# AMTE Power review drives vision and shapes evolutionary changes

- Link: https://www.directorstalkinterviews.com/amte-power-review-drives-vision-and-shapes-evolutionary-changes/4121109105
- Published: 2023-03-08T07:23:51+00:00
- Author: Madison Wilson

**AMTE Power Plc** ([LON:AMTE](https://www.directorstalkinterviews.com/company/amte-power-plc/amte.l)),
a leading UK developer and manufacturer of lithium-ion and sodium-ion battery cells
for specialist applications in global markets, has today announced its results for
the half year ended 31 December 2022 and the conclusion of its new CEO’s strategic
review.

> **Alan Hollis, CEO of AMTE Power, commented:**
> _“I am pleased to report that AMTE Power continued to make good progress in the
> half year ended 31 December 2022, with progress continuing in line with market
> expectations of loss before tax for the full financial year._
> _“Since my arrival at AMTE Power I have been undertaking a strategic review of
> the people, markets, products, operational capability, functional capability and
> processes with a clear focus on positioning the business for success through commercialisation
> of its products and scaling up of the organisation to support our ambitious plans
> to accelerate routes to market._
> _“AMTE Power has rich technical capabilities and a highly differentiated product
> range across multiple markets. We have identified where the business needs to 
> be positioned as a market leading cell provider for specialist applications, with
> planned scale up at our existing manufacturing facility in Thurso, Scotland and
> the UKBIC, ahead of Gigafactory scales of production in due course in our proposed
> new facility._
> _“AMTE Power is one of the few_ _manufacturers of battery cells in the UK today
> and has three products in development that are close to commercialisation with
> samples already in the hands of customers for testing from whom we are receiving
> positive feedback._
> _“This_ _strong foundation underpins our growth plans and, combined with the renewed
> vision and the team’s energy, means we look forward with confidence and focus 
> to the year ahead.”_

**Operational Highlights:**

Ultra High Power

·      Fully functional and operationally tested cells (A-samples) leading to UN38.3
certification and abuse testing to be completed in H1 2023

·      Planning to supply samples to customers in Q2 2023

·      Production planning at UKBIC (“UK Battery Industrialisation Centre”) for 
larger scale production

Ultra Safe

·      Initial order received for Ultra Safe cells and focus on strengthening the
opportunity pipeline

·      A-Samples already shipped to customers in Q1

Ultra Prime

·      Initial batch of cells produced at Thurso shipped to customer

**Financial Highlights:**

Half Year Financial Performance reflects continued investment in commercialisation
plans

·      Turnover of £0.55 million (H1 2022: £0.82 million)

·      Loss before tax of £3.72 million (H1 2022: loss £2.65 million)

Balance sheet strength underpins investment phase

·      Cash and cash equivalents of £1.21 million (H1 2022: £6.26 million)

·      £2 million of convertible bond facility remains undrawn

**Current trading:**

·      Focus on converting opportunities to orders with in excess of 100% of planned
capacity already covered by existing MoU’s / JDA’s.

·      Cost base continuing in line with market expectations for the current year

·      Positive outlook with healthy pipeline

**Refined focus following new CEO strategic review:**

·      Growth Strategy increasingly focused on accelerating the evolution of AMTE
Power from technology research to full commercialisation of products in order to
capitalise on unique market opportunities.

·      Products aligned to the growing high performance and fuel cell electric vehicles(“
FCEV”) sectors, battery energy storage systems (“BESS”) and other specialist markets.

·      Fully functional and operationally tested cells leading to UN38.3 certification
and abuse testing to be completed for all products during H1 2023.

·      Dundee remains the preferred site for AMTE Power’s new facility, with the
long-term objective of Gigafactory scale.

·      Investment strategy to accelerate time to market by scaling up production
capabilities at Thurso facility and UKBIC:

o  Ultra Prime commercial contract signed and initial batch of cells shipped

o  Investment to support scale up at Thurso planned to commence in 2023

o  Phased ramp up of Ultra Prime and Ultra Safe cells at Thurso and Ultra High Power
at UKBIC

o  Planned Gigafactory scale of production for Ultra Safe and Ultra High Power will
be our proposed Gigafactory  

o  Ultra Prime will continue to be manufactured at Thurso

·      Senior leadership team bolstered with augmented skills and resources critical
to scale up the business and drive ambitious plans

o  Appointment of Anita Breslin, Chief Finance Officer

o  Appointment of Wes Simons, Corporate Development Director

o  Appointment of John Valentine, Supply Chain Director

ESG is central to our business, and we continue to make good progress against our
ESG strategy targets. In partnership with the leadership team, our [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
lead and our third party consultant, we have developed an ESG strategy that comprises
six pillars aligned to a number of the key goals identified in the UN Sustainable
Development Goals framework. We have already made significant progress having already
achieved scope 1 and 2 emissions of 337 tonnes CO_(2) equivalent for FY 2022, secured
100% renewable electricity saving 136 tonnes CO_(2) equivalent, been recommended
for accreditation to ISO14001 at Thurso and started to include sustainability as
a key criteria within our procurement policies. Without a focus on this metric our
current outturn would have been 472 tonnes CO_(2) equivalent. We have also shipped
samples to a recycling company to test and confirm recyclability of product and 
process wastes.    

**Outlook:**

·      Developing capabilities to scale up and commercialise whilst retaining R&
D expertise at our core 

·      Healthy pipeline:

o  Five MoUs and development agreements for the supply of Ultra High Power

o  First order received for Ultra Safe

o  One supplier agreement already in place for Ultra Prime

o  Samples for two of our three products already in customer hands with positive
feedback

·      Continue to focus on converting existing customer pipeline

·      Complete investment plans to increase production capacity at our existing
facility in Thurso

·      Continue to make progress on new facility planned for start of production
in 2026 and eventual Gigafactory scale

·      Secure supply chain through responsible sourcing

**Chief Executive’s Statement**

**Introduction**

AMTE Power is the only manufacturer in the UK with three highly differentiated battery
cells in development that are close to commercialisation.

I am pleased to report that the business has continued to make good progress in 
the half year ended 31 December 2022.

Since joining AMTE Power, I have been undertaking a strategic review of the _people,
markets, products, operational capability, functional capability, and processes_
with a clear focus on positioning the business for success through commercialisation
of its products and scaling up of the organisation to support our ambitious plans
and to accelerate routes to market.

The business has rich technical capabilities and a strong foundation to support 
future growth, with planned scale up at our existing manufacturing facility in Thurso
and the UKBIC ahead of full-scale Giga rates of production in due course at a proposed
new facility.

**Refined focus following new CEO strategic review:**

Our ambition is to grow AMTE Power production to c.1GWh per annum in due course.
In order to achieve this, our growth strategy is increasingly focused on accelerating
the evolution from technology research to full commercialisation of our core products
to capitalise on the unique market opportunities ahead.

Achieving this ambition and accelerating time to market will require:

·      Scaling up of AMTE Power’s existing battery cell manufacturing equipment 
and expertise at the production facility in Thurso, complemented by cell manufacturing
at the UKBIC

·      Commercialisation of three core products: Ultra High Power, Ultra Safe and
Ultra Prime

·      Increasing production rates towards the long-term objective of Gigafactory
scale at the proposed facility in Dundee, Scotland

·      Ensuring AMTE Power has a secure supply chain in place

·      Investing in our people to build a team with the skill and resources necessary
to support future growth

Our products are aligned to the growing FCEV, BESS and other specialist markets.
We are aiming to achieve A-samples leading to UN38.3certification for all products
during H1 2023 which enables initial customer testing.

AMTE Power’s purpose-built cell manufacturing facility in Thurso has the second 
largest cell manufacturing capacity in the UK. The investment to support scale up
at Thurso is planned to commence in 2023 where we will begin a phased ramp up of
the production of our Ultra Prime cell, to meet the supply agreement in place, and
our Ultra Safe cells. In tandem, we are planning to increase the manufacture of 
our Ultra High Power cell at the UKBIC.

Dundee remains the preferred site for AMTE Power’s new facility, with the long-term
objective of Gigafactory scale. We plan for production of our Ultra Safe and Ultra
High Power cells to begin at the proposed Dundee facility in 2026, with Ultra Prime
continuing to be manufactured at Thurso.

To support our growth ambitions, we have bolstered the senior leadership team during
the period with the appointments of Anita Breslin as Chief Finance Officer, Wes 
Simons as Corporate Development Director and John Valentine as Supply Chain Director.
We are delighted to have them at AMTE Power as we build a team with the experience,
skills and resources necessary to scale up and commercialise the business.  The 
achievements of the existing AMTE Power staff must also be recognised for their 
fantastic contribution so far to take us to where we are today and their passion
and experience for the business, augmented with our ambitious future plans is essential
in driving the business forward.

**Operational Overview**

During the first half of the current financial year, good progress continued to 
be made across our core product range as we move towards full commercialisation 
and meeting growing demand across all applications.

_Ultra High Power_

Our target market for the Ultra High Power cells is high power density cells for
all FCEV, high-performance BEV and high-power automotive applications. This includes
becoming a first mover, in the European market which is forecast to grow to c.50GWh
by 2030.

We have non-binding MoUs and development agreements in place for the Ultra High 
Power cell with key automotive partners including Cosworth, Viritech, MAHLE Powertrain,
TAE (Sprint) power solutions and BMW. During the first half of this calendar year,
we expect to complete UN38.3 certification and abuse testing of fully functional
and operationally tested A-sample cells and commence first commercialisation by 
supplying A-samples to our customers in Q2 2023. Production planning is in place
for larger scale production at UKBIC in readiness for the expected demand for high
power cells across our target market.

_Ultra Safe_

Our Ultra Safe cell is well suited to the battery storage market, which is set to
grow in Europe to approximately 300GWh by 2030, of which AMTE forecasts approximately
10% is expected to be based on sodium-ion by 2030, as a result of the need to speed
up the replacement of fossil fuels with renewable energy. Battery storage will play
an increasingly pivotal role between green energy supplies and responding to electricity
demands via the grid.

The Ultra Safe product is a greener, safer and cheaper alternative to other technologies
and driven by this increasing demand for continuous power and energy storage systems
in critical infrastructures, adoption of renewable energy grid storage and balancing
solutions.

During the first half of 2023, the business received an initial order for Ultra 
Safe cells. Going forward, we will continue to focus on strengthening the opportunity
pipeline. A-Samples have already been shipping to customers in Q1 for Ultra Safe
and Ultra Prime for customer testing.

_Ultra Prime_

Our Ultra Prime cell is designed for use in some of the most difficult environments,
with very high energy density, high-temperature performance and low self-discharge.
The nature of the work undertaken in decarbonising industries such as construction,
mining, oil and gas, and agriculture requires a combination of high power and range.
With this, and a growing engagement with the rail industry, we expect additional
volume orders from outside of our core markets, supporting us further to expand 
our manufacturing footprint in line with our plans.

During the period, we carried out customer testing of prototype cells in accordance
with the agreement already in place for supply of this cell into subsea applications.
The Ultra Prime cell is on track to be produced from Thurso with commercial start
of production in 2023.

**Financial Review: half year to end December 2022**

For the 6-month period ended December 2022 the Group’s turnover was £0.55m, 32% 
less than H1 2022 (£0.81m). Grant funding income for the period was £0.47m, down
from £0.62m in the first half year of 2022. Similarly commercial revenue fell from
£0.16m H1 2022 to £0.07m in H1 2023. The reduction in revenue reflects the reduced
strategic investment in research and development, moving away from contract manufacturing
and continued focus towards commercialising the three core products.

The Group’s loss before tax for the period was £3.72m (H1 2022 loss £2.65m) impacted
by the commencement of scaling the organisation and financing costs of £0.40m incurred
in the period related to the Arena convertible bond. Group loss after tax was £3.67m(
H1 2022, loss £2.65m).

At the half year end, cash and cash equivalents amounted to £1.21m (H1 2022; £6.26m),
with two fifths (£2m) of the Arena convertible bond facility unutilised.

**Outlook**

AMTE Power is one of the only manufacturers in the UK with three highly differentiated
battery cells in development that are close to commercialisation. The business is
readying itself to scale up and commercialise whilst retaining R&D expertise at 
our core.

The business has a healthy pipeline, with five MoU and development agreements for
the supply of Ultra High Power; the first order received for Ultra Safe; an existing
agreement in place for Ultra Prime; and A samples for two of our three products 
already in customer hands, with positive feedback received so far.

We will continue to focus on converting our existing customer pipeline while completing
investment plans that will enable the business to increase production capacity at
our facility in Thurso, in addition to our arrangements at UKBIC. Led by our new
supply chain director, the business is working to ensure we have a secure supply
chain through responsible sourcing as we progress towards Giga rates of production
at our proposed Gigafactory in Dundee, which is planned to start production in 2026.

AMTE Power has a positive outlook supported by its healthy pipeline. Customer testing
is underway, and we are focused on converting opportunities to orders and the cost
base continues in line with market expectations for the full year. We are excited
about the opportunities ahead.

**Alan Hollis**

Chief Executive Officer

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