DGAP-Adhoc: Leclanché SA reports first half-year 2014 financial results
Leclanché SA / Key word(s): Half Year Results
04.09.2014 07:01
Release of an ad hoc announcement pursuant to Art. 53 KR
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Leclanché SA reports first half-year 2014 financial results
- Consolidated revenues of CHF 5.6 million
- EBITDA for H1 2014: CHF -7.6 million
- New Chief Executive Officer as of June 1st 2014
- Successful launch of energy storage products
- Orders/shortlisting for greater than 1 MWh industrial storage solutions
- Tight liquidity, launch of a new financing round in cooperation with
its major shareholders
- Publication of Interim Report
Yverdon-les-Bains, Switzerland, 4 September 2014 - Leclanché S.A. (SIX
Swiss Exchange: LECN), specializing in the production of large-format
lithium-ion cells and energy storage solutions, announced today its
unaudited financial results for the first half-year 2014. Total
consolidated revenues reached CHF 5.6 million for the six months ended 30
June 2014, a 29.8% decrease from CHF 8.4 million in the same period last
year. This decrease in revenues directly led to an increased EBITDA loss
amounting to CHF -7.58 million for the period, compared to CHF -4.95
million in 2013. This loss also reflects an increase in personnel costs to
intensify marketing and selling activities linked the launch of Leclanché's
home and industrial energy storage solutions. Due to higher depreciation
and amortization costs, the net loss amounted to CHF -10.8 million versus
CHF - 6.5 million in 2013.
The increased loss recorded during the period reflects largely lower
revenues from Leclanché's stationary business as the home storage and the
new generation of industrial energy storage products were only launched
respectively in March and July 2014. This loss also reflects the investment
made by the company to implement its strategic plan around four main
objectives:
(a) Continued implementation of the turnaround plan, leading to a long term
growth strategy;
(b) Commercial ramp up of its mass production line it its factory in
Germany;
(c) Launch of Leclanché's home storage product in Europe and launch of a
range of industrial storage products in the second half of the year;
(d) Continued development of channels to market and growing a sales
pipeline for these products
A new growth plan
A number of significant milestones were recorded in this respect so far
this year. This includes an increase in commercial orders in particular in
the stationary business, including an industrial storage solution for a
research project conducted by Leclanché S.A. at the Ecole Polytechnique
Federale de Lausanne (EPFL). The company also signed an agreement with
Saint-Gobain to co-develop an enhanced separator material leveraging
Leclanché's current technology and patents.
Under the leadership of its new CEO appointed 1 June 2014, Anil Srivastava,
Leclanché is introducing a new growth plan that will position the company
as a complete Battery System Provider, significantly increasing Leclanché's
addressable market and with the ability to address the full spectrum of
power-intensive and energy-intensive applications.
Tight liquidity
The company is still operating under tight liquidity conditions. The Board
is therefore firmly of the view that it is necessary, based on its current
business plan, to secure additional medium-term financing to meet its
working capital requirements and the capital required to scale the business
operations as envisaged by the new growth strategy.
Since June 30, 2014, the company has received an additional financing of
CHF 1.6 million under the convertible loan agreement already announced with
Oakridge. There is a further kCHF 400 receivable under this loan agreement.
Under the current letter of support from Precept, valid until March 2015,
Leclanche has so far received CHF 4.6 million under the convertible loan
agreement with Oakridge. However, we have a short-term need to translate
the intent of the support letter into formal agreements against which
Leclanché can draw down further funds to satisfy the company's working
capital requirements for at least the next twelve months and until EBITDA
breakeven is achieved.
Leclanché is therefore in active discussion with its major shareholders to
secure this commitment and extend the current Letter of Support at least
until 31 March 2016. Further, Precept, as the major shareholder, has given
its agreement to co-operate with Leclanché to diversify its financing base,
in order to further satisfy working capital and growth capital
requirements, and to work with the Company on its fund raising efforts on a
reasonable efforts basis.
Strategic outlook
The market for large scale energy storage applications in Europe and other
key regions is developing strongly and Leclanché is participating in this
growth. This market is evolving at a rapid pace not just in Europe, but in
North America and Asia as well. In particular the company notes the
following trends and key drivers:
- The return on investment proposition ("ROI") is clear and compelling
for photovoltaic (PV) and diesel-coupled Battery Energy Storage Systems
(BESS). Leclanché's recent shortlisting for an island storage solution
will provide the company with an important reference for expanding such
packaged solutions in selected markets worldwide
- The addressable market for grid-coupled BESS providing ancillary
services such as frequency and voltage regulation, where Leclanché's
technology is particularly well suited, is a multi-billion market.
However it must be noted that the contracting structure and
remuneration policy for such services is still evolving in key markets
such as Germany, the UK and California in the USA. Market reports
indicate this market will be in a commercial procurement phase within
two years
- The electrified transport and industrial machinery sectors also exhibit
compelling ROI business cases. The new growth strategy envisages the
introduction of high energy-density chemistries which will enable the
company to address this large growth market.
- International expansion remains a top priority for the company.
Leclanché will continue to pursue its current Joint Development
Agreement with Oakridge, and other strategic alliances, to establish a
strong go-to-market and delivery partnership in the US and Canada.
Leclanché also continue to work with Precept in their pursuit of a
Battery Industry Consolidation Platform.
Guidance
Leclanché's objective remains to achieve EBITDA break-even before the end
of 2015, subject to a successful completion of the turnaround plan and the
successful implementation of the new growth strategy. The company is
scaling up its operations, particularly in sales and delivery. It is
encouraged by the extent and number of opportunities it is engaged in, but
is also aware of the significant execution risk this carries.
Key achievements and events in 2014
- In February 2014, after several months of test running and validation,
the company commenced volume production of A4 cells at its state-of-art
factory in Willstaett, Germany.
- The process of water-based coating of electrodes in volume production
was successfully implemented during this period, which Leclanché
believes is a unique industry achievement.
- Leclanché's new Head of Production started in January 2014. By June 30,
with sufficient cells produced to fulfil expected orders in H2 2014,
the company entered a period of holiday shutdown. Production has now
been restarted and will be maintained at a level to produce the cells
needed for delivery in H1 2015.
- Leclanché has developed a world leading ceramic safety separator, which
is a key element of the cell construction as it forms a strong barrier
between the anode and cathode materials that are the two main active
components of a cell. In June 2014 the company entered into an
agreement with Saint-Gobain to co-develop an enhanced separator
material leveraging Leclanché's current technology and patents. As a
part of the agreement, Leclanché will outsource the manufacture of the
existing separator to Saint-Gobain and work on this has commenced.
- Developing sales channels: the company has made significant progress
for its energy storage products including the recruitment and training
of a significant number of PV installers in Europe for home storage
systems and large systems integrators for industrial storage. Leclanché
is in active discussions to expand this network into the USA, Canada
and the Middle East.
- With the initial phase of the turnaround plan successfully implemented,
in June the Board of directors appointed Mr Anil Srivastava as the new
Chief Executive Officer. In addition to discharging the normal duties
of chief executive, the Board has asked M. Srivastava to deliver a new
growth plan providing improved market offer and a path to sustainable
profitability.
- Pilot order received by the portable business for off-grid street
lighting solution using Leclanché's Titanate A4 cells.
Financial overview half year 2014
While revenues from the distribution business remained stable, those from
the stationary business declined significantly, pending the launch of
Leclanché's home and industrial storage products. The launch of these
products took place respectively in March and July 2014. With a large long
term contract drawing to a close, revenues from the portable business
declined accordingly in the first half of 2014. EBITDA from the portable
unit was slightly negative during the period under review at CHF - 0.2
million. EBITDA for the distribution business showed a positive
contribution of CHF 0.1 million, while the loss from the stationary
business was CHF - 3.2 million due to lower grant revenues and higher
direct costs.
In the first six months of 2014, the company operated under tight liquidity
conditions. Available cash and undrawn facilities at 30 June 2014 were CHF
564k (2013: CHF 3.06million). In addition, the Convertible Loan from
Oakridge has been increased by a further CHF 2 million in August 2014, of
which CHF 400k is currently awaited from Oakridge.
Leclanché S.A. Consolidated Figures for the 1st half-year 2014
in million CHF 2014 2013
[IFRS] 1st half-year 1st half-year
Revenue 5.55 7.91
EBITDA -7.58 -4.95
EBIT -10.21 -5.88
Profit / (Loss) -10.82 -6.52
Publication of interim results
Leclanché SA published today its Interim Report 2014, which is available in
pdf format on the company's web site:
http://www.leclanche.eu/page/financial-reports
Analyst and investor call
Leclanché S.A. will discuss its first half-year 2014 financial results
during a live audio webcast taking place Thursday, September 4, 2014 at
11:00 AM CET.
The audio webcast, including the slides, will be accessible on the
Leclanché web site and by using the following link:
http://leclanche040914-live.audio-webcast.com (ID: leclanche0914)
A replay of this teleconference will be made available one hour after the
conference.
Analysts and investors wishing to ask questions during the webcast should
use the following conference-ID: 559 08 92 and the dial-in number: +41(0)44
800 9658
About Leclanché
Leclanché's strategy is to become one of the leading lithium-ion cell
producers and solution providers for energy storage systems in Europe. Its
strategic priorities are to develop and market energy storage products for
home, industrial markets and grid applications and to grow its existing
businesses of developing portable energy storage systems for military,
medical and industrial applications. It also includes providing a range of
professional energy storage systems to a diversified customer base. Through
participation in research consortia focusing on hybrid and E-mobility
applications, Leclanché is positioned to take advantage of new market
opportunities.
Through a unique, patented ceramic separator technology and focus on
lithium-titanate technology, Leclanché manufactures large-format
lithium-ion cells, optimized for safety and cycle-life, in a fully
automated production process. The newly installed production line will have
an annual capacity of one million cells or 76 MWh.
Leclanché was founded in 1909 in Yverdon-les-Bains. Through the integration
of a spin-off from the Fraunhofer-Gesellschaft in 2006, the company evolved
from a traditional battery manufacturer to become a leading developer and
manufacturer of lithium-ion cells in Europe. Leclanché currently employs
more than 100 staff and is listed on the SIX Swiss Exchange (LECN). The
company has its headquarters in Yverdon-les-Bains (Switzerland) and
production facilities in Willstätt (Germany).
www.leclanche.eu
Media contact:
Christophe Lamps, Dynamics Group S.A.: Telephone: +41 79 476 26 87,
cla@dynamicsgroup.ch
Disclaimer
This press release contains certain forward-looking statements relating to
Leclanché's business, which can be identified by terminology such as
"strategic", "proposes", "to introduce", "will", "planned", "expected",
"commitment", "expects", "set", "preparing", "plans", "estimates", "aims",
"would", "potential", "awaiting", "estimated", "proposal", or similar
expressions, or by expressed or implied discussions regarding the ramp up
of Leclanché's production capacity, potential applications for existing
products, or regarding potential future revenues from any such products, or
potential future sales or earnings of Leclanché or any of its business
units. You should not place undue reliance on these statements. Such
forward-looking statements reflect the current views of Leclanché regarding
future events, and involve known and unknown risks, uncertainties and other
factors that may cause actual results to be materially different from any
future results, performance or achievements expressed or implied by such
statements. There can be no guarantee that Leclanché's products will
achieve any particular revenue levels. Nor can there be any guarantee that
Leclanché, or any of the business units, will achieve any particular
financial results.
04.09.2014 News transmitted by EQS Schweiz AG.
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Language: English
Company: Leclanché SA
Av. des Sports 42
1400 Yverdon-les-Bains
Switzerland
Phone: +41 (24) 424 65-00
Fax: +41 (24) 424 65-20
E-mail: investors@leclanche.com
Internet: www.leclanche.com
ISIN: CH0110303119, CH0016271550
Valor: A1CUUB, 812950
Listed: SIX
End of Announcement EQS Group News-Service
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