Proton Motor Power : 2023 Annual Report of Proton Motor Power Systems PLC

100% Energy

Zero Emission

Annual Report & Financial Statements Registered number 05700614

31 December 2023

Contents

PART I - Contents

Strategy and information

Chairman's statement	2
Strategic report	6
Directors' report	12
Shareholder information	16
PART II - Governance and Corporate
Social Responsibility
Board of Directors	18
Corporate Governance Statement	19
Corporate and Social Responsibility	23
Nominations committee report	24
Remuneration committee report	25
Audit and internal control report	27
PART III - Financial Statements
Independent auditors' report to the
members of Proton Motor Power
Systems plc	28
Consolidated income statement and
statement of comprehensive income	31
Group and Company statements
of financial position	33
Group and Company statements
of changes in equity	35
Group and Company statements
of cash flows	37
Notes to the consolidated
financial statements	39

OUR VISION

Proton Motor Fuel Cell GmbH is a pioneer in hydrogen technology with 20 years of experience. We have set ourselves the goal of designing, manufacturing and assembling sustainable energy solutions for the world of tomorrow in the mobile, maritime, stationary and rail transport sectors, as well as continuously developing them further.

With our Cleantech Competence, we enable our customers to develop energy-sustainable products and use modern technologies.

OUR PROMISE

Our focus in the production of hydrogen fuel cell technologies is on sustainable production to contribute to a better and greener future.

Thus, we aim to improve our understanding of the climate impact of our products and operations, reduce our carbon footprint for products and businesses, and lower our waste and energy consumption. We are constantly doing our best to reduce pollution by recycling, reusing and extending the life of our products and materials.

Fuel Cells

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023





KEY STATISTICS

£2.512m	+83%
Total order intake 2023	growth in system sales
£2.471m	Progress
Sales value production backlog	in the delivery of our new production
	facility
96%
of order intake derived from stationary
applications

	Stationary	Automotive	Maritime		Rail

Overview

Strategic Report

Governance

Financial Statements

Additional Information

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023

1

Chairman'S STATEMENT 



We are pleased to report our results for the year ended 31 December 2023.

OVERVIEW:

Proton Motor Power Systems plc ("Proton Motor") has made further progress this year in proving and maturing its technology and wide product offering, and building up capacity to deliver complete zero- emission power supply solutions for stationary, heavy duty transport, marine and rail applications

The Company's focus is now on achieving economies of scale by increasing production capacity, and seeking strategic partnerships to provide new channels to market.

HIGHLIGHTS:

• Total order intake in 2023 of £2,512k (2022: £2,653k), including a mix of repeat and new customer orders, supporting current and future revenue.
• At the year end the production backlog was £2,471k
  (2022: £2,659k). Fulfilment of this backlog will result in deliveries of varying configurations of fuel cell systems and also service maintenance charges to customers both in 2024 and 2025.
• There was a notable shift in demand during the year to stationary applications which comprised 96% of order intake in 2023 (2022: 59%). Notable orders announced throughout the year included:
  o DB Bahnbau Gruppe, part of Deutsch Bahn AG for an indoor emergency power unit including HyCabinet S24 with 3 HyModule S8s
  o Redexis HyShelter a combined heat and power source from renewable onsite hydrogen production for an Iberostar hotel in Majorca
  o University Stuttgart a HyShelter 215 Power as combined heat and power source from renewable onsite hydrogen
• Sales in 2023 were £2,122k (2022: £2,088k), representing an annual increase of 1.7%.
• The number of system sales in 2023 increased by 83% to 42 (2022: 23 system sales).
• The operating loss in 2023 was £10,368k (2022: £10,542k), resulting principally from further investment in the technical development area, staff and infrastructure.
• Progress in the delivery of the new production facility with production planned to commence from the new facility in 2025.

Cash utilisation from operating activities has increased during the period to £9,959k (2022: £9,056k) in-line with increased investment in staff and technology development and in preparation for our move to new premises. Cash flow is the Group's key financial performance target and our objective is to achieve positive cash flow in the shortest time possible by increasing sales and reducing costs. Current contracts are quoted with up-front payments, reducing reliance on working capital as we continue to invest in our manufacturing capability. The cash position as of 31 December 2023 was £2,741k (31 December 2022: £2,720k).

2 Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023

Post year end developments included:

• Introduction of the new HyModule S4 fuel cell system in early 2024, a smaller version of our S8 zero-emission heat and power generator to replace diesel and gas alternatives.
• Introduction of the new HyModule S4 fuel cell system in early 2024, a smaller version of our S8 zero-emission heat and power generator to replace diesel and gas alternatives.
• A restructuring programme to match the business plan for the new year, based on a headcount of 93. The Board continues to monitor the Company's cost structure to ensure that this remains aligned with growth expectations in the short to medium term.
• During the period to June 2024, the Company utilised the loan facility it has in place with its principal shareholder, as announced on 20 June 2023, in excess of its limit by approximately €6 million. This was necessitated by the decision to accelerate payments on sums due for the new production facility and the delayed receipt of a payment due from a customer.
• A new shareholder loan facility of up to €12 million to ensure operational and investment financing from July 2024 to the end June 2025 has been entered into.
• Order intake during the first five months of 2024 to the end of May was lower than expected at £0.5 million (same period in 2023: £1.4 million) and this is likely to be reflected in lower sales for the full year.

Proton Motor Power Systems plc continues to make progress in its strategy to commercialise its comprehensive suite of hydrogen fuel cell systems, covering all the key application markets of stationary, heavy- duty transport, marine and rail. This includes a focus on developing near-term sales from existing customers, moving them from product testing to regular repeat orders, development of new customers relationships, and initiation of strategic partnerships to provide new channels to market.

The Company's strategy is to meet expected fuel cell demand, and to invest in additional production capacity and sales and marketing, in order to grow volumes and reap the benefit of economies of scale.

OPERATIONS

Central to meeting supply is the investment Proton is making through a new and far more efficient production facility, having signed a 15- year lease on a new and larger premise in 2022. The Company hosted various clients and media at an introduction ceremony for the new facility in August and is currently making good progress with its move from the existing facility. Requisite planning permission is anticipated to be received in summer 2024 to permit the installation of hydrogen storage facilities, which, once installed, will enable production to start at the new facility in 2025. Much of the focus for 2023 was on planning for the move across to the new facility. This included planning for

the installation of the stacking robot, which will be installed shortly, and progressing regulatory approvals for hydrogen storage and infrastructure.

On the sales side, the Company's strategy is to develop near-term sales through existing customers, as they transition from testing and approvals to commercial orders and developing the customer base, via targeted marketing initiatives at industry events and direct engagement. With a number of customers having now been through the testing period for the Company's products, we are already seeing the number of repeat orders grow, as reflected in 2023 sales. We would expect to see further repeat order as additional clients gain

comfort and understanding of the technology. In addition, in February the Company signed an MOU with WILO SE, through which it expects to derive synergies from access to WILO's extensive distribution and customer network, while cooperating with them on decentralised and decarbonised energy supply.

RESULTS & FINANCING

The Company delivered results for the year in line with budget. This saw revenue of £2.1m and an operating loss of £10.4m. Proton ended the year with cash of £2.7m, reflecting the continued support of our principal shareholder, with whom it was agreed to further extend the loan facility by €17.5m during the year. This ensures operational financing for the Company in 2024. The principal on the new facility is not convertible and interest is charged at EURIBOR +3%. The revenue line reflects a 40% increase in system sales to £2m, offset by lower revenue from maintenance activities. This is an encouraging change, reflecting a further development of the Company's customer base. In terms of quantity, the increase in systems sales represents the delivery of 42 systems in 2023, compared to 23 in the prior year, and an increase in megawatt terms of 40% to 0.7MW.

The operating loss for the period is the result of an increase in operational expenses, on the back of the increase in headcount, sales and marketing expenditure, and additional development costs, which were not capitalised. The Company ended the year with a sales order backlog of £2.5m. This was supported by an order intake for the year of £2.5m, from a combination of existing and new customers, representing a total of 42 systems of varying sizes. The order intake included a further 15 systems from GKN Hydrogen Germany, 18 systems from UMSTRO and 3 systems from WILO SE, among other orders. The order of a further 15 systems from GKN Hydrogen Germany, brings the total number of systems ordered by the company to 46. These additional systems were successfully delivered in November 2023.

Towards the end of the year, the Company secured a grant from the German Ministry for Economics and Climate to help develop modular renewable and self-sufficient energy supply using hydrogen technology, as part of a consortium, which includes GKN Hydrogen. The basis of the grant is to match the Company's investments by 50%, over a period of 36 months. In addition to the financial benefit, working within

the consortium will help support and develop existing customer and developer relationships.

MARKET OUTLOOK

Hydrogen as a zero-emission energy carrier will undoubtedly play a major role in the success of the energy transition, and a significant number of hydrogen generation projects are in development. Fuel cells represent the most efficient way of using hydrogen to create electricity for transport and stationary applications.

In transport, experience has confirmed the Company's long-held view that fuel cells are best for heavy duty applications such as trucks, ships and rail.

What we are seeing currently is earlier adoption across the stationary application market. This alone represents a very significant and growing opportunity, on the back of the increasing need for back-up power, critical power systems and off-grid solutions. Much of this market

is currently served by diesel generators, which are highly polluting and expensive to run and maintain, making fuel cells an attractive alternative, with identical usability characteristics.

Adoption will inevitably take time, as customers need to get comfortable and gain confidence in the technology. That said, we are increasingly seeing repeat orders, from multiple blue-chip clients that have now

Overview

Strategic Report

Governance

Financial Statements

Additional Information

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023

3

Chairman'S STATEMENT 



gone through that process. That includes companies such as DB Bahnbau Gruppe GmbH, a subsidiary of Deutsche Bahn AG, Germany's leading full-service provider for rail infrastructure.

BOARD AND MANAGEMENT

I agreed to assume the role of Chairman in May 2024, to fill the vacancy created by the retirement of longstanding chairman Mr. Helmut Gierse, and to assist the Company in its search for suitable strategic partnerships. I have over 20 years' experience of Climate Technology investments, including helping the Company in 2007 negotiate to bring in its current main shareholder.

The Board would like to thank Mr. Helmut Gierse for the tremendous contribution he has made to the business over the last 15 years and wish him a healthy and long retirement.

During the year, Mr Manfred Limbrunner, a long standing senior member of Proton Motor, assumed the role of Director of Investor Relations and Communications. This is a key role in the development of the business, as it seeks to widen its shareholder base and expands its pipeline of opportunities, through sales, marketing and wider communication.

OUTLOOK

The Company has a diverse range of products covering stationary, heavy duty transport, marine and rail which it will continue to maintain and develop in line with market demand.

Reflecting the increasing interest in liquid cooled fuel cell technology and combined heat and power applications, the Company introduced the HyModule S4 system in January. This is a smaller version of the Company's S8 product, aimed at competing directly in the diesel and natural gas generator market, for those looking for a "plug and play" emission free alternative for combined heat and power applications. It is a product that is in-line with the Company's near-term focus on the stationary market, in response to market demand, which we look forward to developing further over the coming years.

Proton Motor is also looking forward to progressing several grant funding options to support its near and longer term strategy and technology development. These initiatives will also support existing relationships, including among the existing customer base, forming part of the Company's drive to grow it sales pipeline.

We are encouraged to witness market adoption taking place as customers seek solutions to meet emission reduction and energy storage targets and the wishes of their investors and customers, and discover the benefits of Proton's track record as one of Europe's longest established fuel cell development companies.

Proton Motor is well placed to take advantage of the opportunities that lay ahead.

Ali Naini
Non-Executive Chairman	Date: 27 June 2024

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Overview

Strategic Report

Governance

Financial Statements

Additional Information

Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023

5

Strategic report 



BUSINESS REVIEW

Proton Motor Power Systems plc ("Proton Motor") and its subsidiaries' (the "Group") principal activity is the development and production of hydrogen low temperature proton exchange membrane ("PEM") fuel cells and fuel cell systems and hybrid systems through its German subsidiary Proton Motor Fuel Cell GmbH ("PM").

A low temperature PEM fuel cell is a device that converts the chemical energy of a hydrogen and an oxidant into electric and thermal power, with only water as a by- product. In principle, it's functionality is like a combustion engine, but without any harmful emissions and does not require recharging as long as an ongoing hydrogen source is available. Operating fuel cells in combined heat and power mode increases the system efficiency significantly.

Fuel cell engines are widely regarded as a potential alternative to internal combustion engines, power from fossil fuels and battery technology. Fuel cell engines produce no noxious gases and pure hydrogen fuel cells produce no harmful emissions such as carbon dioxide. There are a number of types of fuel cell, classified by the type of electrolyte used, including alkali, molten carbonate, PEM, phosphoric acid, and solid oxide. Proton Motor has selected a PEM-based fuel cell as the Directors believe that, based on the PEM's start/stop capability, dynamic operation and life time, it is the only technology able to meet the demands of the market which the Group has specified for its intended commercial applications.

Proton Motor has made further progress this year in proving its technology, building up capacity. The Group sees a strong market trend to focus on hydrogen as a renewable energy carrier to manage the energy transmission process, especially in stationary applications for combined power and heat generation, autonomous power supply, power to power applications and emergency power supply, where a strong market ramp up is expected over the coming years. Also, for the transition of the transport sector from combustions engines (based on fossil energy carriers) to an emission free transport sector with electric drive trains, hydrogen-based fuel cells in combination with a battery will play an important role, given the likelihood of bottlenecks caused by electricity infrastructure. In all of the above sectors and applications, the Group has significant know-how in fuel cell stacks, systems and applications.

Over the years, different applications provide good examples of Proton Motor's in-depthknow-how. These include: back-up power solutions (e.g for tetra radio stations, railway control centres or road tunnels) outdoor (HyShelter®) and indoor (HyCabinet) solutions for heat & power generation up to 215 kVA power output and autonomous power supply solutions based on a fuel cell battery hybrid solution (e.g. HyShelter® with up to 180 kW output power. In the mobility markets, the Company has also built a high level of knowledge, based on the different solutions created, including: HyRange® 43 fuel cell systems for the integration into garbage collecting trucks from E-Trucks Europe, the HyRail® fuel cell system for a rail milling machine for the Austrian company Linsinger and HyShip® inside the maritime project ZEUS from Fincantieri.

In addition to developing application and a customer specific driven sales approach, the customer base for the standardized stationary fuel cell systems HyModule® and HyFrame® has also developed. The Group´s long term customers, GKN Hydrogen, Umstro and Ostermeier, regularly order these types of fuel cell systems and integrate them in their applications.

The Group continues to see an increase in the potential order sizes from the market. To be prepared for this, Proton Motor will be expanding its production capacity to several thousand stacks, fuel cell systems and turnkey solution per year. To facilitate this, Proton has signed a lease agreement for new production site, near its headquarters in Puchheim. It is expected that the process of moving to the new facilities will gather pace, once the application to build the hydrogen storage tanks is approved, later in the summer, with the start of production from the new facility then planned for 2025.

The Group has always recognised the commercial importance and value of protecting its intellectual property ("IP") and, therefore, the need to protect it wherever possible by way of patents and trademarks. The Group's key IP portfolio comprises a mixture of granted patents, patent applications, trademarks, confidential information and know-how.

The Group undertakes comprehensive business planning to define long- term strategic objectives and goals. Annual budgets and operational plans are prepared utilising financial and non-financial Key Performance Indicators ("KPIs"). Business performance is measured by KPIs which include monitoring of actual against budget and rolling forecasts, and R&D project status. These are reported to the Board on a quarterly basis and to executive management on a monthly basis.

The Company began as Magnet Motor, opening its factory in 1996. The technology and application roadmap went from the world's first triple hybrid forklift truck to the world's first fuel cell ship. After that Proton Motor developed the triple hybrid Skoda bus in 2008. Turnkey power solutions completed the application portfolio. All those applications are powered via our own fuel cell stacks HyStack®, with a robust design for a long lifetime. The Company established operations close

6 Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023

to the Munich area and was one of the first German designers and manufacturers of fuel cells.

VIEW TO THE FUTURE

The world is committed to protecting the environment. European cities and governments, supported by the European Commission, must reduce inner-city pollution drastically. Society and the economy have to switch to renewable energy sources, such as wind and solar, and combustion manufacturing industry and supply chains must be transformed towards clean technology. Renewable energy sources are only available on a fluctuating basis and therefore much more power capacity is required to be installed, than the average of demand, resulting in the need for

a long term and loss free energy storage solutions and a transportable energy carrier, with hydrogen being the only possibility. In this regard fuel cells will become the ideal consumer for hydrogen. China fights against smog in its big cities. After Dieselgate in the US and Europe, electric vehicles with batteries are on the move, but electric grid restrictions have become apparent. Supply constraints on fossil fuels, due to military conflicts, such as in Ukraine, have also strengthened the need for hydrogen strategies in Europe. All this is generating a market demand for a clean power supply in all markets. Based on that development, the world market for fuel cell products and solutions is more active than ever.

Besides pure battery solutions, hydrogen fuel cells are in focus. Corporations such as Toyota, Hyundai, Bosch and Cellcentric are pushing the technology forward. Hydrogen powered fuel cells provide benefits such as fast refuelling and long range of operation. Hydrogen is reproducible and can be a store of surplus energy from wind and solar power. Europe has put major funding programmes in place to set up hydrogen infrastructure and manufacturing of hydrogen technology. The same is now happening in Japan, Korea and China. The Chinese government is fully committed to fuel cell technology with major regulatory and funding support.

Proton Motor has deep experience in applications for stationary power solutions, heavy duty vehicles, such as buses and trucks, ships, rail machines and material handling. With 93 staff members , it is a relatively small but regarding IP and experience a powerful company. Proton Motor has developed and continues to develop its own fuel cell stacks. Systems are designed from first simulation, prototype up to final solution for volume manufacturing. Proton Motor is cooperating with German and European based companies in the field of fuel cell technology.

MARKET DRIVERS

The Board believes that growth in the fuel cell market will be determined by the following factors:

• United Nations Framework Convention on Climate Change ("UNFCCC") COP legalisation on climate change;
• Strengthening competitiveness on cleantech technology in Europe and making Europe more independent from Asia
• Current and future air quality regulation;
• Growing industrial and consumer demand for alternative sources of energy;
• The potential long term competitiveness of the auto and transportation industries;
• Energy security concerns;
• Expansion of renewable energy sources and therefore the need of energy storage;

• Limitations of purely battery powered systems and electrical infrastructure constraints;
• Renewable energy storage systems in industrial buildings and private residencies.
• Discussions regarding hydrogen as an energy storage for green energy (power to gas);
• A growing global demand for transportation;
• Increasingly urgent demands for healthy breathable air in urban centres and for action to mitigate the adverse effects of climate change;
• The growing availability and the compelling economics of cleaner fuels; and
• Increasing political commitment to hydrogen on an EU, national and regional level.

INCREASING POLITICAL COMMITMENT TO HYDROGEN AS AN ENERGY SOURCE:

EUROPEAN UNION (EU)

• The EU originated European Clean Hydrogen Alliance (ECH2A) was announced as part of the New Industrial Strategy for Europe, which was launched on 8 July 2020 within the context of the hydrogen strategy for a climate-neutral Europe.
• The European Clean Hydrogen Alliance aims at an ambitious deployment of hydrogen technologies by 2030, bringing together renewable and low-carbon hydrogen production, demand in industry, mobility and other sectors, and hydrogen transmission and distribution. With the alliance, the EU wants to build its global leadership in this domain, to support the EU's commitment to reach carbon neutrality by 2050. https://www.ech2a.eu/
• Proton Motor has been participating in the ECH2A founding process.
• Proton Motor is already participating in the EU REVIVE project. REVIVE stands for 'Refuse Vehicle Innovation and Validation in Europe'. The project has been running from the beginning of 2018. The objective of REVIVE is to significantly advance the state of development of fuel cell refuse trucks, by integrating fuel cell powertrains into 15 vehicles and deploying them across 8 sites in Europe. It aims to deliver substantial technical progress by integrating fuel cell engines from three suppliers into a mainstream DAF chassis, and developing effective hardware and control strategies to meet highly demanding refuse truck duty cycles.
• Proton Motor is also participating in the EU StasHH Project. The consortium operating together as "StasHH" (Standard-Sized Heavy- Duty Hydrogen) comprising 11 fuel cell module suppliers, 9 original equipment manufacturers and 5 research, test, engineering and/or knowledge institutes and will standardise physical dimensions, flow and digital interfaces, test protocols and safety requirements of the fuel cell modules that can be stacked and integrated in heavy duty applications like forklifts, buses, trucks, trains, ships, and construction equipment. The consortium received €7.5 million funding from
  the European Union, through the "Fuel Cells and Hydrogen Joint Undertaking" (FCH JU), in order to kickstart the adoption of fuel cells in the heavy duty sector. The total budget for the StasHH mission is €15.2 million.

Overview

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Governance

Financial Statements

Additional Information

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7

Strategic report 



FEDERAL REPUBLIC OF GERMANY

Germany is a prime market for the Group. On 3 June 2020 Germany´s coalition government presented a €130 billion (£114 billion) fiscal stimulus package over two years. This package includes the following elements with regard to the role of hydrogen:

• The 'national fuel cell strategy' will support the hydrogen industry. The goal is to make Germany a global champion in the hydrogen industry. By 2030, Germany plans to install 30 Gigawatt of electrolysers to produce green hydrogen from offshore and onshore alternative energy. Additionally, the German government is seeking to support the shift from fossil energy to hydrogen in all types of industrial processes.
• Since 2023 Proton Motor has participated in the German funded project MarrakEsH. The consortium consists of universities and institutes, the industrial companies Infineon Technologies, Würth and GKN Hydrogen as partners. The target of the project is to develop
  a modular, renewable, and self-sufficient energy supply based H2 technology. Proton Motor will design a new HyModule® product with a power output of around 12 kW, as an extension of the current available HyModule® product line.

UNITED KINGDOM

• UK (November 2020): 5GW of low carbon H2 production by 2030 & £240m into a Net Zero Hydrogen Fund (part of the UK government's 10-point plan for a Green Industrial Revolution).

solutions remain at the forefront of technological advancements. Rapidly expanding production capacities to meet growing demand, Proton Motor focuses on penetrating the market quickly to secure significant market shares across various sectors. High levels of standardization, digitization and automation drive overall market growth, while collaborating with other industry players fosters innovation and progress. The company's strategy involves developing concrete use cases for current and future customers, collaborating on concepts integrating battery systems, and other complementary technologies. While reaching breakeven is the company's main objective, the initial focus is on market penetration.

Operative Concept: Operationally, Proton Motor is implementing concrete development activities, and made an application in 2024 to participate in Innovation Fund projects and executing specific projects with customers. Pilot projects serve as winning new customers, preparing the market, informing strategic decisions, and refining offerings. Governmental affairs, marketing and sales efforts are aligned with strategic objectives, ensuring effective communication of the value proposition to target markets.

In securing financing for its initiatives, Proton Motor is now actively engaging with investors and governmental funding programs. This holistic approach to the Company's strategy positions Proton Motor as a leader in the Cleantech sector, poised to drive meaningful change and make a lasting impact on the energy and industrial landscape.

COMPANY STRATEGY AND PRODUCT OFFERING

Proton Motor's vision is to revolutionise the energy industry through clean technology innovations, aligning with EU climate goals to pave the way for a sustainable and green future. Guided by strategic goals, the Company endeavours to achieve the following objectives:

Vision: PM´s vision is to create a clean world for the next generations while being economically successful and creating new added value in Europe.

Mission: As a team, PM develops, produces, and distributes emission- free, sustainable, and reliable system solutions in-line with market needs. PM has built up and will extend long-term relationships with its customers and suppliers. As quality is important to PM, it establishes high standards in purchasing, production, service and maintenance.

Strategic goals: With the vision of a sustainable future, Proton Motor aims to deploy fuel cell systems across various market sectors, ensuring widespread adoption of its cutting-edge technology. The company focuses currently with its standard Hy brand products on the stationary market with spillover effects into the mobility markets (heavy-duty, rail and maritime) with customizable systems to tailor solutions to needs of volume customers, ensuring maximum customer focus and fastest time to market. Central to the strategy is cost-effective manufacturing and superior performance parameters, even with current low production volumes that, it is hoped, will soon grow exponentially and will dramatically reduce costs. Prioritizing sustainability throughout the lifecycle of its products minimizes environmental impact while maximizing long-term value for customers.

Strategy: To achieve these goals, Proton Motor allocates a significant portion of resources to further development, leveraging innovations to reduce costs and enhance performance. Its flexibility allows the company to adapt swiftly to evolving market demands, ensuring that

PRODUCT OFFERING

Proton Motor has demonstrated and validated a wide range of fuel-cell based zero-emission propulsion and energy systems. The Company maintains an active exchange, with national and international customers, in various applications and markets. Proton Motor has developed and extensively validated its core technology, the fuel cell stacks HyStack® 200 - and HyStack® 400 - which together offer a modular power range from 4 kW to 50 kW. These are used in the market related products:

FUEL CELL SYSTEMS FOR STATIONARY APPLICATIONS

For stationary systems, the current product range includes emergency power systems for numerous industrial applications, e.g. for secure telecommunications (BDBOS), road tunnels or railway switching stations. Especially for the railway switching stations emergency power supply systems for indoor use, with 25 kVA and 50 kVA available. Autonomous energy systems, for residential houses/apartments, e.g. power generated by solar energy is stored as hydrogen and released as needed, power supply systems (on or off grid) with large power ratings (e.g. 90 kVA- 220kVA) in containers, e.g. for grid-independent energy supply of transportable hydrogen filling stations (project performed together with Shell) in containers.

The stationary market seems to have the highest near-term market potential. Not only has Europe been the fastest growing market for stationary PEM Fuel Cells over the last ten years, in terms of global market volumes and growth, indications are that PEM Fuel Cells (using graphite Bipolar Plates (with a long lifetime) have the greatest potential within stationary applications. Global market value, in megawatt,

is expected to increase from 1,787 megawatt in 2026 to 22,026 megawatt in 2032, while the global market for fuel cells is expected to grow significantly by 2032, from EUR 7.5 bn. in 2026 to EUR 69.9 bn. in 2032. Proton Motor is therefore prioritising the stationary market segment in the near and medium term.

8 Proton Motor Power Systems PLC ANNUAL REPORT AND ACCOUNTS 2023