Welcome, everyone. Welcome to this Q4 presentation. Unfortunately, again, we have to do this without people in the room. But still, you will be able to answer ask questions and you can start to put in your questions already now. We'll try to deal with them at the end of the presentation.
In terms of the agenda today, it It goes as follows. We will go through the Q4 highlights and talk a bit about that. We'll talk about Nel in brief. We will also look at some of the key technology development, which I think is important and which Not everyone potentially has understood the significance. We will talk obviously about the main developments of the quarter.
And then our CFO, Kjell Christian, will go through the ESG and some outlook slides that we also covered in the Capital Markets Day. And then we will finish off with a summary before Q and A. So let me start off then with the financial highlights. Revenues were up 30% based on or compared to the same quarter last year, which is good. We finally see some of the revenue growth that You should expect from a company like now.
We have a strong order backlog, more than 90% up from the same quarter last year, which is good. And as orders getting bigger and we saw quite a lot of activity in the quarter even with the negative impacts of the corona pandemic. Let me just run through some of the main elements. We received the purchase order for an H2 station from Everfuel. We received the purchase order for 2 stations from CPAC.
We received a PO for a 1.25 Megawatt PEM solution, a Navy Stack order, a PEM Navy Stack order, 1.5 Megawatt PEM solution. We signed an LOI with Statkraft related to a hydrogen project with a potential up to 50 megawatt of alkaline. We signed an agreement with Evofuel, to develop the fueling network in Norway. And we also signed a 20 Megawatt alkaline electrolyzer project, a contract for that. And after the quarter, just over New Year, we also signed an agreement with Iberdrola for a 20 Megawatt PEM solution to Spain.
We'll talk about all of those. And then last but not least, we also launched our 1.5 dollar per kilo green renewable target. That we did in connection with our Capital Markets Day, and we will also cover that a bit later. So let me then move over to the financial review. Let me start by covering this.
We will no longer report adjusted EBITDA like we have done in the past in a separate column. So basically, This will be covered. The general EBITDA explanation of the developments will be covered in the general explanation. And That means that you will need to try to understand some of the underlying adjustments or reasons for the EBITDA development by going through some of the materials. So here I'm trying to I will try to help you out a bit on to do that.
We have obviously included the provision for a NOK 20,000,000 fine, which we got notice of only a few days ago. In general, we can say that EBITDA is negatively impacted by The preparations and investments that we have to do to prepare for the future, that we have talked about a number of times and that will continue. Projects are getting larger and we are recruiting a lot of individuals all across the organization to be able to prepare for what is coming. And in particular, we are recruiting a lot in project execution, which we need to then undertake in different parts of the world, but also recruiting when we ramp up our organization for the Harrier expansion, for example. We can also say that the Q4 EBITDA and the Q4 results has also been negatively impacted by COVID-nineteen, including provisions that we've made for future costs like, for example, hiring external resources to compensate for the fact that Nel employees are not able to travel somewhere.
So sometimes We need to add on local resources to cover up for the fact that we cannot be there. We've also spent additional hours on projects because things are getting more complicated to move the process forward. Additional hours and additional cost as a result of travel restrictions and other limitations. And you can expect that These effects will continue. As long as we have restrictions that we need to abide by, there will be also issues going forward.
As mentioned, we had all time high revenue, which we are happy about, related to the €20,000,000 Provision for the Sherbo fine, which we received on Tuesday. Let me just make a few statements. First of all, the event itself, we took very seriously. It was a serious event and we spent a lot of time and resources doing a thorough investigation of the incident back in 2019. We also shared all of this information with the relevant authorities.
All the reports and all the technical details that we could share. So we were a bit surprised by the conclusion, but also the size of the fine and especially when we look at what we've seen Other companies have received. So we will obviously continue we will obviously consider what to do next with this. But we have taken a provision for it, so it's already now covered in the Q4 results. In terms of pretax and net income, these were both positively impacted by the valuation of both Nicolas and Everfuel where we have investments.
And We ended the year with a very strong cash position, more than NOK 2,300,000,000 which means that we have the cash we need to be able to deliver on our plans. As we talked about, we have a strong order backlog. It's up more than 90% from the same We also have a strong pipeline of projects that we are working on. But as we have talked about, when the projects get larger, There are more details. There's more technical details.
There are more commercial details. There are more things that needs to be discussed and evaluated. So you don't know exactly when you're able to close the order. And that means that we'll continue to see swings In the order backlog, you all continue to see swings when orders are coming in also going forward. So that's at least something to keep in mind when you monitor the development in Nel.
I will then quickly go through Nel in brief for new listeners. So for those of you that are very familiar with us, please bear with me. What makes Nel different and unique is the fact that we are integrated. We have both electrolyzers and fueling stations. We are a pure play technology company that deliver in house developed and produced products.
We're also becoming increasingly global. We have production facilities in Denmark, in U. S. And in Norway. And we also have people and organization in other relevant areas like California, Korea, Japan and China.
We are the world's largest electrolyzer producer. We have delivered more than 3,500 Systems in more than 80 countries. So we have been around and we're also one of the leading manufacturers of fueling stations with more than 110 stations sold or under developmentconstruction in 13 different countries. We consider ourselves a frontrunner in the industry in terms of technology with the absolute longest experience. We cover both PEM and alkaline, so that's the 2 relevant platforms on electrolyzers.
And we target to have the most attractive technology portfolio in both of those camps. And that we do by working very hard every day to improve total cost of ownership, TCO, for our customers. That means that we will cut continue to cut cost of equipment drastically, but at the same time as we also are improving efficiency. So we're cutting costs and improving efficiency of the product at the same time. Within fueling, we already have an attractive portfolio of fueling station solutions for light duty and buses, which are pre certified for EU, U.
S. And Korea. And we are now developing a number of technology components, which will be relevant when we now move more and more over to heavy duty, fueling larger fleets of trucks. We're also working very hard to improve the general performance of our station, making them even more robust, even more reliable for the time to come. As I mentioned, we have 3 main locations, 3 main manufacturing sites.
We are in Wallingford, Connecticut, where we have slightly more than 50 megawatt of PEM production capacity. But within this building, we have room to grow. In terms of alkaline, we are located in NordholmHaria, and we are now constructing our 500 megawatt production line. And in Denmark, we have a new facility that can produce up to 300 hydrogen stations per year. We have a very long experience, as I talked about, in each of our areas, longest in the industry, 20, 30 years experience in PEM, more than 90 years experience in alkaline and more than 15 years in fueling station.
And obviously, since we have been around for quite a while, we also have a lot of equipment sitting out in the field, which then acts as very useful references when we talk to new customers. So let me then start by covering some of the key technology developments that we have seen. We covered some of these during But I suspect that not everyone has understood the significance of some of these developments. So let me highlight a few of them. Now we are bringing a brand new high capacity large PEM stack to the market.
This can produce up to 500 kilo of hydrogen per day. This stack is exactly 5 times larger than the previous class, the previous generation stack. 1.25 Megawatt, that is world class, ladies and gentlemen. It's world class. It obviously enables us to significantly cut complexities and cost and which is relatively easy to understand because you replace many small with 1 larger.
This stack has undergone rigorous testing for long lifetime and the durability performance, which the Nel brand demands. Now the most important thing is then what you do with this larger stack. And that's basically the value comes when you then turn this into a product. And that's why we launched only a few weeks ago our brand new MC 250 and MC 500 containerized compact PEM Solutions, they replaced than the previous generation. I've tried to illustrate that, the difference on these slides.
So Let's take an example. The previous generation MC400. 400 stands for normal cubic meter per hour output of gas which comes out of this. So the MC400 has 8 stacks inside if you look at the previous. We now replace 8 stacks with 2 stacks and we bump up the capacity from 400 to 500.
So you get more capacity out of same size and you have less complexity because you have 2 stacks rather than 8 stacks. So it's relatively easy to understand that you reduce complexity and you reduce cost. And we see that as very attractive going forward. Now maybe even more importantly is what these new stacks enable us to do in projects like, for example, with Iberdrola. So here, we've actually taken these brand new stacks And we have used them to develop a large scale pen facility, 20 megahertz for the Iberdrola contract, which is going to be installed in Portorano, Spain.
This would not have been possible with the smaller stack design. Jura Stacks all over the place. It would have been too complex. But now with this new stack technology, we can actually do these things. We can build larger systems.
This picture is a visualization of the solution that we are installing in Spain for green ammonia production. It's a unique 2 floor layout. And as you can see, it's very compact. Part of the attractiveness is very attractive, 35x15 meters, and that's also world class in terms of compactness. So I hope that this gives you some perspective of the importance of these technology developments.
Now when it comes to Our Capital Markets Day, we also launched our green renewable hydrogen cost target. Based on the cost reduction plans that we have on alkaline and the combination of the cost on renewables, We believe that by 2025, you should be able to produce from a large scale Nel facility Green renewable hydrogen at $1.5 per kilo. And that means that That's basically on par with fossil hydrogen. In other words, we will start to see reach fossil parity. It won't happen everywhere at the same time, But it will start to happen where you can secure low cost renewable power.
And that means that our slogan, unlocking the potential of renewable, is really becoming true. Now the cost of renewables is obviously important. It contributes the most, 70%, 80% of the total cost. However, the key now is to get the cost of equipment down. And that is basically what we are doing when we're going through this so called scale up cost down process.
We as you know, we've already talked about but we're developing this fully automated production site, which will cut the cost significantly at Haria. The first line, 500 Megawatt, will cut the cost approximately in half. When we then add additional lines and we optimize the design of the facility and the product, we should be able to cut the cost almost in half again. And on that journey, We will basically turn renewable green hydrogen competitive to fossil hydrogen. This facility will be run according to the latest and greatest lean manufacturing principles at the game changing cost, 500 Megawatt initial production line, but room to expand up to 2 gigawatt.
Test production will start in the Q2 2021. Commercial ramp up starting in Q3 2021. And one line, ladies and gentlemen, 500 Megawatt can contribute to 1,000,000 ton CO2 reductions annually. One line. So it has a huge importance if you can use the products coming out of this facility in projects around the world.
So this is actually a view of the 500 Megawatt fully automated production line. It's a fully automated chemical line with supporting Sales, you will be able to find a virtual tour of this in our Capital Markets Day material. The whole facility is already in a 3 d model, and the operators are already testing the line and running the line virtually. Now let's move over to other key developments of the quarter. In terms of our close cooperation with Evofuel, there were basically 3 main elements which happened.
We signed a PO for a fueling station for the Netherlands buses, value approximately €1,600,000 We We'll here introduce the latest and greatest fueling station equipment, and we will fuel buses and installations supposed to happen in 2021. The second thing that's happened was that we reached an agreement for Everyfuel to help us to develop the fueling infrastructure network in Norway. Every fuel will then take over gradually, the company previously called H2 Fuel Norway. And this entity is designed to own and operate fueling stations in Norway. And the last thing that happened just before Christmas or just before New Year Also, we signed an agreement for the 20 megawatt alkaline electrolyzer plant for the production of green renewable hydrogen in Fredericia, Next to a Shell Oil Refinery, total value of €7,200,000 But we also need to congratulate our friends in every few with their IPO, which happened also before Christmas.
And in connection with the IPO, they raised NOK 290,000,000. And they were also able to secure additional financing in January this year, around NOK 600,000,000. And ensuring that Evofuel is a good and well financed is obviously important for Evofuel, But it's also important for now because we really want them to be successful. And we have an agreement with Evofuel, a frame agreement, which covers equipment with the value up to €100,000,000 So we still have more work to do together. We also signed or received a purchase order for a station unit in Poland.
That's the first stations that we sell into this market. This was 2 station units and it also serves dual purposes. It will fuel both cars and buses. Total value, EUR 3,200,000 and the system is expected to be installed in 2021. We got an order for a 2.25 Megawatt PEM electrolyzer from NREL, National Renewable Energy Labs in the United States to be installed in their research facility in Colorado.
This is the new product that I talked to you about a bit earlier. This is the new containerized MC 250 solutions. So we already started to sell those units. This one has a value of around $2,000,000 and is scheduled to be delivered in 2021. Later in the quarter, we actually signed an agreement that we've been working on for quite some time.
This is an indoor PEM solution and is based on the previous generation smaller stack design. This is an M300. And as you can see from the illustration on this slide, we left 2 slots available. So Here, the customer can add additional stacks later if they want to increase the capacity of this unit later. This was sold to a large industrial U.
S. Client, which actually is also an investor into one of our competitors. But it's good to see that they still chose a Nel product for this project. Installation expected in 2021. We also got another order for so called Navy Stacks Here to United Technologies, this is for producing oxygen for U.
S. And U. K. Navy crews on multiple classes of nuclear submarines. It's delivered under an exclusive Production contract.
And if you accumulate all the orders that we received from on Navy Stacks in 2020, It accumulates to more than $10,000,000 So it's obviously an important client that we need to take care of. But Equally important is that it shows that we can actually deliver equipment with the toughest quality requirement. And you can imagine People actually rely on this to be able to breathe underwater. We signed an LOI with Stadtkeraft up to 50 megawatt of Elliot pulses. This will support CO2 free or fossil free recycling of steel.
Selsa is the producer. Selsa is a leader in this space, a very important market, and we are very happy to have been chosen as the partner that they will rely on for this. It's a facility in the middle of Norway in Moirama. It currently produces 700,000 tonnes of steel each year, which is equal to 2 Eiffel Towers per week. So it's a lot of material.
And here we basically exchange natural gas with green renewable hydrogen. That will potentially reduce CO2 emissions with more than 60% out of this facility. So that is great. The parties have had to go to EU to get support funding, have sent an application to the European Innovation Fund. That's because Norway and Enova do not support They only support energy saving projects, energy saving.
And here we're not talking about saving energy, we're talking about saving CO2. We're talking about removing natural gas, replacing it with renewable hydrogen, cutting CO2, I. E, It doesn't qualify for Norwegian funding. And I think that's something that the Norwegian politicians should pick up on because you shouldn't have to go to the EU to secure funding for such a great project like this. Just after New Year, we signed an agreement with Iberdrola to deliver the 20 Megawatt PEM solution to Porto Lano, Spain that we talked about a bit earlier.
Iberdrola is one of the largest electricity utilities in the world. And they have together with world leading fertilizer producer, Fateberia, launched a product to produce green renewable ammonia in Europe and it's a project that includes 100 Megawatt Solar, 20 megawatt hours of battery and 20 megawatt electrolyzer. So the green renewable hydrogen will produce green ammonia. And this will actually when this is up and running, it will be the largest electrolyzer facility in operation in Europe. It sounds strange, but that's true.
And it will be by far the largest PEM facility in Europe up and running. So with that, I will just I'll pass the word over to our CFO, Kjell Christian, to cover some of the ESG And 21 priorities, and then I'll be back a bit later.
So thank you, Jan. I will then be repeating a bit of what we said on the Capital Markets Day on ESG as that is an area where we have gotten some questions. So first of all, And now Nel has been out there to work with sustainability all along. It's what we do for a living. But we have not been reporting on the ESG metrics that you would typically expect before now.
So what we plan to now in our annual report for the year 2020 is to introduce our 1st sustainability report. We will be following the standard frameworks. But keep in mind that this will be a first report, so we will be meeting minimum requirements. We see that a lot of investors have actually had issues investing in us even if we are a green fund and a green company just because of the fact that we haven't had these basics in place, and we're getting them in place now. The second part of ESG that we get a lot of questions about is the EU taxonomy on sustainability.
And when we look at the framework, we are very positive. The details are still being Hashed out, and we need to do some internal work. But it currently looks like all or almost all of our own internal activities will be compliant. You could say what is the implication of that for Nel. The most important implication is actually on the customer side.
Our customers, when they buy our equipment and use that, that is definitely an activity that will comply with this. And that will help them get access to funding, both on the access side, but also hopefully on the pricing side of the funding, and meaning that it will support the market that we deliver into. We also at the Capital Markets Day talked a bit about 2021, so I will repeat that there here, because we are talking about the massive scale up now across the industry and That has some implications for us as well. So first of all, we are accelerating the investments we do in Our own organization in technology and in maintaining our leading position for the future. We have a broad technology road map, keeping in mind that we push forward full speed both on the PEM side On the alkaline side on electrolyzer, but also that we are developing the product that's currently missing on the fueling side, the heavy duty vehicle product.
So the product that you would really need to fill trucks in a good and efficient and fast enough way. And then finally, we see that as the project gets larger, we need to have a strong financing because our customers need to see that we are there today as we deliver the project, but also in 10 or 15 years to be there with spare parts, to be there with ongoing support if they need that. So in total, that means that we are taking a lot of steps now to build a scalable capacity that we need for the future. So first of all, we will be adding more than 100 new employees in 2021 all across the value chain from Technology, sales, project delivery and also production. We will be planning to deploy about 25% of all the capital we raised last year in 2020 into investments, both in the physical assets, But also in capitalized R and D.
So when we make new platform investments or step changes on the R and D side, We capitalize that and have that as an intangible asset. On capacity, and this is a point where I would like to make We have said that we will add capacity as needed by the market. So we have not gone out and said that in 2025, we will have a certain Capacity, we will have been talking about multi gigawatt capacity. We will add that capacity when it is needed by the market and where it is needed by the market. So if there's a need for us to scale up more quickly, we will be ready to do that.
But we will not be speculatively building ahead or opening subscale facilities all around the world. Finally, the sum of all of this is, of course that we will be seeing a significantly negative EBITDA in 2021. And then I hand it back to Jan for the summary.
Thank you very much, Kjell Christian. So that is was very useful to go through those elements again as a reminder. And as we've said many times, we have a lot of work to do. We have a lot of work to do here basically. I will finish off.
But before that, This is maybe on the less serious side, but we have opened our merch store. We received a lot of requests from you, Our stakeholders and shareholders and fans, in some cases, that you would like to see Nell merchandise, and you now have that possibility. My favorite is the Thanks for the right dinosaur T shirt, which I have actually purchased and I'm actually waiting for it. So I'm wondering when it will be arrived. I hope it's not too long from now.
So In terms of our focus areas going forward, we still focus on the same 6 areas in our quest to become a rapidly growing NOK 1,000,000,000 company. We obviously still have a strong focus on world class safety. We've added one ingredient for those of you that follow the Capital Markets Day, we've added scalability to the mix. So scalability in the way that we set up our production and scalability in the way that we organize ourselves. We constantly want to have scalability in mind so that we can actually add building blocks and the way we organize ourselves.
And that's why We now say that we're working hard on scalability and to maintain the cost leadership, both of those elements. We're pushing still to be a technology frontrunner, and that means that we will keep working very hard on reducing both CapEx at the same time as we're reducing OpEx for our customers. In other words, we're improving efficiency of the products. We still want to be the preferred partner. We're trustworthy and reliable and offer unique products and solutions and services, combinations of products.
We still want to ensure that we have a strong financing that Kjell Christian just covered to be able to execute on our strategic plans. And we will keep working on having a global presence in the market in the relevant markets for our products and services. So with that, I would like to summarize with covering what we have seen Throughout 2020 has really been incredibly encouraging, the development we've seen. A lot of frustration with COVID, But fundamentally, in terms of pushing for the energy transition and pushing the industry, the hydrogen industry in accelerating, we've seen a lot of encouraging developments. That means that we now believe or we can state again that we believe that hydrogen will be big As a market, it will be maybe as big as wind and solar.
We see that cost of renewables are going down. Cost of equipment continues to go down. That means that green renewable hydrogen will outcompete fossil hydrogen in the relatively near future. And we've seen that there are a lot of incentives and targets now in place to accelerate the development. So with that, I would like to end on our favorite note here.
Thanks for the ride, dinosaurs. And we will move over to Questions? I'll try to set that up. With Kjell Christian, it's a bit tight here. So I'll fold this down.
And then
Good. So I hope you can all see us Even if we're trying to maintain a corona safe distance. So first, Jan, we got a high level question.
Okay.
We say that we have world class electrolyzers. How do we back that up? What do we mean when we say that?
Well, there are 2 measuring elements, obviously, when you have an electrolyzer, is the cost of the equipment. So cost, which is dollars per kilowatt or the capacity. Here, we clearly have a leading position. I don't think there is any dispute that there is no one that can offer a complete facility with the cost that we have. And then we try to and then we have you want to make equipment that consume less electricity.
And here, we also believe that we have a world class position. That means that our alkaline electrolyzers are consuming less energy per kilo of hydrogen produced then references. And you will find 3rd party analysis That also has done similar exercises of comparing the various players. And we publish our the energy consumption on our web pages. Some of our competitors do the same.
You can do your own comparison if you want to.
Good. And then we got a clarification question around the Sherbaud fine that I will just handle. Yes. We went out and said that some of the fines was SEK25 1,000,000, but part of it was for partially owned companies. So The provision we have now taken reflects our economic exposure to the fines received.
And for those of you who are not Norwegian, this is an Administrative fine where we have the opportunity to basically settle a case with the police, that is the state. And if we refuse to do that, the The second question for you, Jan, again on the more high level. We've talked About MOUs with Statkraft around Selsa, we have a cooperation with Yara. We have An MoU with Iberdrola for next 200 megawatts. So there has been talk about large new orders.
Are we in a position to say anything more clearly about when we expect news on any of those?
Well, I mean, the whole list of POs and agreements that I went through today, Most of them I also said something about when installations will either start or when they will be completed. So for example, in the case of the 20 Megawatt PEM facility for Iberdrola in Porto Lanna, Spain, it will actually we should start to see hydrogen out of that facility already in this year. That means that we will obviously start to install equipment this year. So here we are in a bit of a hurry. When it comes to so for those, I think you can if you go back, you will find dates on when they are coming.
When it comes to the Stadtkeraft LOI, it depends on funding. As soon as funding as soon as they get an answer, I believe that Stuttgart and Selsa will move forward, and we will obviously support as best as we can on that. We don't know when the funding is going to be secured. So we will have to see. And that's the case with many, the whole pipeline of projects.
You do not exactly know when it is coming. I mean, as I said, sometimes it relies on funding, sometimes it relies on agreeing a lot of the technical details. Room. I don't want to promise that this is coming in this quarter and this is coming in that quarter, but rather give you a general understanding of how this works.
I see we have a lot of questions that are actually answered by the notes to the report. So we will not be covering all of those and we have more questions than we can handle. I will, however, push a final question to you, Jan, and that is adding capacity when that's required by the market. Are we confident that we can build factories fast enough? And how long will it take for us to build a new factory if we need that?
Yes. So we've been kind of ahead of the market in a couple of areas. We have already have a new facility in Denmark, which is capable of producing 3 endostations per year, we still have a lot of space and room to grow within that facility. When we build our first line at Hario, we're actually also a bit ahead of the market because we announced that some time ago. We started working on this from some time ago.
That was before the market before we could see clearly or everyone could see that, that market was that capacity was needed. We have also started thinking about what do we do on PEM now. If we see the continuation of orders like we have seen with Iberdrola, We need more capacity on PEM. Here, we have space within the current building. When it comes to adding more lines at Haria, You know, 500 megawatt increments.
The first line took us a bit more time, approximately 2 years from we started planning until we will start test production. Simply because we had to also improve. We had to go through kind of deconstructing all the process steps, putting it together again in a more efficient way before we automated it with the robot cells. Next line will take us 12 months. Next line will be a copy paste.
So to do that, get the next line in Harjan will take us 12 months. If we do a similar 500 megawatt line somewhere else in the world, it will maybe take us a bit more time. We need to find a facility. We need to find a location. If it's greenfield, it will take more time than brownfield.
But adding more capacity is relatively quick. And I think in many cases, it's quicker than the pipeline of projects we can see quite far out on what potentially is coming. I mean, you don't receive a surprise order for a gigawatt capacity. You will have been working on this quite some time before you get the order. So I think we are in a good position to be able to expand when we see the market needs it.
Good. I think we should end the Q and A session.
Yes, very good.
And thank you all for participating.
Thank you for joining. See you again at our Q1 presentation. Thank you.