Despite difficult conditions in the market for green H₂, thyssenkrupp nucera significantly increased sales in the alkaline water electrolysis (AWE) business in the second quarter and first half of 2023/2024. The supplier of leading global technologies for highly efficient electrolysis plants also made significant progress in implementing its growth strategy and completing customer projects.

thyssenkrupp nucera has successfully started the preparatory work for the commissioning of CF Industries' water electrolysis plant in Louisiana, U.S. The U.S. company is a leader in nitrogen products such as ammonia. “CF Industries' plant is the world's first of our high-performance 20 MW (megawatt) electrolyzers, which will soon start producing green H₂ on an industrial scale as planned. We are thus opening a new chapter in the history of green H₂ at thyssenkrupp nucera," said Dr. Werner Ponikwar, CEO of thyssenkrupp nucera.

In the second quarter, the electrolysis specialist also laid the foundation for the expansion of its technology portfolio and thus a further growth area. In March, thyssenkrupp nucera entered into a strategic partnership with Fraunhofer IKTS in the highly innovative high-temperature electrolysis (SOEC) technology. The company has also taken a major step forward in one of its core growth markets, North America. The U.S. Department of Energy (DOE) has selected thyssenkrupp nucera to advance the mass production of water electrolysis cells and the development of an automated assembly line for these cells.

At the end of April, thyssenkrupp nucera signed a contract with a company of the basic industry for a more than 100 MW electrolysis project in Europe. It is further proof that it is mainly projects in the ammonia, steel and refinery sectors that are driving the growth of green H₂.

Cepsa, a leading company in the mobility and energy sector in Spain, has chosen thyssenkrupp nucera as its preferred supplier for an AWE plant with an installed capacity of 300 megawatts for the production of green H₂ at the Cepsa refinery in the “La Rábida” energy park in the southern Spanish province of Huelva. With an annual production capacity of up to 47,000 tons of green H₂, this plant will be part of the large-scale project planned by Cepsa in the south of Spain, with a total capacity of 2 gigawatts of electrolysis capacity by 2030.

Australian project developer ABEL Energy had previously selected the electrolysis specialist as the preferred supplier for its 260 MW project in Australia. The company, which specializes in green H₂ and green methanol projects, aims to reduce fossil carbon emissions in the maritime business.

The positive developments on the order side were offset by developments that slowed momentum in the reporting period. For example, delays in the final investment decisions of many potential customers became increasingly apparent. “We are currently seeing a discrepancy in Europe and North America between originally planned projects and final investment decisions on the necessary electrolysis capacities. Although the necessary progress on the regulatory side is evident, many investors are waiting for the regulatory framework to be finalized. This situation is causing a level of uncertainty in the market and is therefore dampening investment momentum. Obstacles to investment such as the design of regulatory requirements and the pace of funding commitments should be removed quickly,” said Dr. Christoph Noeres, Head of Green H₂ at thyssenkrupp nucera.

In addition to the natural fluctuations in the project business and the subdued investment momentum, the postponement of the Full Notice to Proceed at H₂ Green Steel to the third quarter also had a negative impact on the order intake trend. Under the Full Notice to Proceed, suppliers are authorized to proceed in full with the work required under the contract. As a result, thyssenkrupp nucera's order intake of €75.3 MM in the second quarter of the 2023/2024 financial year was significantly lower than in the same quarter of the previous year (€130.9 MM).

In the AWE segment, the company recorded new orders of €11.6 MM after €82 MM in the second quarter of 2022/2023. The electrolysis specialist increased its order intake in the chlor-alkali (CA) segment very strongly by almost a third (30%) to €63.6 MM (same quarter of the previous year: €48.9 MM). At €250.8 MM, incoming orders in the first six months of the current reporting year were 14% below the corresponding figure for the previous year (€292.1 MM). However, a significant increase in incoming orders is expected in the coming quarters.

The order backlog as of March 31, 2024 amounted to around €1.2 billion, of which €800 MM was attributable to the AWE business and €500 MM to the CA business.

thyssenkrupp nucera increased its sales in the second quarter of the current financial year by 11.1% to €168 MM (prior-year quarter: €151.2 MM). Growth was driven by sales in the area of electrolysis plants for the production of green H2. The swift completion of projects in Saudi Arabia, Brazil and Sweden led to a sharp 59.1% increase in sales in the AWE segment to €95 MM (prior-year quarter: €59.7 MM). In contrast, sales in the CA business fell by 20.2% to €73 MM (same quarter of the previous year: €91.5 MM). As expected, the increase in sales in the new construction business could not compensate for the decline in the service business; the service business had grown very strongly in the previous year.

At €376.3 MM, sales in the first half of 2023/2024 exceeded the previous year's figure (€306 MM) by almost a quarter (23.0%). In the AWE business, sales rose even more sharply by 68.6% to a record level of €215.8 MM (first half of the previous year: €128 MM). The increase in AWE sales was mainly driven by the good progress made with NEOM project execution in Saudi Arabia. Construction of the first 20 MW modules has begun on the world's largest gigawatt electrolysis project, NEOM. The Unigel project in Brazil and H₂ Green Steel in Sweden also contributed to the positive sales performance in the first half of the year. At €160.5 MM, sales in the CA business were 9.8% down on the previous year (€178 MM).

The electrolysis specialist also continued to systematically drive forward the organizational measures required to implement its growth strategy. At the end of the second quarter (March 31, 2024), the company employed 855 people worldwide. Compared to the previous year (March 31, 2023), the number of employees increased by 261. Research and development costs almost doubled from EUR 4.4 MM to €9.2 MM in the second quarter and from €7.6 MM to €14.6 MM in the first half of the year.

The higher expenses associated with the implementation of the strategy, a lower gross margin due to a higher AWE share of total sales and mix effects from the expected lower service business led to negative earnings before interest and taxes (EBIT) of -€10.6 MM (same quarter of the previous year: €2.3 MM). As expected, the electrolysis specialist's EBIT fell to -€11.4 MM in the first six months of the current financial year 2023/2024 (prior-year period: €13.3 MM).

The EBIT margin weakened from 1.5% to -6.3% in the second quarter. The EBIT margin fell from 4.4% to -3.0% in the first half of 2023/2024.

The provider of world-leading technologies for highly efficient electrolysis systems continues to have a strong net financial asset position to finance its growth plans. The financial result rose sharply from €2.7 MM to €6.1 MM in the second quarter, primarily due to higher interest income. Higher interest income was also the main driver behind the improvement in the financial result to €11.9 MM in the first six months of 2023/2024 (prior-year period: €3.2 MM).

The lower EBIT caused earnings after taxes on income and earnings (net result) to fall to EUR -7.2 MM in the second quarter (same quarter of the previous year: €3.6 MM). After income taxes, the net result for the first half of the year amounted to EUR -€4.4 MM (prior-year period: €12.1 MM). Earnings per share attributable to the shareholders of thyssenkrupp nucera fell accordingly to -€0.06 (prior-year period: €0.12).

“The market for green H₂ continues to have very high growth potential. With our strong financial position and our highly efficient electrolysis technology, we at thyssenkrupp nucera are very well positioned to exploit this potential. We therefore expect incoming orders to grow more strongly again,” said Dr. Arno Pfannschmidt, CFO of thyssenkrupp nucera.