Nilar International AB Interim Report Q2 2023

Nilar is ready to take the next step.

April – June 2023 in summary

• Net sales, MSEK 2.1 (1.8).

• Gross profit MSEK -36.6 (-35.0).

• EBITDA¹ MSEK -38.9 (-42.8).

• Operating profit (EBIT) MSEK -58.9 (-58.5).

• Profit for the period MSEK -72.9 (-67.8).

• Earnings per share SEK -0.23 (-1.33).

January – June 2023 in summary

• Net sales, MSEK 5.2 (-2.4).

• Gross profit MSEK -66.8 (-75.8).

• EBITDA¹ MSEK -83.8 (-90.9).

• Operating profit (EBIT) MSEK -123.7 (-122.0).

• Profit for the period MSEK -143.8 (-142.1).

• Earnings per share SEK -0.45 (-2.94).

Significant events during the second quarter

• Nilar International AB has in May signed an offtake agreement with Indutecc Renewable Solutions to supply ReOx® batteries for integrated energy storage. The new agreement entails an order worth EUR 10 million, or approximately SEK 110 million, corresponding to over 13 MWh in battery capacity.

• Research support has been granted within the strategic innovation program RE:Source, which is funded by Vinnova, Energimyndigheten (the Swedish Energy Agency) and Formas. Together with Stockholm University and Uppsala University, Nilar will undertake the development of simple, environmentally friendly and cost-effective methods for reusing used electrode material in new nickel metal hydride (NiMH) batteries. The project is scheduled to commence in September.

• During Nilar's Annual General Meeting, a number of changes in the Board of Directors were resolved. Gunnar Wieslander, Marko Allikson, Peter Wesslau and John Häger were re-elected as Board members in accordance with the Nomination Committee's proposal. Britta Dalunde, Marie Fossum Strannegård and Per Johansson were elected as new Board members. Gunnar Wieslander was re-elected Chairman of the Board. Stefan De Geer, Ulrika Molander and Helena Nathhorst stepped down from the Board.

Significant events after end of period

• Due to Nilar's updated business plan, the Board of Directors has decided to write down parts of two production lines for current generation batteries by approximately SEK 69 million in August.

CEO's comments: Nilar is ready to take the next step

During the second quarter of this year, Nilar has unveiled a series of significant announcements that further solidify its position as a pioneering developer and producer within the realm of innovative energy storage. Noteworthy among these developments are the acquisition of a substantial 10 million EUR order from Indutecc, coupled with the approval of funding by the Swedish Energy Agency for an upcoming research venture. These achievements mark considerable milestones in our journey, serving as a testament to the attractiveness of our solutions and our collaborative integration projects alongside valued partners. Today I am also proud to be able to present an updated business plan and goals for the period up to and including 2027.

Indutecc – A Trusted Long-term Partner for integration projects and new orders

Our long-term collaboration with Indutecc Renewable Solutions is a significant step forward and our third integration collaboration. Together, we are pioneering intelligent energy storage solutions tailored to large-scale industries and commercial enterprises. This collaboration forms a crucial component of our strategy reinforcing our influence across all prioritized market sectors. Additionally, Indutecc will acquire energy storage systems from Enequi, in which Nilar's batteries are integrated, and plans to sell a significant number of ready solutions already in 2023.

In May, Nilar signed an important agreement to supply ReOx® batteries to Indutecc‘s integrated energy storage solutions. The agreement strengthens our financial position and confirms the market's confidence in our technology. In total, Nilar receives an order of EUR 10 million, or about SEK 110 million, which corresponds to over 13 MWh in battery capacity.

The Swedish Energy Agency grants research support for advanced battery recycling

We are proud that the Swedish Energy Agency has granted research support to a pioneering research initiative aimed at advancing battery recycling methodologies. This collaborative effort, in partnership with Stockholm University and Uppsala University, is geared toward the development of streamlined, environmentally friendly, and cost-effective techniques for recycling electrode materials found within spent NiMH batteries.

The project will contribute to a sustainable and circular economy, all while enabling enhancements to our battery performance.

Decision on changes in the board

Nilar's annual general meeting took place in Stockholm on May 25th, resulting in a series of strategic changes within the board structure. These changes, marked by the re-election of several board members and the introduction of fresh faces, are anticipated to strengthen our governance and management, and contribute to our continued growth and success.

Gunnar Wieslander, Marko Allikson, Peter Wesslau, and John Häger have been re-elected as board members, aligning with the proposal set forth by the nomination committee. Britta Dalunde, Marie Fossum Strannegård and Per Johansson were elected as new board members. Gunnar Wieslander retains his position as Chairman of the Board. Stefan De Geer, Ulrika Molander and Helena Nathhorst have declined re-election.

Updated business plan and goals for the period up to and including 2027

The development of Nilar's battery technology maintains its planned course, with a continued focus on enhancing both quality and performance. Since Q1 2022, a significant milestone has been achieved: doubling the selling price.  At the same time, it can be stated that further development of Nilar's batteries is necessary.

Based on the current strategy, Nilar therefore presents a developed business plan with three new focus areas for the period up to 2027 in a separate communique. In brief, the plan includes:

1. Development of two new versions of Nilar's batteries until 2027. Focus on higher performance and better cost efficiency.
2. A more automated and resource-efficient production capacity, adapted for larger volumes.
3. Continued establishment towards prioritized market segments through existing and new collaboration partners.

To implement the plan, Nilar implements a number of important measures to improve the company's financial structure and position. In addition, the company's milestones and financial goals are updated:

Key Milestones:

• Start of customer delivery of ReOx®2 Q1 2024
• Agreement with at least four new system integrators per year 2024 - 2027
• A first production line for new generation batteries established in 2025
• Launch of the next generation battery in 2026

Financial goals (replaces previously communicated goals):

• A turnover that exceeds SEK 1,500 million in 2027
• Positive cash flow from second half of the year 2027
• Long-term EBITDA margin of at least 25 percent.

​​​​​​​By unveiling a new roadmap extending to 2027, Nilar takes important steps forward. Our unwavering commitment lies in fostering innovation and providing intelligent energy storage solutions that meet market needs as a reliable partner to our customers and partners. With positive market development, we assess that Nilar's safe and sustainable battery technology will secure a robust foothold in the market, particularly given the present security considerations that elevate the strategic importance of battery production in Sweden and Europe.

For further information, please contact: 
Erik Oldmark, CEO
+46 70 432 4444
erik.oldmark@nilar.com 

About Nilar:

Swedish-based Nilar International AB develops and manufactures batteries that are part of stationary energy storage systems. With better energy storage, society can support the increasingly stressed electricity grid by bridging imbalances between energy production and demand, especially important as the share of renewable energy sources increases. Nilar's battery technology is based on nickel metal hydride (NiMH) electrochemistry with a water-based electrolyte, which provides higher safety while allowing the components to be recycled and reused. Nilar has its headquarters in Täby and since 2012 all batteries have been developed and produced in the production facility in Gävle, which is powered by 100% renewable energy.

The Nilar share is listed on the Nasdaq First North Premier Growth Market under the ticker NILAR. FNCA Sweden is Certified Adviser. For more information see 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 person set out above, at 2023-08-11 08:00 CEST.

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