Management Presentation - Leclanché · Management Presentation July 2016 . 2 company confidential...

company confidential – 2016

Management Presentation July 2016

2 company confidential – 2016

Disclaimer

This presentation has been prepared by Leclanché S.A. (the “Company”) solely for informational purposes.

None of the Company or any of its directors, officers, partners, employees, agents, affiliates or advisers nor any other person makes any representation or warranty of any

sort as to, and no reliance should be placed on, the accuracy, completeness, fairness or reasonableness of the information or the opinions contained in this presentation or

in any other document or information made available in connection with this presentation. No person shall have any right of action against the Company or any of its

directors, officers, partners, employees, agents, affiliates or advisers or any other person in relation to the accuracy or completeness of any such information or for any

loss, however arising, from any use of this presentation or its contents or otherwise arising in connection with this presentation.

This presentation contains non-IFRS measures (including certain ratios and key performance indicators, such as MWh, or megawatt hour, which means a unit of energy

equal to 1MW of power being applied continuously for one hour, which the Company uses to illustrate its overall production as demonstrated through the electrical

energy storage capacity of its battery systems). These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of

the Company’s results as reported under IFRS.

This presentation contains statements that constitute forward-looking statements relating to the business, financial performance and results of the Company and the

industry in which the Company operates. Such forward looking statements in this presentation are for illustrative purposes only. These statements may be identified by

words such as “expectation”, “belief”, “estimate”, “plan”, “target”, “forecast”, “pipeline”, and similar expressions or the negative thereof; by the forward-looking nature of

discussions of strategy, plans or intentions; or by their context. All statements regarding the future are subject to inherent risks and uncertainties, and various factors could

cause actual future results, performance or events to differ materially from those described or implied in these statements. Such forward-looking statements are based on

numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Further,

certain forward-looking statements are based upon assumptions of future events that may not prove to be accurate, and neither the Company nor any other person

accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. Past performance is not an indication of future

results and should not be taken as a representation that trends or activities underlying past performance will continue in the future. The forward-looking statements in this

presentation speak only as at the date of this presentation, and the Company expressly disclaims any obligation or undertaking to release any updates or revisions to these

forward-looking statements to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any

statement is based after the date of this presentation or to update or to keep current any other information contained in this presentation or to provide any additional

information in relation to such forward-looking statements.

This presentation does not constitute, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation, inducement, solicitation or

recommendation to any person to purchase, underwrite, subscribe for or otherwise acquire securities in the Company or any of its affiliates or constitute an inducement to

enter into investment activity in any jurisdiction.


Who we are

Market opportunity

Products, services & technology roadmap

Customers & case studies

Competitive advantage and IP

Organisation / execution platform

Financial Summary

Strategic Challenges and Risk Factors

4 4 company confidential – 2016

Who we are Leclanché at-a-glance

We are experts in energy storage

We have over 100 years of energy storage expertise with full solution capabilities including development, design, systems integration and management software for a wide array of storage and hybrid power configurations

We have the capability to deliver complete customer solutions

Our customer references across both stationary and transportation applications have been validated by industry-leading implementations and innovations in market segments ranging from utility-scale power generation/microgrids and grid services to mass eTransport (e.g. eFerry and eBus) and commercial & industrial battery systems. Our focus is providing customers with high-performance, infrastructure-grade, sustainable, safe, efficient and cost effective energy storage solutions, demonstrating the turn-key delivery of complex projects

We have proprietary, market-leading cell technology

Our proprietary Lithium Titanate Oxide (LTO) cell technology is protected by more than 100 patents granted or filed and provides market-leading charging speed, cycle/calendar life and thermal stability for lowest lifetime cost and world class performance

We can integrate any battery chemistry with our software and systems

Our advanced battery management system and cloud-based asset management software enables us to optimise solutions for an array of end-customer use cases. We are system integrators and our integration business encompasses in-house and externally sourced battery chemistries as well as other energy storage technologies, such as fuel cells

We bring quality European engineering to global markets

We have a heritage and culture of high quality design engineering and renowned Swiss precision, which feeds into efficient manufacturing and production through our global partners for growing markets worldwide. Our team includes 50 engineers (5 PhDs), with 20 in software development

We power clean, intelligent energy for the future

We are investing in our intelligent software, systems integration and power controls to deliver best-in-class storage solutions for 21st century applications


Leclanché in numbers

$18 billion forecasted market size for Li-Ion energy storage for stationary, commercial & industrial and mass eTransport applications in 2020 **

> 150 FTEs including 50 engineers (5 PhDs), with 20 in software development, operating from offices located in Switzerland, Germany and Belgium

> 100 years company history, with rich heritage as one of the oldest battery manufacturers in the world

100+ MWh opportunity through 2017 from identified projects in advanced stages of our pipeline*

100% growth revenue growth target for 2016

> 100 patents granted or filed covering our proprietary Lithium-ion technology, our manufacturing processes and our systems expertise > CHF 135 million

total invested and committed by shareholders since June 2010

*Please refer to page 31 for more information on our pipeline. **Source : Navigant Research.


Key investment highlights

Large, growing, strategic market

c.$18bn annual market in 2020, with target segment growth rates from 37-58% through 2025*

Strong technology differentiation, IP, software and design know-how

Strategically important IP enabling longer battery life, critical software and integration tools

Solid international pipeline with good momentum

100+MWh pipeline** with international customers supporting target 100% revenue growth in 2016

Vertically integrated with strong ‘downstream’ capabilities in emerging sector

Track record and expertise in project delivery to de-risk opportunity pipeline

Enhanced management to deliver on growth

Team now has >150 years combined executive experience and proven track record

*Source: Navigant Research. **Please refer to page 31 for more information on our pipeline.


Who we are

Market opportunity





Financial Summary



The global Li-Ion energy storage market is growing rapidly, driven by utility-scale generation and the electrification of transport

Source: Navigant Research

4.4 7.5

11.9

15.7

21.4

28.9

36.0

45.5

58.3

75.5

0

10

20

30

40

50

60

70

80

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GWh

Global Lithium-Ion battery installed capacity by application

Buses, Trucks and Materials HandlingVehicles

Residential Energy Storage

Commerical & Industrial Buildings

Microgrids

Utility-Scale

The Li-ion market for stationary and industrial mobility applications is forecast to grow 37% annually to 75.5GWh by 2025


• Micro-grids: renewable integration

• Grid stabilisation and peak shifting

We have a sharpened focus on high growth end-markets 44% CAGR to $18 billion in 2020

• Commercial, industrial & residential

• Solar lighting, medical, telecoms, security & defence

• Branded consumer (selected markets)

Source: Navigant Research.

• Fleets of buses, trains & trams

• Ferries and tugboats

• Forklifts, cranes, mining vehicles

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

GW

h

GW

h

GW

h

Utility-scale generation & microgrids

Commercial & industrial battery systems

eTransport


Who we are

Market opportunity





Financial Summary



Our common technology stack is applicable across multiple markets

Module design

Battery management system (BMS)

Systems integration and engineering expertise

Solutions delivery, including financing & EPC*

Proprietary Lithium Titanate Oxide (LTO) cells for leading performance in long-life and

rapid-charge applications

Proprietary G-NMC** cells for energy

intensive applications

eTransport Utility-scale generation

& microgrids


Asset planning & management software

*Engineering, Procurement & Construction. **Graphite anode and Nickel-Manganese-Cobalt cathode.

Third party battery cells and other energy storage technologies

Common, modular ‘building block’ technology – with

capabilities to integrate all storage technologies

Our systems integration business is cell chemistry

agnostic and encompasses other evolving energy storage technologies


We leverage our in-house capabilities and top quality partners to provide the right solution for each customer application



eTransport


Cycle life 15,000 @ 100% DoD >20,000 @ 80% DoD

4,500 @ 100% DoD 8,000 @ 80% DoD

Lifetime & warranty

Up to 20 years Up to 10 years

Charge time to 90% SoC

Less than 15 minutes (4C) 1 hour (1C)

Charge acceptance

Symmetrical to discharge (max. c-rate 5 to 20)

Asymmetrical to discharge (max. c-rate 1)

Energy density

70 Wh / kg 160 Wh / kg

Temperature range

-20°C to +55°C 0°C to +45°C

Safety Superior ceramic cell technology Superior ceramic cell technology

Ideal use case • Power intensive applications

• Long lasting applications

• Applications needing rapid response

• Grid stability projects

• Energy intensive applications

• Low- or micro- cycle applications

• Bulk storage or weight critical applications

• Renewable energy integration projects

We deploy our proprietary LTO and G-NMC cells yet remain flexible to incorporate all third party technologies for selected solutions

Lithium Titanate Oxide (LTO) Lithium Graphite/NMC (G-NMC) Integrated 3rd Party Technologies

The vast majority of applications use our technology… …but we remain flexible to integrate

Examples could include:

Other battery chemistries (Ni-MH, Ni-Cd, PbA, Li-ion)

Hydrogen fuel cells

Vanadium redox / redox flow batteries

Ultracapacitors


We continue to invest in complementary technologies to enhance our customer solutions offering & delivery capabilities

Jan-15 Dec-15

Jul-15 Acquisition of storage developer Trineuron

Solution integration and customer base in eTransport applications, e.g. electric buses, ferries and AGVs (automated guided vehicles)

New system development centre including

additional 10 engineers from Trineuron

May-15 Strategic partnership with Visedo

Strategic partnership for marketing, selling and developing Visedo’s electric drive trains with Leclanché’s battery systems

Provision of a ”one-stop-shop for electric power trains” – an integrated solution to maximize performance and reduce lead times

Joint R&D activities

Aug-15 Acquisition of IP rights from ADStec

Leclanché acquired the non-exclusive usage right to employ special battery technology designed by ads-tec, primarily for stationary applications

Ads-tec offers solutions for the energy management of hybrid energy systems, a central cloud solution, as well as complex storage systems for commercial and industrial applications

May-15 Strategic cooperation with Litarion

Cooperation announced with Litarion for the supply of Graphite and NMC electrodes to be incorporated into Leclanché’s Li-Ion cells and systems

Acquisition

Strategic partnership/cooperation

Summary of recent transactions to increase downstream capabilities for enhanced customer solutions


To accelerate growth, we are making substantial investments in software, controls and integration tools

2016 2018

Battery Cell Innovation to improve price-performance

Battery Module Move to lighter, scalable and cost-competitive modules

Pack & rack Standardised to enable efficient systems integration

Cloud software & services Enables fleet/asset management

Long-term recurring service revenues from next-generation cloud release

System integration & EPC Integration with drive lines, inverters & energy management systems

Industry leading system efficiency to reduce total cost of ownership (TCO)

Battery management systems (BMS) Single platform across multiple market applications, with apps for bespoke solutions

Risk reduction through commitment to double-digit percentage annual cost reductions, aiming to beat competitors’ ASP reductions Multiple ongoing R&D programs delivering cost reductions to drive competitiveness Universal platform and standardised designs where possible; customisation delivered through software and integration


We are a market leader in sustainable battery solutions

The first global Li-Ion battery producer with a water-based cell production process

─ In contrast to the chemical solvents, which have to be subsequently recycled or burnt, which are used by our peers in conventional industrial coating

We are a member of the Swiss Inobat Interest Organization for the disposal of batteries and began with the recycling of batteries as early as 60 years ago

Protection of the environment is given high priority in every phase of our product life cycle:

─ saving resources by reduction of waste in manufacturing

─ separation technology in all areas of chemical processing

─ gas and water treatment through to systematic recycling and recovery of raw materials

ISO9001:2015 with ISO14001 underway

Our high quality production, combined with the benefits that energy storage brings to integrating renewables and emission-free transportation, provides us with amongst the cleanest credentials in our commitment to sustainability


Who we are

Market opportunity





Financial Summary



We are building a diverse global customer base following international demand

Secured projects and pipeline

Pipeline only

Our secured projects and pipeline* encompass over 40 projects in 19 countries

eTransport China

eTransport Haryana, India

4 projects (utility / eTransport) Sweden

Commercial & industrial Switzerland

Commercial & industrial Saudi Arabia

Commerical & industrial Sri Lanka

5 projects (eTransport) Spain

eTransport Denmark

11 projects (utility / commercial & industrial / eTransport) Germany

eTransport Czech Republic

eTransport Poland

eTransport San Francisco, USA

eTransport Tuscaloosa, USA

Utility Canada

2 projects (utility) Azores/Portugal

2 projects (eTransport) France

2 projects (eTransport) Norway

2 projects (utility) United Kingdom

eTransport Holland

4 projects (utility / eTransport) Finland

*Please refer to page 31 for some further information on our pipeline.


We are growing our pipeline, with substantial momentum over the past 12 months

Jun-15 – World’s largest electric Ferry

Jan-15

Aug-15 – Solar street lighting, Saudi Arabia

Jan-16 – World’s largest grid ancillary services project (53 MWh), Canada

Feb-16 – New CFO

Jul-15 – Autonomous guided vehicles (AGVs), Belgium

Our awarded and

expected projects*

total >100 MWh

across 10+ project

deliveries through

2017

Jul-15 – New CSO

Aug-15 – New VP Corporate Development

Jan-16

Customer traction with project wins across each of our segments

May-15 – European largest Hybrid power plan, Azores island, Portugal

*See page 31 for more information.


Customer case studies: utility-scale and microgrid storage applications

• Micro-grid supplying power for 4,500 inhabitants; turnkey solution for energy storage plant and distribution management integrating solar PV, wind park and diesel genset technologies

• Increase in proportion of renewable generation used from 15% to 65% of annual consumption

• 20 years performance warranty by Leclanché on its LTO batteries

• Project management and EMS by Younicos, financing provided by local grants and Leclanché’s shareholder, Recharge

Location: Graciosa, Azores Islands, Portugal

System: 3.2MWh LTO BESS

COD: Dec-2015

École polytechnique fédérale de Lausanne Ontario IESO / grid ancillary services

Graciosa energy island / micro-grid

• Fast frequency response for grid reserve / voltage control services

• 15 years performance warranty by Leclanché on its G-NMC batteries

• Partners include Deltro Energy (electrical and civil work and PCS) and Greensmith (EMS); Leclanché providing development Capital and arranging Swiss Export Credit (SERV)

Location: Ontario, Canada

System: 53MWh G-NMC BESS

Target COD: Q1-2017 (under construction)

• Turnkey BESS for ancillary services, solar PV solar integration, peak shaving, load management and fast frequency response

• 10 years performance warranty by Leclanché on its LTO batteries

• Largely co-financed by the Canton of Vaud

Location: Lausanne, Switzerland

System: 500kWh LTO BESS

COD: Sep-2015

Bamboo Sprout – primary control reserve

Location: North Germany

System: 33MWh BESS

Target COD: Q4-2016 (under construction)

• Turnkey BESS to provide grid frequency control via the German primary control reserve (PCR) market

• 10 years performance warranty by Leclanché on its BESS

• 2-MW capacity being built by Leclanché on the basis of Build-Own-Operate-Transfer- while the Company is actively seeking long term strategic owners of this Asset

• Project partner and DSO: ENERTRAG AG


Customer case studies: eTransportation applications

Location: Denmark

System: 4.2MWh G-NMC

Target COD: Jun-2017

b u s e Location: Espoo, Finland

System: 55kWh LTO

COD: Feb-2016

Location: Brugge, Belgium

System: 38kWh LTO

COD: Oct-2015

• First wirelessly charged fully electric buses to enter public operation in Belgium

• Three VanHool A308E buses equipped with an LTO battery delivered by Leclanché.

• Project partners included VanHool, De Lijn (Belgian bus operator) and Bombardier

Brugge eBus

VTT eBus

• Ranked #1 in TransDev energy consumption test, which included several European and Chinese bus designs; eBus achieved as low as 0.7 kWh/km consumption vs typical consumption of 1.1-1.3 kWh/km.

• Full electric drivetrain provided in partnership with Visedo

ÆRØ Ferry Project

• 56m x 12m public eFerry to replace one of the diesel-powered ferries on route between Denmark mainland and Ӕrø Island.

• Will be largest electric ferry in the world with planned energy savings up to 50% and major emission reductions

• Full electric drivetrain provided in partnership with Visedo

BB Green

Location: Sweden

System: 200kWh LTO

COD: Q2-2016

• Battery system and integrated BMS for demonstrator fully electric high speed commuter ferry

• LTO technology means batteries may be fully charged in as little as 10 minutes

• Battery capacity divided into two identical battery packs for redundancy

• Ferry fully constructed and awaiting deployment


Customer case studies: eTransport, commercial and industrial applications

Automated guided vehicles (AGVs)

Off-grid residential storage Off-grid street lighting

• Globally renowned toy and entertainment brand chose Leclanché to replace their fleet of 27 NiCd-powered warehouse AGV’s

• Leclanché was chosen over competing solutions for:

– Lowest total cost of ownership with guaranteed 80% residual capacity after 7 years

– Greater autonomy and operational flexibility from better efficiency, ultra-fast charging and remote management software

– Low ecological footprint given favourable battery chemistry and Leclanché’s other ‘green’ credentials

• In March 2015 Leclanché delivered 200 battery modules for the project, certified to CE and UN38 safety standards

• Each module consists of 10 A4 LTO cells and is supported by a 10-year performance warranty

• Fully integrated design, specified with capacity for two full consecutive nights of autonomy, heat resistant (to over 50°C) and maintenance-free

Location: Saudi Arabia

System: 3x700Wh LTO modules

COD: Oct-2015

Location: Billund, Denmark

System: 40kWh LTO

Target COD: Q4-2016

Location: Island, Sri Lanka

System: 130 kWh, G-NMC

COD: Nov-2015

• Economical residential storage solution delivered for a small island in the north of Sri Lanka

• 4 battery banks, five 6.7kWh each

• 7 year warranty with design life of more than >5,000 cycles

Auto-guided oceanography submarine

Location: Belgium

System: 14.4kWh Third Party G-NMC

Target COD: Q4-2016

• Advanced design constraints to provide enough energy within limited physical envelope and able to resist to huge pressure and mechanical constraints (for diving depths over 300 metres)

• Design, testing and all certifications completed, production underway


Who we are

Market opportunity





Financial Summary



We have demonstrated differentiation relative to our competitors

Storage solutions as %

of business

Multi-chemistry cell

capabilities

Module, BMS pack & rack

EPC & project systems

integration

Balance sheet strength

Segment focus for:

Electric utilities

Commerical, industrial and

eTransport

Passenger vehicles (EVs)

Strong position

Weak position

China

Korea 1

Japan 1

Europe

Korea 2

Japan 2

USA

Japan 3

Source: Management.


Our IP portfolio of patents protects our proprietary LTO technology and water-based processing methods

IP Coverage Patent family Patent granted In filing status

LTO specific 5 35 5

Manufacturing process 3 37 30

Separator technology(1) 1 - 5

System/module integration 2 - 3

11 72 43

Coverage area # patents granted # patents filed # of patent families

(1) Further separator patents are filed under our Fraunhofer license.

We have built up a broad portfolio of IP to safeguard our business

We continue to secure our technology with patents as an on-going part of our strategy


Who we are

Market opportunity





Financial Summary



Organisational chart New group structure introduced in July 2016

Chief Executive Officer Anil Srivastava

Regional functions Worldwide functions Corporate functions

Executive Committee

EU & RoW [External to be hired]

(Interim Anil Srivastava)

North America Bryan Urban, EVP

APAC Jacques Boppe, SVP

Customer Projects Delivery

Fabrizio Marzolini, EVP

Product Delivery Pierre Blanc, CTIO

Marketing & Communications Florent Gaillard

Human Resources Nathalie-Claire Altherr

Finance Hubert Angleys, CFO

Legal [External to be hired]

Quality Health & Safety

Yann Beaufils

Innovation Board

Systems R&D Stefan Louis, SVP

Distribution & Home Storage

Thierry Perronnet, MD


Who we are

Anil Srivastava, Chief Executive Officer

• Joined June 2014; former CEO of Areva Renewables

• Previously CEO of a large offshore German wind company and senior executive positions in companies such as TomTom group and Alcatel-Lucent

• Masters degree from the National Institute of Technology in India (IIT) and Executive MBA from the Wharton School of Business

Fabrizio Marzolini, Executive Vice President - Customer Projects Delivery

• Joined 1994; over two decades experience in integrating and managing battery technologies and systems for a variety of applications, with background in military-grade energy equipment

• Degree in electrical engineering and an executive Master of Business Administration (MBA)

Hubert Angleys, Chief Financial Officer

• Joined February 2016

• Formerly CEO and CFO of Metalor, a Swiss corporation with multi-billion dollar revenues

• Previously CFO of ALCOA Europe - Geneva and SICPA Group - Lausanne

Pierre Blanc, Chief Technology Information Officer

• Joined 2000

• Responsible for the development and manufacturing of battery cells of major brands such as Varta, Energizer, Panasonic and Enersys

• BA Moderatorship Chemistry from Trinity College Dublin

Stefan Louis, Senior Vice President – Systems Research & Development

• Joined 2015

• Previously at Trineuron, division of Emrol, acquired by Leclanché in 2015

• MSc in Electronics

Thierry Perronnet, Managing Director - Distribution & Home Storage

• Joined 2013

• Previously Marketing Director with Eastman Kodak for the EMEA region and developer of a business in data storage and photographic products that was spun off from 3M

Bryan Urban, Executive Vice President – North America

• Joined Board in 2013, EVP since 2016

• Over 25 years of energy development, finance and operation experience gained worked with Silverton Capital, Panda Energy International and Arthur Andersen

• BS from Indiana University and CPA

Jacques Boppe, Senior Vice President - APAC

• Joined 2015; former co-founder of Bogga Wind Power

• Previous private equity and investment experience with GWIT, China Renaissance Partners and Credit Suisse

• MBA from INSEAD, MPhil University of Cambridge and MSc Ecole polytechnique fédérale de Lausanne


Who we are

Market opportunity





Financial Summary



We have a large addressable market supporting our growth opportunity


GWh 0.9 4.2 0.04 0.2 0.4

$m 1,200 3,700 40 190 370

Commercial and industrial systems

GWh 1.8 11.3 0.1 0.6 1.1

$m 2,300 12,600 130 630 1,300

eTransport

GWh 1.7 6.0 0.1 0.3 0.6

$m 700 1,800 20 90 180

Total GWh 4.4 21.4 0.2 1.1 2.1

Implied Leclanché revenue opportunity $m 4,300 18,100 180 910 1,810

Estimated market size Implied market share in 2020

2016 2020 ~1% ~5% ~10%

Note: Numbers have been rounded and therefore may not sum exactly to totals shown. Source: Navigant Research.


We expect to see strong growth through 2017 driven by our pipeline of awarded and expected projects*

Awarded and expected projects

Battery type

Market Segment

Size (MWh)

Target Delivery

Pipeline Status (as of 14 July 2016)

Stationary 1 G/NMC 2 2016 Short listed for supply contract; Final decision expected Q3-2016

Stationary 2 G/NMC 12 2016 Project awarded; Under construction

eTransport 1 (Ferry) G/NMC 4 2016 Project awarded; Under construction

Stationary 3 TBA 10 2016 Project awarded; Construction expected to start in Q3-2016

Stationary 4 TBA 10 2016 Project awarded; Construction expected to start in Q3-2016

eTransport 2 (Bus) LTO 5 2017 Term sheet signed Q4-2015; Certification testing underway

Stationary 5 G/NMC 41 2017 Project awarded

Stationary 6 G/NMC 33 2017 Short listed for supply contract; Final decision expected Q3-2016

eTransport 3 (Ferry) LTO 4 2017 Multiple discussions underway

Stationary 7 TBA 10 2017 Project under development

Stationary 8 TBA 10 2017 Project under development

Total 141

*Execution on the pipeline assumes sourcing of up to CHF 50 million, as referenced in Leclanché’s press release dated 13th April 2016. The Company is exploring various means to raise this capital including equity, off- balance sheet project finance ‎and licensing some of its technologies.


We see a positive correlation between production volume and gross margin

Analysis based on internal management estimates shows cumulative gross margin crossing above 25% at c.100 MWh production and above 30% at c.400 MWh

Production assumes a mixture of in-house and planned outsourced manufacturing

Pricing assumes cell and module ASPs reducing by 3-5% annually from current market levels

This is indicative, without reference to time period, and not intended as a forecast

*Gross margin calculated using internal management estimates for cell and module production (including different ASPs and volumes assumed for different chemistries and applications).

*

18%

20%

22%

24%

26%

28%

30%

32%

34%

36%

0 100 200 300 400 500 600 700 800 900 1,000

Gross margin %

Cell and module production (MWh)

Cumulative gross margin increase as production volume scales


Summary income statement and announced guidance

FYE December 31 2014A 2015A 2016 guidance

CHF millions from management

MWh delivered na 5 30

Total revenue 10.8 18.2 36

Growth % na 69% 100%

Gross profit 2.8 1.7 *

Gross margin % 26% 9% *

Personnel costs (12.4) (14.3) *

Other operating expenses (7.4) (13.4) *

EBITDA (16.9) (26.0) (13)

Depreciation & amortization (4.6) (5.8) *

EBIT (21.5) (31.8) *

Interest (1.9) (2.7) *

Income tax - (1.1) *

Net loss (23.4) (35.6) *

Doubling revenue in 2016

Plan to deliver 30MWh in 2016


Summary balance sheet

FYE 31 December 2015A

CHF millions

Accounts payable 6.0

Current portion of long-term debt 0.8

Other current liabilities 6.9

Total current liabilities 13.7

Long-term debt 8.1

Pension & other 9.9

Total non-current liabilities 18.0

Common stock and paid in capital 129.8

Retained earnings and other (121.2)

Total equity 8.6

Total equity and liabilities 40.3

FYE December 31 2015A

CHF millions

Cash and cash equivalents 3.5

Trade and other receivables 4.7

Inventories 4.4

Total current assets 12.6

Property, plant and equipment 17.8

Intangible assets 9.6

Other financial assets 0.3

Total non-current assets 27.7

Total assets 40.3


Consistent backing from new and existing shareholders

We benefit from supportive shareholders; ACE, Recharge, Bruellan and Logistable together have put in CHF 50+ million since 2013

Additionally, Recharge has provided CHF millions in off-balance-sheet project financing support for an array of customer solutions integrating Leclanché’s technology, such as projects in Graciosa Island, Canada and Saudi Arabia

Shareholders have continued to support us with capital at increasing valuations reflecting our progress

1.50

1.90

2.20

2.41

2.86

1.00

1.50

2.00

2.50

3.00

Precept(Jul-13)

Recharge(Dec-14)

RechargeFacility B(Dec-14)

December2015 raise

ACE Facility C(Mar-16)

CHF/Share

CHF 17m

CHF 13m

CHF 8m

CHF 6.9m

CHF 20m

Denotes capital raised

Indicative shareholding - Pro Forma for conversion of outstanding convertible loans

20%

16%

9%

9% 6%

6%

35%

ACE & Company

Golden Partner

Bruellan

Logistable Group

Bright Cap SICAV

Recharge

Others / Free float

(Either equity or debt that is convertible into equity)


Who we are

Market opportunity





Financial Summary



We are actively working to mitigate key strategic challenges across our business

Perceived challenge Mitigation effort

Sustainability of high double-digit revenue growth

• Leclanché is working to secure capital – both growth capital and diverse sources of off-balance sheet project financing – recognizing that access to capital is critical to support the Company’s ongoing operations and continued growth

• Leclanché has an order backlog of ~CHF 40 million, which represents part of a wider pipeline of awarded and expected projects totaling 141 MWh in customer contracts, which provides visibility of growth into 2017-2018

‘Lumpy’ project-related revenue creating unpredictable earnings profile

• While Leclanché’s near-term order book is currently oriented toward utility-scale and microgrid projects, the Company has also won exemplar projects in eTransport, including electric buses and ferries. Following a process of certification and homologation, Leclanché’s solutions become ‘designed-in’, creating a barrier to entry and positioning the Company for multi-year contracts impacting growth in 2018 and beyond

• This will diversify the Company’s business away from stationary project-related revenue and towards 7 to 15+ year repeat ‘unit sales’ business in eTransport and selected Commercial & Industrial applications, for which the Company’s LTO technology is ideally suited

Perception of overly broad market focus

• Leclanche’s solution architecture is modular. It has 80% common system design elements across its three end market segments – from cell module manufacturing through integrated software for power management systems and drive train / inverters. This strategy of common design enables the Company to target multiple fast-growing market segments with a competitive cost base

• Also encompassed in this strategy is the Company’s focus on developing a common charging infrastructure across all three of its end markets. This is a substantial market opportunity as the convergence between stationary and mobility businesses occurs

Competition and margin pressure

• Notwithstanding considerable competition in a highly fragmented marketplace the Company is competing favorably

• Current R&D programs in system and cell design are delivering a planned double digit cost reduction per annum, together with ongoing significant improvements in cell performance

• The Company’s cost reduction efforts, integrated solution offering and scale can drive increased margins

Risks related to EPC business

• Leclanché deploys its solutions into projects with relatively short construction periods (typically <6 months), with a high management focus on recycling capital and reducing warranty exposure

• Large project performance guarantees are backed by The Swiss Export Credit Agency (SERV) and are non-recourse to Leclanché

• In addition, the Company carries separate insurance to cover standard product warranties and corporate matters

Sufficient working capital and resources to sustainably compete in cell manufacturing

• In-house cell manufacturing capacity is being limited to 1.3 million cells annually (+30% from current levels) with G-NMC cell production increasingly outsourced and a focus on in-house manufacturing of LTO

• The Company is actively reviewing opportunities to license its cell technology and partner on its upstream cell manufacturing and remains committed to integrating other upstream technologies to achieve optimal system designs for its customers


Note on risk factors

Shareholders and prospective investors should be aware of the of the following factors, any of which could have a material adverse effect on Leclanché’s business, financial condition, results of operations and prospects, and accordingly the value of Leclanché’s shares:

− Leclanché has limited liquidity and may not have sufficient capital to continue as a going concern

− Leclanché may be unable to raise additional capital

− Leclanché could be subject to liquidation if it fails to take appropriate remedial action

− Leclanché may be unable to become profitable or achieve positive cash flow

− Leclanché may be unable to implement its strategic plans for growth

− Success will depend on the ability to offer more cost effective products and improve existing battery technology

− Leclanché must be able to establish and maintain confidence of its customers, partners and suppliers, among others

− Leclanché may fail to develop successful products and solutions

− Leclanché is subject to the risk of uncertain global economic conditions

− Partnerships and collaborations may not be successful

− Leclanché has limited number of customers and operates in limited geographical areas

− There is substantial overcapacity in the sector

− Leclanché could be exposed to warranty and guaranty claims

− Leclanché could be exposed to product liability claims

− Leclanché could be exposed to environmental claims

− Leclanché could be exposed to tax risks

− Leclanché could be exposed to intellectual property risks

− Leclanché could be exposed to litigation risks


We operate with integrity Company code of conduct

Ethics: honest and ethical business, wherever we operate in the world

Confidentiality: integrity in all dealings with potential, current and past customers, suppliers and associates, both in terms of normal commercial confidentiality

Duty of care: conform with relevant law and avoid causing adverse effect on the human rights of people in the organizations we deal with, the wider environment and society at large

Conflict of interest: perform duties in accordance with the best interests of Leclanché and not for private or personal advantage

Relationships with customers and suppliers: avoid personal dealings with contractual counterparties of the Company that could influence or create the impression of influencing their decisions on behalf of the Company

Gifts, Entertainment, and Favors: not accept gifts or preferential treatment that could influence business dealings or assessments

Pricing: competitive pricing throughout with generally no arbitrary discounts

Intellectual property (IP) and moral rights: retain moral rights and ownership of IP that we create and in turn respect our customers’ IP rights

Quality assurance: maintained through constant ongoing review and reports with our customers

Professional conduct: professionalism, integrity and objectivity in judgement to protect the interests of our customers

Equality and discrimination: decisions, actions or recommendations never influenced by issues of gender, race, creed, color, age or personal disability


Our focus leverages our heritage of precision engineering for best-in-class customer solutions

We benefit from over 100 years of energy storage expertise with full solution capabilities including development, design, systems integration and management software for a wide array of storage and hybrid power configurations, with the know-how to integrate for a broad range of infrastructure-grade industrial and commercial stationary and transport applications.

Our focus is to provide customers with sustainable, safe, efficient and cost-effective energy storage solutions. Our experience integrating a diversity of battery chemistries enables us to deliver, whatever the application. We’ve demonstrated our capabilities across targeted end-markets and applications, integrating our proprietary long-duration battery cells, our high energy density cells, as well as an array of third party energy storage technologies.

We are investing in our intelligent software, systems integration and power controls to deliver best-in-class storage solutions for 21st century applications.

Management Presentation - Leclanché · Management Presentation July 2016 . 2 company confidential...

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Transcript of Management Presentation - Leclanché · Management Presentation July 2016 . 2 company confidential...