May I now hand you over to Jörg Peter Hahn.
Good afternoon, everybody, and good morning to overseas participants. Today, we want to present our preliminary group results for first quarter in 2024. We have put together first the financial highlights, as always, of Q1. So like every year, Q1 has always been a very special quarter in which not much has happened in our business. And the bigger deliveries, they only come in the last two quarters, as we know and we have seen. So and it's even clearer, the commodity market, but how the market develops later in the year and how the warehouses have changed, the level of warehouses.
So, we had seen that storage orders were or will be delivered in the second half of the year, as Michael Reich last week explained on the CMD call. We started campaigns regarding the storage customers, but mainly, we've seen that mobility customers, like truck customers, have shifted diesel production temporarily into Q1, so less storage from less storage requirements from there. So, going to the mere numbers, we had EUR 1.2 million of revenues and an EBITDA of -EUR 2.6 million. You see that we have comparison full year 2023, since we have started the consolidation in the year in Q3 2023.
So, I have to or we had to use the full year number as comparison. Nevertheless, looking at the EBITDA of flat full year 2023, this changed to the last to our last call. We were in progress of our audit in 2023, so we could anticipate some changes here. And currently, we don't expect any more figures in the group audit that is still going on. Looking at the operating cash flow with planned and then adopted operating costs, surely the operating costs moved the negative operating cash flow to -EUR 3.5 million.
If you go deeper in the P&L, like I said, we had low revenue in the first quarter. A lot of customers, they shifted their orders into last quarter of last year. Looking at, for example, the fluctuation of people that were leaving and new people were hired led to qualification training activities and less project works, so that we could not, as anticipated, less or low work capitalized in project work. The personal costs, they will remain stable, like the average of last year.
Looking at the operating expenses, yeah, EUR 1.3 million is slightly higher than previous year's average. It reflects the ongoing increased operational activities and investments that we had. So we are not slowing down our investments here. If you look, for example, at finance expenses, sure, they went up comparing it to the average. And this comes mainly from loans that were taken mid of the year, and so the expenses went up. We also have seen deferred taxes that we had to anticipate regarding following the IFRS accounting.
I already mentioned the -EUR 3.5 million cash flow from the operating activities. I mean, there is not too much change of EUR 200,000 but we have any any financing any funding measures. So, it's at the end of the period, the end of Q1, we have still a +EUR 600,000 in cash, in cash equivalents. Going through the balance sheet in Q1, there had been some main changes, especially in the current assets. They decreased by EUR 24.4 million. And this is mainly due to the collections from customers.
In the end, we had no outstanding or significant outstanding customer payments. Going on the other side of the balance, if you check the current liabilities, they decreased by EUR 17.9 million, and this was attributed to the repayment to suppliers. And it overall was EUR 20.7 million of repayments to suppliers for deliveries in Q4 and in last year. So we paid them off in Q1. There's also a maybe you see a decrease of non-current liabilities. It was current liabilities due to IFRS reclassification. I will now like to hand over to our CEO, Joachim Damasky, our CEO, who'd like to talk about again on the sales target. Joachim?
Yeah. Thank you very-
Can you hear me?
Thank you very much. Yeah. Can you hear me?
Yes.
Yeah. So thank you very much, Jörg, for running us through the financial numbers. The sales targets haven't changed. We are still very confident that we will achieve our sales target for this year. Currently, we have orders on hand for EUR 12 million. So, I think we are on a good track. We are just preparing the good outgoing for one of our major bus customers, for Kässbohrer. This will happen then next week. So in total, I think the things are quite running good. As we explained last week in the Capital Markets Day, the batteries, especially on the immersion cooling light batteries, are now built into the test batteries.
We are quite confident that the test drives that we are waiting for in the next weeks will be successful. We have also got an RFQ for more prototypes coming from other car manufacturers for these. So I think we are now at the right time with this technology. Yesterday we had the first working day for its three new engineers experienced engineers on the battery business, and they will support us in the development, what- that would be explained also the narrow pack for the U.S. market, but also for the improvements in NMC Plus on our existing battery pack and also LFP.
Customers we are talking to, they are looking forward to get the samples, the B and C samples, so that they can build up their test vehicles with them. So everything is on track, I would say. We are very positive, and the mood is quite good. I think now we can go to the questions. Is there anything what was coming up? Yes, there are a few things. First question is: What kind of capital expenditure does one have to expect? I think this is something that you, Jörg, can answer. And the second question: What is explained revenue recognition principles? As soon as we invoice, we count it as revenue. But, Jörg, if you want to say something-
Yeah.
About capital expenditure.
Capital expenditures. Yeah, well, you mean the. Well, I would say the this year capital expenditures we had already talked about this in the past, but we have not released the total amount since we are in the discussion and to fine-tune the development. Right now, we have roughly said EUR 5 million-EUR 6 million for this year, but this we need to go through that again. What about why there was no gross profit? Well, this is also material coming in from LION Smart for our prototyping, and there was not much of revenues against it. So the gross profit was almost zero in my mind. How many customers does LION have, approximately? Is the next question. Maybe you want to answer?
... Yes, currently we are, we have, around 20 customers where we are in intensive talks. And, the number of customers where we ship to is, between 12-15 currently. Depends a little bit if we talk, also about customers where we send products as to.
Okay. Next question is: Why are the very low revenues called seasonal revenues? Revenues haven't even dropped that much last year when the new production was ramped up. This year is extraordinarily bad. Well, seasonal, it's just the, as we also see with our, with our customers, we heard from them. There's basically a seasonal effect in the storage market. And, as I explained, so, mostly in the year-end, the orders will come in to get the necessary subsidies. And, mobility is, there has been changes to combustion engine orders, but this was for a certain period of time.
And we, as we said, and Joachim already explained, we are picking up now these revenues with mobility customers. Another one coming in, "Why have investors not been for revenues at almost zero? I don't ... Why have investors..." Don't get this. "There should be communication before this cannot come out of nowhere." Well, I think this is no revenue at zero. I mean, there is revenue, and you can see that the whole year has been jeopardized. So, we still, as we said, we are still keeping to our guidance of EUR 60 million-EUR 65 million. There are EUR 20 million contracted revenue in the books. How big was the number one year ago? How much of this revenue is supposed to come in Q2 2024? Joachim, give some information on Q2.
Yeah. Q2, I would say, we are planning roughly to get from these EUR 13 million contracted to have at least 50% now in Q2. And we are also working on other customers, especially on the stationary market, so that we still are very confident that we will achieve our target for that year.
Question from Christian Fanta: While sales in Q4 did slow down production, did you produce for inventory?
Yes, we reduced the production because we do not produce for inventory. We only produce that much. We can still make sure that the whole line is working. So for example, this week we have three days off for the production line in total. So we try to reduce to keep our stock when it's possible on the low level, that means on the production material side.
Another question: If you would get a contract for the light battery, where would these packs be manufactured? And, is the current location in Burgau capable to say to do that, and would you have to build up a new one, or will there be a license model?
For the time being, we are not talking about any license model. We have the possibilities to expand our production facility in Burgau. There is one part of our production facility that is currently used as a storage, and this can be turned into production facilities. Plans are made already for this, and we are talking with an architect, what would be the time for reshaping this for being a production facility and what is necessary then to build up on the side area of the building, where we have also the possibilities expand to then in future our storage area there. So the stock would move out of the current facility, and we would be able to do it there.
Franco Ferrari asked just an understanding question: "Is in the press release, you mentioned Q1 2024, mainly impacted by the absence of reselling business compared to Q1 2023. Today, you mentioned also some business anticipation into Q4, presumably from storage. Can you please clarify? Many thanks." Well, the retailing business is, there's no retailing business anymore in Q1 2024. And we also had some business that were anticipated in Q4 2023. It was not only storage, but also mobile customers who asked for shipments in 2023. As of today, how much of the full year 2024 sales target is covered by current orders? Oh, the sales target, we had sales target is EUR 60-EUR 65.
I think we have 12-13 million of orders intake, as that Joachim explained. Another question, is the revenue drop caused by a sell out in Q4? Well, as we said, it was a pull through from... There was a pull through from Q1 to Q4 last year. And also some customers, as I said in the that ordered that had to shift their production to diesel, and so to combustion engines.
Jörg, can you hear me? Can you hear me okay?
Yes.
Yeah, just you were cutting out a little bit. Maybe I can-- I'm looking at the questions.
Yeah.
Maybe I can summarize a few things. One, we do not want to do quarterly guidance. Our quarters are volatile. We've seen it before. That's important, so we're not going to do quarterly guidance. We stick to our full year guidance. I think you heard that from Joachim and Jörg quite clearly. There was a question about, was there a sell out in Q4? I think some of our revenues from Q1, I wouldn't like to put a number on it, could be 5, could be 10, went into Q4. We saw customers wanted to pick up inventory going into the year. We are learning about our business. We understand Q1 is pretty close to zero for storage.
Our storage customers tell us, for various technical reasons, that I think Michael Reich talked about last week, tends to be a second half of the year business, so most of our storage activity will likely come then. Just looking at some other questions, just to make sure we've covered everything. On the light battery, I think Joachim mentioned quite clearly that we have picked up another potential prototyping customer, so we're in an RFQ to provide prototypes to another OEM. If we make immersion packs, we will have to build a new line in Hildburghausen. We won't be able to use the i3 line, so there will be CapEx. However, you know, we would have a multi-year order from an OEM behind it if we did go through, if we did go into that.
Other questions, so somebody asked, "How much of 2024 sales are covered by current orders?" We think that we have maybe up to a third, at least currently covered, but we are not doing as many NDAs as we would like to do for a variety of reasons. And we have found, for example, some of our bigger customers that may well come through in the second half of the year. One of them is, you know, a bus company that we've done business with for a long time. They tend to want to buy spot later in the year, because we are second source of supply, not primary suppliers. So they will come to us as and when they need to top up. I think we've covered a lot of...
Oh, do you have enough financial resources to build a second line in Hildburghausen? Well, if you're talking about for the immersion, not today, but we wouldn't think about that today, unless we would win an RFQ from an OEM to do this. And if we do win a seven-year production order from an OEM, we would probably quite easily be able to get the funding to build a line for that. So we're not particularly concerned. What we're much more concerned about is to find a OEM client for our immersion system that is the huge focus for us, obviously, really, really important. Okay. I think that should be answered, all the Q&A questions, as I can see right now. Just give it a minute, Jörg, and see if anything else comes through.
Yeah, exactly.
Yeah, one more. A little bit of a complex last question from Franco Ferrari. Franco, assuming you are referring to the immersion here, Joachim, if we did win an RFQ with the OEM we're working with, how long would it take us—I mean, again, if we win an RFQ, there would be a lag before production. How long do you think it would take us to get an immersion line in place?
I think, I would say once we have decided the final design for the modules and for the battery, it will take us, I would say, roughly at least 9-12 months to set up the production line. But then we have to do all the trial runnings, then we have to make the final test. They have to come from the final production series or the release of the production line. I would guess it will take us, I would say something like 18 months from start of the investment until we are ready for the OEM supply. So this is a timeframe that is normally quite realistic to set it up.
We have some experience on the production line now, but to set up the new production line, of course, we will try to keep as much as possible known technologies, including welding from the existing one. We have also to look what kind of documentation the OEM wants to have from every battery. We have to monitor each welding point, whatever else. So I would say roughly 18 months until the line is set up, and before we can start then the final production.
I think there's another question, Joachim, which is how big would you build? I think, more importantly, I think the question is: How many immersion packs would we produce per OEM per year? So with the current one, Joachim, that we are working with, if we move into RFQ with them, roughly how many packs a year would we be asked to produce? I think the order period is over about, well, potentially would be over about six or seven years. So how many packs a year? And then if we win subsequent OEMs, what kind of further amounts of packs would come in? Clearly, these are not high volume because they're for sports cars.
Yeah. So yeah, our current development is going in a way or into a direction that the modules that we would use, they would be produced for as a standard module on both 800 volts and 400 volts. So that means the preparation is done with in a way that we can have with three or four of the modules in both 800 and 400 volts. So the module production will be on a higher number. The packs depend very much on the size how many thousand vehicles the OEM wants to build from one line. So, what I would expect for the time being is several thousands of the packs, and depending on what packaging and what the final pack will be, a few thousand per in each model, that m ans for each packaging that we use. We hope we can standardize it as much as possible, but this depends very much on the base design.
Just to be clear, you're saying a few thousand packs per model would be what you would use as a rough idea per-
Yes.
Per model of car, right?
Yeah, per model of car and several thousand of packs that we use there. But also there, I would say we will have it in different versions. It depends very much on what voltage the pack finally has to be assembled, how many packs is, what kind of what voltage.
... And one other question is, there is a suggestion that we would build the line bigger, so we could produce for other customers. So there's a capacity question. When you look with the production team, engineering team, Joachim, and you think about setting up an immersion line, is it one that would have quite big capacity? Like, what would the capacity be? 10,000 packs per year?
Yeah. Yeah, yeah. Something like that, I would say. This should be, of course, possible. But first of all, we would not be, we will not build up for a large volume before we start thinking about what we can do in two or three shifts.
Right. Got it. Anna, do we have oral question ability, or is it all coming in through the chat? I don't know if Anna's there?
Hello, dear participants. Can you hear me now? I hope you can hear me well.
Yeah.
Hello. So I will start the oral Q&A right now. Please press nine star on your telephone keypad to state your questions from the conference call. To activate your question function in the conference call, please press nine star now to state your question. Let's wait for a couple more seconds. There are no questions incoming so far. Still no questions incoming in the conference call, so I'm handing back over to you.
Thank you very much from our side. Joachim, do you want to make some closing calls, closing first?
Yeah. So thank you very much for your attendance today. I hope that we can also now continue in our immersion cooling project as we have planned it with our customers. We are now in deep negotiations with our existing OEM pack customers, especially for the upgrade, and we will keep you informed in our next call. Thank you very much, and have a good day.