Leclanché SA

EQS-Adhoc: Leclanché builds momentum towards step-change



EQS Group-Ad-hoc: Leclanché SA / Key word(s): Interim Report/Contract
Leclanché builds momentum towards step-change

03.09.2015 / 07:15
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

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Yverdon, Switzerland, 3 September 2015

Leclanché builds momentum towards step-change

-Interim results announced today. They do not yet reflect the positive impact of
the series of major Customer wins, acquisitions and partnership agreements since
the start of 2015.

-Thanks to strong support from Recharge ApS, substantial debt reduction achieved
through conversion of CHF 22 million into Leclanché shares

-Signed contracts have led to production ramp-up during this period and point to
a significant order backlog by the end of this year.

-Far-reaching industrial and commercial transformation is underway.

Leclanché is taking its momentum up by several levels with a string of successes
in the first half of the year. Simultaneously, Leclanché is undergoing a
transformation from a mere producer of battery Cells (even high-performance
ones) into a global leader in sophisticated energy storage systems with a
software-and-services led vertically integrated business model. The strategy
developed by the new CEO, which has received strong support from its major
shareholders, gives Leclanché access to a wide range of high growth new markets.

Leclanché has successfully completed the installation of a 500 KWh solar power
storage unit at the Ecole Polytechnique Fédérale de Lausanne, an important
reference reinforcing its credibility.

The Company is currently implementing a major micro-grid project. In partnership
with Younicos on Graciosa Island, in the Azores, the project is to install the
world's first renewable energy power plant with a megawatts-scale energy storage
system. This system shall be a benchmark for all future island projects on all
five continents: by stabilising the grid with a reduced use of a traditional
thermal engine, it will supply power that is more than 60% renewable (wind and
solar).

Leclanché has signed a strategic partnership with Visedo Oy (Finland) to develop
a battery management system (BMS) combining Visedo's Drive/ Power Train systems
expertise with Leclanché's battery systems. This partnership will provide a
decisive innovation in delivering 30-40% more efficient Electric Drive Trains
for mass transport vehicles and heavy industrial machineries like Buses;
Ferries; Trams; Mining Equipment etc.

As a clear stamp of approval for Leclanché and Visedo's industry leading
innovation, the combined solution has already been chosen for the world's
largest electric-propulsion ferry, ÆRØ FERRY, which will be equipped with a 4.2
MWh Leclanché battery system - a record in terms of capacity. Named as one of
the five main projects of the European Union's Horizon 2020 programme for
research and innovation, this Danish project aims to guarantee local populations
access to environmentally friendly transport.

Meanwhile, the partnership with Litarion, a subsidiary of the Electrovaya group,
will enable two of the largest European producers in this sector to sell
market-leading electrochemical storage systems, as the combination of Litarion's
graphite/NMC electrode production and Leclanché's cutting-edge Cells production
know-how, including its Ceramic safety separator technology will provide
unparalleled performances.

Leclanché is continuing to deepen its vertical integration of storage
technologies, from cell manufacturing to the design and production of complete
systems. The acquisition announced in July of Trineuron, a subsidiary of the
Belgian group Emrol, adds specialized Battery Modules and Cloud Services
Platform to Leclanché's portfolio. In addition, it provides access to other
market applications including Automated Guided Vehicles (AGVs).

In August, Leclanché announced acquisition of the design and intellectual
property rights for module and battery management system of ADS-TEC, a German
company. This insourcing of all design and perpetual IP rights includes
mechanical design of modules; all electronics hardware for Battery Management;
and Source code of the software for Battery Management System. A gradual
transfer of Production knowhow is planned to set up an Assembly facility in
Yverdon-les-Bains in Switzerland.

This succession of agreements or acquisitions gives Leclanché control of all
aspects of the technology, from cell production to the design of full systems,
as well as module assembly and installation. Leclanché is thus boosting both its
competitive edge and its margins, while delivering optimised "best-in-class"
solutions for a very broad range of stationary and transport energy storage
applications.

In parallel, Leclanché has boosted its commercial policy. In partnership with
the Danish company Scotia, an important contract for solar-powered public
lighting in Saudi Arabia has just been announced. The lithium-ion titanate
battery module, which is built into its support mast, can withstand temperatures
ranging from -20 to 55 degrees Celsius. This is a big first that opens up
considerable market potential.

Through its acquisition of Trineuron, Leclanché has won a major order for
supplying Battery Systems for Automatic Guided Vehicles to globally known
company. This customer was looking for batteries that were more environmentally
friendly (lead- and cadmium-free) and can handle fast charging to reduce
operating costs.

Obviously, such a scale and speed of development makes it more difficult to
reduce costs, although management is seeking to make its marketing more
effective, to optimise productivity, and to allocate resources more optimally.

In addition, expanded sales forces have clearly focused on the most promising
projects rather than traditional products. This growth strategy has required
Leclanché to invest, especially in human resources, and this also weighed on the
results of the first half of 2015, given that Leclanché's first major successes
will not begin to pay back until the second half of 2015 and, into 2016. The net
loss at the EBITDA level thus came to CHF 8.94 million, a CHF 1.36 million
decline from the previous half-year (which showed an EBITDA loss of CHF 7.58
million).

The management, the Board of Directors and Leclanché's major shareholders were
well prepared for this unavoidable loss and are encouraged by booked orders in
the same period (Graciosa and Electric Ferry) which will already translate into
aggregate revenues of some CHF 13 million from deliveries towards the end of
2015 and into 2016. So much so that management maintains its belief that
Adjusted EBITDA breakeven* will be achieved in the closing months of this year.

Four contributions to financing this far-reaching industrial ramp-up are proof
of Leclanché shareholders' confidence and their firm belief in its future
potential:

- In January, Recharge Aps subscribed CHF 21 million in convertible loans for
both operating costs and the capital needed for investments in growth;

- Recharge also spent CHF 5 million to purchase the convertible loan held by
Oakridge Global Energy System and this was then fully converted into shares by
May 2015;

- Universal Holdings and Bruellan agreed to extend their bridge loans, which had
otherwise been due to mature in June;

- In July, Recharge converted CHF 16.8 million of its convertible bonds into
shares, thus cutting into Leclanché debt considerably. At this time, Recharge
also provided an additional CHF 5 million of Growth funding.

The Board of the Company wishes to thank the Leclanché team, and all trading
partners, for the tremendous progress achieved in the current period and looks
forward to the fruits of this labour for all stakeholders in the second-half of
2015 and beyond.

* As previously recorded, 'Adjusted EBITDA breakeven' is defined as breakeven at
the EBITDA level, after adjustment to exclude of 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.

Detailed results:www.leclanche.eu

For any additional information:

Claude-Olivier Rochat, Voxia communication. Tel.: (+41) 079 203 52 19
-co.rochat@voxia.ch
Rohan Sant, Voxia communication. Tel.: (+41) 079 120 00 28 -rohan.sant@voxia.ch

About Leclanché
Leclanché, which is listed 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. 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 (both for cells with titanate and graphite anode) and
long service life. Thanks to our patented separator technology, which is a core
element of lithium ion batteries, Leclanché is able to make cells with very good
safety characteristics in a highly automated production process. Leclanché
operates a fully automated plant for the production of large format lithium-ion
cells at an annual maximum capacity of up to one million cells and is capable of
running multiple chemistries through production for different cell
characteristics. In addition, Leclanché offers a number of specialized battery
systems through its Portable Business Unit, such as customer-specific energy
storage systems for defense and medical applications. Leclanché also distributes
primary and secondary batteries and accessories of other producers.

 

End of ad hoc announcement

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03.09.2015 News transmitted 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


End of News EQS Group News Service

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