Proton Motor Power : Annual Report of Proton Motor Power Systems PLC 2020

Proton Motor Power Systems plc

Annual report and financial statements 31 December 2020

Contents

PART I - Overview
Highlights	1
Chairman's statement	2
PART II - Strategic Report
Business review	4
Strategic report	6
Directors' report	8
PART III - Governance and Corporate
Social Responsibility
Board of Directors	13
Corporate Governance statement	14
Corporate and Social Responsibility	18
Nominations committee report	19
Remuneration committee report	20
Audit and internal control report	22
PART IV - Financial Statements
Independent auditors' report
to the members of Proton Motor
Power Systems plc	23
Consolidated income statement and
statement of comprehensive income	26
Group and Company statements
of financial position	28
Group and Company statements of
changes in equity	30
Group and Company statements of
cash flows	32
Notes to the consolidated financial
statements	34
PART V - Additional information

OUR VISION

Proton Motor Fuel Cell GmbH is a pioneer in hydrogen technology with 20 years of experience. We have set ourselves the goal of designing, manufacturing and assembling sustainable energy solutions for the world of tomorrow in the mobile, maritime, stationary and rail transport sectors, as well as continuously developing them further.

With our Cleantech Competence, we enable our customers to develop energy-sustainable products and use modern technologies.

OUR PROMISE

Our focus in the production of hydrogen fuel cell technologies is on sustainable production to contribute to a better and greener future.

Thus, we aim to improve our understanding of the climate impact of our products and operations, reduce our carbon footprint for products and businesses, and lower our waste and energy consumption. We are constantly doing our best to reduce pollution by recycling, reusing and extending the life of our products and materials.

Shareholder information

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PM manages its production site perfectly through Corona crisis

PM is featured in hydrogen report by TV-station PHOENIX

First Record quarter with 6,4 Million Euros in order intake

PM joins sustainable BReCycle-Project with Fraunhofer IWKS

PM receives order for stationary solution for energy self- sufficient housing complex

APRIL	MAY
2020	2020

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2020

HIGHLIGHTS 



KEY STATISTICS

£5.8m

Q1 2020 order intake

£7.3m

Total order intake 2020

New Framework agreement

With APEX Energy Teterow GmbH for ten containerised 100kW fuel cell systems

Overview

£6.8m

Sales value production backlog

+146%

Increase in sales since 2019

Production capacity unaffected by COVID-19

at Pucheim factory

Strategic Report

				Order for newly
				released "PM
				Frame" to equip
				road tunnels
		European
		shipbuilding
		company places	First hydrogen-
		order with PM for	powered rail milling
		research vessel	train receives Proton
				Motor fuel cell
		Cooperation			PPS share receives
PM experiences	with "KST-	Cooperation	Green Economy
309 percent	Motorenversuch	with "Frerk	Mark Award
increase in	GmbH & Co. KG"	Aggregatebau
first half year	for long-term	GmbH"
sales compared	partnership of	for turnkey
to the first	automotive	stationary
half year 2019	applications	applications

AUGUST	OCTOBER	NOVEMBER	DECEMBER
2020	2020	2020	2020

Governance

Financial Statements

Additional Information

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2020

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Chairman's statement 



We are pleased to report our results for the year ended 31 December 2020.

OVERVIEW:

Proton Motor Power Systems plc ("Proton Motor") has made further progress this year in proving its technology, building on its strategic cooperations and sales pipeline. We have strengthened our organisation to be able to deliver complete power supply solutions. Inspite of the COVID-19 backdrop a further strengthening of industry and consumer demand for alternative sources of energy continues to be evident in the period under review. Proton Motor´s technology offer continues to mature to remain aligned with this growing demand and supports the continuing commercialisation process of the group. This is evidenced by the record order intake in Q1 2020. The potential sales order and production pipeline is also strong as at the date of this report.

HIGHLIGHTS:

• In Q1 2020 Proton Motor achieved a record quarterly order intake of £5.8m. Total order intake in 2020 amounts to £7.3m. At the date of this report there is a production backlog of sales value amounting to £6.8m. This backlog will result in deliveries of varying configurations of fuel cell systems to customers both in 2021 and 2022.
• 76% of order intake in 2020 to the date of this report is derived from the stationary segment with other orders being spread across the mobile, maritime and rail segments.
• In 2020, we entered into a framework agreement with APEX Energy Teterow GmbH for ten containerised 100kW fuel cell systems.
• Having implemented from the onset all recommended protective measures at its factory in Puchheim, to date Proton Motor has not been affected by COVID-19 and there have only been several isolated cases of COVID-19 amongst the Company staff as at the date of the report. Whilst our staff have to maintain social distancing and other recommended measures to protect themselves against the virus, our factory in Puchheim remains fully open and our production capacity is unaffected, thus being able to focus on manufacturing and delivering the above mentioned order intake. Other effects such as material supply bottlenecks have not been significantly experienced to date.
• Sales in 2020 at £1,893k, when compared to the 2019 sales figure of £769k, have seen an annual increase of 146%. Sales performance included deliveries to the stationary, mobile and maritime segments.
• Excluding the impact of the embedded derivative together with exchange losses, the operating loss in 2020 was £7,128k vs. £7,150k in 2019 which is in line with our budgeted expectations.
• The movement relating to the embedded derivative is a non- operating, non-cash item, required by IFRS financial reporting, which is based on gauging the potential effects of partial convertible interest on loan financing.
• Cash burn from operating activities has decreased during the period to £4.7m vs. £6.4m despite the increased level of activities to deliver our sales pipeline. Cash flow is our key financial performance target and our objective is to achieve a positive cash flow in the shortest time possible. Current contracts are quoted with up-front payments reducing reliance on working capital as we continue to invest in our manufacturing capability. The cash position at 31 December 2020 was £2,739k vs. £1,028k at 31 December 2019.

2 Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2020

BOARD AND GOVERNANCE:

The Proton Motor Group Board is functioning well and interacting effectively with executive management contributing a good balance of skills and experience. The corporate governance framework which the group operates, including board leadership and effectiveness, board remuneration, and internal control is based upon practices which the board believes are proportionate to the size, risks, complexity and operations of the business and is reflective of the group's values. Of the two widely recognised formal codes, the Board decided in 2018 to adhere to the Quoted Companies Alliance's (QCA) Corporate Governance Code ("QCA Code") for small and mid-size quoted companies (revised in April 2018 to meet the new requirements of AIM Rule 26). Within the context of Corporate and social responsibility the Group has a continuing commitment to act ethically, to comply with all relevant regulations, and to contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. This is continuously monitored by the Executive Management and evaluated annually by the Chairman, as it is regarded that motivated and committed staff members will provide maximum value to the Group´s activities.

FINANCE:

• A 146% increase in sales in 2020 to £1,893k compared to 2019 sales of £769k. Sales in 2020 were made to the stationary, mobile and maritime market segments.
• Inspite of the sales increase the operating loss was reduced by 0.3% from £7,150k to £7,128k, as the 2020 cost and asset structure contains further investment in the technical development area, in support staff and infrastructure.
• At the end of April 2021 Proton Motor has order backlog at sales value amounting to £6.8m relating to deliveries to customers partially in 2021 with the remainder in 2022.
• Following the year end, a further €11.8m loan facility has been agreed to ensure operational and investment financing into 2022 with a view to accelerating the investment programme in the face of increasing demand.
• Cash burn from operating activities decreased by 27% to a level of £4.7m in 2020, from £6.4m in 2019, including stocking up on material for the incoming order intake, to be delivered in 2021. Cash flow is our key financial performance target and our objective is to achieve a positive cash flow in the shortest time possible. Current contracts are quoted with up-front payments reducing reliance on working capital as we continue to invest in our manufacturing and development capability.

OUTLOOK

In the year ahead we are focused on progressing the maturity of the group technology offer, ramping up production capacity and exploiting the current potential sales pipeline. The current outlook at the end of 2020 looking into 2021 is more optimistic than that as prevalent at the end of 2019.

I personally thank all our customers who believe in us, our team of committed employees and our shareholders who have the vision to invest in our mission.

Helmut Gierse
Non-Executive Chairman	Date: 9 June 2021

Overview

Strategic Report

Governance

Financial Statements

Additional Information

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2020

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