technology, product innovation, and development
across bus, truck, rail, and marine markets, including
next-generation MEAs, plates, stacks, and modules, and increasing
sales and marketing expenditures.
|
|
|
Capital
Expenditures5:
$40M – $60M
|
Ballard has initiated
full year capital expenditure guidance between $40 million and $60
million (compared to $14.7 million in 2021) as it continues to
invest in testing, advanced manufacturing and production. Capital
allocation includes increasing testing and prototyping
capabilities, including new advanced test station equipment and
refurbishments of existing testing equipment in Canada, advanced
manufacturing equipment in Canada for next-generation bipolar
plates, testing and assembly equipment at Ballard Motive Solutions
in the UK to support powertrain and vehicle integration and
assembly operations.
|
|
|
Introduce plan to
expand
global footprint
|
Ballard is confident
in the value of investing ahead of the hydrogen growth curve and
positioning its manufacturing capabilities to support anticipated
scale in key markets. The company also continues to look at
opportunities to expand its presence in growing markets.
|
|
|
Develop roadmap
to
achieve corporate
"Mission Carbon Zero"
goal by 2030
|
Ballard continues to
focus on decarbonizing difficult to abate emissions across medium-
and heavy-duty motive applications of bus, truck, rail, marine, and
certain stationary and backup power applications. Ballard plans to
complete its roadmap on achieving its corporate "Mission Carbon
Zero" goal by 2030 in 2022.
|
|
|
Q4 & Full Year 2021 Financial Summary
|
|
|
(Millions of U.S.
dollars,
except per share amounts)
|
Three months
ended December 31,
|
Twelve months
ended December 31,
|
|
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
REVENUE
|
|
|
|
|
|
|
Fuel Cell Products
& Services:1,2
|
|
|
|
|
|
|
Heavy Duty
Motive
|
$22.5
|
$11.9
|
89%
|
$51.7
|
$47.7
|
8%
|
Material
Handling
|
$1.3
|
$0.9
|
36%
|
$8.1
|
$5.3
|
53%
|
Backup
Power
|
$2.7
|
$2.1
|
30%
|
$8.2
|
$5.6
|
47%
|
Sub-Total
|
$26.6
|
$15.0
|
77%
|
$68.0
|
$58.6
|
16%
|
Technology
Solutions
|
$10.1
|
$13.6
|
(26)%
|
$36.5
|
$45.3
|
(19)%
|
Total Fuel Cell
Products & Services Revenue
|
$36.7
|
$28.6
|
28%
|
$104.5
|
$103.9
|
1%
|
PROFITABILITY
Gross Margin
$
|
$4.8
|
$5.6
|
(15)%
|
$14.0
|
$21.0
|
(33)%
|
Gross Margin
%
|
13%
|
20%
|
(7) pts
|
13%
|
20%
|
(7) pts
|
Operating
Expenses
|
$32.3
|
$19.6
|
65%
|
$102.1
|
$60.7
|
68%
|
Cash Operating
Costs3
|
$26.6
|
$16.4
|
62%
|
$83.8
|
$50.0
|
67%
|
Equity gain (loss) in
JV & Associates
|
($4.9)
|
($4.3)
|
(14)%
|
($16.1)
|
($12.6)
|
(28)%
|
Adjusted
EBITDA3
|
($25.5)
|
($14.5)
|
(76)%
|
($82.2)
|
($38.9)
|
(111)%
|
Net Income (Loss)
from continuing operations
|
($43.8)
|
($14.4)
|
(204)%
|
($114.4)
|
($49.5)
|
(131)%
|
Earnings Per
Share
|
($0.15)
|
($0.05)
|
(200)%
|
($0.39)
|
($0.20)
|
(95)%
|
CASH
|
|
|
|
|
|
|
Cash provided by
(used in) Operating Activities:
|
|
|
|
|
|
|
Cash Operating Income
(Loss)
|
($23.5)
|
($6.7)
|
(252)%
|
($68.9)
|
($25.8)
|
(167)%
|
Working Capital
Changes
|
($7.1)
|
$0.0
|
n.a.
|
($11.6)
|
($17.1)
|
32%
|
Cash
provided by (used in)
Operating Activities
|
($30.7)
|
($6.7)
|
(360)%
|
($80.5)
|
($42.9)
|
(87)%
|
Cash
Reserves
|
$1,123.9
|
$763.4
|
47%
|
|
|
|
For a more detailed discussion of Ballard Power Systems' fourth
quarter 2021 results, please see the company's financial statements
and management's discussion & analysis, which are available at
www.ballard.com/investors, www.sedar.com and
www.sec.gov/edgar.shtml.
Conference Call
Ballard will hold a conference call on
Monday, March 14, 2022 at
8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review fourth quarter
2021 operating results. The live call can be accessed by dialing
+1.604.638.5340. Alternatively, a live audio and webcast can
be accessed through a link on Ballard's homepage (www.ballard.com).
Following the call, the audio webcast and presentation materials
will be archived in the 'Earnings, Interviews & Presentations'
area of the 'Investors' section of Ballard's website
(www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems'
(NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for
a sustainable planet. Ballard zero-emission PEM fuel cells are
enabling electrification of mobility, including buses, commercial
trucks, trains, marine vessels, passenger cars and forklift trucks.
To learn more about Ballard, please visit www.ballard.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements
concerning the hydrogen economy and markets for our products and
the effects of governmental regulations on such markets, expected
revenues, operating expenses, capital expenditures, corporate
development activities, impacts of investments in manufacturing and
R&D capabilities and market growth, and our carbon emissions
goals. These forward-looking statements reflect Ballard's current
expectations as contemplated under section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Any such statements are based on Ballard's
assumptions relating to its financial forecasts and expectations
regarding its product development efforts, manufacturing capacity,
and market demand. For a detailed discussion of the factors and
assumptions that these statements are based upon, and factors that
could cause our actual results or outcomes to differ materially,
please refer to Ballard's most recent management discussion &
analysis. Other risks and uncertainties that may cause Ballard's
actual results to be materially different include general economic
and regulatory changes, detrimental reliance on third parties,
successfully achieving our business plans and achieving and
sustaining profitability. For a detailed discussion of these and
other risk factors that could affect Ballard's future performance,
please refer to Ballard's most recent Annual Information Form.
These forward-looking statements are provided to enable external
stakeholders to understand Ballard's expectations as at the
date of this release and may not be appropriate for other purposes.
Readers should not place undue reliance on these statements and
Ballard assumes no obligation to update or release any revisions to
them, other than as required under applicable legislation.
Endnotes
1 We
report our results in the single operating segment of Fuel Cell
Products and Services. Our Fuel Cell Products and Services segment
consists of the sale and service of PEM fuel cell products for our
power product markets of Heavy Duty Motive (consisting of bus,
truck, rail and marine applications), Material Handling and Backup
Power, as well as the delivery of Technology Solutions, including
engineering services, technology transfer and the license and sale
of our extensive intellectual property portfolio and fundamental
knowledge for a variety of fuel cell applications.
|
|
2 The
UAV market has been classified as a discontinued operation in our
third quarter of 2020 consolidated condensed financial statements.
As such, the assets of the UAV market have been classified as
assets held for sale as of September 30, 2020. Furthermore, the
historic operating results of the UAV market for 2020 have been
removed from continuing operating results and are instead presented
separately in the statement of comprehensive income as income from
discontinued operations.
|
|
3 Note that Cash Operating Costs,
EBITDA, and Adjusted EBITDA are non-GAAP measures. Non-GAAP
measures do not have any standardized meaning prescribed by GAAP
and therefore are unlikely to be comparable to similar measures
presented by other companies. Ballard believes that Cash Operating
Costs, EBITDA, and Adjusted EBITDA assist investors in assessing
Ballard's operating performance. These measures should be used in
addition to, and not as a substitute for, net income (loss), cash
flows and other measures of financial performance and liquidity
reported in accordance with GAAP. For a reconciliation of Cash
Operating Costs, EBITDA, and Adjusted EBITDA to the Consolidated
Financial Statements, please refer to the tables below.
|
|
Cash Operating Costs
measures operating expenses excluding stock-based compensation
expense, depreciation and amortization, impairment losses or
recoveries on trade receivables, restructuring charges, acquisition
related costs, the impact of unrealized gains or losses on foreign
exchange contracts, and financing charges. EBITDA measures net loss
from continuing operations excluding finance expense, income taxes,
depreciation of property, plant and equipment, and amortization of
intangible assets. Adjusted EBITDA adjusts EBITDA for stock-based
compensation expense, transactional gains and losses, asset
impairment charges, finance and other income, the impact of
unrealized gains or losses on foreign exchange contracts, and
acquisition related costs.
|
|
4 Total Operating Expenses refer to
the measure reported in accordance with IFRS.
|
|
5 Capital Expenditure is defined as
Additions to property, plant and equipment and
Investment in other intangible assets as disclosed in the
Consolidated Statements of Cash Flows
|
|
|
(Expressed in
thousands of U.S. dollars)
|
Three months ended
December 31,
|
Cash Operating
Costs
|
2021
|
2020
|
$
Change
|
Total Operating
Expenses
|
$
|
32,307
|
$
|
19,559
|
$
|
12,748
|
|
Stock-based
compensation expense
|
(2,319)
|
(2,347)
|
28
|
|
Impairment
recovery (losses) on trade
receivables
|
(11)
|
(60)
|
49
|
|
Acquisition
related costs
|
(1,580)
|
-
|
(1,580)
|
|
Restructuring
(charges) recovery
|
(9)
|
(26)
|
17
|
|
Impact of
unrealized gains (losses) on foreign
exchange contracts
|
263
|
324
|
(61)
|
|
Depreciation
and amortization
|
(2,047)
|
(1,060)
|
(987)
|
Cash Operating
Costs
|
$
|
26,604
|
$
|
16,390
|
$
|
10,214
|
|
|
|
|
|
|
|
(Expressed in
thousands of U.S. dollars)
|
Year ended December
31,
|
Cash Operating
Costs
|
2021
|
2020
|
$
Change
|
Total Operating
Expenses
|
$
|
102,116
|
$
|
60,745
|
$
|
41,371
|
|
Stock-based
compensation expense
|
(9,669)
|
(6,228)
|
(3,441)
|
|
Impairment
recovery (losses) on trade
receivables
|
(54)
|
(310)
|
256
|
|
Acquisition
related costs
|
(2,115)
|
-
|
(2,115)
|
|
Restructuring
(charges) recovery
|
(156)
|
(66)
|
(90)
|
|
Impact of
unrealized gains (losses) on foreign
exchange contracts
|
(519)
|
259
|
(778)
|
|
Depreciation
and amortization
|
(5,821)
|
(4,371)
|
(1,450)
|
Cash Operating
Costs
|
$
|
83,782
|
$
|
50,029
|
$
|
33,753
|
|
|
|
|
|
|
|
(Expressed in
thousands of U.S. dollars)
|
Three months ended
December 31
|
EBITDA and
Adjusted EBITDA
|
2021
|
2020
|
$
Change
|
Net loss from
continuing operations
|
$
|
(43,836)
|
$
|
(14,408)
|
$
|
(29,428)
|
Depreciation and
amortization
|
3,272
|
1,768
|
1,504
|
Finance
expense
|
313
|
324
|
(11)
|
Income taxes
(recovery)
|
(233)
|
(39)
|
(194)
|
EBITDA
|
$
|
(40,484)
|
$
|
(12,355)
|
$
|
(28,129)
|
Stock-based compensation
expense
|
2,319
|
2,347
|
(28)
|
Acquisition related
costs
|
1,580
|
-
|
1,580
|
Finance
and other (income) loss
|
11,366
|
(4,138)
|
15,504
|
Impairment loss on assets
|
-
|
-
|
-
|
Impact
of unrealized (gains) losses on foreign
exchange contracts
|
(263)
|
(324)
|
61
|
Adjusted
EBITDA
|
$
|
(25,482)
|
$
|
(14,470)
|
$
|
(11,012)
|
|
|
(Expressed in
thousands of U.S. dollars)
|
Year ended December
31,
|
EBITDA and
Adjusted EBITDA
|
2021
|
2020
|
$
Change
|
Net loss from
continuing operations
|
$
|
(114,397)
|
$
|
(49,469)
|
$
|
(64,928)
|
Depreciation and
amortization
|
9,752
|
7,405
|
2,347
|
Finance
expense
|
1,294
|
1,303
|
(9)
|
Income taxes
(recovery)
|
(216)
|
130
|
(346)
|
EBITDA
|
$
|
(103,567)
|
$
|
(40,631)
|
$
|
(62,936)
|
Stock-based compensation expense
|
9,669
|
6,228
|
3,441
|
Acquisition related costs
|
2,115
|
-
|
2,115
|
Finance
and other (income) loss
|
8,813
|
(4,282)
|
13,095
|
Impairment loss on assets
|
263
|
-
|
263
|
Impact
of unrealized (gains) losses on foreign
exchange contracts
|
519
|
(259)
|
778
|
Adjusted
EBITDA
|
$
|
(82,188)
|
$
|
(38,944)
|
$
|
(43,244)
|
|
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SOURCE Ballard Power Systems Inc.