Ceres Power Holdings plc

Good morning, everybody, and welcome to Ceres Power Interim Results for 2025. I'm Phil Caldwell, Chief Executive.

And I'm joined by Stuart Paynter, CFO; and Patrick Yau, Head of Investor Relations. So without further ado, let's go through the first half year.

First half of 2025 has been quite an exciting year for Ceres in a number of different ways. Probably biggest milestone for us is the start of production with Doosan in South Korea.

And that's a milestone that we've anticipated for a long time. And it really is a pivotal point for the company, because it proves out R&D innovation all the way through to mass production and ultimately will lead to the payment of royalties and proves out the business model.

So that's a big milestone for us achieved in this first half of the year. We're very pleased with progress with other partners as well.

Delta Electronics has acquired land and factory facilities now to begin their scale up in Taiwan, committing around GBP 170 million investment into those large-scale manufacturing facilities for hydrogen energy solutions. We've had some landmarks with Shell as well on electrolysis, the largest solid oxide deployment in India, achieving record efficiencies.

And our partnership with Thermax goes from strength to strength also in India, opening the HydroGenx Hub, which is going to actually test and validate systems and ultimately build systems in India as well. So a lot that we'll talk about this morning there.

I think the markets are interesting as well. I'm sure you've seen the headlines, but the power markets are changing dramatically, probably in a way that we didn't anticipate 12 months ago.

And it's really being catalyzed, if you like, by the near-term need for power, the time for power driven by things like AI data centers. So that market has shifted dramatically.

And as a business, that's a big opportunity that we need to respond to as well. For Ceres, we're now very much in commercialization phase.

As I mentioned, we've kind of crossed the Rubicon, if you like, from R&D into mass production. I mean, that's been coming for a long time.

Our teams, our people have worked incredibly hard on that. And we're getting pretty good at this as well in terms of factory builds with our partners globally.

And we really have this clear ambition to establish Ceres as the industry standard in solid oxide. We have a strong balance sheet and positive cash flow in the period, and Stuart will talk to the financials in a minute.

And in response to what's going on in the markets and also the transition of where the company is moving from heavy investments in the R&D phase now through to commercialization and manufacturing, we are undertaking an alignment of resources and a business transformation initiative over the next few months leading to a year, which really will focus our partners more on initializing and executing on these commercial power market opportunities that we see and supporting partners as they go into mass production. I just want to remind you, you're probably pretty familiar with the technology.

So the unique technology is the steel cell. This is the latest larger footprint, high-performing fundamental steel cell technology that we have at Ceres, that same cell now has a dual use.

And we will be launching next year our latest stack platform. So that's a single product, single stack platform that will service both the power markets and the hydrogen markets.

Now that's very important to us, because what that means is, we have a single platform, we have a very much focused R&D and product development pathway. And also the maturity, the scale, the supply chain build-out that we're doing for these first markets for power, ultimately will also directly result in the maturity, the cost down and everything that we need for the hydrogen market as well.

So single cell, single stack platform. On the top here, you can start to see the first products coming through from our partnership with Doosan, our partnership with Weichai in China, our partnership with Delta in Taiwan.

And also, we're making good progress on the hydrogen side of the business as well, particularly with Shell and Thermax in India and also our partnership with Denso in Japan as well. So just to give you an illustration, this is now becoming very real for Ceres.

I think for some people, it's probably -- you understand the technology, you understand the potential of this, but seeing it in reality is what's now starting to happen. This is getting very real for Ceres.

This is the first time probably that we're sharing with you the inside of that factory at Doosan. This is 300 meters long, highly automated state-of-the-art production facility in South Korea.

It's a semi-clean room environment, all based upon the Ceres technology. It's an amazing facility, and we're very excited to hit that milestone.

Doosan developing the power systems that will now go into things like commercial buildings, the data center markets and grid reinforcement in South Korea. We're making good progress with Weichai as well, developing larger power systems, again, on that commercial stationary power type applications.

So very good progress in China. And then I mentioned Delta in Taiwan.

This is a picture of the facility that they've recently purchased, which is -- just to give you a sense of scale, it's probably 4x the size of the Doosan factory as well. So you can start to see the potential of the scale-up of our partnerships.

I want to say a few words about the two markets that we serve, the power market and the hydrogen market. If we start with the power market, AI-driven data centers, you've seen it in the news, it's driving what we believe is a killer application for solid oxide power.

And you can't go anywhere without seeing headlines about investment in infrastructure, not just here in the U.K., but in the U.S. in places like on here, South Korea, Thailand.

And one of the key themes of this is the need for power. We believe that this represents a very attractive market opportunity for solid oxide.

In a near-term opportunity by 2030, we see the potential market for this being about 22 gigawatts. And it's a very underserved market today.

Probably the only player that's addressing this market today is Bloom Energy in the U.S., which has a multibillion-dollar market cap. But we're starting to bring in to our partnerships, competitors that will actually enter this market.

So we see that as very much the near-term focus. There's a clear market opportunity there.

If you look at the 22 gigawatts, about 50% is projected to be data center, but also commercial buildings, industrial power shipping as well. And the split is 50% Asia Pacific, about 25% U.S., 25% rest of the world.

Why do we believe the solid oxide is a killer app in this market? It's all about time-to-power.

If you look at what's going on today, if you want to buy a gas turbine, you're waiting up to about 7 years now for gas turbine. There's been a lot of talk, particularly in the U.K.

about small modular nuclear. You're not going to see small modular nuclear until about 2030, if you're looking, probably 2035.

High-voltage grid connections, 5 to 15 years. So while there's a lot of talk about time-to-power, there's a gap.

There's a near-term gap in the market. You could build a solid oxide fuel cell factory and develop products in under 3 years.

That's what our partners are doing, far faster than you can address this time-to-power. In terms of resiliency, we have a very mature offering now that gives you 24/7 baseload and long stack life.

We have low noise, very importantly, low emissions. So when you're talking about some of the things that you've seen in the data center market like deployment of gas turbines on a temporary basis, very quickly, they come up against emissions regulations.

You can't deploy those kind of things for long. So it's low to zero emission technology.

It lends itself very well to carbon capture as well. And it's highly fuel efficient.

So it's over 60% electrical efficiency, so as efficient as any gas turbine. But also when you combine that with the heat or the cooling that you get off the back end of it, you get something which is 85%, 90% efficient.

It's fuel flexible, natural gas today, hydrogen tomorrow, and it's modular, which means you can build out rapidly. And also, it's starting to benefit from policy decisions.

We've seen this recently in the U.S. You've got the one big beautiful bill gives a 30% tax credit for solid oxide fuel cells.

We see it in places like South Korea and many other places as well starting to have positive policy decisions to enable this time-to-power. This is just an illustration of how some of our partners are very much in this ecosystem.

You may not be less familiar with Delta. Delta is now the third largest company in Taiwan.

So when you think the biggest company is TSMC, Taiwan semiconductors, Delta is a very impressive company. This comes from their website.

So you can see that they are already providers of things like power conditioning equipment, UPS equipment that feed into the data center market. And this schematic, I think, illustrates it very well.

You have a fuel flexible input into solid oxide. You can combine it with carbon capture on the top, absorption chilling for cooling and also with the rest of the equipment, you have a ready-made solution that can service things like micro grids, AI data centers.

Semiconductor manufacturing is really interesting as you go down to lower and lower nanometer kind of wafers, you need more and more power. So you're starting to see this whole electrification, industrial loading increasing this need for time-to-power.

We have a lot of experience on this. This is with one of our partners that we did a hell of a lot of field work with.

So we've got over 100,000 hours of real-world data center type application data for this and 28,000 load cycles. So, because of the nature of our technology, we can load cycle very well.

So we have a very mature offering for this market. A few words about electrolysis.

While we see the data center market and the power market as being the near-term market opportunity, we also are making good progress on electrolysis. I think, we've seen headwinds on hydrogen, and I think that will continue for the near term.

However, it does open up a window of opportunity for solid oxide, which is a higher efficiency technology than what people are using today. Projections on hydrogen.

Still, we believe that's a bigger market, but it's a longer-term market. This data is out to 2040.

And again, we're very committed to the industrial applications, steel, ammonia, synthetic fuels. That's some of the work we've been doing with companies like Shell recently.

The Shell milestone, we demonstrated 37 kilowatt hours per kilo. What does that mean in real terms?

A typical low-temperature electrolyzer would need between 50, 55 kilowatt hours per kilo. So to generate the same amount of power, you need 50 wind turbines.

In our case, you only need 37 or you get 30% more production from the same renewable assets. So, because you can integrate this into industrial processes as we've done with Shell, this lends itself very much to 50% of that electrolysis market, which is the industrial decarbonization.

We are moving ahead with our partnership with Thermax in India. That's important to us because we have to compete with things like Chinese electrolyzers' longer term.

So establishing low-cost manufacturing in hubs like India is very key to us. Also, it's a key market in terms of the ability to combine with renewable assets that they're putting in there and actually servicing things like the ammonia and the green steel markets in the future.

This is an interesting piece of news that came out yesterday from one of our partnerships with DENSO. So we began our relationship with DENSO a year ago.

We're very pleased that DENSO have announced the installation of their first SOEC hydrogen production with JERA, one of the biggest utilities in Japan. What this is doing is producing hydrogen for thermal power plants to reduce emissions there.

So you can see quite a lot of progress, I think, in the first 6 months of the year. We're seeing this near-term market opportunity coming towards us on the power side, which we're very much focused on near term, and we continue to make very good progress on the electrolysis side.

But I'm going to hand over to Stuart to talk you through the financials.

Thanks, Phil. Good morning, everyone.

So let me just take you through the financials for the first half of the year and a little bit about our plans going forward. So financial review, revenue number, just over GBP 20 million, and we'll point to the gross margin percentage, which is industry-leading high gross margins given the fact we're pursuing our licensing model.

These to remain high, gives us flexibility, which we'll take you through, generating a good gross profit number. And then, we're still a loss-making company, right?

We're still investing in our stack platform, as Phil mentioned, and we'll take you through a little bit of the trend around that spend and how we're going to manage that going forward. Also, as Phil mentioned, we've been cash generative in the first half.

This is a working capital internal financial efficiency play. And I think what we've done is we've managed to preserve more than GBP 100 million in cash at the half year through really tidying up the balance sheet.

Of course, now we need to continue to deliver on the top line in order to drive future cash flows. The bottom right-hand number is an interesting one.

This time last year, we came out and said that we were going to realign the business and do a little bit of a restructuring and generate about 15% of savings, both in OpEx and CapEx. And that measurement, as you can see is a slight increase on that 17% compared to the targets we set ourselves.

That now forms the baseline of our costs. So anything you see from now on is based on this lower cost level.

And just a bit on revenue and gross profit. You can see that we had a jump at the beginning of '24, and that represents the signing of Delta.

We followed that up last year with the signing of Denso, and we're managing to maintain a relatively high revenue number given we're working our way through the backlog and the milestone generations for those two projects. This trend needs fuel and that fuel is signing of MLAs, and we are 100% focused on so doing, and we'll take you through a little bit of the plan about how we're going to optimize that going forward.

Licensing model, of course, enables a sort of flexible cost base. And here, we're just talking about the OpEx in the last few halves and how it's come down.

Like we said, we would deliver a 15% reduction in OpEx and CapEx. That translated to a 13% OpEx reduction, as you can see there.

This now forms the baseline for which we go forward. We've done a few -- you'll notice if you're looking at the detailed interim report that we've started writing off some of the R&D that was previously being capitalized.

So that's a slightly inflated number. So we've adjusted it there, and we'll continue to do that going forward.

But this is a very important piece of the business model, the ability to keep a flexible cost base, and we'll go through a bit more of that in a moment. In terms of cash flows, I think this is a really interesting chart.

This backs up what Phil was saying. We raised quite a lot of money in 2021.

And you can see there, that the peak spend on the hydrogen investment we made was 2022. And that investment has been continuing but reducing.

And we believe that with the cell, Phil showed you, and the next generation of technology, that's going to be available very soon, that we're going to commercially launch in 2026. We've come to -- we've crystallized a lot of the effort that's been made in '22, '23 and '24.

So whilst I'm not going to sit here and promise we're going to be cash generative like we were in the first half, we're going to see a lesser amount of cash burn as we move forward, because even though we're going to continue to innovate, it's very important as a licensor, we're talking about lifetime and cost and very, very focused programs based on that one stack technology that we're going to launch in early 2026. Here's the licensing model.

And the orange signpost is really where we are. So licensing fees are everything for us, and they'll continue to be very important for the next few years.

But as Phil mentioned, that Doosan have now reached the start of mass production, and we expect royalties to flow there on. So we'll see that royalty base build, and that is sustainable profitability, the royalty base.

The royalty stack is what we're after. In the meantime, we're going to continue to try and generate license fees as well, very important to make the maximum impact to our technology in the world as we're aiming for this technology to become the industry standard in solid oxide.

So the orange signpost is where we are, and we believe that's a really important inflection point for us, because we're sort of through the R&D phase and into the commercialization phase now. And what does that mean?

Well, in this morning's announcement, we did announce a business transformation program that we're going to launch within Ceres. That's going to take 12 months.

And the aim is to utilize the fact that we've reached these various inflection points, the product that we've been talking about, Doosan's launch and royalty generation to realign the business resources around being more commercially focused and being able to maximize the impact of our product in terms of signing more MLAs. So we're going to support our existing partners.

We're going to gain more partners and we're going to restructure ourselves. So we're in the right space to be able to achieve that goal.

And we believe the output of that is going to be a reduction in operating expenses of around about 20%. And that will lead us on that clear path to profitability that we're looking for as royalties becomes a bigger part of the revenue streams.

The first phase of this program will be done by the end of this calendar year. So there's a 3-month reorganization, which will go first.

And then we'll work very hard on the ways of working and cultural alignment on the business for the next 9 months post that. But that kicks off today, and I think that's an important part of the position we are in the market at the moment.

I think it's a real opportunity for us to maximize the position we currently find ourselves in. And with that, I'll hand back to a Phil on summary.

Thanks, Stuart. Yes.

So just a few words in closing on the outlook for the year. So as Stuart said, this landmark start of production at Doosan means, we are transitioning from the very much 20-plus years of R&D through product development now into actually having products that are coming to market and a big milestone for us.

We are seeing more and more incoming on power, with just respond to that market opportunity. That's being targeted by our partners as first product launches.

If you look at Doosan, if you look at Delta, it's all about the power market to begin with, and then electrolysis will follow. We are making very good progress on electrolysis as well.

As I mentioned, the relationship with Shell has been fantastic, great results there, great news coming out of Japan on progress there. So it really validates the capability of this technology to be a real step change in electrolysis in the future.

Stuart has already talked about the business transformation plan. I think, we have that continued discipline on growing top line, but also managing our resources to really respond flexibly to the opportunities that we see.

We maintain a strong balance sheet with the cash management and the cash inflows in the period, and that will continue. We did this morning adjust the revenue expectation for the year.

I think, it's very hard to predict signing of new MLAs. So when you look at our revenues, they come from engineering services, signing technology transfers and then ongoing royalties.

So for the year-to-date now, we are expecting a minimum of GBP 32 million. And anything that we sign now will be upside to that.

The reason for the change here is, we honestly cannot predict exactly when we sign these deals, and also -- that also has an impact on revenue recognition, which, as you can imagine, is not trivial when you're actually dealing with these kind of contracts. But we are continuing to pursue several opportunities, and we'll keep you updated on progress as and when they arrive.

So with that, I think Patrick, we may take some questions from.

Yes, we have a couple of questions from the room. So if you have any questions, please wait for the roving microphone to arrive and ask your question, and then we'll have time, hopefully, for some questions online.

Alex from Berenberg. Just the focus on the power market, and you mentioned kind of the news flow in the U.S.

and Bloom Energy. And are you seeing the pipeline of potential partners with that kind of U.S.

tint that you kind of showed that pie chart of how big the Asian market is as well for the power data center AI market. Can you give a bit more color on where that pipeline is coming from?

You mentioned a bit more incoming, that would be great.

Yes, sure. Look, I think what's happening with Bloom Energy is definitely attracted interest, and also the whole time-to-power thing has become pretty acute.

I think when you look at the partnerships that we have, when you look at companies like Doosan, like Delta, you have to also remember they have U.S. operations.

They're already servicing those markets for a lot of the products that we talked about in the data center market. So we have ways already into that market, but also we're looking for U.S.

partners as well for that particular market. So that's -- I think, there's clearly a power gap there, and I think that does open the opportunity.

I think -- what's interesting as well is on the electrolysis side, for example, the IRA bill has obviously had a lot of headwinds in the U.S. And we've really seen the U.S., I think, is now moving towards blue hydrogen rather than green hydrogen.

But also what the Trump administration has done on the one big dutiful bill is definitely enable power generation for solid oxide, particularly with natural gas and carbon capture. So I think, that's a 10-year initiative that's just come in.

So I think, some of the uncertainty around which way the U.S. is going, I think it's pretty clear now.

We don't really see the U.S. as a market for green hydrogen.

That's not where we're putting our commercial efforts, but we do see it as a potential market for power.

Just a couple of questions from me, if I may. You mentioned that it's quite hard to kind of predict when you might be able to recognize revenue when you do indeed sign an MLA.

Can you just give us a bit more color around that in terms of the mechanics? I know that's probably hard to summarize, but just kind of a bit of an idea would be helpful.

And the second one is just on the business transformation. I think, that makes a lot of sense and kind of preparing the business for its next kind of step.

Can you just give us an idea of kind of what the cash costs might be around that to implement it?

Yes. So, when we talk about signing an MLA and an MLA is a manufacturing license, it's a very complex sale.

And you are also not just selling a license in our case, GBP 40 million, GBP 50 million type deal. You're actually convincing a partner potentially to invest several hundred million in facilities in product development to enter a market.

So it really is a corporate development type activity. And any of you that have worked in that kind of sphere realized that those decisions go all the way up to Board level and therefore, they take time.

And they are subject to a calendar that you don't control. So the difficulty that we have as a business is, if we're trying to forecast revenue based on very discrete events, it gets somewhat difficult.

Once we have those contracts, as you've seen with the likes of Delta and Denso, that gives us pretty predictable revenue flowing into the first half of this year, for example. So that's what's what makes it difficult.

Now, we obviously have at any one time, several of these kind of conversations going on. And -- but it's very difficult to forecast exactly when they will come.

I think the second complication, which is Stuart's world, which he knows and loves now is, once you actually get these kind of contracts, you have IFRS 15 and all kinds of moving standards, which seem to change quite dramatically. So when we have a contract, we have to also be very careful about how we recognize that.

So it's not just the winning of a deal. You have to then to be able to specify or forecast how much of that deal you can recognize by when is quite a lot.

So that's part of it as well.

I'll just follow-up by saying that single words in those contracts can make big differences in when revenue is recognized. So we go -- we diligently work through those contracts, but contracts are in negotiation, and there are gives and takes in those contracts.

So when you come to the end, you then got to do a full review and see when your performance obligations are and try and decode that into revenue recognition. So it's not easy.

As we do more and more deals, we become more experienced, we try and standardize the contracts where we can. But as Phil said, these are big corporate development deals, so it becomes tricky.

The second part of your question on the costs of the first step of our transformation plan, which is the 3-month reorganization. This will be done by Christmas.

And we're looking, as we said, we think on the back end of the reorganization to get an optimal structure, we can be about 20% less cost. To get there, there may be a one-off cost, but it's going to be relatively trivial compared to the saving, maybe it's GBP 1 million.

So a good payback in terms of an investment.

Yes. But we are not here searching for cost savings.

What we're doing is making sure the company is optimally structured given the inflection we're going through. And we believe the output of that will be the cost reduction rather than chasing.

We're not chasing a cost reduction. So it's definitely a transformation rather than rightsizing or anything like that.

Are there any more questions from the floor before we move on to our online audience? No.

Okay. Well, let me ask a couple of questions from the participants online.

Phil, you mentioned that 2025 is a landmark year for the business. So what are the key milestones that investors should be looking out for to mark progress?

I think, it's continued milestones with existing partners. If you look at the partner progress this year with each of our partners, you're seeing evidence coming through Shell, Delta, Doosan.

So I think that's continued. And then, I think it's also the potential to sign new partnerships as well.

On Doosan, do we have any visibility into their sales pipeline at all? And can you elaborate on the types of markets that they're focusing on?

Doosan is a public company in Korea. So I think, obviously, I can't speak for them.

But I think it's clear what their first markets. When you look at the Korean market, it's, again, a highly stimulated market as in SOFC is treated as quasi-renewable energy.

And they have very clearly laid out targets in South Korea about, I think, it's 16 gigawatts of power by 2040. And every year, there's a process, there's auctions that are bid into, and Doosan has been in the past, very successful in those markets.

So they tend to be grid reinforcement type activities, commercial power basically supporting electrification.

Thank you, Phil. A question for you, Stuart.

We're starting another cost savings program. So can you give an update on thoughts around cash burn, excluding licensing agreements in '25 and '26, how would cash burn look with one or two license wins, respectively?

Amid, so respectfully, I would correct the premise of the question. We're not going into a cost saving exercise.

We're going to transform the business so we can commercially face into the power opportunities in front of us. That will lead to a reduction in operating costs.

And for the -- to be most useful, given some of the uncertainty around revenue recognition and timing of deals, which Phil mentioned, I would just encourage the person who asked the question to go back and look at our operating cost base, which is here for the first half of the year and look at a roundabout a 20% reduction on that. That's going to be the cost base.

What we can't do is sit here and predict accurately what revenue is going to be. So we believe that, that step, the optimization step leading to a 20% reduction will obviously reduce the cash burn on an average basis by a significant amount.

But it's almost impossible to predict with the MLAs coming in.

A question on the Bosch announcement earlier on in the year. So can you give an update on where we are with Bosch and what your latest thoughts are, please?

There's not a great deal more to say regarding Bosch, really. We've obviously more or less concluded the exit of Bosch.

Obviously, they still have some shareholding, which they began to sell, but that's really up to Bosch to sell. Look, I think we've already been over the reasons behind that.

Bosch, just this week announced a further 12,000 layoffs. So they're very clear.

This was not about the technology. This is more to do with a Bosch restructuring of priorities, and we're just working with Bosch to conclude that.

But the fact that we're not even really discussing Bosch, I think, shows you the progress that we're making with other partners.

We've got a few questions on the data center power market. So firstly, can you talk a little bit more about our competitors in fuel cells within the market?

Obviously, you talked to -- you mentioned Bloom. Are any of our partners, do you know thinking about solid oxide fuel cells plus carbon capture technologies to make the energy greener?

And how does the cost of power for solid oxide compare to other costs of power for other solutions?

Sure. So when you look at the market for solid oxide for power generation, there is only really one player at the moment, which is Bloom Energy.

And I think Ceres' licensees are probably the next wave of entrants into that market. And that's quite a difference when you look at the electrolysis market.

You've got in China alone, 60 electrolyzer companies of PEM and alkaline and then you have solid oxide and then you've got four or five players on solid oxide in the electrolysis market. So in terms of competition, I think it's -- our competition is clear.

It's Bloom Energy. And I think they've done a fantastic job in pioneering that market.

What's interesting when you look at the economics is the cost of conventional power generation now has gone up quite dramatically. When you look at lead time of gas turbines, the time of lead ships, et cetera, the cost of those power generation equipment assets is secondary to the availability of power.

So you're starting to see, I think, a very clear window and potentially a crossover where you can see solid oxide coming down the cost curve at the same time that conventional power generation is actually getting more expensive. Now that window maybe you can debate how long that is, but the order book for gas turbines, et cetera, now is full to 2030.

So that window is clearly there. And I think that once you actually enter that market with solid oxide, you will get that scale effect.

When you talk about then cost of power, that really depends on which part of the world you're operating in. It comes back to your spark spread, your difference between your gas price and your power price.

But when you look at the key geographies that we operate in, the most attractive markets for this kind of technology are U.S. with cheap gas, U.K.

because they have very high power prices. Germany, ironically, even though maybe Bosch didn't see that, I think that's unfortunate.

I think they would see it. Taiwan, Japan, Korea, all of these nations that are somehow energy constrained, there is a clear advantage and you can generate power more efficiently than you can actually currently source grid power.

So there the near-term geographic markets that we see for this. In terms of the ability to combine with carbon capture, I think it's an excellent question.

When you take a conventional centralized power plant, your carbon that comes off the back end of it is about a 4%, 5% carbon concentration. Because we're not using combustion and the -- what comes off the air side of a solid oxide has a much higher concentration of carbon, 40%, 50% concentration.

And therefore, it lends itself very well to a more efficient carbon capture. And definitely, it's -- you saw it in some of the thinking of people like Delta, it lends itself very well to power generation with natural gas, with biogas, with blends if you end up with putting hydrogen into the system, but with carbon capture.

One for you, Stuart. Could you remind us of the mechanism for royalty payments?

How does that work? And if you can just explain what goes behind that?

Sure. So our first royalty stream is going to come from Doosan.

It's based on them making sales into marketplace. And there's a mechanism and actually, some of the mechanisms are different across many of our partners.

But ultimately, it leads to either an exact percentage of their net sales or a proxy percentage to their net sales. So the more successful they are commercially, the more royalties we get.

So supporting them to launch and kind of help generate demand for them is well worth it for Ceres.

One more question for you, Stuart. In the slide deck, we talk about a GBP 0.9 million order intake at present compared to a larger number last year.

So can you just elaborate a little bit on what's behind that difference?

Yes, sure. I mean, last year, in the first half, we concluded the Delta deal.

And the Delta deal was what you see there, that number, GBP 40-something million worth of orders coming in, and that's what we're generating the revenues on now. So orders are super important for us because they build our backlog.

And in those times where we're pursuing the MLAs, that's going to be the revenue stream and the cash flow for us. So we're -- even though we haven't been successful in signing an MLA in the first half, we -- one of the reasons we go through the transformation process now is so we can make sure we're optimally structured to pursue these opportunities and execute.

We got time for one more question from the online audience. Phil, can you talk a little bit about India?

Obviously, we have a relationship with Thermax there. So where are the main sources of hydrogen for that market?

And how do you see that developing over time?

So the Indian market is obviously very interesting and it's, kind of, evolving quite rapidly. I was there just 2 weeks ago, and I was quite surprised how much progress had been made.

I think we're often quite skeptical. So when you look at India today, it's a big importer of fossil-based energy.

And its potential is to be one of the biggest generators of renewable energy. Under Modi, he has a plan to be able to export renewable energy, but you can't export electrons very easily.

So you have to convert it into a green molecule. And those green molecules that they're looking at is green ammonia, green steel synthetic fuels.

Now the problem you have in an economy like India is your renewable assets are often quite far away from your means of production, shall we say. So you can generate solar very cheaply, let's say, $15 a megawatt hour, something like that, but it's not where you want to site an ammonia plant or whatever.

They've had a recent round of auctions on things like ammonia and they've achieved very low prices as in the 12 bids that went in, 6 of them were around, I think, I'm not an expert on ammonia, but $600 to $700 a tonne, which is pretty competitive. And one thing that's unlocking that is they've now made a more homogeneous power pricing policy, which means that if you're generating hydrogen and you're using renewable assets, you get a lower power price as a combination of renewable power that you're putting in and also conventional power and hydropower.

So what it means is, India, actually, is progressively moving forward now in terms of cost of hydrogen. It's getting -- your cost of green hydrogen is coming down and cost of things like green ammonia is coming down as well.

So there's a lot of progress being made. You asked about where hydrogen is coming from.

I think it's being pushed a lot. And if you look at the auctions by companies that previously have been big renewable energy producers and are now moving into some of these areas.

So it's a fascinating market. I think, the interesting thing for India is can they manufacture, can they have a made-in-India kind of strategy.

But when we look at places like Taiwan, Korea, et cetera, China, it's obvious how they really get down cost curves and supply chains. And I think that's the challenge, I think, for the Indian opportunity.

I think we're drawing to a close in terms of question time. If there are no more questions in the room, then I'll hand back to Phil just to conclude.

Over to you, Phil.

Yes, sure. Look, I think we've covered a lot of ground today.

I think there's a couple of takeaways. One is the company has made some very significant progress this year.

We've hit some big milestones. We've talked about start of production.

That's been key. We've talked about our partners investing and making progress.

That's key for us. And I think also, some of the progress that we've made in the hydrogen side is continuing to give us confidence in that market.

However, we see the near-term market now coming towards us quite rapidly as this power market, and we have to respond to that. We just follow the market, to be honest.

We follow the demand that comes in our pipeline. We follow what our first product launches are with partners, and we're starting to see that.

We continue to operate an asset-light model. We continue to operate high margins, and we're very confident in the future strategy of this business in terms of signing new partnerships and also bringing the partnerships that we have to market.

So I think it's -- the company is very well positioned, particularly with what we see ahead of us with this near-term market and the hydrogen market following. And I think, what we're doing around a single product offering, a single platform that services both markets really gives us that opportunity to rationalize some of our activities and really focus now on the commercial launches.

So thank you very much for your participation today, and we look forward to updating you again on progress in the future. Thank you.