HALF YEAR RESULTSFor the six months ended

31 December 2016

Our vision

“A fuel cell in every home and business”

2

SteelCell™ Market Opportunities

Commercial Data Centres

Electric Vehicles Residential3

Commercial Highlights

• On target for extremely successful year

• Income tripled in the period; aim to at least double for full year

• Strong pipeline; £4.8m order book as of 31 December 2016

• Most customers want SteelCell for higher power products (>5kW)

• First “go-to-market” agreement signed with global OEM to develop product

• First significant US commercial success with Cummins & US Dept. of Energy

On track to hit targets

• Achieved 4 out of 5 development agreements targeted by end 2017

• Achieved 1 out of 2 launch programmes targeted by end 2018

4

Commercial Highlights

5

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

H1 15/16 H2 15/16 H1 16/17

£m

Revenue and other operating income

0.0

1.0

2.0

3.0

4.0

5.0

6.0

£m

Order book

Sep-15 Jun-16 Dec-16

Other Highlights

Successful £20m fundraise

• Enables further embedding the SteelCell into partner programmes

• Able to invest to access multi $bn markets

Technology and Operations

• Started development on larger cells to address higher power products

• Increasing manufacturing capacity in Horsham to 40,000 cells/yr

• Considering options to expand manufacturing to meet customer demand

6

Financial highlights – income statement

£m HY

2017

HY

2016

Change

Revenue and other operating

income 1.6 0.5 1.1

- Revenue 1.0 0.2 0.8

- Other operating income 0.5 0.2 0.3

CoS and operating costs (7.8) (6.7) (1.1)

Operating loss (6.2) (6.2) -

Income tax credit 1.0 0.7 0.3

Loss for the financial period (5.2) (5.5) 0.3

7

Revenue and income driven by new customers and contracts

Cost base increased as planned to address high power customers

Financial highlights – cash flow

£m HY

2017

HY

2016

Change

Operating cash flows (5.2) (5.1) (0.1)

Changes in working capital (0.9) (0.2) (0.7)

Cash used in operations (6.1) (5.3) (0.8)

Capital expenditure (0.3) (1.0) 0.7

Tax received in the period 2.2 0.8 1.4

Equity-free cash outflow1(4.2) (5.4) 1.2

Net proceeds from fundraise 19.4 0.0 19.4

Net cash & financial assets 22.2 12.8 9.4

1 Change in net cash and cash equivalents and short-term investments, excluding cash flows from financing activities

8

Building team to support customers & development

Receipt of whole R&D tax credit in the period (prior year 50%)

Increase in cash & financial assets due to £20m placing

Data Centres

▪ Account for 3% of global electricity

supply; growing exponentially

▪ Fuel Cells provide primary power

▪ Grid backup is secondary

▪ Eliminates diesel ~ Zero emissions ~

Multi kW system

Development started in 2016

9

10

▪ Fuel Cells enable no

compromise for end users

in range or recharge time

▪ Run on available Bio-fuels

▪ 25% of all vehicles by 2025

Electric Vehicles

Multi kW stack

Development started 2016

Residential / Commercial

▪ Distributed generation using

fuel cells is the most

efficient fuel to power

• ~30% lower energy costs

▪ ~30% lower carbon

▪ Zero SOx and zero NOx

First “go-to-market”

Multi kW CHP (Commercial)

+

1kW system field testing

ongoing (Residential) 11

Outlook

• 5 global partners by the end of 2017

• 2 partners in launch programmes by the end of 2018

• Target high power applications & open new markets

• Increased investment in people, technology and manufacturing

capability to access multi $bn market

12

Appendices

13

SOFC Fuel Cell Electric Vehicle Market

14

As the cost of batteries reduces to below USD $200/kWhr, current market forecasts suggest that Electric Vehicles

will gain a dominant market share (>35%) of all vehicles sold by 2040. If SOFC fuel cells are used as range

extenders in 5% of the market, this could drive demand to > 1.5million vehicles per year or USD 5 billion/year

15

SOFC fuel cells in data centres support the long term architecture towards DC powered data centres by

generating DC power at the point of use. Data centres already consume 3% of global electrical generation

capacity and growth rates are 4-10% per year. Continued reliance on grid capacity is not realistic.

Data Centre Market

Data Centre Market

16

A typical data centre invests a significant amount of capital and floorspace into the provisioning of power

conversion, storage and power distribution to the server loads. To mitigate the grid power interruptions, diesel

generators and batteries are installed to improve the grid reliability from 99.9% to the data center requirement of

99.999% availability

17

Annual investment in Datacentres exceeds USD $180 billion. Power, power distribution and cooling comprises

and estimated 30% of the total investment or USD$55 billion annually. Fuel cell SOFC systems could replace

some of this infrastructure while offering a more efficient operating cost to the adopter.

Data Centre Market

We have strong institutional backing

18

OCEANWOODCAPITAL MANAGEMENT