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 powerintensive 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:
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
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 [IFRS] | 2014 1 st half-year | 2013 1 st half-year |
Revenue | 5.55 | 7.91 |
EBITDA | -7.58 | -4.95 |
EBIT | -10.21 | -5.88 |
Profit / (Loss) | -10.82 | -6.52 |
About Leclanché
Headquartered in Switzerland, Leclanché SA is a leading provider of high-quality energy storage solutions designed to accelerate our progress towards a clean energy future. Leclanché’s history and heritage is rooted in over 100 years of battery and energy storage innovation and the Company is a trusted provider of energy storage solutions globally. This coupled with the Company’s culture of German engineering and Swiss precision and quality, continues to make Leclanché the partner of choice for both disruptors, established companies and governments who are pioneering positive changes in how energy is produced, distributed and consumed around the world. The energy transition is being driven primarily by changes in the management of our electricity networks and the electrification of transport, and these two end markets form the backbone of our strategy and business model. Leclanché is at the heart of the convergence of the electrification of transport and the changes in the distribution network. Leclanché is the only listed pure play energy storage company in the world, organised along three business units: stationary storage solutions, e-Transport solutions and specialty batteries systems. Leclanché is listed on the Swiss Stock Exchange (SIX: LECN).
SIX Swiss Exchange: ticker symbol LECN | ISIN CH 011 030 311 9
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.
Contacts
Media Switzerland /Europe:
Thierry Meyer
T: +41 (0) 79 785 35 81
E-mail: tme@dynamicsgroup.ch
Media North America:
Henry Feintuch / Ashley Blas
T: +1-914-548-6924 / +1-509-494-4053
E-mail: leclanche@feintuchpr.com
Media Germany:
Christoph Miller
T: +49 (0) 711 947 670
E-mail: leclanche@sympra.de
Investor Contacts:
Anil Srivastava / Hubert Angleys
T: +41 (0) 24 424 65 00
E-mail: invest.leclanche@leclanche.com