Company Announcements

The information contained within this Announcement is deemed by Invinity Energy Systems plc to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

18 December 2023

Invinity Energy Systems plc

("Invinity" or the "Company")

Year-End Business Update

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF), a leading global manufacturer of utility-grade energy storage, is pleased to provide an update on current trading and business activities.

Financial & Corporate

The Company confirms that it expects to recognise a minimum total income of £21.6m for 2023, a 500% increase on the prior year, and therefore deliver financial results broadly in line with expectations for the full year.

Invinity continues to see strategic partnerships and investment as an important pillar of its future corporate growth. The Company remains extremely encouraged by the level of interest shown and resources being deployed by potential strategic partners into the due-diligence process and can confirm that it is currently in detailed discussions with a number of parties which it would anticipate concluding during Q1 2024.

The Company continues to manage its cash resources prudently as it invests in its next-generation product, code-named "Mistral". As a result of receipts from existing customers and factoring in forecast receipts from current product deliveries and recent project wins, including the recently announced Mistral deliveries scheduled for 2024 and 2025, the Company currently anticipates having sufficient cash resources into H2 2024.

Next-generation product development

Further to the update provided on 25 September 2023, Invinity confirms that the development programme for its next-generation product continues to progress well, in line with the expectations of both Invinity and development partner Gamesa Electric. The first Mistral prototype has been assembled and initial validation testing is in process at the Company's facility in Vancouver, representing an important development milestone ahead of the anticipated launch of the product next year. To date, Invinity has announced funding for almost 100 MWh of orders for Mistral and expects to announce further orders in due course.

Invinity is also pleased to announce that it has recently been awarded a CAD $74,700 research grant from the National Research Council of Canada which will be used to advance the Company's vanadium electrolyte development programme.

Commercial

The Company's pipeline continues to grow with opportunities to deploy nearly 6 GWh of Invinity batteries currently in various stages of commercial discussions.

During the second half of 2023, management has been impressed by the increase in volume and scale of opportunities which have entered into the Qualified segment of the Company's pipeline.

While the Company's policy remains to not disclose customer details until contracts are agreed, Invinity's qualified pipeline includes multiple new opportunities in the 200 - 500 MWh size range across North America, Australasia and Europe. In each case, the developers of these projects have found the Company's technology to be highly appropriate for their needs following review of existing Invinity project data or site visits and are now actively engaged with Invinity's commercial team to scope and specify a solution.

The increased size of these opportunities naturally leads to a longer sales cycle than Invinity has previously experienced. While there can be no guarantee that Invinity will be successful in securing these projects, the Company views the growth in average potential order value as a strong positive which supports Invinity's future corporate projections.

Invinity's current commercial pipeline as at 30 November 2023 is detailed below. The Company is pleased to note a 25% total increase across the pipeline since last reported. Many of these opportunities were generated as a result of the Company's presence at key industry events in the UK, U.S. and Australia during H2 2023. Material increases have been observed across all categories of the pipeline apart from Advanced, the reduction in which is primarily due to the advancement of one large U.S. project into the Base category and two projects being assigned back to the Qualified group due to the extension of project timelines.

Update on contracting for grid-scale funded projects in the UK and U.S.

Invinity continues to make progress towards a final investment decision with its preferred project partner in respect of the LODES project which was awarded £11m of matched funding by the UK Government's Department for Energy Security and Net Zero (DESNZ) in April 2023.

The Company is progressing towards concluding final contracts for the six projects totalling 84 MWh which were awarded funding from the U.S. Department of Energy ("DOE") in September 2023. Invinity has conducted a site visit and formal project kick-off for the first of those projects and similar steps on the remaining five projects are scheduled for early 2024.   

Operational

The Company is pleased to confirm that it has achieved manufacturing output in line with its production plan for the year. Key global production and fulfilment statistics for the year to date include:

§ 720 cell-stacks manufactured at the Company's facilities in the UK and Canada;

§ 103 Invinity VS3 batteries assembled, equal to 23.7 MWh of battery capacity; and

§ More than 28 MWh of batteries shipped in the year to date.

Invinity's batteries in the field continue to deliver strong performance for the Company's customers with more than 1.3 GWh of energy discharged from Invinity's batteries connected to the UK grid alone in the year to date.

Larry Zulch, Chief Executive Officer at Invinity said:

"COP 28 and the U.S. DOE's recent announcement of funding for non-lithium long-duration storage development are but the latest confirmations that global demand for the kind of energy storage represented best by vanadium flow batteries is undiminished. Dramatic increases in our qualified sales pipeline for a product still in development underscores the opportunity. We continue to advance ever-larger deals for our proven VS3 product as well. Together, this interest reinforces market demand for our technology at ever-greater scale although larger projects often take longer than we wish to close.

"Our challenges are two-fold: get the support of strategic partners as previously disclosed and complete the development of Mistral. For the former, we have been in deep discussions with multiple parties, and though the process is not rapid, particularly in a difficult market environment, I'm highly confident in our ability to formalise an appropriate relationship in the next few months.

"The development of Mistral is on track. I'm very proud of our product development team and the progress they are making toward a product that will be transformational for Invinity. I firmly believe that the official launch of Mistral next year will be the most significant announcement in the entire stationary energy storage market in all of 2024.

"I'm pleased with our operational performance having delivered the largest flow batteries ever deployed in multiple countries. Invinity has set out to do something that has not been done before: make flow batteries into a proven, factory-built product that transforms renewable energy into the kind of dependable resource it must be to help power the future low-carbon world. Invinity is well underway in the difficult but promising transition from a development-stage company, to making significant revenue, to a profitable company with class-leading products."

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Notes to Editors

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF) manufactures vanadium flow batteries for large-scale, high-throughput energy storage requirements of business, industry and electrical networks.

Invinity's factory-built flow batteries run continually with no degradation for over 25 years, making them suitable for the most demanding applications in renewable energy production. Energy storage systems based on Invinity's batteries are safe, reliable, and economical, and range in size from less than 250 kilowatt-hours to tens of megawatt-hours.

Invinity was created in April 2020 through the merger of two flow battery industry leaders: redT energy plc and Avalon Battery Corporation. With over 70 MWh of systems already deployed or contracted for delivery across over 79 sites in 15 countries, Invinity is active in all major global energy storage markets and has operations in the UK, Canada, USA, China and Australia. Invinity Energy Systems plc is listed in the UK on AIM and AQSE and trades in the USA on OTCQX.

To find out more, visit invinity.com, sign up to our monthly Investor Newsletter here or contact Investor Relations on via +44 (0)20 4551 0361 or ir@invinity.com