The PwC 2007 Fuel Cell Survey, released in conjunction with the Tenth Grove Fuel Cell Symposium in London, UK, examines the 2006 year-over-year financial results of the world's 26 publicly-traded companies whose primary business involves one or more of fuel cell production, systems integration, and/or related fuelling infrastructure. The PwC survey, now in its fifth year of publication, included six new companies: Heliocentris Fuel Cells AG (Germany); Oxford Catalysts Group plc (UK); Proton Power Systems plc (UK); Protonex Technology Corporation (US); SFC Smart Fuel Cell AG (Germany); and Zongshen PEM Power Systems Inc. (Canada).

Almost all of the revenues reported in the survey were from North America-based companies. Quantum Fuel Cell Systems (US$193 million) retained its spot as top revenue earner in the PwC Fuel Cell List for the second consecutive year, followed by Ballard Power Systems (US$50 million), and Distributed Energy Systems Corp (US$45 million). Outside of North America, German company Smart Fuel Cell reported the most revenues (US$8 million), followed by Heliocentris Fuel Cells, also of Germany (US$2.1 million), and UK-based Proton Power Systems plc (US$1.9 million).

None of the companies in the 2006 survey reported profits. Aggregate losses of the sector increased to US$644 million in 2006 from US$371 million in 2005.

"The information PwC reviewed for the survey shows that, beyond the financial numbers, fuel cell companies are working hard to deliver products that meet customer demands for performance and cost," said John Webster, a PwC partner and co-author of the survey. "Certain niche markets have begun to open for fuel cell products and we expect to see product development and cost reduction continue to challenge incumbent products."

The total spending on R&D in 2006 was US$213 million, relatively unchanged from the previous year. Companies in the PwC survey reported that this expertise was primarily focused on next generation products and refining technologies to lower costs, develop markets, and develop manufacturing capacity.

"The sector saw the public listing of five fuel cell companies in 2006, three on the AIM exchange in London and two on the Frankfurt Stock Exchange," said Alastair Nimmons, a director in PwC's Advisory Services practice, and co-author of the survey. "As we have seen in a few other sectors, European markets seem to have a longer term investment horizon, available capital for the fuel cell sector, and perhaps a keen appreciation of the future of clean technologies."

Global climate change is one more driver for the commercialisation of fuel cells, but has also shed light on other clean technologies such as wind, solar and bio-fuels. In some cases these technologies may compete for capital with the fuel cell sector.

Webster added: "There are and will be many opportunities for fuel cells to collaborate with other clean technologies. Ultimately, however, the entrepreneurial skill and drive of those building the sector will determine whether fuel cells become successful on a commercial scale. It is critical that the sector continues to refine its products and gain success in the early markets."

Other key findings from the PwC survey include:

    -   Overall market capitalisation for public fuel cell companies rose 20%
        in 2006 to US$3.8 billion. Ballard remained the most highly
        capitalised company at US$650 million, up 38% over 2005.

    -   Total net cash flow for the companies surveyed was negative
        US$71 million, an increase from negative US$12 million the previous
        year.

    -   Full time employment in the sector increased 10% to 3,434.

Copies of the full survey report are available on-line beginning today at: www.pwc.com/ca/fuelcellsurvey07. For more information on the PwC 2007 Fuel Cell Survey or to arrange an interview with the authors to discuss the findings, please contact Jim Nelson, PwC, Vancouver, at +1 (604) 806 7047, or via email: jim.nelson@ca.pwc.com.

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