- H1 2023 sales revenue at €14.9 million, +80% vs. H1
2022
- Backlog1 at €10.3 million at June 30, 2023, down -6% vs. H1
2022
- Gross margin rate improved to 41% vs. 35% in H1
2022
- Cash position of €2.2 million at June 30, 2023
- Proposed tender offer by SoftBank Group to acquire BALYO
shares at €0.85 per ordinary share
- Financial position and outlook
Regulatory News:
BALYO (FR0013258399, Ticker: BALYO), technology leader in
the design and development of innovative robotic solutions for
industrial trucks, today announces its results for the first half
of 2023, approved by the Board of Directors on September 18,
2023.
Pascal Rialland, Chairman and CEO of BALYO, comments:
"Our results for the first half of 2023 have significantly improved
compared with 2022, marked by a significant improvement in our
gross margin and overall profitability metrics. This improvement is
mainly due to favorable seasonality in the execution of order
commitments with Linde. Nevertheless, direct sales orders in H1
fell short of our expectations. The Company must meet financing
requirements over the next 12 months, which will depend on the
success of SoftBank Group's takeover bid for the Company's shares
that would enable us to secure our financial position".
First half 2023 activity
As announced on the occasion of the release of the revenues for
the first half of 2023, BALYO recorded sales of €14.9 million in
the first half of 2023, up 80% over the first half of 2022.
In the second quarter of 2023, the Group recorded sales of €7.6
million, up 73% over the second quarter of 2022.
After integrating new orders of €3.3 million in the second
quarter of 2023, BALYO's order backlog1 stood at €10.3 million at
June 30, 2023, compared with €11.0 million for the same period last
year. This represents a decline of -6% compared with the first half
of 2022, due to a slowdown in business in the United States.
Over the period, BALYO generated 24% of its order intake
directly, compared with 36% in 2022, a lower level of performance
than the Company's ambitions, due in part to client delays.
2023 Half-Year financial results
The interim financial statements have been subject to a limited
review by the Statutory Auditors
In € million
H1 2023
H1 2022
Change
Sales revenue
14.89
8.29
+80%
Cost of sales
-8.76
-5.43
+61%
Gross profit
6.13
2.86
+114%
Gross margin rate
41%
35%
+19%
Research and Development
-2.36
-2.46
-4%
Sales and Marketing
-1.78
-1.33
+34%
General and administrative expenses
-3.72
-3.83
-3%
Share-based payment expense
-0.11
-0.21
-49%
Operating loss
-1.85
-4.98
+63%
Financial expense
-0.54
-0.02
-
Net loss
-2.43
-5.00
+52%
Cash position (as of June 30)
2.16
6.68
-
In the first half of 2023, gross margin stood at €6.13 million,
up +114% over the first half of 2022. This improvement is the
result of favorable seasonality in the execution of 2023 order
commitments with our partner Linde, and a more controlled cost
structure, with raw material costs stable and under control in
relation to revenues, combined with better absorption of personnel
costs. As a result, the gross margin improved from 35% to 41%.
Operating expenses stand at €7.87 million, up slightly by 3% due
to higher sales and marketing expenses (+34%). This increase can be
best explained by higher personnel and marketing costs following
participation in numerous trade fairs.
After taking these items into account, the operating loss for
the period came to -€1.85 million, a clear improvement compared
with the -€4.98 million recorded in the first half of 2022.
Net financial expense came to -€0.5 million, compared with
-€0.02 million for the corresponding period in 2022.
Overall, net income for the first half of 2023 totaled -€2.4
million, compared with -€5.0 million for the first half of
2022.
At the end of June 2023, BALYO had 178 employees, compared with
146 at the end of December 2022.
Change in order intake
At the date of this press release, firm orders intake over the
course of the 2023 3rd quarter amounted to €3.7 million, a level
that remains significantly lower than anticipated. As a result,
BALYO's order backlog stood at €12.5 million at September 18, 2023,
compared with €11.5 million for the corresponding period in
2022.
Reminder of the proposed takeover bid by SoftBank
Group
At the beginning of June, SoftBank Group (the “Offeror”)
initiated a proposed takeover bid to acquire the shares of BALYO.
This friendly offer is priced at €0.85 per ordinary share, €0.01
per preferred share and €0.07 per share purchase warrant. BALYO is
complementary to SoftBank's existing investments in the transport
and logistics sectors. Should the offer be successful, this
investment will enable SoftBank Group to expand its business in the
transportation and mobility sectors, while BALYO will gain access
to its partner's global network of over 470 technology-driven
companies to develop new business relationships. Should the offer
be successful, considering the SoftBank Group ecosystem, it is
expected that BALYO will benefit from a support to deliver on its
direct sales strategy.
In connection with the Offer, the Offeror has agreed to provide
interim financing of up to €5 million to BALYO to meet its working
capital requirements. This financing includes a payment in several
drawdowns and is structured in the form of convertible bonds issued
by BALYO to the Offeror, maturing on October 31, 2024. As a result
of softer than expected orders in H1, Balyo drew down a first
tranche of this financing on July 20, 2023 for an amount of €1.5
million, as well as a second tranche amounting to €0.5 million on
September 6, 2023. Besides, a drawdown of €1 million in September
2023 has been requested by BALYO, which has not yet been issued at
the date of publication of this press release. BALYO plans to
continue drawing on this financing in October and November, up to
the monthly contractual limit of €0.5 million.
The amount drawn down by BALYO under the financing is
convertible at the Offeror's selection, at the following price:
(i.) if the conversion occurs as from the date of filing of the
Offer but prior to the first of the following two dates: the first
settlement-delivery of the Offer or the termination of the Offer2,
at the Offer Price per share, provided that the Offeror has
announced its intention not to convert during the Offer;
(ii.) if the conversion occurs on or after the earlier of: the
first settlement-delivery of the Offer and the Termination of the
Offer and the Ordinary Shares are still listed on Euronext Paris,
at the lower of (A) the Offer Price, and (B) the price
corresponding to the VWAP of the BALYO share price calculated on
the basis of the last thirty (30) trading days preceding the date
of the conversion notice less a 20% discount;
(iii.) if the conversion occurs on or after the earlier of: the
first settlement-delivery of the Offer and the Termination of the
Offer and the shares have ceased to be listed on Euronext Paris
following the completion of a squeeze-out on the remaining
outstanding shares of BALYO, at the lower of (A) the Offer Price
per share, and (B) a 20% discount to the market value of the BALYO
shares.
Upon Termination of the Offer, the Financing will remain in
place but the amount available to BALYO shall be reduced to
€3,000,000 less any amounts that have previously been drawn3 (in
the event of drawdowns exceeding €3,000,000 prior to the Offer and
in the event of Termination of the Offer, the amount of authorized
financing will be reduced to the amount already drawn down).
BALYO's Board of Directors welcomed the Offer in principle on
June 13, 2023, pending the independent expert's conclusions on its
financial terms. BALYO's Economic and Social Council also issued a
favorable opinion on the Offer on July 5. All the documents
relating to the Offer has been filed with the AMF during the third
quarter of 2023, following the Board of Directors' reasoned opinion
on the Offer, with completion of the Offer scheduled for the fourth
quarter of 2023.
Pursuant to Article 261-1 I 2°, 4° and 5° and II of the AMF's
General Regulations, Eight Advisory (represented by Geoffroy
Bizard) has been appointed as an independent expert to issue a
report on the fairness of the Offer Price in the context of the
public tender offer.
On August 4, 2023, Eight Advisory issued a report concluding
that the financial terms of the Offer were fair. The addendum to
this report dated September 12, 2023 does not call into question
the fairness of the financial terms of the Offer. This addendum was
submitted to BALYO's Board of Directors and Ad Hoc Committee on
September 18, 2023, who reaffirmed their support for the Offer and
its interest for the Company, its employees and its shareholders,
particularly in the context of the Company's deteriorating cash
position.
Financial position and outlook
At June 30, 2023, prior to the first drawdown on July 20 on the
interim financing provided by the Offeror, BALYO's cash position
stood at €2.2 million, compared with €8.2 million at the end of
December 2022. In June 2023, BALYO has entered into an agreement
with its senior creditors regarding the extension of its existing
financing, for which the Company was not in a position to meet
upcoming payment deadlines.
Indeed, BALYO's cash flow forecasts, as previously established
prior to this agreement, indicated uncovered financing requirements
for September 2023 due to negative operating cash flow and
repayment deadlines for state-guaranteed bank loans known as "PGE".
It thus appeared necessary to postpone the repayment of the “PGEs”
and these discussions led to an agreement with Balyo's creditors on
a deferred payment divided into 2 periods: a firm period running
until September 30, 2023, and a conditional period running from
October 1 to December 31, 2023, subject to a fundraising of €10
million (repayments will otherwise resume on the basis of the
amortization schedule in January 2023).
Since then, forecasts have been adjusted downwards in June to
reflect 2nd quarter order intake. The further deterioration at the
end of August as observed today can be best explained by (i) the
absence of expected down payments on significant commercial
contracts currently under negotiation for which the receipt of down
payments was finally subject at the end of August to the obtaining
of bank guarantees for equivalent amounts (these guarantees are
still under discussion at the date of publication of this press
release) and (ii) the upward review of forecast cash outflows for
the 2nd half of the year. After taking into account the remaining
convertible bond issues with the Offeror and the postponement of
payment deadlines to 2024 granted to BALYO by one of its main
suppliers, the cash position would be positive until early
2024.
Based on its cash position at the end of June 2023, firm orders
intake and the level of order backlog at the date of this press
release, BALYO's Board of Directors considers that in the event of
the offer not being successful, or of commercial orders falling
short of expectations, and should the financing requirement
identified to the beginning of 2024 not be covered over the
subsequent period, BALYO might not be able to realize its assets
and liabilities and settle its debts in the normal course of
business. As a result, there is a significant uncertainty regarding
BALYO's ability to continue as a going concern.
In addition, the Company received the repayment of the Research
Tax Credit 2022 on September 18, 2023 (originally scheduled for
October).
In the last quarter of 2023, BALYO will particularly pay
attention to look for new partnerships after being notified by its
long-standing partner, Linde, of the non-renewal of order
commitments from 2024 onwards.
***
Next BALYO financial release: 2023 third quarter sales,
on October 26, 2023.
BALYO has made available to the public and submitted to the
Autorité des marchés financiers its half-year financial report as
of June 30, 2023. The Statutory Auditors' interim financial report
contains an observation concerning the Company's current cash
position, which gives rise to significant going concern
uncertainty.
The half-year financial report is available on BALYO’s website
at www.balyo.com, in the "Documentation" section.
About BALYO
Humans around the World deserve enriching and creative jobs. At
BALYO, we believe that pallet movements in DC and manufacturing
sites should be left to fully autonomous robots. To execute this
ambition, BALYO transforms standard forklifts into intelligent
robots thanks to its breakthrough Driven by Balyo™ technology. Our
leading geo guidance navigation system enables robots to locate
their position and navigate autonomously inside buildings - without
the need for any additional infrastructure. To accelerate the
material handling market conversion to autonomy, BALYO has entered
into two global partnerships with KION (Fenwick-Linde's parent
company) and Hyster-Yale Group. A full range of globally available
robots has been developed for virtually all traditional warehousing
applications; Tractor, Pallet, Stackers, Reach and VNA-robots.
BALYO and its subsidiaries in Boston and Singapore serve clients in
the Americas, Europe and Asia-Pacific. The company has been listed
on EURONEXT since 2017 and its sales revenue reached €24.1 million
in 2022. For more information, visit www.balyo.com.
___________
1 The backlog refers to all orders for projects received but not
yet fulfilled. The backlog evolves every quarter following the
taking into account of new orders, the revenue generated by
projects during the period and the cancellation of orders. 2
"Termination of the Offer" as defined in the TOA signed between the
Offeror and the Company. 3 Without any early repayment for any
amount above €3,000,000.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230918024230/en/
BALYO Frank Chuffart investors@balyo.com
NewCap Financial Communication and Investor Relations Thomas
Grojean / Aurélie Manavarere Phone: +33 1 44 71 94 94
balyo@newcap.eu
Balyo (EU:BALYO)
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