Ballard, Sofa (Seite 3203)

[TTcoolj]

Antwort auf Beitrag Nr.: 56.105.444 von Darth_Plaguis am 05.11.17 19:34:26

Na dann

Hallo Darth
lange nix gehört ,bin auch der Meinung das wir am Anfang stehen, werde den Teufel tun und meine letzten Stücke her zu geben ,meiner Meinung nach stehen wir im Anfang einer sehr starken Aufwärtsbewegung!
Mal sehen was kommt !

[ballarde]

den gesamtmarkt sehen

der gesamtmarkt ist total überhitzt, die kurse werden nur noch von wenigen großen getrieben

es wird eine korrektur geben , nur der auslöser fehlt noch

die riesenfusion von sprint und t-mobile usa ist gestern geplatzt

da sprint zu softbank gehört und softbank seit langem durch diese fusionsfantasie gestiegen ist

wird softbank morgen abstürzen und den nikkei mit nach unten ziehen, soetwas kann der auslöser für eine korrektur sein

nasdaq 100 kann bis 5400 - 5800 korrigieren

da bp noch ein smallcap ist und in diesem jahr schon 200% gestiegen ist , kann der rückgang bis 2,5 euro möglich sein

da werde ich wieder kaufen

kaufe wenn alle skeptisch sind, habe ich vor 2 jahren bei 1,3 euro getan, da war total optimistisch und nur häme gehört, wie blöd ich bin

verkaufe wenn alle jubeln , das habe ich freitag getan 5 euro, ihr jubelt alle wie die wilden

[Darth_Plaguis]

Liebe Investierten,

die Aussagen einiger hier nach dem "vergleichsweise moderaten" Anstieg sind für mich nicht nachvollziehbar. Ballard steht nach der Übernahme durch Randy sehr gut da. Das Chinageschäft wird spannend. Einzig allein die Einbußen bei Material Handling sind zunächst besorgniserregend. Gerade, weil Plug es scheinbar ziemlich schnell geschafft hat, Ballard als Zulieferer zu ersetzen... Das werden die Chinamänner früher oder später auch machen! Dauert aber noch! Mal schauen, was da kommt. Ich habe zwar kein stopp loss gesetzt, aber werde bei 2,60 € wahrscheinlich einen großen Teil verkaufen. Denke aber nicht, dass der Kurs so tief abschmiert. Denke, dass der Kurs auf 20€ oder höher im nächsten Jahr steigen kann. Die meisten auf der Börse verkaufen eben bei steigenden Kursen und verkaufen zu spät bei sinkenden Kursen. Diese werden eben nicht den ganz großen Gewinn einfahren. Ich sehe die BZ-Technologie im Kommen und würde mir in den Arsch beißen, wenn ich jetzt bei diesen Kleckerkursen verkaufen würde.... Schaut euch die Marktkapitalisierung für hellofresh an: Da hat Ballard noch gaaaaaaaaaanz viel Potential!

In diesem Sinne


Euer Darth

[urfin]

Die Einführung von Brennstoffzellenprodukten wird nun erweitert, um einen Großteil der Anwendungen von Automobil-Transitbussen bis hin zu Nutzlastkraftwagen und Zügen zu umfassen, die in naher Zukunft auch Aktivitäten in der Schifffahrtsindustrie erproben. Diese Produktanwendungen werden in China, Europa als Auch der US-Markt mit Ballard ist gut positioniert, um dieser wachsenden Nachfrage gerecht zu werden.

Um es noch einmal zu betonen, haben wir ein Gerüst oder eine Schicht von Umsatzmöglichkeiten mit FCEVs mit der Markteinführung von Brennstoffzellen-Elektrobussen in China, Europa und Nordamerika gesehen, aber die Einführung von Brennstoffzellen-Elektro-LKWs in China, Europa und Nordamerika und die Annahme von elektrischen Brennstoffzügen in China, Europa und Nordamerika.

Darüber hinaus bringen unsere Technologielösungen eine wichtige Einbettung optional vor allem in den Automotive-Drohnen- und Materialhandling-Märkten. Das ist Position Ballard, ich denke einzigartig innerhalb der Brennstoffzellenindustrie.

Mit Blick auf die Zukunft freuen wir uns, wenn wir unseren Geschäftsplan weiter umsetzen, unsere finanzielle Leistung verbessern und den Shareholder Value steigern.

Damit werde ich den Anruf an Tony weiterleiten, um unsere Meinung zu überprüfen. Ich denke, es sind spannende Finanzergebnisse für das dritte Quartal 2017. Tony?

[urfin]

Wie wir bereits besprochen haben, glauben wir, dass Ballard angesichts unserer strategischen Beziehungen zu Broad Ocean in Shanghai gut positioniert ist. Wir unterstützen derzeit die Broad-Ocean-Tochtergesellschaft Shanghai eDrive und bauen eine Endmontage der Motorenbaugruppe auf, die voraussichtlich Ende des Jahres betriebsbereit sein wird. Ausgezeichnetes Timing, das uns für die Teilnahme am Entwicklungsplan für Brennstoffzellenfahrzeuge in Shanghai gut positioniert.

Es gibt also beispiellose starke Signale, die eine aufregende Zukunft für die Pan Fuel Cell-Technologie weltweit und für Ballards zukünftige Aussichten auf weiteres Wachstum und Profitabilität unterstützen.

Lassen Sie uns nun einige wichtige strategische Entwicklungen seit unserer letzten vierteljährlichen Ausschreibung Revue passieren lassen. Beginnend mit China, wie auf unserem Analystentag diskutiert, kündigten wir die Eröffnung unseres Joint Venture-Werks in der Provinz Zhongtong mit unserem Partner synergy an. Dies war ein wichtiges Ergebnis im Jahr 2017.

Der JV-Betrieb wird nun auf eine jährliche Produktionskapazität von 6000 Brennstoffzellenstapeln mit einer jährlichen Produktionskapazität von 20.000 Stacks bis Ende nächsten Jahres erhöht. Für Interessierte können Sie ein Betriebsvideo mit der neuen Joint Venture-Anlage im Bereich Präsentation und Veranstaltungen im Bereich Investor auf unserer Unternehmenswebsite unter ballard.com einsehen.

Im Anschluss an das Quartal gab die Tangshan Railway Vehicle Company oder TRC, ein Teil der CRRC Group, einen Test ihrer Brennstoffzellen-Niederflurstraßenbahn in einer neuen Straßenbahnlinie in der Stadt Tangshan nördlich von Peking bekannt.

Diese Straßenbahn wird von FC-Brennstoffzellenmotoren angetrieben. Diese 3-teilige Straßenbahn mit einer Kapazität von 336 Passagieren kann bis zu 70 Kilometer pro Stunde zurücklegen und hat eine Reichweite von 40 Kilometern bei einer einzigen 12-Kilogramm-Wasserstoff-Auffüllung. Dies ist ein aufregender nächster Schritt in unserer Arbeit mit CRRC bei Zuganwendungen in China. Wir sind weiterhin sehr erfreut über den weltweiten Eisenbahnmarkt und das starke Kundenengagement, das wir jetzt bei den Möglichkeiten für brennstoffzellenbetriebene Züge sehen.

Auf dem europäischen Markt gaben wir im dritten Quartal auch den Erhalt von LOI von Van Hool für acht 100-Kilowatt-FC-Geschwindigkeitsmotoren zur Versorgung von 8 ExquiCity-Straßenbahnbussen bekannt, die in der zweiten Jahreshälfte 2019 in Pau, Frankreich, ausgeliefert werden. Für den Einsatz auf den ersten Wasserstoffbus-Routen in diesem Land.

In unserer Japan-Akte haben wir kürzlich auch bekannt gegeben, dass wir einen neuen Brennstoffzellenstapel unter Verwendung der mit Nisshinbo entwickelten Nichtedelmetall-Katalysatortechnologie entwickelt haben. Dieser FCgen-1040-Stack wird dieses Jahr für eine ultraleichte Gewichtsanwendung eingesetzt.

Im Anschluss daran erhielten wir von Nisshinbo, unserem strategischen Investor und Partner von Ballard, einen Kaufauftrag für Technologielösungen zur Bewertung der potenziellen Entwicklung der luftgekühlten und flüssigkeitsgekühlten Brennstoffzellenstapel unter Verwendung der Nichtedelmetall-Katalysatortechnologie von Nisshinbo für kommerzielles Material. Handhabung von Anwendungen.

Dieses nächste mehrjährige Technologielösungsprogramm, das speziell auf Materialhandhabungsanwendungen ausgerichtet ist, stellt eine aufregende Möglichkeit dar, die Low-Platin-Beladungstechnologie von Nisshinbo für kostengünstige kommerzielle Anwendungen im großen Maßstab zu nutzen.

In Bezug auf den US-Markt möchte ich die Erreichung der Meilensteingebühr im Armeeprogramm für unsere Power-Management-Produkte kommentieren. Dies ist eine wichtige Schwelle, auf die wir seit einiger Zeit gewartet haben. Und mit dieser Errungenschaft erwarten wir ab 2018 US-Militäraufträge, die dem militärischen Budgetbestätigungsprozess folgen.

Wie wir auf dem Investoren- und Analystentag besprochen haben, haben wir in den nächsten fünf plus Jahren einen adressierbaren Marktanteil im Bereich von 150 bis 250 Millionen US-Dollar gesehen, wobei das US-Militär allein die Möglichkeiten des alliierten Militärs nutzen wird.

Schlussfolgern, dass die zugrunde liegenden Trends für die Einführung von Null-Missions-Automobil-Stromversorgungslösungen an Dynamik gewinnen und in noch nie dagewesenem Tempo umgesetzt werden; Diese schnell wachsende Nachfrage nach einer zunehmenden Anzahl von Brennstoffzellen-betriebenen Anwendungen für die wachsende Zahl von geografischen Standorten.

[urfin]

Wir sehen weiterhin ein erhöhtes globales Interesse und das unwiderstehliche Wertversprechen, das Brennstoffzellen-Elektrofahrzeuge oder FCEVs einzigartig bieten. Besonders bei schweren und mittelschweren Transporten wie Bussen, Nutzfahrzeugen und Zügen.

In diesen Fällen können Brennstoffzellen und Batterien gemeinsam in einer komplementären Brennstoffzellen-Elektro-Hybrid-Lösung verpackt und optimiert werden, um eine Reihe von Vorteilen zu erzielen, darunter [null zwei] Rohremissionen, geringes Rauschen und Vibrationen sowie schnelle und sanfte Beschleunigung. Wir adressieren auch die Beschränkungen von eigenständigen elektrischen Batterielösungen, indem wir weitreichende, schnelle Betankung und volle Routenflexibilität bieten, die mit der Erfahrung von Legacy Diesel konsistent ist.

Unsere Vision ist, dass FCEVs das dominierende Antriebssystem in den Märkten für Hochleistungsmotive und mittelschwere Motoren werden. In gebrauchten Fällen waren Reichweite, Tankzeit und Routenflexibilität für Kunden und Anwender wichtig.

Hier sehen wir FCEVs, die hohe Sicherheit, hohe Zuverlässigkeit, hohe Verfügbarkeit, hohe Lebensdauer und hohe Betriebsflexibilität bieten und gleichzeitig die überzeugendsten Gesamtbetriebskosten bieten.

Der Beweis, wie stark wir erwarten, dass sich die Transformation von Ballard unterscheidet, zeigt sich in einem außergewöhnlichen Niveau von Kunden, die sich entsprechend ihrer Tätigkeit für disruptive Lösungen für Brennstoffzellen-Elektrobusse, Nutzlastwagen und Züge einsetzen.

Das erhöhte Interesse an FCEVs wurde durch die nachhaltige globale Bewegung in Richtung Entgalvanisierung getrieben. Wir sehen jetzt eine starke Führungsrolle der Regierung in der Industrie, um die THG-Ambitionen zu senken und die Luftqualität zu verbessern. Jedes von Großbritannien und Frankreich hat einen Plan zum Verbot von Verbrennungsmotoren und -fahrzeugen bis 2040 skizziert.

Indien strebt bis 2030 alle Fahrzeuge auf der Straße an, die mit sauberer Energie versorgt werden sollen. In Norwegen sind 24% der heute verkauften Neufahrzeuge elektrisch und die Regierung will, dass bis 2025 ein 100% iger Verkauf Null Emission sein wird.

Die Niederlande folgen auch Suite. Deutschland prüft ebenfalls ein ähnliches Ziel. Es gibt Anzeichen dafür, dass der California Air Resources Board auch einen Schritt in Richtung emissionsfreier Fahrzeuge erwägt.

Und im September machte Shin, Chinas stellvertretender Minister für Industrie und Informationstechnologie, eine sehr bedeutsame Ankündigung, insbesondere, dass die chinesische Regierung einen langfristigen Plan entwickelt, alle Fahrzeuge, die mit fossilen Brennstoffen betrieben werden, auslaufen zu lassen.

Während des dritten Quartals hatte ich das Glück, Treffen mit zwei Parteisekretären der Provinz in China zu haben. Sekretär Hu Chunhua, Parteisekretär der Provinz Guangdong und Sekretär [Lee Chen]. Der Parteisekretär der Provinz Jiangsu bekräftigte meine Ansicht über das starke Engagement in China, FCEVs in großem Maßstab zu vermarkten und einzusetzen.

In beiden Sitzungen legte ich meine 30: 30-Vision dar. Das heißt, 30% aller Transitbusse und Nutzfahrzeuge werden bis zum Jahr 2030 Brennstoffzellen-Elektrofahrzeuge sein. Diese Zeitschiene harmoniert gut mit einem Verbrennungsmotor bis zum Zeitrahmen von 2040.

Auch auf Stadtebene erleben wir beispiellose Entwicklungen. In der Tat, eine sehr aufregende und diese sehr aufregende Initiative wurde erst letzte Woche von C40 angekündigt, Ein Netzwerk der Mega-Cities der Welt, die sich dem Klimawandel widmen.

Bürgermeister von 12 dieser Städte, darunter London, Paris, Los Angeles, Kopenhagen, Barcelona, ​​Vancouver, Mexiko City, Mailand und Seattle unterzeichneten eine C40 Fossil Fuel Free Street Deklaration. Dort haben sie sich zum Ziel gesetzt, bis zum Jahr 2025 nur noch Null-Emissionstrends bei Fossilien zu beschaffen. Angesichts der Tatsache, dass diese 12 Städte derzeit insgesamt rund 60.000 Busse auf ihren Straßen betreiben, ist dies ein sehr spannender und sinnvoller Schritt. Richtung auf Null-Emissions-Massentransport weltweit.

Im September veröffentlichte die Regierung von Shanghai den beispiellosen Brennstoffentwicklungsplan der Shanghai Fuel Cell, einen bahnbrechenden Plan, der die Entwicklung und den Einsatz einer großen Brennstoffzellen-Wertschöpfungskette und eine jährliche Produktion von 300 Brennstoffzellen-Elektrofahrzeugen bis 2020 und 30.000 fordert. Brennstoffzellen-Elektrofahrzeuge bis 2025.

[urfin]

Antwort auf Beitrag Nr.: 56.105.054 von Schlood am 05.11.17 18:12:44

Randy MacEwen

Vielen Dank und willkommen zu unserer Telefonkonferenz für das dritte Quartal. Angesichts der Tatsache, dass wir vor kurzem unseren Investor- und Analystentag abgehalten und ein umfassendes Update zu diesem Zeitpunkt bereitgestellt haben, werde ich meine vorbereiteten Kommentare heute relativ zu unserem Atem halten.

Ich möchte damit beginnen, die positive Entwicklung unserer Finanzergebnisse im dritten Quartal zu bestätigen. Im Berichtsquartal haben wir starke Fortschritte bei den finanziellen Leistungszielen für 2017 erzielt, darunter ein Umsatzwachstum von 54% im Vergleich zum Vorjahr, eine starke Bruttomarge von 32% und ein positives bereinigtes EBITDA.

Das bereinigte EBITDA auf Jahresbasis war mit 1,2 Millionen US-Dollar positiv und für den nachfolgenden 12-Monats-Zeitraum mit 3 Millionen US-Dollar positiv. Die kontinuierliche Verbesserung dieser Schlüsselmetrik ist ein wichtiger Meilenstein für Ballard und ich glaube für die gesamte Brennstoffzellenindustrie.

Mit Blick auf die Zukunft sind wir gut positioniert, um ein starkes Q4 und das Gesamtjahr 2017 zu liefern.

Wir verfügen über einen beachtlichen Auftragsbestand, einschließlich eines beträchtlichen Auftragsbuchs für engagierte Geschäfte in den nächsten 12 Monaten. Darüber hinaus bleibt unsere Vertriebspipeline robust mit einer sehr hohen Aktivität im gesamten Vertriebsteam.

Ich möchte einen sehr wichtigen Punkt betonen, wir sind in den sehr frühen Momenten einer globalen Transformation der Transportindustrie. Diese Transformation beinhaltet den Umstieg auf emissionsfreie Fahrzeuge durch die Elektrifizierung von Fahrzeugantriebssträngen.

In diesem Kontext von Ballard sind wir einzigartig positioniert, um mit disruptiver Technologie Wert zu schaffen. Lassen Sie mich wiederholen, dass wir bei Ballard mit disruptiver Technologie einzigartig positioniert sind. Wir haben eine aufregende Zukunft gesehen, in der wir hohe Wertschöpfung erzielen und bedeutende Marktanteile gewinnen, da wir in großen adressierbaren Märkten große Probleme sahen.

[Tjulzz]

Antwort auf Beitrag Nr.: 56.105.072 von Schlood am 05.11.17 18:19:09

sry, das dürfte jetzt zeitgleich gewesen sein; reicht aus um das forum auszufüllen

[Tjulzz]

Conference Call in voller Länge zum Nachlesen:

Operator

Thank you for standing-by. This is the conference operator. Welcome to the Ballard Power Systems 2017 Q3 Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Guy McAree, Director, Investor Relations. Please go ahead.

Guy McAree

Thanks very much, and good morning to everybody. We’re going to be discussing Ballard’s Third Quarter 2017 financial and operating results this morning, and we’ve got Randy MacEwen, our President and CEO; and Tony Guglielmin, our CFO with us today, and they’ll both be speaking on the call.

We are going to be making forward-looking statements that are based on management's current expectations, beliefs and assumptions, concerning future events. Actual results could be materially different. So, please refer to our most recent annual information form and other public filings for our complete disclaimer and related information.

On this call, this morning Randy is going to discuss key developments during Q3, followed by Tony's review of our Q3 and year-to-date financial results and then we'll open the call for questions and answers.

Just before we start-up a brief note for those who are unable to participate at our September Investor and Analyst Day in New York, the presentation material from that day, and the audio recording of the event can be found on our website at ballard.com/investors.

So, now, I’ll turn the call over to Randy for his remarks before Tony reviews third quarter financial results.

Randy MacEwen

Thanks Guy and welcome everyone to our 2017 Third Quarter Earnings Conference Call. Given that we’ve recently held our Investor and Analyst Day and provided a comprehensive updated that time, I’ll keep my prepared comments today relative we breathe.

I’d like to start by reaffirming the positive trajectory of our financial results through Q3. In the quarter, we made strong progress against our 2017 financial performance objectives, including 54% year-on-year revenue growth, strong gross margin of 32% and positive adjusted EBITDA.

Adjusted EBITDA on a year-to-date basis was positive $1.2 million, and for the trailing 12-month period was positive $3 million. The continued improvement in these key metric is an important milestone for Ballard, and I believe for the entire fuel cell industry.

Looking forward, we are in well-positioned to deliver a strong Q4 and full year 2017.

We have the substantial order backlog including a sizable order book of committed business over the next 12 months. In addition, our sales pipeline remains robust with a very high level of activity across the entire sales team.

I want to emphasize a very important point, we are in the very early moments of a major global transformation of the transportation industry. This transformation involves the move towards zero emission vehicles through the electrification of vehicle power trains.

In this context of Ballard, we are uniquely positioned to deliver value with disruptive technology. Let me repeat that at Ballard, we are uniquely positioned with disruptive technology. We have seen exciting future where we deliver high value and enjoy significant market share as we saw big problems in large addressable markets.

We continue to see heightened global interest and the compelling value proposition uniquely offered by fuel cell electric vehicles or FCEVs. Particularly in heavy and medium duty transportation such as buses, commercial trucks and trains.

In these used cases, fuel cells and batteries can be packaged and optimized together in a complementary fuel cell electric hybrid solution to generate a number of key benefits including [zero two] pipe emissions, low noise and vibration and fast and smooth acceleration. We are also addressing the limitations of standalone battery electric solutions by offering long range, fast refueling and full route flexibility consistent with legacy diesel experience.

Our vision is that FCEVs become the dominant propulsion system in heavy duty motive and medium duty motive markets. In used cases were range, refueling time and route flexibility are important to customers and users.

Here we see FCEVs offering high safety, high reliability, high uptime, high durability and high operational flexibility while offering the most compelling total cost of ownership economics.

The evidence of how powerful we expect to transformation to differ Ballard is showing up in extra ordinary level of customer of engagement according activity to provide disruptive solutions for fuel cell electric buses, commercial trucks and trains.

The heightened interest in FCEVs is been driven and part by the sustainable global movement towards degalvanization. We are now seeing strong leadership by government in industry to lower GHT ambition and improved air quality. Each of Britain and France has outlined a plan to ban internal combustion engines and vehicles by 2040.

India is targeting all vehicles on the road to be powered by clean energy by 2030. In Norway 24% of new vehicles sold today are electric and the government wants a 100% sale to be zero emission by 2025.

The Netherlands is also following suite. Germany is also reviewing a similar objective, there is indication that the California Air Resources Board is also considering a move towards zero emission vehicles.

And importantly in September, Mr. Shin, China’s Vice Minister of Industry and Information Technology made a very significant announcement, specifically that the government of China is developing a long-term plan to phase out all vehicles that our powered by fossil fuels.

During Q3, I was fortunate to have meetings with two of China’s provincial party secretaries. Secretary Hu Chunhua, Party Secretary of Guangdong Province and Secretary [Lee Chen]. Party Secretary of Jiangsu Province both of whom reinforced my view of the strong commitment in China to commercialize and deploy FCEVs on a large scale.

In both meetings, I laid out my 30/30 vision, meaning that 30% of all transit buses and commercial trucks will be fuel cell electric vehicles by the year 2030. This timeline dovetails well with a complete – combustion engine by the 2040 timeframe.

We are also seeing unprecedented developments at the city level. Indeed, a very exciting and these are very exciting initiative was announced just last week by C40, A network of the world's mega cities that are committed to addressing climate change.

Mayors of 12 of those cities including London, Paris, Los Angeles, Copenhagen, Barcelona, Vancouver, Mexico City, Milan and Seattle signed a C40 Fossil Fuel Free Street Declaration. There they've set a target of procuring only zero emission trends at fosses by the year 2025. Given that these 12 cities currently have a total of about 60,000 buses operating on their streets, this is a very exciting and meaningful step that sets a positive direction towards zero emission mass transportation globally.

In September, the Government of Shanghai released the unprecedented Shanghai Fuel Cell vehicle development plan, a ground-breaking plan calling for the development and deployment of a large scale of fuel cell value chain an annual production of 300 fuel cell electric vehicles by 2020 and 30,000 fuel cell electric vehicles by 2025.

As we've discussed before, we believe Ballard is well positioned in Shanghai given our strategic relationship with Broad Ocean. We're currently supporting Broad Ocean's subsidiary, Shanghai eDrive and setting up a final engine assembly facility which is expected to be operational by year-end. Excellent timing that positions us well for participation in the Shanghai fuel cell vehicle development plan.

So, there is unprecedented strong signals that support an exciting future for Pan Fuel Cell technology globally and in Ballard's future prospects for continued growth and profitability.

Let's now review a number of important strategic developments since our last quarterly call. Beginning with China, as discussed during our Analyst Day, we announced the opening of our stack joint venture facility in Zhongtong province with our partner synergy. This was an important deliverable in 2017.

The JV operation is now ramping up to an annualized production capacity of 6000 fuel cell stacks with the potential for annual production capacity of 20,000 stacks by the end of next year. For those of you interested, you can view an operations video that includes the new joint venture facility in the presentation and events area in the Investor section at our corporate website at ballard.com.

Subsequent to the quarter, Tangshan Railway Vehicle Company or TRC part of the CRRC Group announced a trial of its fuel cell low floor tram on a new tram line in Tangshan City just north of Beijing.

This tram is powered by FC velocity fuel cell engines. This 3-car tram has a capacity of 336 passengers can travel up to 70 kilometers per hour and has a range of 40 kilometers on a single 12-kilogram hydrogen fill up. This is an exciting next step in our work with CRRC on train applications in China. We continue to be very excited about the rail market globally and the strong customer engagement we now see on opportunities for fuel cell powered trains.

In the European market during Q3, we also announced receipt of LOI from Van Hool for eight 100-kilowatt FC velocity engines to power 8 ExquiCity tram buses that are planned for delivery in the second half of 2019 in Pau, France. For use on the first hydrogen bus routes in that country.

On our Japan file, we also recently announced we've developed a new fuel cell stack using non-precious metal catalyst technology developed with Nisshinbo. That FCgen-1040 stack will be used this year for use an ultralight weight application.

We subsequently received a purchase order from Nisshinbo, our strategic investor and partner of Ballard to engage in technology solutions program aimed at assessing the potential development of the air cooled and liquid cooled fuel cell stacks using the Nisshinbo's non-precious metal catalyst technology for commercial material handling applications.

This next multi-year technology solutions program designed to specifically look at material handling applications, represents an exciting opportunity to leveraging Nisshinbo's low platinum loading technology for large scale low cost commercial use.

In terms of the U.S. market, I like to comment on the achievement of milestone fee in the army program of record for our power management products. This is an important threshold that we've been waiting for some time. And with this achievement finally, we anticipate U.S. military purchase orders beginning in 2018, following the military budget confirmation process.

As we discussed at the Investor and Analyst Day, we have seen addressable market share in the range of $150 million to $250 million over the next Five plus years with the U.S. military alone, in addition to opportunities among allied military.

To conclude underlying trends supporting to deployment of zero mission automotive power solutions are building momentum and in unprecedented paced; this rapidly driving demand for an increasing range of fuel cell powered applications across the growing number of geographic locations.

The adoption of fuel cell products is now expanding to include a most of applications from automotive transit buses to commercial trucks and trains which trial activities in the marine industry also on the near-term horizon and these product applications are growing traction in China, Europe as well as the U.S. market with Ballard well-positioned to service this growing demand.

So, to reemphasize, we have seen a scaffolding or layering of revenue opportunities with FCEVs with market adoption of fuel cell electric buses in China, Europe and North America but the adoption of fuel cell electric commercial trucks in China, Europe and North America and the adoption of fuel cell electric trains in China, Europe and North America.

In addition, our technology solutions bring a significant embedded optionally particularly in the Automotive drone and material handling markets. This is position Ballard, I think uniquely within fuel cell industry.

So, looking ahead, we are excited as we continue to execute our business plan improved our financial performance and build shareholder value.

With that, I will turn the call over to Tony for review of our I think it is exciting Q3 2017 financial results. Tony?

Tony Guglielmin

Thanks, Randy and good morning, everyone.

As Randy represent earlier our strong Q3 results included year-on-year revenue growth of 54% to $31.9 million. Gross margin was up 1 point to 32%. Adjusted EBITDA up positive $0.9 million up 158% as well as continued strength in our balance sheet with cash results of $60.1 million at end of Q3 and No debt.

On a year-to-date basis with the first three quarters we have delivered strong improvements including revenue of $81 million representing year-on-year growth of 48% which just show of our full year 2016 revenue of $85.3 million.

Gross margin improvement of 9 points to 36% and adjusted EBITDA of positive $1.2 million and improvement of 111%.

In terms of top line revenue growth in the quarter, power products were up 45% to $21.3 million driven by a 138 gain in heavy duty motive to $17.8 million primarily related to deliveries into the China markets.

Technology solutions revenue was up 78% in Q3 to $10.6 million. Again, reflecting work done in supportive key transactions in the China market, in addition to our stock strong top line revenue growth we also generated a modest improvement of 1 point in gross margin. This was the result of our ongoing focused, ongoing revenue from high margin businesses in particular heavy-duty motive and technology solutions.

Cash operating cost in the quarter were up 11% to $9.4 million, this is primarily result of increase investment in research and product development work related to next generation products and for growing our China platform in global services platform.

While we continue to invest in our business key areas, we are also continuing to see a positive trend in our operating leverage with cash operating cost as a percentage of revenue at 34% year-to-date in 2017 down from 48% for the same period 2016.

So, with this growth in revenue improved in a gross margin and improved operating leverage adjusted EBITDA improved 158% to positive $0.9 million in Q3 bringing year-to-date adjusted EBITDA through the three quarters of 2017 to positive $1.2 million and as Randy noted earlier adjusted EBITDA for the trailing 12 months period was positive $3 million.

Net loss from Q3 was negative $1 million, a 75% over Q3 last year and earnings per share improved 67% in Q3 to negative $0.01 per share from negative $0.03 per share in Q3, 2016.

Cash used by operating activities was up year-on-year at negative $7.7 million in the quarter. This consisted of cash operating income of $0.6 million and working capital outflows of $8.3 million.

Now, there is working capital outflow was principally the result of lower deferred revenue balances related to China as we fulfill deliverables on contracts for which prepayments had previously been received.

In terms of liquidity, with cash reserves of $60.1 million, we believe our balance sheet strength positions us well to continue supporting the company’s growth trajectory.

And looking forward, as Randy referenced, our order backlog at the end of Q3 was $236.8 million. This represents the aggregate value of committed orders in hand at the end of the quarter.

Of this amount, our 12-month order book was $82.4 million representing the value of deliveries expected by the end of Q3, 2018. These numbers underpin a strong outlook for the remainder of 2017 along with the positive momentum heading into 2018.

So, with that, let me turn the call back over to the operator for questions.

Question-and-Answer Session

Operator

We will now begin the question-and-answer session. [Operator Instructions] The first question is from Rob Brown of Lake Street Capital Market. Please go ahead.

Rob Brown

Good morning, thanks for taking my questions.

Randy MacEwen

Good morning, Rob.

Rob Brown

Just wanted to get some other details on the China ramp. I think you said the JV facility will be ready by year-end. And -- how that facility starts to ramp and sort of the expected support for unit truck deliveries in the next year?

Randy MacEwen

Yes. So actually, I'm quite pleased with the total program of bringing that facility online. I think overall the program has gone quite well. In terms of where we are today, the joint venture kind of start to get operationalized effectively in the August September timeframe. We had a formal opening at that time.

We'll be doing pilot production runs optimizing the equipment validating quality and items like that. So, we expect by the end of this year, the facility will have a production capacity run-rate about 6000 fuel cell stacks per year. All of the equipment is in place to support 20,000 stacks per year on an annualized basis late next year.

So, we see the ramp occurring in November and December as they start to move from pilot production to larger scale production and start to deliver product. It's important to understand as well, with Broad Ocean now set to bring it manufacturing facility in Shanghai online by the end of this year. That will be a key captive customer for stacks as well in addition to the synergy program.

So, we see some market demand obviously and order flow. But we're still in the process of making sure that we have high quality product that's going to meet the specifications. And then we'll start a more significant ramp over the next 60 days. Is that helpful, Rob?

Rob Brown

That's very helpful thank you. And then just some color on the order backlog both the near term and then ultimate. What sort of that comprised in terms of groupings there?

Randy MacEwen

Sure Rob. So, in the 12-month order backlog, the two largest items that would be in there would be the expected deliveries of NEAs to the joint venture over the next 12-month period to support the growth. And then other significant item in that would be the -- contract.

I would say the two of those together probably are 40% out of the backlog. But beyond that we have some shipment expected into a number of markets including the U.S. transit market. Obviously, some deliveries to plug and power and variety of deliveries into Europe. But the two largest would be the MEA as well as the Stephen case Rob, their reality. I should also mention there as well is some – we are stilling delivering some of the Broad-Ocean unites we announced earlier this year as well.

You may recall we announced 600 unites, we've shipped about 200 of those and we still have 400 to ship and then in the next twelve months as well which we expect to start shipping in Q4.

Rob Brown

Okay. Thank you. And then last question, just on the material handling market, how was that developing U.S. I guess globally and how do you see that transaction over the next few years?

Randy MacEwen

Couple of things that comment on, obviously both from power and highest yield are in the market now plug power I think continues to do a very good job at increasing scaling it's deployments.

So, I think as you think about market adoption North America has been leading it and I think there is a value proposition there in Europe particularly when you look at the labor rate hours in Europe and the value proposition around increased productivity.

So, we expect Europe to be the next market in terms of adoption and as longer term as we've talked about, we see a transitioning away from aftermarket systems integration or of existing forklift trucks to more of a purpose-built forklift design, we that transitioning occurring in the time period that you alluded to.

Rob Brown

Well, thank you.

Randy MacEwen

Thanks Rob.

Operator

[Operator Instructions] The next question is from Carter Driscoll of B. Riley FBR. Please go ahead.

Carter Driscoll

Good morning, gentlemen. Thanks for taking my question.

Randy MacEwen

Good morning, Carter.

Carter Driscoll

So, just maybe dig in a little dipper into Broad-Ocean and kind of how that matches up with your expected run rate for your JV. So, they are hoping to have their Shanghai facility up and run by year-end potentially two more by the end of 2018, could those three facilities and your estimation hope through the entire stack demand of the capacity that you have on hand right now?

Rob Brown

I think it's a little early to make that statement, there is a lot of variables in terms of how demand shapes from anyone customer and particularly when you start looking at early stage deployment in a new market with new refilling infrastructure with permitting vehicle certifications, there is a lot of parallel activity that occurring. If you talk directly to Broad-Ocean they would say yes, we're going to take all of the production demand available from the joint venture, but it is important to be cautious improving here in terms of what the expectations are.

So, I think the 6,000-annualized production ramped that we see is the appropriate ramp in the near-term. And as some of the customers including Broad-Ocean for its tax start to see their deployments plans actually materialized consistent with their expected timeline then we can be a little more sort of and what the volumes will be from the joint venture and which customers will see most of those volumes.

I'm firstly very excited about the opportunity for Broad-Ocean, we are working day and night with them right now to make sure that the Shanghai facility comes up, it is able to achieve its objectives but the other two facilities both in Shendong province as well as in the Wuhan Hobby area, there is significant activity and planning going on with those two facilities as well.

So, we expect to see large demand from Broad-Ocean just for those three facilities including the captive vehicles, fuel selected vehicles they planned to buy in addition to the customers that there are lining up with the number of bus OEMs and truck OEMs.

Carter Driscoll

Okay. All right, so then maybe could you addressed maybe some the discussions you had with either other truck or engine OEMs and maybe give some characterization of what their plans may or may not be I know without naming specific potential customers?

Randy MacEwen

I think you referring to China specifically I assume. In China there were two key things that we see emerging here over the last number of months and I would say it's accelerated recently where you have companies that have exposure to diesel and are now looking for next generation technology.

They recognized that they are going to be in a very difficult position and whether the timeline is 15 years from now and 30 years from now they still have the same strategic issue they have to address.

So, they’re now canvassing the market for different opportunities they see the limitations in heavy duty vehicles, with battery only solutions and they’re now taking a very close look at fuel sell electric vehicles as a next generation solution.

So, I think companies that have significant exposure to diesel are looking. That could be the companies that manufacture diesel engine they could be bus OEMs that are predominantly or commercial truck OEMs that are predominantly using diesel today.

Carter Driscoll

Okay. Maybe shifting gears, a little bit could you talk about obviously how is the big percentage of your TS segment right now, can you talk about or characterize maybe some of the other programs obviously there’s work you’ve done on light duty size. Is a significant component on the medium duty and heavy-duty opportunities of programs with different vendors worldwide?

Randy MacEwen

Yes, so you’re correct, Audi is a very important customer for us and I think collaborative with Audi we’re doing outstanding work for the fuel sell passenger vehicle market. But as you know we typically have in any given quarter somewhere in 25 to 35 projects or programs underway and these programs offer us as we talked about before significant embedded optionality.

And we work not just in automotive and in the drone markets but also activities in heavy duty motor so there’s a number of activities on the train side, on the commercial truck side and the metal handling side where we see a TS activity that I think will scale in the coming years and ultimately lead to product sales and or surfacing of value on our significant IP portfolio.

Carter Driscoll

Okay. And then maybe just last one from me, obviously a lot of focus on China over the last several quarters as it should be with the market size and opportunity there and clearly, they’re pushed to at zero clarify permissions and much bigger percentage in commercial vehicle market, but Europe tends to get under represented some time certainly a forward-thinking market as well.

You’re talking about two things, one, the opportunity to participate in the RFP that’s out there under the FCH program and secondarily it seems like a lot more interest on the rail front in Europe particular, so any color would be appreciated. Thank you.

Randy MacEwen

I agree with you I think the market is focused primarily on the China opportunities for Ballard. We see a very diversified business model here with different applications, buses, commercial trucks, rail that are serviced with the same technology and those applications layering in revenue opportunities in China, Europe and in North America in that order in my opinion.

Japan what we expect to see some exposure as well. Now in terms of Europe we do there’s significant activity occurring right now for the adoption of fuel sell electric buses with I think in the range of 291 fuel sell buses that are out for tender. We expect to see very significant market participation by Ballard in this important next round and we think that leads to a further round of in the range of a 1000 to 2000 fuel sell buses in the European market.

And I want to emphasize I’ll be in Europe in a few weeks speaking at the fuel sell hydrogen joint undertaking it’s a 10-year anniversary. And I want to emphasize that there’s a lot of work going on in Europe, in each one of these applications I referred to. And you’re absolutely right Carter, there are significant activity on the train side in Europe.

Carter Driscoll

Perfect. I will pass on take the rest offline. Thank you, gentlemen.

Randy MacEwen

Thank you.

Operator

The next question is from Amit Dayal of Rodman & Renshaw. Please go ahead.

Amit Dayal

Thank you. Good morning, guys and congrats on the execution. I have one question for you in regard to follow this activity we’re seeing in China how are you sort of seeing the hydrogen infrastructure build out taking place to support your efforts?

Randy MacEwen

That’s a great question, and I think it’s a question that’s applicable globally not just in China. Just one important development that I want to highlight globally is that the hydrogen council is a very industry first in terms of collaboration of strong companies in the energy, gas and transportation markets in particular, where companies like [Air Lagid, Lindsey, Eaton], Shell, Total, RG.

And then on the passing the vehicle side now Audi, BMW, Toyota, Honda, GM, so, Hyundai. A number of great companies that have committed to deploy in the range of 4.8 billion euros to see the commercialization particularly you fuel saw passenger vehicle cars, but a key part here is really the investment in infrastructure.

Lot of the learnings that have occurred over the past 10 years in California, in Japan, in Germany are now being translated in the China market and so in terms of engineering procurement, construction, certification, those type of things for hydrogen fueling station, I think there is a lot of work that’s been done that enables much more efficient setup of how did refueling infrastructure.

And again, we are focused on the market opportunities where the barest entry is lowest, where you have centralized depo refueling where vehicles typically come back to those depos at night as they do today with current diesel or legacy diesel technology.

In terms of China specifically, there is been a lot of progress over the last 12 and 24 months with a number of different companies becoming far more educated both as suppliers and as users of hydrogen and we see a buildup occurring right now in China of hydrogen fueling stations.

And I think as we pick up our conference call in the late February, early March timeframe next year, we will be able to provide a little more visibility on the deployment schedule for hydrogen fueling station, particularly as it relates to our partners.

Amit Dayal

And as we get to the fuel cells tax per year capacity sort of utilization levels can you talk about how much impact on the cost front that could have?

Randy MacEwen

Yes, so it’s a great question. We’ve outlined on the Investor and Analyst day, some fairly a clear cost down – cost reduction roadmaps not just for stacks but also for modules. I am actually to be honest more bullish on the opportunity for the module cost reduction where we see a lot of opportunity on balance of plant components in terms of localization of supply in China, in high volume at quality and the ability for dollar to see that provide benefit not just for the Chinese market but for the global market.

So, we are doing a lot of great work Ballard on cost reduction of the stack, the joint venture will see opportunity with scaling on cost reduction for the stacks, but we are also doing a lot of work both of Ballard on a standalone basis and with our partners in China at the module level.

Amit Dayal

Understood. And this maybe a little early but is sort of Broad-Ocean committed to continuing expanding capacity if and when we get to the 20,000 levels, I mean it looks like your go to and get there next year, is just looking out maybe a few years ahead that may not be sufficient given what the demand looking like, so how do we sort of plan for capacity beyond 2018?

Randy MacEwen

Yes, so Broad-Ocean is making a very significant investment in the fuel sale industry, like they did in the battery electric market and I don’t want to comment on what their plans are that’s for them to stay but we’re excited by the level of investment we see as they realize success it wouldn’t surprise me to see them grow their plans like they did in battery electric.

Amit Dayal

Got it. Just last question on the Japan front. It looks like that market is getting interesting as well for you. Do you see material contribution from them in 2018 or is that something that should sort of attributed to maybe further down the road?

Randy MacEwen

Yes, so this is a market that moves very slowly and what I would say is that where we see initial exposure in the Japanese market is in our technology solutions business. And where we continuing to work with key partners in Japan to move technology to the next stage of performance and next stage of cost reduction and where we see certain applications where product innovation is a foot.

Amit Dayal

Got it. Thank you so much.

Operator

The next question is from Jeff Osborne of Cowen and Company. Please go ahead.

Jeff Osborne

Hey, good mornings. Just a couple of question on my end many of them are even ask and answered but may be Randy just – sounds like visibility shaping up much better for you as China ramps up in the all the different type of facilities come and deploy, I just wasn’t sure as we head into 2018, if you felt more comfortable prior years ago Ballard used to get guidance heading into a year, is that something that you intend to do for 2018 or still wanted to get more comfortable with the situation?

Randy MacEwen

Yes. Good morning Jeff. I still there am the lot of variability and team potential loving this quarter-to-quarter in our business. a lot of moving pieces not just in China but as we say globally and so right now, we don’t have an expectation of providing guidance in 2018, well of course we give it that let the management team in the board in early 2018 but that’s not the current intend.

Jeff Osborne

Got it and then just with the activity on buses outside of China, you have given some comments at the analyst day a month or so ago as it relates to cost down but can you just help us may be one they are removed to see the competitiveness of fuel cell bus versus an electric versus a natural gas bus.

Firstly, I agree with around emission reductions targets, but you have seen in particular electric pick up so momentum in market – and if you all there is so the factories in public RSPs and their pricing typically would be in around $800,000 of bus, can you just update us where North American fuel cell power bus would be today?

Randy MacEwen

Yes. So, in terms of North American Fuel cell buses so next year I could see in the range of cells of around 30 engines for Ballard for fuel cell electric buses primarily in California although may be five or so outside of California those will lead to deployments starting potentially next year in the end of the following year.

So, we are still at a modest scale in the U.S. market and the U.S. market is actually the most expensive of the three that we are looking at for fuel cell buses at this time in terms of China, Europe and the United State Markets.

So, during the range of about $800,000 for the fuel cell bus today U.S. a road map as we described is to look at getting a total of cost of ownership looking at the cost of fuel cell bus plus the hydrogen cost plus of bus maintenance cost on part with battery electric buses by 2020.

But with -- of course with all of the benefits of extended range fast refueling and full route flexibility and when you kind of translate to a number per kilometers per year on a total cost of ownership basis.

We feel like we are right in that range we need to be and kind of on year basis we kind of spend most of our time more recently looking at the year model when the 3.5 years for kilometer range which we think is a very compelling solution in 2020 compared to income technology and where we expect battery electric buses to be at that time.

Jeff Osborne

And just how – for their fees in Europe how are they valuating this year to intensity of the hydrogen?

Randy MacEwen

So, it’s a great question. I think what we are going to see overtime is the migration towards looking at green hydrogen I think there is recognition today that there is opportunity for improved CO2 emission even with reformed hydrogen.

So, I think you will see most of the refueling applications in Europe in the very near term I believe being satisfied with traditional hydrogen generation technology and I think longer term when we started looking at well to wheels carbon foot print and moving away from just zero type emissions, we will see more green hydrogen including electrolysis based hydrogen production.

Jeff Osborne

Got it, just two other quick one if you don’t mind; one is – how a rough number made in exact number but of how many buses with Ballard equipment feel so units are on the road in China specifically today it’s been a lot of comments about module this and that and how many of you have produced in capacity but how many physically are on the road relative to expectations of sales in 2017. Total bus.

Randy MacEwen

Right, so we have partners coming out with some launch plans and deployment plans in the very near-term in terms of activity. So, I don’t want to use excerpts, some of her announcements, but what I will tell you is that there are number of vehicles that have been built manufactured with Ballard technology inside of them that are road ready and we will start to see some deployments occurred in a number of different cities in China this is both in the bus market as well the commercial truck market.

Jeff Osborne

Got it, and in commercial is that more like class 5 through 7 type of delivery van as a range extender or this is more class 8 long haul trucking, I am just curious.

Randy MacEwen

Yes, in the very near-term in terms of vehicles that are in production right now and are ready for deployment right now those are the delivery vans. Correct.

Jeff Osborne

Correct. Got it and lastly how it is – super technical answer but just Nisshinbo side without using platinum, you mentioned earlier to using just for lightweight applications and then having a separate discussion or narrative around materials handling, can you just walk us through why from a technical perspective, it's only a suitable for lightweight applications today, does it have something to do with energy density and that needs to be improved or I guess what are the hurdles technically speaking to get into materials handling?

Randy MacEwen

Yes. So, with Nisshinbo there has been a great work done I think on this carbon alloy. We have presented at a number of technical conferences on this and I think a lot people of didn’t surprise by the results that we've achieved.

But the results we have achieved so far just would be cleared our four lower use our applications which typically for us translate to later applications affordable power applications for example and what the next stage of program, which is a multi-year technology solutions program with Nisshinbo is then it takes to learning and the success so far and translate that to a longer our product and particularly focused on the material handling segment.

Jeff Osborne

Got it, that’s helpful. Thank you.

Operator

The next question is from [Anne Forney] of Roth Capital Partners. Please go ahead.

Unidentified Analyst

Hi, congrats on the strong results in this quarter. Most of my questions have already been answered but I just had like couple of questions. First was on the Analyst Day, you have mentioned that there is possibility of additional order activity from China like – is there any update that you may be able give on this other activity?

Randy MacEwen

Hi, Good morning Anne and thanks for the question, could you just repeat the question, I apologize.

Unidentified Analyst

Yes, in the Analyst Day, you had mentioned that there is a possibility of increased order activity from existing clients in China from Shandong City, so I just wanted to check if there is any update that you can give on that?

Randy MacEwen

I see, Okay. Yes. So, what we have seen with the number of bus, so we enhance typically our buying a regularly for them a relatively small number of modules with a new deployment of initial buses and then we start to see through performance and through validation and they start looking at next round of orders think it's long, it’s too early I should say for us to comment on whether [Ying Long] will be repeat customer. We delivered modules to them and expect a good progress as we have seen with other partners there.

Another one I think that’s really interesting is the work that’s been done with [Ying Long] and we have been added a much longer with [Ying Long]. So, I expect to see continue progress with the number of bus OEMs and really what we are trying to do here with the bus OEMs is get them comfortable with the technology and in some cases educating them on the technologies and in some cases, there are very experienced with it.

And then getting the bus platforms certified with Ballard technology inside so that there is they can actually get – and license for the road and qualify for the subsidy programs. And so, there is lot of work that we have been doing I think we have in the range of about 13 different platforms today that have Ballard technology inside in some form that are certified in China and we will continue work with Bus OEMs and commercial truck OEMs to make sure there is demand go through an adoption of the technology.

Unidentified Analyst

Thank you. And just another if you may give highlight on the hydrogen train markets like do you see a -- how soon do you see that expanding and turning out to be like a commercial market for you?

Randy MacEwen

Yes. So, the train market has really accelerated in the last six months and as we comment at earlier we have seen another milestone obviously with Ten Shang Railway Company in Ten Shang where they deployed their first tramp and that's a pretty exciting development for us there. Work continues in on a Doming line in Foshang with CSRC both of these companies are part of CRRC.

We feel we're very strongly positioned for the Chinese market. In Europe we're seen lots of coding activity for fuel cell trends and trains and we expect to see some opportunities develop in that market for Ballard. And even in North America, we're seeing for the first time some serious activity occurring.

So, we're very excited about the train market and I think the value proposition there is clear. You have you can continue with diesel technology or you can have a long extensions code in sky or you can go fuel cell solutions.

Unidentified Analyst

Okay. Thank you.

Operator

This concludes the question-and-answer session. I would like to turn the conference back over to Randy MacEwen, CEO for any closing remarks.

Randy MacEwen

Great. Thank you for joining us today. We look forward to report in Q4 and full year 2017 results along with our outlook for 2018 in late February early March timeframe next year. Thanks again, everyone.

Operator

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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Ballard Power Systems' (BLDP) CEO Randy MacEwen on Q3 2017 Results - Earnings Call Transcript
Nov. 2, 2017 4:05 PM • BLDP
Ballard Power Systems, Inc. (NASDAQ:BLDP)
Q3 2017 Earnings Conference Call
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November 02, 2017 11:00 AM ET
Executives
Guy McAree - Director of Investor Relations
Randy MacEwen - President and Chief Executive Officer
Tony Guglielmin - Chief Financial Officer
Analysts
Rob Brown - Lake Street Capital Markets
Carter Driscoll - FBR Capital
Amit Dayal - Rodman & Renshaw
Jeff Osborne - Cowen and Company
Presentation
Operator
Thank you for standing-by. This is the conference operator. Welcome to the Ballard Power Systems 2017 Q3 Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]
I would now like to turn the conference over to Guy McAree, Director, Investor Relations. Please go ahead.
Guy McAree
Thanks very much, and good morning to everybody. We’re going to be discussing Ballard’s Third Quarter 2017 financial and operating results this morning, and we’ve got Randy MacEwen, our President and CEO; and Tony Guglielmin, our CFO with us today, and they’ll both be speaking on the call.
We are going to be making forward-looking statements that are based on management's current expectations, beliefs and assumptions, concerning future events. Actual results could be materially different. So, please refer to our most recent annual information form and other public filings for our complete disclaimer and related information.
On this call, this morning Randy is going to discuss key developments during Q3, followed by Tony's review of our Q3 and year-to-date financial results and then we'll open the call for questions and answers.
Just before we start-up a brief note for those who are unable to participate at our September Investor and Analyst Day in New York, the presentation material from that day, and the audio recording of the event can be found on our website at ballard.com/investors.
So, now, I’ll turn the call over to Randy for his remarks before Tony reviews third quarter financial results.
Randy MacEwen
Thanks Guy and welcome everyone to our 2017 Third Quarter Earnings Conference Call. Given that we’ve recently held our Investor and Analyst Day and provided a comprehensive updated that time, I’ll keep my prepared comments today relative we breathe.
I’d like to start by reaffirming the positive trajectory of our financial results through Q3. In the quarter, we made strong progress against our 2017 financial performance objectives, including 54% year-on-year revenue growth, strong gross margin of 32% and positive adjusted EBITDA.
Adjusted EBITDA on a year-to-date basis was positive $1.2 million, and for the trailing 12-month period was positive $3 million. The continued improvement in these key metric is an important milestone for Ballard, and I believe for the entire fuel cell industry.
Looking forward, we are in well-positioned to deliver a strong Q4 and full year 2017.
We have the substantial order backlog including a sizable order book of committed business over the next 12 months. In addition, our sales pipeline remains robust with a very high level of activity across the entire sales team.
I want to emphasize a very important point, we are in the very early moments of a major global transformation of the transportation industry. This transformation involves the move towards zero emission vehicles through the electrification of vehicle power trains.
In this context of Ballard, we are uniquely positioned to deliver value with disruptive technology. Let me repeat that at Ballard, we are uniquely positioned with disruptive technology. We have seen exciting future where we deliver high value and enjoy significant market share as we saw big problems in large addressable markets.
We continue to see heightened global interest and the compelling value proposition uniquely offered by fuel cell electric vehicles or FCEVs. Particularly in heavy and medium duty transportation such as buses, commercial trucks and trains.
In these used cases, fuel cells and batteries can be packaged and optimized together in a complementary fuel cell electric hybrid solution to generate a number of key benefits including [zero two] pipe emissions, low noise and vibration and fast and smooth acceleration. We are also addressing the limitations of standalone battery electric solutions by offering long range, fast refueling and full route flexibility consistent with legacy diesel experience.
Our vision is that FCEVs become the dominant propulsion system in heavy duty motive and medium duty motive markets. In used cases were range, refueling time and route flexibility are important to customers and users.
Here we see FCEVs offering high safety, high reliability, high uptime, high durability and high operational flexibility while offering the most compelling total cost of ownership economics.
The evidence of how powerful we expect to transformation to differ Ballard is showing up in extra ordinary level of customer of engagement according activity to provide disruptive solutions for fuel cell electric buses, commercial trucks and trains.
The heightened interest in FCEVs is been driven and part by the sustainable global movement towards degalvanization. We are now seeing strong leadership by government in industry to lower GHT ambition and improved air quality. Each of Britain and France has outlined a plan to ban internal combustion engines and vehicles by 2040.
India is targeting all vehicles on the road to be powered by clean energy by 2030. In Norway 24% of new vehicles sold today are electric and the government wants a 100% sale to be zero emission by 2025.
The Netherlands is also following suite. Germany is also reviewing a similar objective, there is indication that the California Air Resources Board is also considering a move towards zero emission vehicles.
And importantly in September, Mr. Shin, China’s Vice Minister of Industry and Information Technology made a very significant announcement, specifically that the government of China is developing a long-term plan to phase out all vehicles that our powered by fossil fuels.
During Q3, I was fortunate to have meetings with two of China’s provincial party secretaries. Secretary Hu Chunhua, Party Secretary of Guangdong Province and Secretary [Lee Chen]. Party Secretary of Jiangsu Province both of whom reinforced my view of the strong commitment in China to commercialize and deploy FCEVs on a large scale.
In both meetings, I laid out my 30/30 vision, meaning that 30% of all transit buses and commercial trucks will be fuel cell electric vehicles by the year 2030. This timeline dovetails well with a complete – combustion engine by the 2040 timeframe.
We are also seeing unprecedented developments at the city level. Indeed, a very exciting and these are very exciting initiative was announced just last week by C40, A network of the world's mega cities that are committed to addressing climate change.
Mayors of 12 of those cities including London, Paris, Los Angeles, Copenhagen, Barcelona, Vancouver, Mexico City, Milan and Seattle signed a C40 Fossil Fuel Free Street Declaration. There they've set a target of procuring only zero emission trends at fosses by the year 2025. Given that these 12 cities currently have a total of about 60,000 buses operating on their streets, this is a very exciting and meaningful step that sets a positive direction towards zero emission mass transportation globally.
In September, the Government of Shanghai released the unprecedented Shanghai Fuel Cell vehicle development plan, a ground-breaking plan calling for the development and deployment of a large scale of fuel cell value chain an annual production of 300 fuel cell electric vehicles by 2020 and 30,000 fuel cell electric vehicles by 2025.
As we've discussed before, we believe Ballard is well positioned in Shanghai given our strategic relationship with Broad Ocean. We're currently supporting Broad Ocean's subsidiary, Shanghai eDrive and setting up a final engine assembly facility which is expected to be operational by year-end. Excellent timing that positions us well for participation in the Shanghai fuel cell vehicle development plan.
So, there is unprecedented strong signals that support an exciting future for Pan Fuel Cell technology globally and in Ballard's future prospects for continued growth and profitability.
Let's now review a number of important strategic developments since our last quarterly call. Beginning with China, as discussed during our Analyst Day, we announced the opening of our stack joint venture facility in Zhongtong province with our partner synergy. This was an important deliverable in 2017.
The JV operation is now ramping up to an annualized production capacity of 6000 fuel cell stacks with the potential for annual production capacity of 20,000 stacks by the end of next year. For those of you interested, you can view an operations video that includes the new joint venture facility in the presentation and events area in the Investor section at our corporate website at ballard.com.
Subsequent to the quarter, Tangshan Railway Vehicle Company or TRC part of the CRRC Group announced a trial of its fuel cell low floor tram on a new tram line in Tangshan City just north of Beijing.
This tram is powered by FC velocity fuel cell engines. This 3-car tram has a capacity of 336 passengers can travel up to 70 kilometers per hour and has a range of 40 kilometers on a single 12-kilogram hydrogen fill up. This is an exciting next step in our work with CRRC on train applications in China. We continue to be very excited about the rail market globally and the strong customer engagement we now see on opportunities for fuel cell powered trains.
In the European market during Q3, we also announced receipt of LOI from Van Hool for eight 100-kilowatt FC velocity engines to power 8 ExquiCity tram buses that are planned for delivery in the second half of 2019 in Pau, France. For use on the first hydrogen bus routes in that country.
On our Japan file, we also recently announced we've developed a new fuel cell stack using non-precious metal catalyst technology developed with Nisshinbo. That FCgen-1040 stack will be used this year for use an ultralight weight application.
We subsequently received a purchase order from Nisshinbo, our strategic investor and partner of Ballard to engage in technology solutions program aimed at assessing the potential development of the air cooled and liquid cooled fuel cell stacks using the Nisshinbo's non-precious metal catalyst technology for commercial material handling applications.
This next multi-year technology solutions program designed to specifically look at material handling applications, represents an exciting opportunity to leveraging Nisshinbo's low platinum loading technology for large scale low cost commercial use.
In terms of the U.S. market, I like to comment on the achievement of milestone fee in the army program of record for our power management products. This is an important threshold that we've been waiting for some time. And with this achievement finally, we anticipate U.S. military purchase orders beginning in 2018, following the military budget confirmation process.
As we discussed at the Investor and Analyst Day, we have seen addressable market share in the range of $150 million to $250 million over the next Five plus years with the U.S. military alone, in addition to opportunities among allied military.
To conclude underlying trends supporting to deployment of zero mission automotive power solutions are building momentum and in unprecedented paced; this rapidly driving demand for an increasing range of fuel cell powered applications across the growing number of geographic locations.
The adoption of fuel cell products is now expanding to include a most of applications from automotive transit buses to commercial trucks and trains which trial activities in the marine industry also on the near-term horizon and these product applications are growing traction in China, Europe as well as the U.S. market with Ballard well-positioned to service this growing demand.
So, to reemphasize, we have seen a scaffolding or layering of revenue opportunities with FCEVs with market adoption of fuel cell electric buses in China, Europe and North America but the adoption of fuel cell electric commercial trucks in China, Europe and North America and the adoption of fuel cell electric trains in China, Europe and North America.
In addition, our technology solutions bring a significant embedded optionally particularly in the Automotive drone and material handling markets. This is position Ballard, I think uniquely within fuel cell industry.
So, looking ahead, we are excited as we continue to execute our business plan improved our financial performance and build shareholder value.
With that, I will turn the call over to Tony for review of our I think it is exciting Q3 2017 financial results. Tony?
Tony Guglielmin
Thanks, Randy and good morning, everyone.
As Randy represent earlier our strong Q3 results included year-on-year revenue growth of 54% to $31.9 million. Gross margin was up 1 point to 32%. Adjusted EBITDA up positive $0.9 million up 158% as well as continued strength in our balance sheet with cash results of $60.1 million at end of Q3 and No debt.
On a year-to-date basis with the first three quarters we have delivered strong improvements including revenue of $81 million representing year-on-year growth of 48% which just show of our full year 2016 revenue of $85.3 million.
Gross margin improvement of 9 points to 36% and adjusted EBITDA of positive $1.2 million and improvement of 111%.
In terms of top line revenue growth in the quarter, power products were up 45% to $21.3 million driven by a 138 gain in heavy duty motive to $17.8 million primarily related to deliveries into the China markets.
Technology solutions revenue was up 78% in Q3 to $10.6 million. Again, reflecting work done in supportive key transactions in the China market, in addition to our stock strong top line revenue growth we also generated a modest improvement of 1 point in gross margin. This was the result of our ongoing focused, ongoing revenue from high margin businesses in particular heavy-duty motive and technology solutions.
Cash operating cost in the quarter were up 11% to $9.4 million, this is primarily result of increase investment in research and product development work related to next generation products and for growing our China platform in global services platform.
While we continue to invest in our business key areas, we are also continuing to see a positive trend in our operating leverage with cash operating cost as a percentage of revenue at 34% year-to-date in 2017 down from 48% for the same period 2016.
So, with this growth in revenue improved in a gross margin and improved operating leverage adjusted EBITDA improved 158% to positive $0.9 million in Q3 bringing year-to-date adjusted EBITDA through the three quarters of 2017 to positive $1.2 million and as Randy noted earlier adjusted EBITDA for the trailing 12 months period was positive $3 million.
Net loss from Q3 was negative $1 million, a 75% over Q3 last year and earnings per share improved 67% in Q3 to negative $0.01 per share from negative $0.03 per share in Q3, 2016.
Cash used by operating activities was up year-on-year at negative $7.7 million in the quarter. This consisted of cash operating income of $0.6 million and working capital outflows of $8.3 million.
Now, there is working capital outflow was principally the result of lower deferred revenue balances related to China as we fulfill deliverables on contracts for which prepayments had previously been received.
In terms of liquidity, with cash reserves of $60.1 million, we believe our balance sheet strength positions us well to continue supporting the company’s growth trajectory.
And looking forward, as Randy referenced, our order backlog at the end of Q3 was $236.8 million. This represents the aggregate value of committed orders in hand at the end of the quarter.
Of this amount, our 12-month order book was $82.4 million representing the value of deliveries expected by the end of Q3, 2018. These numbers underpin a strong outlook for the remainder of 2017 along with the positive momentum heading into 2018.
So, with that, let me turn the call back over to the operator for questions.
Question-and-Answer Session
Operator
We will now begin the question-and-answer session. [Operator Instructions] The first question is from Rob Brown of Lake Street Capital Market. Please go ahead.
Rob Brown
Good morning, thanks for taking my questions.
Randy MacEwen
Good morning, Rob.
Rob Brown
Just wanted to get some other details on the China ramp. I think you said the JV facility will be ready by year-end. And -- how that facility starts to ramp and sort of the expected support for unit truck deliveries in the next year?
Randy MacEwen
Yes. So actually, I'm quite pleased with the total program of bringing that facility online. I think overall the program has gone quite well. In terms of where we are today, the joint venture kind of start to get operationalized effectively in the August September timeframe. We had a formal opening at that time.
We'll be doing pilot production runs optimizing the equipment validating quality and items like that. So, we expect by the end of this year, the facility will have a production capacity run-rate about 6000 fuel cell stacks per year. All of the equipment is in place to support 20,000 stacks per year on an annualized basis late next year.
So, we see the ramp occurring in November and December as they start to move from pilot production to larger scale production and start to deliver product. It's important to understand as well, with Broad Ocean now set to bring it manufacturing facility in Shanghai online by the end of this year. That will be a key captive customer for stacks as well in addition to the synergy program.
So, we see some market demand obviously and order flow. But we're still in the process of making sure that we have high quality product that's going to meet the specifications. And then we'll start a more significant ramp over the next 60 days. Is that helpful, Rob?
Rob Brown
That's very helpful thank you. And then just some color on the order backlog both the near term and then ultimate. What sort of that comprised in terms of groupings there?
Randy MacEwen
Sure Rob. So, in the 12-month order backlog, the two largest items that would be in there would be the expected deliveries of NEAs to the joint venture over the next 12-month period to support the growth. And then other significant item in that would be the -- contract.
I would say the two of those together probably are 40% out of the backlog. But beyond that we have some shipment expected into a number of markets including the U.S. transit market. Obviously, some deliveries to plug and power and variety of deliveries into Europe. But the two largest would be the MEA as well as the Stephen case Rob, their reality. I should also mention there as well is some – we are stilling delivering some of the Broad-Ocean unites we announced earlier this year as well.
You may recall we announced 600 unites, we've shipped about 200 of those and we still have 400 to ship and then in the next twelve months as well which we expect to start shipping in Q4.
Rob Brown
Okay. Thank you. And then last question, just on the material handling market, how was that developing U.S. I guess globally and how do you see that transaction over the next few years?
Randy MacEwen
Couple of things that comment on, obviously both from power and highest yield are in the market now plug power I think continues to do a very good job at increasing scaling it's deployments.
So, I think as you think about market adoption North America has been leading it and I think there is a value proposition there in Europe particularly when you look at the labor rate hours in Europe and the value proposition around increased productivity.
So, we expect Europe to be the next market in terms of adoption and as longer term as we've talked about, we see a transitioning away from aftermarket systems integration or of existing forklift trucks to more of a purpose-built forklift design, we that transitioning occurring in the time period that you alluded to.
Rob Brown
Well, thank you.
Randy MacEwen
Thanks Rob.
Operator
[Operator Instructions] The next question is from Carter Driscoll of B. Riley FBR. Please go ahead.
Carter Driscoll
Good morning, gentlemen. Thanks for taking my question.
Randy MacEwen
Good morning, Carter.
Carter Driscoll
So, just maybe dig in a little dipper into Broad-Ocean and kind of how that matches up with your expected run rate for your JV. So, they are hoping to have their Shanghai facility up and run by year-end potentially two more by the end of 2018, could those three facilities and your estimation hope through the entire stack demand of the capacity that you have on hand right now?
Rob Brown
I think it's a little early to make that statement, there is a lot of variables in terms of how demand shapes from anyone customer and particularly when you start looking at early stage deployment in a new market with new refilling infrastructure with permitting vehicle certifications, there is a lot of parallel activity that occurring. If you talk directly to Broad-Ocean they would say yes, we're going to take all of the production demand available from the joint venture, but it is important to be cautious improving here in terms of what the expectations are.
So, I think the 6,000-annualized production ramped that we see is the appropriate ramp in the near-term. And as some of the customers including Broad-Ocean for its tax start to see their deployments plans actually materialized consistent with their expected timeline then we can be a little more sort of and what the volumes will be from the joint venture and which customers will see most of those volumes.
I'm firstly very excited about the opportunity for Broad-Ocean, we are working day and night with them right now to make sure that the Shanghai facility comes up, it is able to achieve its objectives but the other two facilities both in Shendong province as well as in the Wuhan Hobby area, there is significant activity and planning going on with those two facilities as well.
So, we expect to see large demand from Broad-Ocean just for those three facilities including the captive vehicles, fuel selected vehicles they planned to buy in addition to the customers that there are lining up with the number of bus OEMs and truck OEMs.
Carter Driscoll
Okay. All right, so then maybe could you addressed maybe some the discussions you had with either other truck or engine OEMs and maybe give some characterization of what their plans may or may not be I know without naming specific potential customers?
Randy MacEwen
I think you referring to China specifically I assume. In China there were two key things that we see emerging here over the last number of months and I would say it's accelerated recently where you have companies that have exposure to diesel and are now looking for next generation technology.
They recognized that they are going to be in a very difficult position and whether the timeline is 15 years from now and 30 years from now they still have the same strategic issue they have to address.
So, they’re now canvassing the market for different opportunities they see the limitations in heavy duty vehicles, with battery only solutions and they’re now taking a very close look at fuel sell electric vehicles as a next generation solution.
So, I think companies that have significant exposure to diesel are looking. That could be the companies that manufacture diesel engine they could be bus OEMs that are predominantly or commercial truck OEMs that are predominantly using diesel today.
Carter Driscoll
Okay. Maybe shifting gears, a little bit could you talk about obviously how is the big percentage of your TS segment right now, can you talk about or characterize maybe some of the other programs obviously there’s work you’ve done on light duty size. Is a significant component on the medium duty and heavy-duty opportunities of programs with different vendors worldwide?
Randy MacEwen
Yes, so you’re correct, Audi is a very important customer for us and I think collaborative with Audi we’re doing outstanding work for the fuel sell passenger vehicle market. But as you know we typically have in any given quarter somewhere in 25 to 35 projects or programs underway and these programs offer us as we talked about before significant embedded optionality.
And we work not just in automotive and in the drone markets but also activities in heavy duty motor so there’s a number of activities on the train side, on the commercial truck side and the metal handling side where we see a TS activity that I think will scale in the coming years and ultimately lead to product sales and or surfacing of value on our significant IP portfolio.
Carter Driscoll
Okay. And then maybe just last one from me, obviously a lot of focus on China over the last several quarters as it should be with the market size and opportunity there and clearly, they’re pushed to at zero clarify permissions and much bigger percentage in commercial vehicle market, but Europe tends to get under represented some time certainly a forward-thinking market as well.
You’re talking about two things, one, the opportunity to participate in the RFP that’s out there under the FCH program and secondarily it seems like a lot more interest on the rail front in Europe particular, so any color would be appreciated. Thank you.
Randy MacEwen
I agree with you I think the market is focused primarily on the China opportunities for Ballard. We see a very diversified business model here with different applications, buses, commercial trucks, rail that are serviced with the same technology and those applications layering in revenue opportunities in China, Europe and in North America in that order in my opinion.
Japan what we expect to see some exposure as well. Now in terms of Europe we do there’s significant activity occurring right now for the adoption of fuel sell electric buses with I think in the range of 291 fuel sell buses that are out for tender. We expect to see very significant market participation by Ballard in this important next round and we think that leads to a further round of in the range of a 1000 to 2000 fuel sell buses in the European market.
And I want to emphasize I’ll be in Europe in a few weeks speaking at the fuel sell hydrogen joint undertaking it’s a 10-year anniversary. And I want to emphasize that there’s a lot of work going on in Europe, in each one of these applications I referred to. And you’re absolutely right Carter, there are significant activity on the train side in Europe.
Carter Driscoll
Perfect. I will pass on take the rest offline. Thank you, gentlemen.
Randy MacEwen
Thank you.
Operator
The next question is from Amit Dayal of Rodman & Renshaw. Please go ahead.
Amit Dayal
Thank you. Good morning, guys and congrats on the execution. I have one question for you in regard to follow this activity we’re seeing in China how are you sort of seeing the hydrogen infrastructure build out taking place to support your efforts?
Randy MacEwen
That’s a great question, and I think it’s a question that’s applicable globally not just in China. Just one important development that I want to highlight globally is that the hydrogen council is a very industry first in terms of collaboration of strong companies in the energy, gas and transportation markets in particular, where companies like [Air Lagid, Lindsey, Eaton], Shell, Total, RG.
And then on the passing the vehicle side now Audi, BMW, Toyota, Honda, GM, so, Hyundai. A number of great companies that have committed to deploy in the range of 4.8 billion euros to see the commercialization particularly you fuel saw passenger vehicle cars, but a key part here is really the investment in infrastructure.
Lot of the learnings that have occurred over the past 10 years in California, in Japan, in Germany are now being translated in the China market and so in terms of engineering procurement, construction, certification, those type of things for hydrogen fueling station, I think there is a lot of work that’s been done that enables much more efficient setup of how did refueling infrastructure.
And again, we are focused on the market opportunities where the barest entry is lowest, where you have centralized depo refueling where vehicles typically come back to those depos at night as they do today with current diesel or legacy diesel technology.
In terms of China specifically, there is been a lot of progress over the last 12 and 24 months with a number of different companies becoming far more educated both as suppliers and as users of hydrogen and we see a buildup occurring right now in China of hydrogen fueling stations.
And I think as we pick up our conference call in the late February, early March timeframe next year, we will be able to provide a little more visibility on the deployment schedule for hydrogen fueling station, particularly as it relates to our partners.
Amit Dayal
And as we get to the fuel cells tax per year capacity sort of utilization levels can you talk about how much impact on the cost front that could have?
Randy MacEwen
Yes, so it’s a great question. We’ve outlined on the Investor and Analyst day, some fairly a clear cost down – cost reduction roadmaps not just for stacks but also for modules. I am actually to be honest more bullish on the opportunity for the module cost reduction where we see a lot of opportunity on balance of plant components in terms of localization of supply in China, in high volume at quality and the ability for dollar to see that provide benefit not just for the Chinese market but for the global market.
So, we are doing a lot of great work Ballard on cost reduction of the stack, the joint venture will see opportunity with scaling on cost reduction for the stacks, but we are also doing a lot of work both of Ballard on a standalone basis and with our partners in China at the module level.
Amit Dayal
Understood. And this maybe a little early but is sort of Broad-Ocean committed to continuing expanding capacity if and when we get to the 20,000 levels, I mean it looks like your go to and get there next year, is just looking out maybe a few years ahead that may not be sufficient given what the demand looking like, so how do we sort of plan for capacity beyond 2018?
Randy MacEwen
Yes, so Broad-Ocean is making a very significant investment in the fuel sale industry, like they did in the battery electric market and I don’t want to comment on what their plans are that’s for them to stay but we’re excited by the level of investment we see as they realize success it wouldn’t surprise me to see them grow their plans like they did in battery electric.
Amit Dayal
Got it. Just last question on the Japan front. It looks like that market is getting interesting as well for you. Do you see material contribution from them in 2018 or is that something that should sort of attributed to maybe further down the road?
Randy MacEwen
Yes, so this is a market that moves very slowly and what I would say is that where we see initial exposure in the Japanese market is in our technology solutions business. And where we continuing to work with key partners in Japan to move technology to the next stage of performance and next stage of cost reduction and where we see certain applications where product innovation is a foot.
Amit Dayal
Got it. Thank you so much.
Operator
The next question is from Jeff Osborne of Cowen and Company. Please go ahead.
Jeff Osborne
Hey, good mornings. Just a couple of question on my end many of them are even ask and answered but may be Randy just – sounds like visibility shaping up much better for you as China ramps up in the all the different type of facilities come and deploy, I just wasn’t sure as we head into 2018, if you felt more comfortable prior years ago Ballard used to get guidance heading into a year, is that something that you intend to do for 2018 or still wanted to get more comfortable with the situation?
Randy MacEwen
Yes. Good morning Jeff. I still there am the lot of variability and team potential loving this quarter-to-quarter in our business. a lot of moving pieces not just in China but as we say globally and so right now, we don’t have an expectation of providing guidance in 2018, well of course we give it that let the management team in the board in early 2018 but that’s not the current intend.
Jeff Osborne
Got it and then just with the activity on buses outside of China, you have given some comments at the analyst day a month or so ago as it relates to cost down but can you just help us may be one they are removed to see the competitiveness of fuel cell bus versus an electric versus a natural gas bus.
Firstly, I agree with around emission reductions targets, but you have seen in particular electric pick up so momentum in market – and if you all there is so the factories in public RSPs and their pricing typically would be in around $800,000 of bus, can you just update us where North American fuel cell power bus would be today?
Randy MacEwen
Yes. So, in terms of North American Fuel cell buses so next year I could see in the range of cells of around 30 engines for Ballard for fuel cell electric buses primarily in California although may be five or so outside of California those will lead to deployments starting potentially next year in the end of the following year.
So, we are still at a modest scale in the U.S. market and the U.S. market is actually the most expensive of the three that we are looking at for fuel cell buses at this time in terms of China, Europe and the United State Markets.
So, during the range of about $800,000 for the fuel cell bus today U.S. a road map as we described is to look at getting a total of cost of ownership looking at the cost of fuel cell bus plus the hydrogen cost plus of bus maintenance cost on part with battery electric buses by 2020.
But with -- of course with all of the benefits of extended range fast refueling and full route flexibility and when you kind of translate to a number per kilometers per year on a total cost of ownership basis.
We feel like we are right in that range we need to be and kind of on year basis we kind of spend most of our time more recently looking at the year model when the 3.5 years for kilometer range which we think is a very compelling solution in 2020 compared to income technology and where we expect battery electric buses to be at that time.
Jeff Osborne
And just how – for their fees in Europe how are they valuating this year to intensity of the hydrogen?
Randy MacEwen
So, it’s a great question. I think what we are going to see overtime is the migration towards looking at green hydrogen I think there is recognition today that there is opportunity for improved CO2 emission even with reformed hydrogen.
So, I think you will see most of the refueling applications in Europe in the very near term I believe being satisfied with traditional hydrogen generation technology and I think longer term when we started looking at well to wheels carbon foot print and moving away from just zero type emissions, we will see more green hydrogen including electrolysis based hydrogen production.
Jeff Osborne
Got it, just two other quick one if you don’t mind; one is – how a rough number made in exact number but of how many buses with Ballard equipment feel so units are on the road in China specifically today it’s been a lot of comments about module this and that and how many of you have produced in capacity but how many physically are on the road relative to expectations of sales in 2017. Total bus.
Randy MacEwen
Right, so we have partners coming out with some launch plans and deployment plans in the very near-term in terms of activity. So, I don’t want to use excerpts, some of her announcements, but what I will tell you is that there are number of vehicles that have been built manufactured with Ballard technology inside of them that are road ready and we will start to see some deployments occurred in a number of different cities in China this is both in the bus market as well the commercial truck market.
Jeff Osborne
Got it, and in commercial is that more like class 5 through 7 type of delivery van as a range extender or this is more class 8 long haul trucking, I am just curious.
Randy MacEwen
Yes, in the very near-term in terms of vehicles that are in production right now and are ready for deployment right now those are the delivery vans. Correct.
Jeff Osborne
Correct. Got it and lastly how it is – super technical answer but just Nisshinbo side without using platinum, you mentioned earlier to using just for lightweight applications and then having a separate discussion or narrative around materials handling, can you just walk us through why from a technical perspective, it's only a suitable for lightweight applications today, does it have something to do with energy density and that needs to be improved or I guess what are the hurdles technically speaking to get into materials handling?
Randy MacEwen
Yes. So, with Nisshinbo there has been a great work done I think on this carbon alloy. We have presented at a number of technical conferences on this and I think a lot people of didn’t surprise by the results that we've achieved.
But the results we have achieved so far just would be cleared our four lower use our applications which typically for us translate to later applications affordable power applications for example and what the next stage of program, which is a multi-year technology solutions program with Nisshinbo is then it takes to learning and the success so far and translate that to a longer our product and particularly focused on the material handling segment.
Jeff Osborne
Got it, that’s helpful. Thank you.
Operator
The next question is from [Anne Forney] of Roth Capital Partners. Please go ahead.
Unidentified Analyst
Hi, congrats on the strong results in this quarter. Most of my questions have already been answered but I just had like couple of questions. First was on the Analyst Day, you have mentioned that there is possibility of additional order activity from China like – is there any update that you may be able give on this other activity?
Randy MacEwen
Hi, Good morning Anne and thanks for the question, could you just repeat the question, I apologize.
Unidentified Analyst
Yes, in the Analyst Day, you had mentioned that there is a possibility of increased order activity from existing clients in China from Shandong City, so I just wanted to check if there is any update that you can give on that?
Randy MacEwen
I see, Okay. Yes. So, what we have seen with the number of bus, so we enhance typically our buying a regularly for them a relatively small number of modules with a new deployment of initial buses and then we start to see through performance and through validation and they start looking at next round of orders think it's long, it’s too early I should say for us to comment on whether [Ying Long] will be repeat customer. We delivered modules to them and expect a good progress as we have seen with other partners there.
Another one I think that’s really interesting is the work that’s been done with [Ying Long] and we have been added a much longer with [Ying Long]. So, I expect to see continue progress with the number of bus OEMs and really what we are trying to do here with the bus OEMs is get them comfortable with the technology and in some cases educating them on the technologies and in some cases, there are very experienced with it.
And then getting the bus platforms certified with Ballard technology inside so that there is they can actually get – and license for the road and qualify for the subsidy programs. And so, there is lot of work that we have been doing I think we have in the range of about 13 different platforms today that have Ballard technology inside in some form that are certified in China and we will continue work with Bus OEMs and commercial truck OEMs to make sure there is demand go through an adoption of the technology.
Unidentified Analyst
Thank you. And just another if you may give highlight on the hydrogen train markets like do you see a -- how soon do you see that expanding and turning out to be like a commercial market for you?
Randy MacEwen
Yes. So, the train market has really accelerated in the last six months and as we comment at earlier we have seen another milestone obviously with Ten Shang Railway Company in Ten Shang where they deployed their first tramp and that's a pretty exciting development for us there. Work continues in on a Doming line in Foshang with CSRC both of these companies are part of CRRC.
We feel we're very strongly positioned for the Chinese market. In Europe we're seen lots of coding activity for fuel cell trends and trains and we expect to see some opportunities develop in that market for Ballard. And even in North America, we're seeing for the first time some serious activity occurring.
So, we're very excited about the train market and I think the value proposition there is clear. You have you can continue with diesel technology or you can have a long extensions code in sky or you can go fuel cell solutions.
Unidentified Analyst
Okay. Thank you.
Operator
This concludes the question-and-answer session. I would like to turn the conference back over to Randy MacEwen, CEO for any closing remarks.
Randy MacEwen
Great. Thank you for joining us today. We look forward to report in Q4 and full year 2017 results along with our outlook for 2018 in late February early March timeframe next year. Thanks again, everyone.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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