Invinity Energy Systems plc, a leading global manufacturer of utility-grade energy storage, is pleased to announce its unaudited consolidated results for the six months ended 30 June 2022 (the "Period") and an update on current trading.
Invinity's management team will host a virtual results presentation and interactive Q&A for shareholders and retail investors at 4pm UK Time on Wednesday 5 October 2022 via Investor Meet Company. Those wishing to join the session can sign up for free via this registration link .
Analysts wishing to cover the results are asked to contact ir@invinity.com to request a pre-recorded results presentation prepared by Invinity executives.
Board Changes
Peter Dixon-Clarke will step down from his role as Chief Financial Officer and from the Board of Invinity, following the release of these Interim Results. Chief Development Officer Jonathan Marren will additionally assume the role of Interim CFO whilst the company concludes the search for a permanent successor. Mr. Dixon-Clarke will remain with the Company for a period to assist in the transition. Peter has been a valued member of the Company's executive management team since his appointment in August 2020 and has made an important contribution to the Group during his tenure as CFO.
HIGHLIGHTS
Financial
• Revenue for the Period of £1.4m (H1 2021: £0.015m);
• Period-end inventory of £10.9m, including prepaid inventory (H1 2021: £8.0m);
• Period-end cash of £16.1m (H1 2021: £10.9)
• The Group remains debt free, excluding leases.
Commercial
Invinity's commercial team has seen significantly increased sales interest in the Company's products, driven in part by the successful delivery and associated press coverage of 7.6 MWh of VS3s delivered to Energy Superhub Oxford, Scottish Water and the European Marine Energy Centre (EMEC) in late 2021 and early 2022. Building on that interest, key developments during the Period included:
• An 8.4 MWh vanadium flow battery ("VFB") system sale to Canadian renewable energy project developer, owner and operator Elemental Energy;
• Securing funding under Phase 1 of the UK Government's Longer Duration Energy Storage (LODES) competition to plan an up to 40 MWh VFB that, if advanced to Phase 2 of the programme, is expected to be the UK's largest flow battery project; and
• Signing an MoU with industrial conglomerate Hyosung Heavy Industries, with the intention to partner with Hyosung to deliver Invinity's VFBs to grid-scale projects in South Korea.
Reflecting this increased sales interest, the Company's latest commercial opportunity pipeline for its VS3 battery product as at 22 September 2022 is summarised below (next-generation product interest, while considerable, is not included in these numbers):
The market continues to hold tremendous opportunities for Invinity's existing and future products. Clients ranging from behind the meter users to large-scale utility developers are engaging with the Company at an increasing rate. Our focus has been on clients ready to commit to orders, a strategy which has nearly doubled the number of potential new contracts approaching close. These Base opportunities, and the group qualified as Advanced that will join them if they progress, are the areas where Invinity's Commercial team are focusing their efforts.
In addition to advancing sales of existing products, Invinity has received positive preliminary feedback from prospective customers regarding its next-generation product in development alongside Gamesa Electric.
Including sales made in the year to date, the Company's delivery backlog currently totals £12.98m, the majority of which Invinity hopes to recognise in the remainder of 2022, subject to suitable logistics arrangements and customer sites being ready to receive and accept Invinity battery shipments. Approximately 80% of the backlog figure relates to two projects, namely Yadlamalka and Elemental Energy.
Operational
During the Period and in the year to date, Invinity made good progress fulfilling its closed sales and enhancing its manufacturing capabilities.
Highlights included:
• 93 VS3 battery modules with a total capacity of more than 3 MWh were shipped to site during the Period;
• Commencement of a significant expansion of its manufacturing capabilities alongside partner Baojia New Energy, activity that was subsequently completed in August 2022 with the shipping of the first consignment of VS3 batteries destined for the Elemental Energy project in Alberta; and
• General improvements to the macro supply chain environment for Invinity as prices begin to normalise. For instance, in the year to date, the Company has observed a c.60% reduction in the cost of shipping its products. Invinity has also benefited from a c.14% reduction in the price of electrolyte and begun to realise economies of scale through its new manufacturing partnership with Baojia.
The Company is also pleased to announce it has now received confirmation from its partners that the Yadlamalka Energy project will be relocated to a second site in South Australia which is being developed by Invinity's customer as a PV + Vanadium Flow Battery project. This confirmation means that the delivery phase of the project can resume and the shipping of 8 MWh of Invinity VS3 batteries, manufacturing of which is already largely complete, can now commence.
Corporate & Strategic
The Period saw Invinity make a number of important strategic developments relating to its products, partners and corporate positioning. These included:
• In March 2022 Invinity's shares, and warrants created in the December 2021 placing, were admitted to trading on the Aquis Stock Exchange to provide increased liquidity for Invinity shareholders;
• In April 2022, Invinity signed a MoU with Hyosung Heavy Industries to initiate a strategic distribution partnership with the Korean firm for the Company's batteries;
• In May 2022, Invinity announced its intention to materially expand its corporate and commercial presence in the U.S. in response to attractive market conditions; and
• In the year to date, Invinity has continued to make good progress towards the milestones and stage gates set out as part of the joint development and commercialisation programme with Gamesa Electric, a wholly owned subsidiary of Siemens Gamesa Renewable Energy.
Post-Period, the Company signed an MoU with U.S. Vanadium in August 2022 with the intention to form a joint venture which aims to manufacture and sell vanadium flow batteries in the United States. The development represents an important step forward in Invinity's U.S. expansion strategy and intends to leverage government support announced as part of the Inflation Reduction Act that was signed into law on 16 August 2022.
Outlook
Invinity expects to make material progress during the remainder of 2022 and beyond on the following key areas:
• Capitalise on positive macro developments to conclude late-stage commercial deals, demonstrating Invinity's VS3 product transition from pilot projects to commercial projects;
• Deliver order backlog to customers, converting inventory into revenue; and
• Progress the development of our next-generation product towards commercial release alongside Gamesa Electric / Siemens Gamesa and take advantage of the strong degree of commercial interest already shown in the product (not currently reflected in the Invinity VS3-only sales pipeline).
Larry Zulch, Chief Executive Officer at Invinity said:
"We have made significant progress in our strategy to establish ourselves as the premier alternative to lithium storage for large-scale, 4- to 12-hour energy storage projects. The kind of progress we've made so far this year isn't always as visible to the public as we would like, but our continued discipline to focus on what we know will be the right outcome is, I strongly believe, the path to Invinity's success in this vital and growing market."
