Hello, everyone, and welcome to Fusion Fuel's Third Quarter 2023 Investor Update. My name is Ben Schwarz, and I'm the Head of Investor Relations at Fusion Fuel. I would first like to remind everyone that this call may contain forward-looking statements, including, but not limited to, the company's expectations or predictions of financial and business performance. These statements are based on numerous assumptions such as sales, margins, competitive factors, industry performance, and other factors which cannot be predicted.

Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees of performance. I encourage you to read the disclaimer slide in the investor presentation for a discussion of the risks that may affect our business or may cause our assumptions to prove incorrect. The company is under no obligation and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.Okay.

So greetings. Thank you all for joining us today.

In terms of our agenda for the next hour, I'll kick things off with an overview of Fusion Fuel, along with some perspectives on what we're seeing in the market currently. Gavin and Frederico, Fusion Fuel's CFO and CEO, respectively, will then share third-quarter highlights, financial results, and commercial updates before wrapping up with a recap of our 2023 priorities and our progress against them.We'll then open up the floor for a facility of Q&A.

As in our previous quarterly calls, questions can be entered in the Chatbox in the webcast platform at any point during the next hour. Alternatively, you can also submit your questions to the Investor Relations team at the IR mailbox, ir@fusion-fuel.eu.So as always, let's begin with a brief refresher on Fusion Fuel, our value proposition positioning in the green hydrogen sector.

Our mission is to make the energy transition more accessible through the developments and delivery of cost-effective clean hydrogen solutions.

Our patented miniaturized PEM-based electrolyzer – the HEVO, at the heart of everything we do, is a simplified and modular architecture, is a unique differentiator in a crowded electrolyzer market - one that unlocks multiple advantages for us, including high throughput, industrialized production, and a scalable building block approach that positions us to create customized fit-for-purpose hydrogen solutions.We've built a robust pipeline of actionable near-term green tendering projects in our core market of Southern Europe, enabling us to create our own demand for our technology. Many of these foundational projects have significant grant funding tied to them, strengthening and de-risking the business case for third-party investors.

We have a differentiated and synergistic business model that positions us across the value chain.

In addition to selling our proprietary technology to third-party customers, we also originate and develop green hydrogen projects from start to finish with diverse avenues for monetizing value creation along the development cycle. And finally, we are positioned for a significant growth ramp as the market continues to mature with an extensive long-term project pipeline and a world-class production facility located in Portugal, where we're targeting 500 megawatts of electrolysis production per annum by the end of 2025. Despite the promising long-term tailwinds behind the green hydrogen opportunity, the industry is grappling with a number of fundamental challenges that threaten this trajectory—rampant project delays, electrolyzer underperformance, scarcity of firm projects, and offtake agreements are about a handful of roadblocks the industry has had to navigate as early movers work to deliver on the lofty expectations they've set. Nevertheless, with the development, with the velocity, rather, of our project pipeline and our unique technology, amongst other things, we believe we are uniquely positioned to overcome these obstacles. And in many cases, we have a meaningful head start in doing so compared to our peers.

So, with that, I'll now introduce Gavin Jones, CFO of Fusion Fuel, to share some highlights from the third quarter of 2023.

Thank you, Ben. Good afternoon or morning to all of you who joined our third-quarter investor update call. I'm joining today from our offices in Ireland.

During the third quarter, we were awarded a technology sale contract to supply a 300-kilowatt electrolyzer and balance of plant system from a leading global building solution supplier.

We also entered into a partnership with Elemental Clean Fuels, a company focused on originating and developing clean fuel projects in North America. This partnership will provide Fusion Fuel with exposure to the emerging North American green hydrogen market and add to our existing partnership with Duferco in Italy, plus enabling the company to focus its near-term commercial efforts on the Iberian Peninsula and Northern Europe.After the end of the third quarter, we received 2 separate purchase orders for a combined EUR 4.2 million of revenue. These projects will serve as customers in Portugal and will include the supply of our HEVO-Chain product along with balance plant equipment and EPC services and will each represent a 1.25-megawatt system.While I spoke to you about in early September, I commented that we were in discussions with both existing and prospective capital providers about financing solutions.

We are pleased to share that we have entered into an agreement with Macquarie on a financing facility of up to USD 20 million, which we announced last week. This agreement represents the culmination of a due diligence process that spanned multiple months.

We are very pleased with the terms of this facility and perhaps equally as importantly, the structure and quality of the counterparty in Macquarie. This is a convertible debt facility with a 2-year term. The drawdowns will be done on a phased basis with the size of each tranche to be mutually agreed by both parties depending on our cash flow needs at the time. Macquarie will receive warrants equal to 30% of the aggregate amount funded. The warrants will have an exercise price equal to 130% of the volume weighted average price for the 5 trading days immediately preceding any tranche issuance. There are certain conditions that must be met before we operationalize this facility, such as completing the required SEC filings.

We are working on these and expect to close them during the first quarter of 2024. This facility will provide us with the capital needed to execute our 2024 objectives.We will now move on to the financial results for the third quarter. Please note that all values disclosed are in Euros unless stated otherwise. We recognized EUR 2.5 million in revenue during the third quarter. This represents the revenue related to our green hydrogen project in Madrid. Provisional acceptance of this project was achieved in September of this year. Of the EUR 2.5 million recognized, EUR 0.7 million is accrued, and this cash is expected to be received within the next 60 days. Back in the first quarter of 2023, we recognized revenue relating to a technology sale contract.

Our customer's intention was to complete this project as part of Portugal's First Green program.

During the third quarter, it became apparent that this project would not proceed as it wouldn't be completed within the timeframe set out in their grant agreement with the Portuguese government. We reversed the revenue and associated cost of goods sold for this contract during the third quarter, and this reversal is shown as part of the second-quarter volume for comparative purposes. The revenue reverse amounted to EUR 0.5 million. Please note that we still expect to complete this sale with this client with further projects they have planned.

As you may remember from our second-quarter investor presentation, we booked a provision for impairment of EUR 7.2 million against our legacy HEVO solar inventory.

During the third quarter and into the fourth quarter, we've continued to sell or scrap this legacy equipment.

We expect this process to continue for the foreseeable future. The infills received as part of this process have been offset by an increase to the provision of EUR 0.5 million during the third quarter.

Our operating cost base decreased for the third consecutive quarter. We saw a reduction to our personnel-related costs of EUR 0.26 million when compared to the second quarter. This was due to the continued reduction in our headcount, coupled with the fact that the second and fourth quarter typically have higher costs due to vacation subsidies being paid to our Portuguese-based employees. This was coupled with further reductions to travel, administrative, legal and consulting fees, but was somewhat offset by an increase in R&D expenses.

Our quarterly charge relating to our equity incentive plan increased point by EUR 0.28 million during the third quarter.

The second quarter amount was lower due to a one-off reduction for the forfeiture of a significant number of instruments. There were no new awards during the third quarter and not expected for the fourth quarter.

We expect a noncash quarterly expense of EUR 0.6 million for legacy share-based compensation until the end of 2024. The pre-tax loss for the quarter amounted to EUR 4 million.

In terms of the balance sheet, the increase of property plant and equipment is driven by the booking of new equipment that was invoiced during the quarter for our Benavente production facility. This increased the value of this asset by EUR 2.8 million. The inventory balance shown is net of the impairment charge, which was discussed earlier. The significant decrease since the second quarter is down to the revenue recognized. Until we recognize this revenue, the equipment we used, is related to this revenue was recognized as part of inventory.Our bank balance was just over EUR 1 million on September 30. Since then, we've received EUR 2.1 million in grant funding with a further amount of EUR 0.4 million in addition to client inflows before the year is out.

We have significant grant demands expected for 2024, which will mostly be through reimburses for spend relating to R&D and our Benavente production facility.

Given that we are now receiving customer inflows monthly, we are satisfied that the operational inflows, coupled with the drawdowns from the Macquarie facility will enable us to have a strong 2024.

The other notable movements included a reduction of EUR 2 million in the fair value of warrants, an increase of trade payables as we book the equipment for Benavente, as mentioned above, and grant income of EUR 2.3 million received during the third quarter. Over 16 trading days in the third quarter, we raised EUR 0.6 million cumulatively by selling 376,000 ordinary shares through our ATM facility. No sales have been made since September 20th.

Next slide, please. We revised our 2023 guidance in the second quarter, and we expect this guidance to hold true.

We have significant equipment to deliver during December for 2 active technology sell contracts.

For 2024, we expect to recognize revenues of EUR 34 million.

As this slide shows, this total can be attributed to 2 different categories: technology and balance of plant equipment sales and the sale of projects from our own portfolio. The technology and balance of plant demands are already backed by committed orders.

We have not included any estimate of further equipment sales from our pipeline as if we were awarded contracts; the timing of revenue recognition is too uncertain right now.

For those familiar with our development project pipeline, we have 2 projects in Sines, Portugal that have been awarded a combined EUR 32.5 million in grant funding from the Portuguese government. The revenue guidance for 2024 assumes that we will sell our Sines 1 project to an infrastructure fund and convert the project into a technology sale that will include balance of plant and EPC services. Frederico will touch upon the status of our technology and development project pipelines a little later. From a cost perspective, we continue to work through our budget for 2024. It's imperative that we keep our costs as slim as possible given the general uncertainties in the global hydrogen economy. Right now, we have a lower cost base when compared to our competitors, and we are working to reduce this further without diluting the quality of our product and ancillary services.

As noted earlier, our cost base has reduced for 3 consecutive quarters, and we will look to continue this trend into 2024.

Our goal continues to be reaching cash flow self-sufficiently, as quickly as possible and keeping costs low as critical to achieving this. I will now pass you over to our CEO, Frederico, who will guide you through the rest of the presentation.

Thank you, Gavin, and good afternoon, good morning to all. I'm pleased to share with you today the latest news from the numerous activities we have going on. I want to note that many people speak about green hydrogen and announced large future plants. In reality, very few companies have plants that are live and producing green hydrogen today and few have the expertise to install Green hydrogen plant safely. Through the process of having the Madrid plant live, we have seen first-hand the benefits of our modular solution with the occasional teething problems at the plant, only causing the loss of a few days of production rather than full plant shutdowns, as others have suffered.

We have the pleasure of having hydrogen plants in Portugal and Spain as well as the laboratory that is not only testing the next generation of materials from future HEVO releases, but is also ensuring we run thousands of hours on our existing versions to ensure degradation rates of material behavior.

During 2024, we expect to put at least another 6 green hydrogen plants into operation. The experience from these first projects from our lab and our own production facility has been critical to close these contracts. I would like to highlight today our engineering capabilities as they are not only a differentiating factor, but have also been a crucial one, including the various equipment sales we have signed. Few clients have the experience and knowledge required to design, implement, and go live with a fully-fledged green hydrogen plant.

In addition to submitting [collateral] proposals for over 40 projects, our engineering team has fully designed more than 10 green hydrogen plants in Portugal and Spain to date. This includes ATEX & HAZOP studies, licensing processes and fully defining the specifications for all the equipment in the plant.Given the challenges that some hydrogen projects have experienced recently, using an experienced and proven player is of increasing value to clients. This allows us to create a partnership with clients that goes beyond simply delivering equipment.

We have already received requests for engineering, auditing services where I find wants us to review their plant design in addition to requests to fully develop the engineering solutions for even alkaline electrolyzer systems. This confidence and trust in our engineering capabilities will not only be a major selling point for Fusion Fuel, but we expect to generate independent revenues from these services as early as next year. More and more, the proposal requests we are receiving are for full plant designs, and these are tailored to the specific client requirements.

We have designed plants with hydrogen usage at a pressure of 2 barg as well as one reaching even 1,000 barg and also various sizes from 300 kilowatt plants all the way up to 10 megawatts so far. The use cases include plans for hydrogen mobility, gas blending, tube trailer filling and for use in industrial furnaces. What you see here are renders from 3 of the 10 projects that the team has designed and provided full specifications for. In an initial step, we provide preliminary engineering for the equipment in offer, and then we charge for engineering services for detailing and designs beyond Stage 1. There are companies that can deliver this type of expertise.

For markets, there are a few companies that can deliver the expertise.

For markets where we do not have full engineering capabilities, we look to establish partnership with players that have a know-how for their specific market. The partnership we entered into in Italy and also in the Middle East with TCC is a good example of such cases.

As we announced at the end of September, we will be delivering a 300-kilowatt green hydrogen plant for a global leader in the cement sector. This includes the HEVO-Chain electrolyzer along with full plant design and implementation along with a local partner. This plant uses our already announced HEVO-Chain technology, in particular, the cube solution, which is modular at 20 kilowatts per unit. In the image, you can see the first HEVO-Chain demonstrator that has already been installed in our plant, which uses multiple HEVO-Chain tubes in synchronized production.

In addition, it is the first plant where we will be using our new oxygen capture system as the client has used for the green hydrogen -- the green oxygen as well.

So we're using our new oxygen capture system, sorry, as a client has used for the green oxygen as well. This project is currently in development and is expected to be fully installed and operational in the first half of 2024. More recently, we announced the order of two 1.25-megawatt green hydrogen plants that will also use the HEVO-Chain system for installation in 2024 in Portugal.

As you can see, we will not only provide the electrolyzer unit, but also do the full plant design, POP equipment selection, and purchasing and oversee the installation.

We expect to book approximately EUR 4 million in combined revenues from these two projects in 2024. These projects consist of multiple HEVO-Chain Cabinets as shown under the Render, where each contains around 50 kilowatts of electrolyzer capacity, still providing significant modularity for the clients and reducing costs by reducing the number of connections, valves, and piping used in the solution.

As we've said before, we made a significant push on our technology sales efforts at the start of the third quarter of this year.

In addition, we continue to receive request for engineering services that we will evaluate on a case-by-case basis, for which we expect to generate revenues from this activity during 2024.

We have submitted around 50 proposals to third-party projects, all with the HEVO-Chain modular system. We do not see the industry executing more than a few very large projects in the next 2 years. Simply put, as has been demonstrated in several cases, the industry is not prepared for such projects. And companies cannot provide the performance guarantees that want to allow our clients to take such risks on a project. We believe the next leaders will primarily see several, if not many, projects below the 10-megawatt size being implemented. This is where we have focused our commercial efforts, and where we believe not only our technology shines, but it avoids us taking outsized balance sheet risks when providing warranties for these systems.

As Gavin mentioned, our revenue target for 2024 is EUR 34 million.

Although our inflows may differ given how some proceeds can only be recognized towards the end of the delivery to the client. These EUR 34 million are based on the projects and activities listed on the right. We already have 5 projects signed and confirmed for 2024, and we are in the negotiation phase of selling Sines I project. These 6 projects alone would allow us to meet our targets, giving still some room for further revenues from proposals that we are awaiting to hear back from and also from new engineering services.

As we have seen in these previous years, the exact date of the project is hard to predict. And therefore, in our revenue guidance, we've only included those that have already confirmed for 2024, have already started, and are Sines I project.

So there is still potential for upside from new sales as we -- as the pipeline matures. We're in a position where we believe we have significantly de-risked the revenue guidance for 2024 as well as allowing us to expect cash inflows and revenue bookings from clients quarterly going forward as opposed to the one-off bookings we have seen previously. The hydrogen market has been slow to take off, but we are seeing significant movements now and particularly in the project size where we excel.

So, we are very excited to capture part of this growth as the industry really comes to its terms.To finish up, I will briefly cover the strategic priorities we had laid out for the year and where we stand against those.

As I've just highlighted, we have made substantial progress in the technology sales activities with several of the proposals in the table in the slide before being for projects beyond Southern Europe.

With the announced tranche financing facility that was signed with Macquarie, we believe we have significantly addressed one of the largest concerns that hampered our company in the last year or so. This facility, a result of several months of due diligence and discussions is not only with the first-rate partner, but also of a size that allows us to focus on business execution for the future.

In addition, the conditions for this facility, in particular, with its pricing related only to each tranche executed are fair and attractive to shareholders. They avoid the brutal dilution that we had seen in office throughout the year, and a design is designed with enabling the company to reach its goal rather than simply benefiting only the partner providing the capital as many of the deals in this capital constraining environment can end up being.

As mentioned, we've been designing projects for 5 and 10 megawatts. And in theory, we can deliver larger projects using such building blocks.

However, for the midterm, our focus will be on the 10 megawatts under project to avoid overextending ourselves and hoping to avoid the need for large warranty provisions as we have seen from others in the market.

As Gavin mentioned, we are actively reducing costs but also throughout this process in chart of the resource allocation in the business, that is where we see the upcoming need and development of the market. This is a process that is well underway but still in progress. Therefore, we won't comment much more on this, except to say that our focus is to have an organization that is sized and driven to help us be one of the first companies to reach cash flow breakeven in the industry. Growth beyond Europe and in some European markets is only possible with strong partnerships, both from our commercial and production aspects. We've already established partnerships in the North American market and for Italy and also for the Middle East as mentioned. And we will continue to expand these where we believe it makes strategic sense for the company. We're making substantial progress on all these key elements, and we're excited to be approaching 2024 as we can truly highlight how much of the pivotal role Fusion Fuel can play in this industry.

We will already be reaching some peers that have much higher valuations in terms of revenue books booked and we have much lower cost run rate.

We have a modular technology that provides lower risk in terms of future warranty provisions and expenses.

So we look forward to executing with driving excellence on our plans for 2024. With that, I'll close today and open up for Q&A.

Thanks, Federico. [ Operator Instructions ]So for now, let's begin with some questions from Jeffrey Graham from Alliance Global Partners.

First question is, are you seeing any particular use cases having stronger business models in this tightened hydrogen market.

So I'll take that then.

So that's hard. I know we see a bit of everything.

So what's the use cases that have the highest IRR at this point in time is mobility, where there is enough of a fleet to justify the CapEx related the hydrogen per kilo basis is one of the more expensive in terms of uses in the hydrogen industry.

So this is one of the use cases that's most attractive today. That said, we do see a lot of projects starting where people really want to learn more about hydrogen, how it impacts their business and they're preparing for the future. The project we mentioned before with the one of those well-leading cement companies is exactly that a project where they expect that hydrogen will be a core element of that business going forward, and they want to learn how the furnaces and so on react when mixed with hydrogen.

So from an IRR perspective, simply at this stage, I would answer that it's mobility, but we're seeing more and more industrials taking the funds and betting on hydrogen for their decarbonization purposes and the longer-term views of findings.

On the priority slide, you allude to progress made on submitting offers to projects or opportunities in Northern Europe. Can you provide an update on that?

Sure.

So we continue to provide offers to Northern Europe. And these at this time have been all around the mobility sector.

So we have just now submitted offers to other countries with U.K., France and beyond as well.

We expect this to continue. But what we are seeing is that it takes [indiscernible] between getting offers submitted and the clients taking their FID on the project, mainly as they go through the process of negotiating offtake.

So we do expect to continue to see more offers to Northern Europe, although it might take us some time to hear back on positive or negative decisions on FID.

One more for [ Midu ]. Can you provide any examples of the type of projects where you might monetize your engineering services and what that revenue opportunity might be on a per megawatt basis?

Sure.

So this is hard to map out on a per megawatt basis, very often the project, it's mainly due to the project complexity in the end case of a client.

So a project that requires hydrogen and/or oxygen without purification at 2 barg is very different the one that needs the pure at 500 barg.

So it's win on a project-by-project basis.

We have seen several cases as all of the projects that we have today where people do want us to not only do the full design of the projects, but also the specifications of what the balance of plant is.

So what compressor to use, what power system to use, or purifiers use and so on. And we put them in touch with the right buyers. We design, we do the full engineering mapping for the project. Currently, we've targeted hoping to reach 500,000 of revenues next year in terms of engineering services and hoping to, in 2025, get that to each EUR 1 million. This is still early numbers as we are going through some engineering offers even as recently as today is having some offers being sent on that.

So, we're still building the business case on our engineering services. But given the strong demand also services, we do expect to be booking revenues for us already next year.

Gavin, this question is for you. What's the magnitude of cost reduction potential you are reviewing? Is there an internal target or anything to communicate at this time?

So again, to reiterate our position from our Q2 investor presentation back in September. That cost review that we embarked is still ongoing. It has been very, very detailed. And as I mentioned previously, we're still working on finalizing our budget, but in terms of looking at that number of percentage internally, where we're trying to get as close to a 20% reduction on our full year 2023 SG&A. And I suppose that's currently why the review is taking so long and will continue for some time as well because as I mentioned in my remarks, it's very important for us to have a [indiscernible] cost base, and we see that as being a key driver to us being successful.

So, it's so important that we take the time and leave no stone unturned when it comes to costs.

So yes, hopefully that answers the question.

Thanks, Gavin. A question from Erin Gordon from Bank of Canada.

On the third quarter pipeline slide, we show 45 proposals for EUR 172 million in prospective revenues - outdated offers versus 41 proposals for EUR 222 million in the previous iteration of the slide from the second quarter that implies a decline in the average value per project parole or EUR 5.5 million to a little under EUR 4 million per order. Can you provide any commentary on that distinction or difference?

Absolutely.

So, we have simply done as we have stripped out the balance of plants equipment and revenues from that sales pipeline, so that it's focused around the electrolyzer sales rather than balance of plants equipment. In the end, the balance of plants equipment sales per project will be determined by the client to what extent we will be involved in providing those and the gross margin that we will be able to provide on that balance plants can substantially project.

So for -- in order to more the more like-to-like purposes for the [indiscernible] proposals, and we've really kept it to the electrolyzer portion of the proposals.

Great. Thanks.

Moving to capital strategy now, perhaps for you, Gavin, how are you thinking about the ATM facility in light of the recent financing with Macquarie, we look to utilizing ATM going forward?

Sure.

So as I mentioned, we haven't used the ATM since September 20, I think was the last trading day.

We have no immediate plans to re-engage activity on the ATM. And just to be very clear on it. It is one of the conditions for operationalizing the Macquarie deal, is that the ATM facility is canceled.

So now that is the answer, both in terms of current or expected future use of the ATM.

Great. And without there with the solutions currently in place between the Macquarie convertible project inflows and grant funding. Does that get you to the cash position needed? Or will you consider additional fundraising efforts?

I'll start with the annoying phrase of it really depends.

So it depends on whether we witnessed further delays in both project financing and execution of those projects.

So if they're delayed, the amount of capital required, could and can probably will change substantially. We move it caution here given the recent delays witnessed throughout the industry. Partly most importantly, as we noted in our investor letter, the structure of the Macquarie facility allows us to pursue complementary forms of financing and other strategic sources of capital that would further stretch our balance sheet as needed.

Thanks, Gavin. What you hear about the timeline to profitability or cash flow breakeven?

Sure.

So we expect this at some time during 2025. This is a good follow-up point to the previous question then, as again, it goes back to the point of it depends.

So, if everything plays out as we forecast and as we expect, and we finalized the cost review and get our costs as time as possible. We hope it will be -- we plan it to be during 2025, but don't expect it to be during next year.

I will simply add that we will still be one of the first or the first electrolyzer producers who reached that milestone given all the cost base.

Frederico for you! Do you see the recent political issues in Portugal having an effect on the business, for example, in the form of delays in permitting or received and funds.

So naturally, this was one of our big concerns, especially on the day that the news came out and the recent political turn a few weeks ago that kicked off in Portugal. Since then, we have actually seen the monetizing of various grants. We've seen a number of items that we had with the government moving forward.

So, we have actually seen relatively normal operations within the government.

So, at this point in time, our projects have not been affected. I will just note that what we have seen or where we expect delays is around programs the government was about to launch.

So for example, there was the green hydrogen [auction] in Portugal that was expected to launch towards the end of this year. That naturally will be pushed on hold until the new elections happen in early 2024. But to the projects that themselves have not been delayed, although some of the government programs have, none of the projects we had were expect -- we're awaiting for that auction.

So it doesn't impact the revenue sort of guidance that we've given for 2024.

In addition, the launch of the European Hydrogen Bank, which has recently been put out all of the rules and regulations around it and have opened up calls for this has also meant that clients who have considered going for one auction to now go for the European Hydrogen bank auction instead.

So the impact from the Portuguese government has been minimal.

A question here on mobility.

So clearly, a priority market for the company. Does management have a perspective on the future of hydrogen in mobility versus EVs? And then anything else of note to touch on regarding strategic partnerships in this space.

So [indiscernible] debate of which is better between the hydrogen and EV sort of discussion to know by personally, and I think most of the executive committee of Fusion Fuel l believes that there is a market for both, in particular, the places where which need fast charging, it avoids the need for having multiple batteries or whether you need to carry a sort of large loads. There's a big case to be made for hydrogen or even hydrogen derivatives, be it ammonia as fuel as well.

So we think and our view is that there will be a market for both EVs and hydrogen mobility in all their elements.

So we've seen this across all the discussions with our clients also seem to point to that fact that it is not an either/or, but actually a combination of both in the aim to decarbonize mobility.

Can you touch on the ability of or need for players in this space to provide those guarantees, particularly on larger projects.

I think this is a really important topic that in the industry is not discussed enough. Effectively we have to keep in mind that when someone wants to do a 100-megawatt project, they're spending like the EUR 150 million on the full hydrogen plant and which is a substantial CapEx risk for any infrastructure player or clients.

Now with that, traditionally, you would expect to get performance guarantees and warranties for several years to back up a CapEx investment of that size. To date, the industry does not provide or as far as we have seen, does not really provide performance guarantees, especially for the very large projects. Therefore, whoever is doing a large investment needs to determine how much capital they can truly put at full risk.

So we have seen one, let's call it, a large U.S. competitor has called through the approach of putting substantial cash deposits and cash collateral with banks in order to finance some of the larger equipment sales. This is a substantial risk to anyone's balance sheet, especially with technology that has not yet had years and years of proven track record.

So this is why we believe that there will be a few projects, large projects being done in the next 2 to 3 years. And the majority of the projects will be in the small to mid-scale where the risk for both parties, both the project buyer or investor as well as the companies providing the equipment is manageable.

So I think this is really important because it will limit the amount of large projects in the next 2 to 3 years until the industry is more mature.

For us, it's an advantage because our technology really plays in that small to mid-cap sort of area.

Can you perhaps get a comment on current head count in the context of kind of the cost structure and their need based on current and expected sales.

Yes. Sure.

So I think we've gone on a journey in terms of headcount over the past 12 months, we're probably roughly around the 130, 135 mark at the Munich, probably close to the 130.

I think the important thing to point out is that the salary cost within Portugal are a lot lower than a lot of other countries within the EU and also compared to the likes of North America and even Australia.

So that is included within our cost review process. But we think and I think I touched upon this in the quarter 2 presentation was that it might not be a case of reducing the headcount, but more rationalizing the headcount and moving people from one department to a different department.

I think as Frederico pointed out in his slides, this engineering stream that it has come to the fore in recent months. Do we have the team fit for purpose for that? And do we have resources in other areas of the organization that could assist and even promote that stream even further.

So that is something -- it's a very good question, and it's something that we actively look at. And right now, we think we've got a positive mix. But as I said, that's something that we look at on an ongoing basis.

So in the absence of any additional questions, I think that will do it for our third quarter webcast.

So thank you for everyone who's joined.

If you have additional questions or if you'd like to speak with myself or the Fusion Fuel management, please feel free to reach out to me and the IR team at IR@fusion-fuel.eu, and we look forward to seeing you all again at our next update. Thank you.