Valoe Corporation Business Review January – September 2024

Valoe Oyj                 Business review         29 November 2024 at 20.20
                                        

THE THIRD QUARTER OF 2024 IN BRIEF 

Financial situation

In July-September 2024, Valoe Group's turnover according to IFRS standards was EUR 0.0 million (EUR 0.2 million in 2023). EBITDA was approximately -0.4 million euros (-0.8 million euros), operating profit was approximately -0.8 million euros (-1.3 million euros) and the result for the period was approximately -0.9 million euros (-2.1 million euros).

In January-September 2024, Valoe Group's turnover according to IFRS standards was approximately 0.2 million euros (1.1 million euros in 2023). The EBITDA was approximately - 1.4 million euro (- 2.4 million euro), the operating result was approximately - 2.5 million euros (- 3.7 million euros) and the result for the period was approximately - 2.9 million euros (- 5.3 million euros). Valoe Group's equity ratio, including capital loans, was -55,3 percent (-26.9%) at the end of the review period.

Valoe filed a company restructuring application on 5 December 2023. The district court of Pohjois-Savo decided on January 22, 2024 to start Valoe's corporate restructuring procedure.

In February 2024, the liquidator of the restructuring procedure, lawyer Pekka Jaatinen gave his first assessment according to the law on company restructuring, according to which Valoe's business has potential that can be improved with the help of the restructuring procedure. The liquidator considered that the continuation of the company's restructuring procedure requires finding a financing arrangement during the procedure. According to the liquidator's preliminary assessment, a feasible restructuring program can be drawn up for the company, provided that the company is able to implement such a financial or ownership arrangement that can secure the continuation of the company's business in the longer term.

Due to the delay in the further financing of the company's business. The administrator of the restructuring proceedings, Pekka Jaatinen, applied for a suspension of the restructuring proceedings on 24 October 2024 after the review period. The district court of Pohjois-Savo will sit on 9 December to decide if the administrator’s application will be approved or not This decision can be challenged within 30 days of the decision day. The company's financing negotiations are still ongoing.

In a challenging economic situation, the company has continued part-time and full-time layoffs of personnel throughout, the review period in accordance with the result of the change negotiations held in January 2024.

During the first half of 2024, the company delivered prototype deliveries to its most important customers for applications in the automotive industry, electronics and space technology. During the review period, the company's operations have been suspended in order to save cash. However, the company has maintained its key competencies so that operations can continue immediately after a sufficient financing solution has been found.

Trading in the company's shares has been suspended since December 5, 2023 and is still suspended as of the date of this business review.

THE MANAGING DIRECTOR’S REPORT

After the financing negotiations were delayed over the summer, the company has cut its costs as much as possible. The company's factories in Finland and Lithuania have been closed throughout the review period. Financing negotiations have continued uninterrupted. During the review period, we have had discussions with several domestic and foreign investors. The discussions are still ongoing and are expected to yield results at the end of the year. The company's most important customers have continued to express their readiness to continue cooperation with us as soon as Valoe's financial position strengthens. However, it is not certain that the financing negotiations will reach a positive outcome. If the financing solution is not concluded in time, the company may go bankrupt.

PROSPECTS FOR THE FUTURE OF LIGHT

Valoe's future prospects depend essentially on whether the company can find a viable financing solution. Several customers are still interested in using Valoe's technology, and to our knowledge, the company's potential competitors have not managed to close the gap on our lead. The turbulent market situation in the European automotive industry in particular has slowed down the introduction of solar energy in the roof windows of well-known car brands, along with other innovations. The slowdown in development has given Valoe's sales work some extra time, thanks to which the slow-moving financing negotiations have not unduly disrupted customer relationships, and the potential for successful business in the future still exists.

VALOE’S COMPETITIVE ADVANTAGE AND PROSPECTS FOR 2024

Valoe's competitive advantage is still based on the use of back contact technology. The solar cells connected to the circuit board provide freedom in the design and manufacture of OddForm panels, which now make Valoe's solutions both technically and economically better compared to other solutions. The connection method allows the panel's current and voltage to be seamlessly matched to the electrical system of the final product, for example of a car, and thus avoids weaknesses that have emerged in other solutions. Valoe's solutions support even the most innovative solutions of car brand designers.

The possibilities for utilizing solar energy in new applications have not disappeared either. Many high-value-added solar energy solutions can enable completely new product applications. In such applications, business can be extremely profitable.

MARKET GUIDELINES

Valoe does not give market guidance for the financial year 2024 due to the company restructuring procedure.  

RISKS

Valoe's most significant risk is the further delay in arranging financing. If financing negotiations are not concluded by the end of this year, Valoe's bankruptcy is possible.

Certain statements in this business review, and in particular non-binding estimates related to our strategy, are forward-looking and based on management's current views. By their nature, they involve risks and uncertainties and are subject to changes in general economic or industry conditions.

Risks related to the company's financial position and financing needs, as well as other risks, are described in more detail in the annual review published on April 28, 2024, which are available on the company's website at www.valoe.com .

In Mikkeli, 29 November 2024

Valoe Oyj

Board of Directors

Further information:
CEO Iikka Savisalo, p. 040 521 6082, ikka.savisalo@valoe.com