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The Norwegian is one of the most advanced listed groups in electrolyzers which make it possible to produce hydrogen with water. To fully understand what it is all about, we must remember that currently, 99% of hydrogen is produced from fossil fuels. This gas is widely used in industry, for example to produce ammonia, methanol or to purify fuel. But we know how to create hydrogen in other ways. The challenge is to develop technologies so that production is based on renewable energies, making the cycle much more virtuous than it currently is. At the same time, it turns out that hydrogen can serve as a basis for propulsion, land or sea for example, through a fuel cell.
On this theoretical basis, we can therefore adorn “green” hydrogen with many virtues. If we are able to produce it with cleaner energies, to have adequate outlets and under satisfactory economic conditions. On this last point, water electrolysis costs at least three times more than natural gas steam reforming systems, and often even more. Consequently, as humanity does not yet know how to put a price tag on climatic disorders, the production of hydrogen by electrolysis of water is a sector still under construction, reserved for pilot or emerging projects and for donors. of orders who have taken the side of accepting the risks inherent in this pioneering side. To put it another way, the companies that shine in the specialty are not yet at the stage where they are making money.
In this nascent market, there are three main types of players. The former manufacture fuel cells, the latter electrolysers and the third charging stations. Nel, in the same way as the French McPhy, operates both in electrolyzers and charging stations. But it is the electrolyser that is at the heart of the activity. There are two major technologically mature systems, which point to a future business model. On the one hand, alkaline electrolysis, mastered for a long time, and, on the other hand, proton exchange membrane electrolysis, which is more compact and more flexible. Nel is one of the few players to operate in both areas. The Norwegian also manufactures charging stations (HRS) for vehicles. In 2021, the two activities, electrolyzers and HRS, contributed more or less equally to the turnover. But since then, electrolysers have gained the upper hand, partly because projects are multiplying. And also because hydrogen mobility is still anecdotal, which limits the expansion of HRS for the moment.
Nel, leader of an emerging market.
© / Art Press
A rising hydrogen star
Financially speaking, Nel’s income statement is characteristic of an emerging sector. Its order book is well stocked, having doubled between 2021 and 2022. But the amounts are relatively modest: 2.6 billion Norwegian kroner, or around 238 million euros. The 2022 turnover reached 1 billion crowns, for a net loss of 1.2 billion. In euros, this gives 96 million in turnover for 113 million in net loss. Profitability is not stored in the Norwegian kalends, but it will not intervene before several years. What matters in this configuration is the depth of the pockets and the quality of the partnerships forged. At the end of 2022, Nel had 3.1 billion crowns (about 300 million euros) in cash and agreements with many leading manufacturers. Its position as world leader in the sector puts the group in pole position for the major electrolyser projects of the future, both in Europe and in the United States.
Nel is one of the reference files for investors looking for the rising stars of hydrogen, with the risks that are naturally associated with it.