Trading Statement

 

TIDMAXE 
 
RNS Number : 5973M 
Axeon Holdings Plc 
30 January 2009 
 

30 January 2009 
 
 
AXEON HOLDINGS PLC 
 
 
Delivering clean mobile power for electric vehicles, cordless power tools and 
mobile power applications 
 
 
Trading Update 
 
 
 
 
Axeon Holdings plc ("Axeon" or the "Company"), Europe's largest independent 
lithium-ion battery system supplier, is pleased to provide an update on trading 
for the year to 31 December 2008. 
 
 
Axeon will release its full financial results for 2008 on 6 April; this update 
provides a summary of business performance in 2008 and a brief comment on the 
outlook for 2009. 
 
 
Results 
Turnover for the year to 31 December 2008 increased to GBP61m (2007: GBP29m), 
with 12 months activity in 2008 from Axeon AG (our continental European 
acquisition completed in August 2007) compared to 5 months in 2007.  A loss of 
below GBP3m from operations is expected compared with a 2007 operating profit of 
GBP0.14m. 
 
 
Cash at 31 December 2008 was GBP2m (2007: GBP12m).  Borrowings at 31 December 
2008 were GBP8m (2007: GBP6m) with the movement caused entirely by currency 
fluctuation in the year on these US dollar denominated loans.  The Company 
continues to enjoy the support of its principal lender and, since it continued 
to operate at a loss during the final quarter of 2008, has reached agreement on 
a covenant waiver until the end of February 2009.  The Company will seek a 
continuation of this waiver. 
 
 
Stock levels at 31 December were GBP21m (including GBP10m financed by customer 
trade credit) compared to GBP9m at 31 December 2007. This was more than 
originally anticipated in both the UK and continental Europe. The Company has 
actively developed and implemented a plan for rescheduling deliveries and 
controlling inventory levels since September when customers first indicated 
significant demand changes. Some of the higher stock value is caused by currency 
fluctuation. The directors are confident that they will be able to convert a 
significant portion of working capital to cash over the course of the year. 
 
 
Automotive 
While the longer-term outlook for Automotive remains encouraging, it has taken 
our customers longer than they had anticipated to establish a market for 
electric commercial vehicles, and therefore 2008 has seen slower demand in this 
segment than expected. 
 
 
Key events during 2008 were as follows: 
  *  Long-term supply agreement completed with Allied Vehicles followed by the 
  delivery of prototypes and the first 25 production units to date. 
  *  Completion of the Modec Hi-bex longer-range battery prototypes.  Modec Lo-bex 
  batteries continue to be deployed, and with recent Modec orders from Fedex and 
  UPS, there appears to be a strengthening of the order pipeline for this product. 
  *  Delivery of prototype batteries for Ruf GmbH (electric sports car), Tecnobus 
  (electric bus), an electric city car, an electric scooter, two heavy-duty 
  plant projects and a materials handling project. 
 
 
 
Power Tools 
Following a good first half of the year the expected seasonal increase in sales 
in the second half did not happen and we saw a reduction in the final quarter, 
as the construction industry suffered due to the unprecedented change in the 
general economic environment. This impacted overall customer demand in the small 
battery division, which supplies into the European handheld power tool market. 
 
 
Mobile Power 
This part of the business, which has a higher element of design and development, 
has performed well with strong growth over the year.There are a large number of 
customers in this segment, most based in Europe, primarily in the UK, Germany, 
Austria and Switzerland.  Significant recent orders that are now in production 
include electric bikes, medical devices and mobile refreshment trolleys. 
 
 
Restructuring 
In response to the downturn in the power tool business and slower uptake of 
automotive products, the company initiated a restructuring programme in 
September 2008, to reduce costs and to stabilise cash flow.  As a result the 
company has already reduced overhead and headcount in all locations by over 200 
full time equivalent jobs with annualised savings of over GBP2m; these, together 
with a focus on converting working capital to cash, prioritisation of 
engineering resource and a focus on securing a higher margin sales mix, remain 
key objectives. 
 
 
Outlook 
The medium term outlook in key areas of Axeon's business remains positive, but 
the unprecedented turmoil in financial markets creates uncertainty.  While it is 
difficult to plan in such economic conditions, the strategy for the business of 
building a leading independent supplier of lithium-ion power solutions for 
certain sectors remains unchanged. 
 
 
With the restructuring activity that has taken place, and the current focus on 
releasing cash from working capital, the Board, subject to the continued support 
of its principal lender, believes that the business has sufficient working 
capital for its expected levels of activity and can reach a minimum of a cash 
break-even position in 2009 based on a prudent view of the expected levels of 
activity in the Company's market places. 
 
 
The board looks forward to building on the work already undertaken to stabilise 
the business during the course of the coming year. 
 
 
 
 
CONTACT 
 
 
Axeon Holdings plc 
Charles Matthews, Executive ChairmanTel: [phone] 
Lawrence Berns, Chief Executive Officer    Tel: [phone] 
www.axeon.com 
 
 
Gavin Anderson & Co 
Ken Cronin / Robert Speed / Janine Brewis    Tel: [phone] 
 
 
Arbuthnot Securities 
Antonio Bossi / John Prior                    Tel: [phone] 
 
 
 
 
NOTES TO EDITORS 
 
About Axeon Holdings 
 
 
Axeon Holdings plc is Europe's largest independent supplier of lithium-ion 
battery solutions, manufacturing over 5 million battery packs. 
 
 
Axeon designs and manufactures batteries and battery management systems for 
three main sectors: automotive, powering the clean electric vehicles of the 
future; power tools, enabling new cordless tools that deliver more power with 
less weight; and mobile power solutions, delivering energy for innovative new 
products. 
 
 
Axeon's Battery Management System is a market-leading technology for managing 
lithium-ion batteries, delivering safe, durable performance. 
 
 
Axeon has been listed on the Alternative Investment Market (AIM) of the London 
Stock Exchange (LSE: AXE) since 2005 and is headquartered in the UK, with 
operations in the UK, Switzerland, Germany and Poland. 
 
 
For more information, please see www.axeon.com 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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