Currency in -
Last close As at 17/03/2023
-0.96
— 0.00 (0.00%)
Market capitalisation
288m
Research: Industrials
Leclanché’s H120 results show strong growth in revenues for marine applications. Together with an order book of over CHF90m for delivery between 2020 and 2022, this demonstrates demand for the group’s energy storage systems. However, management needs to secure financing to progress the transformational stationary energy storage project on St Kitts and expand its cell manufacturing capability to fully take advantage of opportunities in the e-Transport segment. Our estimates and valuation remain under review.
Leclanché |
Awaiting completion of financing activities |
Interim results |
Renewable energy |
2 October 2020 |
Share price performance
Business description
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Analyst
Leclanché is a research client of Edison Investment Research Limited |
Leclanché’s H120 results show strong growth in revenues for marine applications. Together with an order book of over CHF90m for delivery between 2020 and 2022, this demonstrates demand for the group’s energy storage systems. However, management needs to secure financing to progress the transformational stationary energy storage project on St Kitts and expand its cell manufacturing capability to fully take advantage of opportunities in the e-Transport segment. Our estimates and valuation remain under review.
Year end |
Revenue (CHFm) |
EBITDA* |
PBT* |
EPS |
DPS |
P/E |
12/17 |
18.0 |
(31.1) |
(37.8) |
(0.68) |
0.00 |
N/A |
12/18 |
48.7 |
(36.9) |
(47.8) |
(0.62) |
0.00 |
N/A |
12/19 |
16.3 |
(57.5) |
(71.5) |
(0.53) |
0.00 |
N/A |
Note: *Adjusted for exceptional items, amortisation of acquired intangibles and share-based payments.
Progress hampered by lack of finance
Revenues rose by CHF3.5m year-on-year in H120 to CHF10.0m. e-Transport revenues jumped by CHF6.3m to CHF6.6m, boosted by delivery to Kongsberg Maritime of the energy storage system for the first of nine Grimaldi vessels. Revenues from the Stationary business unit fell by CHF1.7m to CHF1.3m because two projects potentially worth c CHF6m were postponed to H220. Speciality Battery revenues, which are primarily defence related, declined by CHF1.1m to CHF2.1m. Gross margin remains negative, reflecting low plant utilisation rates. EBITDA losses narrowed by CHF3.3m to CHF16.3m. Net debt (including convertible loans and finance leases) increased by CHF22.7m in H120 to CHF64.4m. Post-period end, Leclanché’s majority shareholder FEFAM converted CHF50.9m of debt to equity and its associate Golden Partner converted CHF10.7m of fees to equity.
Awaiting completion of financing activities
While FEFAM has agreed to provide up to CHF34m in working capital bridge loan financing as an interim measure, management states that it needs to complete a fundraise with a major industrial investor interested in taking a significant stake in the group to be confident of remaining a going concern. In addition, Leclanché needs to secure c CHF120m to increase capacity to up to 2.4GWh/year to provide the volumes that its e-Transport customers will need long term. This financing may be realised by transferring the cell manufacturing plant to a customer-backed JV. Management is still securing finance for a separate holding company that will own the St Kitts solar farm and energy storage facility and operate these under a build-own-operate model. This follows a change in business model in Q120, which sacrificed c CHF50m orders for over CF5m EBITDA/year over a 20-year period.
Valuation: Awaiting progress on JV
Our valuation and estimates remain under review until there is greater clarity on financing and the formation of the potential JV.
Exhibit 1: Financial summary
CHFm |
2017 |
2018 |
2019 |
|
Year-end Dec |
||||
PROFIT & LOSS |
||||
Revenue |
|
18.0 |
48.7 |
16.3 |
Cost of Sales |
(15.7) |
(45.7) |
(31.8) |
|
Gross Profit |
2.3 |
3.0 |
(15.5) |
|
EBITDA |
|
(31.1) |
(36.9) |
(57.5) |
Operating Profit (before amort. and except.) |
|
(35.3) |
(39.9) |
(63.7) |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
|
Share-based payments |
(0.7) |
(0.8) |
(0.8) |
|
Exceptionals |
(0.1) |
(1.3) |
(10.8) |
|
Operating Profit |
(36.1) |
(42.1) |
(75.3) |
|
Net Interest |
(2.5) |
(8.0) |
(7.2) |
|
Share of profits from JVs and associates |
0.0 |
0.0 |
(0.5) |
|
Profit Before Tax (norm) |
|
(37.8) |
(47.8) |
(71.5) |
Profit Before Tax (FRS 3) |
|
(38.5) |
(50.0) |
(83.1) |
Tax |
0.1 |
(0.7) |
(0.3) |
|
Profit After Tax (norm) |
(37.7) |
(48.6) |
(71.8) |
|
Profit After Tax (FRS 3) |
(38.5) |
(50.7) |
(83.4) |
|
Minority interest |
0.0 |
0.0 |
0.0 |
|
Net income (norm) |
(37.7) |
(48.6) |
(71.8) |
|
Net income (FRS 3) |
(38.5) |
(50.7) |
(83.4) |
|
Average Number of Shares Outstanding (m) |
55.3 |
79.0 |
136.4 |
|
EPS - normalised (CHFc) |
|
(68.3) |
(61.5) |
(52.6) |
EPS - normalised fully diluted (CHFc) |
|
(68.3) |
(61.5) |
(52.6) |
EPS - FRS 3 (CHFc) |
|
(69.6) |
(64.2) |
(61.1) |
Dividend per share (CHFc) |
0.0 |
0.0 |
0.0 |
|
BALANCE SHEET |
||||
Fixed Assets |
|
16.6 |
25.1 |
32.7 |
Intangible Assets |
4.5 |
5.6 |
5.0 |
|
Tangible Assets and Deferred tax assets |
12.1 |
19.5 |
27.7 |
|
Current Assets |
|
52.1 |
62.2 |
40.4 |
Stocks |
12.7 |
19.9 |
19.8 |
|
Debtors |
32.8 |
33.9 |
19.1 |
|
Cash |
6.6 |
8.4 |
1.5 |
|
Current Liabilities |
|
(35.7) |
(20.2) |
(51.0) |
Creditors including tax, social security and provisions |
(20.6) |
(14.8) |
(31.7) |
|
Short term borrowings |
(15.1) |
(5.4) |
(19.3) |
|
Long Term Liabilities |
|
(22.1) |
(48.7) |
(34.8) |
Long term borrowings |
(13.3) |
(37.5) |
(23.9) |
|
Retirement benefit obligation |
(8.5) |
(10.8) |
(10.5) |
|
Other long-term liabilities |
(0.4) |
(0.4) |
(0.4) |
|
Net Assets |
|
11.0 |
18.4 |
(12.7) |
Minority interest |
0.0 |
0.0 |
0.0 |
|
Shareholders’ equity |
|
11.0 |
18.4 |
(12.7) |
CASH FLOW |
||||
Operating Cash Flow |
|
(44.6) |
(47.9) |
(45.2) |
Net Interest |
(0.1) |
(2.2) |
(1.8) |
|
Tax |
0.0 |
(0.1) |
(0.4) |
|
Investment activities |
(6.6) |
(14.2) |
(9.2) |
|
Acquisitions/disposals |
0.0 |
0.0 |
0.0 |
|
Equity financing and other financing activities |
6.5 |
0.0 |
0.0 |
|
Dividends |
0.0 |
0.0 |
0.0 |
|
Net Cash Flow |
(44.7) |
(64.4) |
(56.7) |
|
Opening net debt/(cash) |
|
17.8 |
21.7 |
34.5 |
HP finance leases initiated |
0.0 |
0.0 |
0.0 |
|
Other |
(40.8) |
(51.6) |
(49.4) |
|
Closing net debt/(cash) |
|
21.7 |
34.5 |
41.7 |
Source: Company data
|
|
Research: Industrials
Interim results from PIERER Mobility confirmed the strong increases in demand being seen for powered two wheelers as lockdowns ended around the globe. Both motorcycles and e-bikes segments are benefiting and while Q220 bore the brunt of COVID-19 impacts, subsequent market developments require higher year-on-year production levels. The continued strength of demand in Q3 has led management to increase FY20 revenue guidance by around 3% to more than €1.45bn with an EBIT margin of 4–6%, and we are increasing our estimates modestly.
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