Last time we looked at NEL ASA, the Norwegian Hydrogen company, well-known for electrolysis (making hydrogen from electricity). Now it will be Powercell Sweden AB. Technologically it’s the counterpart of NEL ASA, because the company manufactures fuel cells, generating electricity from hydrogen. Actually it was a Volvo spin-off.
I picked this one as the second company to populate the 3D-graph, because then I won’t forget to warn you that I own some shares in Powercell Sweden AB as well. Again, there is no relationship with this blogpost, as its main purpose is to demonstrate the power of our 3D-graphs. No advice on investments is given whatsoever.
Back to the annual reports of Powercell. What do they tell us? Of course it’s again 2016, 2018 and 2020 we will take. For some reason the one for 2018 was in Swedish, but with all the standardised formats it’s not an issue and then Swedish is similar to Norwegian. After putting the numbers in a spreadsheet and saving it as a .csv, the 3D-graph was generated within a couple of seconds and a few mouse-clicks. The result is all about ratios: equity to total assets, revenue to equity, profit (or loss) to revenue and so on Remember: the yellow height is the revenue – the red loss comes on top of it, the width is equity and the depth is total assets).
Double-clicking the screenshot will open the 3D-graph in your browser. Beware: thegraph haw so many companies that zooming out is necessary to see the whole picture! Clicking the right mouse-button and moving the mouse up and down at the same time, will zoom the graph in and out. For maniputalion of this 3D-graph: Clicking left while moving the mouse will tilt the graph in different directions. Double clicking in the graph translates it and readjusts the centre at the same time. Just try it – If you don’t know how to get the normal position back, refresh the page in your browser.
From the front-side we can see the ratio of the revenue (height) to the equity (width). It’s rather low, meaning that the company may be rich, but doesn’t sell a lot. Is the money going to R&D or to marketing?
If we compare this revenue to equity ratio with the automotive companies from an earlier series or the series on the big tech industry, the differences are very clear!
What do we see with the two companies next to each other? Well, Powercell started out about as less than a tenth of NEL ASA for all the directions, but is growing faster now. As a result it was only six times smaller in 2020 when is comes to revenue. Neither of these companies show any profit. The red roofs are indicating the additional expenditures on top of the revenue, making the total heigtht of the building equal to the total costs. The revenue is just not enough to cover the costs – far from it – so there is a big loss!
Yet this is quite normal for a new technology struggling to get accepted by the market. During the dotcom bubble a lot of companies were burning money and also Tesla was not profitable for a long time. However, the red roof being more or less half of the building’s height means that the total costs are about twice the revenue. Normally this would mean an evaporating equity (the width of the building), but these two companies have something more in common.
Looking from above their shape is not completely square, but close to it. This means that the equity (again: the width of the building) is rather close to the total assets (the depth). The difference between total assets and equity is (usually) total liabilities and being close to a square means that hardly any liabilities like loans or accounts payable are in place. Of course this makes sense, because no bank will lend money to a very risky business and the money has to come from investors who will be shareholders. This industry may be on the verge of a breakthrough and people who believe in it are willing to bring their money in to make it happen. However, nothing is guaranteed!
Short tutorials, explaining different parts of AnRep3D are available at our Youtube-channel
The white-paper and its inspirational graphs can also be downloaded from the homepage of our website.
Follow @AnRep3D on Twitter, to be informed about new posts.