q2 investor deck
TRANSCRIPT
Copyright 2017, Plug Power Inc.
August 2017
Infinite Drive
2
Safe Harbor Statement
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties about
Plug Power Inc. (“PLUG”), including but not limited to statements about PLUG’s expectations for 2016 and 2017, including GAAP revenue, number of GenDrive shipments, number of
GenFuel sites, number of ProGen modules, GAAP gross margin, bookings and net cash use, future product cost reduction, PLUG’s growth in multi-site customers, PLUG’s entry into new
markets and products, including but not limited to ProGen and the electric vehicle market in China and the viability and growth of such market. You are cautioned that such statements
should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will have
been achieved. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. In
particular, the risks and uncertainties include, among other things, the risk that we continue to incur losses and might never achieve or maintain profitability; the risk that we will need to
raise additional capital to fund our operations and such capital may not be available to us; the risk that our lack of extensive experience in manufacturing and marketing products may
impact our ability to manufacture and market products on a profitable and large-scale commercial basis; the risk that unit orders will not ship, be installed and/or converted to revenue, in
whole or in part; the risk that pending orders may not convert to purchase orders, in whole or in part; the risk that a loss of one or more of our major customers could result in a material
adverse effect on our financial condition; the risk that a sale of a significant number of shares of stock could depress the market price of our common stock; the risk that negative publicity
related to our business or stock could result in a negative impact on our stock value and profitability; the risk of potential losses related to any product liability claims or contract disputes;
the risk of loss related to an inability to maintain an effective system of internal controls or key personnel; the risks related to use of flammable fuels in our products; the cost and timing of
developing, marketing and selling our products and our ability to raise the necessary capital to fund such costs; the ability to achieve the forecasted gross margin on the sale of our
products; the risk that our actual net cash used for operating expenses may exceed the projected net cash for operating expenses; the cost and availability of fuel and fueling
infrastructures for our products; market acceptance of our products, including GenDrive, GenSure and GenKey systems; the volatility of our stock price; our ability to establish and
maintain relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; the cost and availability
of components and parts for our products; our ability to develop commercially viable products; our ability to reduce product and manufacturing costs; our ability to successfully expand our
product lines; our ability to successfully expand internationally; our ability to improve system reliability for our GenDrive, GenSure and GenKey systems; competitive factors, such as price
competition and competition from other traditional and alternative energy companies; our ability to protect our intellectual property; the cost of complying with current and future federal,
state and international governmental regulations; risks associated with potential future acquisitions; and other risks and uncertainties referenced in our public filings with the Securities
and Exchange Commission (the “SEC”).
For additional disclosure regarding these and other risks faced by PLUG, see disclosures contained in PLUG's public filings with the SEC including, the "Risk Factors" section of PLUG's
Annual Report on Form 10-K for the year ended December 31, 2015. You should consider these factors in evaluating the forward-looking statements included in this presentation and not
place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and PLUG undertakes no obligation to update such statements as a result of
new information.
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Our Mission
4
Plug Power is the Leader in
Hydrogen and Fuel Cell Technology
1st to create a
market for HFC
technology
150
HFC patents
7.5MM+
Hydrogen fuelings
15K+ units in
the field
135MM+
operating hours
70% reduction in cost
profile since 2013
>3x revenue
growth since 2013
80% Blue Chip
Customer Base
5
Success in Our First Market:
Growing Share in Material Handling Applications
Full suite of products through GenKey
solution accelerates customer adoption
Plug Power owns 95% of current market
share for hydrogen fuel cells
Plug Power’s technology drives
productivity and streamlines operations
for our customers
❖ Constant power and improved
performance drives enhanced operator
efficiency
❖ Reduced downtime due to battery
changes/charging
❖ Space savings
❖ IoT proactively identifies issues to
maximize uptime
The global material handling market represents a $30 billion total market opportunity
Co
mp
lete
Tu
rnke
y S
olu
tio
n
Hybrid electric fuel cell solution for forklifts
• Drop in replacement
• >15,000 units in the field; 135M + hours
Fueling infrastructure & fuel delivery
• 150+ hydrogen dispensers @ 48 installed sites
• 10k fuelings/day, 7M+ total
Complete service and maintenance
• 98+% uptime performance
• IoT data collection, monitoring and control
Fuel cell engines for a variety of applications
• Industry leading high power & air-cooled designs
• Lower cost, higher performance, 35+ yrs. IP
6
Success in Our First Market:
Loyal and Repeat “Blue Chip” Customers
M
u
l
t
i
-
multi-site & repeat customers
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Plug Power and Walmart Expand Relationship
History of a Long Term Partnership• Relationship dates back to 2008, with Walmart now
having over 6,600 units in the field
Multisite Program• Deployments at 30 sites expected over next three
years
• Ten sites already under contract and expected to be
completed in 2017 (~$80 million in value)
Improved Financing Terms• Low cost financing without restricted cash
• Resulting in cash flow positive financing for
GenDrive and GenFuel infrastructure
Warrant Agreement• Warrant structure connected to cash payments
• $600 million overall revenue target
Technology Collaboration• Leadership in helping develop new ProGen markets
and applications
Walmart : Early Adoption with Rapid,
Consistent Growth
Plug Power’s relationship with Walmart
represents the largest hydrogen enabled fleet
in the world
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Background• Plug Power and Amazon actively engaged in Spring,
2016
• Amazon recognized Plug’s value proposition,
including the ability to enhance warehouse
productivity
Pathway to Success• First site implemented in Q4 2016
• Multiple sites completed year-to-date 2017
• $70 million estimated revenues in 2017
Technology Collaboration• Leadership in helping develop new ProGen markets
and applications
Investment in Plug Power• Warrant structure connected to cash payments; full
vesting of warrant upon $600 million aggregate
spend
Plug Power Signs Strategic Agreement with Amazon
Amazon establishes multi-year,
multi-site customer agreement with Plug Power
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Plug Power is…
Leading the commercialization of hydrogen fuel cell technology
Expanding our market position in material handling applications
Leveraging our proprietary and flexible ProGen fuel cell engine platform
Replicating success achieved in first market
Delivering strong and predictable revenue and bookings growth
10
The global electric vehicles market is expected to reach $334 billion by 20241
The Future of Mobility is Electric
Robotics &
Drones
Autonomous
Vehicles
Commercial
Trucks
Commercial
Buses
Industrial
Mobility
Industrial and commercial electric vehicles today represent 60% of the value of the electric vehicle market2
1. IDTechEx Market Research: “Electric Vehicles Change the World 2017-2037”
2. Research and Markets: “Industrial and Commercial Electric Vehicles on Land 2017-2027"
EV Use Cases
Will…
✓Have high utilization
✓Require long run times
✓ Be fully sensored
✓ Be constantly connected
✓Have zero emissions
✓ Leverage renewable
fueling options
✓Connect and interact
with the grid
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Fuel Cells will be a Viable Player in Addressing the
Trends Shaping the Motive Industry
Seeking Efficiency Through Vehicle…
ElectrificationFuel Cells: Range is not compromised, reduced emissions, shorter charging
times
❖ Plug fuel cells will replace batteries in the forklifts used in the
distribution centers of leading retailers and manufacturers
like Walmart, Amazon, Carrefour, and Mercedes (and others)
Asset UtilizationFuel Cells: Consistent utilization to meet consumer demand; fuel costs
scalable over larger fleets, centralized fueling, automation
❖ Plug Power services the BMW fleet, which has its trucks in
operation 24/7
AutonomyFuel Cells: Sensor-equipped, range, persistent use
❖ Plug Power is powering automatic guided vehicles at P&G
factories
Last MileFuel Cells: Ability to use within delivery vans, robots, drones, hastening
delivery times
❖ FedEx delivery vans incorporating ProGen engines, save time
spent on fueling, and without compromising range
Asset
Utilization
Last MileAutonomy
Electrification
Hydrogen Fuel Cells Are a Logical Enabler
Each trend is driven by the value individuals
place on time, reliability, convenience,
predictability, and cost savings
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Beyond Material Handling
Customer behavior in commercial applications drives the need to use fuel cells as part of the EV solution
Chinese Delivery Vans
• Will increase range of current battery-only truck
from 90 to 160 miles
• Prototypes were installed in May of 2017
• Three-way MOU signed to deploy commercial fuel
cell vehicles
FedEx
• Cargo payload not diminished
• More than double current battery-only range
to 150 miles
• First truck was ready for testing in June of 2016
• 19 additional units expected to be deployed through
2018
Heavy Utilization - High Energy Intensity - Inability to Pause Operations
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Total GenKey Installs Cumulative GenDrive Units
Total Hydrogen Fuelings (Thousands) Bookings (Millions)
Rapidly Growing Sales & Deployments
-8
26
42
67
2013 2014 2015 2016 2017(Est)
4,400 6,700
10,600 14,800
20,400
2013 2014 2015 2016 2017(Est)
$75 $150
$205 $280
$325
2013 2014 2015 2016 2017(Est)
1501,200
4,600
7,500
2014 2015 2016 TODAY
Note: 2017 estimates are available in the guidance posted in our latest 10Q filing.
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$9.4
$24.0
$31.4
$38.4
$15.3
$20.5
$17.6
$32.6
$15.2
$22.6
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17
GAAP Gross Quarterly Revenue
Commenced utilization of new Power Purchase
Agreement (“PPA”) financing in 1Q’16
Increased Visibility with Recurring Revenue Mix
Full year 2017 adjusted gross revenue is expected to be $130 million
15
$14.8
$17.5 $17.3 $16.6
$8.9 $8.7
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17
Fair Value of PPA Assets Deployed
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Cost Controls and Economies of Scale
Drive Margin Expansion
Many factors will continue to support steady
cost reduction• Volumes
− Multi-year sourcing allows us to take advantage of lower
pricing associated with higher volumes
• Dual source strategies− Risk mitigation
− Cost reduction and supplier innovation
• Integration− Functional & Vertical
• Tooling, Automation
• Industry leverage of key components− Sector expansion drives component pricing
− Examples include membranes, batteries, etc
Cost Reduction is the Key to Success
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2017 Guidance: Improving Operational and
Financial Performance
Metric 2017 Guidance
Gross Revenue (GAAP) Total: $130 million
Shipments
GenDrive
GenFuel Sites
ProGen Mods.
Total
5,600
25
100
Non-PPA
3,800
16
100
PPA
1,800
9
N/A
Adjusted Gross Margin* • 8% - 12%
Bookings • $325 million
Cash • $25-$35 million of free cash flow use
*Adjusted gross margin excludes charges related to Amazon and Walmart warrants
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Continuing to lead the commercialization of fuel cells• Plug experience remains unmatched with more than 135 million hours of fuel-cells in service
Expanding Plug market position• Added top retailers Amazon and Carrefour to our book of business, and meaningfully expanded our relationship
with Walmart through new multi-site agreement
Leveraging the ProGen fuel stack in our new designs• The ProGen platform has enabled us work with OEM’s, leading to the 3-way MOU signed with Furui for delivery
vans
Replicating success in material handling• Adaptable technology across a range of power and energy needs: deployed multiple units of ground support
equipment (GSE), and developed the FedEx fuel cell commercial vehicle
Paving a path towards profitable revenue growth• Significant cost reductions will continue to drive margins
• Enhanced predictability of revenue and deployments through new long-term contracts
Plug Power Success
Corporate Headquarters
968 Albany Shaker Road, Latham, NY 12110
West Coast Office
15913 E. Euclid Avenue, Spokane, WA 99216
plugpower.com
Andy Marsh, President and Chief Executive Officer
Paul Middleton, Chief Financial Officer
Investor [email protected]