Leclanché SA

EQS-News: Leclanché SA: Leclanché announces its Financial Results for 2014 and presents the progress of its Turnaround Plan

EQS Group-News: Leclanché SA / Key word(s): Final Results
Leclanché SA: Leclanché announces its Financial Results for 2014 and
presents the progress of its Turnaround Plan

10.04.2015 / 08:00

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Press Release

Leclanché announces its Financial Results for 2014
and presents the progress of its Turnaround Plan

  - First phase of the Turnaround plan completed and - thanks to new
    shareholders - long term Growth Plan is under implementation

  - Results not positive yet, but clear ambitions and corresponding
    investments

  - With Younicos, a ground-breaking project announced this morning : The
    world's first megawatt-scale storage system for renewable energies,
    which sets new world standards

  - Success of major projects with Ecole Polytechnique Fédérale de Lausanne
    and Saint-Gobain

  - Innovation and launch of new products

  - New organization

  - Leclanché now well profiled in markets with huge potential

  - Annual Report 2014 published today

Yverdon-les-Bains, Switzerland, April 10, 2015 - Leclanché SA (SIX Swiss
Exchange: LECN),
specialized in the production of large-format lithium-ion cells and energy
storage solutions, announces today its annual results for the year ending
31 December 2014. Consolidated revenues for the fiscal year 2014 were CHF
10.78 million, down by 27.6% compared with the previous year; the EBITDA
loss for the year amounts to CHF (16.92) million compared with a loss of
CHF (9.65) million in 2013.

As stated in the September 4, 2014 Interim Report, Leclanché's results are
not yet positive; this position has been mainly driven by:
 1. Tight liquidity, which affected its ability to improve its operations
    and financial performance for a large part of the year;

 2. Measures to scale operations, particularly in Sales and Solutions
    Delivery, in line with the ambitious targets set for commercial
    development and the objective to achieve sustainable profitability for
    the company by addressing the emerging growth markets for our BESS
    solutions.

The progress made in continuing to re-set the business clearly confirms the
path toward achieving Leclanché's ambitions, not least the arrival of new
shareholders and a 9% increase of the workforce, which is needed to support
the new Growth Plan.

Today's announcement of the new ground breaking Mega-watts scale storage
Systems project confirms that the Company has made substantial progress to
deliver growth.

2014 has been both an exciting and challenging period, during which
Leclanché has been heavily focused on its four main objectives:
 1. Continued implementation of the Turnaround Plan, leading to a long term
    Growth Plan;

 2. Commercial ramp-up of the mass production line at the company's factory
    in Germany;

 3. Launch of the home-storage product in Europe, and the launch of a range
    of industrial storage products in the second half of the year;

 4. Continued development of channels to market and setting up of sale
    pipelines for these products.

Based on Leclanché's strong business plan, and the need to diversify the
company's financing, the Board has been focused on securing additional
medium-term financing both to meet its working capital requirements and to
provide the additional capital required to improve business operations in
line with the growth strategy.

At the EGM on January 5, 2015, shareholders approved the introduction of
two facilities under a new convertible loan from Recharge ApS:

 1. Facility A - CHF 13 million of working capital funding,

 2. Facility B - CHF 8 million of growth funding, to be drawn for the first
    phases approved under the new growth strategy.

The CHF 5 million convertible loan of Oakridge was also acquired by
Recharge APS on January 21, 2015. Under the terms of that loan, a partial
conversion to equity was effected, increasing the equity of the company by
CHF 3.7 million and simultaneously reducing debt. CHF 5.6 million has so
far been drawn under Facility A and the first CHF 0.8 million has been
drawn under Facility B to fund the implementation of initiatives under the
new Growth Plan.

Key Events and developments

In February 2014, after many months of test running and validation,
Leclanché started volume production of A4 cells at its state-of-the-art
factory in Willstaett, Germany. The Company's process of water-based
coating of electrodes in volume production was successfully implemented
during this period - a unique achievement in the industry - significantly
reducing pollution compared to the conventional solvent-based coating
process.

Leclanché has also developed a world-leading ceramic safety separator,
which is a key element of the cell construction forming a strong barrier
between the anode and cathode, the two main active components of cells.  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 begun.

Leclanché will ultimately benefit from a licence fee on potential 3rd party
sales of the separator by St Gobain into large volume markets such as
automotive and aviation, where the safety separator is a critical
component.

In June, once the initial phase of the Turnaround Plan was successfully
implemented, the Board appointed Mr Anil Srivastava as the new Chief
Executive.  In addition to his normal duties of chief executive, the Board
has asked Anil - Bloomberg New Energy Finance 'Energy Manager of the Year'
in 2010 & 2012  - to deliver a Growth Plan which will improve Leclanché's
market offer and plot a path to sustainable profitability.

The Growth Plan now positions the company as a complete Battery Systems
Provider, significantly increasing the company's addressable market and
allowing the Company to cover the full spectrum of power-intensive and
energy-intensive applications, whilst profiling Leclanché as the only
player with full in-house technologies.

This will require:

 a) Acquisition or licensing of Battery Module designs and best-in-class
    Battery Management Systems software, widely known as BMS.

 b) Addition of high energy-density lithium-ion chemistries such as LFP or
    graphite/NMC, coupled with Leclanché's world-leading Titanate chemistry
    to address power-intensive applications

 c) Provision of packaged Energy Storage Solutions for electricity markets,
    focused on Diesel-coupled systems, PV-coupled systems and Grid-coupled
    ancillary services

 d) Provision of packaged solutions for Electrified Transport and
    Industrial Machinery sectors, such as buses, marine systems and
    materials handling equipment.

Good progress has already been made in building sales channels and
Leclanché is pleased to report two major successes: an order of 500kWh,
worth around CHF 2 million, from the Ecole Polytechnique Fédérale de
Lausanne (EPFL) for a full grid-coupled ESS, and shortlisting for 400kWh,
for an island storage solution incorporating PV and diesel coupling. The
EPFL contract is a joint project with Romande Energie to build a
Utility-scale grid-coupled Storage solution that facilitates the grid
stabilization needs for better integration of increasing levels of
Renewables Energy generation.

Leclanché is in active discussions to expand its sales channels' network
into the USA, Canada, Chile, India and the Middle East.

With increasingly strict environmental regulation, the Company also has a
significant opportunity to license its unique capability for water-based
coating of anodes and cathodes in volume production.

Continued Research & Development

During the second semester 2014, the Italian utility ENEL performed
intensive tests on the Company's battery energy storage system based on
Titanate-cells. The tests confirm that the Leclanché solution meets the
standard for grid ancillary service application. This is a valuable
achievement as ENEL has one of the most demanding requirements for these
services.

Having completed the De-Lion project, a grant-funded project through which
Leclanché pioneered the use of water based technology in its coating
process for both anode and cathode, it has now successfully implemented it
in volume production. Apart from making a positive environmental
contribution, this provides the Company with enhanced cell stability and
performance. Leclanché is also participating in Batteries 2020, which is an
EU-funded project aimed at enhancing the lifetime and energy-density of
lithium-ion batteries used in electric vehicles.

Leclanché is also a consortium member of the Ambassador project, which is
an EU-funded project to study, develop and experiment with systems and
tools that aim to optimise district energy usage and manage energy flows by
predicting and matching energy consumption and energy production.

Leclanché's industry-leading cells have been independently tested by the
Hochschule Landshut, a University of Applied Sciences, and found to have
"enormous cycling stability and capacity retention" at 100% depth of
discharge. Copies of the report are available on the Company's website.

Available market reports indicate continuous reduction in Average Selling
Price ("ASP") in the coming years. The Company has therefore launched an
aggressive cost reduction program for raw materials procurement together
with related cell development. Initial results indicate that significant
cost savings can be achieved during the first half of 2015, and beyond.

As previously reported, Leclanché is also working on a high voltage cell,
which might allow the increase of the capacity of its standard cell,
significantly reducing cost per kilowatt hour. The test results are
encouraging and the development program continues to progress well, but it
is still too early to make any commitment as to if and when the Company
would be in a position to launch such a cell on the market.

New Organization

Notwithstanding the difficulties of the second half of 2014, Leclanché has
been preparing the Organization to carry out the 2015 Operating and Growth
Plans of the Company. Effective from Jan 2015, the Company is organized
around three commercial Business Units, an Engineering Business Unit (BU)
and a Technology and Industrial team:

  - Stationary Storage Systems BU sells and supports customers requiring
    Storage solutions coupled with Distributed Power Generation like PV
    Solar/Wind/Diesel Gensets and Grid Ancillary Services.

  - Speciality Battery Systems BU will combine current Portable and
    Distribution businesses to bring even greater focus to deliver
    Customized Battery Systems to its Customers.

  - Mobile Storage Systems BU sells and supports customers requiring
    Storage solutions for mass transport networks like hybrid/ full
    electric fleet of Bus/ Trams/ Trains/ Ferries; and Industrial
    Machineries like Automated Guided Vehicles (AGVs) etc.

  - System Engineering and Delivery BU is responsible for Design, Project
    implementation and Services for all commercial Business Units.

  - Technology and Industrial Team is responsible for group-wide R & D and
    Production functions.

Leclanché now has a top-class International leadership team with a good
blend of existing personnel and new recruitments.

Financial Results

Key Figures


          (in mCHF)
          (IFRS)                             31/12/2014          31/12/2013

          Revenue                            10,78               14,90
          EBITDA                             -16,92              -9,65
          EBIT                               -22,44              -12,09
          Loss for the year                  -25,73              -13,55
          Equity                             22,92               39,22
          Equity % of Assets                 54,6%               76,6%
          Earning per share[CHF]             -1,33               -1,69
          Number of Employees [FTE]          114                 105




Overall financial performance of the Company was seriously affected by the
tight liquidity situation causing loss of business in the second half of
2014 and preventing fulfilment of Orders with short-term deliveries.
Accordingly, consolidated revenues for the year to December 2014 were CHF
10.79 million, down by 27.6% compared with the previous year, as a result
of these factors and also as a result of reduced grant revenues in the
Stationary Business.

Revenues from the Portable Business were CHF 6.75 million (2013: CHF 8.88
million), down by 24% compared with the previous year mainly as a result of
one large long-term contract drawing to a close during 2014. This Business
unit was particularly affected by the Liquidity situation. The Portable
business has recruited new sales personnel during the period and is
successfully diversifying into new sectors such as medical systems and
transport with a view to replacing this lost revenue over the course of the
next 12 months.

Revenues from the Distribution Business were CHF 3.27 million (2013: CHF
3.33 million), marginally reduced from last year but with the prospect of
some increase during 2015 as a result of the recent addition of a number of
significant new customers.

Revenues in the Stationary Business were just CHF 0.63 million (2013: CHF
2.60 million). Most of the revenues in 2013 came from grant-funded
projects. After his arrival, the new CEO restructured the Sales
Organization with nearly half the team replaced. Significant progress for
Stationary orders and revenues is now envisaged.

The Portable Business generated an EBITDA loss of CHF (0.80) million (2013:
EBITDA CHF 1.11  million) as a result of reduced revenues and the increased
cost from new sales personnel. The Distribution Business showed a small
EBITDA of CHF 0.03 million (2013: EBITDA loss CHF (0.10) million).

The Stationary Business recorded an EBITDA loss of CHF (9.35) million
(2013: EBITDA loss CHF (4.74) million), mainly due to the reduction in
grant revenues and the reorganisation and ramp up of sales as well as
marketing activity and personnel during 2014.

Group central costs at the EBITDA level were CHF (6.80) million (2013: CHF
(5.92) million), an increase of 15%, mainly attributable to the
organisational and operational restructuring needed to deliver business
expansion.

The net loss for the year was CHF (25.73) million (2013: loss CHF (13.55)
million), an increase of CHF 12.18 million, as a result of an increased
EBITDA loss described above the commencement of depreciation charges
associated with the main production facility in Germany and a one-off, non
cash, deferred tax charge of CHF 1.38 million , arising under the
requirement of IFRS, in connection with the elimination of carry-forward
tax losses in Germany and resulting from the recent financial restructuring
of the group.

The earnings per share are a loss of CHF (1.33), compared to a loss of CHF
(1.69) in 2013, due to the higher weighted number of shares in issue when
compared to the previous year.

Whilst the Company's management is determined to operate as efficiently as
possible, current operating cost levels are unlikely to be substantially
reduced further, as this is incompatible with business expansion. The new
Growth Plan implies significant scaling of operations in sales as well as
solution deliveries and incorporates an efficient organisational structure
to deliver increased productivity per person.

Outlook

While the road ahead still presents many challenges, Leclanché is now well
positioned to register commercial success, thanks to the actions already
launched under the Growth Plan; the Company now has the financial means and
the stability needed to fulfil its ambitious strategy.

The Company is well underway to complete its compelling product offer in
the industry and to emerge as the unique provider of optimized BESS for
Power, Energy and blended Hybrid applications. It has already begun
industrial production of the new Energy Cell based on Graphite NMC
chemistries. For this Leclanché is acquiring proven automotive-grade
Electrodes from a partner and producing cells using its well-established
industrial process in its factory in Germany, as well as leveraging its
industry leading Safety Separator.

The market for large-scale energy storage solutions for both Electricity
and Mass Transport Segments is evolving at a rapid pace not just in Europe,
but in North America, South America and Asia as well.  This market has
clearly entered into the early stage of Commercial Procurements.

In this field, Leclanché is well positioned on four key market drivers:

  - Its offer and its Return on Investment proposition ("ROI") for PV Solar
    and diesel-coupled ESS are clear and compelling. In addition to the
    Island solution for which it has been short-listed in 2014, Leclanché
    is also actively engaged in another Island solution where its BESS will
    couple with both Wind and Solar parks to significantly reduce Diesel
    consumption. These will provide the company with an important reference
    for expanding similar packaged solutions in selected markets worldwide.

  - The addressable market for grid-coupled ESS providing ancillary
    services such as frequency and voltage regulation, where Leclanché's
    technology is particularly well suited, is a multi-billion dollar
    market. The contracting structure and remuneration policy for such
    services is still evolving in key markets, but market reports indicate
    this market will be in a commercial procurement phase within two years.

  - Following its success with the EPFL project, the Company is now engaged
    in a large BESS project for Frequency regulation services in Europe. It
    is at the front end of the Engineering and Design (FEED) stage of this
    project and has launched its initial marketing to potential investors.

  - The company has also validated its offer and its Return on Investment
    ("ROI") for Electrified Transport and Industrial Machinery sectors,
    which is particularly well-suited for fleets of Electric Buses or
    specialized heavy transport vehicles.


International expansion remains a top priority for Leclanché which
continues to pursue strategic alliances to establish a strong go-to-market
and delivery partnership in selected markets around the world. Its priority
remains the US, Chile, China, India and South Africa.

The company anticipates that, subject to the successful completion of the
Turnaround Plan and  successful implementation of the Growth Plan, funding
under Facility A will satisfy the company's working capital requirements
for at least the next twelve months and until the achievement of Adjusted
EBITDA breakeven (defined as EBITDA breakeven excluding any non-cash items
and as further adjusted to exclude the negative effects of any growth
initiatives and activities which are separately funded under Facility B or
otherwise).

Notwithstanding the above, as operations are scaled, particularly in Sales
and Delivery, the Company is aware of the significant execution risk this
carries, and continues to explore options to raise further growth capital
alongside the existing Facility A and Facility B, as envisaged by the
agenda approved by shareholders at the Extraordinary General Meeting of 5
January 2015.

Available cash and undrawn facilities at 31 December 2014 were CHF 537K
(2013: CHF3,060K). In addition, CHF 6.4 million has been drawn subsequently
under the Convertible Loans from Recharge ApS.


Publication of annual results

Leclanché SA published today its Annual Report which is available in pdf
format on the Company Web site : www.leclanche.eu/page/financial-reports.

Analyst and investor Webcast

A live audio webcast of the meeting will be accessible on the Leclanché web
site: www.leclanche.ch

A replay of this teleconference will be made available one hour after the
conference, on the Leclanché web site.

AUDIO WEBCAST Live
Live and replay link: http://leclanche100415-live.audio-webcast.com

Analyst and investors wishing to ask questions during the conference are
invited to call at 14:15 CET (13:15 GMT/ 8:15 EST) using one of the
following dial-in numbers:

Switzerland:                                 +41 (0)44 580.72.14
United Kingdom:                 +44 (0)20 34.27.19.00
United States of America:         +16 46 254.33.64
Germany:                                  +49 (0)69 22.22.10.626

Confirmation Code:                    9322919

About Leclanché

Established in 1909 Leclanché has been a reliable partner for battery
storage technologies. Founded in the tradition of Georges Leclanché, the
inventor of the dry cell battery, Leclanché today has a rich portfolio of
Energy Storage Systems that include Specialized Customer-specific Battery
Systems to industry leading lithium-ion solutions.

Through the integration of a spin-off of the German Fraunhofer Institute in
2006 the company evolved from a traditional battery producer into one of
the first developers and manufacturers of lithium-ion cells in Europe.

Leclanché's Storage Solutions are optimized for various applications, in
particular for the integration of renewable energy, diesel fuel reduction,
electricity grid-connected ancillary services, peak power shaving for heavy
industries but also for heavy duty transportation in buses, trams, trains
or maritime vessels.

Leclanché products are characterized by a very high cycle stability (cells
with titanate anode) and long service life. Thanks to our patented
separator technology, which is a core element of lithium ion cells with
titanate anode, Leclanché is able to make cells with very good safety
characteristics in automated production. Leclanché operates a fully
automated plant for the production of large format lithium-ion cells at an
annual maximum capacity of up to 175MWh or up to one million cells.

In addition, Leclanché offers a number of specialized battery systems
through its Portable Business Unit, such as customer-specific energy
storage systems for military and medical applications. Leclanché also
distributes primary and secondary batteries and accessories of other
producers.

Leclanché, which is quoted on the Swiss stock exchange (SIX:LECN), has a
wide range of storage products for homes, small offices, large industries,
electricity grids, hybridization for mass transport systems like fleet of
buses, trams etc.

Media contacts:

Claude-Olivier Rochat, Voxia communication - Mobile +41 79 203.52.19 -
co.rochat@voxia.ch
Rohan Sant, Voxia communication - Mobile +41 78 763.33.40 -
rohan.sant@voxia.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.



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10.04.2015 This Corporate News was distributed by EQS Schweiz AG.
www.eqs.com - news archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

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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:      Foreign Exchange(s) SIX


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