McPhy will design, manufacture and integrate a McFilling “Dual Pressure” hydrogen station. Providing two distribution pressures (350 and 700 bar), this robust equipment, at the cutting edge of technology, is designed to refuel all forms of hydrogen mobility: light vehicles, garbage trucks, buses or trucks.

With a distribution capacity of 800 kg/day, this model of station responds to the growing demand of the zero-emission mobility market, and to the increasingly ambitious decarbonization schemes emerging in the heart of the territories.

This new contract brings the number of McPhy references to 37 stations (2), confirming the Group’s position as a major player in hydrogen mobility.

Footnotes

(1) To date, name of the customer and location of the project are confidential.
(2) References deployed, under installation or in development. Among them: 2 stations are included in the ZEV framework contract’s conditional part [contract signature: 18, June 2020].

Next financial event

• 2021 Full-Year Revenue, on January 25, 2022 (after market)

It is with confidence that I am handing over the General Management to Jean-Baptiste Lucas whom, with this track record of excellence in innovation, major projects and scale-up of industrial processes, has the necessary qualities to lead, with McPhy’s teams, the large-scale industrialization and place the company among the world leaders.

Luc Poyer, Chairman of the Board of Directors of McPhy said: “As announced in July, the Group has conducted a rigorous and open selection process for the recruitment of a new Chief Executive Officer. Jean-Baptiste Lucas has a solid and successful international experience, focused on the customer, in the process industry, both in operational management of industrial units, development and transformation, as well as in general management positions in fast growing companies within global groups. It is with confidence that I am handing over the General Management to Jean-Baptiste Lucas whom, with this track record of excellence in innovation, major projects and scale-up of industrial processes, has the necessary qualities to lead, with McPhy’s teams, the large-scale industrialization and place the company among the world leaders.”

Prior to joining McPhy, Mr. Lucas, 50, was since January 2019 the Managing Director of IPS B.V, a Dutch packaging technology group owned by Apollo Management, where he led the successful resizing and turnaround of the company. Between 2011 and July 2017, Mr. Lucas spent 6.5 years in Bahrain, working for industrial companies owned by the kingdom’s sovereign wealth fund as Managing Director of GARMCO, where he led the construction of an aluminum casthouse, and previously as Executive Vice President of ALBA, where he was responsible for casthouses operations, operational excellence, metallurgy and global sales and marketing. Prior to that, Mr. Lucas spent 13 years with the Pechiney Group, now Alcan, where he was General Manager in Switzerland, heading the Aerospace, Transportation and Industry division after having headed sales and marketing in Germany. Mr. Lucas began his career in 1996 with the French management consulting firm Bossard Consultants. He is a former French Foreign Trade Advisor and a graduate of ESCP.

Upcoming financial communication events

• Publication of annual sales on January 25, 2022, after market close

The CEOG project highlights our technological expertise and McPhy’s ability to contribute to the scale-up of hydrogen solutions.

Luc Poyer, Chairman and acting CEO of McPhy, states: “The CEOG project is distinguished by its scope, its innovative character and the collaboration of leading manufacturers in a spirit of industry. We would like to thank Meridiam, SARA and HDF for having initiated this visionary project. By equipping the project with a 16 MW electrolysis platform, capable of producing 860 tons of green hydrogen per year, McPhy is demonstrating its technological and industrial capacity to participate in the CEOG project. This demonstrates our technological expertise and McPhy’s ability to contribute to the scaling up of hydrogen solutions for the energy transition.”

Designed and initiated by Hydrogène de France (“HDF”) and developed with the financial, strategic and operational support of Meridiam, a leader in investment and asset management in public infrastructure serving the local communities, the CEOG project represents a decisive milestone in the industrialization currently taking place in the hydrogen sector. Indeed, this major project allows the massive storage of intermittent renewable energies, on an industrial scale that is economically viable thanks to hydrogen.

Combining a photovoltaic solar farm, a high-power electrolyzer (16 MW), a hydrogen storage unit and high-power fuel cells, the CEOG plant will produce hydrogen that will be stored under pressure in tanks. This hydrogen will then be recombined with oxygen from the air in fuel cells to produce 24/7 non-polluting electricity and secure the supply of a competitively priced electricity, compared to the territory’s thermal power plants of the territory, to 10,000 households in French Guiana.

Each stakeholder will bring to the project its expertise in the fields of production, distribution and storage of green energies.

• McPhy: a specialist in hydrogen production and distribution equipment, McPhy will supply the 16 MW Augmented McLyzer high-power electrolyzer, which will convert the electricity produced by the photovoltaic park into renewable hydrogen.
• HDF: a global pioneer in hydrogen energy, HDF develops and operates multi-megawatts Hydrogen-to-Power power plants, incorporating its high-power fuel cells, to provide continuous or on-demand electricity from intermittent renewable energies.
• Meridiam: a leader in public infrastructure investment and asset management for public authorities.
• SARA (French West Indies refinery limited company, Group Rubis): a key player in energy production in the French West Indies and French Guiana for over 50 years.

The 16 MW hydrogen production platform, scheduled to be commissioned in 2024, will be equipped with McPhy’s “Augmented McLyzer” innovative technology. The unique combination of high-pressure alkaline electrolysis (30 bar) and high current density electrodes will enable almost 860 tons of green hydrogen to be produced per year.

Based on non-polluting energies, CEOG will avoid the emission of 39,000 tons of CO2 per year compared to a fossil fuel power plant (1).
This project will also be the first time that McPhy will be offering an outdoor version of its alkaline electrolysis technology. In addition to being the most suitable solution for an isolated geographical area, containerization ensures a high level of profitability for the customer. Indeed, the reduction in civil engineering costs and the pre-assembly of the equipment directly in McPhy’s plants, make it possible to optimize time and total installation and assembly costs.

Because of its scope, its innovative nature and the collaboration of leading manufacturers, this contract positions McPhy at the forefront of large-scale hydrogen projects.

Footnote

(1) ADEME study: : https://www.guyane.ademe.fr/sites/default/files/notes-emissions-gaz-effet-serre-secteur-energetique-guyane.pdf ; integrating CEOG’s carbon intensity of 0.136 kg CO2 eq/kWh; emission factor of the thermal kWh of the Guyanese coastline of 0.915 kg CO2 eq/kWh.

Next financial events

• 2021 Full-Year Sales, on January 25, 2022 (after market)

As a reminder, the incident consisted of a leakage of potassium hydroxide solution (“KOH”) (1) from the electrolyzer. The equipment shut down before automatically went into safety mode in accordance with the integrated safety system, the proper functioning of which was confirmed by the investigation report.

Investigations were conducted by Gexcon, an independent safety expert, who carried out an in-depth analysis to determine the sequence of events, the root causes of the incident and the remedial action plan.

Based on the technical information gathered and extensive laboratory experiments on collected samples, Gexcon concluded that a formation of deposits had gradually restricted the flow in the channels of the stack. This led to a series of internal events within the stack that triggered a KOH leakage.

McPhy will bring EnergieDienst’s equipment back into service according to the schedule defined in coordination with the customer.
Based on the investigations carried out, McPhy has proactively initiated an inspection campaign on the few customer sites equipped with a similar model of electrolyzer.

At the same time, the Group is implementing reinforced quality process, inspection and maintenance procedures to provide its customers with the highest quality of technology and services.

Footnote

(1) Electrolytic fluid: consisting of demineralized water with a 30% concentration of potassium hydroxide (“KOH”)

Next financial events

• 2021 Full-Year Sales, on January 25, 2022 (after market)

We are very pleased with McPhy’s participation in this innovative project located in the heart of the Strasbourg metropolis at the crossroads of Europe.

Luc Poyer, Chairman and acting CEO of McPhy, stated: “We are very pleased with McPhy’s participation in this innovative project located in the heart of the Strasbourg metropolis at the crossroads of Europe. The R-Hynoca project, with its decentralized approach, illustrates the complementarity of the different green hydrogen production and distribution methods based on the diversity of the territories, to which McPhy’s diversified offer perfectly responds.”

R-Hynoca is an innovative project which aims to produce green, carbon-neutral hydrogen from local biomass. The hydrogen production is ensured by the Hynoca® process developed by Haffner Energy. This hydrogen will be recovered as a fuel for low-carbon mobility and as a resource for industry. McPhy, partner of the project for the mobility part, will provide a dual pressure station (350-750 bar) equipped with two terminals to refuel all types of hydrogen mobility:

• A “Dual Pressure” station for light vehicles at 700 bar and 350 bar;
• A “Hi-Flow” station for buses and trucks.

This large capacity station will deliver 700 kg of green hydrogen per day, allowing the daily refuel of the equivalent of a fleet of 30 buses, or 70 light commercial vehicles, or 150 light vehicles.

McPhy will also equip the site with a refueling point for pressurized hydrogen cylinders (“tube trailers”) that will be carried to be used in mobility or industrial applications elsewhere than at the point of hydrogen production. The commissioning of the station and the refueling interface is scheduled for the end of 2022.

This innovative system architecture offers great flexibility by facilitating hydrogen refueling for all types of mobility, whether at the production site or remotely. Its modular design will enable the distribution capacity to be increased at the same rate as the applications will be deployed on the territory.

Footnotes

(1) Leading distributor of natural gas in the Bas Rhin region, R-GDS for “Réseaux gaz naturel de Strasbourg” (Strasbourg natural gas networks) transports nearly 4.3 TWh of natural gas each year to meet the needs of 108,000 customers in 119 municipalities.
(2) Haffner Energy, a specialist in biomass energy since 1993, is launching the commercial deployment of the Hynoca process for producing hydrogen from biomass.
(3) FCH-JU : « Fuel Cells and Hydrogen Joint Undertaking »

Next financial event

• 2021 Full-Year Revenue, on January 25, 2022 (after market)

In order to prepare itself for an acceleration of its growth, McPhy, strengthened by its technological choices and attentive to its customer’s needs, is intensifying its industrialization efforts and is strengthening its teams in its three countries of operation in accordance with its strategy.

Luc Poyer, Chairman and CEO of McPhy, stated: “McPhy operates in a market where projects are progressively changing in scale, driven by the European Green Deal and the French National Hydrogen Strategy. The Group is particularly well positioned with equipment designed to meet the expectations of the two market segments at the heart of this transformation: industry and mobility. In order to prepare itself for an acceleration of its growth, McPhy, strengthened by its technological choices and attentive to its customer’s needs, is intensifying its industrialization efforts and is strengthening its teams in its three countries of operation in accordance with its strategy.”

McPhy’s revenues for the first half of 2021 amounted to €5.2 million compared to €5.4 million in the first half of 2020. Revenues is made up of 58% of electrolyzer sales (of which 45% are large capacity and 17% smaller capacity) and 42% of hydrogen station sales. Although the dynamics of the decarbonized hydrogen market are still very favorable, sales in the first half of the year were impacted by delays in decision-making by certain stakeholders.

Purchases consumed decreased significantly as R&D costs were capitalized in the first half of 2021 for an amount of €1.4 million.
Based on a still very promising medium-term outlook, the Group pursues its investment efforts in order to secure the necessary resources to respond to the massification of projects, increase its technological lead and strengthen the key know-how in its sector. As expected, McPhy recruited 24 people in the first six months of the year, bringing the workforce to 134 people as of 30 June 2021, in line with the objective of welcoming 50 new employees over the entire year, and has also incurred expenses to support its growth. This acceleration and these efforts have an impact on personnel costs and operating costs, which have been brought respectively to €5.7 million and €4.4 million.

During the period, net provisions increased by €1.8 million and mainly correspond to the estimation of: (i) the potential impacts of the incident that took place at the EnergieDienst site in Grenzach-Wyhlen while awaiting the expert report (costs estimated to date at €1.3 million provisioned) and (ii) the costs of dismantling two completed demonstration projects equipped with McPhy storage technology (MgH2 pellets) for an amount of €0.6 million provision. This leads to an operating loss of €8.4 million and a net loss of €8.6 million.
Cash consumption was €13 million in the first half of 2021 and included (i) a €2.5 million contribution to the liquidity contract in line with the increase in trading volumes of McPhy shares, (ii) €2 million in investments, (iii) the repayment of State Guaranteed Loans of €4 million.

As of June 30, 2021, McPhy holds €185 million in cash, a significant increase compared to the same period last year, due to the capital increase that took place in the second half of the year 2020.

During the first half of the year, McPhy observed a slowdown in firm order intake, notably due to the global health context and related restrictions and the wait-and-see attitude of certain stakeholders dependent on public funding mechanisms. In this context, the Group was nevertheless able to achieve new operational achievements:

New strategic and technological partnerships
Already associated with leading industrial stakeholders such as EDF, Chart Industries and Technip Energies to support its industrial scale-up work, McPhy has expanded its network of partners by signing several agreements during the first half of the year. McPhy has concluded a technological partnership with Plastic Omnium, in order to optimize the filling protocols and interfaces between hydrogen stations and high-pressure tanks, as well as with TSG, which reinforces the 24/7 maintenance service provided on McPhy hydrogen stations.
This partnership ecosystem is both a powerful commercial lever, particularly in calls for tender, and a cooperation in a sector logic to pool expertise, develop an industrialized and standardized approach, and increase the competitiveness of hydrogen mobility.

Merger of McPhy’s station activities on a single site in Grenoble
McPhy pursues its transition to an industrial scale with a new hydrogen station production site located in Grenoble, which will be operational by March 2022. This site will increase McPhy’s production capacity to 150 stations per year, representing a sevenfold increase of its current production capacity. This merger of activities, currently located in La Motte-Fanjas and Grenoble, on a single site will enable the optimization of project execution times and a better service to customers. At full load, it will lead to the creation of more than 100 new jobs in the Isère region.

Pre-selection of the Belfort site for the electrolyzer Gigafactory
McPhy has announced the pre-selection of the Belfort site to build its electrolyzer Gigafactory. This gigawatt-scale electrolyzer production site, whose implementation remains subject to obtaining financing under the IPCEI, will create more than 500 McPhy jobs at full load (including about 400 in France and a hundred in Germany and Italy), and several hundred indirect jobs in France and Europe. This is the Group’s industrial response to the strong growth prospects of the alkaline electrolyzer market in Europe.
In parallel with these major developments, McPhy pursues the optimization of its supply chain by strengthening partnerships with key suppliers and implementing new processes under the responsibility of the Chief Manufacturing Officer who joined the Group at the beginning of the year.

On June 25, McPhy reported a potassium hydroxide leakage from its electrolyzer that occurred on Thursday, June 24, 2021 at the Grenzach-Wyhlen power-to-gas plant in Germany, operated by EnergieDienst.
Since then, McPhy, in consultation with EnergieDienst, has appointed Gexcon as an independent expert to determine the exact cause of the incident. The Group is investigating further and expects the first conclusions of the expert report in the course of September.

The Board of Directors following the General Meeting of 17 June 2021 appointed Luc Poyer as Chairman. He succeeds Pascal Mauberger who remains a director of the Group and becomes its Honorary Chairman.
McPhy also announced on 12 July the evolution of its governance. A selection process for a new Chief Executive Officer was immediately initiated and Luc Poyer will assume the role of Chief Executive Officer during this transition phase. His priority is to ensure the smooth running of operations, ongoing projects and the satisfaction of the Group’s customers and partners while accelerating the industrialization phase of the Company, in close collaboration with the teams.

The market outlook remains well oriented for the Group, particularly in Europe where the Group is strongly established, with its activities in France, Germany and Italy. Beyond the long-term objectives, Europe has confirmed, in the framework of the Green Deal, an objective of 6 GW of Electrolysis and 500 H2 stations by 2024.
The second half of 2021, with revenues expected to be close to the one recorded in the second half of 2020, should enable the Group to continue to build up its technological and industrial capacities and to equip itself with the appropriate organization to meet the requirements of the sector effectively.
The Group intends to continue the deployment of its business model based on the continuous improvement of its green hydrogen technology, which can only be conceived over long cycles. Thanks to the mobilization of its teams and the support of its industrial partners, McPhy is more confident than ever in its medium and long-term growth prospects.

Next financial event

• 2021 Full-Year Revenue, on January 25, 2022 (after market)

Next financial events

• 2021 Half-Year Results, on July 27, 2021 (after market)

Next financial events

• 2021 Half-Year Results, on July 27, 2021 (after market)

McPhy has all the technological and industrial assets to serve a fast-growing hydrogen mobility market.(…) I would like to thank the teams of McPhy for all the commitment they put, on a daily basis, into making this project a great success.

Laurent Carme, CEO of McPhy, states: “This new industrial site marks an important milestone in McPhy’s history and in our transition to industrial scale. McPhy has all the technological and industrial assets to serve a fast-growing hydrogen mobility market. This project will lead, in term, to the creation of over 100 jobs in the Grenoble region. I would like to thank the teams of McPhy for all the commitment they put, on a daily basis, into making this project a great success. I also warmly thank all the services of the French State and local authorities, the Auvergne-Rhône-Alpes Region and Grenoble-Alpes Métropole, for their support in this venture for the energy transition and the reindustrialization of the territories”.

From March 2022, we will have a state-of-the-art production tool, to better serve our customers. (…) From an economic standpoint, our ramp-up and the volume effect will result in significant gains in competitiveness.

Antoine Ressicaud, Chief Manufacturing & Procurement Officer: “From March 2022, we will have a state-of-the-art production tool, to better serve our customers. This industrial set-up will allow us to multiply by 7 our production capacities of hydrogen stations and strengthen our technological leadership in green hydrogen production and distribution equipment. From an economic standpoint, our ramp-up and the volume effect will result in significant gains in competitiveness”.

In March 2022, McPhy will move into the heart of Grenoble, renting a 4,000 m2 existing industrial building. The teams currently spread between the La Motte-Fanjas and Grenoble sites will be brought together there, which will increase efficiency in the realization of projects, promote knowledge-sharing by creating synergies of teams and skills, and further improve the level of customer service with reduced turnaround times. The surface area of the new offices and their location in an urban area, accessible by public transport, will facilitate the onboarding of new employees with the objective of recruiting over 100 employees by the time the site is running at full load.

The factory is expected to gradually ramp up production to reach an annual manufacturing capacity of 150 stations from 2022. This increase in volume, when McPhy already has 35 stations delivered or in the process of being delivered, will significantly lower manufacturing costs while guaranteeing optimum delivery times. At the same time, the Group will implement a new integrated test platform and demanding lean manufacturing processes based on digital manufacturing tools, with the aim of mass-producing its new range of stations for refueling all types of vehicles: light vehicles, buses, trucks or trains.

This increase in productivity and capacity is a response to the massification of the hydrogen mobility market, a consequence of the pivotal role played by hydrogen in the transport decarbonization process.

The takeover of this industrial site marks, for McPhy, a strengthening of its foothold in Auvergne-Rhône-Alpes, a pioneering region in the development of hydrogen. Thanks to its strategic location in the heart of the Grenoble ecosystem, which is one of the most dynamic in Europe, McPhy’s new factory will contribute to the international Group’s standing. Its location, which is optimal in terms of logistics flow management, will give the Group the capacity to supply the entire European market.

Next financial events

• 2021 Half-Year Results, on July 27, 2021 (after market)

Pascal Mauberger, Honorary Chairman of the Board of Directors of McPhy, stated: “After having contributed to the birth and growth of McPhy, it is with confidence that I hand over my position as Chairman of the Board of Directors to Luc Poyer who has supported me for a long time and knows the Company very well. I am proud of the work achieved in recent years by the Group’s teams and of my commitment to their side. As Honorary Chairman, I will continue to support the Board of Directors under the leadership of Luc Poyer, and I am convinced of our ability to make McPhy the benchmark player in carbon-free hydrogen.”

Luc Poyer, new Chairman of the Board of Directors of McPhy, added: “As a director of McPhy since its early years, I am honored to take up this position at a time when the Company is embarking on major developments that will pave the way for a change of dimension. I would like to highlight the work accomplished by Pascal Mauberger: as a visionary and pioneer, he founded and developed McPhy, placing the Company at the heart of the industry’s change of scale dynamic. I would also like to thank McPhy’s shareholders and directors for their confidence, and I am determined to help McPhy meet the expectations of its clients, with whom we share the conviction that hydrogen will play a decisive role in the fight against climate change and the transition to a more sustainable world. “

Upcoming of financial communication event

• Publication of half-yearly results on July 27, 2021, after market closing