PLASTIC OMNIUM (EPA:POM) - Plastic Omnium aims for world leadership in hydrogen mobility

Transparency directive : regulatory news

25/11/2020 07:30

Levallois, November 25, 2020

Plastic Omnium aims for world leadership in hydrogen mobility

During today's online conference at 2:00 PM CET, Plastic Omnium will present
its strategic vision for hydrogen mobility:

* an industrialized and competitive offer across the entire value chain:
hydrogen vessels, fuel cell stack and integrated hydrogen system
* a rapidly expanding market from 2025 climbing to at least 2 million vehicles
by 2030
* EUR3 billion in revenue for Plastic Omnium in 2030 following an annual
investment of EUR100 million over the coming years.

Given the faster-than-expected recovery in global automobile production and the
effectiveness of Plastic Omnium's cost-cutting measures, the Group will also
comment the upgrading of its second-half 2020 targets and on the outlook for
its return, as of 2021, to levels of profitability and free cash-flow
comparable to those of 2019.

Laurent Favre, CEO, says: "Despite the uncertainties surrounding short-term
prospects for the automotive market, we are firmly confident and are looking
toward the future and the transformation of our businesses in favor of clean
and connected mobility. As a responsible and innovative industrial company, we
are playing our part in the energy transition and already offer advanced
technology and production capacity in every segment of the hydrogen value
chain. Longer term, we see a very bright future for our hydrogen business and
the human and technological resources we are deploying reflect that."

Significant commitment to hydrogen-powered clean mobility since 2015: EUR200
million already invested, and an additional EUR115 million recently announced
for the fuel cell stack

Convinced that hydrogen will play a key role in tomorrow's clean mobility,
Plastic Omnium has invested EUR200 million in hydrogen technologies since 2015.
Over the past five years, the Group has built up research and development
resources in Europe and China, acquired Optimum CPV (hydrogen vessel) and Swiss
Hydrogen (integrated hydrogen system), and created an open innovation ecosystem
(venture capital with AP Ventures, Hydrogen Council membership, etc.) to extend
its expertise in each segment of the hydrogen industry.

Financial information Phone: +33 (0)1 40 87 66 78 Fax: +33 (0)1 40 87 96 62
investor.relations@plasticomnium.com
Plastic Omnium is the world leader in intelligent exterior systems, clean
energy systems, and automotive modules. The Group and its joint ventures employ
more than 31,000 people in 131 plants, 25 R&D centers and 25 countries
worldwide and serve 93 automotive brands.
Plastic Omnium is listed on Euronext Paris, compartment A. It is eligible for
the Deferred Settlement Service (SRD) and is part of the SBF 120 and CAC Mid 60
indices (ISIN code: FR0000124570).

More recently, the Group announced the creation, with the German supplier
ElringKlinger, of a joint venture called EKPO Fuel Cell Technologies,
specializing in fuel cell stacks, and the acquisition of ElringKlinger's
subsidiary in Austria specializing in integrated hydrogen system. These two
transactions, for a total investment of EUR115 million, complement Plastic
Omnium's offer. They put the Group well ahead technologically and industrially,
since it is currently the only company able to deliver the complete hydrogen
value chain with its production capacity already in place. A hydrogen vessel
production line recently came on stream in Belgium to supply the first bus and
truck contracts starting in 2021, and the EKPO joint venture is able to produce
10,000 fuel cell stacks annually at its German facility.

An industrialized and competitive offer across the entire value chain: hydrogen
vessels, fuel cell stack and integrated hydrogen system

This value chain comprises three segments: hydrogen vessels, fuel cell stack
and integrated hydrogen system. Plastic Omnium will be in a position to sell
each segment individually or as an ensemble depending on customers'
preferences.

Plastic Omnium aims to be the leader in each of these segments by developing an
offer that is technologically and commercially competitive. For 2030, the Group
is targeting 25% of the hydrogen vessel market, between 10% and 15% of the fuel
cell stack business, and 10% of the integrated hydrogen system segment.

The competitiveness of Plastic Omnium's offer will depend on reducing the
technology costs in each of the three segments:

- the Group aims to cut hydrogen vessel costs by 30% by 2030; and
- to divide by 5 the cost for fuel cell stack and integrated hydrogen system
within the same timeframe.

These significant cost reductions will be achieved by automating the industrial
processes, leveraging the volume effect and improving on both design and
materials, including lowering the carbon fiber and precious metal content.

By 2030, the total cost of the hydrogen system for a passenger car will be
around EUR6,000 to EUR8,000, bringing this technology within reach of the mass
market.

2030 ambition: EUR3 billion revenue in a market of at least 2 million
vehicles

The hydrogen mobility market is based on exponential volume growth: from
200,000 hydrogen vehicles in 2025, there will be more than 2 million by 2030.
The bus, truck and utility vehicle market will develop first, followed by the
passenger car segment. There will be 500,000 and 1.5 million vehicles
respectively for each category by 2030. In terms of the geographic spread, Asia
will be the foremost market in 2030 with 75% of hydrogen vehicles' production,
followed by Europe and North America.

Plastic Omnium is aiming for revenue of around EUR300 million in this market by
2025 and EUR3 billion by 2030.

To achieve these targets, the Group will be investing around EUR100 million a
year over the coming years, directly or through its EKPO Fuel Cell Technologies
joint venture, to build industrial capacity in all regions with around 15
production lines installed by 2030 at existing or new plants.

The Group also intends to create a major Hydrogen Hub at the ?-Alphatech R&D
center in Compiègne, France. Around 100 engineers will bolster the existing
teams of 500 people, and close to EUR30 million will be invested in laboratory
and research equipment over the coming two to three years.

Improving market and effective cost-cutting measures: second-half 2020 targets
upgraded and outlook for profitability and free cash-flow generation back to
2019 levels as of 2021

During the conference, Plastic Omnium will also address its situation in the
current market environment.

The Group rapidly rolled out all the necessary measures to adapt its cost
structure and protect its cash position: these measures put Plastic Omnium in a
position to deal with the 33% drop in automobile production in first-half 2020
and to benefit from the faster-than-expected recovery in global automobile
production, down just an estimated 3% compared with the 10% to 15% initially
expected.

In this more favorable context, while not overlooking the uncertainties
surrounding automobile production in Europe as the year draws to a close,
Plastic Omnium revises up its second-half 2020 targets:
- operating margin above 5% (compared with the previous 4%)
- free cash-flow above EUR400 million (compared with the previous EUR250
million).

At end-October 2020, Group liquidity stood at EUR2.2 billion, similar to the
2019 year-end figure and higher than the EUR1.9 billion at June 30, 2020.

The programs to rationalize costs and transform the organization are ongoing.
For Plastic Omnium, 2021 looks like seeing a sharp upturn in business, and
profitability and free cash flow generation climbing back to 2019 levels.

The eConference will be held on November 25, starting at 2:00 PM CET. Use this
link to join the conference:
https://www.hydrogen-revolution.plasticomnium.com/

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