Interim report for the period January 1 - September 30, 2020

During the quarter, Climeon delivered Heat Power modules to our first customer within land-based engines in the UK and established a local presence in the country. We have established a subsidiary in Taiwan and in cooperation with Baseload Capital we are developing the market and creating conditions for putting up power plants. The quarter was also characterized by intensive work with our financing, which resulted in an approved loan of EUR 7.5 million from the Swedish Export Credit Corporation and DNB, followed by a directed new share issue, raising net proceeds of SEK 245 million. The loan as well as the proceeds from the share issue will be available to the company in the fourth quarter and enables increased local presence in our focus markets, accelerated development of the next generation Heat Power system and a broader customer offering. 

THIRD QUARTER 2020

JULY - SEPTEMBER

• Order intake amounted to  SEK 0.0 million (0.0)
• Net sales amounted to SEK 13.2 million (35.3)
• Operating profit/loss amounted to SEK -30.8 million (-30.6)
• Profit/loss per share amounted to SEK -0.66 (-0.62)
• Cash flow from operating activities after change of working capital amounted to SEK -35.0 million (-6.1)
• Climeon has established a subsidiary in Taiwan
• Climeon and Landsvirkjun, the national power company of Iceland, have signed a letter of intent and initiated a cooperation. The purpose is to evaluate the possibility of combining silica extraction with Climeon´s technology
• Climeon has been granted a loan by The Swedish Export Credit Corporation and DNB. The loan amounts to 7,5 MEUR on a two year term

JANUARY - SEPTEMBER

• Order intake amounted to SEK 56.3 million (24.5)
• Net sales amounted to SEK 42.9 million (81.7)
• Order backlog amounted to SEK 763.3 million (781.6)
• Operating profit/loss amounted to SEK -99.5 million (-80.9)
• Profit/loss per share amounted to SEK -2.03 (-1.52)
• Cash flow from operating activities after change in working capital amounted to SEK -53.0 million (-107.2)
• Total cash and cash equivalents and short-term investments amounted to SEK 55.6 million (142.9)

IMPORTANT POST-CLOSING EVENTS

• Climeon has completed a directed new issue of 5,000,000 Class B shares with a net capital contribution of 245 MSEK. The directed new share issue implies that the conditions for the disbursement of the loan from The Swedish Export Credit Corporation and DNB are met

The CEO comments

STEP BY STEP WE ARE DEVELOPING THE MARKET TOWARDS A GREENER WORLD

So far, 2020 has implied major adjustments and changed plans for many companies and individuals around the world, Climeon included, and we are grateful that our employees have remained at good health. We see that the full year 2020 will be significantly affected by delays due to covid-19. Both net sales and operating profit/loss are affected by a lower roll-out rate and order intake.

However, operational progress has not been absent. During the third quarter, we delivered the first Heat Power modules to the UK and our first customer within landbased engines. We see promising prospects for landbased engines, specifically in the UK, and have during the quarter staffed employees locally to further develop our business on site.

Within geothermal, we are making progress in several geographies although deployment in new markets with a completely new technology entails challenges, including shifted time plans. We have now established a subsidiary in Taiwan and are working together with Baseload Capital to develop the market and create conditions for putting up power plants. In Taiwan, we are focusing on greenfield projects, which means that the customer drills to access the hot water. During the quarter, Baseload began drilling for the first power plant. Now, we are looking at the possibilities to start with greenfield also in Japan. In Iceland, the first power plant is being expanded while the second is approaching commissioning and construction of the third has just begun. In August, we initiated a cooperation with Landsvirkjun, the national power company of Iceland. The purpose is to evaluate a solution that combines the extraction of silica from the brine from large-scale geothermal power plants with Climeon's technology.

For the maritime industry, the third quarter was also characterized by covid-19 in the form of continued travel restrictions and a reduced focus on discussions with external suppliers such as Climeon. The situation is somewhat better within shipping where we have seen a cautiously increased interest during the end of the third quarter. Due to increased spread of infection in Europe, however, boarding the Maersk vessel has been postponed again and we are still waiting to be able to complete the installation work.

At the end of the quarter, we were granted a loan of EUR 7.5 million by The Swedish Export Credit Corporation (SEK) and DNB, with a guarantee from the European Investment Fund. We are very proud of our cooperation with SEK and DNB. The loan will be used to expand our offering through more complete power plant solutions.

Shortly after the end of the quarter, we also carried out a heavily oversubscribed directed new share issue, raising net proceeds of SEK 245 million. We thank our shareholders for continued support and welcome all new shareholders. One of the purposes of the share issue is to be able to increase our local presence in our focus markets in order to affect our deployment rate. We are convinced that a local presence creates the best possible conditions for doing business and with global travel restrictions, the need increases further. The second purpose is to accelerate the development of the next generation Heat Power system. Our development team has now found a way to increase the power output of the system significantly without considerably increasing the cost. This has a direct impact on both the customer's business case and our margins.

With the underlying demand in our focus markets and of our solutions, I feel hopeful for the future. 2020 will not be like any of us imagined, but with increased focus on, and large investments in, Greentech, the conditions for clean electricity production have never been better. The hard work continues and with one Heat Power plant at a time, we are developing the market step by step, towards a greener world.

Thomas Öström, CEO

For full report, please see attached file below.

For more information, please contact:
Thomas Öström, CEO, +46 708 94 96 05, thomas.ostrom@climeon.com
Charlotte Becker, Investor Relations, +46 730 37 07 07, charlotte.becker@climeon.com
Christina Kassberg, CFO, +46 701 84 84 43, christina.kassberg@climeon.com

This press release contains such information that Climeon AB (publ) is required to publish in accordance with the EU Market Abuse Regulation. The information was published for public disclosure on November 4, 2020 at 07:30 CET through the agency of the contact persons set out above.
 

About Climeon AB (publ)
Climeon is a Swedish product company within energy technology. The company’s unique technology for geothermal heat power - Heat Power - makes a large untapped energy resource available and provides sustainable electricity around the clock all year round. Heat Power is a cheap and renewable energy source with the potential of replacing much of the energy that comes from coal, nuclear, oil and gas, today. Climeon’s B share is listed on Nasdaq First North Premier Growth Market. Certified Adviser is FNCA Sweden AB, +46(0)8-528 00 399, info@fnca.se.