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company confidential – 2017
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26 th July 2017 Yverdon-les-Bains, Switzerland 0 company - - PowerPoint PPT Presentation
26 th July 2017 Yverdon-les-Bains, Switzerland 0 company - - PowerPoint PPT Presentation
Annual General Meeting 26 th July 2017 Yverdon-les-Bains, Switzerland 0 company confidential 2016 Agenda 2016 Achievements 2016 Financial Summary 2016 Disappointments Solid foundation for growth Strategic transformation of
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- Micro-grids: renewable integration
- Grid stabilization and peak shifting
Leclanché addresses high growth end-markets
- Commercial, industrial & residential
- Solar lighting, medical, telecoms,
security & defense
- Branded consumer (selected markets)
Utility-scale generation & microgrids Commercial & industrial battery systems
Source: Navigant Research
- Fleets of buses, trains & trams
- Ferries and tugboats
- Forklifts, cranes, mining vehicles
eTransport
0.9 4.2 0.0 1.0 2.0 3.0 4.0 5.0 2016 2020 1.8 11.3 0.0 3.0 6.0 9.0 12.0 2016 2020 1.7 6.0 0.0 2.0 4.0 6.0 8.0 2016 2020
GWh GWh GWh
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Leclanché serves different markets with a common technology stack solution designed for higher margins
Proprietary Lithium Titanate Oxide (LTO) cells for leading performance in long-life and rapid-charge applications Proprietary G-NMC* cells for energy intensive applications
*Graphite anode and Nickel-Manganese-Cobalt cathode
Module design
eTransport
Asset planning & management software
Leclanché is no longer just an upstream Li-Ion technology provider. It is one of the most vertically integrated ESS provider in the world!
Third-party battery cells and other energy storage technologies
Battery management system (BMS)
Utility-scale generation & microgrids Commercial & industrial battery systems
Systems integration and engineering expertise
*Engineering Procurement and Construction
Solutions delivery as EPC*, including selective financing
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2016 Achievements
- 56% growth, in line with the guidance given
during the interim results
- 2.5x over the year 2014
Revenue
- 16X increase in order intake, currently >85
MWh Orders
- >450 MWh in Order Pipeline
- 22 MWh of projects under construction
Order Book
- Steady-state EBITDA Loss reduced by 54%
compared to 2015
- Reduced Capex by 35% over previous year
- Loss per share reduced by 28% vs. 2015
Reduction of loss
Secured USD 23M of project finance from SGEM, a Golden Partner controlled entity
- CHF 8M Equity in Marengo project in
Chicago
- USD 15M construction loan for IESO
project in Canada
Project Finance
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Agenda ▪ 2016 Achievements ▪ 2016 Financial Summary ▪ 2016 Disappointments ▪ Solid foundation for growth ▪ Strategic transformation of the business ▪ Outlook
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Annual Results 2016
2016 2015 Comments kCHF kCHF Sales of goods and services 28 067.1 17 882.5 1 First two IESO sites in Canada and Marengo project in the US Other income 454.1 325.5 Total income 28 521.2 18 208.0 Raw materials and consumables used
- 26 162.6
- 16 554.1
Personnel costs
- 19 381.2
- 14 297.2
2 Ful year impact of Belgium July 2015 acquisition + Leclanché North America staffing Other operating expenses
- 10 501.3
- 13 384.3
Earnings Before Interest, Tax, Depreciation and Amortization -27 523.9
- 26 027.6
Steady-state loss reduced by 50%, excluding one-time investments Depreciation, amortization and Impairment expenses
- 6 155.5
- 5 795.5
3 Impairment of Germany machinery damaged by the April 2016 fire Operating Loss
- 33 679.4
- 31 823.1
Finance costs
- 4 091.1
- 2 670.2
4 Capital raise commissions paid to financial institutions Finance income
- 0.5
Loss before tax for the year
- 37 770.5
- 34 492.8
Income tax 553.4
- 1 084.6
Loss for the year
- 37 217.1
- 35 577.4
Net Loss per share
- 0.87
- 1.21
INCOME STATEMENT
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Annual Results 2016 (Cont’d)
2016 2015 kCHF kCHF ASSETS Non-current assets 16'856.0 27'700.2 1 Damaged machinery write-off impact Current assets 35'613.8 12'562.2 2 CHF 21.5M Trade recevable balance TOTAL ASSETS 52'469.8 40'262.4 EQUITY AND LIABILITIES Share capital 72'005.2 56'854.5 Reserve
- 3'441.7
- 65'879.1
Accumulated losses
- 73'899.0
- 114'121.8
Total Equity
- 5'335.5
8'611.8 Convertible Loan 21'814.6 7'563.5 3 ACE/JADE C-Note that expired on 30-Jun-17 Other liability (DBO, DTL...) 11'666.9
- 9'930.8
Borrowings 500.0 1'250.0 4 UBS/Cautionnement Romand Loan Trade and other payables 23'823.8 12'906.3 5 Cell raw material + Module assembly + Advances from customers 24'323.8 14'156.3 Total Liabilities 57'805.3 31'650.6 TOTAL EQUITY AND LIABILITIES 52'469.8 40'262.4
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Agenda ▪ 2016 Achievements ▪ 2016 Financial Summary ▪ 2016 Disappointments ▪ Solid foundation for growth ▪ Strategic transformation of the business ▪ Outlook
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The ‘rebuilding and renovation work’ underway from 2015 through to 2017
Temporary slowdown in 1H-2017. Work resumed now
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Leclanché – historical revenue development
Sources: Bloomberg (2000A-2016A), company information (2017F) 50.2 48.9 39.7 37.5 31.2 25.6 13.3 15.2 13.1 16.3 15.1 13.4 16.1 14.9 10.8 18.2 28.5 43.1 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017F
Revenue (CHFm) Significant restructuring / reorganisation period New management era
Discontinuation of legacy activities, e.g. ̶ Capacitors (2003) ̶ Alkaline batteries (2005) ̶ Lead acid batteries (2007) Refocused offering with building momentum and customer traction
Funding Issues
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Leclanché – historical share price performance
Source: Bloomberg as at 25 April 2017 Management enhanced and investment made to reposition as vertically integrated energy storage solution provider 5 10 15 20 25 30 35 40 45
Share price (CHF)
Leclanché acquires production capacity for lithium-ion batteries in 2006 Construction of Willstatt plant in Germany Expansion of lithium-ion production capacity and specialisation in high performance batteries Discontinuation of small-format manufacturing at Itzehoe plant Restructuring towards integration and modern technologies Leclanché rides wave of substantial hype in energy storage sector towards 2009/2010 Cooling of market hype and Leclanché financial difficulties Significant restructuring / reorganisation Major capital raise (at a premium) Series of further capital raises (discounted) Company warns market it is facing liquidity issues 2009 capital raise sees speculation by new institutional investor, driving up Leclanché’s share price
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2016 Disappointments Impacting Operations in 1H-2017
- Accumulated loss from the past, and the
delay in raising fresh equity, has led to a technical insolvency situation under Swiss CO725.2
- Needed to negotiate extension of the
Convertible Loan provided by ACE and Jade group which fell due on 30th June 2017
- ACE/Jade have accepted to roll-over 47% of
their Convertible Loan until 30th June 2018
- Golden Partner, the largest shareholder of
Leclanché, has purchased 53% of the Convertible Loan to ACE/Jade with a 30th June 2018 maturity
- Business operations nearly frozen in 1H-
2017 due to tight liquidity situation
Major Impact
- Only CHF 11M raised vs. target CHF 30M
Equity raise from institutional investors
- Positive endorsement through entry of
such as Barings and Herald
- Primary reasons for the limited success
- f the fund raise
- Long history of loss
- Low market cap despite so much progress
- ver past two years
- Small float/ Low liquidity in stock trading
- Confusing business model/ too many
markets addressed
- Successful Due Diligence for a CHF 75M
Corporate and Project Finance Debt Facility, but failed to close due to insufficient Equity
Fund Raise
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Agenda ▪ 2016 Achievements ▪ 2016 Financial Summary ▪ 2016 Disappointments ▪ Solid foundation for growth ▪ Strategic transformation of the business ▪ Outlook
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‘the bump’ in 1H 2017, doesn’t affect Company's journey to a Profitable High Growth
Golden Partner has undertaken to provide equity of CHF 27.5M comprising of the following: ▪ Investment of CHF 3.5M in equity ▪ New investment of CHF 12M through Mandatory Convertible Note (MCN) and undertaking to convert it by mid-September ▪ Further undertaking to convert CHF 12M of the Convertible Loan and/or inject equivalent equity by end August Bruellan has undertaken to provide equity of CHF 4.5M comprising of the following: ▪ New investment of CHF 3M through Mandatory Convertible Note (MCN) and undertaking to convert it by end- September ▪ Conversion of CHF 1.5M MCN in July
✓ Order book totalling 95 MWh through 2018 ✓ >3x 2016 deliveries planned in 2018 ✓ >450 MWh qualified pipeline currently
▪ Rights Issue / Large Private Placement / Asset Sale planned in early October 2017 with aim to raise further CHF 30M (hence the need approve the creation of new shares) ▪ Complete ongoing stationary storage projects and accelerate agreements in the eTransport business ✓ >30 MWh projects under construction and delivery ✓ Significant framework agreements signed in the eTransport business, expected to generate >150 MWh per annum volume or >USD 45M revenue per year, from 2019 onward
Step #1: Cure CO725.2 through capital injection Step #2: Resume Growth in 2H-2017
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Continued growth momentum in the first half of the 2017
Utility-scale generation and micro grid applications - Forecast to grow 48% annually to 4.2 GWh1
▪ EUR 1M order from a leading innovator in the Netherlands for a Hybrid Energy Storage Solution with Leclanché ESS and Flywheel ▪ CAD 17M project for world’s first battery-based Electric Vehicle Charging Station Network in Canada, is being partially funded by a CAD 8M repayable contribution from Natural Resources Canada (NRCan) under the Canadian Energy Innovation Program ▪ EUR 630K order for LTO Battery Packs for EV Chargers in London
“Demand for energy storage from the utility sector will grow more than the market
anticipates by 2019-20…….storage is expected to grow from a less than $300 million a year market to as much as $4 billion in the next two to three years. Ultimately there’s about a $30 billion market for storage units, with capacity for around 85 gigawatt-hours of power
- storage. That’s enough electricity to light up most of the New York City metro area for a
year.”
- Morgan Stanley’s Utility and Clean Tech analyst, Stephen Byrd and Shared Mobility &
Auto analyst, Adam Jonas: Forbes, July 14th 2017.
(1) According to Navigant Report
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Continued growth momentum in the first half of the 2017 (Cont’d)
Commercial & Industrial battery systems - Forecast to grow 48% annually to 11.3 GWh1
▪ Leclanché established 4 MWh standardized System for Canadian C&I Market – 1st order secured; 2nd order awarded ▪ Multi million orders from Armasuisse for Specialized Battery Packs
eTransport (including buses, ferries, forklifts, trains and industrial material handling) - Forecast to grow 37% annually to 6 GWh1
▪ EUR 800K order for Automated Guided Vehicles (AGV) in Europe ▪ Framework Agreement with a leading Automotive Integrator in India to provide Battery Packs for Electric Vehicles ▪ Joint Development Agreement with Skoda envisaging delivery of Battery Packs for 500 Electric Buses
(1) According to Navigant Report
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Agenda ▪ 2016 Achievements ▪ 2016 Financial Summary ▪ 2016 Disappointments ▪ Solid foundation for growth ▪ Strategic transformation of the business ▪ Outlook
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We have transformed the Company into fully vertically integrated Energy Storage Systems Integrator
Restructure, sharpen focus and increase productivity per person ▪ Wholly owned subsidiary Stationary Storage Business Unit ▪ Wholly owned subsidiary eTransport Storage Business Unit ▪ Considering strategic options for rest of the legacy business ▪ All IP and knowhow held in the parent Leclanché SA 2017 Results will be adversely impacted by the delayed funding in 1H-2017 and until completion of the funding underway Increase margins, increase capital efficiency ▪ Acquire ‘the identified Energy Management Software’ asset, expected to generate additional 3.5% margin ▪ Make & Buy sourcing to
- ptimize gross margin
▪ Senior managers agree to “transform significant portion
- f their compensation into
stock option” until the EBITDA breakeven is reached in 2019 Fully fund the Business Plan ▪ Second listing in North America by Q2 2018 ▪ Strategic partnership for non- recourse project finance ▪ Open capital of the operating Business Units to strategic shareholders at an appropriate time
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Restructuring framework, organization announcement by Q4-2017
- 1. Capital Lite: Product
Supply Co
- 2. Opex-optimized
- rganizational
structure
- 3. Unlock the “Value” by
market segment: dedicated Business Units focused on Stationary Storage Solution and eTransport
- 4. Strategic options
under consideration for the legacy businesses (Portable,
Distribution and Home storage)
Pr Produ
- duct
ct Su Suppl pply y Divi Divisi sion
- Retain ownership of Cell IP; Cell R & D and Production; Module Design
and in-house Module Assembly
- Long-term Master Supply Agreements with committed minimum per
annum volume, initially with Commercial Business Units (BU)
Sta Stati tionar ary St Stora
- rage BU
BU
- 95 MWh Backlog
- In-house EMS and Systems
Integration capabilities
- Turnkey EPC business model,
with strategic partnerships with ‘Owner and Operators’ of ESS assets
- Project Sales / Liquidity Events
- Secure access to >USD 100M
Project Finance Pool: build on significant progress in Project Finance
- Includes C & I and EV Chargers
eT eTra ransport BU BU
- Framework agreements
covering more than 150 MWh
- f Battery Pack shipments
from 2019
- In-house BMS and Drive Train
Packaged solution and integration
- Sales, Marketing and After
Sales Service to and through OEMs in the automotive sector
- Structured access to Lease/
Rental Financing for Battery Pack leasing
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Agenda ▪ 2016 Achievements ▪ 2016 Financial Summary ▪ 2016 Disappointments ▪ Solid foundation for growth ▪ Strategic transformation of the business ▪ Outlook
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2017 Outlook shall be provided during Interim Results Announcement in September
Despite funding related constraints in 1H-2017, no major contracts have been lost
▪ Subject to timely completion of the planned funding, the outlook for 2018 is robust ▪ EBITDA breakeven in late 2018/ early 2019
Major breakthrough possible in eTransport business
▪ Framework agreements signed envisage more than 150 MWh or USD 45M revenue per year the year 2019 ▪ Joint Development Agreement with Skoda Electric, a world leading integrator
Envisage continued success in non-recourse project finance for Stationary Storage
▪ Advanced Term Sheets in place for both IESO and Marengo project covering Equity and Debt ▪ Exclusivity agreement with a leading European Utility for Cremsow project in Germany
New organization operational from Jan 2018
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