NILAR INTERIM REPORT Q1 2021
COMMISSIONED THE FOURTH PRODUCTION LINE. COMPLETED THE REPAIR OF THE VENTILATION SYSTEM IN THE PRODUCTION PLANT.
January – March 2021 in summary
- Revenue 5.4 (4.6) MSEK.
- Production 3.2 MWh.
- Delivered energy storages 73 (53), average size per energy storage 19 (15) kWh.
- Gross profit -69.6 (-41.6) MSEK.
- EBITDA -78.0 (-48.3) MSEK.
- Operating income (EBIT) -96.0 (-60.9) MSEK.
- Net loss -114.4 (-68.0) MSEK.
- Earnings per share -22.53 SEK.
Significant events during the first quarter
- The repair of the ventilation system in the production facility in Gävle was completed during the end of the quarter, during the rebuilding period, Nilar's production capacity was significantly limited.
- The fourth production line was commissioned, and a fourth production shift was introduced.
- The new Energy+ product series was launched.
- The Company received a second and final payment of 8.75 MEUR under the first tranche of 17.5 MEUR of the EIB loan facility.
Significant events after the end of the period
- The Company’s shares were listed at Nasdaq First North Premier Growth Market on 30 April.
- In connection with the listing, the Company carried out a new share issue which brought in a total of 750 MSEK before costs and the Company's convertible loan was converted into equity through a new share issue to the convertible holders.
- For information on covid-19's impact on Nilar, see the CEO review on page 2.
- An EGM was held on 19 April where, among other things, a share split 1:6 was decided.
- An incentive program for the Board and management was introduced at the EGM on 12 March.
On Friday the 30th of April an 09:00, Nilar’s shares were first traded on the Nasdaq First North Premier Growth Market – a monumental moment; few days later, the company received the proceeds from its new share issue. 750 MSEK before expenses in new capital allows Nilar’s hugely energized team of now over 200 engineers, scientists and highly skilled machine operators to seriously get on with realizing their ambitious growth plan – to service discerning customers throughout Europe and to multiply output and sales several times over during the next years, while continuously refining our product offering and strengthening our competitive position.
During the quarter, we delivered 73 BESS (battery electrical storage systems) compared to 53 in Q1-20 and billed 5.4 (4.6) MSEK. In reality, sales could have been higher had it not been for the fact that we had a certain overhang of earlier delivered systems of a previous product version which we needed to exchange and/or update. This reduced the number of systems available for new sales: total production was 3.2 MWh of which 1.5 MWh was reserved for warranty replacements. Despite building out our product capacity rapidly, demand for our systems still significantly outstrips our ability to deliver.
The market outlook remains positive despite Covid-19 challenges. European energy storage installations increased to 1.7 (1.0) GWh in 2021 and are forecast to grow to 3 GWH in 20211, largely driven by national goals of renewables introduction and necessity of storage. While Germany remains the largest (and growing) market, Spain’s BESS demand increased significantly from 4 MWh in 2019 to 40 MWh in 2020, driven by a change in tariff and support regulation. The EU’s Recovery Plan further fans the move across Europe towards combined PV (solar energy) and BESS renewable energy, through large national ‘green’ capital allocations2. Both Germany and now Spain are solidly in our focus.
Closer to home, Finland has recently declared its goal to become the world’s first completely fossil-free society. Finland is changing focus from support for production of green electricity support for demonstration of new energy technologies3. BESS is such a technology, which has increased demand for our products from the household, business and the real-estate sectors. Our new partnerships with Kostal, Yaskawa (The Switch) and Danfoss (Vacon Drives) broadens Nilar’s market coverage here, as well as in several other European markets. And Sweden decided, this year, a new tax deduction4 amounting to 50% of BESS material and installation cost – a huge incentive for Swedish consumers which clearly drives demand for our systems. And since the increasing inability of the Swedish grid to deliver demanded effect (kW) to consumers becomes ever more apparent in many cities, we are likely to see larger BESS projects as buffers in the grid in the near future.
Covid-19 remains a serious issue, as it does for everyone, though perhaps somewhat less pressing than I feared a few months ago. While demand remains strong, sick-leave and stringent restrictions in how we handle production shift hand-over has put a lid on our effective production capacity during the past quarter and into Q2 – and especially bothersome as we further ramp up capacity. More alarming, however, is the widely reported Covid-19 related shortage of critical components throughout supply chains, where also certain quality issues have appeared. Electronic circuits, extruded plastic components and raw material supplies are all affected. Nilar’s purchasing team has worked over-hours to so far mitigate likely shortages, but I see this still as a significant risk over the next quarters.
As previously reported, our Q4-20 was noticeably depressed due to a relatively minor powder explosion in our air extraction system, which however required us to have it rebuilt. Here again, Covid-19 struck, with almost three months’ delivery delay of a critical component from Germany. Hence, repairs could only be concluded end-March to alleviate this serious bottleneck; hence, also the first quarter was negatively affected.
Still, we used the enforced reduced production period productively to install, commission and test our fourth production line which is now starting to produce; in combination with now a fourth production shift.
Product development has been very satisfactory. During the quarter, we launched a new product, Energy+, which incorporates an energy optimized cell design. For the first time, Nilar offers two products, targeted at somewhat different applications. Going forward, we have a long list of product development projects to even more clearly differentiate Nilar from its mass-market competition.
Overall, and in the face of strong continued demand for Nilar’s systems, managing rapid scale-up remains our biggest task. Towards the end of this year, Nilar’s Gävle factory is likely to be completely built out with eight production lines. So, further expansion includes ongoing detailed planning for the next factory in Estonia by second half of 2022. I, together with my Nilar leadership colleagues, thus look forward to our first post-IPO year filled with strenuous work, but also with the satisfaction of running a true high-growth company in a truly ‘green’ sector.
Marcus Wigren, CEO Nilar
Täby 27 May 2021
For further information, please contact:
Marcus Wigren, CEO
Mobile +46 767 69 50 75
Nilar is a Swedish-based developer and manufacturer of stationary energy storage systems, so-called Electrical Energy Storage (ESS) systems. Energy storage systems can be used to bridge imbalances between energy production and demand in order to, for example, improve the utilization of intermittent electricity production from renewable energy sources, such as solar energy and wind power, as well as to strengthen the increasingly strained power grids. Nilar's battery technology is based on nickel-metal-hydride (NiMH) electrochemistry with a water-based electrolyte, which results in a strong environmental and safety profile together with a competitive price over a life cycle. The Company is headquartered in Täby and the energy-efficient production facility is, since 2012, located in Gävle, where the Company's research and development also takes place.
The Nilar share is listed at Nasdaq First North Premier Growth Market, ticker NILAR. FNCA Sweden is Certified Adviser +46 8 528 00 399. For more information go to www.nilar.com.
This information is information that Nilar International AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2021-05-27 08:00 CEST.