VanEck Intermediate Muni ETF Price & Performance (ITM)

The first, approximately 500 Kilometers of pipeline are announced to come online already this year. In the United Kingdom, the new government reaffirms the support for 11 green hydrogen projects selected in the How 1 auction last December. They further signaled an ongoing commitment to green hydrogen. In the United States, the energy policy and related net zero targets remain uncertain after the election. The Inflation Reduction Act has always had bipartisan support. And much of the investment in manufacturing has been concentrated in Republican states. The Hydrogen Production Tax Credit Section 45V was introduced with the IRA and proposes to award up to 3 US dollars kilogram of hydrogen produced. The long awaited final rules were released just this month. However, President Trump has since signed an executive order immediately pausing the disbursement of funding. All agencies must now review their processes policies, and programs for issuing grants, loans, contracts and any other financial disbursements of these appropriated funds for consistency with a new set of criteria. Until the outcome is clearer, industry participants will likely hold off making material investment decisions in the U. S. Beyond politics from an industrial perspective, the previous hype around green hydrogen has now given away to real industrial scale up of projects and production capacities.

We are seeing an increasing number of customer FIDs and expect this momentum to continue. Especially in the European Union, which remains the most mature market for electrolyzer With regards to our operational performance, we have continued to make massive strides. Today, we are clearly in the best shape the company has ever been in. We now have a comprehensive and competitive product portfolio. Tailored to the needs of our customers. The very visible success of Neptune 5 proves the product to be a game changer. In the first half of the year, we have commissioned important reference plans for our customers. Such as the 24 Megawatt Green Hydrogen to Green Ammonia plant for Iara in Norway, and to the 4 Megawatt pilot plant in Dingen. [indiscernible] growing number of deployed reference plants and field operating data are conducive to more confidence. One tangible evidence for our operational progress is our FAT or factory acceptance test first time pass rate for electrolyzer stocks. [indiscernible] Every stake we produce must pass a comprehensive set of tests before being declared ready for shipment to our customers. [indiscernible] 2 years ago, we were faced with a pass rate of below 50%. This was not sustainable.

Today, we stand at an impressive 98% pass rate. This unlocked obvious and significant cost savings. The last point on my list is our very healthy sales pipeline, which I will talk about in more detail later in the presentation. Despite obviously growing momentum, custom FIDs overall are still slower than industry participants would like. As a result, competitive pressure has increased and 1st peers have reported that they are struggling. Market consolidation has undoubtedly started. In turn, we at ITM forecasted and expected this development and have therefore meticulously prepared for this very moment over the last 2 years. I just talked about our many operational improvements Likewise, we have continued to advance our technology. The cost base we have achieved is highly competitive. And improvements like the recently announced further 40% eridium reduction among many others yet to come, are keeping us in the pole position. This is also a result of distinguishing ourselves from our competitor competitors by retaining all cost, science and manufacturing processes in house, which maximizes value add, provides security of supply enables rapid improvement and validation cycles. As customers and finance providers including banks, increased their focus on derisking their investments, reference plans, operational product performance data and long term service agreements are gaining importance.

IDM has successfully reduced its dependence on Linde as our primary go to market channel. We bigger share of our sales pipeline today are projects without Linde involvement, especially when Neptune 5 comes into play. This does not mean though that our relationship has deteriorated. Quite the opposite, actually. We are actively bidding together, and DIN remains an important partner and door opener for large scale projects in particular. Recently, we have increased regional focus. Which is starting to bear fruit. I will share more about this topic later in my presentation. I don't want to go into too much detail on our financial situation, Because Andy and Amy will do so later. But let me confirm that our position is very strong. Our efforts around spend control and strict cost discipline are showing the desired effect. Underlying cash burn, without exception, a one offs has been halved again compared to last year. You have probably seen already, we have yet again raised our cash guidance substantially for the remainder of the year. [indiscernible] a very volatile market over the last 2 years, we have attained stability. And continue to deliver on each and every of our promises. 2025 will be an exciting year for the industry, Following the completion of our 12 months plan and based on the market development we expected, we formulated our 3 strategic priorities: flexibility in scaling operations and delivering products into different world regions.

And managing our capital commitments carefully to preserve cash. This required from us to first remain at the forefront of technology, product and delivery credibility ITM. I spoke about our operational and product portfolio progress already. What's worth mentioning in addition is that the development of our next generation stack platform, Kronos, is well underway. Kronos is poised to become a game changer just like Neptune 5. We know what our customers need next, and we will stay in the pole position. 2nd, we worked hard to scale our operation without losing regional flexibility and without committing cash too early. Our decision to wait to see the market develop more tangibly before investing into a factory in the U. S. Has proven right. The very conscious and stepwise introduction of manufacturing improvements and automation has had the desired effect as well. I already mentioned our significantly improved FAD pass rates. 3rd, growing our global footprint without sacrificing at a We have enhanced regional focus and dedicated resources to support business development activities in different regions. Allows us to stay close to our customers and to get early sight of new trends and developments. Our electrolyzer stack, the heart of all our products, has a achieved compliance in all relevant markets now.

Just this week, we announced compliance with Australian Standards which was the last missing piece of the puzzle. We are now in a position to deliver the same stack unchanged into every world region. This gives us obvious manufacturing supply chain cost and flexibility advantages. Our success proves us right. They were the right priorities at the right time, and they remain valid also in 2025. Now let's take a look at our contract backlog. Which is an important measure for the health of the company. Contract backlog refers to firm contractual orders not yet recognized as revenue. A growing backlog indicates future revenue growth and a sustainable business. Over the last 2 years, our contract backlog has grown substantially to €135,000,000 to date. Our FinNG year 25 order intake comprises the share refined 2 100 megawatt project, the 500 Megawatt capacity reservation, 4 Neptune 5 units just sold at the end of last year, 60 megawatt of new feed contracts and after sale services. What's particularly important to mention is that all new project contracts which we signed in FY24 FY25 are profitable. This is an important data point on our journey to grow into a profitable business. Andy and Amy will talk more about our revenues later.

We, ITM, distinguish ourselves by keeping things real. Real world products for real customers, not just paper announcements and hot air. Therefore, it's important to me to share some real good impressions of recent activities. In the picture on the top left of the slide, you see 2 Neptun 2 units recently deployed to Germany to produce green hydrogen for waste collection in a circular economy model. Picture on the top right shows our 24 Megawatt Green Hydrogen for Green Ammonia plant for Jara in Norway. Was inaugurated by the Norwegian Prime Minister. In the bottom left, you see a net 2 unit deployed for the semiconductor industry in Austria. And on the bottom right, you see our 4 Megawatt Lincoln Pilot plant built together with Linden Engineering for RWE. This plant will give our customer RWE the opportunity to gather operational experience with our technology prior to the commissioning of the 200 megabyte plant currently in build. In our last update 6 months ago, I showed you a render of how the world's most advanced, biggest permalcholizer plant will look like. In the meantime, this Lighthouse project between RWE, Linde and IDM has [indiscernible] And this is how it looked like just a few weeks ago.

The first 100 Megawatt of Linde Hyper modules are now installed and in them 100 Megawatt of our Trident skids already. Over the next few months, the first 100 megabyte of stacks will be delivered and installed in batches as well. It's very difficult to grasp just how huge this plant is. To truly appreciate ITM dimension, one has to stand in it. Is a massive gas plant, even for people from the oil and gas industry. [indiscernible] Equally massive and not least important are the real world learnings all 3 parties gather during the execution of the project. They are invaluable experiences which make us even more credible for future XX90 products. ITM is these kind of shared experiences which form a special and strong bond between our 3 companies. Speaking of real world deployments, we thought it would be worthwhile sharing in which locations IDM has deployed electrolyzers so far. Every dot on this world map represents a real product. Studies and feeds are not shown here. Some plants older, some newer, some smaller, some bigger, but today already quite widespread across the globe. From the Americas through Europe to the Middle East and East Asia the way to Australia.

As already mentioned, Europe is the most active and mature market today and likely in the next years. We expect other regions to pick up incrementally. Last time, we spoke about our sales pipeline, which had grown by a staggering 25 Since then, over the last 6 months, it has continued to grow unabatedly. This relates to both the number and the quality of projects. We an increasing share of industrial and energy companies in the mix. By year of manufacturing, on the top left, our full pipeline until 2,031 by product. On the top right, a snapshot for 2026. [indiscernible] Whilst Trident stacks and large EPC modules constitute the majority of [indiscernible] Of course, also due to such projects being bigger in megawatt capacity, In the near term, Neptune containerized plants are the most demanded product. Customers tend to prefer the Clean solution of a containerized green hydrogen plant with all its benefits for projects of typically up to 60 megawatt today. Bigger projects then tend to go for modular EPC solutions based on Trident or I spoke about our market and the different regions already. [indiscernible] While the overall picture looks fairly balanced until 2,031, and this shouldn't come as a surprise, In the nearer term, the European Union is likely to remain our core market. 2025, we also expect the United Kingdom to gain momentum.

Finally, I will now hand over to Andy to present the financial results of the half year, which ended on 31st October 24. For the forward looking guidance, Andy will then hand over to his successor, Amy Gray, who has joined as our new CFO just this month.

Thank you, Dennis, and good morning, everyone. This slide shows a summary of the results for the 6 months to 31 October 2020 In the period, we delivered our highest number of Neptune 2 units in any given 6 month period, which is reflected in the revenue line of 15,500,000 dollars up from the $8,900,000 in the prior year. Our gross loss at 10,200,000 is broadly consistent with that in the prior year loss despite higher production. This is a reflection of the improved controls, particularly around projects that have been instilled in the last year. The gross loss features a level of under absorption within production in that we have unlocked greater capacity within our factory, which will support the growing sales pipeline going forward. Our adjusted EBITDA loss improved year on year at $16,800,000 compared to $18,100,000 in the prior period. This loss was achieved despite building the capability of the company through personnel and investment in processes. Our cash position was $203,100,000 at year end, compared to $253,700,000 in the prior period. In terms of cash, our opening balance was 230,000,000 [indiscernible] Inventory increased by 2,600,000 dollars When we consider inventory, the 2 graphs on the top line show that we are starting to see a consistent in the raw materials held at Sohre 11%, 12%, with the balance being products that are being worked on or held as finished goods.

In the period, we paid an exceptional item to Lindor of 13,000,000 This has been disclosed as a contingent liability at the premiums in August. We are pleased to confirm that all historic claim risk is now settled. Our relationship with Linda continues to be very strong and successful both regarding projects in flight also bidding activity on new sales opportunities. There are positive working capital movements before £5,400,000 of investments in the period. In terms of investment, bottom two graphs show the split between investment in manufacturing capability and in new product lines. You can see for the period to 31st October, a higher proportion of investment was made into product development compared to the prior year where we were focused on debottlenecking the factory. Therefore, our total cash outflow was 20 against 28,800,000 in the prior period. However, were we to exclude the impact of the one off exceptional ITM, I like for like cash outflow halved in the period. I am now delighted to hand over to Amy to introduce herself and to give you an update on the guidance. Thanks, Andy.

Before talking about forward guidance, let me introduce myself. I would first like to say how pleased I am to be presenting to you all today just a few weeks after joining ITM. My first impressions of ICM are very positive, and I'm excited about the journey ahead. I have a long standing career in finance and many years of executive finance experience. This has been in a wide range of sectors, including I have a track record in multi site global operations, as well as in growth, change and turnaround environments. In my last role, I was CFO at Sheffield Forge Masters. A steel manufacturer specializing in complex engineering. Previous roles include UK Finance Director of Heres Perimeter Protection, a manufacturer and installer of perimeter products and Vice President Finance of Greenlane Renewables, a Canadian based global provider of biogas upgrading systems. Now onto my second topic, our guidance for the full year FY25. The guidance for revenue remains unchanged and is expected to be between €18,000,000 and €22,000,000 As a reminder, revenue recognition for most of our products is based on the completed contracts method, means that revenue lags behind progress on contracts. The guidance for adjusted EBITDA loss is €32,000,000 to 36,000,000 dollars This also remains unchanged from previous guidance.

Over the last few years, my new colleagues sitting next to me have gained control over what we can Remain in EBITDA losses are now a function of factory loading and fixed cost absorption. The guidance for cash has further improved. To between €185,000,000 and 195,000,000 This is a substantial improvement to both the original guidance of £160,000,000 to 175,000,000 and the previously already improved guidance of GBP 170,000,000 to 180,000,000 which we issued in December 2024. [indiscernible] Increased cash in following the signature of new sales contracts, along with continued strict cash control have contributed to this improved guidance. This concludes our presentation. I'd like to thank you for your attention.

Fantastic. Thank you very much indeed for the update. Ladies and gentlemen, do please continue to submit your questions. Just by using the Q and A tab situated on the right hand corner of the screen. Just like to give the company a few moments to review those questions submitted today. And then I will ask you to read those through. So if I may just hand over to just Scarborough, Head of Investor Relations to host the Q and A. Justin, as you can see, we've received a number of questions throughout today's presentation. Thank you to all the investors for submitting those. Please ask you to read out the questions where appropriate to do so, give a response or direct it to the team and I'll pick up from you at the end. Thank you very much, Paul, and good morning to everyone.

The first question is directed towards Amy. Welcome to your first ITM results presentation. I suppose 2 parts of the equation. First of all, what attracted you to ITM? And what are your initial impressions of the company and the people?

Firstly, I just want to say how happy I am to be here this morning. It's a pleasure to start, work at ITM. And, yes, it's been an interesting first few weeks for sure. So what attracted me to ICM to start with is from the outside, the kind of world of grid hydrogen looks really exciting to be within it. Through the interview process, I'm meeting the board and other exec members, it became really clear to me how good the technology is the products that have been designed and are now in production and sale and the future prospects of ITM and the role it can play within the market. So far, it's been extremely positive over the last just under 4 weeks now. So it's been a really exciting 4 weeks. Been very busy for a really positive experience. It's clear quite how much progress that's been made, particularly The team are exceptionally focused and driven And I'm just really looking forward to continuing the momentum of change and growth here at ITM.

Thank you very much. The second question is for Simon. Neptune 5 seems to have been very well received in the market. Could you elaborate as to why this is the case? Sure. You're absolutely right. NetSuite has been extremely popular.

Perhaps the first thing to say is that it's the full package does everything from water and power on the way in to pressurized hydrogen at very high purity on the way out. So it's a very straightforward thing to deploy and operate. It has the same Trident core technology right at the heart, and we spoken many times about the capability of the core technology. It's also the smallest footprint A megawatt. So that means many more sites that perhaps aren't viable with alternative solutions suddenly become [indiscernible] It's got [indiscernible] In NetGene 5, we have 2 banks of stacks, which we can control separately from 1 And that does 2 things. First of all, it gives the built in redundancy. But it also means that the product has the widest possible operational range and that gives the most flexibility to the operator run the plant as it works for their particular [indiscernible] When we launched the product, we launched it with a price. Of just under €5,000,000 which is very competitive. So all of those things together have led to a product that's very attractive and that's why it's reflected a large part of the pipeline moving forward.

Thanks very much, Simon. This is a joint question, I think, for Andy and Amy. Regarding revenue, first of all, was all of the product revenue in the first half derived from Neptune to sales? And secondly, given that the first half revenue accounted for almost 80% of the full year guidance, at the midpoint range. Why have you not increased full year revenue guidance?

So I think it's worth reflecting on where revenue is recognized for IT and Power, So typically, we recognize our revenue at a point in time, which is usually when we fulfill our obligations. So this is Neptune 2 units that are now out of the field producing hydrogen for the customers.

So it's not to be confused with the bigger brother, the Netgen 5 Simon's talking about, We signed new contracts for that in December. But those revenues will be recognized in future periods. So yes, both the the revenue for the first half of the year were Neptune 2 units are now out in the field.

In terms of half to what Andy has just been talking about in terms of revenue recognition does come into play here. So we recognize based on a completed contracts methodology So that means that the revenue that we recognized lags behind progress on projects. Revenue recognition can also be dependent not only on our obligation but customers as well. And we do recognize as soon as we are able to under the accounting standards. So it does mean that the half two guidance is slightly lower than the half one, but that's just a function is also just worth mentioning the contract backlog of $135,000,000 which represents the amount of revenue that we have yet to recognize and will do in future periods.

Is that worth mentioning about the cash profile maybe?

Yes. [indiscernible] Guess we structure our deals whilst the revenue comes at the end, we structure our deals to have a relatively flat cash profile for us. So we start with money upfront. And we go through design phase where necessary. We see outflows before factory acceptance testing where we tend to have got a cash neutral position before completing our on-site works.

Thank you very much. Next question is, I suppose, pointed towards Dennis. Could you provide any color on the settlement with Linda and the overall relationship with them?

Start with the I'll happily pick that up. So we recognize a contingent liability in the the previous financial year. So the positive news is that in the half one of the year, that was settled and paid at the value that was previously disclosed. This loan. So cash has The details of the settlement are commercially sensitive. We can't particularly provide any anything further than what we already have done. But I can say that that is now cleared and we do absolutely have a positive working relationship with Linda, which has been demonstrated to me over my first few weeks here with Dennis.

And maybe picking up there on the relationship piece. The relationship between Linen and ITM remains exceptionally strong. Today, we have more than 350 megawatts of contract jointly in execution, which is [indiscernible] a big chunk of what we're executing in total. And also for Linde Engineering, quite important terms of value and in terms of credibility for customers. When it comes to customers, the combination of Linde Engineering has a very strong technology and EPC company on the one hand side, and ITM is a strong technology provider on the other hand side. Has not lost any attractiveness. And that's why we are bidding together for some very large scale projects And I would say, when I look at our sales pipeline, while Linde makes up the smaller part of the pipeline, I would say they are involved in some very credible and important projects, which which are important to ITM to win as well. Recently, maybe that's also worth mentioning, recently, there was a rotation of the Linde Board represented in the ITM Board. [indiscernible] left our board and handed over to Matthijs from Plooto. Is a normal process That's a bit of a non event, I have to say.

After 5 years of being on the Board, Jurgen Viki has has basically rotated with somebody else of equisigniority. I think the interesting thing is that Linde Engineering left our board and Linde Gas joined our board, which gives us an opportunity now to grow a little bit closer also to our end customer Lindigas.

Thank you very much indeed. The next question roadmap that will drive the company towards achieving consistent profitability.

I'm going to pick that one up. So if I could [indiscernible] discipline in terms of spending and making sure we're spending money on the right things at the right time. The second would be delivering our projects that we have won profit [indiscernible] So that's really important that we do that now and demonstrate that everything that we've sold over the last few years is profitable. The 3rd section would be operational efficiency. So making sure the way that we operate and manufacture is done in the most efficient way that we possibly can. And if there is a fourth one, it would be to continue the increase in our sales profitable contracts.

Yeah. I think you said almost everything already. I mean, I already presented our strategic priorities, which haven't changed much I think this is very conducive to profitability and cash generated. Business. When it comes to the key features, I think Amy just covered it, right? I mean, it's about filling the factory, basically, and then doing well what we are supposed to be doing, which means if we sell a profitable contract, we also need to deliver as a profitable contract. I can say that our track record over the last 2 years has significantly improved on that. And I think this will be reflected in our financials going forward as well. The key feature and key milestones for us will be to to win more orders in the market and to see more customers, FIDs coming through as they accelerate in the market now.

In terms of the next question, our order book what sort of use cases are we seeing for electrolyzer deployments? And are most projects located close to the hydrogen demand or the [indiscernible] I can start that one off. Mean, all sorts of applications.

And the We've executed projects of both flavors where we are deploying the electrolyzer adjacent to the demand For example, Shell Refined 1 and Shell Refined 2 will follow the same [indiscernible] profile and also the containerized units which can be deployed in more remote locations. And a few of those are being used, for example, for refueling applications. But what we've tried to do is make sure that the product we're offering covers all of those eventualities. So there's nothing about technology or the way that the product operates that really places any restrictions So we're seeing all of those variations coming through.

And maybe adding to that, I think over the last 2 years, we saw particular demand coming from the mobility side, especially in Germany. We saw a lot of demand from the energy and refinery side, And when I look into our sales pipeline, these three areas and sectors will continue to dominate the pipeline. Nevertheless, there are also some other very interesting use cases, for example, around cement and glass steel. Other areas. I think one important enabler will be pipelines. As we just talked about, in Germany, they're currently building a big pipeline network. The first 500 plus kilometers coming on stream this year. Because pipeline are quite a critical enabler to connect producers and off takers. And they take away the necessity to find a very local off taker to your electrolyzer plant before being able to submit planning permit to the government or taking FID. It makes a huge difference to get projects accelerated.

The next question, I think, is for Dennis. Obviously, you recently visited the Prime Minister at Downing Street. Is there anything you can update us on regarding the U. K. Hydrogen allocation rounds.

Yes, we have waited for the Halwan project to take FID for quite a long time now. I think the elections last year has slowed the process down a little bit. [indiscernible] End of last year, some signed beginning of this year. To my knowledge. So we would expect the first FIDs to be taken fairly imminently. I would expect the Q1 latest in the Q2 this year. When it comes to Heart2, which is a much bigger distribution of funds, this is also a little bit overdue. I think the original aspiration was to communicate the shortlist of selected projects end of last year I think we are all waiting eagerly for that to be released. I think it's a fair assumption that this will happen in Q1 this year.

Thank you. A question for Simon. Is there any update or color that you can provide regarding Cronos and its development?

Okay.

Well, I can say that Cronos is certainly on track. It's a very exciting project because we're able to introduce all of the learning from the Trident stack platform and the platforms that went before ITM. And it's also a vehicle to introduce a number of technology improvements technology breakthroughs in fact. So I'm very excited about the progress we're making. I'm going to stop short of saying when it's going to be finished or give any details of its specification. But we are able to pour all of our learning into that stack platform So I mean, personally, I'm very excited about ITM, and I think it is going to be a game changer.

Thank you, Simon. Again, this is probably on back to Dennis. How do you see the outlook for green hydrogen projects and FIDs in Europe during 2025 and beyond?

Yes. It's always a bit of a speculation, right? I personally think that the momentum which we are currently seeing will continue. Especially in the U. And in the U. K. The U. S. Is a bit more shaky at this point in time, but I think especially in Continental Europe, we were see the momentum to continue. I think that we will see a lot of FIDs in the 5 [indiscernible] 20, 30 megawatt range then a few projects slightly above, and then we will see 1 or 2 larger projects every couple of months, 100 megawatt plus. I do expect this momentum to continue. Again, it depends always a little bit also on overall economics and everything. But if I mean, the only real tangible evidence we have is that over the last couple of weeks, couple of months, we saw more FIDs than over the last 3 years combined. Before that, and there's no reason to believe that this moment will not continue. For IDM, we are very well placed. I think we have a high visibility of of almost every sales project in these regions. In most of these projects, we are ranking somewhere in the top 3 of the suppliers.

And I'm very confident that we will get our fair share in the orders to be decided in 2025. Personally, I believe that 2025 can be a turning point for the hydrogen especially green hydrogen industry. As more projects are getting FID and as the whole industry is accelerating a little bit.

Which also comes on the back of more and more reference plans going live. Because especially conservative customers were waiting to see more operating data, field data, So having these plants live and being able to show real plants to customers [indiscernible] a way to convince customers to accelerate their FIDs.

Thank you, Dennis. Coming back to Linda, are you we bidding on projects with Linde in the U. S. And Australia? Or is it just mainly related to bidding in Europe?

So we are bidding together with Lindner for projects also outside of of Europe, for example, in Australia. We have not yet bid with Linde together in the U. S. I think the market is a little bit in a limbo right now given the recent elections. While I have said that just now, what we did see is a significant up tick in customer requests for potential projects in the U. S. Following the election of Donald Trump.

So our order pipeline in the U. S. Has grown by 5 times since the election. But we have not yet submitted any bid together with Linde for U. S. Projects. We are doing so worldwide. And I think if the right project comes for the U. S, we would also do so. But we are, for example, working on projects in Canada together as well.

Thank you, Dennis. This is a question going to Andy and to Amy. You mentioned earlier the backlog of €135,000,000 Could you give some idea of how much of that has already been reflected in cash flow? At the end of the first half?

Yes, I'll take that one. It's a good question. The cash received ahead of revenue recognition will go into deferred income. So you can track that within the trade and other payables line. And it will make up the bulk the trade another payables line. So that line is 67,000,000 as at the half year points. So the question that naturally follows is have you had all the money but not spent to actually deliver the projects. But you can see within the inventory line, we have whip and finished products which is a very similar balance. So actually those cash payments and the cash received are tracking against the products that we are producing. We're holding very little product to stock. So to answer the question, it's not precise one right now, but it's bulk of the 67,000,000 that we have within trade and other payables.

Thank you, Andy. Another sort of financial straight strategic question. At what revenue level will ITM breakeven.

I'll kick it off and we can go from there. We've had this question before. And actually it's a feature of volume in terms of megawatts. And also in terms of controlling costs.

And And product mix. [indiscernible] we're very clearly controlling the costs. So the answer really remains the same. If it was fully trident, would be about 400 to 500 megawatts. And this is absolutely right, though, The product mix plays a part here. Actually, if there are more Neptune 5s, the number of megawatts required will reduce in order to hit breakeven. We're starting to see those Neptune 5 interest lifting up.

Thank you very much. Question, how many containerized solutions can ITM produce in a year? And is the production capability a bottleneck to signing future contracts?

Let me maybe start with the later part of the question. So the current manufacturing capacities we have neither for stacks nor for designing Poseidon's nor for Neptune 5 or Neptune 2s are about a neck to [indiscernible] future orders. There's a good reason why I usually do not disclose such kind of figures. And this goes more to customers. Let me say it like that. One important lever you have on customers to sign contracts is to make customers understand that if they don't sign at a certain point, they may not hit their project timelines anymore because they may run into capacity constraints on the OEM side. If I sat here now and told you that we can produce x x number of Neptune 205 or stacks, customers could calculate backwards and that threat scenario of if you don't buy now, maybe you cannot buy in 3 months from now. Would just disappear. So it's a conscious decision to prioritize the customer side and generating more orders over capacity numbers. I can tell you that as we sit here right now, we are not anywhere near capacity constrained to build more units. This could, of course, change if we sign more Neptune 5 orders, in particular, because they do consumes some factory space.

However, also for that scenario, we have different options on how we can enlarge factory space or how we can work with partners too. To deliver more units at the same time. There's no bottleneck to sign any more contract at this point in time. That would be a luxury problem to have, right, if we couldn't sign any more contracts.

Maybe.

Let's wait and see.

Thank you, Dennis. Does ITM have a goal the market share that it believes it can achieve in the PEM electrolyzer space?

Yeah. It's always a bit difficult to forecast that because that depends on what is market share. Is it delivered projects? Is it theoretical selections of projects? I would say when it comes to real deployments and real plants in the PEM space, we are looking at a market share of 25% to 30% minimum to be satisfied with our performance in the market.

Thank you, Dennis. Another question, which relates to probably capacity and capability. Can you give an update on the adjacent facility at Bessemer Park to the one that we are currently in today? Please.

Yeah, the adjacent facility is for us a space which we could, for example, use to fabricate more Neptun II and Neptun V containers if the need arises. We have continued to automate our manufacturing processes. ITM not sure if you want to add some context maybe. I mean, we talked about our high pass rate of 98%, which we have now achieved. That is also future of introducing in a very conscious and incremental way more automation and more control steps This includes several optimizations, which we have done and there are some some yet to come. I would say we are probably 80%, 90% through of what we had planned. Overall to implement, especially when it comes to snacks. Now you can optimize stack manufacturing a lot with automation, and by that, you can free up a lot of space in your factory because if you have automated machines, usually you need less space to produce. Which gives you more space you can use for Neptune 2 and Neptune 5 units, which are a bit more space consuming. Right now, we plan to use Unit 3 for the next Bessemer Park expansion, which we invested For an overflow of the current factory for more Neptune 5 build, which seems we will soon have to make use of our sales pipeline for Neptune V products is extremely healthy.

And we would expect to sign more orders in the next month.

Maybe just to pick up on the automation point a little bit. I mean, we have been in a very stepwise and controlled way in introducing automation to the highly repetitive steps of our stack production. But it's important to make sure you, of course, have a very stable product and you know exactly what and how to automate the different steps. So that's something that's continued. And I think the the improvement we've seen in our first time pass rates is testament to that all moving in the right direction. And so the automation journey does continue. And the focus is very much on ensuring that we have quality and reliability at the heart for what we do.

Thank you, guys. In terms of you mentioned the containerized solutions Neptune II and Neptune V. Could you give some sort of context between containerized solutions and other plant builds? In timeframes between contract and say revenue and final cash [indiscernible] [indiscernible] Project Tanners, okay. So when it comes to overall project timelines, right, I mean Neptune is one part of it or Poseidon or Depending on the site conditions, typically, you would have to do some civil works. Which could be groundworks, some plants need a building for noise reasons. There could be different kinds of of civil works required. Usually then determine when the critical path starts for the ITM deliveries. It comes to big EPC projects like like Lignan, like Refine, that sort of project where you have a modularized approach, Poseidon or Alinda Hypermodule plus we produce snacks. Would look at a project time of between [indiscernible] Between signing the contract and going live with the plant IDM is nowhere on the critical path with our deliveries there. When it comes to Neptune projects, and I think this is one of the big advantages of Neptune containerized you can shorten the build time significantly. This requires less civil works usually.

Our containers can also operate outside. Oftentimes, you don't need a building. Not required for noise reasons. And currently, we are quoting Neptune 5 and Neptune 2 units with a 12 months lead time. Which means from signing the order, ITM could leave our factory latest after 12 months. Sometimes also a little bit earlier. With some elements like, for example, the power supply unit, which we buy in from partners. Being on the critical path there, less the build time. Build time of 1 Neptun5 unit is significantly shorter also, the Neptun2 ITM is significantly shorter than what we are talking about. Of course, you need to order material, you need to make sure that you that the quality is right, and then you need to build ITM test it and deploy it to a customer side. So I think it's a fair assumption to say that the Neptune 5 project takes around 12 months to deliver, and then you have further on-site work integration into whatever other infrastructure you have. Could be refueling station, could be connecting different units together, could be integrating it in other Brownfield installation. Commissioning time to get the unit and the wider system up and running.

So I would say full project lead time for Neptune based project, especially if it's a bit larger than just 2 or 5 megawatts. We would probably look at 14 to 16 17 months.

And maybe that's revenue recognition. Yes. I'll pick up the revenue recognition point. So as we previously discussed, the majority of our revenue [indiscernible] So revenue generally recognized at the end of the contract after our obligations are fulfilled, but can also be dependent on obligations. And as Dennis mentioned, they may have additional work on-site to make sure that their obligations are fulfilled as well. So generally, revenue recognition will be towards the end of completion of a project, but it is dependent on the specific contract and specific projects.

Thank you very much. Dennis, you mentioned earlier about system being deployed for waste treatment. Could you comment potentially on what you think this market looks like, particularly in Europe and if ITM has got any [indiscernible] [indiscernible] projects or contracts coming up in waste treatment specifically?

Yes. I think this So when we talk about waste treatment, it's not that the hydrogen is used for waste treatment. It's about a mobility application where a customer is incinerating waste use the energy produced by that. To generate hydrogen We then fuel the waste collection cars with hydrogen. We're collecting the waste again and then basically the waste is incinerated again. So it's basically a intercompany or intracompany mobility application a circular economy model. Of waste and green hydrogen production as an energy buffer and fuel for mobility. I think there's there's more projects like that. Coming. I think not only in Germany, but the wider European Union. Hopefully also in the UK going forward. Which makes a lot of sense to store energy and then reuse it as a fuel. [indiscernible] Following a raft of positive statements coming out of Spain yesterday, about the industry. Could you give some flavor of ITM's potential involvement in Spanish project? [indiscernible] Yes, Spain is an interesting market. I mean, the wider Iberia region I would say, Portugal included.

We are very active now in that region in terms of business development. We are talking for different customers. I think we are well positioned for all the projects to come. Think Spain is one of the few markets which have a very high focus from us right now other than the markets where we already see projects. So if I look into the European Union, I would say the most attractive markets right now are TD Germany, I would say wider euro would then be Norway. The U. K. And Iberia as a region. Also France is picking up a little bit. But I think Iberia rings fairly high on the one of the next regions to come for projects and for us. Have dedicated business development resources tackling that market, and we are in very good customer discussions Thank you, Dennis. Suppose this would be a question for Simon. Are there any shortages of raw material or products in our supply chain? Or is that bottleneck that was there historically fairly clear at this moment in time?

No, I think we're in a good position.

We've done a lot of work with our supply chain. We have changed some key suppliers. To try and ensure we are always getting the best quality. And we are working with a partner that can grow with us and provide the quantities that we need. So I think that's in good shape. From a technology point of view, we've also done a lot to reduce the amount of material that we need. In particular precious metals. So we because we have made active insourcing decisions around key components or processes, we're able to influence very significantly the amount of precious metal that we use in our stacks.

And we made an announcement last year that talked about that in a bit more detail. And that is a function where we're able to [indiscernible] thrifting of precious metals substantially. Having already taken about 80% of the pre GMs out. We are able to take a further 40% now. And that is only possible because we've insourced it we've got a very strong team and very extensive testing capabilities. So mean, there are many such activities that are underway that are not only making sure our supply chain is secure, but we're pulling every technology lever that's available to us to reduce our our demand for such materials.

Thank you very much, Simon. I think for now that probably wraps up the Q and A session. As Pukono, I will endeavor to respond to every other question that's not been answered today. For now, thanks for your time. I'll hand back to IMC.

Very much.

Thank you, Justin, and thank you to the IT and Para team for updating attendees today. Please ask attendees not to close this session. It should be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it'd be greatly valued by the company. On behalf of the management team of ITM Power PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.