Ceres Power Holdings plc Stock

Good morning, ladies and gentlemen, and welcome to the Ceres Power plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll. I'm sure the company will be most grateful for your participation.

I'd now like to hand over to Phil Caldwell, CEO. Phil, good morning.

Good morning, everybody, and thank you for joining myself and Stuart for the interim results up until 30th of June this year. I'm very pleased to update you on quite significant progress, I think the company has been making. Just to remind you, the growth story of Ceres is built upon 3 strategic pillars: signing new manufacturing licensees. That's all about growing market share and establishing this technology as the industry standard. Once we have those partners, accelerating them to market and scale up and getting into the market is obviously increasingly important.

And then obviously, as a technology business, we have the single stack technology platform, which is Endura, which we launched earlier this year. And that's really the platform upon which our partners are scaling and making significant investments as we go today. The first half of the year, we've made what I would say, considerable progress. I'm very happy with where we are on the pipeline. We've continued to grow that in all regions. And we reiterate our guidance. We remain confident that we are in a good position to sign a new licensee this year. Once we have those partners, we're obviously focused on our existing partnerships as well. And there's quite a lot of activity going on with those partners. With Doosan in South Korea, they signed their first export order, which is around GBP 60 million supply stack to Reverion in Germany. Delta in Taiwan are continuing to put in the first initial production and have also announced plans for a new facility in Guanyin in Taiwan.

In China, Weichai are going extremely quickly, and they're targeting first production later this year, early next year and have announced 200 megawatts by the end of the year after, so within 2 years, incredibly fast. On the hydrogen side, Japan with DENSO. DENSO received GBP 165 million in government support. So we're continuing to make progress on the hydrogen side, but our near-term priority is really on the power systems side. Earlier this year, we also signed a partnership with Centrica here in the U.K. That's more of a channel partnership where we aim to bring in technology into regions like the U.K. and Europe from our manufacturing licensees. And I'm pleased to say Centrica is already starting to develop their own relationships with our supply chain as well. So that's incredibly important for us as we match up the demand side with the supply side that we're building out in this ecosystem.

I mentioned the single stack technology platform, Endura. That's our flagship solid oxide stack platform. That's the culmination of many years of not just research but manufacturing and engineering. And it's really the building block now as people scale factories. We're not going to be changing that every year. It's all going to be about improving lifetime and cost and CapEx of factories as people scale. But that gives them the confidence, and we think that is the leading stack platform out there.

On top of that or underpinning that, should I say, we've reinforced the business. And in the first half, we took the opportunity to continue with the business transformation, which we undertook last year, which is built around these 3 pillars of focus, and that's continuing to deliver an optimal cost base, I think. Following years of significant investments, we're now at that execution stage, and Stuart will talk more about the financial performance in just a moment. And we also reinforced the balance sheet with just over GBP 100 million in an oversubscribed equity issuance earlier this year. That's really important for the business because as our partners are making significant investments in scaling, it's important that they realize that we're here in a very strong position to support them as the technology provider of choice.

Just a very quick reminder of our strategy. We are 25 years old this year. We believe we have world-leading technology on solid oxide. That's transferred to partners now through the Endura stack platform, which we launched earlier this year. But it's not just the stack platform. We also provide the factory blueprints and also have relationships now with line builders, factory builders who can help our partners get into market quicker and easier. That technology platform, the Endura, has 2 functions, running in one direction, we can generate power, running in the other direction, we can generate hydrogen or synthetic fuels, as is the case with Reverion.

The urgency right now is on the power side, and we have Doosan in South Korea, Weichai in China, Delta in Taiwan, all either in production or imminently coming into production and scaling. On the hydrogen side, we've been working for a number of years with Shell as a channel partner, but our licensee partners are DENSO, who are making good progress, and Delta also has the dual license as well, and we work with Thermax as a systems integrator in India. So one platform, [ intentions ] global factories and partnerships.

I just want to talk a little bit about the demand for power. I think many of you probably are seeing this or are familiar with this. But there's 2 things going on here. One is the demand for power has never been greater, and that's pretty acute because conventional power generation equipment is in short supply. If you want to buy a gas turbine, it's 5 to 7 years lead time. If you think about nuclear, it's into the next decade. If you think about waiting for a grid connection, not just in the U.K., but in many countries now, it's at least 5 years and up to a decade.

Now, time to power creates a window of opportunity for us. I believe that we have about a 5-year window to get into this market, establish this technology and get down the cost curves and scale the supply chain. Part of that is time to market. It's all about time to market. Our first factory that we did with Doosan took us around 4 years around the COVID time. Current factories that have been built around 3 years. The factories that we currently have now, the last factories that we signed with the likes of Weichai, are on track for about 2 years or less. That's because we've standardized the Endura. We've built factories several times over, and we've actually now got partners who can actually -- when we sell a license, we can actually bring into view and help people lay down production pretty quickly.

So 2 things going on. Time to power is acute and wait for conventional power generation has got longer and our ability to get people into the market is getting faster. So why do we think that the Endura platform can win in the power market? Well, I've just mentioned the first factor, which is time to power, and I mentioned this window. However, it only works if this technology is cost competitive. And right now, we are cost competitive with conventional power generation there or thereabouts. Now with time, there's going to be more supply, I think, of things like turbines, [ recips ], et cetera, and they'll start to come cheaper again.

But I think where we are with solid oxide is we're only at the beginning of that scale-up journey and the costs are going to come down with scale, with supply chain, with localization. So we're cost competitive now. And I think in the future, if you look at the attributes of this technology, it's predominantly steel, the rare earths we use are commonly available. We're using equipment that's come out of standard chip manufacturer, PV manufacturing. It can scale rapidly, and there's no reason why we can't get down these cost curves, particularly with the manufacturing partners that we've already signed. But then I think there's another story to this, which is what gives solid oxide the right to win in the long-term. And if you actually look at this from the other factors that are coming on in terms of power generation, -- the first thing is permitting.

So just because you can build power doesn't mean you should build power or you have the right to build power. And you're probably seeing it in the news. There's a lot of resistance to new data centers, for example, being built, particularly in the U.S. And we're seeing power generation, what we call behind the meter, on-site power generation, in some cases, contracts that were won by conventional power generation like turbines, like recips actually now being flipped over towards solid oxide. Why is that? Well, first thing is almost 0 water usage, which is becoming critical in many regions as we've seen this summer, things like lower carbon, to zero carbon when you combine it with carbon capture. No combustion means air quality. So there's no SOx, no NOx. It's virtually silent, which means you put it in buildings, you can locate it close to urban centers, et cetera.

And because it's behind the meter, there shouldn't be an impact on local power prices as well. So actually, this technology is a better technology from a sustainability point of view, and that's becoming more of an issue with permitting. So if you have a technology that can be delivered in the right time scale because it's modular and coming out of factories, it's cost competitive and aids permitting, solid oxide becomes a permanent part of that energy mix. So it's not just a passing thing because we can't get conventional power generation.

Then I think the other thing that's interesting is when we think about conventional power generation, it's AC based. It's alternating current. And that's because it was developed in the last century for the economy we had then. If you look at our economy now, it's more computing, it's AI, it's electric vehicles. A lot of that infrastructure is DC-based. And we're seeing companies like NVIDIA pushing 800-volt DC architecture. The good thing about fuel cells is they're DC native. That means they actually generate DC power. That means that you can -- first of all, they're more efficient. So you can save about 5% is NVIDIA's view in terms of the efficiency of going from AC to DC in a data center by being DC direct. It's higher voltage, lower current, which means you're saving on things like copper, you're eliminating things like switchgear transformers, et cetera. And you can also get more power into the rack, which is going to be a key feature going forward.

So as well as the permitting, the 800-volt DC compatibility is going to become more and more of a potential requirement for about '28, '29. So the way I see the whole thing is the window has opened up now. First buying criteria is always going to be cost and time to power. But then permitting comes along and then also future proofing for 800-volt DC. So the Endura platform meets all of those requirements. This is Ceres view of the market. We haven't changed this. We think it's about a 22 gigawatt opportunity by the end of the decade. There's a lot of interest, obviously, right now in things like data centers, but that's about 50% of the market. We're also seeing a lot of interest in industrial applications, commercial buildings and also shipping in the future.

Regionally, obviously, the U.S. is the biggest market right now. But when you look at the rest of Asia, that's 50% of the market, Europe, et cetera. So we see this as a global market. This is not unique to one particular region. Just going on now to what progress our partners are making. I mentioned earlier, Doosan making progress with their first contract with stack supply with Reverion in Germany. Reverion is an interesting company because they have a truly reversible system using our technology, so they can generate power in one direction. When they don't need that power, they can actually generate synthetic methane in the other direction. So you have something that can arbitrage, if you like, and work on both sides of the energy mix. It's an important milestone for Doosan because it's their first export contract for SOFC.

I mentioned Delta. The first production we're busy with now right now in Tainan. So that's the 2026 production facility. They have announced this year a brand-new facility in Guanyin in the North, which will house the scale of the mass manufacturer of the solid oxide as well. So Delta is obviously a key customer for us, very big already in the ecosystem of data centers and has the strength and the ability to scale faster.

We signed a partnership with Centrica earlier this year. That's all about bringing in this technology into markets where we've got the right kind of, first of all, spark spread in terms of the opportunity for localized power generation and also the need, and we have that in the U.K. in terms of the time for grid connections, et cetera. There's a lot more detail on this. We published a joint white paper with Centrica just last week, and that's really got a lot of interest, particularly for end users for Centrica as well. But that's also well worth looking at. And it's not just about us. We -- our role here is to facilitate the ecosystem. So we've introduced Centrica to all of our partners. Centrica signed the first agreement with Delta, and that's really targeting data centers and other energy-intensive industries in the U.K. and Europe as well.

Weichai are going fast. We've been working with Weichai for a long time on system. They haven't launched their new system yet, but it's pretty impressive. And they're looking to sell that through a subsidiary, Baudouin in Europe, at 600-kilowatt SOFC systems. So at some stage, I hope later this year, this will be launched and announced. But that's -- they have a lot of experience on the system side. And obviously, now they're scaling up on the stack production side as well. That's on the power generation side.

I want to also just reference our progress on hydrogen. I mentioned DENSO. They've continued to develop the SOEC technology. They have big government backing in Japan. That's continuing. We're very happy with progress there. Our partnership with Shell on the demonstrator continues to exceed expectations. And we're looking at now the next version of that, which is the pressurized SOEC, which we're doing in combination with Shell, but also looking to test that in India with Thermax, our EPC partnership there. I think that what we're seeing on the hydrogen side is, obviously, India is a big market for the hydrogen side, but we're also starting to see growing interest in China as well. So we continue to develop this technology because we are starting to see some demand for the SOEC.

What do we think this market looks like? About 38 gigawatts, but that's a 2035 number. I think the easy way to think about this is near-term between now and 2030, we think this is a power generation market. But if you're scaling Endura and you have the production, you're positioning yourself, I think, for the hydrogen market, which follows end of this decade and into the next decade. So I think it's an important future value creation for us and our positioning is good because all the work we're doing on the stack in terms of power generation scale up supply chain, et cetera, it's the same stack technology that services the hydrogen market in the future as well.

And as I mentioned at the beginning, it's all about becoming the industry standard for solid oxide. So that is building out this ecosystem. We have the 4 manufacturing partners we talked about already and the systems and channel partners in terms of Centrica, Thermax and Shell. So that's a brief overview of where we are strategically. I'm very happy with the progress to date.

And now I'll hand you over to Stuart to talk you through the financials.

Thank you, Phil. So Phil has given us a bit of a briefing on where the market is and where we are in the market with our partners. I'm just going to give you a little view of how that translates into numbers and how things are going back in Horsham and Redhill, where we're making some progress internally in transforming ourselves into a commercially focused company.

So on the financial review, our guidance for the year was that we had contracted revenues of GBP 45 million. You can see that we've achieved about half of that in the first half, which is, I think, good progress. And I've got a slide on the execution here. Obviously, the gross margin is going to be high. The mix is around licensing revenues in the first half, and we'll maintain that high margin. And the loss you can see has come down on a comparable revenue basis from the prior year based on all the work we've done in terms of rationalizing our cost base to give us more focus on the commercials. And again, you can see that in the R&D cost as well. And we believe that this is now an optimized level of R&D we're spending. So as Phil said, all this work crystallized into the Endura stack we launched in the first half of the year.

Now we believe we've got the right people in the right places in our business to both deliver the next raft of lifetime and cost innovations in SOFC and SOEC and also to get our message out into the marketplace correctly. We did do a fundraise in the first half. And as Phil said, it's important, given who we speak to in terms of the ecosystem, some of the biggest companies in the world that they are -- they've got surety that we can be around to be their R&D engine for the next 20 years. This is a 20-year investment they're making in their factories. Hopefully, accessing both of the markets still has taken us through. And that leaves us with a strong cash position. So that's really, really, really positive for us.

And then on the cash outflow, that's normalized, obviously, without the fundraising it. But we've got a lumpy cash inflow and outflow given some of the big amounts that swing in and out of our bank balance given some of the billing we do. So we're pretty confident now we've got the right financial structure, the right cap table to make the sort of progress that we're looking for. Just on this revenue and gross profit, I mean, I want to just highlight here that this is about execution. So when we made the changes and did our -- kicked off our transformation at the end of last year, we wanted to be sure that we could still deliver for our partners. And I think this is a story of delivery from our teams. I'm very proud of our teams having delivered half of the contracted revenue in the first half, very confident we can deliver the contracted revenue in the second half. So that really is a testament to the team that's going through embracing this transformation and continuing to deliver for our customers.

And then a bit on the transformation, it started at Q4 2025, and it's going to finish sometime this year. I mean, continued improvement will always be there. But in terms of our transformation programs, we've really done a lot of work. So the team can be very proud of themselves. We've got 350 to 370 people back in Redhill and Horsham who are doing a great job. We believe we've transformed the company into this commercially focused company. I think that reads through to the pipeline health that our Chief Commercial Officer spoke about at the Capital Markets Day. And we've launched Endura, which we did at the Capital Markets Day, too, and that's really the crystallization of a ton of hard work from the team. And now we're very focused on this is our product to the market, making these lifetime and cost improvements which we're very confident we can do to make this business case even more compelling for our existing and potential new partners.

So we've enhanced our commercial capabilities, done a lot of, sort of, cultural work on being very partner-centric, and we've also reduced cost while we're there. So that's -- we believe now we've got an optimized cost base. So we can make various investments from this point to enable us to bring this technology to the widest market we can. So the cost base, you can see it's coming down significantly -- it's come down significantly. And now this is the base which we see we can make these specified strategic investments from, but we're going to be very, very prudent. We've got the right people in the right place doing the right things now and we're going to be pretty prudent with that cash. But we do see now the opportunity to make some investments in scale up for our partners. And this is a technology now that's going from pilot scale to commercial scale. And when we say commercial scale, this is very large commercial scale.

So we need to ensure that we are acting both on the demand side, as Phil laid out with Centrica and on the supply side through supply chain management to make sure that our partners can move very, very quickly to gigawatt scale because ultimately, this is all about royalties for us.

And then the cash flow, you can see it's obviously coming down. It's dependent on signing new customers. But we're definitely trending in the right direction here. And we reiterate that we've got a strong pipeline and with one partnership on a cadence every 12 months, we'll be more or less breakeven from a profitability and a cash perspective. So that's the situation we find ourselves in now. So we've optimized the cost base for that purpose and to deliver world-class R&D, which we believe we can do and put ourselves in the strongest position to be around for the longest time for our partners.

With that, I'll hand back to Phil.

Thanks, Stuart. Yes. So just to close out really, we think we're in a very healthy position now to take full advantage of this opportunity that we see ahead of us. That power demand isn't going away. It's accelerating and time to power is now the defining constraint, and it will be for the next 5 years. That's driving more and more interest for this technology. And this technology is now, I think, going from being something that was a new technology to something that people now start to understand and actually becomes part of that an option, a real option for power generation for behind the meter.

We've built the Endura platform, and that's really designed for scale. And as we said, after many years of R&D, we're now in that scale-up phase. So that Endura platform isn't going to significantly change year-on-year, but it's going to have the continuous focus of cost, lifetime performance from our technology team in Ceres. And really, we aim -- our aim is to establish this as the global standard. And the way we do that is more partners scaling on the Endura platform. And that's the strategy we have, and we're very happy with the progress we're making to date.

So thank you for your attention this morning, and we're happy to take questions.

That's great. Thank you very much indeed for updating investors. Before we take those online questions, perhaps I could just invite questions from the room. I'll pass you the microphone, and then we'll move on.

Alex Smith from Berenberg. Just a question on, kind of, the current pipeline of partners that you're talking to. Could you maybe give a bit more color on what that looks like, how live discussions are going? You mentioned some reallocation of resources towards, kind of, better customer engagement. A bit more color on how you can do that would be great.

Yes. I'll say what I can. So the pipeline has grown significantly and continues to grow. And that's in all regions. So we have engagements in the U.S., in Asia, there's a lot of activity and here in Europe as well. So we have invested in the business development team significantly, and we have we're starting to see, I think, the fruits of that in terms of the number of engagements and the quality engagements of where they're at. Obviously, it's a pipeline. So people are at different stages. And we're obviously focused on some of the ones that are later on in those stages.

I would say that we are -- I'm very happy we are doing everything that we're doing to delivering to the customers. There's always a timing issue in terms of we're not fully in control of that. So the more of these engagements that we have, the better. But as we look towards the end of this year and into next year, the health of that pipeline is very strong. So I'm very confident that, that will yield future MLA partners.

And you mentioned, like, line builders, you almost have like a factory footprint. Does that help accelerate, kind of, your discussions with future partners that they can get scale as quickly as possible?

It does, and it's almost become part of the buying process now that a lot of our potential partners actually go and visit our partners on who would actually build factories. So a typical process would be they'll come in, see the technology in Horsham, see the pilot facility in Redhill, but then they'll also go and see the scale of activity and who can actually deliver that as well. So it's -- I think it's a key part of that sales activity because the pipeline of partners that we have are all looking at how do I produce several hundred megawatts and above. So that's the real consideration for them.

Just one last one. And just on the Centrica partnership, and that was quite successful. It was quickly unlocked quite a bit of demand already. Is that also something we should see in the future more collaborations similar to that Centrica partnership?

Yes, it's something that we're looking at replicating. But I think at the moment, we want to get that Centrica one moving. I mentioned the activity that's going on with Centrica, the white paper, et cetera. They're looking to get units into the U.K. end of this year, beginning of next year. And I think that really starts to accelerate things as well because I think once people can actually see the units and the technology firsthand, I think that's an important step.

Alex O'Hanlon from Panmure Liberum. Well done on a strong first half. The first question I just wanted to pick up on is something you said, Stuart, around strengthening partner-centric values and behaviors. Could you just give us a bit more detail on what that means and how you, kind of, track and monitor it?

So I mean this is a cultural program that we've got working. So we've essentially refreshed the company values, and we've rolled them out and the people team have done a great job in communicating that across the business. And like any cultural program, actually, the proof of the pudding is in the long-term. So you bake all those cultural values into your hiring programs and your communications. And I mean, we're not trying to change massively the people that are already at Ceres are all mission-focused, very purpose-driven.

And we're just trying to make sure everything is perfectly aligned. And how do you assess cultural success? Ultimately, the proof of pudding is in the long-term health of the business. And we think certainly in the first half, we've seen a good record of execution and the pipeline health is looking good. So I think we think it's working. and the people team are doing a great job in rolling this out.

Great. And then just one other probably slightly technical question. Last year, you signed the Weichai agreement in November. And obviously, there's a bit of time that it takes for tech transfer and then therefore, before you can recognize revenue. Should we be thinking in terms of if you're going to sign potentially a new MLA that, that tech transfer could happen quicker? Or is, kind of, that 2 months probably where we should kind of, be thinking of -- because I know you said that you're confident in the GBP 45 million and anything else would be additional on top of that.

Yes. Look, revenue recognition is not that simple when it comes to big contracts. And it does depend on the contracts awarded written. And of course, contracts are negotiated by 2 parties, and they've got to survive the battle essentially. So we do our best to make it as predictable as possible. It's not that predictable. But we're fairly confident that we can both sign and recognize revenue in this calendar year for a new MLA. But we are well aware of our obligations, both in terms of the guidance we've given and the consensus that's out there that we've got to be very clear and transparent with the market when the time is right.

So we are -- it's something we track. And certainly, part of the progress we're making is in the investment we've made in our commercial teams is the contracts are now at least templated to be a lot more clear on when the revenue recognition occurs than the Weichai contract, which was a very sort of old, it was an update to the 2018 contract. So it's pretty complicated. We're hoping to make things a bit simpler, but it's not clear.

Lacie Midgley, Bloomberg Intelligence. Just thinking about the new MLA economics. Obviously, the backdrop here is completely different to what you were dealing with 4, 5 years ago. Customers, they need solutions and they need them yesterday. I mean does that give you more, I guess, leverage at the negotiating table when you're thinking about upfront license fees with partners? Has your thinking around any of that changed given where we are and given how quickly now you can get new factories up and running?

And then I think within that as well, if we think about -- particularly Phil, you talked about the 800 VDC compatibility, early estimates on longer-term running costs of SOFC being a lot cheaper. Does that give you any more, I guess, the same question, leverage on the royalty fee you can eventually charge? And is there any change in how you're thinking about all that? I know ultimately, there's a high setup cost here and you just want MLAs and new partners on board. But is any of that thinking changed at all given the backdrop?

I think we haven't changed our thinking to date on license fees. But obviously, as we're starting to get more demand or competition, I think it certainly helps -- it strengthens our position. But the license fees are helpful in terms of the funding of the day-to-day business. But really what's more important is scale up and royalties. And we've just got to be a bit careful that when we're negotiating these deals, if you're too -- if license fees are too high, before people get into the market and pay back, you don't want to skew that investment decision. But I think on the royalty side, I think given the benefits that we're seeing and the potential of SOFC, I think the royalties then become, let's say, more sustainable as in -- you obviously negotiate royalties going into a contract, but 5 years, 10 years in, you want to be preserving those royalties.

And for new contracts, potentially, you could negotiate even higher royalties in the future. But it's all about proving out the economics. So short answer is we haven't changed it as fundamentally. I would say each its commercial negotiation has nuances and depends on what the scope is and the size of the customer and the scale of ambition is the attractiveness of those partners to us obviously has a factor as well. So the longer-term is more important to us than the near-term.

Understood. Okay. And just checking on Delta second factory, presumably that's covered by the existing MLA. How do we think about other partners that are looking to scale as that demand is there?

Yes, we don't charge additional fees for additional scale. We don't make it volume limited. We actually want people to scale. So Delta have got the license they need to scale. And then it's just the investment decisions on new factories, et cetera. I think the first one, Tainan was always going to be almost like a development factory because the footprint and everything else was somewhat constrained, and this is a brand-new facility that they're now investing in.

Skye Landon with Rothschild. First question, on Weichai revenue recognition, are you able to share a little bit about the, I guess, the percentage that was in 1H and percentage in 2H just as we're thinking about the GBP 45 million?

And then second question, I guess, a follow-up on the partner expansion with Doosan. They've obviously had the success that they've seen in getting orders, getting pipeline in. Have they shown any interest in increasing the size of their initial factory?

So first question first. So the majority of the revenue is going to be Q1 for Weichai because it was signed in November last year and the full tech transfer happened in the first half. So we'll have some Weichai revenues in the second half of the year, but the majority would have been in the first.

Second part of the question, we obviously stay close to Doosan. And what we would like them to do at some stage is to move to the Endura platform because Doosan is an earlier partner of what I would call the first-generation technology, which is the slightly smaller footprint, slightly smaller stack size. But obviously, they're now getting orders, they want to fill that factory. So it's an ongoing business decision for Doosan really that either that conversion or additionality. So Doosan, I'm sure we'll update the market as and when they're thinking about expansion.

Great. If no further questions in the room just for now, maybe Merryl can come back to you. I know you've got quite a lot of questions online, so some of which I think you may have touched upon, but if I may just hand back to you.

Yes. So while we stay on the vein of Doosan, one of the questions are their announcement of the contract with Reverion, what can Ceres expect from the value of those royalty payments? And is this a one-off fee? Or will this be ongoing?

It's part of -- again, it's part of the license deal they have. So when they sell product, we get royalties. So it's within the standard range that we always say that we receive between $50 and $100 a kilowatt depending on the scope of what they're selling. And so we just expect to receive payment via royalties.

Another question, which is slightly more technical is referencing the cost competitiveness. And how does that impact based on natural gas prices? And then are our power partners primarily targeting natural gas as the power source for the SOFC?

So it's reliant on the difference between the power price and the gas price. So -- because basically, very simply, what we're doing is we're taking -- if it's natural gas as a fuel, we're taking natural gas and converting it at a 60% efficiency into power or higher if we use the heat or the cooling. So it's very much reliance on where you're actually putting this. So for example, one of the reasons why it's attractive in the U.K. is we've got some of the highest power prices in the world. And actually, our spark spread, our gas price and our power price is actually very attractive for this technology.

Now okay, if gas prices go up, it depends on what's the knock-on effect on the power price, but there's quite a big margin there. So it is competitive today in certain geographies. It depends on where you're looking at that. To answer the question today, it's natural gas based. Reverion are also tapping into things like the biogas market in Germany, and it can be future fuels such as hydrogen -- but today, it's natural gas.

Great. And Stuart, a question towards you is we continue to spend heavily in R&D with around GBP 48.6 million in 2025. And just querying if we will continue to have that type of R&D expenditure going into the future? Or will we see it going down or up?

Well, if you compare it to 2025, it's going to go down. I mean you saw on the slide, the R&D cost went from, say, GBP 25 million in the first half of 2025 to GBP 18 million in the first half of 2026. So that is representative of the crystallization of the effort to produce Endura. So Endura as a project is now in the commercialized world. So we've chosen to have a look at that R&D cost base optimize it, which we believe we've now done, and that's going to roll forward. So we believe we've got the right number of people in the right jobs to keep on innovating on lifetime and cost without having to be spending the amount that we took to actually get Endura to the market.

Thank you. One of the questions on a similar vein is as we intend to find more partners over the next couple of years, how should investors think about the evolution of revenue mix over the next few years of upfront licensing and engineering services versus royalties?

I think today, if you look at the revenue mix, it's that combination, license fees, engineering services. And as we sign more partners, we can expect that for the next few years. Royalties are there, but they are not yet material, I would say, but they should start to grow into next year and '28, '29, et cetera. So royalties will become more of that revenue mix in the future and towards the late stage of this decade, they're going to be significant because that's when we expect cumulatively our partners scaling to the high levels of around 1 gigawatt or more by that stage.

Great. One of the other questions was just given the interest in behind the meter, do we anticipate having more than one licensee this year? Or could we have more in next year just given the demand and, kind of, coming back to that pipeline, just it's come up a couple of times. I thought it might be helpful to reiterate.

Look, we've based the business on a 1 year on average. The thing that is very unpredictable is timing. A few years ago, we had 2 in 1 year, none in the year before, et cetera. So I think it's entirely possible that you can have a year where there's more than one, particularly as momentum builds. But the guidance we have is 1 a year of the quality of parts that we want really gets us to that industry standard.

And we do try and think of this as sort of cadence rather than in year because the year-end, albeit that we've all in the finance world, we all have to adhere to the year-end. And what we're looking at is an average cadence of every 12 months. So we don't know whether 2 arrive at once and then there's a gap or 2, then 1 in a gap. And we know which year they're going to fall into necessarily. But what we're looking at the average cadence of the signings of these things.

Great. I think one just final question is as a U.K. tech company, wondering if we are in discussion with U.K. government to explore initiatives or partnerships that may be available.

We have obviously got a strong relationship with government. We do various things, trade missions, et cetera. I was fortunate enough to go with previous Prime Minister on the India trade missions, et cetera. We've done that in the past to Asia. So we do work with government, get government support. In terms of financial support, the business right now is pretty well capitalized. So there might be certain needs or projects where government can help. But we've never relied on government funding -- and we don't really rely on subsidies either. We're very much a commercial operation. And we're very proud to be in the U.K., but the global opportunity is there that we're very self-sufficient.

Excellent. I think those covered the majority of the questions and key themes. So I'll hand back to you, Phil, for any closing remarks.

Yes. Look, I'll just reiterate, I think it's a really exciting time in the business right now. We're obviously very engaged on both new partnership acquisition and also not by any means, but our focus is very much on the scale-up of our existing partners at the same time. So we've got the business in the right shape to be able to do both, and we'll update you, obviously, on progress as and when we get more announcements.

I think with our existing partners, they're in that stage of starting to scale, starting to launch new products, et cetera. I think we'll get more news flow from some of those guys as well as and when they start to actually come forward. So I think that there's quite a lot to look forward to in the next 12 months or so.

Great. Phil, Stuart, Merryl, thank you very much indeed for updating investors. We will now redirect you for your feedback.

Okay. Good morning, ladies and gentlemen, and thank you very much for joining the Ceres team here today. We have an exciting product launch today, which culminates 25 years of science and technology developed here in the U.K. But the thematic of today really is about a new era of power generation and how Ceres and its partners can deliver at scale and pace to need what is now becoming a strategic and acute need, not just in the U.K. but globally.

I'm joined by my team today. So you're going to hear a bit more from me on the market dynamics. Then you're going to hear from Filip Smeets, my Chief Commercial Officer, who's got over 25 years in the industry. We're delighted to be joined by Lauren Dickerson, Director of Strategy at Centrica. We obviously announced a recent partnership with Centrica. So we're going to give you a bit more color on that relationship.

And then we have a product launch today, but we're also going to talk in a facilitated session with Chris Leonard from UBS, with Caroline Hargrove, my CTO; and Nick Lawrence, CPO, our Chief Product Officer, who are really the team behind this core technology and the product that we're launching today. Stuart will wrap up on what this means, the financial opportunity, the business opportunity and then the service team will take questions. So that's the outline for the day. I don't think there's any fire alarms or anything. So let's get started.

So let's talk about what I think is one of the critical issues right now is time to power. We are on this journey for decarbonization, and that is meaning increased electrification of all areas of society. Now power demand or primary energy demand in the EU is set to double by 2050. And all of these plans were put in place even before we laid on top what's happening now with the AI demand.

AI growth is increasing. That's clear, and there's all kinds of numbers on this. But when we switch from the learning mode into inference AI, we see that energy demand starting to go from 20 gigawatts to 120 gigawatts in this decade just on the AI side. So we already have companies like Ceres, like others that need low-cost available power for industrial strategy. Every country wants industrial growth, industrial strategy that starts with affordable, reliable energy.

On top of that, every country is now talking about sovereign AI as well. So that's another layer on top. So we need affordable, reliable access to power. But the reality of this is the problem. Time to power is the critical issue. So if you want a conventional gas turbine, good news for the turbine manufacturers, they're sold out until the next decade. You can be waiting now 2031, 2032 for an order for a gas turbine.

New nuclear, SMRs, of which -- and AMRs, of which Centrica is a pioneer, we're still probably middle of 2030s before we're really going to see deployment of new nuclear. Now that's going to be a key part of zero carbon energy, but -- and also our technology works very well with that, but it's not going to be here in the next 5 years.

And then grid connection. We are at least 5 years away and probably longer for grid connections. It's estimated that there's going to be about $5 trillion globally spent on grid reinforcement, and it's still not going to keep up. And I'll give you an example from Ceres. A few years ago, we were actually going to amalgamate our 2 sites. We have our R&D facility, our manufacturing facility. We were told by Power Networks U.K. we had a 5-year wait, and we had to pay about several million to actually get that grid connection.

So this is not just a data center issue. This is actually a fundamental issue for commercial and industrial customers as well. Affordable power as well is also in the news. I mean we saw last week, OpenAI delaying infrastructure decision in terms of big investment into the U.K. So it's access to power and it's affordability of power. And that's where we believe fuel cells now come in.

So at Ceres, we are world leaders in electrochemical technology. What does that mean? That is the most efficient way to convert fuel to power known to physics. It's more efficient than a gas turbine. It's more efficient than a combustion engine. And also, it goes both ways. So we can turn fuel into power and also power into low-carbon fuels like hydrogen in the future. So this technology is the culmination of 25 years of British ingenuity coming out of Imperial College. It's robust. It uses everyday materials like steel, widely available rare earth materials.

So we're not constrained on supply chains. It's highly efficient, like I said, it's more efficient than any other form of power generation out there. And it's modular and modularity matters because that is speed to market. So we're going to talk about speed to market in terms of entering businesses into this market today. But it also opens up something called behind the meter or on-site power generation, which can be complementary to grid power or in some cases, it can be your own power, but that is the thematic that we're talking about.

So really, what we're talking about here is designed for cost, low-cost materials designed for efficiency and designed for scale. And we fundamentally believe it's a no regret technology. You can run this on our existing fuel infrastructure today, which is the natural gas grid that we have. You can run it on blends. If you inject hydrogen into those grids, you can run it on hydrogen, you can run it on future fuels. So that technology is a no regret technology.

We're super excited to introduce to you the technology today. And without further ado, I'd like you to be introduced to Endura, [indiscernible].

[Presentation]

So this is the Endura platform. This is the platform that our partners are now scaling, investing hundreds of millions in building manufacturing facilities globally. And we believe fundamentally at Ceres that in a constrained energy world, the winner is going to be the platform that scales fastest and scales globally as well. And that's why we believe that Ceres will win because it's not just about the technology. It's also about how we go to market and how we partner to bring this technology to a global stage.

So I talked a little bit earlier about behind-the-meter opportunities. We believe that the opportunity by the end of this decade is about 22 gigawatts is the total addressable market that solid oxide fuel cells can play in. No surprise, about 50% of that is the data center market. But 50% of it almost is conventional power generation for everyday businesses, for industries, for buildings like this.

When you look at where this is geographically, there's a lot of attention today on hyperscalers in the U.S., et cetera, but this is not just a U.S. issue. This is a global issue. So we see the U.S. market is about 25%, but we see Europe, Middle East, about 20%. And then 50% of that is Asia. We have energy constraints in places like Taiwan, Korea, Japan. You can expect manufacturing in China, et cetera. So globally, 50% Asia, 25% U.S., about 20% Europe.

And what's unique about Ceres' approach is it's not just a technology. It's not just the entry of stack. What we are actually doing is enabling people to build businesses and enter into this market. So we license not just the stack technology, but we also license the whole factory blueprint to enable people to enter this market, all the supply chain, everything that goes around that. And we're building out this very strong ecosystem of partners.

On the top, running in one direction, we have Doosan in South Korea that's entered production; Weichai, which is scaling now; and Delta Electronics, one of the leading players in the data center industry. On the hydrogen side, we also have Delta on dual license; Denso, very large Japanese automotive manufacturer; and we have relationships with Thermax and Shell around India, one of the key markets for this.

We believe the fastest way to address this demand is through partnerships. The Doosan factory that you see behind me was built in about 4 years. Current projects are coming in at less than 3 years, and Filip will talk to you a bit more about how we're actually approaching these partnerships. But we work with these high-quality global OEMs for a reason. They have the ability to scale, they have the ability for supply chains. And what we do with the Endura is we give them the confidence to invest hundreds of millions. So when you actually back Ceres technology, you're building a business around it. It's a make, not buy decision.

And we're seeing a world now where more and more people want localization of production. They want shorter supply chains. And this technology, if you want to get into this business, you have a long road ahead of R&D or you can partner with somebody like Ceres, and we can give you the factory blueprint and the reliable technology and the confidence to invest.

So different partners, different geographies and in many cases, different end markets are all choosing Ceres, Endura, and we expect that to become the global standard. So just recently, there was an announcement just yesterday actually about 2.8 gigawatts in the U.S. with Oracle and Bloom announcing for fuel cells for data centers. If you think about that 22 gigawatt market, what we're creating is businesses that can also play in that market space.

So it's not just one company is going to dominate this. We expect new entrants based upon our technology to enter, and we provide those companies with that ability to build those businesses. We're continuing to grow this network. We've signed 3 partners in the last 2 years, high-quality partners, building those businesses. And like I said, our aim is to become that industry standard.

We're running the business on 3 strategic pillars. One is signing more partners, signing new manufacturing license agreements. And Filip will talk in a moment about how we address that. But we also realize that we also need to connect with the end market. And that's where accelerating partners to market and the relationship we have with the likes of Centrica comes in because you have these global manufacturing giants, but you also have the end customer who quite often, they just want power. And bringing the 2 together is now part of our strategy.

And then we have this single stack technology platform, which is Endura, and it's how do we maintain the advantage that we have on that, how do we stay ahead. So when people have invested in this platform, how does that keep progressing over time.

So without further ado, we're going to talk about the first strategic pillar, which is signing new manufacturing licensees. And I'd like to invite Filip to the stage. Filip has been with us a couple of years, but has over 25 years in the fuel cell industry. So Filip?

Thank you. So good morning, everyone. So just a quick clarification on my role within Ceres. So my role is to sign up new manufacturing license partners, and that's really a very exciting endeavor. We have accelerated these partners over the past couple of years, the ones that we have already under contract. So that's another focus of mine department is to make sure that they get to production fast and make sure that we support their go-to-market effort.

And then, of course, we create also market pull and Centrica is one of those examples, I think, that we will highlight and explain a bit more to you today. So first of all, it is probably good if I explain you a little bit on what has changed over the past year within Ceres and within the commercial department. First of all, we have changed our strategy. We have improved the tools that we need in order to improve our pipeline. And we have also invested in more disciplined execution of that strategy.

On top of that, we have also invested in resources. Also in the U.S., so we have invested in new resources in key markets so that we are more effective in our pipeline buildup. That resulted in a quintupling of our pipeline over the past period, which is very promising for the future. Now the demand side is also important because over the past year, we have seen that there has been a significant increase in the demand signal in the market, especially for SOFC. And that helps us also to reach out to new potential licensees.

One of the things that we did was also defining who are the targets that we need to go after in order to convert them into licenses over the past year, and that has been so far quite promising. In this slide, what I would like to highlight is that those customers that come to us, even if we don't have approached them yet because of the demand signal that is there, they come to us not only for our technology, there is more that they see.

First of all, there is the technology, of course, because we invested several decades in developing a leading solid oxide platform. And by signing up to our technology, they bring down their -- they gain at least 10 years to bring that technology to the market because our platform is already mature and it's ready to go. So that is the first pillar.

Our technology is ready to go, and we help them leapfrog from R&D immediately to fast commercialization in growth markets. The second pillar is industrialization partner. Ceres is a true industrialization partner. That means that we stand shoulder to shoulder to our partner when they invest and build out their manufacturing footprint. And the way we do that is we bring a lot to the table. We bring the manufacturing reference processes to the table. We bring a Ceres house line builder to the table if they need it. We bring equipment specifications to the table. We bring our mature supply chain to the table. We have experience on how they need to organize quality control and the control of the manufacturing process.

So all of that we bring to the table, which means that their investment is de facto already derisked. And that is very difficult to find in the market. Actually, you can't find it in our market, only with Ceres. So the third pillar that I want to highlight, and it's the third one, but probably the most important one because here, what we are doing and what we are offering to our partners is an evergreen -- being an evergreen external R&D engine for their future. That means that we continue to innovate.

We continue to upgrade our technology platform, and we bring those improvements to our partners' base. That means that they can be sure that they will sustain competitiveness and they will have sustained growth in the market. So this is probably the most important pillar and very often overlooked when they approach us initially.

Now on this slide, I would like to introduce you to one of our partners, Delta Electronics. And this slide shows a high-level flow chart of how they have translated our SOFC platform into a solution for the market and in this case, for data centers. And it's a little bit complicated, so I will take you through it from left to right, so I can make sure that you get a complete flavor of the enormity of the value stack that SOFC offers to the data center application because that's very important over the past 1.5 years, we have seen the value stack being increased and increased as this application started to develop.

So first of all, let's start at the left-hand side here. That's the energy that is fed into the system, which is very often gaseous fuel. And currently and for the foreseeable future, it will be natural gas. So our technology runs on natural gas, but it is fuel flexible. It is future-proof with regard to the fuel that you're going to use because our platform can also run with biogas, can run with hydrogen, can run with methanol, can run with ammonia or blends of those fuels.

So when and if those renewable greener fuels will become available in the future at scale, our technology is already ready. And a customer who has invested in an SOFC park, they can simply switch. They don't need to throw away the investment. They can simply use the existing assets to convert that to clean power. Then this part here, the SOFC system, I will not go into detail into that because I have a couple of slides talking to that. But what it delivers is very important because the SOFC systems, they deliver high-quality electrons to the data center white space.

Very important because that means that a lot of the balance of plant stuff that you normally need if you get the power from a gas turbine, you can reduce that because the quality of the electrons of the power that is delivered is of very high quality, plus it's a direct current and it can deliver up to and more than 800-volt DC power to the white space. And that's very important because what we have seen over the past year is that NVIDIA and others are scaling up power density.

We will see in the future 1 megawatt [indiscernible]. And that means that there is a trend to move towards 800-volt DC power input into the white space of the data center. And that is a perfect pairing with SOFC because SOFC delivers that kind of power without any conversion. That's not the case with gas turbines or other conventional alternative generation assets. So because of that, you can save a lot of investment on the conversion hardware that you would be needing here in the power infrastructure, plus the fact that we have a very modular high-quality redundancy solution with our SOFC, you can also cut back on the centralized UPS and on the battery or backup power solutions that you need to integrate in that system.

So the result is that you can get to GBP 1 million to GBP 3 million of savings on CapEx in the power architecture when you move to 800-volt DC and you switch to SOFC. So that's a very important data point to remember and that drives SOFC, I think, in the future in this market. On top of that, we are not done yet with the value pack. SOFC also delivers an exhaust gas with high concentrations of CO2. So it's basically a carbon capture ready and the carbon capture asset or technology that you need to install on the system will be of a lower CapEx than, for instance, on a gas turbine because the exhaust gas is so rich in CO2. So that's another important future-proof value element.

And then the waste heat can also be used for the absorption chilling. So reduce the power consumption of that part, if that's important in your structure. And then something which is not mentioned in here, but SOFC systems deliver water. And that is something that in certain countries can be leveraged if you're not obliged to recycle the water from your absorption chilling infrastructure. So that is my high-level walk-through of what you can do with our technology and a practical example of how our partners convert Ceres technology into a commercial system-level offering for large and fast-growing data centers.

Now you will see an animation here that shows you how we go from the Endura stack, coupling that together into modules of 100 kilowatts. That's what you see here, 12 fuel cell stacks of the Endura stack coupled in one repeatable factory-led module that can then be coupled together into a 500-kilowatt fully integrated system that is ready, plug-and-play to be connected with the grid and deliver clean power. And then it's a question of simply replicating that into, in this case, a 100-megawatt power solution that can be coupled with the data center.

So you see the enormous benefit of -- you see the enormous benefit of the modularity of SOFC technology. And it's put in practice here because before it was an animation. This is the real life. It's put in practice by Delta Electronics again. There above, you see a 550-kilowatt fully integrated self-contained system, plug-and-play, that you can drop ship to a site and connect with the grid and connect with the data center. But it's 550 kilowatt, you can then cluster it together in aggregated solutions of 1.5 megawatt and 5.5 megawatt centralized systems that then can further be replicated into a 25-megawatt power tower concept that can be used for larger-scale solutions for data centers or for data center campus like energy infrastructure.

You have seen before Phil showed you that an external picture of the Doosan factory that was built over the past couple of years. This is an internal picture of the process area of the Doosan factory. What I want to highlight here is that the Doosan factory was built over a period of, well, designed, procured, built, et cetera, over a total period of less than 4 years. But that was with a certain purpose because we wanted to go through the learning curve of properly designing the manufacturing processes, properly specifying the equipment, properly selecting suppliers of that hardware into the system, properly designing the automation, properly coming up with the test kits for the quality control, et cetera, et cetera.

And by the way, during that period, we had COVID. But that was necessary, that learning curve to wrap that into a much tighter factory blueprint that we are now rolling out. So the current factories, they get on stream within 3 years. And for the next ones that are coming in the months to come or the years to come, we are confident that we will be able to bring that down below 2 years. So that is very important because that means that our next licensees, they have -- and the existing, if they expand their capacity, have an opportunity to benefit from the surge in the data center market and also coming distributed power markets by building extra capacity very fast and bringing mature derisked products to the market.

So this was my talk. I showed you how we are convincing new licensees to invest in a license agreement with Ceres. But there is more than that, that we are doing. We, of course, focus on bringing them fast to production, but we also need to make sure that they find their way to very strong anchor customers in the market. And that's why I would like Phil to introduce you to one of those anchor customers.

So a few weeks ago, we made significant announcement of a partnership with Centrica. And I'm delighted today to be joined by Lauren Dickerson, Director of Strategy at Centrica. Lauren, if you'd mind coming up to the stage. And I think we just wanted to have a chat really about how this partnership is working. It's early stages, but I'm delighted that Lauren is great [indiscernible] today from the Centrical point of view. So [indiscernible].

So I don't think Centrica needs any introduction really. We are all familiar with Centrica, but Centrica is changing as a company as well. I mean, you are investing in things like storage, nuclear behind the meter. I suppose the obvious question is why you getting into solid oxide fuel cells and how does this fit in that kind of strategy?

Yes. So first of all, I'm delighted to be here. Thanks so much for inviting us, Phil. When it comes to the market, and actually, the presentations that we've heard earlier today, I think, really drive this point home. Our observation is that the market has really come to us right now. The biggest game in town everybody is talking about is AI infrastructure, and it's a massive opportunity, but it's also a huge challenge. And the challenge really hits us when it comes to how are you going to build this infrastructure that connects to the grid quickly and cost effectively.

It used to take 18 months, 2 years to get a grid connection. And now we're looking at a much longer, much more extended time frame that oftentimes ends up with delays, so 4, 5, 6 years or longer. And this is time that data center providers just cannot afford to lose. Every month that their data centers sit idle is lost revenue. And for a country like the U.K. and many others out there, they've got to do everything they possibly can to alleviate the bottlenecks that will bring this infrastructure online.

So as a result, we're really seeing urgency and also momentum in behind-the-meter solutions. And the kinds of solutions that customers are looking for have lower emissions, are reliable, cost effective and high efficiency. And that's where we think solid oxide fuel cells really will come into this. And equally, just one very important point here is that the grid is not going away. There's tens of billions that's been invested and that will continue to be invested in the grid over the long haul.

And we think that there's a real opportunity to bring hybrid architecture that involves behind-the-meter solutions with grid-connected power, which is really what those end customers want alongside storage and potentially other solutions. We heard a little bit about carbon capture today. So this sort of a hybrid architecture that's going to be a go-to for customers that are looking for power quickly.

Great. Thanks, Lauren. And then I suppose the follow-on question is, okay, this need for behind-the-meet solutions is there. So why did you choose to work with Ceres?

It's a good question. We didn't run a kind of beauty patent to have all of the SOFC companies come to us and tell us what they could do. What we really tried to do our homework. And the first thing that really stood out to us about Ceres is the steel cell. It's a technology that runs on mains gas, so existing infrastructure. And if you were to run it in reverse and use electricity as the input rather than natural gas or another hydrocarbon, you can produce hydrogen.

And for us, that sort of really differentiates Ceres from others in the market. No one else can use the same platform to do 2 very distinct applications. And equally, for us, as a new nuclear investor, we're looking at the possibility of pushing to incorporate SOEC with new nuclear in order to produce cost-effective hydrogen. The other thing that really stood out to us is the licensing ecosystem. It's really matured over the course of the last couple of years as your colleagues have talked about today.

And one of the things that is a major proof point to us is the Doosan production facility. They're actually producing fuel cells, and it's a major proof point that gives us a lot of confidence and helps to derisk that offtake piece. The final thing, and I think that's really worthwhile spending a second to talk about this is the strategic fit. Centrica is not a technology company. We are an energy services provider. We deploy systems for our customers. We optimize them, we manage them. We need technology partners, of which Ceres is one.

And one of the really interesting things about Ceres is as a British company with British-generated IP, operating in kind of what I see as the sweet spot of how a British technology company can work in the global environment and be really competitive. We think that this is really significant. And for us as a company that's trying to both support U.K. economic competitiveness that has the deep British heritage that we have. We think that, that sort of tie-up is a really neat one.

Okay. That's great. And you mentioned that the depth of the ecosystem of partners was important. I know you've met those partners firsthand. You've engaged -- you've actually seen some of the -- your Chief Strategy Officer seen the manufacturing facilities. What's your view of the ecosystem? Do you have particular thoughts on which partners at this stage? Or how do you see that playing out?

Yes. So the first thing that stood out to us is the breadth of the partner ecosystem and also the seriousness of these companies. These are really big, significant manufacturers that are making major investments. They have gone through really rigorous procurement processes. And the ones that we're engaging with, they've all chosen you, and it's really significant to see this momentum amongst these really big serious companies backing a single technology. So that in and of itself is a kind of diligence that is quite interesting.

In terms of the specific partners, we've gone out to see 3 of them for ourselves. We've gone out to Doosan in Korea, Weichai in China and also Delta in Taiwan. And it's actually my boss, our Chief Strategy and Transformation Officer, Robert Booker, who has been to site several times over the course of the last 6 months. And I mean, genuinely, he came back so impressed by the scale of the manufacturing and the investment that's going in.

I mean he actually took the same picture of the Doosan factory, but from the ground. And when you look at it on his phone, the end of the factory goes into the horizon. It's absolutely massive. And it's hard to appreciate, I think, if you haven't actually been there to see it for yourself.

So as to the specific partners themselves, you've got Doosan, let's start with them. We think they're probably the one to watch because they actually have production up and running right now. And this is a really interesting one because for us, we look at it and say, well, we've gone from a world where the question was, what's the time line that you're going to be producing this on to the question of how do we access this technology. So Doosan, we're keeping an eye on them.

Delta, we heard today a lot about the end-to-end architecture of solutions that are specifically designed for the data center market. And we think there's a really big opportunity here in the U.K. for data center development to then incorporate SOFC to increase that speed to power. So very much looking forward to working with them on that.

And then finally, Weichai, a Chinese company that is specialist in powertrain manufacturing and power systems. And I think that SOFC forms a really nice extension of their portfolio. And for us, the Centrica, too, we're a company that's been around for close to 200 years in a variety of [indiscernible]. And that sort of evolution of how you incorporate new products into your portfolio to serve your customers differently, but ultimately to provide them with the service that they need, it's something that really resonates with us.

Okay. That's great. And the question that I'm getting is, well, what's Centrica's strategy? How are you actually going to approach this market? Are you going to sell modules services. What's your approach on this?

Yes. So again, we're not a technology company. We are not in the business of just selling fuel cells. We like the idea of bringing together a managed package essentially for customers to help them incorporate this technology into their facilities and make best use of it in a way that's going to be cost-effective, cost predictable and also to take the worry out of how you actually manage these systems for your customers.

So our go-to-market strategy kind of revolves around 3 pillars. The first is relying on and utilizing the customer relationships that we already have. A Centrica, we have through British Gas and through our Business Energy division, we've got hundreds of thousands of business customers that we already serve and who have come to us, many of whom have come to us with the same problems that I've been articulating about speed to power.

And I should say also not just data centers. Data centers are a particular kind of customer, but they're not alone. Many other C&I customers are experiencing the same challenge. So -- and coming back to the data center point, as Centrica, by virtue of who we are, we have relationships with companies that invest in, build, operate data centers for themselves. And they're coming to us to say, well, how can we work together to solve this challenge for building these facilities here in the U.K.

So it's those customer relationships and partnerships that we're really going to lean on in the first instance as part of our exploratory phase for how we deliver a service to the market. The second point that I'd say about our go-to-market is the delivery side. We already have in-house really significant delivery infrastructure for providing on-site behind-the-meter power solutions to customers. This is a really difficult to replicate capability, and it's one that we seek to really leverage as we incorporate this new product into our portfolio.

And the third piece, and I think probably the one that's maybe the least appreciated is the optimization capability that we bring to the offering. Ultimately, the way that we think this technology is going to be -- achieve its greatest economic potential is around leveraging the ability to utilize the technology in flexibility markets, demand response programs, grid balancing. It's a highly dispatchable, highly efficient technology, and we think it will really form a nice part of the overall value stack that should also deliver considerable value to customers and also to us as a business.

That's great. So I mean, this is all really exciting. We're tremendously excited about this partnership. The question I get, and we can't always say too much, but -- so what could we expect next from Centrica?

Well, I'm definitely not going to make news here today. So please don't get too excited anybody. But what I can talk about is the fact that we are still very much in this evaluation and structuring phase, but with a lot of clear direction and intent around where we think we're going. In terms of those concrete next steps, please watch the space. we believe we're reasonably confident that we're going to actually start getting some of the modules from these manufacturing partners into one of our facilities in the second half of this year.

And when we do, and this is a really important part because Centrica doesn't deploy technology that we ourselves don't understand and haven't done our own due diligence around. But when we get these facility -- these units into our facility and can start testing them, we're absolutely going to invite customers and stakeholders and partners along to actually see them for themselves because I'm a big believer that seeing is believing.

And we'll also make the data available so that people can look at them for themselves and make their own judgment. But this is all part of the process for us in moving from our market and technology thesis to really hands-on technical assessment. And I have to say I'm personally really excited about it, and I'm also seeing a lot of excitement around the company for what's next.

Great. Lauren, thank you so much for giving us those insights today. And I think we're thrilled. It's great to have a U.K. partner where we can really showcase this world-class technology and the scale. And I think your insight today has given us more cause for excitement. So thank you very much for joining us today, Lauren.

So if I don't stand on the clicker, that's what I was looking for. We're now going to have a session that's facilitated about the technology platform itself. So we move into the third pillar, how do we maintain technology leadership. And I'm delighted that we're going to have a session that's moderated by Chris Leonard of UBS. And we're going to have aroline Hargrove, our CTO, who has a long pedigree in digital twins, did the base car for Lewis Hamilton at McLaren. So knows all about digitalization, how we bring that forward. And Nick Lawrence, our Chief Product Officer, who's been with the company over 10 years and over 15 years in this clean energy space.

So if I can welcome you guys to the stage. Thank you very much.

Great. Hopefully, the mic is on. So thank you, Phil. Thank you for the introduction, and a real pleasure to be here today to host Caroline and to host Nick to go deeper into the technology behind the product and the journey, how Ceres got there and equally, how this will now benefit the Ceres manufacturing partners.

So Caroline, welcome, and maybe starting with you, as CTO, clearly, the journey for R&D is pivotal for Ceres in the last 25 years, we've seen a huge development. So can you comment on that R&D strategy, what led you to the development of the Ceres Endura stack?

Yes. Well, first of all, I'm going to say that we have an amazing team of scientists and engineers. So of course, it's lovely to work on technology when you have really dedicated and really, really bright people around you. But actually, one thing I wanted to stress today was the fact that all of this knowledge and know-how that we've developed over the last 25 years. What I'm really proud that we've been doing in the last probably 2 years really in massive earnest is how we've put this knowledge, this quantification into models and simulation and the digital twins.

And the reason why this is so important is on many levels is the fact that -- in fact, we've got a little animation here, and I'm going to talk you through it to illustrate this. We do models at the cell level, the chemistry to understand what happens at the molecular level, the nanoscale. And then each of these cells, as you saw, get stacked into our Endura product. And then we need to understand how that works. And then we put those into systems and we simulate that as well because we need to understand how our systems work.

And at each stage, there's a hell of a lot of value to be gained from the digital twins and the simulations. But it's because essentially, it accelerates development. And why we've been doing this before is because we needed to gain this understanding, especially at the chemistry level that is not easy to do. It is something that is years and years and years of understanding what's going on in order to then understand where do we put our effort to do our next bit of R&D so that our endure product continues.

As Philip mentioned, we need to keep innovating. And unless we've got this really good digital infrastructure, it's a hard thing to keep doing at pace. But we also need it at the system levels because our partners build their own systems. You heard Centrica talking to our partners, they have their own application.

Our partners will have a number of applications, as you heard today. How do we help them build their own systems as fast as possible where we're not actually doing the system they are, but we want them to be successful. We want them to accelerate that system development. So we do need our suite of simulation very much. And what I'm really proud that we've done is we've managed to really codify this in a way that is helpful to us and to our partners.

And I think that you mentioned the sort of the speed and the speed for your partners and perhaps also this digital approach, if you could maybe touch on the potential cost savings you've also unlocked through the digital approach for your partners.

Yes. The more maybe obvious one is to understand what is the sweet spot for utilizing your stacks in order to make the most of it eke out as much performance as possible so that you have a better levelized cost of energy. But actually, you also will save money by having an efficient system. So as a partner, that's very useful. We share data with our partners in explaining how our systems -- our stack works, how the system will work by being quite open like this, it also -- and actually, I probably need to stress this.

When you're licensing technology, you've got to be really open with the partners. We can't just kind of hide the problems and then just go and fix them. It's open to -- like we've just got to share everything. It's hard. It's hard on us. You just got to be able to say and believe what you say. And the simulations are really helpful in doing this because how are you going to say, yes, it lasts for 5 years unless you run it for 5 years.

Well, it's simulations. That's what you need. You need to be able to prove that it will last 5 years. And you need to bring them along that journey so that they see that it will do that. And on the cost saving front, as I said before, when you start understanding the mechanism that happen even at the nano scale, this is when you also understand that if I make this change, then because what we want to do when we reduce cost is at all levels is potentially improve how we manufacture it, remove steps in that.

To do that, you need to understand what will be the impact of it. So hence, we use the digital side all the way along, and we're priding ourselves now to really do digital first and reduce the number of tests that we need to do, although we still test a lot, obviously, because it is something that is needed to convince our partners. They still want the seeing is believing and Lauren was saying is there. But the more they see that our simulation match the test results, the better it is and the more we gain from it. So we do increase the speed that way.

Sure. No, that makes a lot of sense. And actually, there, you mentioned on sort of stack lifetime when you went towards 5 years. So it may be helpful to bring Nick in here. And obviously, the name of the stack is Endura. So with a tagline built to last. So I'm sure I can guess, but maybe talk to us why you chose the name, please.

Yes. So hopefully, it's obvious, but Endura is based off a shortened version of Endurance. And it connects to one of the most unique selling points of our stack and our technology. And it's the fact that our cell chemistry is a really thin layer printed on a metal support. And that metal support gives our cell a robustness that's the envy of our competition. So effectively, our st cell is really robust. You can smack it around, you can put it through a normal manufacturing facility without worrying about it breaking.

You can stack these cells into really tool stacks without worrying about those cells cracking. You can transport them from that factory to site without any problems. And it's also really robust to real-world events that happen on power sites, power outages, emergency stops, those sorts of things. So really, the unique part of Endura is its robustness. The fact that it's built to last, the fact that it's built for the real world. But with that robustness also comes ultra-low cost too. So we've built Endura based off really low-cost steels and seals.

So the steels on this cell and in the stack are all ferritic steels that you can get in your car exhaust. They're freely available all the way around the world. 85% of the stack is steel. And the chemistry on our cells allows us to operate at a fundamentally lower temperature than high-temperature solid oxide. And what that means is we can choose cheaper components throughout the whole balance of plant in the system.

And effectively, what we've done is we've turned high-temperature aerospace tech into something that's mass manufacturable and automotive domain automotive tech. And that gives our licensee partners confidence to enter the market now at a cost competitive position compared to the incumbents at relatively low volume, say, 100 megawatts. But as they scale, say they got to a gigawatt worth of production scale, which might be similar to where others are now. I think our models show that we would be probably 1/3 less in terms of production cost than that competition.

So it's truly low cost, and we've only got further to go down that route. But we didn't stop there. So you think we might have compromised a bit on performance because of all of that low cost, but it's absolutely not true. This is still world-class, both in fuel cell and electrolysis mode. So we have system net efficiencies in fuel cell mode approaching 65% at start of life. But the really important thing compared to the competition is that performance holds through life.

So after 5 years, you're probably 10 percentage points on system efficiency better than an equivalent high-temperature solid oxide cell. But I think for me and also the team at Ceres that Caroline spoke to, too, we've got such an awesome technology and engineering team. The name Endura and the branding that we've put around it now marks the transition from an R&D company to full commercial realization. So this is the cell. This is the stack that's going to get manufactured at high volume at pace and scale, entering a market where there's clearly opportunity and a tailwind, and it's one that's built to last and designed for scale.

I think that's an excellent answer. And I think I guess you've kind of helped me on my next question in terms of the addressable market and what we're seeing here. You just mentioned the cost benefit as well that Ceres could unlock. So obviously, Phil mentioned Bloom Energy just announced yesterday a very sizable fuel cell order for data centers out of Oracle 2.8 gigawatts. How do you see Ceres fitting into this ecosystem alongside Bloom?

I think, firstly, it's great to see Bloom making a market for solid oxide, making it real, making it a proper technology choice, a proper power platform choice. And we've got a lot to thank Bloom for that. They're doing well. However, the market size is beyond what Bloom can scale to. So the market opportunity is still there for all our licensee partners. And we're going to be entering a market with a product that's fundamentally higher performance and lower cost at scale.

And I suppose going back maybe to Caroline in terms of the cadence of this technology development as well. I mean you're not going to stand still here. You've said that you're going to continue -- obviously, R&D is going to be the lifeblood of the company. So what kind of cadence of sort of technology development should we expect over the coming years? And how then does that affect your manufacturing partners linking into their current operations?

Well, we're going to continue to innovate. That's for sure. We also want to make sure that our partners feel that they have a stable platform. So a stable platform means that you're not changing it all the time. But there are some things that you can do continuous improvement on, which is things that don't require any factory changes of any sort. And all of that will happen. But it can happen also at the cadence that our partners are happy to take on.

But we want to keep innovating, and we will have bigger platform improvements roughly every 2, 3 years. That's the intent because you don't want to overwhelm our partners. You want something that they -- well, we truly believe that this is good as it is anyway, but we will continue to innovate. As Philip said, this is why it's a lifeblood for licensees to keep ahead of what others do.

Yes. I mean I'll just add to that. We've got a large backlog of changes we want to put into the stack. But for a licensee partner and also a user of a system that is going to be installed maybe for 20 years, what you'll see is upgrades to that stack. So the box and the interface will probably change very little, if not at all. But what changes will be inside that box. And what changes is probably things that are very easy to change on a production line. So it's not a tear up of a current production line. It's minor changes only, but with major opportunity.

And I suppose you've spoken previously about the cost and the scale benefits. We you guys hit gigawatt scale and you're very competitive and they're probably undercutting current systems out there. Can you talk to us about how Endura will equally help your partners hit that key manufacturing scale that's required and is helping them accelerate their time into market?

Yes. I'd say the beauty of the licensing model is that all licensing partners can source the materials and also source the machines from their own localized supply chains across China, Taiwan, Japan or wherever. And they can gain cost down through doing that. We're also now collaborating with licensee partners so that when we sell a license, we're not just selling some intellectual property. We're actually selling a blueprint to a validated design with a complete supply chain in place that they can access. So we're speeding their access to market, but then they're also taking opportunities in their own markets to take cost out, too.

And I think, obviously, scale is naturally going to be important, but the manufacturing partners have 2 routes to market. You have the fuel cell opportunity in the future, if they take an electrolysis license, they also have that side as well to play into. And I guess, Caroline, can you maybe speak to how Endura is going to help assist the sort of the evolution of the hydrogen production for Ceres Power's technology?

Yes. When we started the technology development, we really concentrated on fuel cells. But all these technologies that you hear are intrinsically work either in fuel cell mode or electrolysis mode, but most of them are not the same chemistry. We worked on our chemistry a few years ago. We had a big push on electrolysis.

And to our delight, we managed to get a technology that is the same, the same cells, the same stack that work in both directions. And that does future-proof our partners' factories. They can use it in both directions. But from an R&D perspective, when we started testing it in electrolysis mode, we learned a hell of a lot about our own chemistry and our own development have benefited from this understanding because we pushed the limits further than we had ever tested.

And we realized that actually, we could improve one direction, it improved the other, and we have a better product as a result. So from an R&D perspective, we're very confident that this is a massive bonus for our partners, even if they've taken a license to just one at the moment that they can also move into the other at a later stage.

And that's culminated in a conscious product strategy steer or decision, which is to make sure that an Endura fuel cell stack is as common as possible with an Endura electrolyzer stack. And what we're releasing to our partners can be effectively built along the same line. So the same line can produce electrolysis stacks as well as fuel cell stacks. There's virtually very little that they need to change to achieve [indiscernible]

Caroline, I just wonder in terms of the digital approach and all the data that's been coming off and perhaps as you explored further on the electrolysis side, did that then generate sort of a data suite that you could send out to prospective new clients? Like has it been useful for further licensee developments thinking into '26 if we can see you guys land some further commercial deals?

Absolutely. Our demonstrator in Bangalore with Shell, this is our biggest test site is amazing. Now it's great. We're getting that data from Shell directly onto our system. We can share it with our partners. We've -- this was a while coming, and we're so glad we've done this because we can see it. not live live, not Formula 1 live, but we don't need to. It will be minutes, maybe an hour later than what we have in Bangalore. That's plenty to inform how it works, to have insights and we want to keep building that.

We want to build that with other partners because ultimately, if we share -- if they share data, we can share a summary of what is an aggregate data set back to them and they gain the benefit of everyone else that has pulled their data together. It's at times a process of convincing our partners that they will benefit from that, but they do, and they want to collaborate with us when they get that benefit. But it's -- the other thing I need to mention is through our simulations and through some of the testing we've done in R&D, our stacks, as Lauren mentioned, they work in both directions.

And we found that there is interest now in actually running reversible system. This wasn't something that we intended to do, but it's lovely to see that there is interest, and therefore, we can make simulations of that, understand how that works and have positive conversation with potential partners that are interested in that space.

And you mentioned collaboration there. And obviously, Ceres Power was born out of Imperial College London, and obviously, we're very lucky in the U.K. to have some great research institutions and universities at the forefront. So historically, I think you've worked very closely with these bodies. Is that continuing? Is that very helpful? How do you see it?

Absolutely. One of the things we've done is kept the relationship with Imperial, obviously. We still -- we've come from there, and we have strong bonds. But we've strengthened our university links with several universities in country. We have active programs with St. Andrews, Liverpool, Sury, Manchester and the Royce Institute. And I'm going to do a shout out for the Royce Institute because a lot of what I've said, understanding what's going on at the nanoscale, it takes really good kit. It takes like really very detailed and expensive electron microscopes, for example. This is not something that we can invest in having all that suite of kits.

But these research -- they're kind of meta research centers, Royce. That does this research and materials. We're really good at doing this in the U.K. And having those collaboration means our understanding of those techniques we apply to our chemistry and then we understand it better. So it's really beneficial to us to have a thriving network of partners in academic institutions, for example. And we -- they like us, too, because they like to see that a lot of the fundamental work gets applied into British engineering.

Yes. No, I think that's absolutely clear. And just as a last one for me, maybe going back to Nick your commentary in terms of gigawatt scale and the potential for dropping by 1/3 and maybe further cost evolution down after that point. How would that place you on a levelized cost of energy basis against other existing technologies that we saw previously?

It's a good question. I think in some markets today, in some applications, some of the C&I options we've got and also with high availability situations for data centers where you need very little oversizing to achieve Tier 4 availability. We're probably competitive with the AI crunch today on LCOE. But the important thing to say is I think we will remain competitive, and we'll remain competitive for 2 reasons.

Firstly, we're going to go up the manufacturing scale journey. So even if you assume a sort of simple learning rate of 12% to 15%, something like that, we will achieve cost down. And then our ambition to take cost out of the stack and the system also compounds with that. So I genuinely see a point in the early 30s where we will be conventional -- competitive with conventional generation technologies like natural gas CHP and gas turbines.

Amazing. Well, thank you both for the insights. Thank you for giving us all the detail behind the Endura launch. And yes, I think I'll now hand back to Cere's management team who can do a much better job.

So thank you, Chris, Caroline, Nick. I'm Stuart Paynter. I'm the Chief Financial Officer. And I'm going to give you a couple of slides today to just tell a bit of a story. We've been on a bit of a journey today. And that journey is to the Endura stack. And that is a very important journey for us. And what I'm going to do is I'm just going to give you a view of what it's taken to get there. the benefits of that and how we are continuing to be very strong, financially robust and disciplined in order that we maintain our high-margin business, our asset-light business, and we can try and actualize some of the opportunities I'm going to take you through on the second slide.

So on this first slide, this is the cash burn in the last 2 years from 2022 to 2025. And you can see that, that's been significantly reducing. That is the work that's gone into the Endura stack, right? We've talked about this 25-year journey. We raised a lot of money in 2021, and this is crystallized into this dual use and reversible, potentially, as Caroline was mentioning, single platform stack, which is going to be available to all of our existing partners and our new partners will come on to this technology.

This is, we believe, going to be the industry standard fuel cell offering. And that's what it's taken to get there. And what do we do once we got there? Well, we had to maintain financial discipline. And that discipline involved optimizing our cost base to have a correct cost base to achieve the strategic goals that Phil was laying out earlier. Are we going to stop innovating? No, we're not. But that innovation is now going to be more focused on lifetime and cost within this platform.

That means that in 2026, our cost base will be roughly 20% lower than in 2025. That's good financial discipline. Our cash, GBP 83 million at the end of the year. So we've got a good cash balance. How are we going to maintain that cash balance? Well, you can see in 2025, we were cash positive in the first half. What this means is that we've now got a cost base and the opportunities in front of us that we need to sign an MLA on a cadence of 1 every 12 months on average, and we'll be roughly breakeven from a cash flow and profitability perspective.

Very important to us because that is financial robustness. That is a non-reliance on the capital markets, which are tricky, we understand. Our contracted revenues for 2026 already at GBP 45 million. That doesn't include any new business for the year. No new business at all in that number. One new MLA in this year, depending on timing, et cetera, et cetera, caveats. And we are going to see roughly cash flow neutrality in the year. Okay.

So I spend the first slide talking about cash flow neutrality, which is, okay, right, it's good, financial robustness, nonreliance on the capital markets, but it's not exciting. We understand it's not exciting. What is exciting? Well, we've heard a lot about accelerating partners to gigawatt scale. We've heard a lot about the market today. What if we can become an industry standard? We have a heavy ARM influence on our Board. Founder of ARM is one of our Board members. We love the ARM model, becoming industry standard, low asset-light business, high-margin business, licensing business, we like it.

What does that actually mean if we can succeed in doing this? Well, we heard the 2.8 gigawatt order this week for Bloom. This market is becoming real. What if you're a player who is looking at this market and wants to get into it. We've already got 3 people into that power market in our portfolio. We want more. What is their option to get into this market? They've got 3 options if they want to get into this market and play in this market. They've got the option of doing their own R&D.

And we've seen on the cash flow slide previously, that takes a long time, and it costs a lot of money and you need hundreds of people. People typically don't attack that problem in that way. That's a big barrier to entry, a big protection for us as well as all the IP around steel cell, et cetera. Option 2 is you can acquire capacity already in the market. There's only one real player in the market now. that's Bloom. Their capacity is between 1 and 2 gigawatts.

And if you wanted to acquire Bloom today, you're probably talking close to 11 figures. They're at GBP 60 billion market cap as of today. The third option is derisk the R&D. Come and take a license to the technology we're offering, build a factory, and you've seen that we're aiming for those factory builds to be under 2 years. That's a very fast derisked entry point into the market. We think that's becoming more and more compelling as an offering, and Philip relayed that to us in the health of our pipeline.

What does it actually mean if we can bring our partners, both existing and new to gigawatt scale? So let's imagine a world in which they get to 1 gigawatt capacity. Bloom are already at 1 to 2, right? So this is not pie in the sky. This is being done. Our annual royalties from a 1 gigawatt scale partner of ours reaching that sort of scale per year, $50 million to $100 million, depending on the mix. The valuation on that royalty stream, 15% to 20%. It's a high quality.

Our partners are world-class and the R&D we're doing gives longevity to that royalty stream. They'll keep on coming back because we'll keep on improving their experience. You do some simple maths on that, and it's approximately $1 billion per gigawatt scale partner we can create into this competitive landscape with Bloom. Remember, it's a 22 gigawatt market. Bloom at 1 to 2 gigawatts now, maybe 2 to 3 soon. That's still only 10%, 12%, 15% of that marketplace. There's room for multiple other players in this market.

And each one of those creations is worth $1 billion to us. We sit here today with a market cap of roughly $1 billion, excuse me, for flipping into dollars for a moment. But you can see that every success we have in bringing our partners forward, we've already got 3 of them moving on this journey. We want many, many more is worth $1 billion to us. That is the opportunity, the financial opportunity for all the stakeholders in Ceres Power. It's multiple times today's market cap, multiple times today's share price without reliance on the capital markets.

Okay. With that, I'm going to hand back to Phil, who will give you some final remarks.

Thanks, Stuart. So I hope today, we've kind of taken you on a bit of a journey from the foundation of the technology all the way through to where the business is positioned. And we genuinely believe we're at this exciting time and a pivot in the market and the product all coming together at the same time. Power demand is accelerating. That's come towards us at a very good time as the business is ready for prime time. Time to market, you heard it from Centrica, that is a key constraint. And what we have now with the Endura platform is a platform that's designed for scale. And it's not just a technology platform.

As you heard from Filip, it's the whole ecosystem. It's also the manufacturing blueprint. We're helping partners enter a market. We're not selling them products. We're actually selling them businesses here, and that's what the really exciting part of this is. So that will be the foundation going forward on which we believe that we will address this global market opportunity.

I'd like to thank you all for your time today. I'd like to thank the team for walking us through that. And particularly, I'd like to thank Lauren for joining us from Centrica to give us that outside perspective as well. So thank you, everybody.

Good morning, ladies and gentlemen. Welcome to the Ceres 2025 Full Year Results Investor Presentation. [Operator Instructions]

I'd now like to hand over to the management team, Stuart, Phil, good morning.

Good morning, everybody, and thank you for joining us for the 2025 full year results presentation. I'll talk you through an update on the company and the strategy to begin with, and then Stuart will obviously talk you through the financial numbers, and we'll obviously go into Q&A at the end as usual.

So at Ceres, we're operating on 3 strategic imperatives. The first one is signing more licensees. So new manufacturing license partners is a key focus for us as a business. The second is once we have those partners, bringing those partners to market. So that's obviously assisting them as they scale up and put in capacity, but also actually helping to stimulate demand, which actually helps pull through the products that we're developing with partners.

And the third is obviously technology leadership. We believe we have the best solid oxide technology in the world. We have a single stack platform, which we're actually going to be launching in April. And we need to maintain that technology leadership advantage because that's what our partners come to rely on from Ceres.

So over the last 12 months, we've made significant progress on all these activities. The first thing to say is there is an acute need for power driving the commercial interest in our technology right now and particularly for SOFC technology in the wider landscape. As we go into partner progress, in the past 12 months, we signed a new manufacturing license agreement in China with Weichai, our partner.

We'll give you a little bit more on that today, but that's going extremely well, extremely rapidly. In Taiwan, Delta is also scaling and starting to produce first prototype products and is also investing significantly in land and facilities to do that scale up as well. In South Korea, a big milestone for us in the past 12 months with Doosan starting production at the factory there, both for SOFC stacks and power systems, and that also generated first royalties for the company in this period.

In Japan, our partnership with DENSO on the electrolysis side began production of first hydrogen with JERA and also led to government funding recently with an estimated value of about JPY 35 billion, approximately GBP 165 million to continue the advancement of SOEC technology. Great progress in India with Shell. The megawatt scale electrolysis demonstrated actually exceeded performance expectations, high efficiency but capacity as well.

And we're progressing now towards the pressurized systems as well with Thermax and Shell and Thermax developing a new pilot facility for testing of those systems. We also undertook a business transformation plan around those 3 strategic imperatives that we talked about. And we've restructured the business, very much focused on accelerating the commercial opportunities.

So after 25 years of developing this technology, we are now at that point of commercialization and the point of first production and scale up. We'll talk more about this business transformation, but there's a cultural change there, but also it's anticipated it will drive cost savings of around 20% this year compared to the 2025 cost base. And we finished the year with a very strong cash position of over GBP 83 million at the end of the period.

So again, we'll talk in more detail about financial management in the second half of the presentation. We had some news this morning as well, which is very pleasing, partnership with Centrica here in the U.K. It's fantastic to be able to actually bring this British technology to the U.K. And this really is part of our second pillar of that strategy, which is how do we stimulate demand and how do we bring this technology forward at scale.

Centrica, as you all know, FTSE 100 leading energy integration company. The statement there is about a multi-gigawatt opportunity that we see in the U.K., Centrica sees. And that's on this gap that we're seeing as we have more need for electrification. We have a time to power need that's becoming quite acute. And this modular high-efficiency technology can really service that market, both in terms of the data center needs, commercial and industrialization partners as well.

So the purpose of this is we're introducing our licensing partner network to Centrica, the whole ecosystem of manufacturing partners. And we will support Centrica in terms of bringing that forward, if you like, acting as their technical advisory arm, helping them to set up this model of how they go to market with this. So that will include our expertise in things like installation, commissioning, remote monitoring, maintenance, recycling, all of those good things that we at Ceres know how to do.

The initial focus will be the data center market, commercial customers and industrial power. So that's a fantastic step forward for us today, and we'll have more details on that. We have an upcoming Capital Markets Day on April 15, and we'll be able to provide you with more detail on that and from Centrica as well. But that's just in very exciting development today. I mentioned also the single stack platform.

So we're going to launch that also at our Capital Markets Day. One of the things that's unique about Ceres is the solid oxide platform, the same stack, the same cell technology can run in both directions, both for power generation and for green hydrogen. That's an amazing benefit to our partners because as they develop the supply chain, as they scale up, that investment that they're putting into factories now for power generation also has this dual use aspect in the future for hydrogen as well.

And as you can see in the chart here, that same stack technology is now going into products, Doosan, Weichai, Delta, but also we're using that on the hydrogen side with partners like DENSO, Thermax, Shell and Delta as well. Just wanted to spend a little bit of time on what we're seeing as the emerging demand for power. Our estimate is we see an opportunity for power generation using solid oxide of around 22 gigawatts by 2030.

And we see that market roughly split about 50% the data center opportunity, but also a very significant part in the industrial and commercial applications as well. So around 50-50 kind of split. Geographically, it's an interesting split as well. About 25% of that is the U.S. market, which gets a lot of attention right now. I'm sure you're all covering data center applications in North America. But just under 20% of that is here in Europe as well.

And the U.K. is a great market opportunity when you think about we have some of the highest power prices anywhere in the world. This is a market that really lends itself well to this application. And then about 50% of that market we see is Asia, the wider Asian opportunity as well. And with our partnership network, we're able to access all aspects of this market.

So our aim here is to really establish the service technology as the industry standard, and we're doing that by embedding it in these global partners that are accessing and servicing these different parts of the market. Why is that becoming a critical factor? Well, today, if you need power generation, you're waiting about 6 to 7 years for a gas turbine. Small modular reactors are also coming down the pipeline, but they're about 7 to 10 years away.

And then high-voltage grid connections, 5 to 15 years away. So right now, with this acute need for power generation, behind the meter or on-site generation is becoming a really viable alternative because there just isn't the conventional power generation equipment available. I think it also opens a window for us in terms of the technology today is good enough. It's viable in terms of its lifetime, its performance and its cost to actually enter the market.

And as we scale, we anticipate these costs coming down significantly. Just to show you some of the progress that's being made. These are the first units developed by Delta, took a license just under 2 years ago. So this is a Thai power in Taiwan. So you can see here the first prototype units being made using car stacks, but all the systems done by Delta. Delta are fitting out their production as well, and they're on track.

Delta is a very exciting partnership for us because when we talk about that data center market, Delta are already very much in that supply chain. I think by market cap now, they're the second or third biggest company in Taiwan after NVIDIA and Fox. And where we fit in is they make solid-state transformers, they make power conditioning, they make UPSs, et cetera.

So by adding in the power generation capability of the solid oxide, they're developing a complete offering from fuel in all the way through to power out. And that power out can either be AC power or in the data center application, 800-volt DC. So don't forget that the fuel cell technology is actually generating DC power and the way that you actually combine stacks, you're very close to being able to match up that 800-volt DC power direct from the power generation unit, which is the SOFC.

It's fuel flexible. So we run on natural gas today. We can run on biogas. We can run on hydrogen in the future. It lends itself extremely well to things like carbon capture. And also, if you want to, you can capture the heat or convert that heat into cooling through absorption chilling as well. So you have the option to go from low carbon all the way through to zero carbon and also push very high efficiencies.

In Delta's case, the same market applications apply. It's microgrids, AI data centers, even for the semiconductor industry and manufacturing in general. So I think this is a really good illustration of how our partners take this technology and put it into a complete offering for these kind of market opportunities. Weichai is an exciting partner for us. We've been working with them on system level for about 7 or 8 years now. Their systems are very impressive, I have to say.

And I'm expecting this year, they'll launch their latest system, which is going to be a very impressive unit. We've taken the step with them. We've done the technology transfer. So we signed last November. already, we're going very quickly, and there will be more to come from Weichai this year, but they're probably going, I would say, faster than any of our partners have ever gone before. Doosan factory, I was privileged to go around the factory.

I've been a couple of times, but this was in July with Doo-Soon Lee, the CEO of Doosan. First production was there. And when you actually get in there to see the realization, the single piece flow end-to-end, it's about the size of 3 football pitches, semi-clean room, it's an impressive facility. And they've actually fulfilled their first capacity orders in the past few months, and that factory is now up and running.

So that's a big, big milestone for us going full circle. So Doosan is the first. We expect Delta starting to come on stream and then Weichai. So we are building out this ecosystem. On the hydrogen side, I think it's been fair to say that over the past 12 months, there's been more headwinds on the hydrogen side. But at the same time, I think that opens up an opportunity for, again, higher efficiency technology like the Ceres technology.

And as I mentioned, all of the investments that are going in now are directly applicable on to the hydrogen side of the business. So extremely pleased with our partnership with Shell. We've exceeded expectations there. We've met all the targets that we set. And that's leading on to the pressurized development, which is now underway. So taking this one, which was the first atmospheric SOEC that we did and now actually putting that into a pressurized system that can be scaled to megawatt scale.

And we're doing that engineering ourselves to begin with, but then in partnership with Thermax in India who can really drive down cost. And India is one of the big markets that we see for this green hydrogen in the future. So we see green hydrogen, particularly opportunities in China and India as those areas come on stream. We also did this with DENSO very quickly.

So similar to the Shell container, DENSO actually deployed this on site within 18 months of actually taking the license, and that's using Ceres' technology. That's putting in hydrogen into a thermal power station to reduce emissions from conventional power generation. And that's unlocked further funding for DENSO as well. So great progress on all aspects of the hydrogen side as well.

In terms of where we are as a business, we're building out this ecosystem of partners. And really, our aim is to be the technology provider of choice. So we now have manufacturing in Korea. We're seeing manufacturing being built now in Taiwan. That will come on stream in China as well and with DENSO in Japan.

So really strong ecosystem of partners. Shell is more in the end user category, and we can add Centrica to that list of partners today as well for U.K. and Europe. So our aim is embed this technology to become the industry standard.

So with that, I'm going to hand over to Stuart to give you the financial update for the past year.

Thanks, Phil. Good morning, everyone. I'm just going to take you through a few slides, just to give you a bit of an update on where we are from a financial position and financial planning position and some of the actions we've taken to put ourselves in a strong position to be able to execute the strategy Phil has laid out.

So here's the headline numbers you can see. As you all know, the revenues of Ceres are largely dependent on how successful we can be in terms of signing MLAs. We signed Weichai in 2025, but towards the end of the year, we in sufficient time to recognize any revenue at all from that contract. So we're rolling that into 2026. But you can still see that the margins remain high, right?

That's the asset-light model we retain, and we have good financial discipline around that. The other thing to note here is cash. We're still very strong on the cash side. You can see that the cash burn in the year was just under GBP 20 million. And like I said, that was without the benefit of having an MLA. So we're pretty efficient now. I believe we've got the optimized cost base, which I'll take you through.

And you can see that the restructuring that we've been going through in the last few years has fed through to the cost saving in 2025 from 2024. There's more to come on that, but we'll take you through that and be very clear, we now believe we have an optimized cost base. So the actions we took towards the end of '25 will flow through to '26, but we really do think now we've got the correct team to prosecute the strategy, which we've chosen.

So here's just a graphical representation of the revenue and gross profit. Gross profits remain industry-leading with the asset-light model we have. And of course, the success and the health of those are maintained by signing new MLAs, and we retain the confidence that we have the opportunities to keep on chasing that Pillar 1 on Phil strategy of signing new MLAs and be successful in doing that in 2026.

So Phil mentioned business transformation earlier, very important to us. We now have that single stack platform commercially viable to get out into the market, and that started in earnest with Doosan with others to follow. And now we need to make sure that we are still innovating. Pillar 3 was keeping a technology lead, very, very important to a licensor. -- and we'll continue to do that with one of the biggest solid oxide expertise pools in the world.

But now we believe we've reached a point where we need to just look at the focus of the company and be very, very commercially disciplined, commercially focused and make sure we have the right people in the background, giving the R&D sufficient attention that we have something to license in the future. And we believe during the end of Q4 2025, we've realigned the business to be able to do that.

The flow-through of that will be a 20% cost saving in 2026, but all the actions needed to do that have been taken and are now finished. So now we're into a business transformation for this year, which is all about culture, team and making a cohesive unit so we can make sure that we succeed and our teams succeed at the same time. So we -- this is all crystallizing, as Phil said, in the Capital Markets Day where we're launching this single stack platform.

We're very proud of it. And hopefully, that will make sense to everyone when they see it, and it's something we can go out and actively -- more actively sell into the marketplace. In terms of the cost base, so this is the optimized cost base we see for the next commercial phase. All the actions we've had to take have been taken. There will be a natural flow through into 2026 of this cost saving, but we are essentially building from here.

We've still got a world-class R&D team. They're very focused on the things we need to do to be successful. That's cost down, that's lifetime. And we've strengthened the commercial teams in order that we can make the biggest impact we can on the top line. So we really do think we've got the right team, the right place, the right assets in place to make real success for the next few years.

And why are we doing that? Well, you can see that commercial momentum essentially over the last few years has reduced our cash outflows. And we're very clear, we've now got the model of our business. If we can sign MLA on average every 12 months on that sort of cadence, we will be very close to breakeven and cash flow neutral. And that's important. That gives us control of our own destiny without having to rely on the capital markets.

And it's building that MLA base so we can become that industry standard that Phil talks about. And why is that important? Well, the end goal for any company that's ultimately a licensing company is to build your royalty streams. As Phil mentioned, we're just at this orange blob stage here today. Doosan has fulfilled their first order at the very end of last year led to our first royalty revenues, a big milestone after 20, 25 years of development of this project.

But we need now to push on if we can become the industry standard, essentially have a portfolio effect of many, many partners building, we're really going to be able to build these royalty streams, power first, hydrogen second. As Phil mentioned, this is the same technology, but you can attack 2 markets, one right and acute now and the other coming several years after.

So we're in this in order to keep on signing licensing agreements, which we know we can for the next few years, and then it's all about building the royalty base. So we like the model. Every time we make progress with Centrica and partners, we think it reinforces the success we need to have that model. But importantly, we need to show that we're financially disciplined to keep this asset-light model, which we're doing.

So with that, I'll hand back to Phil.

Yes. Look, I think we have a very clear strategy. I think the steps we took last year put us in an extremely good position with the asset-light model. The 3 priorities for this year remain unchanged. We're working hard on signing new manufacturing licenses. I think we're at an exciting stage now where you'll probably hear more from our partners this year as they're starting to actually scale and launch things, but also helping to drive that demand as per the announcement with Centrica today, that also helps stimulate that demand for our partners as well.

And then the single stack technology platform launch is a key milestone for us. We do believe we have the world's best solid oxide technology. And we're now at a point where we can actually bring that forward rapidly to new partners and existing partners to scale both for power first and then for hydrogen as that follows. And we're starting this year with a strong cash position.

We have around GBP 45 million of contracted revenue based on existing contracts from today for 2026. So we're in good shape. And I think the market opportunity has probably never been stronger, particularly on the power side. And I think now we need to get on and actually grab that opportunity, and we're well positioned to do so.

So with that, I think we'll probably move on to questions.

That's great, Phil. Thank you very much indeed. Before we go to those online, Phil, if it's okay, I'm going to come to the room. If you do have a question, just raise your hand and I'll give you the microphone.

Chris Leonard from UBS. Maybe 2 questions from me. And to start with, can we go into Centrica. And obviously, you spoke to the time to power and the need there. You also spoke in the presentation to the evolution of cost and what you see is feasible here.

It will be really helpful to get a gauge on where you think your partners when they first push out these fuel cell products, where you think they'll land at on CapEx price and where you think that evolution can get to?

Yes. I have to be very careful here because whenever I start forecasting our licensees prices, I get into trouble. But let's just -- if we talk in general terms, the SOFCs that are out there at the moment are available at around $3,500 a kilowatt. If you take that in the U.K. market context, and you look at the spark spread of gas and power, then you can generate power very efficiently in the U.K.

I mean, obviously, gas prices are moving around a bit at the moment. So I don't want to be precise on this. But given we pay in the U.K., the highest energy bills probably anywhere in Europe and even worldwide, when we map the U.K. out, when we look at market attractiveness, spark spreads, cost of power, et cetera, the U.K. is right up there, Northern Europe, et cetera. So it's a very significant opportunity.

To go back to your question, Chris, we think that we can significantly generate power at a lower cost, even at a relatively high entry-level CapEx compared to turbines and other generation because we're so efficient, because of the OpEx, et cetera, and because of the lifetimes that we can achieve. So we think that there's a big opportunity there in terms of that deployment.

And then the thing I would add is I think that kind of level is a starting point because I think what we see is a window that's opened up. So people need power. I think SOFC can now fulfill that power. And as our partners scale, we expect the cost of those SOFC units to come down quite significantly.

Yes, that was the second part. And then following up on Centrica. Obviously, you spoke to the contracted revenue for this year at GBP 45 million in the books, but presumably, I don't know, but I presume that maybe didn't include Centrica's potential contribution. Like what should we think about for engineering revenues and consulting fees, et cetera?

Yes. Look, the role that we're playing with Centrica is more in the advisory support side. So at the moment, that's going to be fairly modest revenue. So it's not like -- don't think of this like an MLA, they're not an MLA partner. The big value add of Centrica, obviously, we generate some engineering support fees, et cetera, there.

But really, it's the deployment of our technologies through our partner network that drives that demand that ultimately drives royalties. That's -- we see them in that Pillar 2 category, not in the Pillar 1. So that's where we see that. So the thing that would really move the needle for us this year is new MLAs.

Alex here from Berenberg. Just a quick one on the next-gen kind of stack technology. You kind of mentioned it in your kind of closing comments. Kind of what the real benefit you think that could have to offer? And is that like a key milestone for the business going forward?

And then second one is just kind of a new licensee pipeline, how the discussions are going to kind of bring new people in and new manufacturing products.

Okay. So look, the stack launch is the culmination of several years of effort. Over the years, we've increased the cell footprint. We've increased the stack height. There's a lot of focus on the simplicity to manufacture. We will continue to drive that in terms of getting down the actual installed manufacturing CapEx of what it takes to build those factories.

But that stack itself represents what we believe to be the building block that all our partners will now scale on. And our technology teams, our R&D teams are really focused on driving cost and lifetime, cost as in the unit cost of stacks, but also the manufacturing cost and then the lifetime of the product. So that's where we see that technology evolving.

And I think it's a significant milestone for the company because we've been in that investment mode for quite a while on the core technology and R&D. I think by launching this product now, you can see from the optimized cost base, we've got the right team to keep on innovating around that particular platform. In terms of the pipeline. I think it's grown considerably in the past 12 months.

I think we're getting incoming from most of the kind of players that are in the power system market, in particular, because I think that's the acute need that people see. Obviously, we're very strong in Asia, but we're looking at how we build out that ecosystem as well.

So it's grown considerably in the past 12 months. I would say on the hydrogen side, it tailed off a bit towards the end of '24, et cetera. But I think the -- as I look at the pipeline now, I would say it's about 70%, 80% driven by the power demand side of things as well.

Alex O'Hanlon from Panmure Liberum. A couple of questions for me. Firstly, well done on the Centrica deal. I'm interested if you could give some more color on how that came about? And is there scope for similar type deals in the pipeline?

And the second question is just on the cultural change. You mentioned a couple of times in the presentation. Clearly, you're shifting towards being more commercial now. How are you tracking that and making sure that the change that you want to see is actually permeating throughout the business?

Okay. So on the Centrica deal, I reached out and I saw what was happening in the U.K. we saw the opportunity in the U.K. market. It's like this market if this technology is so good, why are we not deploying it in probably one of the most attractive markets for this in the world. So Centrica was a logical choice for that.

One of the biggest LNG importers, they're looking to diversify. They're making investments in small modular -- advanced modular reactors for nuclear, et cetera. And I think once we started talking with Centrica, they saw the same thing that we did, which was this acute need for power, et cetera. So we were very, very much aligned. And so I think they're an excellent partner for us in the U.K.

I think the other thing we didn't talk too much about today is not just on the power generation side, but also there is the potential to combine this with nuclear in the future to do hydrogen generation on the back of modular reactors. So there's a lot of good synergies there between the 2 companies. And we're very excited about that partnership. And as part of that process, what I did is with Centrica I took them and they've actually visited our partner factories.

So they've been to Korea, been to Taiwan, been to China. And at that point, I think they realized this is real. And I think this is the key thing is the question we get asked time and again is, well, yes, fuel cells have had about fuel cells. Yes, but is it real? Does it really scale? -- aren't they expensive? How long do they last, et cetera? And then you go and you walk around the Doosan factory and it's like, oh, right, got it. This is real.

Even before they went into the factory, it's like, okay, we know what you're talking about now. Is there potential to do that with other partners? I don't think we need to in the U.K., but it's an interesting model. We have so if we can stimulate demand and then we can introduce our ecosystem of partners, I think it's pretty powerful. So as part of that commercial discipline in the future, we will probably look to replicate this in maybe in other parts of the world.

But in the U.K., it's Centrica. So in terms of the commercial progress, how we're tracking it, et cetera, our Chief Commercial Officer, Filip Smeets, joined us last year. There's a lot of rigor now in terms of the pipeline progress. We put more people in regions. We're just getting better, better and better at it through some discipline as well. And also demand helps.

So we're getting incoming, but also people are starting to realize who we are. And I think in the industry, already, we've got a very good reputation. I think people, competitors, they respect our technology. I think the thing that people have always maybe had the question mark on is, well, how does Ceres scale and go to market. And I think that's what we're going to see coming through this year.

Lacie Midgley here, Bloomberg Intelligence. Just a couple from me. Stuart, your comment on securing the one partnership every 12 months and that triggering the breakeven point. I mean, clearly, that's the place we need to be to before the royalty scale. But I mean, I'd be interested in both your comments really, but what in your mind is a realistic number there because no doubt the demand is there to have as many MLAs as you can across geographies.

But presumably, your current partners won't want that number going too high given the competition that they'll likely face in certain geographies. I mean what kind of number are you thinking there on kind of a longer-term view? Do you have anything around that? I mean...

Well, if you look at recent history, we've signed 3 in the last 2 years from the beginning of '24 to the end of -- we have set ourselves up that on an average cadence every 12 months, we will achieve what you said, Lacie, sort of breakeven and cash flow neutrality, right? But that's not exciting for anyone.

That's just a stop gap until the royalties come along and it helps us diversify, build a portfolio of clients. We think there's really plenty of room to play. Phil showed a 22 gigawatt solid oxide market by 2030. Even if Bloom have scaled to 3 to 5 gigawatts by that, that's 15% to 20% of the market. There's plenty of room for plenty of people to play with plenty of applications and with a much bigger market coming along later in hydrogen.

So we really don't feel like there's downward pressure on this number. It's a case of execution for us, building a pipeline, instilling commercial discipline and executing. These are big agreements. So they're very -- it's difficult to predict. But we believe we've got the right team in place now, led by Filip, as Phil said, with some really, really strong people sort of backing his team up to give us the best chance of executing.

It's still difficult to do, but we -- given our recent history and new commercial discipline, we believe we can as -- the short answer to your question is as many as possible.

I mean as the royalties are stacking, that makes the commercial proof point easier to sell, right? So that all becomes a lot easier.

Yes. I think also, we've done this now 5 or 6 times. So building factories is something that we're getting we're getting pretty good at, but it's a learning curve. The first time you do it, second time you do it, et cetera. So -- but we also -- what's good to see is when you -- when our first licensees came on, they had to take a fairly immature supply chain and scale that as well and equipment builders.

So when somebody takes a license, it's not just to the technology, it's to that whole ecosystem of partners. And so new license discussions now are much faster, much easier because in some ways, you'd say, well, okay, this is where you would get equipment builders from. This is your choices in supply chain, et cetera. So we started off with a very European-centric supply chain.

And now we've added to that to our partnerships with Doosan, but now with the Taiwanese and the Chinese, we're building out quite a formidable set of supply chain partners as well. So that -- in terms of that credibility, not only do we know how to build factories and help our partners to do that, but we can also introduce them to a whole ecosystem of very willing suppliers as well.

That's helpful. And then just lastly, on Weichai, I mean, you talked about them moving very quickly, quickest out of all your partners so far. Just trying to kind of work this out. So how much of that is because maybe of the historical work that you had with the sort of legacy partnership?

And how much of that is kind of versus your own kind of technology developments, maybe reducing time frames there or just Weichai's desire to get to market more quickly? Just trying to understand, firstly, how quickly they can get to royalties, but then I guess, the time frames from MLA signing to actually getting to royalties, future partnerships?

Yes. So when we're talking to new partners, we kind of give a guidance of less than 3 years. And we're obviously looking to reduce that all the time. But some of that's incompressible in terms of technology transfer, the time it takes just to actually build either greenfield or brownfield factories and equip them. But we roughly talk about that kind of time frame.

Now in parallel with that, you've got not just the stack manufacturer, which for us now is becoming more like a blueprint. We can take people around our own facility in the U.K. And like I mentioned, we can -- we've got blueprints of how you build factories, and we've got an ecosystem of partners there. But then they also have to develop the product, the power system product as well. I think we started the relationship with Weichai with a system license, and we've developed that system with them over a number of years.

But now what they're doing is very impressive in terms of their own system development. So I think they can go fast because the system level maturity is very good. And then it's that desire to get to market is how quickly you build out that capacity. And I think that's -- that's what's happening extremely fast. It's a fairly typical approach in Asia, in particular in China, but they set incredibly aggressive time frame. So they're looking to obviously reduce that 3 years quite significantly.

Just a follow-up on that actually in terms of the royalty outlook and thinking about Delta scaling up this year, the target to be online end of '26. Has that changed at all? Are you still looking at that time frame?

And Doosan as well? I mean, how are you feeling about them looking into '26? Obviously, you recognize right at the end of '25, some royalty perhaps, but is there more to come? And how should we look at this year?

Yes. Look, I think on this year, fresh royalties are there, but they're still pretty modest. So I don't think it's that material into '26 is our guidance. Yes, Delta is on track, but really, that's going to be like '27 type time frame and then obviously, new partners coming on.

So in the near term, we're really focused on the license fees, the engineering services still through 2026 and probably into '27. And then -- but royalties build from that point. So that's how we see it. We're not changing guidance on that really.

It looks as though we're doing well for much into the room. So we've got a couple online that we might start to tackle.

So the first one is regarding the Centrica deal. And given they're based in the U.K., you mentioned that there's going to be revenue from U.K. and Europe. And what is the likely spread for revenue, be it U.K.-centric or more broad?

I think that's really one for Centrica to look at. But their presence predominantly, it's U.K. and Ireland as well is a very attractive market. So U.K. and Ireland, and then they're active across Europe as well. But I think initially, our focus is predominantly U.K. and Ireland.

Another question coming from the supply chain. So given the fact that the technology transfer includes quite a bit of the supply chain upgrades, do we have any concerns for material, rare earth material accessibility or scaling up to match our partners for the supply chain potential constraints that you see in other industries at the moment?

No, we don't because the nature of our technology, we use Ceria where the company gets its name from the major rare earth material, which is the most abundant. We're not using Scandia. We're not using where we use other rare earths, we're using very small amounts. So we're not concerned about constraints in any of those kind of materials.

We also have a question on the pipeline, which is wondering when and if there's opportunity for U.S. partners? And have there been any constraints of why we haven't signed any EU partners either recently?

There's no constraints. And look, as and when I can update you on commercial activities, I will, but I can't give specifics on particular opportunities or geographies at this point. I think there is interest in the U.S. I can say that clearly, given the market opportunity there. And yes, that's an area of focus for us as well.

Switching topics slightly. We've got a question on hydrogen. So wondering if we can -- you can expand upon what the pressurized modules are, those and the balance of plant and how Thermax is looking to scale and what the time lines would be for that?

Okay. So the pressurized modules are basically taking the core cell and stack technology, putting them inside a pressure vessel. And the reason you do that is by working with OEM partners like Shell, you save a very significant compression cost even on first stage compression, just a couple of bar makes a big difference.

So as we look at hydrogen at a refinery kind of level or in an industrial application like steel or fertilizers, et cetera, it makes a lot of sense to have modules that are pressurized and can be scaled. The reason for the partnership with Thermax is twofold, really. One is they're an EPC, so a contractor -- engineering contractor based in India, which is one of the key markets that we see for green hydrogen.

And secondly, compared to European suppliers, et cetera, there's significantly lower cost in terms of the engineering and actually driving the unit cost of these things down. So again, we're always looking at what's the most economically advantageous way to bring this technology to market. And that's why we have the relationship with Thermax.

Great. And Stuart, I'm conscious you've already touched on it, but we've got a couple of other questions on when we expect theirs to reach profitability or break point even. I'm just wondering if there's anything else you'd like to add to clarify.

Yes. I mean -- so hopefully, we've made it clear that if we can achieve a cadence of 1 MLA every 12 months, that's where we get to. These aren't as predictable as sometimes we'd like. But that would be the goal. So the moment we can continually execute the pipeline to MLA every 12 months, that's when we're going to reach that sort of profitability level.

But that's not long-term sustainable profitability. That comes when the royalty streams become the dominant player in our revenues, and that's going to be a few years out. So the idea now is to have a cost base where we can maintain a technology advantage, execute the commercial strategy whilst preserving cash.

And in the end, that getting new partners on board and pushing the technology forward will drive the royalties in the long term. So we think it's a really viable business strategy as Phil laid out those 3 pillars, both for the short to medium term, and it also benefits the long term when we get to royalties as well. So it's a really nice business strategy we're pursuing.

Great. The only final question that's come up is regarding RFC and wondering what has happened to that investment? And are we continuing to pursue that technology?

Yes. So RFC was something we supported in the middle of the year and bought it into the Ceres Group. We're still looking to give that really, really viable long-term energy storage technology life. And we're pursuing some opportunities to see whether we can get that business funded. And when we got more news, we'll share.

Great. I think that wraps up everyone. So Phil, I'll hold -- hand back to you for any final comments.

Yes, sure. Well, Yes. Thanks, everybody, for your time today. I think that we've got an exciting 2026 ahead of us. The company is extremely well positioned. We have a Capital Markets Day on 15th of April, where you'll hear more from the industrial applications with a guest speaker, hopefully from Centrica attending from that side of things.

We'll have our new product launch. And then I think you'll hear more from our existing partners as well this year as they hit some key milestones. So the market opportunity is definitely very live, and we need to capitalize on that opportunity right now. But I think Ceres is extremely well positioned to do so.

That's great, Phil. Thank you very much indeed. We will now redirect investors.

First of all, thank you for joining at short notice. We -- we signed this agreement literally today. And this is a culmination of the relationship that we've had with over the past 7 years. So it's fantastic progress. And first of all, it relates directly with our strategy.

So as many of you know, we're going through a business transformation at the moment, and we're focused on 3 main things. One is signing new manufacturing licenses, of which this is what we're talking about today. The second is accelerating partners to market so that we can actually get into the market and get royalties flowing. And the third thing is launching and maintaining our technology leadership position with a single stack platform, which is going to be power first, but they can also do electrolysis later.

Okay. So let's move on. So what we signed today is a manufacturing license agreement for solid oxide for fuel cell only for power markets in China. It does not include electrolysis, and it does not include the marine market. It's a stage technology transfer to establish manufacturing facility, and it is supported by supply from sellers of key components. So we're doing it in collaboration with Weichai. We've been working with them for a number of years. We've developed the systems that you can see behind the team and the photograph here. And now it's about actually starting to bring core technology into production in China.

Okay. Next slide. As I mentioned, Weichai is a strategic shareholder. There may be less known to some of you. They're one of the world's largest engine manufacturers globally. They, I think, produce something like 15% market share of engines. They have a broad product portfolio for power generation, including conventional gas engines, diesel engines, et cetera. So this is a natural fit, if you like, for their product portfolio. They employ 100,000 people globally with revenues in '24 of about $30 billion. So they're a pretty progressive and ambitious company in China. The relationship with Weichai has always been good. It was recognized by the European Union as an exemplary case of European-China energy cooperation. So we're coming into this, I think, in a good position based upon the trust we've built up with these guys over the past 7 years.

Next slide. And I think China -- the China market, we can't really ignore. It's attracted 76% of global clean tech investment last year for clean-tech factories globally, which is pretty staggering. China now holds 70% of production capacity in every major clean energy technology category. And they continue to have this ambition across all clean energy technologies. And there are various funding opportunities, as you can imagine, to support low zero-carbon technology. The data center market in China is obviously growing as it is elsewhere. It's set to double in the next 5 years. Recent research published by Goldman estimates that the market for fuel cells and particularly for solid oxide fuel cells in that data center market is somewhere between 8 and 20 gigawatts by 2030. And obviously, not all of that is going to be U.S.-based. So partnerships like Weichai are very important.

And the China's up and coming 15th Five Year Plan references fuel cells as part of that clean-energy system. And the roadmap suggests that solid oxide for stationary industrial power will be part of that. And I think that's very important because that becomes very strategic. So the financial implications of the deal, it's consistent with our approach with other license deals in the past, which is upfront license fees and then ongoing royalties. We guided this in September that we were working on a deal, but the timing is always what impacts when we can recognize revenue, et cetera. We're not anticipating this will change our revenue for 2025, which we previously guided to GBP 32 million, but it will underpin as a minimum, our revenue for '26 million of GBP 45 million. So it's going to be something that has more of an impact into next year.

But I think more importantly, it's the potential for royalties and another the manufacturing partner for Ceres, which is the key progress we're announcing today. And in combination with the business transformation program that we are executing right now, it adds obviously to contracted revenue to '26, but it also builds that royalty stack and brings forward our time to profitability. I think, given some of the cost reduction that we're anticipating going into '26 plus this momentum, I think the company is extremely well placed.

So that's a very quick overview of what we've signed today. If you look at how this looks now on our map of partnerships, it builds upon the announcement we had this year of first production in South Korea with Doosan, our partnership with Delta in Taiwan, who have a dual license for both SOFC and EC, Denso in Japan, which has the EC license for hydrogen electrolysis and now Weichai for manufacturing of SOFC. So the growing ecosystem continues, and that's very good news for Ceres with potently 4 production centers coming on stream. Next slide.

Good morning, everybody, and welcome to Ceres Power Interim Results for 2025. I'm Phil Caldwell, Chief Executive. And I'm joined by Stuart Paynter, CFO; and Patrick Yau, Head of Investor Relations.

So without further ado, let's go through the first half year. First half of 2025 has been quite an exciting year for Ceres in a number of different ways. Probably biggest milestone for us is the start of production with Doosan in South Korea. And that's a milestone that we've anticipated for a long time. And it really is a pivotal point for the company, because it proves out R&D innovation all the way through to mass production and ultimately will lead to the payment of royalties and proves out the business model. So that's a big milestone for us achieved in this first half of the year.

We're very pleased with progress with other partners as well. Delta Electronics has acquired land and factory facilities now to begin their scale up in Taiwan, committing around GBP 170 million investment into those large-scale manufacturing facilities for hydrogen energy solutions.

We've had some landmarks with Shell as well on electrolysis, the largest solid oxide deployment in India, achieving record efficiencies. And our partnership with Thermax goes from strength to strength also in India, opening the HydroGenx Hub, which is going to actually test and validate systems and ultimately build systems in India as well.

So a lot that we'll talk about this morning there. I think the markets are interesting as well. I'm sure you've seen the headlines, but the power markets are changing dramatically, probably in a way that we didn't anticipate 12 months ago. And it's really being catalyzed, if you like, by the near-term need for power, the time for power driven by things like AI data centers. So that market has shifted dramatically. And as a business, that's a big opportunity that we need to respond to as well.

For Ceres, we're now very much in commercialization phase. As I mentioned, we've kind of crossed the Rubicon, if you like, from R&D into mass production. I mean, that's been coming for a long time. Our teams, our people have worked incredibly hard on that. And we're getting pretty good at this as well in terms of factory builds with our partners globally. And we really have this clear ambition to establish Ceres as the industry standard in solid oxide. We have a strong balance sheet and positive cash flow in the period, and Stuart will talk to the financials in a minute.

And in response to what's going on in the markets and also the transition of where the company is moving from heavy investments in the R&D phase now through to commercialization and manufacturing, we are undertaking an alignment of resources and a business transformation initiative over the next few months leading to a year, which really will focus our partners more on initializing and executing on these commercial power market opportunities that we see and supporting partners as they go into mass production.

I just want to remind you, you're probably pretty familiar with the technology. So the unique technology is the steel cell. This is the latest larger footprint, high-performing fundamental steel cell technology that we have at Ceres, that same cell now has a dual use. And we will be launching next year our latest stack platform. So that's a single product, single stack platform that will service both the power markets and the hydrogen markets.

Now that's very important to us, because what that means is, we have a single platform, we have a very much focused R&D and product development pathway. And also the maturity, the scale, the supply chain build-out that we're doing for these first markets for power, ultimately will also directly result in the maturity, the cost down and everything that we need for the hydrogen market as well.

So single cell, single stack platform. On the top here, you can start to see the first products coming through from our partnership with Doosan, our partnership with Weichai in China, our partnership with Delta in Taiwan. And also, we're making good progress on the hydrogen side of the business as well, particularly with Shell and Thermax in India and also our partnership with Denso in Japan as well.

So just to give you an illustration, this is now becoming very real for Ceres. I think for some people, it's probably -- you understand the technology, you understand the potential of this, but seeing it in reality is what's now starting to happen. This is getting very real for Ceres. This is the first time probably that we're sharing with you the inside of that factory at Doosan. This is 300 meters long, highly automated state-of-the-art production facility in South Korea. It's a semi-clean room environment, all based upon the Ceres technology. It's an amazing facility, and we're very excited to hit that milestone.

Doosan developing the power systems that will now go into things like commercial buildings, the data center markets and grid reinforcement in South Korea.

We're making good progress with Weichai as well, developing larger power systems, again, on that commercial stationary power type applications. So very good progress in China.

And then I mentioned Delta in Taiwan. This is a picture of the facility that they've recently purchased, which is -- just to give you a sense of scale, it's probably 4x the size of the Doosan factory as well. So you can start to see the potential of the scale-up of our partnerships.

I want to say a few words about the two markets that we serve, the power market and the hydrogen market. If we start with the power market, AI-driven data centers, you've seen it in the news, it's driving what we believe is a killer application for solid oxide power. And you can't go anywhere without seeing headlines about investment in infrastructure, not just here in the U.K., but in the U.S. in places like on here, South Korea, Thailand.

And one of the key themes of this is the need for power. We believe that this represents a very attractive market opportunity for solid oxide. In a near-term opportunity by 2030, we see the potential market for this being about 22 gigawatts. And it's a very underserved market today. Probably the only player that's addressing this market today is Bloom Energy in the U.S., which has a multibillion-dollar market cap. But we're starting to bring in to our partnerships, competitors that will actually enter this market. So we see that as very much the near-term focus. There's a clear market opportunity there.

If you look at the 22 gigawatts, about 50% is projected to be data center, but also commercial buildings, industrial power shipping as well. And the split is 50% Asia Pacific, about 25% U.S., 25% rest of the world.

Why do we believe the solid oxide is a killer app in this market? It's all about time-to-power. If you look at what's going on today, if you want to buy a gas turbine, you're waiting up to about 7 years now for gas turbine. There's been a lot of talk, particularly in the U.K. about small modular nuclear. You're not going to see small modular nuclear until about 2030, if you're looking, probably 2035.

High-voltage grid connections, 5 to 15 years. So while there's a lot of talk about time-to-power, there's a gap. There's a near-term gap in the market. You could build a solid oxide fuel cell factory and develop products in under 3 years. That's what our partners are doing, far faster than you can address this time-to-power.

In terms of resiliency, we have a very mature offering now that gives you 24/7 baseload and long stack life. We have low noise, very importantly, low emissions. So when you're talking about some of the things that you've seen in the data center market like deployment of gas turbines on a temporary basis, very quickly, they come up against emissions regulations. You can't deploy those kind of things for long.

So it's low to zero emission technology. It lends itself very well to carbon capture as well. And it's highly fuel efficient. So it's over 60% electrical efficiency, so as efficient as any gas turbine. But also when you combine that with the heat or the cooling that you get off the back end of it, you get something which is 85%, 90% efficient.

It's fuel flexible, natural gas today, hydrogen tomorrow, and it's modular, which means you can build out rapidly. And also, it's starting to benefit from policy decisions. We've seen this recently in the U.S. You've got the one big beautiful bill gives a 30% tax credit for solid oxide fuel cells. We see it in places like South Korea and many other places as well starting to have positive policy decisions to enable this time-to-power.

This is just an illustration of how some of our partners are very much in this ecosystem. You may not be less familiar with Delta. Delta is now the third largest company in Taiwan. So when you think the biggest company is TSMC, Taiwan semiconductors, Delta is a very impressive company. This comes from their website. So you can see that they are already providers of things like power conditioning equipment, UPS equipment that feed into the data center market.

And this schematic, I think, illustrates it very well. You have a fuel flexible input into solid oxide. You can combine it with carbon capture on the top, absorption chilling for cooling and also with the rest of the equipment, you have a ready-made solution that can service things like micro grids, AI data centers.

Semiconductor manufacturing is really interesting as you go down to lower and lower nanometer kind of wafers, you need more and more power. So you're starting to see this whole electrification, industrial loading increasing this need for time-to-power.

We have a lot of experience on this. This is with one of our partners that we did a hell of a lot of field work with. So we've got over 100,000 hours of real-world data center type application data for this and 28,000 load cycles. So, because of the nature of our technology, we can load cycle very well. So we have a very mature offering for this market.

A few words about electrolysis. While we see the data center market and the power market as being the near-term market opportunity, we also are making good progress on electrolysis. I think, we've seen headwinds on hydrogen, and I think that will continue for the near term. However, it does open up a window of opportunity for solid oxide, which is a higher efficiency technology than what people are using today.

Projections on hydrogen. Still, we believe that's a bigger market, but it's a longer-term market. This data is out to 2040. And again, we're very committed to the industrial applications, steel, ammonia, synthetic fuels. That's some of the work we've been doing with companies like Shell recently.

The Shell milestone, we demonstrated 37 kilowatt hours per kilo. What does that mean in real terms? A typical low-temperature electrolyzer would need between 50, 55 kilowatt hours per kilo. So to generate the same amount of power, you need 50 wind turbines. In our case, you only need 37 or you get 30% more production from the same renewable assets. So, because you can integrate this into industrial processes as we've done with Shell, this lends itself very much to 50% of that electrolysis market, which is the industrial decarbonization.

We are moving ahead with our partnership with Thermax in India. That's important to us because we have to compete with things like Chinese electrolyzers' longer term. So establishing low-cost manufacturing in hubs like India is very key to us. Also, it's a key market in terms of the ability to combine with renewable assets that they're putting in there and actually servicing things like the ammonia and the green steel markets in the future.

This is an interesting piece of news that came out yesterday from one of our partnerships with DENSO. So we began our relationship with DENSO a year ago. We're very pleased that DENSO have announced the installation of their first SOEC hydrogen production with JERA, one of the biggest utilities in Japan. What this is doing is producing hydrogen for thermal power plants to reduce emissions there.

So you can see quite a lot of progress, I think, in the first 6 months of the year. We're seeing this near-term market opportunity coming towards us on the power side, which we're very much focused on near term, and we continue to make very good progress on the electrolysis side.

But I'm going to hand over to Stuart to talk you through the financials.

Thanks, Phil. Good morning, everyone. So let me just take you through the financials for the first half of the year and a little bit about our plans going forward.

So financial review, revenue number, just over GBP 20 million, and we'll point to the gross margin percentage, which is industry-leading high gross margins given the fact we're pursuing our licensing model. These to remain high, gives us flexibility, which we'll take you through, generating a good gross profit number.

And then, we're still a loss-making company, right? We're still investing in our stack platform, as Phil mentioned, and we'll take you through a little bit of the trend around that spend and how we're going to manage that going forward. Also, as Phil mentioned, we've been cash generative in the first half. This is a working capital internal financial efficiency play. And I think what we've done is we've managed to preserve more than GBP 100 million in cash at the half year through really tidying up the balance sheet.

Of course, now we need to continue to deliver on the top line in order to drive future cash flows. The bottom right-hand number is an interesting one. This time last year, we came out and said that we were going to realign the business and do a little bit of a restructuring and generate about 15% of savings, both in OpEx and CapEx. And that measurement, as you can see is a slight increase on that 17% compared to the targets we set ourselves. That now forms the baseline of our costs. So anything you see from now on is based on this lower cost level.

And just a bit on revenue and gross profit. You can see that we had a jump at the beginning of '24, and that represents the signing of Delta. We followed that up last year with the signing of Denso, and we're managing to maintain a relatively high revenue number given we're working our way through the backlog and the milestone generations for those two projects.

This trend needs fuel and that fuel is signing of MLAs, and we are 100% focused on so doing, and we'll take you through a little bit of the plan about how we're going to optimize that going forward.

Licensing model, of course, enables a sort of flexible cost base. And here, we're just talking about the OpEx in the last few halves and how it's come down. Like we said, we would deliver a 15% reduction in OpEx and CapEx. That translated to a 13% OpEx reduction, as you can see there. This now forms the baseline for which we go forward. We've done a few -- you'll notice if you're looking at the detailed interim report that we've started writing off some of the R&D that was previously being capitalized. So that's a slightly inflated number. So we've adjusted it there, and we'll continue to do that going forward. But this is a very important piece of the business model, the ability to keep a flexible cost base, and we'll go through a bit more of that in a moment.

In terms of cash flows, I think this is a really interesting chart. This backs up what Phil was saying. We raised quite a lot of money in 2021. And you can see there, that the peak spend on the hydrogen investment we made was 2022. And that investment has been continuing but reducing. And we believe that with the cell, Phil showed you, and the next generation of technology, that's going to be available very soon, that we're going to commercially launch in 2026.

We've come to -- we've crystallized a lot of the effort that's been made in '22, '23 and '24. So whilst I'm not going to sit here and promise we're going to be cash generative like we were in the first half, we're going to see a lesser amount of cash burn as we move forward, because even though we're going to continue to innovate, it's very important as a licensor, we're talking about lifetime and cost and very, very focused programs based on that one stack technology that we're going to launch in early 2026.

Here's the licensing model. And the orange signpost is really where we are. So licensing fees are everything for us, and they'll continue to be very important for the next few years. But as Phil mentioned, that Doosan have now reached the start of mass production, and we expect royalties to flow there on. So we'll see that royalty base build, and that is sustainable profitability, the royalty base. The royalty stack is what we're after. In the meantime, we're going to continue to try and generate license fees as well, very important to make the maximum impact to our technology in the world as we're aiming for this technology to become the industry standard in solid oxide.

So the orange signpost is where we are, and we believe that's a really important inflection point for us, because we're sort of through the R&D phase and into the commercialization phase now.

And what does that mean? Well, in this morning's announcement, we did announce a business transformation program that we're going to launch within Ceres. That's going to take 12 months. And the aim is to utilize the fact that we've reached these various inflection points, the product that we've been talking about, Doosan's launch and royalty generation to realign the business resources around being more commercially focused and being able to maximize the impact of our product in terms of signing more MLAs.

So we're going to support our existing partners. We're going to gain more partners and we're going to restructure ourselves. So we're in the right space to be able to achieve that goal. And we believe the output of that is going to be a reduction in operating expenses of around about 20%. And that will lead us on that clear path to profitability that we're looking for as royalties becomes a bigger part of the revenue streams.

The first phase of this program will be done by the end of this calendar year. So there's a 3-month reorganization, which will go first. And then we'll work very hard on the ways of working and cultural alignment on the business for the next 9 months post that. But that kicks off today, and I think that's an important part of the position we are in the market at the moment. I think it's a real opportunity for us to maximize the position we currently find ourselves in.

And with that, I'll hand back to a Phil on summary.

Thanks, Stuart. Yes. So just a few words in closing on the outlook for the year. So as Stuart said, this landmark start of production at Doosan means, we are transitioning from the very much 20-plus years of R&D through product development now into actually having products that are coming to market and a big milestone for us. We are seeing more and more incoming on power, with just respond to that market opportunity. That's being targeted by our partners as first product launches. If you look at Doosan, if you look at Delta, it's all about the power market to begin with, and then electrolysis will follow.

We are making very good progress on electrolysis as well. As I mentioned, the relationship with Shell has been fantastic, great results there, great news coming out of Japan on progress there. So it really validates the capability of this technology to be a real step change in electrolysis in the future.

Stuart has already talked about the business transformation plan. I think, we have that continued discipline on growing top line, but also managing our resources to really respond flexibly to the opportunities that we see. We maintain a strong balance sheet with the cash management and the cash inflows in the period, and that will continue.

We did this morning adjust the revenue expectation for the year. I think, it's very hard to predict signing of new MLAs. So when you look at our revenues, they come from engineering services, signing technology transfers and then ongoing royalties. So for the year-to-date now, we are expecting a minimum of GBP 32 million. And anything that we sign now will be upside to that.

The reason for the change here is, we honestly cannot predict exactly when we sign these deals, and also -- that also has an impact on revenue recognition, which, as you can imagine, is not trivial when you're actually dealing with these kind of contracts. But we are continuing to pursue several opportunities, and we'll keep you updated on progress as and when they arrive.

So with that, I think Patrick, we may take some questions from.

Yes, we have a couple of questions from the room. So if you have any questions, please wait for the roving microphone to arrive and ask your question, and then we'll have time, hopefully, for some questions online.

Alex from Berenberg. Just the focus on the power market, and you mentioned kind of the news flow in the U.S. and Bloom Energy. And are you seeing the pipeline of potential partners with that kind of U.S. tint that you kind of showed that pie chart of how big the Asian market is as well for the power data center AI market. Can you give a bit more color on where that pipeline is coming from? You mentioned a bit more incoming, that would be great.

Yes, sure. Look, I think what's happening with Bloom Energy is definitely attracted interest, and also the whole time-to-power thing has become pretty acute. I think when you look at the partnerships that we have, when you look at companies like Doosan, like Delta, you have to also remember they have U.S. operations. They're already servicing those markets for a lot of the products that we talked about in the data center market. So we have ways already into that market, but also we're looking for U.S. partners as well for that particular market.

So that's -- I think, there's clearly a power gap there, and I think that does open the opportunity. I think -- what's interesting as well is on the electrolysis side, for example, the IRA bill has obviously had a lot of headwinds in the U.S. And we've really seen the U.S., I think, is now moving towards blue hydrogen rather than green hydrogen. But also what the Trump administration has done on the one big dutiful bill is definitely enable power generation for solid oxide, particularly with natural gas and carbon capture.

So I think, that's a 10-year initiative that's just come in. So I think, some of the uncertainty around which way the U.S. is going, I think it's pretty clear now. We don't really see the U.S. as a market for green hydrogen. That's not where we're putting our commercial efforts, but we do see it as a potential market for power.

Just a couple of questions from me, if I may. You mentioned that it's quite hard to kind of predict when you might be able to recognize revenue when you do indeed sign an MLA. Can you just give us a bit more color around that in terms of the mechanics? I know that's probably hard to summarize, but just kind of a bit of an idea would be helpful.

And the second one is just on the business transformation. I think, that makes a lot of sense and kind of preparing the business for its next kind of step. Can you just give us an idea of kind of what the cash costs might be around that to implement it?

Yes. So, when we talk about signing an MLA and an MLA is a manufacturing license, it's a very complex sale. And you are also not just selling a license in our case, GBP 40 million, GBP 50 million type deal. You're actually convincing a partner potentially to invest several hundred million in facilities in product development to enter a market. So it really is a corporate development type activity.

And any of you that have worked in that kind of sphere realized that those decisions go all the way up to Board level and therefore, they take time. And they are subject to a calendar that you don't control.

So the difficulty that we have as a business is, if we're trying to forecast revenue based on very discrete events, it gets somewhat difficult. Once we have those contracts, as you've seen with the likes of Delta and Denso, that gives us pretty predictable revenue flowing into the first half of this year, for example. So that's what's what makes it difficult.

Now, we obviously have at any one time, several of these kind of conversations going on. And -- but it's very difficult to forecast exactly when they will come. I think the second complication, which is Stuart's world, which he knows and loves now is, once you actually get these kind of contracts, you have IFRS 15 and all kinds of moving standards, which seem to change quite dramatically. So when we have a contract, we have to also be very careful about how we recognize that. So it's not just the winning of a deal. You have to then to be able to specify or forecast how much of that deal you can recognize by when is quite a lot. So that's part of it as well.

I'll just follow-up by saying that single words in those contracts can make big differences in when revenue is recognized. So we go -- we diligently work through those contracts, but contracts are in negotiation, and there are gives and takes in those contracts. So when you come to the end, you then got to do a full review and see when your performance obligations are and try and decode that into revenue recognition. So it's not easy.

As we do more and more deals, we become more experienced, we try and standardize the contracts where we can. But as Phil said, these are big corporate development deals, so it becomes tricky.

The second part of your question on the costs of the first step of our transformation plan, which is the 3-month reorganization. This will be done by Christmas. And we're looking, as we said, we think on the back end of the reorganization to get an optimal structure, we can be about 20% less cost. To get there, there may be a one-off cost, but it's going to be relatively trivial compared to the saving, maybe it's GBP 1 million.

So a good payback in terms of an investment.

Yes. But we are not here searching for cost savings. What we're doing is making sure the company is optimally structured given the inflection we're going through. And we believe the output of that will be the cost reduction rather than chasing. We're not chasing a cost reduction. So it's definitely a transformation rather than rightsizing or anything like that.

Are there any more questions from the floor before we move on to our online audience? No. Okay. Well, let me ask a couple of questions from the participants online.

Phil, you mentioned that 2025 is a landmark year for the business. So what are the key milestones that investors should be looking out for to mark progress?

I think, it's continued milestones with existing partners. If you look at the partner progress this year with each of our partners, you're seeing evidence coming through Shell, Delta, Doosan. So I think that's continued. And then, I think it's also the potential to sign new partnerships as well.

On Doosan, do we have any visibility into their sales pipeline at all? And can you elaborate on the types of markets that they're focusing on?

Doosan is a public company in Korea. So I think, obviously, I can't speak for them. But I think it's clear what their first markets. When you look at the Korean market, it's, again, a highly stimulated market as in SOFC is treated as quasi-renewable energy. And they have very clearly laid out targets in South Korea about, I think, it's 16 gigawatts of power by 2040. And every year, there's a process, there's auctions that are bid into, and Doosan has been in the past, very successful in those markets. So they tend to be grid reinforcement type activities, commercial power basically supporting electrification.

Thank you, Phil. A question for you, Stuart. We're starting another cost savings program. So can you give an update on thoughts around cash burn, excluding licensing agreements in '25 and '26, how would cash burn look with one or two license wins, respectively?

Amid, so respectfully, I would correct the premise of the question. We're not going into a cost saving exercise. We're going to transform the business so we can commercially face into the power opportunities in front of us. That will lead to a reduction in operating costs. And for the -- to be most useful, given some of the uncertainty around revenue recognition and timing of deals, which Phil mentioned, I would just encourage the person who asked the question to go back and look at our operating cost base, which is here for the first half of the year and look at a roundabout a 20% reduction on that. That's going to be the cost base.

What we can't do is sit here and predict accurately what revenue is going to be. So we believe that, that step, the optimization step leading to a 20% reduction will obviously reduce the cash burn on an average basis by a significant amount. But it's almost impossible to predict with the MLAs coming in.

A question on the Bosch announcement earlier on in the year. So can you give an update on where we are with Bosch and what your latest thoughts are, please?

There's not a great deal more to say regarding Bosch, really. We've obviously more or less concluded the exit of Bosch. Obviously, they still have some shareholding, which they began to sell, but that's really up to Bosch to sell. Look, I think we've already been over the reasons behind that. Bosch, just this week announced a further 12,000 layoffs. So they're very clear. This was not about the technology. This is more to do with a Bosch restructuring of priorities, and we're just working with Bosch to conclude that. But the fact that we're not even really discussing Bosch, I think, shows you the progress that we're making with other partners.

We've got a few questions on the data center power market. So firstly, can you talk a little bit more about our competitors in fuel cells within the market? Obviously, you talked to -- you mentioned Bloom. Are any of our partners, do you know thinking about solid oxide fuel cells plus carbon capture technologies to make the energy greener? And how does the cost of power for solid oxide compare to other costs of power for other solutions?

Sure. So when you look at the market for solid oxide for power generation, there is only really one player at the moment, which is Bloom Energy. And I think Ceres' licensees are probably the next wave of entrants into that market. And that's quite a difference when you look at the electrolysis market. You've got in China alone, 60 electrolyzer companies of PEM and alkaline and then you have solid oxide and then you've got four or five players on solid oxide in the electrolysis market.

So in terms of competition, I think it's -- our competition is clear. It's Bloom Energy. And I think they've done a fantastic job in pioneering that market. What's interesting when you look at the economics is the cost of conventional power generation now has gone up quite dramatically. When you look at lead time of gas turbines, the time of lead ships, et cetera, the cost of those power generation equipment assets is secondary to the availability of power. So you're starting to see, I think, a very clear window and potentially a crossover where you can see solid oxide coming down the cost curve at the same time that conventional power generation is actually getting more expensive.

Now that window maybe you can debate how long that is, but the order book for gas turbines, et cetera, now is full to 2030. So that window is clearly there. And I think that once you actually enter that market with solid oxide, you will get that scale effect.

When you talk about then cost of power, that really depends on which part of the world you're operating in. It comes back to your spark spread, your difference between your gas price and your power price. But when you look at the key geographies that we operate in, the most attractive markets for this kind of technology are U.S. with cheap gas, U.K. because they have very high power prices. Germany, ironically, even though maybe Bosch didn't see that, I think that's unfortunate. I think they would see it.

Taiwan, Japan, Korea, all of these nations that are somehow energy constrained, there is a clear advantage and you can generate power more efficiently than you can actually currently source grid power. So there the near-term geographic markets that we see for this.

In terms of the ability to combine with carbon capture, I think it's an excellent question. When you take a conventional centralized power plant, your carbon that comes off the back end of it is about a 4%, 5% carbon concentration. Because we're not using combustion and the -- what comes off the air side of a solid oxide has a much higher concentration of carbon, 40%, 50% concentration. And therefore, it lends itself very well to a more efficient carbon capture. And definitely, it's -- you saw it in some of the thinking of people like Delta, it lends itself very well to power generation with natural gas, with biogas, with blends if you end up with putting hydrogen into the system, but with carbon capture.

One for you, Stuart. Could you remind us of the mechanism for royalty payments? How does that work? And if you can just explain what goes behind that?

Sure. So our first royalty stream is going to come from Doosan. It's based on them making sales into marketplace. And there's a mechanism and actually, some of the mechanisms are different across many of our partners. But ultimately, it leads to either an exact percentage of their net sales or a proxy percentage to their net sales. So the more successful they are commercially, the more royalties we get. So supporting them to launch and kind of help generate demand for them is well worth it for Ceres.

One more question for you, Stuart. In the slide deck, we talk about a GBP 0.9 million order intake at present compared to a larger number last year. So can you just elaborate a little bit on what's behind that difference?

Yes, sure. I mean, last year, in the first half, we concluded the Delta deal. And the Delta deal was what you see there, that number, GBP 40-something million worth of orders coming in, and that's what we're generating the revenues on now. So orders are super important for us because they build our backlog. And in those times where we're pursuing the MLAs, that's going to be the revenue stream and the cash flow for us.

So we're -- even though we haven't been successful in signing an MLA in the first half, we -- one of the reasons we go through the transformation process now is so we can make sure we're optimally structured to pursue these opportunities and execute.

We got time for one more question from the online audience. Phil, can you talk a little bit about India? Obviously, we have a relationship with Thermax there. So where are the main sources of hydrogen for that market? And how do you see that developing over time?

So the Indian market is obviously very interesting and it's, kind of, evolving quite rapidly. I was there just 2 weeks ago, and I was quite surprised how much progress had been made. I think we're often quite skeptical.

So when you look at India today, it's a big importer of fossil-based energy. And its potential is to be one of the biggest generators of renewable energy. Under Modi, he has a plan to be able to export renewable energy, but you can't export electrons very easily. So you have to convert it into a green molecule. And those green molecules that they're looking at is green ammonia, green steel synthetic fuels.

Now the problem you have in an economy like India is your renewable assets are often quite far away from your means of production, shall we say. So you can generate solar very cheaply, let's say, $15 a megawatt hour, something like that, but it's not where you want to site an ammonia plant or whatever.

They've had a recent round of auctions on things like ammonia and they've achieved very low prices as in the 12 bids that went in, 6 of them were around, I think, I'm not an expert on ammonia, but $600 to $700 a tonne, which is pretty competitive. And one thing that's unlocking that is they've now made a more homogeneous power pricing policy, which means that if you're generating hydrogen and you're using renewable assets, you get a lower power price as a combination of renewable power that you're putting in and also conventional power and hydropower.

So what it means is, India, actually, is progressively moving forward now in terms of cost of hydrogen. It's getting -- your cost of green hydrogen is coming down and cost of things like green ammonia is coming down as well. So there's a lot of progress being made.

You asked about where hydrogen is coming from. I think it's being pushed a lot. And if you look at the auctions by companies that previously have been big renewable energy producers and are now moving into some of these areas. So it's a fascinating market. I think, the interesting thing for India is can they manufacture, can they have a made-in-India kind of strategy. But when we look at places like Taiwan, Korea, et cetera, China, it's obvious how they really get down cost curves and supply chains. And I think that's the challenge, I think, for the Indian opportunity.

I think we're drawing to a close in terms of question time. If there are no more questions in the room, then I'll hand back to Phil just to conclude. Over to you, Phil.

Yes, sure. Look, I think we've covered a lot of ground today. I think there's a couple of takeaways.

One is the company has made some very significant progress this year. We've hit some big milestones. We've talked about start of production. That's been key. We've talked about our partners investing and making progress. That's key for us.

And I think also, some of the progress that we've made in the hydrogen side is continuing to give us confidence in that market. However, we see the near-term market now coming towards us quite rapidly as this power market, and we have to respond to that. We just follow the market, to be honest. We follow the demand that comes in our pipeline. We follow what our first product launches are with partners, and we're starting to see that.

We continue to operate an asset-light model. We continue to operate high margins, and we're very confident in the future strategy of this business in terms of signing new partnerships and also bringing the partnerships that we have to market. So I think it's -- the company is very well positioned, particularly with what we see ahead of us with this near-term market and the hydrogen market following.

And I think, what we're doing around a single product offering, a single platform that services both markets really gives us that opportunity to rationalize some of our activities and really focus now on the commercial launches.

So thank you very much for your participation today, and we look forward to updating you again on progress in the future. Thank you.