The IPOX® Watch - IPO Pre-Launch Analysis: Thyssenkrupp Nucera
COMPANY DESCRIPTION
Thyssenkrupp Nucera, formerly known as Thyssenkrupp Uhde Chlorine Engineers, is headquartered in Dortmund, Germany, and was established as a standalone company in 2013 as a Joint Venture between Thyssenkrupp Industrial Solutions and Italian electrolysis specialist Industrie De Nora, which is a member of the IPOX® 100 Europe Index (ETF: FPXE). The firm is a leading provider of hydrogen and chlorine production technologies and offers facilities for Alkaline Water Electrolysis (AWE), which is described as the only available solution to produce green hydrogen at an industrial scale in the range of multihundred megawatts up to several gigawatts. The firm has installed plants to produce more than 10 GW of hydrogen in the chemical industry.
BUSINESS MODEL
Thyssenkrupp Nucera generates revenue through the engineering, procurement, and construction of electrochemical plants. The company's primary product is its water electrolysis technology, which is used to produce green hydrogen. This technology is sold to industries that require hydrogen for their operations, including various industries transitioning to more sustainable energy sources. Current projects include Saudi Arabia's NEOM infrastructure project (>2 GW installation), a hydrogen production facility for Shell (200 MW), Brazilian fertilizer firm Unigel (240 MW) and Europe's first green steel plant H2 Green Steel (700 MW). Major customers in the chlorine production segment include German chemical giant BASF and materials firm Covestro. EBIT from the hydrogen production stream is expected to break even in FY 24/25, after which the company is expecting accelerating profitability.
Thyssenkrupp Nucera also plans to generate income from services throughout the plant’s life cycle, from start-up to on-site support. Here, revenue from services is expected to ramp up 6-8 years after installation. Nucera is also involved in research and development activities aimed at optimizing cell and stack design for electrolysis, which could lead to future revenue opportunities.
GROWTH STRATEGIES
Thyssenkrupp Nucera's growth strategies encompass: 1) Expansion of its green hydrogen production capabilities through the construction of large-scale plants; 2) Continuous innovation and optimization of its electrolysis technology; 3) Strengthening its service business over the entire plant life cycle, which accounts for around half of its revenues; and 4) Capitalizing on the dynamic growth potential of the green hydrogen market, including a strong order intake that promises significant growth.
USE OF IPO PROCEEDS
Thyssenkrupp Nucera is expected to use the net proceeds of the Initial Public Offering to fund future plant constructions and to further its research and development activities in electrolysis technology.
IPO HISTORY
Thyssenkrupp Nucera will make its debut on the Frankfurt Stock Exchange on July 7, 2023, The company offered its shares at an issue price of 20 EUR per share, implying a market capitalization of EUR 2.5 billion, below the expected valuation of over 3 billion. The expected free float, assuming the full exercise of the Greenshoe Option, is 24%. The designated sponsor for the company's shares is Baader Bank, and the paying agent is Commerzbank.
