Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial results for the fourth quarter and full year ended December 31, 2021. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).

"2021 was an important year for Ballard as we made significant progress against our strategic plan and continued to position Ballard as a leading fuel cell player in the decarbonization of medium- and heavy-duty mobility. In 2021, we deepened our customer base in our target markets and made marked progress with existing and new partnerships. This progress is critical as we begin to transition various customer programs and pilots into long-term supply agreements, order book growth, and series production," said Mr. Randy MacEwen, President and CEO. "The increased global alignment around addressing climate change and energy security support the expected proliferation of hydrogen fuel cell technology and our long-term outlook for a significant revenue ramp."

Mr. MacEwen continued, "We are encouraged by the unprecedented capital inflows we are seeing drive the hydrogen economy forward. We have developed our business model to capitalize on the growing hydrogen economy by using the same core competencies and fuel cell technology across multiple applications and markets. We believe our strategy to invest ahead of the hydrogen growth curve in our capabilities, technologies and products, as well as targeted market expansion, position us competitively against our peers and allow us to provide the best zero emissions solution to our customers at scale."

Q4 2021 Financial Highlights
(all comparisons are to Q4 2020 unless otherwise noted)

• Total revenue was $36.7 million in the quarter, up 28% year-over-year. This increase was driven by growth in Power Product sales, more than offsetting the decline in Technology Solutions revenue.
  • Power Products generated revenue of $26.6 million in the quarter, an increase of 77%, driven by higher shipments of fuel cell products.
    • Heavy-Duty revenues of $22.5 million increased 89%, due to higher sale to customers primarily in China, Europe, and North America. European and North American Heavy-Duty Motive revenue increased 92% and 268%, respectively.
    • Material Handling revenues of $1.3 million increased 36%, primarily as a result of higher shipments to Plug Power.
    • Backup Power revenues of $2.7 million increased 30%, supported by an increase in sales of backup power fuel cell stacks, products, and service revenues in Europe.
  • Technology Solutions generated revenue of $10.1 million in the quarter, a decrease of 26% due primarily to decreased amounts earned as a result of the completion of certain customer programs.
• Gross margin was 13% in the quarter, a decrease of 7-points, driven by a combination of a shift in revenue mix and increased labor, supply, and freight expenses.
• Operating Expenses and Cash Operating Costs were $32.3 million and $26.6 million in the quarter, respectively, an increase of 65% and 62%, respectively. Increases were driven primarily by higher expenditure on research, technology and product development activities, including the development of next-generation fuel cell stacks and modules for target markets, as well as increased continuation engineering investments in existing fuel cell products.  Costs were also higher as a result of increased general and administrative expenses and sales and marketing expenses.
• Adjusted EBITDA was ($25.5) million, compared to ($14.5) million in Q4 2020, primarily a result of the decrease in gross margin and increase in Cash Operating Costs.
• Ballard received approximately $21.2 million of new orders in Q4, and delivered orders valued at $36.7 million, resulting in an Order Backlog of approximately $93.1 million at end-Q4.
• The 12-month Order Book was $67.3 million at end-Q4, a decrease of $12.1 million from the end of Q3 2021.

Full Year 2021 Financial Highlights
(all comparisons are to full year 2020 unless otherwise noted)

• Total revenue was $104.5 million in 2021, approximately flat year-over-year. The slight year over year increase of 1% was driven by growth of 16% in Power Product sales, more than offsetting the decline in Technology Solutions revenue.
  • Power Products generated revenue of $68.0 million in the year, an increase of 16%, driven by higher shipments of fuel cell products.
    • Heavy-Duty revenues of $51.7 million increased 8%, due to higher shipments of fuel cell products to customers primarily in North America and Europe which more than offset declines in China. European and North American Heavy-Duty Motive revenue increased 54% and 302%, respectively.
    • Material Handling revenues of $8.1 million increased 53%, primarily as a result of higher shipments to Plug Power.
    • Backup Power revenues of $8.2 million increased 47%, supported by an increase in sales of backup power fuel cell stacks, products, and service revenues in Europe.
  • Technology Solutions generated revenue of $36.5 million in the year, a decrease of 19% due primarily to decreased amounts earned as a result of the completion of certain customer programs.
• Gross margin was 13% in 2021, a decrease of 7-points, driven by a combination of a shift in revenue mix and increased labor, supply, and freight expenses.
• Operating Expenses and Cash Operating Costs were $102.1 million and $83.8 million in 2021, respectively, an increase of 68% and 67%, respectively. Increases were driven primarily by higher expenditure on research, technology and product development activities, including development of next-generation fuel cell stacks and modules for target markets and increased continuation in engineering investment in existing fuel cell products, including activities related to product cost reduction. Costs were also higher as a result of increased general and administrative expenses and sales and marketing expenses.
• Adjusted EBITDA was ($82.2) million in 2021, compared to ($38.9) million in 2020, primarily as a result of the decrease in gross margin, increase in Cash Operating Costs and higher equity loss of investment in the joint venture and associates.
• Cash reserves were $1.1 billion at December 31, an increase of 47% from the end of Q4 2020 and a decrease of 8% from the end of Q3 2021.

Post-Quarter Commercial Update

• On January 13, 2022, Ballard announced orders for a total of 31 modules totaling 3MW of hydrogen fuel cell power, to an undisclosed leading global construction, electric power, and off-road equipment manufacturer for testing and deployment in a variety of end-use applications. The modules are expected to be delivered in 2022 and 2023.
• On January 19, 2022, Ballard announced an order for eight additional 200kW fuel cell modules to support the expansion of Canadian Pacific's (TSX: CP; NYSE: CP) Hydrogen Locomotive Program.
• On February 1, 2022, Ballard and Chart Industries, Inc. ("Chart") (NYSE: GTLS) announced the successful test of a fuel cell powered by liquid hydrogen. The demonstration confirms that heavy-duty vehicles powered by Ballard fuel cells will be able to employ Chart HLH2 vehicle fuel systems that utilize liquid hydrogen as a fuel.
• On February 2, 2022, Ballard announced the delivery two, 200 kW FCwave^TM modules to Norled A/S, one of Norway's largest ferry and express boat operators. The fuel cell modules will power the world's first liquid hydrogen-powered ferry, the MF Hydra, later this year.
• On February 22, 2022, Ballard announced it signed a non-binding Memorandum of Understanding ("MOU") with the Adani Group (NSE: ADANIENT), the largest and fastest-growing portfolio of diversified businesses in India, to evaluate a joint investment case for the commercialization of fuel cells in various applications in India, such as truck, mining equipment, marine vessels, off-road vehicles, and critical industrial power. Under the MOU, both parties will examine various options to cooperate, including potential collaboration for fuel cell manufacturing in India.
• On February 23, 2022, Ballard announced with ABB (SIX Swiss Ex: ABBN) – a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future – that they have received a groundbreaking approval in principle ("AiP") from leading classification society DNV for a jointly developed fuel cell concept capable of generating 3 megawatts, or 4,000 HP, of electrical power. DNV is an international accredited registrar and classification society headquartered in Høvik, Norway.

2022 Outlook

In 2022, Ballard plans to increase investments in the business ahead of the hydrogen growth curve, including expanding product offering and capabilities across the value chain. Ballard's 2022 outlook includes:

Q4 & Full Year 2021 Financial Summary

For a more detailed discussion of Ballard Power Systems' fourth quarter 2021 results, please see the company's financial statements and management's discussion & analysis, which are available at www.ballard.com/investors, www.sedar.com and www.sec.gov/edgar.shtml.

Conference Call

Ballard will hold a conference call on Monday, March 14, 2022 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review fourth quarter 2021 operating results. The live call can be accessed by dialing +1.604.638.5340. Alternatively, a live audio and webcast can be accessed through a link on Ballard's homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the 'Earnings, Interviews & Presentations' area of the 'Investors' section of Ballard's website (www.ballard.com/investors).

About Ballard Power Systems

Ballard Power Systems' (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, passenger cars and forklift trucks. To learn more about Ballard, please visit www.ballard.com.

Important Cautions Regarding Forward-Looking Statements

This release contains forward-looking statements concerning the hydrogen economy and markets for our products and the effects of governmental regulations on such markets, expected revenues, operating expenses, capital expenditures, corporate development activities, impacts of investments in manufacturing and R&D capabilities and market growth, and our carbon emissions goals. These forward-looking statements reflect Ballard's current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any such statements are based on Ballard's assumptions relating to its financial forecasts and expectations regarding its product development efforts, manufacturing capacity, and market demand. For a detailed discussion of the factors and assumptions that these statements are based upon, and factors that could cause our actual results or outcomes to differ materially, please refer to Ballard's most recent management discussion & analysis. Other risks and uncertainties that may cause Ballard's actual results to be materially different include general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard's future performance, please refer to Ballard's most recent Annual Information Form. These forward-looking statements are provided to enable external stakeholders to understand Ballard's expectations as at the date of this release and may not be appropriate for other purposes. Readers should not place undue reliance on these statements and Ballard assumes no obligation to update or release any revisions to them, other than as required under applicable legislation.

Endnotes