Welcome to the conference call of LION E-Mobility AG regarding the Q3 2025 results. This call will be recorded. Currently, all participants are in a listen-only mode. My name is Jens Hecht, and I'm the moderator today. On the call, we have the LION Management Team, Dr. Joachim Damasky, CEO, and Jörg Peter Hahn, CFO. Joachim will give you an update on the overall business development. Afterwards, Jörg will provide an overview on the financial results of the first nine months of 2025 that were published yesterday. After the presentation, the LION Team will be available for any of your questions. You will be able to ask questions via the Q&A chat function, or you can raise your hand virtually, and we will be—you will be unmuted to ask your question. For the presentation, I would now like to hand over to Joachim. Please go ahead.
Thank you very much, Jens. Good morning also from my side. My name is Joachim Damasky, Managing Director of the two companies and also a member of the board. I would like to start on the next slide where we are currently. I think we have been talking many times about phasing out our 120 amp-hour battery cell. That means the current SE09. We are now in the final production phase. What you can see also here on the slide is that we will produce the spare parts and also the last final battery packs in February 2026. We will still have some modules as spare parts available, but from our point now, there will be no cells left.
We are just looking at how many cells we need for supplying our customers in the next year before we get the release for our new battery pack, NMC Plus, in all applications. This also then decides how much we can sell. We have also customers who want to buy cells from us, so I will come to this later on. The production line modification, as mentioned last time, we have started already. We are now doing it for the end-of-line testing and end-of-line manufacturing. That means putting the modules together on the high-voltage side and also module phase-in into the welding. That means that we can also do the ZKS. That means the busbar welding also on the automated station. Cell stacking and the module welding station will follow in March 26.
Currently, we are producing all these battery packs that we are shipping to our customers for the integration tests, for also the capability tests to our customers. We have also produced those that we needed for all the homologation tests on a semi-automated line where we do the welding for these cells. The production process is a little different, as I mentioned last time, because we do have now—this is now state-of-the-art Swelling Pads between the cells, and so the gluing and the manufacturing is a little different. This is what we are doing now, semi-automated, and the serial production for the automation of all this on our production line then will start in April. That means in March we will do the necessary changes. We have also now organized with our cell manufacturing company, Eswold. I mentioned this a few times before.
Now we get all the prototype cells that we need from their Prototype Manufacturing Line. The serial production of the cells will start in January, and this means that because there we have a shipment time of roughly eight weeks, we will get the cells then latest mid-April so that we really then can do all the new batteries with NMC Plus. We hope that we will be able to switch over all customers to NMC Plus. We have a lot of inquiries now. All customers who have already had one of these batteries are in the testing phase. We are still in the final optimization for the software. That means for the BMS, but we have achieved all necessary tests, so we got also that what was necessary for the homologation test. Please go to the next slide.
There you can see that we have finalized all the ECE R100 Revision 3 tests. This is the first battery where LION Smart has made the development, and you can see it on the right side there. We have the type approval for the battery, so homologation of the buses that you can see. This is the example of Kazan, the two buses where we are in. The E-Jest, the smaller one, two batteries are in. ATAC, five batteries of us are in that bus. They have now started homologation of the bus with the new batteries. We have achieved all the tests, thermal propagation and fire resistance tests. We have been even better with this than the old battery.
Vibration, EMC, Crash Test, thermal shock, everything passed on the first test, so there has been no problem with any of these ECE R100 tests, and we were also able to fulfill 100% our own timeline. What I already mentioned, the BMS integration tests are ongoing. We do these tests on our own. Our supplier, Munich Electrification, is doing this also, and we have now the batteries integrated in the vehicles, for example, at Kazan. This is the reason why I show the batteries or the buses there, and we are driving already with our batteries and doing the final tests.
The first bus companies will get the buses in January, so we are producing now the first 30 packs NMC Plus for serial release. They will be handed over to the bus company or to the bus manufacturer in December this year, and mid-January, these buses go to the bus companies. I would say so far we are in our time plan. We are now in the allocation phase for the last cells where we have to look when we can switch over when we get the final release from our bus manufacturing companies so that we will be able to sell off the stock. We do not want to produce with the old cells longer than February. Next slide, please. Let me come to the immersion cooling.
I think this is something I mentioned already that with the German passenger car companies, you see what is going on. The projects have been postponed. In between, we have been doing a project with a major truck manufacturer. They want to have a bus that is able in a very short time to charge the batteries only with a small stop. We have developed the cooling concept further so that we are also able to do this under the circumstances in the vehicle. We have integrated the electrochemical impedance spectroscopy so that we can see what is going on with the cells, things like Lithium Plating, for example, or heating effects that we can see before the temperature outside of the battery is going up. We were also able to start a collaboration with one of the big first-tier automotive suppliers, well-known.
They are now developing to us the other components. That means for the cooling, we are talking about heat exchangers, pumps, and everything that is needed also for getting the heat out of the system, especially under driving conditions. They have also their experience in all the fluid handling on the vehicle, so we have now a company on board who has a lot of OE experience. We also started a collaboration and a partnership with Castrol because they also have been looking for a company with our expertise to do the tests for the oils that they want to supply. They have developed an oil, and this is something that we would like to use then also in our battery systems.
There have to be also carried out some tests, especially for the long-term stability of these oils, but I think we are happy that we have also a company on board who has a lot of experience in the coolant. You can read also what Castrol said. I repeated this out of their press release, and I think this will be also a very fruitful partnership. Next slide, please. Here you can see the next step of our modules where we have solved the issues that we had within the last, especially to get out the air of the modules so that we do not have any pumping problems. This was also outcoming of the collaboration with the two companies I mentioned before. We are doing this now for a 3,000 amp charging.
That means they want to charge 450 kWh in a time less than 15 minutes, and this is only feasible with our immersion cooling technology. We are now in the next step for them. We have transmitted an offer to them for setting up all the prototypes, and we hope that we will come to this point latest beginning of next year. It looks very promising. I think this is something that I only want to show you. We are going further with immersion cooling, although there is a certain dip in the projects running with our big OEMs. I think we have heard all about the problems that even big companies like Porsche have, so nobody is surprised that they postponed some projects, but I think we have still good chances also to bring this to a serial application. Next slide, please.
Yeah, I only want to show you a little bit what we are doing also in our back office. We have successfully completed the audit of ISO 9001. We have implemented the supplier management that we need now for serial supply for our own suppliers. I think you know that most of the suppliers that we have used for the SE09, we have been taking over from BMW. We have now new suppliers where we needed urgently own supplier management. We have also integrated now software-supported production development process, PEP or PDP, and this is standard like all these steps we have in the automotive industry. We have integrated also in our own company training tools, computer-based training tools for the internal staff development. It starts with cybersecurity.
We have quality processes, data security, work safety for all these things so that we can reach every member of our company, every employee in both locations. That means in Garching as well as in Hilburghausen. We are now preparing due to an internal audit that what we need for the IATF 16949. This is standard in the automotive industry. As soon as we want to start there with the big OEMs supply, we also have to fulfill this IATF 16949. We are also working now on other standards that we need if we want to go into the next step of the BESS, what we also have announced, and I would like to come over to now. We need also their cybersecurity and software standards. Let me talk a little bit about the evolution of the LION BESS business.
I think we all know that there is a long history on that. In 2021, LION Smart has been working together with the German ministry, BMWSB, and we have supplied for the low energy house in Berlin the battery already. Then we started supplying the NMC batteries to Alfen in big containers. We also integrated these kinds of batteries in the containers for back automation. You know that Fenecon was a big customer in the smaller containers. You can see also a picture there. Vattenfall, I mentioned this there because most of the batteries they have been using or they are using were coming from BMW. We are doing the service for them now since three years. Whenever there is an issue and we have containers standing in the U.K., but also in Germany with Vattenfall, no problem.
The customer is happy with our service, and this is something that is very well accepted in the market. Unfortunately, you know that the battery business was going further. These all have been fitted with LFP batteries. That means lithium iron phosphate. No, now they are with LFP. There have been NMC batteries, but nobody now needs NMC batteries in the BESS because we do not have these high energy densities. Everything is now switched over to LFP, and the LFP market is dominated by Chinese companies, especially on the container business. I mentioned this last time. This was the reason why we started the cooperation with Leap Energy, a sister company of Leapmotor, and we have been visiting them.
We have signed the contract with them, and now we are cooperating with them because the price level that we see here, that means prices of less than EUR 150 per kWh ready in the container, sometimes with also low prices on the electronics that is needed behind, makes it nearly impossible to produce these kinds of containers with NMC batteries in Europe anymore. This was the reason we started this. I think we have been acknowledging this to the market also by a cooperation with a Munich company. We are now filling our sales pipeline. The container that you can see in the picture has an energy content of about 5 MWh, and this is more or less the standard that we have now. Next generation will have 6 MWh.
The companies are working, and even Leap Energy is working on this, but for the time being, we are working with the standard of 5 MWh because the prices are on that level where we are now. What we should know is that the cells are now more and more optimized. It depends very much if we are talking about a system that is for maybe a two-hour system or a one-hour system. What does it mean? When we have a one-hour system with a 5 megawatt-hour container, that means it has a power of 5 megawatts, and so the battery is able to support for one hour. More and more of the systems are now going to two, four, or maybe eight-hour systems. They are used for buffering big solar plants, for example, for the nighttime, electric power supply, and therefore more and more of these batteries are optimized.
We do not have modules in most of these packs. We have Cell-to-Pack. We have Blade Cells, so they are optimized for this as well. This is something that the big Chinese companies are doing. Most of them, like CATL, are producing their own cells to do this for their battery packs for the containers. The advantage of Leap Energy is that the customers can choose what kind of cells they want to have. It can be CATL. It can be EV. It can be others. This is what makes us also strong working together with Leap. We won the first project now, and I will come to this later on. We are now expanding the best to Italy because our contract gives us also the contract area, Spain, France, but also U.K., Italy, and therefore we are now starting in Italy.
We have hired an Italian engineer who is now working with us here to get all the information that he needs for his market. We are also expanding our BESS team here in Germany. You know that we have one of our experts working on this from the beginning. Now we have hired also another person coming out of this area. We have been able to convince him, coming from a competitor in this area, to join the team. We are now enhancing our sales force because the products will be available. We will also send this month or beginning of the next month our service team, our flying doctors team, to China for the training so that as soon as the containers are here, we will be able not only to build them up, but also to do whatever kind of training is necessary.
I think we are quite on a good way to do the same service level as our customers are used from our old battery also with the new batteries. Next slide, please. What is our advantage? We are a technology supplier, and it is very well appreciated by our customers that we do have experience in batteries, that we also build our own batteries. We know very much about the cells. I think we have state-of-the-art for the grid-scale application. We also are working together with very well-known established manufacturers of the cells. We are working together with Sinexcel. If somebody wants to have a cheap version, we are doing this also with Siemens. We have also now Siemens inverters in our application list. We are doing this also with SMA, a very well-known company established, I think, some 20 years ago in Kassel.
They are doing a very good job there. They are very well known by the customers, and if they demand to work together with SMA, we are doing this also. We now can offer two companies. That means project developers, energy suppliers, but also the EPCs. These are the companies who do the engineering, procurement, and construction, everything that is needed up to the middle voltage, up to 30 kilovolts, whatever is necessary, including the transformers. We can connect to the transform station to the high voltage up to 110 kilovolts, but this is not our product that we will supply. This is something that they normally do on their own. We are also working, as I mentioned before, on the cybersecurity, where we have to also fulfill now in the next years or the next year also the homologation and certification for this.
What we also can use now, we are working together with an EMS. That means energy management system company to provide these kinds of solutions also to our customers. We are working to be a one-stop shopping company, including the long-time service agreement. This is also something where our customers complain that some of the Chinese containers that they get are not coming with any service. This is something that we are building up. That means from day one, we will be able within 24 hours to go to every site where we build up this kind of containers. What we also do have now is German warranties, but we will be bankable with a 10- and 15-year warranty. This is then negotiated also with Leap and the cell manufacturer.
This is something that is running over our production company in GMBH in Hilburghausen, who is doing the turnover. We are also working now for different insurance companies and security so that we can offer the customer whatever they need. Next slide, please. Melissa? The next slide is showing here. Yeah. I think when I look back when we started the agreement with Leap in April, we have really made good business progress. We have been in China. We have been looking also to them. We are now looking if it's necessary also for a second supplier for containers. We have now a pipeline of 7.5 GWh with 10 customers. We won the first project with 20 MWh where we will supply to the customer in January 2026 and maybe March 2026 for the second two containers.
The problem is now not the availability of the containers, but we are now working on the grid connection. This is the big issue now because the German Ministry of Economy and Energy, they are now doing their plans. It is not really clear how much of these storages they will allow in Germany and what is the time frame because the grid companies are looking very much on stability. When I say 7.5 GWh, we would accept maybe 5% or 10% being available next year because the grid connection company or the grid connection allowance with the grid companies now we are waiting for. We have also active discussions across Europe in all these countries that you can see there. As I said, we are now building up our sales management team, and we are doing the training. Thank you very much.
I think this is what I wanted to tell you about our operational business. Now I would like to hand over to Jörg to give you an overview on the financial numbers. I think we are also not that bad this year. Thank you very much.
Yeah, thank you very much, Joachim . My name is Jörg Hahn . I'm responsible for finance in the LION E-Mobility Group. I want to highlight first our three points, meaning revenues, EBITDA, and operating cash flow. As you have also already mentioned, our revenues as seen in the first half of the year remained strong also in Q3. We are up now to EUR 16.3 million overall. As a result of our efforts throughout the year, we could successfully drive our EBITDA to a high EUR 2.4 million.
This resulted also in a push of our operating cash flow to a good EUR 3.8 million coming from a low minus EUR 4.1 million in previous year, same period 2024 through our intense cost control and also managing our inventory levels. Next slide, please. In detail, I would like to explain a bit how the details are then. The revenues, as I said, could be increased of 31% compared to last year's period. Our new NMC Plus modules and packs used almost our development capacity leading to EUR 2.4 million. Also, we used some development capabilities for the immersion technology. The material costs and the ratio could be kept at roughly 50% compared to an 88% last year. Personnel costs stayed at almost the same level despite our higher operations and the mentioned development activities.
Through disciplined cost management, we have reduced our operating expenses to EUR 3.5 million and lifting our EBITDA to this record EUR 2.4 million in the last or in the first nine months of the year. Finance expenses eased to EUR 1.3 million, reflecting the reduction in bank credits and loans. Additional shareholder loans continued to support our financing of our developments. Since they have not been paid out, they further strengthen our funding position. Next slide, please. Looking at the cash flow, the operating cash flow strengthened significantly to EUR 3.8 million, which is a clear result of our ongoing cost discipline and the tighter, as I mentioned, inventory management. On the investment side, on the investing side, our cash flow came in at minus EUR 3 million, reflecting our continued commitment to growth, particularly our mentioned investments in NMC Plus modules and packs and the immersion.
Looking at the financing, cash flow was EUR -8 million, which is mainly driven by the scheduled repayments of the bank loans, while additional shareholder loans continued to provide strong additional financial support for our development activities. Next slide, please. Looking at the balance sheet, we see the total assets. They increased to EUR 26.5 million, driven by a higher non-current assets as we continue to advance our development projects, as we mentioned before. The equity side strengthened to EUR 8.9 million, which reflected the solid operational improvements achieved over this very good period. Looking at the passive side, the non-current liabilities edged down to EUR 3.9 million following regular loan repayments, while additional shareholder loans highlight the continued confidence and commitment from our main shareholder. Current liabilities, they rose slightly to EUR 21 million in line with our growing operational activity. This is rough information on our financial side.
Now I would hand back over to Jens. Thank you.
Thank you, Jörg. Ladies and gentlemen, we would now come to the Q&A session. If you have a question for the LION team, please use the Q&A chat function, and I will read out the questions coming in. You can ask a question by raising your virtual hand, and we will announce your name and unmute yourself. Let's wait for the first questions to come in. We have a first question from Stefan Brunner. Stefan, please go ahead. Sorry, Stefan, can you?
Yes, can you hear me?
Yeah, we hear you now. Great.
Okay, thank you very much. Good morning. A couple of questions. First one, do you expect an additional order intake in BESS in 2025? Second one would be, you're obviously connected to Leap Energy.
My question would be, are you or would Leapmotor, although them being in the mass market, also be interested, or is there any interest in the immersion cooled system as well? Another question would be timeline OEM. Do you have anything to share apart from, yeah, the offer is there and there would be prototypes, but is there a timeline when they would want to see that in a truck? That's it. Thank you very much.
Thank you very much, Mr. Brunner. I would go backwards. The timeline regarding the introduction into the truck, into the market, is something that we do not really know. I think we are talking about in about two or three years, so it will not be in a short time because you know that these concepts are not only related to the truck.
There have been also to be infrastructure be built up and also the connectivity to the truck. When you see 5,000 amps that they want to bring into the truck is something that you cannot do on a normal outlet. They are also working now on connectors. I think it will take two to three years until we'll be these things in the market. Coming back to the second question, what is about Leap? Yes, we are talking also about Leap and also with other companies about immersion now in the worldwide market, not only with the German manufacturers. There is some interest, but of course, we need to have also engineering capacities for the time being. Everything is binded in the final stage of our battery packs, both on software but also on hardware development.
This is something that we have in mind also for the next year. The first question that you asked was, what is about the possible second order? I think we have orders out in the field or offers in the field now. We are talking to the customers, but now everything is depending very much on the grid connection release that is coming from the grid companies and also from the so-called Bundesnetzagentur. We hope we will get a second one this year, but it would be too early to promise that.
Thank you, Jörg Peter Hahn. We have two further questions via the chat from Sarah Heilmann. First question is, how may your revenue share of BESS systems be compared to total project value?
I think we should know that in the past, we had, that means in the year 2023, roughly about 50% of the turnover in BESS, and this is what we also now hope we will be able to achieve in future also. If there will be more, most welcome, but this is our internal target so that we hope that we will come to this share that the company had because then we have two major pillars where we can stand on. The third one with the immersion cooling, we are working on this, but serial supply, as I said, is still sometime ahead of us. A next question from Sarah Heilmann. Do you have a range of revenue expected from the Leap Partnership for 2026? Yeah, I think we have a range.
We hope that we will be able to do some EUR 20 million with also Leap in the next year. As I mentioned, because this is not a serial supply, this is a single project business. Our target is to come to this EUR 20-25 million turnover in the next year. I think the probability is high that we can achieve that. For the time being, we only know the projects that we now have out in the field. There are big projects also, but also this then takes some time. The question is, do we talk about order income or really turnover? With the turnover, this is divided in this kind of business. A smaller portion is paid when the contracts are signed because we need to pay also in advance for the pre-production of the containers.
The final payment is then when the grid connection and the so-called certification for the grid is given and they are switched to the grid. It takes some time from contract signing to getting the final payment. A year is something that can easily happen. It is really the question how this will work. It depends very much on signing and when we get the grid connection.
Thank you. Another question from the chat. Have I understood correctly that Leap installs its own batteries and not LION modules? If so, what is the approximate margin for LION here?
We know where the market prices are and we know what we have to pay. The market prices are driven mainly by the Chinese. I think for the time being, we are calculating with a good margin. We hope that will stay in this way.
Please excuse if I cannot give direct numbers here.
Okay. We have the other questions already. No, not all. There is one more, which is in German, right? The German one. Exactly. [Foreign language] .
For the time being, to translate it also to our broad listeners here, the question is, what is about the limitation of the production capacity in Hilburghausen? For the time being, we do not see this as being a big issue for us because the 2 GWh per year is only then the limitation for the battery module and pack production. That means for the NMC Plus.
We hope that we will be able, and a few of our customers are coming back now to increase this portion also in the next year. The 2 GWh in Hilburghausen will not be the limit in the next year. If we get projects like, for example, the immersion cooling, we already have pre-buy rights for the land behind our factory. We have made the first plannings with an architect, what should be done there and how we can do a modular extension of our work, meaning our factory there, including all the allowances from the local municipality. It looks like this would not be a limitation. There might be investment in another building being necessary because we are now coming to the limitation of our factory. I think we have chances enough also to grow there.
Thank you. We have one follow-up question.
Question from Mr. Brunner. Mr. Brunner, please go ahead.
Thank you. Mr. Mark, you obviously said for me the right thing in terms of order intake. I mean, you're talking EUR 20 million probably in turnover for 2026. But order intake, is that something you can talk about as well?
The only thing that I can say is how much offers we have out there. But order intake depends very much on the grid connection allowance. This is something that has a huge uncertainty because our ministry in Berlin, and I will visit them soon, they are still making up. You know that in Germany, we are discussing also building up of new gas power stations and other things. Everything depends very much on what is going on there. Unfortunately, the grid companies, they are hesitating in some areas because the overall strategy is not given so far.
Can I postpone the answer to our next meeting because then I should know a little more?
Thank you. Currently, there are no further questions. If you have further questions, please type into the Q&A function or raise your hand. It seems that this is not the case. We would end the call here today. Thank you for your participation. If you have any further questions, please reach out to the LION Investor Relations team at any time. This concludes the call today. Thank you.
Thank you very much.
Thank you very much.