Preliminary annual figures LION Smart GmbH Financial year 2018
The year 2018 in the sign of LIGHT Battery development
The 2018 financial year was marked by important changes for LION Smart GmbH. The most important was development from being an engineering service provider to a product manufacturer. This transformation is far from complete and will continue in 2019. The LIGHT Battery modular system should be ready for the market within the next two years. Customer projects included the delivery of a 100 kWh prototype battery for a super sports car, the development of a battery pack for an S pedelec, and the winning of a strategically important order for the development of our modular battery system. The completion of this order is currently in progress.
In the field of research, LION Smart qualified to participate in the innovative European joint project “LiBAT / Cleansky”. Through this venture, the European Union is supporting the aviation industry in the implementation of electric drive trains. In the “EVERLASTING” joint project, which is already in progress, important milestones have been reached; in 2019 hardware and software will now be integrated into a driving demonstrator. A standardization proposal for battery management systems will also be coordinated and submitted.
A clear highlight of the year was the completion of the “Proof of Concept” for the internal development of the LIGHT Battery. In addition to the construction of a demonstrator (A1 sample), many essential development steps were completed. This enabled the value of the company to be increased through the creation of intangible assets. These assets long term, will help to develop LION Smart’s core business from an engineering service provider to a product provider. LION Smart is already working with established partners in the industry on the further development of the modular battery system. With Hörmann Automotive, LION Smart has gained an experienced partner for industrialization. The cooperation has already been successfully tested in initial project launches. The company, 3M has also proven itself to be a reliable supporting partner in securing the service life of the innovative cooling concept of the LIGHT Battery. FOX Automotive was the first customer to be acquired for a potential application of the LIGHT Battery concept.
The goal for 2019 is to gain a broad customer base in several industrial sectors for the battery system and generate significant revenues related to the sales BMS and battery packs
Further important steps were taken in the registration of the corresponding patents. LION Smart is confident that the entirety of the patents will be granted.
Preliminary HGB annual figures for LION Smart GmbH as of 31.12.2018 and outlook for TÜV SÜD Battery Testing GmbH:
LION E-Mobility AG announces that the overall performance of its subsidiary LION Smart GmbH increased significantly in the past fiscal year compared to the previous year. Revenues of EUR 1,023 thousand and internally generated intangible assets of approximately EUR 1,134 thousand resulted in total revenues of EUR 2,157 thousand compared with EUR 1,289 thousand in the previous year.
Sales revenues were at the level of the previous year and primarily relate to engineering and development services for customers as well as research contracts for the EU and various research institutions in Germany. In 2018, LION Smart GmbH continued to be a respected partner for battery management systems and battery solutions in multiple applications. In the “Kreisel Mavero” project, unfortunately Kreisel Mavero customers experienced delays in 2018, so that sales in this project fell short of expectations. It is expected that the delays will also have an impact in 2019.
In addition to the LIGHT Battery, the internally generated intangible assets also include an innovative battery management system with infrared communication interface. Both can be used independently of each other and have a total of 16 patent applications. The accounting relates to personnel expenses, cost of materials, patent costs and appropriate overheads.
Based on these intangible assets, LION Smart GmbH plans to offer a finished product portfolio on the market in 2020/21 and is in talks and negotiations with various market participants to industrialize the products.
The continuing high development costs for the LIGHT Battery product and the infrared battery management system are the main reasons why the operating result for 2018 is not yet positive. The high personnel expenses compared to the previous year are primarily due to two factors: On the one hand, the increase in the average number of employees over the year and, on the other hand , the allocation of shares to eligible employees as part of the stock option program. With this program the company will be able to retain talented developers in the highly competitive marketplace of battery technology engineers and software developers.
The sustained investments in processes and the intensification of quality management are showing positive results and are expected to continue improvements in 2019. The implementation of tight cost management action plan is beginning to bear fruit and will lead to a much better cost structure concerning the overhead and administrative function. Management identified additional cost reduction areas for 2019 and has already initiated the implementation of the appropriate measures.
In addition to property, plant and equipment, the fixed assets of LION Smart GmbH are dominated by the 30% ownership in TÜV SÜD Battery Testing GmbH (TSBT), which is reported under financial assets. In the fiscal year 2018, LION Smart GmbH provided financing in the total amount of EUR 600 thousand in investments carried out by TSB for further expansion to meet customers’ demands and sales increase.
Current assets relate in particular to accounts receivables from customers and cash and cash equivalents. In addition to generating its own operating cash flow, LION Smart GmbH is currently mainly financed through LION E-Mobility AG due to the increased investment activities.
Despite the net loss for the year of EUR 1,188 thousand, equity is clearly positive at EUR 2,324 thousand. This is due to the capital contributions of LION E-Mobility AG to the capital reserve of LION Smart GmbH totaling EUR 1,700 thousand in the current fiscal year. The equity ratio is a good at 44% overall.
With the exception of liabilities from operating business and liabilities to banks in the amount of EUR 275 thousand, all liabilities are long-term. Bank liabilities were further reduced in the 2018 financial year. A total of EUR 150 thousand was repaid last year.
For the 2019 fiscal year, LION expects increasing revenues with a stable cost structure and further expenses for product development on the way to serial production.
TÜV SÜD Battery Testing GmbH:
With regard to the 2018 annual financial statements of TÜV SÜD Battery Testing GmbH, the joint venture of LION Smart GmbH and TÜV SÜD AG, LION’s management again expects a significant increase in sales and net income compared to the previous year. The outlook for 2019 remains extremely positive with regard to capacity utilization and thus sales and earnings. The final figures for the 2018 fiscal year will be published in the Federal Gazette following publication of the annual financial statements and in close consultation with our joint venture partner, TÜV SÜD AG.
Statements that express or contain projections, expectations, beliefs, plans, objectives or assumptions about future events or performance are not historical facts and may therefore be forward-looking statements. Forward-looking statements are based on expectations, estimates and plans as of the date the statements are made and involve a number of risks and uncertainties that could cause actual results or events to differ materially from those anticipated. LION E-Mobility AG is under no obligation to update any forward-looking statements contained in this press release.