The three leaders in their fields have teamed up for McPhy’s deployment of Dassault Systèmes’ 3DEXPERIENCE platform on the cloud to optimize the performance of its equipment as well as the processes and tools used across its development, engineering and production centers in France, Germany and Italy. McPhy – a long-time SOLIDWORKS customer – chose to move to a collaborative business platform deployed by the Visiativ team. This would deliver the collaborative design and product life cycle management capabilities to support its growth strategy as it scales up its business, in particular with the preparation for its new Gigafactory in France in 2024.

“The Dassault Systèmes 3DEXPERIENCE platform deployed by Visiativ will help us structure our teams and our business. A unified architecture across all our sites (France, Italy and Germany) is a key step in McPhy’s industrial scale-up, with the aim of optimizing collaborative processes across our European technology teams. We will also reduce our time-to-market in product development and project engineering for our clients, in particular by modelling the manufacturing process before our products are launched on the market,” said Benoît Barrière, Chief Technology Officer of McPhy.

Reaching carbon neutrality by 2050 implies switching most of the world’s total energy consumption away from fossil fuels. McPhy’s electrolyzers and low-carbon hydrogen refueling stations are increasingly recognized by the industrial, mobility and energy markets as a viable solution to decarbonize their activities. Green hydrogen can be used to decarbonize the industrial sector as an energy carrier or as a raw material for steel production. It also can be turned into clean fuel to charge hydrogen vehicles, injected into gas networks, or used as an energy storage solution to help complement the renewable energy transition.

The 3DEXPERIENCE platform will enable McPhy to leverage knowledge and know-how across the enterprise by standardizing processes and design and simulation applications, centralizing data and project management, and facilitating interaction among its teams.

“As the world shifts away from the use of fossil fuels, our 3DEXPERIENCE platform offers new technological approaches to innovation across all phases of the life cycle, for equipment and products that contribute to a more sustainable economy,” said Philippe Bartissol, Vice President, Industrial Equipment industry, Dassault Systèmes. “Game-changers like McPhy can collaborate, innovate and manage the entire product life cycle in one virtual twin experience.”

Visiativ, a digital transformation partner of Dassault Systèmes, is accompanying McPhy ’s deployment of the platform with integration and support services that enable all users to better collaborate and innovate by centralizing data and project management. This structuring and this multidisciplinary project was made possible thanks to the knowledge of Dassault Systèmes’ solutions combined with the understanding of the customer’s issues on the ground.

“The success of this partnership is thanks to the collaboration, mutual trust, and commitment of McPhy, Dassault Systèmes and Visiativ,” said Laurent Fiard, CEO, Visiativ. “We are delighted to support McPhy in this global project in line with their innovation transformation strategy. It is a perfect example of how the hydrogen industry is positioning for success in reaching carbon neutrality by 2050 and we are proud to partner with McPhy and the hydrogen industry on this journey.”

Jean-Baptiste Lucas, Chief Executive Officer of McPhy, commented: : “We are very pleased with the decision of our Board of Directors, which is a positive conclusion to the various favorable notices we have recently received about our Gigafactory project. This Gigafactory will be a decisive tool in the development and design of large-scale electrolyzers, which are essential for the use of green hydrogen in ambitious decarbonization projects for industry and heavy mobility. We will soon have an industrial set-up capable of mass-producing a wide range of electrolyzers on a continental scale, that is unmatched by any other player in decarbonized electrolysis in Europe.”

Antoine Ressicaud, Chief Operating Officer of McPhy, says: “This is an inspiring project for the entire McPhy team, with 20,000 sqm dedicated to the manufacture and testing of multi-MW electrolyzers. Our desire is to implement the highest standards of industrial performance on this Belfort facility, through an ambitious social and environmental approach.”

The commissioning of the future plant on the Belfort site is scheduled from the 1st half of 2024, with a gradual ramp-up aimed at reaching an annual production capacity of 1 GW. The McPhy Group will then have a total annual production capacity of 1.3 GW(2), including the capacity of the San Miniato site in Italy, in line with the growth prospects of the green hydrogen markets, particularly in industry.

The contract signed with Bpifrance provides for the terms and conditions for the implementation of the public aid. McPhy will receive by December 31, 2022 an initial payment of 28.5 million euros. Subsequent payments will take the form of reimbursements of expenses incurred, pursuant to the terms of the contract, following the satisfactory achievement of defined milestones, for a total amount, including the initial payment, of up to 114 million euros.

With this Gigafactory, McPhy is pursuing 3 objectives:

• Innovation: through the development of new generation alkaline electrolyzers, in terms of size, components and integration within modules;
• Industrialization: with large-scale production to meet the needs of the European market in particular, to contribute to the decarbonization of industry, mobility and energy;
• Collaboration: with numerous partners of the Hydrogen ecosystem in Europe and the dissemination of knowledge with academic, industrial and research stakeholders.

The future plant in Belfort will host new developments and production of the large electrolyzers in the “Augmented McLyzer” range, a real technological breakthrough, enabling 20, 100 MW and beyond (GW) architectures to be equipped with an output pressure of 30 bar. This large-scale R&D and industrialization effort will provide the industry with equipment capable of producing hydrogen from renewable energies at a cost that is competitive compared to alternatives using carbon energy.

The Gigafactory will further strengthen the McPhy’s industrial set-up with, on one hand, the electrolyzers with the ongoing automation of the San Miniato site, dedicated to the production of electrolyzers of up to 1 MW capacity and, on the other hand, the stations, on the brand-new site in Grenoble.

Concurrently, Belfort’s location at the crossroads of many European countries, with a genuine research and development ecosystem dedicated to innovation and hydrogen, will foster the multiplication of potential industrial and commercial partnerships.

The beginning of the construction and the purchase of the land will result in a cash outflow related to the Gigafactory of 9 million euros by the end of the year. In addition, and as previously indicated, McPhy intends to make further investments in order to be able to meet the growing demand for large-scale equipment and facilities, by increasing its R&D resources and by strengthening its project and service teams. These efforts, which are being implemented now, will result in additional expenses in the second half of 2022 and are expected to lead the year-end cash position to a level comparable to the end of the first half, taking into account the Gigafactory-related Bpifrance initial payment and cash outflows.

(1) PIIEC (“Projet Important d’Intérêt Européen Commun “) or IPCEI (“Important Project of Common European Interest”) is a financing system that supports projects deemed essential for Europe’s competitiveness, authorizing Member States to finance initiatives beyond the limits usually set by European regulations. A PIIEC or IPCEI Hydrogen was launched on December 17, 2020.

(2) Annual production capacity of the Belfort site of 1 GW, in addition to the 300 MW production capacity of the McPhy site in San Miniato, Italy.

Jean-Baptiste Lucas, Chief Executive Officer of McPhy Energy said: “We are delighted to welcome Alexandre Brunet as Chief Financial Officer of McPhy. His operational and managerial experience acquired in large international groups will enable him to support our transition to industrial scale.”

Prior to joining McPhy, Alexandre Brunet was a Senior Manager at the audit and consulting firm PwC. He then joined Schneider Electric, where he first integrated the Mergers & Acquisitions department, before becoming the Group’s Head of Investor Relations. Alexandre Brunet continued his career at Schneider Electric with several positions as CFO of operational entities, all multinational, with diverse activities: commercial, projects and services, supply chain. He spent 5 years in Copenhagen to take the responsibility of the Nordic-Baltic subsidiary and he contributed as well to the creation of a global IT Division.

Alexandre Brunet is a graduate of ESCP Business School and holds the DESCF degree as part of the French Certified Public Accountant course.

Next financial communication meeting

Publication of Full-Year Revenue: January 24, 2023, after market close

Jean-Baptiste Lucas, CEO of McPhy, stated: “To respond to the gradual acceleration of the market, McPhy has just completed its industrial facilities with the opening of a new site in Grenoble dedicated to the production of our hydrogen filling stations. At the same time, McPhy is pursuing its strategy to develop its pressurized alkaline electrolysis technology with an investment in capacity at its San Miniato plant, complemented by the recruitment of engineering and R&D teams in Wildau. These investments mark the Group’s change of scale and increase its production capacity to meet the demand of the European market. Finally, also in the electrolyzers area, the validation of the Gigafactory project by the European Commission within the framework of the PIIEC scheme confirms the potential of low-carbon hydrogen, and is a key step in the Group’s decision-making process.
On the operational side, McPhy has started to benefit this semester from the implementation of the large-scale hydrogen projects in which it is engaged. Intrinsic performance was affected by the take back of two stations already ordered due to non-standard technical and commercial requirements for both the two customers concerned and for McPhy.
This adjustment neutralizes the dynamism observed in the good progress of the last few months in the first half of the year.”

• 2022 First-Half Revenue is stable compared to 2021 at €5.2 million. This is mainly due to the repurchase of two old generation stations sold in previous years to German customers, whose related amount has been subtracted from 2022 First-Half Revenue. The buyback of this equipment was deducted from 2022 First-Half Revenue. Adjusted for this effect, revenue would be €7.4 million compared with €5.2 million in the first half of 2021, representing growth of 42%. This solid performance is the result of the completion of the first orders on the major projects in which McPhy is involved, while the market continues to show a wait-and-see attitude regarding the release of public funding.
• The supply of electrolyzers, either large capacity (McLyzer) or from the Piel range, and McFilling hydrogen stations contribute to this half-year performance and demonstrate their perfect complementarity in generating growth.
• The Group’s recently won tenders on large-scale projects are beginning to generate substantial revenues, which are expected to increase significantly with new orders received under the framework of these projects:
o R-Hynoca , regarding the implementation of the first hydrogen station in Strasbourg;
o CEOG , regarding the construction of the West Guyana Power Plant. It will combine photovoltaic energy and massive electricity storage, mainly in the form of hydrogen;
• McPhy also signed a contract at the beginning of the year with a subsidiary of Eiffage to equip a site in Belfort with a 1 MW electrolyzer and a refueling station able to distribute up to 800 kg per day in order to fuel a fleet of hydrogen buses.
• Finally, McPhy received two first orders under the framework of its strategic partnership with Hype , consisting in supplying: (i) two 2 MW alkaline electrolyzers whose capacity can be increased to 4MW, and (ii) two Dual Pressure stations with a capacity of 800 kg per day respectively, to be installed in the Paris region.
The commercial dynamism during the first half of the year is reflected in firm orders totaling €16.1 million, bringing the backlog to €29.1 million at 30 June 2022, an increase of 44% compared to 31 December 2021.

• During the first half of the year, in order to support the expected growth of its business, the Group continued its development strategy. This resulted in an increase in current expenses due to:
o the development of its industrial capacities with the opening of the new station production site in Grenoble;
o innovation and R&D expenses in relation to the future introduction of its new range of electrolyzers and stations;
o the structuring of the teams and the active recruitment policy.
In this environment, personnel costs increased by €2.2 million year-on-year to €7.9 million in the first half of 2022, reflecting the recruitment of 32 new employees during the period. Other expenses amounted to €4.4 million in the first half of 2021 and €9.6 million in the first half of 2022, of which €6 million were incurred to strengthen the Group’s industrial and R&D teams (industrial subcontracting, recruitment costs and technical expertise).
• To cover a possible additional cost related to the technical warranty of its installed base of new generation electrolyzers, the Group has also made a provision of around €3 million in non-recurring expenses.
• The recurring operating loss thus reached – €19.4 million in the first half of 2022, compared with – €8.3 million in the first half of 2021.
• Net loss for the first half of 2022 was €19.7 million, compared with €8.6 million for the same period in 2021.

• As of 30 June 2022, McPhy had a cash position of €141.8 million compared to €177.2 million at 31 December 2021. Cash consumption amounted to slightly more than €35 million during the first half of the year, including €12 million for the financial investment in the Hype Convertible Bonds subscribed under the framework of the strategic partnership with this company . The balance of €23 million is the result of the cash consumption required by the Group to finance its industrial and R&D investment policy.

• McPhy finalized the consolidation of all the activities dedicated to refueling stations on its new site in the heart of Grenoble on an existing industrial building of more than 4,000 m2. The new site will have a production capacity seven times higher than today’s, increasing from 20 to 150 units per year, and will lead to the creation of around one hundred direct jobs at full load. This new facility completes the Group’s network of stations and strengthens its presence in Auvergne-Rhône-Alpes, one of the most dynamic regions in Europe for the development of green hydrogen solutions. It perfectly illustrates McPhy’s ambition to become a major player in the hydrogen mobility segment.
• At the same time, McPhy maintained its efforts to scale up the electrolyzer part of its business with a major investment bringing the production capacity to 300 MW on the San Miniato site, in order to meet the market traction while waiting for the potential commissioning of the Gigafactory. To begin with, its facilities will be based on the Wildau site for the design and engineering of very high capacity electrolysis systems (multi-MW / GW), and on the San Miniato site for the design, production and assembly of stacks. The construction of the Gigafactory, with the addition of 1 GW, would bring the production capacity to 1.3 GW and McPhy would thus have a pan-European industrial facility unmatched by any other electrolyzer manufacturer.
• McPhy pursued the strengthening of its partnership ecosystem with key players such as Chart Industries, Technip Energies and TSG, which complement and confirm the quality of McPhy’s offer while providing important commercial leverage. McPhy thus participated in various tenders through joint bids, notably with Technip Energies.

• The Group strengthened its governance with the appointments of Laëtitia Peyrat as General Counsel and Secretary to the Board, and Benoît Barrière as Chief Technology Officer .
• McPhy hired 32 net new employees in the first half of 2022 in a context of intensified talent hunting. At the same time, the Group developed internal mobility in order to retain its managers, while pursuing an active policy to attract young graduates to the hydrogen sector through the promotion of internships which, in most cases, lead to hiring.
• In terms of ISR, the Group is pursuing the implementation of a structured policy to get closer to the best standards with the aim of achieving a demanding certification by 2025.

• The European Commission validated the electrolyzer Gigafactory project among the projects submitted by France under the framework of the Hydrogen IPCEI. This decision demonstrates the interest of the project for the hydrogen sector in France and in Europe.
• The final investment decision will be taken by McPhy soon, after final confirmation by the French authorities of the amount of public aid and the contractualization of the terms of the provision of this aid with Bpifrance.

Based on 2022 First-Half Results, McPhy observes that the low-carbon hydrogen market is still gradually gaining momentum and anticipates a more moderate growth of its revenue for the year 2022 than initially anticipated.
During the second half of the year, the Group will continue its industrial investments, notably by communicating its final decision on the construction of a Gigafactory. It also intends to maintain its active human resources policy, with a target of more than 60 net recruitments in 2022.
As the market in which McPhy operates remains strong, the Group will also continue to accelerate its growth investments, in particular in R&D, which will consequently impact its profitability.

Agenda

• Availability of the half-yearly financial report: September 15, 2022, after market close
• Publication of Full-Year Revenue: January 24, 2023, after market close

Upcoming financial event

Publication of 2022 First-Half Results on July 28, 2022 after market close

Upcoming financial event

Publication of half-yearly results on July 28, 2022 after market close

The General Meeting adopted all the proposed resolutions. The consolidated result of the vote by resolution and the minutes of the General Meeting will be available on the Company’s website.

The Company would like to thank all shareholders present, represented or having voted by mail for their commitment and support.

In addition, the Company announces the appointment of Laëtitia Peyrat as General Counsel & Board Secretary and Benoît Barrière as Chief Technology Officer (CTO), both joining the Executive Committee.

Laëtitia Peyrat will lead the legal function and, in this position, will define McPhy’s legal strategy in line with the Group’s vision, corporate culture and growth objectives.

Benoît Barrière will be based in Wildau (Germany) and will have overall responsibility for project engineering, product development and R&D for all activities. Benoît Barrière will join the Executive Committee.

Next financial communication

Half-yearly results on July 28, 2022 after market close