Leclanché SA

DGAP-Adhoc: Leclanché SA: Leclanché announces 2013 Financial Results and provides an update on its Turnaround Plan

Leclanché SA  / Key word(s): Final Results

05.03.2014 07:48

Release of an ad hoc announcement pursuant to Art. 53 KR

Press Release

Leclanché announces 2013 Financial Results and provides an update on its
Turnaround Plan

  - Home energy storage product launch scheduled for end of Q1 2014

  - Expansion in the stationary industrial and grid electricity storage
    markets in Q2 2014

  - Possible US co-operation with Precept portfolio company, Oak Ridge
    Energy Technologies Inc (OKME)

  - Precept provides a support letter to meet growth requirements

  - Publication of Annual Report 2013

Yverdon-les-Bains, Switzerland, March 5, 2014 - Leclanché S.A. (SIX Swiss
Exchange: LECN), specialized in the production of large-format lithium-ion
cells and energy storage solutions, today announces its annual results for
the year ended 31 December 2013, which are in line with guidance previously
given. Consolidated revenues for the fiscal year 2013 were CHF14.9million,
down by 7.6% compared with the previous year. Also in line with Leclanché's
2013 guidance, the EBITDA loss for the year was below CHF(10.0)million at
CHF(9.7)million compared with a loss of CHF(12.8)million in 2012, which
represents a reduction of losses of 24.5%.

The Company is broadly in line with its Turnaround Plan and has also
embarked on an international expansion of its offering through several
distributorship/agency agreements, which was not previously contemplated.
There remains however significant execution risk and management believes
that it is necessary to strengthen the liquidity position of the Company as
it launches its stationary products and ramps up production. The Company is
pleased to report that Precept Fund Management SPC acting on behalf of
Precept Segregated Portfolio ("Precept" or "Lender"), with whom it had
negotiated a CHF17million Convertible Loan and Investment Agreement on July
8th 2013 (the "Loan Agreement") continues to be very supportive and has
agreed to provide a Letter of Support, confirming its willingness to
continue  to fully support the Company and that it will take such steps as
are within its powers at least until 31 March 2015 to facilitate the
provision of additional funding as reasonably requested by the Board of the
Company showing need of such funding. Any additional funding shall be on
terms and conditions similar to the Loan Agreement (particularly at the
same conversion rate and the same maturity date) and acceptable to the

The Company and Oak Ridge Energy Technologies Inc., (OKME) ("Oak Ridge")
Precept's US battery industry portfolio company, have commenced a
discussion regarding a strategic alliance and technology exchange
agreement, in particular regarding the US application by Oak Ridge of the
Company's safety separator technology and the grid storage units. Should
such a joint cooperation be implemented and lead to the expected results,
the companies could also explore the additional synergies in order to gain
scale and greater traction in the market. Steve Barber, Chairman and Chief
Investment Officer of Precept Asset Management Limited, the investment
manager of Precept says: "Precept believes strongly that there is a
significant opportunity at present in the battery sector for the creation
of a global platform which offers diversified  technologies and products to
cater for the demanding needs of the energy storage, transportation and
military markets. We want our two battery industry portfolio companies,
Leclanché and Oak Ridge, to participate at the forefront of that

Annual Results

Consolidated revenues for the fiscal year 2013 were CHF14.9million, down by
7.6% compared with the previous year. Revenues from the Portable Business
were CHF8.9million (2012: CHF8.7million), up 1.7% over 2012. Revenues from
the Distribution Business were CHF3.3million (2012: CHF3.7million), a
reduction of 9.7% over 2012, which is attributable to the First Half of
2013. Management in this business unit was changed in the Second Half of
2013 and revenues in this period were up 2.1% over the same period last
year. Revenues in the Stationary Business were CHF2.6million (2012:
CHF3.7million). Most of the revenues in 2013 and 2012 came from grant
funded projects and the reduction of 30.5% in the year is largely
attributable to the timing of these projects. During the Second Half of
2013, a sales management organization was put in place for the Stationary
Business and the Company is on target to announce the launch of its Home
Storage product later in the First Quarter 2014. The Industrial Product
range is also on target for launch during the First Half of 2014.

In line with Leclanché 2013 guidance, the EBITDA loss for the year was
below CHF(10.0)million at CHF(9.7)million compared with a loss of
CHF(12.8)million in 2012, which represents a reduction of losses by 24.5%.
The Portable Business generated an EBITDA profit of CHF1.1million (2012:
Loss CHF(0.2)million), representing an improved profitability of
CHF1.3million. The Distribution Business showed a small EBITDA loss of
CHF(0.1)million (2012: Profit CHF0.6million). The Stationary Business
recorded an EBITDA loss of CHF(4.7) million (2012: CHF(8.8)million),
representing a loss reduction of 46%. Group central costs at an EBITDA
level were CHF(5.9)million (2012: CHF(4.5)million), mainly attributable to
higher legal and professional expenditure associated with the restructuring
of the business.

The net loss for the year was CHF(13.6)million (2012: Loss
CHF(14.9)million), a reduction of 9.1%, in spite of higher depreciation
charges associated with the main production facility in Germany and higher
finance charges associated with the capital that was raised.

The earnings per share is a loss of CHF(1.69), compared to a loss of
CHF(2.82) in 2012, due to the lower net income loss and the higher weighted
number of shares in issue resulting from the conversion of the Precept

Available cash and undrawn facilities at December 31, 2013 were
CHF6.3million (2012: CHF3.9million).

Annual Report 2013 and Annual Shareholders Meeting

Leclanché published today its Annual Report 2013, which can be downloaded
on the company's web site. The company's Annual Shareholders Meeting will
take place in Yverdon on April 3, 2014.

Update on Turnaround Plan

The Turnaround Plan announced on March 5, 2013 had five main objectives:

1. Strengthen the management team

This is now complete. Leclanché's executive committee is made up of seven
senior managers, including the Chief Executive, Deputy Chief Executive,
Chief Financial Officer, Chief Technical Officer, Head of Portable Business
and Systems Development, Head of Stationary Sales and Marketing and General
Manager of Distribution Business. In addition, the Company has built
enhanced sales capability in all three businesses and related support
functions and strengthened the Finance and back office functions.

2. Increase contribution from the Portable and Distribution business units

The EBITDA contribution from the Portable Business increased by
CHF1.3million turning a loss of CHF(0.2)million in 2012 to a profit of
CHF1.1million this year. 2013 was an exceptional year and delivered results
in excess of the Company's expectations. Corrective action was taken in its
Distribution Business by replacing the management of that business. The
first impact has been to stop the erosion in revenues and a number of large
contracts were won in the second half of the year. The next stage will be
to focus on the business profitability.

3. Apply stronger focus in "go-to-market" processes

Leclanché streamlined the responsibilities for the development of the Home
Storage systems product under the direction of Mr Fabrizio Marzolini to
leverage the integration capabilities within his group and added to this
significant resource in program management and software application.
Leclanché is pleased to say that the Home Storage product, which will be
referred to as the Ti-Box, is in beta test sites at the moment and provided
these tests are positive, the Company would expect to announce the
commercial launch of this product at the end of the First Quarter 2014.

The Industrial product, to be referred to as Ti-Rack or Ti-Container, as
appropriate, is being developed in collaboration with an external partner
and is scheduled for commercial launch towards the end of the First Half
2014. In its interim results Leclanché indicated that it was looking to
adopt a third party graphite based industrial product to complete its
product portfolio. The Company expected to do this by January 1, 2014 but
due to certain delays beyond its control, it was unable to meet this
objective. Leclanché is however expecting to complete its evaluation during
the First Half 2014.

Leclanché also indicated on August 21, 2013 that it is working on a high
voltage large format cell. The company said at the time that it is too
early to provide any commitment as to if and when this product will be
incorporated into commercial production. The development program continues
to progress well, but no commitments can be made at this stage.

4. Focus on building sales channels and seek to establish strategic

Leclanché initiated a deliberate recruitment program to build and enhance
its sales and sales support capability and also signed three
distributorship/agency agreements with companies in Saudi Arabia for the
GCC territory, Slovenia for a number of Eastern European and Baltic
territories and Italy. The Company intends to expand this network as and
where it sees a viable opportunity to do so.

5. Reduce costs by streamlining the organisation

Although a number of measures have been taken to streamline the
organisation, the Company is being managed for growth with ambitious
targets being set for commercial development.

Whilst management will aim to always operate as efficiently as possible,
current operating cost levels are unlikely to be substantially reduced
further, as this is incompatible with business expansion.

Preparation for Conversion of Precept Loan

The Company is currently taking all preparatory steps to enable the full
conversion of the remaining outstanding convertible loan granted by Precept
into ordinary shares of the Company, if possible, before 31 March 2014.


Leclanché objective remains to achieve EBITDA break-even by 2015, subject
to successful implementation of the Turnaround Plan, including the timely
launch of products and commercial success. As it enters this market in
earnest in 2014, Leclanché is both aware of the significant execution risk
within the Stationary business, but also encouraged by the extent and
number of opportunities that it is engaged in.

The Board is firmly of the view that it is necessary, based on its current
business plan, to secure additional financing to meet its working capital
requirement and for this reason the Company has obtained a Letter of
Support from Precept confirming its willingness to continue to fully
support Leclanché and that it will take such steps as are within its powers
at least until 31 March 2015 to facilitate the provision of additional
funding as reasonably requested by the Board of the Company showing need of
such funding. Any additional funding shall be on terms and conditions
similar to the Loan Agreement (particularly at the same conversion rate and
the same maturity date) and acceptable to the parties.

Leclanché's current cash flow does not support a commercial credit line and
given the difficulties the company experienced in trying to raise capital
in the public equity market last year, it is fortunate in benefiting from
the continued support of its leading institutional investor.

Analyst and investor meeting

Leclanché S.A. will discuss its full-year 2013 financial results and
achievements during an analyst and investor meeting taking place today,
Tuesday, March 5th, 2014 at the Steigenberger Bellerive au Lac, Utoquai 47,
8008 Zürich.
In addition, a live audio webcast of the meeting will be accessible on the
Leclanché web site: www.leclanché.com. A replay of this teleconference will
be made available one hour after the conference.

Analysts and media wishing to ask questions during the conference are
invited to call at 14:15 CET (13:15 GMT/ 9:15 EST) using the following
conference-ID: 4666562 and dial-in numbers:

  - Europe: +41 (0) 22 592 73 12

  - UK: +44-207-153-2027

  - USA: +1-480-629-9673

Live and replay link: http://leclanche050314-live.audio-webcast.com

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

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).


Media contact:

Christophe Lamps, Dynamics Group S.A.: Telephone: +41 79 476 26 87,


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.

 Consolidated income statement for the year ended December 31, 2013

                                                 31.12.2013      31.12.2012

                                                 KCHF            KCHF

Sales of goods and services                      12'306.8        12'907.0

Other income                                     2'591.5         3'222.8

Total income                                     14'898.3        16'129.8

Raw materials and consumables used               -7'587.0        -10'283.7

Personnel costs                                  -9'443.8        -10'765.0

Other operating expenses                         -7'517.7        -7'859.9

EBITDA                                           -9'650.2        -12'778.8

Depreciation and amortization expense            -2'444.5        -1'909.0

Operating Loss                                   -12'094.7       -14'687.8

Finance costs                                    -1'460.6        -235.2

Finance income                                   1.2             7.5

Loss before tax for the year                     -13'554.1       -14'915.4

Income tax                                       -               -

Loss for the year                                -13'554.1       -14'915.4

Earnings per share (CHF)

- basic                                          -1.69           -2.82

- diluted                                        -1.69           -2.82

Consolidated balance sheet at December 31, 2013


                                                       KCHF       KCHF


Non-current assets

Property, plant equipment                              34'886.3   33'932.4

Intangible assets                                      4'785.1    4'397.1

Other financial assets                                 248.4      249.9

                                                       39'919.8   38'579.5

Current assets

Inventories                                            4'568.1    4'710.6

Trade and other receivables                            3'651.1    4'917.6

Cash and cash equivalents                              3'060.4    3'936.2

                                                       11'279.6   13'564.4

TOTAL ASSETS                                           51'199.4   52'143.8


Equity attributable to equity holders of the parent

Share capital                                          28'220.8   28'150.7

Share premium                                          56'833.8   47'178.0

Accumulated value for share-based payment              1'677.3    983.8

Other reserves                                         8'632.2    8'632.2

Translation reserve                                    -1'645.8   -2'280.3

Equity component of convertible loan and warrants      5'216.3

Actuarial loss on post-employment benefit
obligations                                            -12'658.4  -14'176.5

Accumulated losses                                     -47'053.2  -33'499.1

Total Equity                                           39'222.9   34'988.8

Non-current liabilities

Provisions                                             100.0      70.0

Defined benefit pension liability                      3'840.2    5'268.3

Convertible Loan                                       4'136.3

                                                       8'076.5    5'338.3

Current liabilities

Provisions                                             100.0      130.0

Borrowings                                             -          6'243.4

Trade and other payables                               3'800.0    5'443.3

                                                       3'900.0    11'816.7

Total Liabilities                                      11'976.5   17'155.0

TOTAL EQUITY AND LIABILITIES                           51'199.4   52'143.8

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Language:               English
Company:                Leclanché SA
                        Av. des Sports 42
                        1400 Yverdon-les-Bains
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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