PARIS--(BUSINESS WIRE)--Regulatory News:
Electro Power Systems S.A. (Paris:EPS) (“EPS”), technology pioneer in energy storage systems and microgrids listed on the French-regulated market Euronext Paris (EPS:FP), today announces its 2016 full-year financial results. The accounts have been examined and approved by the Board of Directors on 22 March 2017 and audited by the Statutory Auditors. The full 2016 Consolidated Financial Statements will be available on the EPS’s website www.electropowersystems.com and the full set of consolidated figures is attached to this press release.
Carlalberto Guglielminotti, Chief Executive Officer of the EPS Group, commented “EPS has delivered outstanding results for 2016, driven by record revenues coupled with strong gross margin generation. In a year full of investments in R&D, engineering and industrialization, a new Group organization, and a limited commercial infrastructure, the Group has demonstrated in field not only its technological excellence, but also the ability to deliver and act as a reliable partner for the largest energy players worldwide.”
“Whilst the market remains a blue ocean particularly in emerging countries, bidding activity has increased in recent months. We have right-sized our business strategy, have a good pipeline of opportunities across our core markets and remain cost competitive, as evidenced by recent bidding success.”
2016 KEY FINANCIAL HIGHLIGHTS
|ITEM (amount in euro thousands)||2016||2015||CHANGE|
|TOTAL REVENUES AND OTHER INCOME||7 315||648||10.3x|
|GROSS MARGIN||3 234||513||5.3x|
|EBITDA||(3 976)||(3 152)||26.2%|
|EBIT||(8 472)||(10 654)||20.5%|
|NET RESULT||(8 558)||(10 598)||19.2%|
|CASH POSITION||5 478||8 574||(36.1)%|
|NET FINANCIAL POSITION||(974)||8 285|
Revenues were € 7.1 million, up +18x year-on-year, confirming good market momentum and the continued revenue trend improvement. Revenues grew particularly in the fourth quarter (€ 3.1 million), outlining a seasonal trend which see the order intake increasing in the first part of the year, and the majority of the revenues generation at the end of the year.
This growth was mainly led by the installations in Africa, Asia Pacific and Latin America (approx. 51% of revenues and other income), answering the strong demand of large utilities and grid operators in the context of their energy transition.
Gross margin was € 3.2 million, representing 46% of revenues. This result was achieved thanks to the competitiveness of the Group technology despite the fact that large customers and public tenders tend to stress pricing conditions with a material bargaining power.
The commercial dynamism of the Group is evidenced also by the backlog of orders at € 6.5 million as of today, thanks to €12.1 million order intake of the last 12 months, that gives a good visibility on 2017 growth. The pipeline of potential projects is still in excess of €100 million, with an increasing bidding activity confirming the international visibility and strategic positioning around the different geographies, particularly in Europe and Africa, despite the limited commercial infrastructure.
EBITDA loss amounts to € 4 million for the financial year 2016, down 26% compared with financial year 2015 and in line with market expectations. The loss is mainly due to the personnel and operating expenses costs related to the new Group structure. Compared to 2015, the Group has a new plant in Delebio (SO, Italy), an engineering center in Milan (Italy), increased by 50% its human resources and structured the new organization in 5 Group functions, and 7 departments.
Net result was negative of € 8.6 million, +19.2% year-on-year, mainly impacted by the investments made and the related amortization (€1.2 million), non-recurring expenses related to extraordinary activities carried out in 2016 (€ 1.3 million), and the impact of stock options and warrants allocation to the management team completed in 2016 (€1.6 million).
Cash in bank accounts at the end of 2016 reported at € 5.5 million. In addition, EPS has available additional € 3.5 million short term credit lines to finance the future working capital exposure. Considering the € 6.5 million medium-long term indebtedness drawn-down in 2016 with an average rate of 3.66%, the Net Financial Position was negative by € 1.0 million.
TOTAL REVENUES AND OTHER REVENUES 2016 BY GEOGRAPHY
(amount in euro thousands)
|Asia Pacific||1 827||25%|
|USA and Canada||249||3%|
2016 BUSINESS OVERVIEW
The Group in 2016 has consolidated its business model as a player operating in the sustainable energy sector, pioneering hybrid-storage solutions and micro-grids that, in line with the Group’s mission, transform intermittent renewables into a reliable power supply.
2016 has been the first year in which the Group focused exclusively on hybrid, storage and power conversion solutions for both flexibility and capacity requirements of any national grid or micro-grid, developing and commercializing:
- in developed countries, power conversion, distribution and energy storage systems to stabilize user loads and electrical grids heavily penetrated by renewable sources (“Grid Support Solutions”); and
- in emerging economies, microgrids systems and support to power off-grid areas at a lower cost than fossil fuels (“Off-Grid Power Generation Solutions”).
The Group installations, thanks to the deployment of new Off-Grid Power Generation Solutions in Australia, Chili, Maldives, and Somalia, prevented emissions for in aggregate 2,693 tons CO2, and serve over 165,000 people powered by renewables and the EPS technology every day.
Installed base highlights
Despite the early stage of the commercial development and the continuous investments devoted to research, development and industrialisation, the Group in 2016 showed significant results in its commercial activity, market positioning, and installed base.
HISTORICAL CUMULATED INSTALLED
|EPS as at 31.12.2015||3.0||32.2||3.0||0.0||3.0 MW|
|Elvi Energy as at 31.12.2015||4.4||6.9||5.6||9.2 MW||3.6 MW|
|EPS Group in 2016 only||8.4||7.9||16.4||26.5 MW||12.1 MW|
|TOTAL||15.8 MW||47.0 MWh||25.1 MVA||35.7 MW||18.7 MW|
The Elvi Energy S.r.l. (“Elvi Energy”) acquisition effective from 1 January 2016 has played a pivotal role in leveraging the credentials of the Group, and increasing the current installed base by 28% (4.4 MW) in terms of storage power, and by 15% (6.9 MWh) in terms of storage energy.
In addition, in 2016 the Group installed and had under commissioning at the end of the year a total of 16,4 MVA power conversion systems, i.e. approx. 2 times the aggregate installation history of the Group (8.6 MVA as of 1.1.2016).
For the year 2016 only, the Group had 26.5 MW of Off-Grid Power Generation Solutions installed and under commissioning, i.e. approximately 2.9 times the aggregated historical installed base of Elvi Energy. In the Grid-Support Solutions field, in 2016 only, the Group installed and have under commissioning 12.1 MW, approximately 1.9 time the total installed base of the Group, including the Elvi Energy credentials, at the end of 2015 (6.6 MW).
Main Events in 2016
The following principal events have occurred in 2016:
- Elvi Energy and MCM acquisition: in January 2016, the acquisition of Elvi Energy executed in December 2015 became effective and EPS also completed the acquisition of 100% of the corporate capital of MCM Energy Lab S.r.l. (a R&D centre of excellence). With these transactions (for a global investment equal to € 2.756,922 of which 51% will be reinvested through a reserved capital increase) EPS has secured two significant levers for value creation and for strengthening the Group organic growth’s profile and its potential for improving profitability.
- Microgrid in Somalia and following extension: in February 2016, the Group announced an agreement with the National Energy Corporation of Somalia (NECSOM) for the commissioning of a Hybrid Power Plant in Garowe (Somalia). The power plant enabled intermittent solar power to be transformed into a stable power source, providing clean energy to inhabitants, reducing emission and saving electricity bills. Less than five months later, EPS and NECSOM signed a new deal to expand the power plant by adding an additional Hybrid Energy Storage System (HyESS) and wind turbines, both fully integrated into the micro-grid originally powered by diesel generators only, and totaling in aggregate 8.3MW of microgrids in Somalia.
- Microgrids in the Maldives: in March 2016 EPS has commissioned in the Maldives two microgrids powering a resort completely off-grid, providing energy to approximately 2.300 people, for a combined installed power of 10.4 MW, hybridized with 1.8 MW of solar and 0.6 MWh of storage with 2.4 MW HyESS power conversion. Data available after the commissioning in October confirmed that renewables coupled with the EPS storage system cover up to 63% of the resort power requirements, enabling reduction in diesel consumption by 423,000 litres per year.
- Microgrids in Australia: In May 2016, the Group launched the construction in Australia of a proper hybrid power plant, that will be connected to a 12MW microgrid composed by 1 MW of solar panels, 4 MW wind turbines and up to 6 MVA of generators combined with 1 MW of storage system. Thus, the system will be able to cover up to 70% of the demand, supplying the inhabitants of the area – about 1,600 people – with energy from renewable sources for the hybrid power plant’s 20-year life.
- Commissioning of the Terna Storage Lab: on 2 August 2016 EPS announced its completion of the Terna Storage Lab project, which consists in two multi-technology plants (using various storage technologies and 8 different commercial products) that will provide for a total of 16 MW, divided between Sicily and Sardinia. In such project, EPS played an important role as systems provider for Toshiba and General Electric, which successfully completed the commissioning and testing phases in March 2016. Given the innovative nature of the systems installed, further testing has been conducted in 2016 with Terna and the Authority for Electricity, Gas and Water System (AEEGSI).
- Certification of HyESS integrated with hydrogen: on 2 August 2016, the Group announced that the certification testing of the HyESS integrated with the hydrogen storage module, in line with market and timeline expectations, was successfully completed, after tests conducted by leading and independent international laboratories.
- Financing for € 10 million: in 2016 the Group has raised financing for growth and innovation totaling € 10 million (of which €6.5 million are medium-long term credit lines with an average spread of 3.66% over EURIBOR) as follows: (i) a short-term credit line of € 0.5 million to provide additional working capital and a medium-long term credit line of € 2 million mainly dedicated to EPS’s development plan from Unicredit; (ii) € 3.5 million 5-year long-term credit line primarily dedicated to continuing EPS’s research and development activities on the HyESS (Hybrid Energy Storage System) project and € 3 million short-term credit line to provide additional working capital and to boost the pipeline’s projects, primarily focused on Africa and Asia from Intesa Sanpaolo (House Bank of the group) and (iii) a new medium-long term credit line of € 1 million from Banca Sella.
* * *
EPS in a nutshell
EPS operates in the sustainable energy sector, specializing in hybrid-storage solutions and micro-grids that enable intermittent renewable sources to be transformed into a stable power source.
Listed on the French-regulated market Euronext, EPS is part of the CAC® Mid & Small and the CAC® All-Tradable indices and has registered office in Paris and research, development and manufacturing in Italy.
Thanks to technology covered by 125 patents and applications, combined with more than 10 years of R&D, the Group has developed hybrid energy storage solutions to stabilize electrical grids heavily penetrated by renewable sources in developed countries and, in emerging economies, to power off-grid areas at a lower cost than fossil fuels without the need for any subsidy or incentive scheme.
EPS has installed and has under commissioning in aggregate 36 large scale projects, including off-grid hybrid systems powered by renewables and energy storage totalizing over 35 MW of installed power that provides energy to over 165,000 customers every day, in addition to more than 18 MW of grid support systems, for a total capacity output of 47 MWh of systems in 21 countries worldwide, including Europe, Latin America, Asia and Africa.
For more information, visit www.electropowersystems.com.
Forward looking statement
This release may contain some forward-looking statements. These statements are not undertakings as to the future performance of the Company. Although the Company considers that such statements are based on reasonable expectations and assumptions at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual performance to differ from those indicated or implied in such statements. These risks and uncertainties include without limitation the risk factors that are described in the 2015 Prospectus and its update, both registered in France with the French Autorité des Marchés Financiers.
These forward looking statements can be identified by the use of forward looking terminology, including the verbs or terms “anticipates”, “believes”, “estimates”, “expects”, “intends”, “may”, “plans”, “build- up”, “under discussion” or “potential customer”, “should” or “will”, “projects”, “backlog” or “pipeline” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear throughout this announcement and include, but are not limited to, statements regarding the Group’s intentions, beliefs or current expectations concerning, among other things, the Group’s results of business development, operations, financial position, prospects, financing strategies, expectations for product design and development, regulatory applications and approvals, reimbursement arrangements, costs of sales and market penetration.
By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward looking statements are not guarantees of future performance and the actual results of the Group’s operations, and the development of the markets and the industry in which the Groups operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the Group’s results of operations, financial position and growth, and the development of the markets and the industry in which the Group operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments of the Group to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, the global energy market conditions, industry trends, competition, changes in law or regulation, changes in taxation regimes, the availability and cost of capital, the time required to commence and complete sale cycles, currency fluctuations, changes in its business strategy, political and economic uncertainty. The forward-looking statements herein speak only at the date of this announcement.
The EPS Group does not have the obligation and undertakes no obligation to update or revise any of the forward-looking statements.
1 CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT
(amounts in Euro)
|Cost of goods sold||9.3||(4.080.960)||(135.357)|
|GROSS MARGIN FROM SALES||3.233.856||512.659|
|Other operating expenses||9.5||(2.899.101)||(1.348.270)|
|Other costs for product development and R&D||9.6||(614.895)||(595.890)|
|Amortization and depreciation||9.9||(1.219.064)||(86.259)|
|Impairment and write down||9.10||(264.343)||80.369|
|Non recurring income and expenses||9.11||(1.391.870)||(2.850.353)|
|Stock Option and Warrant Plans||9.8||(1.620.213)||(4.646.452)|
|Net financial income and expenses||9.13||(45.230)||(7.984)|
|NET INCOME (LOSS)||9.15||(8.557.601)||(10.597.524)|
|Equity holders of the parent||9.35||(8.557.601)||(10.597.524)|
|Basic earnings per share||9.35||(1,09)||(1,93)|
|Weighted average number of ordinary shares outstanding||7.881.807||5.487.201|
|Diluted earnings per share||(0,99)||(1,69)|
|(1) EBITDA and EBIT are not defined by IFRS. They are defined, respectively, in notes 9.7 and 9.12|
2 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME
(amounts in Euro)
|NET INCOME (LOSS)||(8.557.601)||(10.597.524)|
Other comprehensive income to be reclassified to profit or
|Exchange differences on translation of foreign operations||1.171||(5.448)|
Other comprehensive income not to be reclassified to
|Actuarial gain and (losses) on employee benefits||(22.439)||(2.973)|
|Other comprehensive income (loss) for the year, net of tax||(21.268)||(8.421)|
|Total comprehensive income for the year, net of tax||(8.578.869)||(10.605.945)|
|Attributable to Equity holders of the parent||(8.578.869)||(10.605.945)|
3 CONSOLIDATED BALANCE SHEET
(amounts in Euro)
|Property, plant and equipment||9.16||804.751||748.115|
|Other non current financial assets||9.18||151.884||65.582|
|Other current assets||9.21||1.546.220||3.602.430|
|Current financial assets||0||0|
|Cash and cash equivalent||9.22||5.477.790||8.573.811|
|TOTAL CURRENT ASSETS||12.974.273||14.267.371|
EQUITY AND LIABILITIES
(amounts in Euro)
|Profit (Loss) for the year||9.23||(8.557.601)||(10.597.524)|
|Severance indemnity reserve||9.24||667.507||336.403|
|Non current financial liabilities||9.28||4.834.771||0|
|Non current deferred tax liabilities||9.25||198.076||0|
|TOTAL NON CURRENT LIABILITIES||5.700.354||336.403|
|Other current liabilities||9.27||1.236.631||999.862|
|Current financial liabilities||9.28||1.712.608||25.744|
|Income tax payable||9.29||5.127||0|
|TOTAL CURRENT LIABILITIES||7.520.819||3.137.483|
|TOTAL EQUITY AND LIABILITIES||18.691.419||15.901.311|
4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
(amounts in Euro)
|Net Equity as at December 31, 2015||1.576.361||18.082.718||4.394.930||(1.029.060)||(10.597.524)||12.427.425|
|EPS Group Reorganization||9.23||0||0||0||0||0||0|
|Previous year result allocation||9.23||0||0||0||(10.597.524)||10.597.524||0|
|Previous year delta on loss coverage EPSM||9.23||0||0||6.264||(6.264)||0||0|
|Stock option and warrants||9.23||0||0||1.620.213||0||0||1.620.213|
|Shareholder's capital contribution (IPO)||9.23||0||0||0||0||0||0|
|Shareholder's capital increase||9.23||0||0||0||0||0||0|
|Loss for the period||0||0||0||0||(8.557.601)||(8.557.601)|
|Other Comprehensive Income||0||0||(13.302)||(7.966)||0||(21.268)|
|Actuarial gains and losses on defined benefit plans||0||0||(22.439)||0||(22.439)|
|Currency translation differences||0||0||9.137||(7.966)||0||1.171|
|Total comprehensive income||0||0||(13.302)||(7.966)||(8.557.601)||(8.578.869)|
|Net Equity as at December 31, 2016||9.23||1.576.361||18.082.718||6.009.582||(11.640.814)||(8.557.601)||5.470.247|
5 CONSOLIDATED STATEMENT OF CASH FLOWS
CASH FLOW STATEMENT
(amounts in Euro)
|Net Profit (Loss)||9.15||(8.557.601)||(10.597.524)|
|Non-cash adjustment to reconcile profit before tax to net cash flows||(6.264)||0|
|Amortisation and depreciation||9.9||1.219.064||86.259|
|Impairment and write down||9.10||264.343||(80.369)|
|Stock option and warrant plan accrual||9.8||1.620.213||4.646.452|
|Defined Benefit Plan||9.24||0||31.956|
|Income related to composition with creditors||9.26||0||(235.933)|
|Working capital adjustments|
|Decrease (increase) in trade and other receivables and prepayments||9.19||(1.691.205)||(3.790.569)|
|Decrease (increase) in inventories||9.20||(469.562)||(158.903)|
|Increase (decrease) in trade and other payables||9.26||2.880.574||745.226|
|Increase (decrease) in non current liabilities||9.27||331.104||11.764|
|Net cash flows from operating activities||(4.409.334)||(9.341.641)|
|Net Decrease (Increase) in intangible assets||9.17||(2.220.566)||(706.846)|
|Net Cash flow deriving from business combination||9.17||(2.740.902)||0|
|Net Decrease (Increase) in tangible assets||9.16||(254.499)||(726.261)|
|Net cash flows from investments activities||(5.215.968)||(1.433.107)|
|Reimbursement of Financial Loans||0||0|
|Increase (decrease) in bank debts||9.28||6.521.635||0|
|Shareholders cash injection||0||0|
|Purchase of treasury shares||9.8||1.478||(63.772)|
|Net Proceeds from increases of Capital||9.23||0||17.921.769|
|Receipt of government grants||9.2||5.000||781.253|
|Net cash flows from financing activities||6.529.281||18.643.647|
|EPS S.A. net cash and cash equivalent at Period Beginning||37.000|
|Net cash and cash equivalent at Period Beginning||8.573.811||667.913|
|Net cash flow||(3.096.021)||7.868.899|
|Net Cash and cash equivalent at Period End||5.477.790||8.573.811|
1 Systems installed from 1.1.2016 to 31.12.2016 and under commissioning as of 31.12.2016