Nel (NEL) Q4 2017 earnings summary

Executive summary

• Q4 revenue rose to NOK 111.9m from NOK 50.6m YoY; full-year organic growth excluding Proton Onsite was ~40%.

• Commercial activity strengthened, with Q4 orders above NOK 110m, backlog at an all-time high of ~NOK 465m, and major opportunities tied to Nikola and H2V.

• Year-end cash was NOK 295m, supported by positive Q4 operating cash flow and financing proceeds; production capacity expansion was under evaluation.

Financial highlights

• Q4 revenue NOK 111.9m vs NOK 50.6m; FY revenue NOK 298.4m vs NOK 114.5m in 2016, with growth largely reflecting Proton Onsite acquisition.

• FY EBITDA was -NOK 81.2m vs -NOK 44.9m; EBIT -NOK 117.2m vs -NOK 55.3m; net loss -NOK 52.4m vs -NOK 55.8m.

• Reported Q4 EBITDA was -NOK 27.7m; adjusted Q4 EBITDA was -NOK 11.1m, excluding ramp-up/non-recurring costs and non-cash option costs.

• Q4 net profit was NOK 22.7m, versus a loss of NOK 18.5m in Q4 2016; the U.S. tax-rate change added a positive NOK 53.2m net tax effect.

Outlook and guidance

• Year-end backlog of ~NOK 465m and cash of NOK 295m intended to support continued development.

• Electrolyser capacity expansion from 25MW to 250MW was being evaluated to support potential H2V and Nikola demand; management cited >30% production cost reduction from the ramp-up.

• Electrolyser sales leads were at an all-time high across traditional and new markets; production synergies between Norwegian and U.S. operations were being pursued.

• Fueling operations planned continued Herning capacity ramp-up, with good 2018 contract coverage and California installation/service preparations for Shell, Sunline and H2Frontier stations.

• Solutions activities included pursuing Korea and Europe station contracts, exploring China entry options, and collaborating on a large-scale H2Bus Europe rollout.