Leclanche : 2020-06-30 – AGM Management Presentation – Business Update

30 June 2020

Management Presentation

Business Update

Annual General Shareholder Meeting

2019 FINANCIAL SUMMARY

BUSINESS UPDATE

STRATEGIC REORGANIZATION TO DELIVER PROFITABLE GROWTH

GOING FORWARD

SUPPLEMENTARY INFORMATION

A G E N D A

2019 FINANCIAL SUMMARY*

*For complete 2019 Financial Presentation, please see « 2019 Financial Presentation »

BUSINESS

UPDATE…

…5 years in the making of the New Leclanché

Click to see Leclanché eMarine movie

Trusted by fleet electric vehicle customers worldwide

• e-TransportBusiness is set to grow by 6 to 10 times in the year 2020. ​

Marine transport customers

• An order book of CHF 90 million to be delivered between 2020-2022. Recurring revenue trajectory underpinned by Master Supply Agreements. ​

• Total cost of ownership reduced through our high energy and very high cycle life cells.​

• Leading position on maritime battery safety with certified & active fire extinguishing systems​.

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Trusted by fleet electric vehicle customers worldwide

The Company is among the market leaders

in the Marine electrification market	Marine transport customers
• Unique integrated on-board battery
systems and charging infrastructure for
Ports/ Harbors.​

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Click to see Leclanché railway movie

Trusted by fleet electric vehicle customers worldwide

• Business revenues of more than 100m € over

Ground transport customers

the next 5 years with Bombardier Transportation. ​

• Significant momentum in the Truck electrification market leveraging the success with TOYOTA.​
• Large opportunities for Bus and Truck fleet retrofit. ​

T R A I N

B U S

T R U C K

O F F - H I G H W A Y

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Trusted by fleet electric vehicle customers worldwide

The Company is now well positioned to address more than 40% of the Train electrification market

• Strategic partnership with Bombardier as the preferred global provider of Battery systems.​
• Recently won a large new project with another major European train supplier.​

Ground transport customers

T R A I N

B U S

T R U C K

O F F - H I G H W A Y

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Trusted by utilities and transmission system operators worldwide

• In-house Energy Management Software (EMS) and

Systems Integration expertise.

• Full Battery Energy Storage System provider.

• Turnkey EPC* model for project delivery.

• More than 100MWh of projects commissioned.

• BOO** model for Energy-as-Service.

ST. KITTS ELECTRICITY CO.

LTD.

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Technology to products

Lithium-ion		BMS** & Modules			Battery		3rd Party# Systems
Cells		Packs & Racks				Integration

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Highest level of certifications

Corporate Certifications	Industry Certifications
•	ISO 9001:2015	•	Marine type approvals
	Quality management System
•	ISO 14001:2015
	Environmental management System
•	ISO 45001:2018
	Occupational health and safety management system	•
		Railways applications

Stage 1 passed

Stage 2 in progress

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Proven performance in the field

As of April 2020, our systems
have completed:
•	more than 36'000
	kilometers of marine	More than 57 GWh of energy
	runtime	throughput in battery-based
•	more than 700'000	energy storage systems
	kilometers of road	designed and commissioned
	runtime	by the Company with an
• average uptime of more	average uptime of 98%, as of
	than 99%	April 2020

B U S I N E S S U P D A T E - 5 y e a r s i n t h e m a k i n g : t h e N e w L e c l a n c h é

Leclanché has secured its position among the best in the industry in terms of energy density and cycle lifetime with the introduction of the new G-NMC 60Ah cells

• 210 Wh/kg and 420 Wh/liter; more than 8000 cycles @80% DoD*
• This position will be further strengthened by the launch of M3 Module in early 2021

STRATEGIC REORGANIZATION

To deliver profitable growth

Structurally addressing the issues impacting profitability

Energy Storage Business, with in-house production of Lithium Ion Cells, requires a critical-size to deliver profitable growth

Simultaneous investment in Production Capacity, Product Portfolio Expansion and Organizational Resources

Need to leap-frog competitor's cost-base to

secure good gross margins

Project led business creates uneven growth pattern

• Increasing Capital expenses (Capex) funding need for production capacity expansion
• Increasing the Operating expenses (Opex)
• Increasing the current cash burn rate
• Substantial investments made in R & D of High Energy Density Cells, Modules and BMS
• Increasing the Opex
• Agreed Business Plan funding remained partial, except in 2018

S T R A T E G I C R E O R G A N I Z A T I O N t o d e l i v e r p r o f i t a b l e g r o w t h

Solid fundamentals to deliver profitable growth

Partnership with Eneris Group secures access to large production capacity to support large and growing order book

• Eneris to invest CHF 53 million in capacity expansion in Production Joint Ventures (JV) in Germany and Switzerland... plus
• Access to further capacity through Eneris Poland Cell factory avoiding an additional investment of CHF 60 million in 2022 timeframe.

Reduced

cash	Capital-light
intensity

More than 20% decrease in Opex: nearly 150 headcount transfer to the Joint Ventures (JV).

Avoided Capex investment of more than CHF 110 million.

Significant reduction in working capital related to production activities.

S T R A T E G I C R E O R G A N I Z A T I O N t o d e l i v e r p r o f i t a b l e g r o w t h

Solid fundamentals to deliver profitable growth

Leclanché innovation, in partnership with Eneris Group, maximizes the gross margin

• Second strong industrial endorsement, after Exide Industries Limited for India JV : Eneris to license Leclanché technologies for its factory in Poland with a payment of up to CHF 32 million
• Giga-scaleproduction drives down costs further

Improved	Reduced product
Margins	costs

25% Year-over-year reduction in cost per kWh over 2018-2019 pricing levels with the introduction of new high energy density Cells 210 Wh per kg, and the next-generation M3 Module. Plus

GWh-scale procurement and productivity gains reduce the Production cost per unit by more than 20%.

S T R A T E G I C R E O R G A N I Z A T I O N t o d e l i v e r p r o f i t a b l e g r o w t h

Solid fundamentals to deliver profitable growth

Strategic reorganization, in partnership with Eneris Group, ensures predictable growth

• Securing working capital: Eneris has confirmed CHF 21 million in working capital loan. Terms for the second loan of CHF 21 million still to be agreed upon.
• Introduction of a new Build-Own-Operate (BOO) business line for projects with long term Power Purchase Agreement/ Offtake Agreements, including the St. Kitts project.

		Order book of CHF 90 million and growing!
		Projects under BOO model are expected to add circa CHF 8
Profitable		million of recurring annual positive EBITDA.
Recurring revenue
growth
	Access to nearly 1 GWh of capacity by 1Q 2022 to super
		charge the recurring growth from the eTransport business
		lines.

S T R A T E G I C R E O R G A N I Z A T I O N t o d e l i v e r p r o f i t a b l e g r o w t h

Solid fundamentals to deliver profitable growth

Strategic reorganization pivots the Company to software and systems integration business model boosting the profitability

• New Leclanché would have nearly 40% of its staff in Research & Innovation and Engineering
• Clear operating model for investors- different businesses financed differently:
• • Upstream business in Joint Venture with an Industrial Partner, Eneris Group;
  • BOO Project business in Joint Venture with a large US-based Infrastructure Fund.

Profitable

Leverage working references!

Leverage success with world leading reference customers

growth

Continuous innovation

already won.

Enhance the in-house Energy Management Software (EMS) Platform to offer Energy-as-Service and IoT Services.

S T R A T E G I C R E O R G A N I Z A T I O N t o d e l i v e r p r o f i t a b l e g r o w t h

GOING FORWARD

The new Leclanché Journey goes into Giga-scale business now…

We are committed to delivering profitable growth. We are thankful for the patient investment by all shareholders.

T H E N E W L E C L A N C H É J O U R N E Y

We continue to build the business undeterred by current challenges

Being realistic about the current Covid-19situation, we shall not provide any guidance for the year 2020

• On an average production capacity reduced by nearly 1/3 during the lock down period.
• Nearly CHF 11 million business deferred, but not lost.
• We see a considerable slowdown in new bids/ request for quotes in the marketplace.

The new Leclanché Journey goes into Giga-scale business now…

We continue to build the business undeterred by current challenges

• The decision to add BOO business line shall add material positive EBITDA to the Company's financial results from 2022 onward. Thus, making the Company more investable by strategic and institutional partners.
• In addition to the Working Capital Loan from Eneris, the Company shall still raise about CHF40 million of fresh capital in Q1 2021 timeframe to fully fund its 2021 Business Plan.

T H E N E W L E C L A N C H É J O U R N E Y

• The Agreement with Eneris is good for all Leclanché Shareholders and Customers.
• Even under these difficult times, the Company has raised up to CHF 95 million in a non-dilutive manner for all shareholders.

Thank You for your patient Investment and the continued Trust

We are on a clear path to deliver profitable growth.

www.leclanche.com

SUPPLEMENTARY INFORMATION

The 3 agreements with Eneris Group

LOAN AGREEMENT		INDUSTRIAL AGREEMENT		TECHNOLOGY AGREEMENT
Providing working capital		•	Progressive investments of		•	Licensing of Leclanché's
financing of up to CHF 42			CHF 53 million for a			technology to Eneris against
million to fully fund the			capacity expansion			payment of a royalty fee of
business plan through June			program			up to CHF 32 million
2021		•	Exclusive Leclanché		•	Leclanché will retain full
			technologies and			ownership of its technology
			production by the JV

T H E T H R E E A G R E E M E N T S

MINORITY STAKE

MAJORITY STAKE*

	LECLANCHÉ PROJECT		STATIONARY		SPECIALTY
	BOO HOLDCO		STORAGE		BATTERIES
	PROJECT INVESTMENT		BATTERY STORAGE		CUSTOM
			BATTERY
				SYSTEM
					SYSTEM
	St Kitts project
	S4 Energy projects
			PROJECTS		SALES
	Refinery project
	Marengo project
	Airport project

N E W O P E R A T I N G M O D E O R G A N I Z A T I O N

E-TRANSPORT

SYSTEMS

CERTIFIED BATTERY PACKS AND RACKS

CUSTOMER BASE

WITH MASTER

SUPPLY

AGREEMENTS

ENERIS-LECLANCHÉ JOINT VENTURES

Willstätt Battery Factory

Yverdon Module Production

€

Disclaimer

S U P P L E M E N T A R Y I N F O R M A T I O N