Green Hydrogen Systems A/S: Cost-Cutting and Restructuring for a Sustainable Future

Green Hydrogen Systems A/S, a leading player in green hydrogen production, has recently announced significant cost-out and restructuring initiatives. These moves aim to enhance the company's competitiveness, adjust guidance for 2024, and strengthen its capital base. This article explores the details of these initiatives and their potential impact on the company's future.

The company is initiating a combined cost-out and restructuring program, which includes a substantial reduction in production costs for its X-Series electrolyser product and a restructuring of its operations. The cost-out program targets a 40-50% reduction in production costs, which is expected to be achieved by 2026. This will enable the company to reach break-even earlier and improve the X-Series' competitiveness from the early stages of commercialisation.

The restructuring of operations aims to reduce the cost base by at least 40-50% compared to the current level. This will involve a reduction in the organisation, impacting approximately 100 salaried employees. The combined program is expected to lead to one-off implementation costs of DKK 100-150 million in 2024 and the first quarter of 2025.

The company's strategic shift towards exclusive focus on the X-Series will also affect its customer base and market position. The execution of the current A-Series product pipeline will proceed as planned, aiming to finalise manufacturing of the existing A-Series order backlog in Q1 2025. However, new sales of the A-Series will be discontinued, and the company will service already delivered A-Series units.

The delay in obtaining the first orders for the X-Series has negatively impacted the company's operational cash flow, leading to a reduction in capital reserves earlier than expected. To address this, the Board of Directors has decided to seek an initial strengthening of its capital base with an amount of up to DKK 300 million to be completed before the end of 2024. An additional capital increase of similar or increased size is expected to be necessary by the summer of 2025.

In conclusion, Green Hydrogen Systems A/S is taking proactive measures to address the slower-than-anticipated market adaption of green hydrogen technology and the development of its X-Series electrolyser product. By implementing significant cost-out and restructuring initiatives, the company aims to enhance its competitiveness, adjust guidance for 2024, and strengthen its capital base. These moves are crucial for the company's long-term success in the rapidly evolving green hydrogen market.