VANCOUVER,
BC, Sept. 12, 2024 /PRNewswire/ - Ballard
Power Systems (NASDAQ: BLDP) (TSX: BLDP) today announced a global
corporate restructuring to reduce corporate spending and in order
to maintain balance sheet strength amid a slowdown in hydrogen
infrastructure development and delayed fuel cell adoption.
"As discussed during our recent earnings call, in
the context of a challenging macroeconomic and geopolitical outlook
and amid protracted policy uncertainty, we see a multi-year
push-out of the availability of low-cost, low carbon hydrogen and
hydrogen refueling infrastructure. As this delay represents a
significant headwind to our corporate growth plan, we are
implementing a cost restructuring to moderate our investment
intensity and pacing to better align with delayed market adoption,"
said Mr. Randy MacEwen, Ballard President and CEO. "We expect our
restructuring measures to impact our global operations, yielding
annualized total operating expense savings in excess of 30%, with a
substantial part of the annualized savings being realized in
2025."
The scope of reduction measures include a
reduction in workforce, a rationalization in product development
programs, operational consolidation, reduction in capital
expenditures, and certain working capital improvement initiatives.
Cost reduction measures are not expected to impact product delivery
and program execution required to fulfill customer commitments.
"Given the leverage from the $94 million in US government funding awards, we
continue to carefully assess our proposed investment for long-term
manufacturing capacity expansion in Texas. We are reviewing financing optionality
to extend our funding timeline, and delay material cash outlays,
until we have appropriate market adoption indicators," Mr. MacEwen
noted.
Mr. MacEwen continued, "With continued challenges
in the China fuel cell market and
underperformance of the Weichai Ballard joint venture, we are also
conducting a strategic review of our China strategy, including all options relating
to the WBJV."
"Notwithstanding the slowing timeline for market
adoption, we remain confident in the long-term value proposition of
hydrogen fuel cells. While the speed of travel has changed, we have
unwavering conviction on the direction of travel, with clean
hydrogen and fuel cells playing an important role in decarbonizing
heavy mobility applications," Mr. MacEwen concluded. "We will
continue our focus on customers and the development of
next-generation, low-cost fuel cell products for select heavy
mobility and stationary power applications, while maintaining
disciplined spending and balance sheet strength for long-term
competitiveness and sustainability."
In connection with the restructuring, the Company
expects to book a restructuring charge in Q3 2024. The
Company had $678 million of cash and
cash equivalents as of June 30,
2024. The Company reiterates its 2024 guidance ranges of
$145 million to $165 million for Total Operating
Expense1 (excluding restructuring and related costs) and
$25 million to $40 million for Capital
Expenditures2.
"As part of the restructuring, Paul Dobson and Mark
Biznek will be departing as our Chief Financial Officer and
Chief Operating Officer, respectively. Paul will be succeeded by
Kate Igbalode as our new CFO
effective immediately. Mark will be succeeded by Lee Sweetland as our new COO effective at the
end of 2024. Paul and Mark will support their respective
successors in an orderly transition. We thank both Paul and
Mark for their dedication and valued service to Ballard," said Mr.
MacEwen.
Ms. Kate Igbalode
was previously serving as Ballard's Vice President Corporate
Finance & Strategy, enhancing our corporate strategy,
management reporting and business capabilities, leveraging her
strong technical and financial experience across the energy sector
in the U.S. and Canada. Prior to
joining Ballard in 2021, she most recently acted as a Director of
Finance with Suncor Energy, Canada's largest integrated energy company,
and held senior engineering roles with a leading Canadian energy
company, the BC Energy Regulator, and consulting firms in the US
and Canada. She holds an
engineering degree from Colorado School of
Mines and completed post-graduate economics curriculum from
Queen's University. She is a registered Professional Engineer with
the Association of Professional Engineers and Geoscientists of
Alberta.
Dr. Lee Sweetland
was previously appointed SVP and Chief Transformation Officer in
January 2024 and brings extensive
project management, operations and process technology development
experience. Dr. Sweetland joined Ballard in 2018 and led the
6x expansion of Burnaby's
operations, the 3x3 cost reduction program and the next generation
bipolar plate cost reduction and process scale up project.
Prior to Ballard, Dr. Sweetland served as Manufacturing Technology
Director in the New Markets sector of Johnson Matthey PLC,
UK. He spent a total of 18 years in JM, across all sectors,
with a specific focus on capital project management, continuous
improvement and operations management, including 5 years in JM's
Fuel Cell business. Dr. Sweetland holds a Ph.D. in Chemical
Engineering from Loughborough
University.
About Ballard Power Systems
Ballard Power Systems' (NASDAQ: BLDP; TSX: BLDP)
vision is to deliver fuel cell power for a sustainable planet.
Ballard zero-emission PEM fuel cells are enabling electrification
of mobility, including buses, commercial trucks, trains, marine
vessels, and stationary power. To learn more about Ballard, please
visit www.ballard.com.
This release contains forward-looking statements
concerning market conditions, including hydrogen infrastructure
development and fuel cell adoption timing, anticipated outcomes of
restructuring activities, and impacts to operating expenses and
capital expenditures for 2024. These forward-looking statements
reflect Ballard's current expectations as contemplated under
section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Any such
forward-looking statements are based on Ballard's assumptions
relating to its financial forecasts and expectations regarding its
product development efforts, manufacturing capacity, and market
demand.
These statements involve risks and uncertainties
that may cause Ballard's actual results to be materially different,
including general economic and regulatory changes, detrimental
reliance on third parties, successfully achieving our business
plans and achieving and sustaining profitability. For a detailed
discussion of these and other risk factors that could affect
Ballard's future performance, please refer to Ballard's most recent
Annual Information Form. Readers should not place undue reliance on
Ballard's forward-looking statements and Ballard assumes no
obligation to update or release any revisions to these
forward-looking statements, other than as required under applicable
legislation.
Endnotes
|
1 Total
Operating Expenses refer to the measure reported in accordance with
IFRS.
|
|
2 Capital
Expenditure is defined as Additions to property, plant and
equipment and Investment in other intangible assets as disclosed in
the Consolidated Statements of Cash Flows
|
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SOURCE Ballard Power Systems Inc.
