Half-year review 1.1-30.6.14 (unaudited). Cleantech Invest made several investments, strong growth in associate companies

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29.08.2014 07:30:00 CET

Half-year review 1.1-30.6.14 (unaudited). Cleantech Invest made several investments, strong growth in associate companies

Cleantech Invest Oyj
Company release 29.8.2014, 8:30

Half-year review 1 January to 30 June 2014 (unaudited)

Cleantech Invest made several investments, strong growth in associate companies

January-June 2014

  • Trading with Cleantech Invest Oyj A-series shares at NASDAQ OMX Helsinki Oy’s First North Finland -market started on 12.6.2014.
  • Cleantech Invest has during the review period increased its ownership in the following portfolio companies: Nuuka Solutions Oy, Oricane AB, Savo-Solar Oy, Sofi Filtration Oy and Lumeron Oy. Cleantech Invest has also invested in two new companies: Aurelia Turbines Oy and Sansox Oy. Further Cleantech Invest has granted debt funding to Enersize Oy.
  • The most significant events during the review period and thereafter:
    • Swap.com continued very strong growth during the review period, the monthly revenue grew +260% (12/2013 vs. 6/2014). After the review period the company’s monthly revenue grew to over 130.000 USD (last 30 days 28.8.2014).
    • During the review period Nuuka Solutions Oy received new significant customers such as Genesta Property Nordic, SOK/Eekoo, Järvenpään mestariasunnot, as well as new sales partners such as Caverion and HE-Management Oy.
    • Savo-Solar Oy secured an order from Danish Løgumkloster district heating company worth over EUR 1 million that will be delivered early 2015. The revenue of Savo-Solar has thereby three folded compared to the whole year 2013.
  • Jan Forsbom and Alexander Lidgren joined the Cleantech Invest board as new members. Forsbom has earlier worked as partner and managing director of Bon-brokerage group, as VP responsible for asset management at Glitnir bank as well as the CEO of FIM Group. Lidgren works at Swedish Energy Agency where he is responsible for the management of the agency’s investments into cleantech companies. Earlier Lidgren has worked as the founder and managing director of Cleantech Scandinavia.

Key figures

1-6 /2014 1-6 / 2013 1-12 / 2013
Turnover 0 57 59
Result for the financial period -293 -381 -967
Cash and cash equivalents 3 525 1 163 542
Shareholders equity 6 839 3 707 3 121
Equity ratio 93,7 % 96,9 % 98,3 %

Comments by the managing director Feodor Aminoff

”In the cleantech market energy and resource efficiency is a growing trend that is driven by cost saving efforts by both firms and consumers. In the cross-sector of IT and cleantech a lot of new investment opportunities are born especially related to energy efficiency. Internationally cleantech solutions related to smart buildings, electric vehicle and infra markets, energy efficiency solutions, solar PV market and solutions related to energy quality, -storage and -distributed generation are experiencing strong growth. In the Nordic-deal flow especially solutions related to smart buildings and energy quality, storage and generation are strong.

Cleantech market growth in smart buildings is affected by the willingness of consumers to become tenants in cost- and energy efficient buildings. New financing models available for energy efficiency investments are one significant growth driver. For Nuuka solutions, a portfolio company of Cleantech Invest, growth in the smart building sector is providing new avenues for growth; building energy management system demand experiences growth during the review period and the company was able to sign new significant customer deals. In Europe energy storage solutions market is experiencing strong growth, lead by German households. Nocart Oy, Cleantech Invest’s portfolio company, has for its part experienced strong growth in its offer book for electricity generation and storage solutions in emerging economies. Solar photovoltaic market has been strong globally during the past year, also solar thermal market has seen positive development. Savo-Solar, Cleantech Invest portfolio company, has been able to grow its offer book as the Danish solar thermal market has been experiencing good growth.

Large industrial corporations have shown growing activity in the cleantech sector both as minority investors and in the acquisition market. Also later stage cleantech firms have been active making acquisitions. Another growing trend is the entrance of consumer driven solutions: cleantech ventures that provide solutions for the end-consumers have become as prevalent as the solutions provided for industrial customers. This trend is especially visible in the strong growth experienced by Swap.com, a portfolio company of Cleantech Invest.

Cleantech Invest shares began trading on 12th of June 2014 at NASDAQ OMX Helsinki Oy’s First North Finland -market. Successfully reaching this long-term goal has given Cleantech Invest additional visibility and increased interest among stakeholders. Public trading also gives additional possibilities for the future business development of Cleantech Invest. Share issue gave us means to grow the shareholder value by actively developing the current portfolio companies and investing in new firms; according to our communicated strategy we will be present in the Swedish cleantech market in an increasing manner. With shares trading at First North Helsinki we also have a liquid market for Cleantech Invest shares. This opens a possibility to use the shares as an exchange in medium in possible mergers and acquisitions.”

Associate companies’ performance during the review period and the subsequent events

The basis of the core and value of Cleantech Invest’s business operations are in the company’s associate companies. In the half-year review, Cleantech Invest briefly comments on all of the associate companies’ business development during the review period and thereafter. Some of the associate companies’ status Cleantech Invest comments, however, a little deeper. These companies are selected on the basis that during the review period there has occurred clear and tangible progress in the development of their businesses. These comments are not an exhaustive description of each of the associated company’s situation and their risks.

Cleantech Invest associate companies Swap.com’s, Nuuka Solutions Oy’s and Savo-Solar Oy’s business developed strongly during the period.

Swap.com (Netcycler Oy) continued strong growth during the review period. Monthly revenue grew in Jan-Jun 260% (June 2014 vs. December 2013), and Swap.com grew to be the largest kids’ online consignment store in USA. After the review period Swap.com moved to a new fulfillment center in Chicago, USA with over 6000 m2 space. The fulfilment center in part enables the continuance of rapid growth. After the review period Swap-com’s monthly revenue grew to over 130.000 USD per month. Online consignment is a rapidly growing market in USA. Swap.com has developed an extremely cost efficient logistics process, which enables Swap.com to cost efficiently trade also inexpensive kids’ clothes and items.

Nuuka Solutions Oy got new important customer contracts during the review period. Among these are Genesta Property Nordic, SOK/Eekoo and Järvenpään mestariasunnot. Also new significant sales channel and other partnerships were formed, some examples being Caverion and HE-Management Oy. The service was also further developed towards international markets and sales channels and new key people were recruited for these activities. New service features with Nuuka are mobile user applications that adapt to consumer behaviour, and reporting tools that fulfill international requirements for real estate investors. In addition, a financing round was carried out that enabled the company to start preparations for international growth.

Savo-Solar Oy has focused on the sale in Central European and the Danish markets, and recruited three persons with long experience in the industry to its Danish subsidiary. Ruukki roof integrated solar thermal collector has received a positive response from the market. Savo-Solar delivered and installed during the review period the first large area solar thermal collector field to Helsinki Energy’s Sakarinmäki-school area-heating system.

After the review period, 10.07.2014, the company received an order for the delivery and installation of a 7 400 m2 solar thermal collector field to Løgumkloster district heating plant in southern Denmark this year and beginning of next. The value of the order is over € 1 million euros. According to the company’s market research, the Danish solar heating market is estimated to be 200 000 square meters in 2014 and 250 000 square meters in 2015. The Danish market is today dominated 95% by the Savo-Solar’s local rival Arcon.

To finance the growth and for strengthening the balance sheet, the company has an on-going share issue, which ends on 30.10.2014.

Other associated companies

Aurelia Turbines Oy successfully completed the first phase of a product development project, strengthened its business development resources, and defined development objectives for the near future. The company received a commitment for an additional equity round from its shareholders, which is conditional for receiving a positive decision on a research and development loan. After the review period, the company received a positive funding decision from EU Horizon 2020 program SME funding instrument.

BT Wood Oy has during the review period sought new industrial partners and funding for R&D of wood fire retardants. No significant developments have been achieved and the financial situation of the company is still challenging.

Enersize Oy continued sales activities with a focus on Finland and China. After the review period Enersize received a positive decision on debt restructuring.

Lumeron Oy focused on solving sales and future financing needs on a large scale. The company’s order book is positive, but the implementation of the projects will require additional funding, which is sought out during the end of the year 2014.

Metgen Oy has been actively working on its industrial pilots, but this has not amounted to revenues during the review period.

Nocart Oy’s power generation and storage system has increased its offer pipeline in the emerging markets and the company has made its first deliveries in Nepal. The company also completed the Tekes-funded research and development project.

One1 Oy continued development of several heat projects during the review period. One large project has not proceeded to construction phase as expected, which prolongs anticipated revenue development. One1 focused on forming close relationships with utilities to enable a large number of heat projects to be developed and constructed in the future.

Oricane Oy continued its co-operation with international internet equipment companies with an aim to license its technology to these.

Sansox Oy continued R&D and began sales efforts and conducted pilot projects. The Water supply and sanitation Technology platform (WssTP) initiated by the European commission rewarded Sansox’ aeration technology as the most innovative product in Europe.

Sofi Filtration Oy received a positive decision on Tekes Young Innovative Companies 3-stage funding of 1 MEUR, of which first stage was now awarded. The first stage includes industrial pilots in Finland, Austria and Lithuania. Additional new international target markets for Sofi Filtration are Canada and USA.

Income Statement: revenue and result

Revenue
The company’s revenue for the review period 1 January to 30 June 2014 was zero euro (1-6/2013: 57 thousand euros). In 2013, revenue came primarily from the accelerator service fees in alignment with the Vigo-program. The revenue decline was due to the company’s strategy change to give up the accelerator service fees. By giving up these fees the company receives better commercial terms in for investments in accordance with the Vigo-program terms.

Expenses
Materials and services expenses in the review period 1 January to 30 June 2014 was zero (10 thousand) euros. In 2013, material and services expenses mainly included purchases of external services. During the review period 1 January to 30 June 2014 these costs are recorded in other operating expenses.

Personnel costs during the review period 1 January to 30 June 2014 amounted to 195 thousand (213 thousand) euros.
Other operating expenses in the review period 1 January to 30 June 2014 were a total of 70,000 (98 thousand) euros. The decrease in other operating expenses is mainly due to the fact that during the year the stock exchange listing expenses have been capitalized for five years.

Depreciation, amortization and write-downs
Depreciation, amortization and write-downs of intangible and tangible assets in the review period 1 January to 30 June 2014 was a total of 28,000 (13 thousand) euros. The increase in depreciation is mainly explained by the stock exchange listing related expenses, 456 thousand euros, which has been capitalized and whose share of the depreciation is 18 thousand euros.

Operating income
The company’s operating loss for the review period 1 January to 30 June 2014 was 293 thousand (EUR -277 thousand) euros.
Financial income and expenses
Financial income in the review period 1 January to 30 June 2014 was a total of 0 (0) euro, financial expenses January 1 to June 30, 2014 was a total of 0 (-104 thousand) euros. In 2013, financial expenses included a write-down of the Clean Future Fund Ky’s capital injection / -input / contributions of capital (EUR 99 thousand), which largely explains the change in financing costs.

Result for the review period
The net loss of the review period 1 January to 30 June 2014was 293 thousand (-381 thousand) euros.

Balance sheet: financing and investments

During the review period the company successfully carried out the listing on the First North Finland marketplace. The company raised through a share issue 4 010 900 euros before costs, commissions and expenses for the share issue and the First North listing. Expenses related to the initial public offering, 456 thousand euros, have been capitalized as part of intangible assets with a five-year amortization plan. As a result of the share issue, the company received about 470 new shareholders. Institutional investors subscribed for the shares for about 57 % and private investors for around 43 %. The total number of shares rose to 18 081 400 pieces. The Board of Directors decided on the conversion of all of the company’s class B shares (a total of 6 060 784 shares) to Series A shares at the ratio of 1: 1.

The capital raised substantially strengthened the financial position of Cleantech Invest and allows for the development of business according to the strategy.

The increase of the balance is due to the increasing investments according to the company’s strategy and to the capitalization of expenses related to the initial public offering.

Investments during the review period

Nuuka Solutions Oy: Cleantech Invest granted a subordinated convertible loan. The loan will be converted to equity upon which Cleantech Invest’s ownership increases to at least 31,7% and at most 40,0% by the end of January 2015.

Oricane AB: Cleantech Invest made an equity investment as part of an investment round, where the main investor was Norlandssfonden from Sweden. After the investment round Cleantech Invest’s ownership increased from 11% to 13,6%.

Savo-Solar Oy: Cleantech Invest made an equity investment, as part of an investment round in which Savo-Solar received finance and export collateral in total 1,5 million €. After the transaction Cleantech Invest’s ownership increased from 24,3% to 25,4%, including indirect ownership through Clean Future Fund Ky.

Sofi Filtration Oy: Cleantech Invest made an equity investment with which Cleantech Invest’s ownership increased from 13,7% to 22 %.

Lumeron Oy: Cleantech Invest made an equity investment with which Cleantech Invest’s ownership increased from 14,3% to 25%.

Aurelia Turbines Oy: Cleantech Invest made an equity investment with which Cleantech Invest received a 2,5% ownership.

Sansox Oy: Cleantech Invest made an equity investment in two tranches with which Cleantech Invest received a 10% ownership.

Enersize Oy: Cleantech Invest granted loans in total of 163 €.

Personnel, management and administration

Feodor Aminoff acted as the managing director of the company during the review period. In addition to the managing director the company employed 3 persons, Tarja Teppo, Lassi Noponen and Timo Linnainmaa, who together formed the management of the company.

In the beginning of the review period the board of directors consisted of is Lassi Noponen (chairman), Tarja Teppo, Timo Linnainmaa and Sami Mykkänen. On the 19th of March 2014 Jan Forsbom and Alexander Lidgren were appointed as new members to the board of directors. On the same date Sami Mykkänen and Timo Linnainmaa resigned from the board. Since 19th of March 2014 the board of directors of the company has consisted of Lassi Noponen (chairman), Tarja Teppo, Jan Forsbom and Alexander Lidgren. Forsbom and Lidgren are independent of the company and major shareholders.

Risks and uncertainties

The most significant risks and uncertainties related to the business of Cleantech Invest Oyj have been reported in the listing prospectus dated 2.5.2014 that can be found on the company’s web site http://frantic.s3.amazonaws.com/cleantechinvest/2014/05/Cleantech-Invest-Oyj_listautumisesite.pdf. There has not been any change in the risks and uncertainties since the date of the prospectus.

Outlook 2014

The drive for energy and resource efficiency creates growth and new possibilities for the cleantech market. In the international market sectors such as smart housing, electric vehicles, energy efficiency solutions, solar PV as we as solutions for energy storage and quality are growing. Growth in these sectors as well as growth in the consumer driven cleantech is estimated to have a positive impact on the outlook H2 2014 for Cleantech Invest’s portfolio companies. International markets are essential in the pursuit for growth; Finland’ economic situation does not support the growth of Cleantech Invest’s portfolio companies.

Annual general meeting

The annual general meeting was held on March 19th 2014 in Helsinki. In addition to the issues stipulated in paragraph 5:2 of the Companies Act the shareholders meeting also resolved on transferring the company’s shares into the book entry system, increase of the share capital through reserve increase, changing of the legal status of the company into a public limited liability company, modifications to the company bylaws, listing of the company’s shares at the Helsinki First North Finland – market as well as granting the board of directors certain rights to decide on issuing new shares or special rights.

Stock

The company had at the beginning of the review period, a total of 11 910 784 shares, divided into 5 850 000 Series K shares, each of which has 20 votes at shareholders’ meetings, and 6 060 784 non-voting Series B shares. During the review period, the company’s Series A shares was applied for trading on the First North Finland marketplace. In the share issue of the initial public offering of the listing, a total of 6 170 616 new Series A shares were subscribed at a price of 0.65 € / share, each of which carries one vote at general meetings. In conjunction with the listing also all 6 060 784 Series B shares were converted into Series A shares at the ratio of 1: 1. Series K shares were/are not listed. Trading in the company’s series A shares commenced on 12.6.2014. The company’s total number of shares after the IPO was 18 081 400, divided into 5 850 000 Series K shares and 12 231 400 Series A shares, which was also the case 30.6.2014 (30.6.2013: 11 910 784, 31.12.2013: 11 910 784). Taking into account the effect of dilution of the options the number of shares was 30.06.2014 20 525 336, divided into 8 293 936 Series K shares and 12 231 400 Series A shares (30.6.2013: 14 354 720, 31.12.2013: 14 354 720).

Emission adjusted average number of shares was 12 664 970 30.6.2014 (30.6.2013: 1 125 813, 31.12.2013: 6 518 298). Taking into account the effect of dilution of the options the emission adjusted average number of shares was 15 108 906 30.6.2014 (30.6.2013: 1 809 064, 31.12.2013: 8 081 892).

Cleantech Invest board members and management team owned on June 30th 2014 in total 4 629 591 K-class shares and options that give a right to subscribe 2 443 936 K-class shares, taking into account all stock and options that the persons own directly, and indirectly through companies controlled or influenced by them or through their family members.

The shares represent approximately 25.60 per cent of the company’s total issued and outstanding shares registered 10.06.2014 in the trade register and 71.65 per cent of the voting rights of the shares.

After the review period the board has, upon request, decided to convert 400 000 K-class shares into A-class shares. After the conversion the amounts of A- and K-class shares are 12 631 400 and 5 450 000, respectively. The trade with the converted shares commenced on August 8th 2014.

Cleantech Invest had 663 registered shareholders according to the shares register on June 30th 2014.

Cleantech Invest’s market value at the end of the review period was 7 142 153 €. The closing price on June 30th 2014 was 0,40€ per share. During the review period the highest price was 0,63 €, the lowest 0,37 €, and the average 0,47 € per share. The Series A share has a liquidity provision agreement with FIM Bank that fulfills the NASDAQ OMX Helsinki Oy Liquidity Providing (LP) requirements.

Events after the review period

Swap.com moved to a new fulfillment center in Chicago, USA with over 6000 m2 space. Swap-com’s monthly revenue grew to over 130.000 USD per month (last 30 days 28.8.2014).

An equity investment round was carried out in Nuuka Solutions Oy end August. After the investment round, where two additional new investors participated, Cleantech Invest’s ownership in Nuuka Solutions Oy increased to 32,6%. The terms of the subordinated convertible loan granted to Nuuka Solutions Oy by Cleantech Invest Oy in June 2014 were modified so that Cleantech Invest’s ownership in Nuuka will be raised to at least 33,6% or maximum to 36,5% by the end of January 2015.

Savo-Solar received an order for over 1 MEUR on July 10th 2014 for the supply and installation of a 7400 m2 collector field to a district heating plant operated by Løgumkloster in South Denmark during 2014 and early 2015.

Aurelia Turbines Oy received a positive funding decision for the Horizon 2020 program’s first phase.

Cleantech Invest has initiated actions for establishing in Sweden.

The board has decided to convert 400 000 K-class shares into A-class shares. The trading with the converted shares commenced on August 28th 2014.

Accounting principles of the semi-annual accounts

Semi-annual accounts have been prepared following generally accepted accounting principles and applicable laws. The figures of the review have not been audited. The figures presented are rounded.

Calculation of key ratios and formulas

Equity ratio (%) Total equity x 100/ Total assets
Number of shares Total number of share at the end of the period
Weighted average number of shares Issue and conversion-adjusted weighted average number of shares
Diluted number of shares Total number of share at the end of the period added by outstanding warrants
Weighted average number of shares, Diluted Issue and conversion-adjusted weighted average number of shares added by outstanding warrants
Basic earnings per share (€) Result for the (financial) period / Issue and conversion-adjusted weighted average number of shares
Diluted earnings per share (€) Result for the (financial) period / Issue and conversion-adjusted weighted average number of shares added by outstanding warrants

Financial communication

The 2014 financial statement will be published on 30.3.2015. In other respects, the 2015 financial information release schedule will be published by the end of 2014.

Financial information

Profit and Loss Statement EUR ’000 1-6 / 2014 1-6 / 2013 1-12 / 2013
Turnover 0 57 59
Materials and services 0 -10 -11
Personnel expenses -195 -213 -446
Depreciation and impairment charges -28 -13 -27
Other operating expenses -70 -98 -205
Operating loss -293 -277 -630
Financial income 0 0 0
Financial expenses 0 -104 -340
Result before taxes -293 -381 -967
Result for the financial period -293 -381 -967
Basic earnings per share -0,02 -0,34 -0,15
Diluted earnings per share -0,02 -0,21 -0,12



Balance Sheet EUR ’000 30.6.2014 30.6.2013 31.12.2013 31.12.2013 Earlier reported
Assets
Non-current assets
 Intangible assets 589 109 160 160
 Tangible assets 11 13 12 12
 Investment in associates 2 685 1 933 2 091 2 091
 Loan receivables from associates 337 420 19 0
Total non-current assets 3 622 2 475 2 282 2 263
Current assets
 Loan receivables 17 110 323 342
 Other receivables 95 12 15 15
 Deferred assets 36 64 13 13
 Cash and cash equivalents 3 525 1 163 542 542
Total current assets 3 673 1 349 893 912
Total assets 7 295 3 824 3 175 3 175
Equity and liabilities
Shareholders equity
 Share capital 80 8 8 8
Reserve for invested non-restricted equity 8 027 4 088 4 088 4 088
 Retained earnings -975 -8 -8 -8
 Result for the financial period -293 -381 -967 -967
Total shareholders equity 6 839 3 707 3 121 3 121
Current liabilities
 Accounts payable 403 0 10 10
 Other current liabilities 35 117 9 9
 Accruals 18 0 35 35
Total current liabilities 456 117 54 54
Total equity and liabilities 7 295 3 824 3 175 3 175

The presentation and the grouping of figures in the balance sheet have been changed from previously published to respond to the nature of the activities of the company. For comparison purposes the balance sheet 31.12.2013 is presented above also as reported before.

Cash Flow Statement EUR ’000 1-6 / 2014 1-6 / 2013 1-12 / 2013 1-12 / 2013
Earlier reported
Cash flow from operating activities
Result for the financial period -293 -381 -967 -967
Adjustments 28 112 359 27
Change in receivables 48 69 -186 -217
Change in current liabilities 65 -8 27 -71
Cash flow from operating activities -152 -208 -767 -1 228
Cash flow from investing activities
Investments in tangible and intangible assets -119 -121 -185 -185
Acquisition of associates -594 -1 319 -1 590 -1 590
Loan receivables from associates -163 -420 -151 0
Loan receivables from others 0 -102 0 0
Cash flow from investing activities -876 -1 962 -1 926 -1 775
Cash flow from financing activities
Share issue against payment 4 011 3 375 3 375 3 587
Change in interest bearing liabilities 0 -75 -173 -75
Cash flow from financing activities 4 011 3 300 3 202 3 512
Change in cash and cash equivalents 2 983 1 130 509 509
Cash and cash equivalents at the beginning of the period 542 33 33 33
Cash and cash equivalents at the end of the period 3 525 1 163 542 542

The presentation and the grouping of figures in the cash flow statement have been changed from previously published to respond to the nature of the activities of the company. For comparison purposes the cash flow statement 1 – 12 / 2013 is presented above also as reported before.

Statement of changes in equity

EUR ’000 Share capital Reserve for invested non-restricted equity Retained earnings Result for the financial period Total share-holders equity
Shareholders equity 1.1.2014 8 4 088 -975 0 3 121
Share issue 0 4 011 0 0 4 011
Transfer 72 -72 0 0 0
Result for the financial period 0 0 0 -293 -293
Shareholders equity 30.6.2014 80 8 027 -975 -293 6 839
Shareholders equity 1.1.2013 8 0 -8 0 0
Share issue 0 4 088 0 0 4 088
Result for the financial period 0 0 0 -381 -381
Shareholders equity 30.6.2013 8 4 088 -8 -381 3 707
Shareholders equity 1.1.2013 8 0 -8 0 0
Share issue 0 4 088 0 0 4 088
Result for the financial period 0 0 0 -967 -967
Shareholders equity 31.12.2013 8 4 088 -8 -967 3 121

Helsinki 29.8.2014

Cleantech Invest Oyj’s Board of Directors

For more information

Cleantech Invest Oyj, Feodor Aminoff, managing director, tel. +358 400 449 096, feodor.aminoff@cleantechinvest.com.
Certified Advisor, Access Partners Oy, tel: +358 9 6829 500.

Cleantech Invest in brief

Cleantech Invest is an investment and development company focused on clean energy and efficient use of natural resources. The company was established in 2005. The company owns minorities in a diversified portfolio of companies and is actively looking for new investment targets. Cleantech Invest invests in the most promising early-stage and growth cleantech companies in Finland, Sweden and in the Baltic Sea area. The company management team members are international pioneers in cleantech investing. Cleantech Invest is also a designated Accelerator in the Vigo Program initiated by the Ministry of Employment and the Economy. www.cleantechinvest.com.