LION E-Mobility

Investor Presentation • Aug 2, 2023

Earnings call Q2 2023

04.08.2023

People on the call

AG and GmbH

Alessio Basteri (Chairman of the Board, LION E-Mobility AG)

Ian Mukherjee (Member of the Board, LION E-Mobility AG)

Winfried Buss (CEO, LION Smart Production GmbH & LION Smart GmbH)

Agenda

• 1. Q2 2023 Result (non audited)
• 1. Update LION Smart Production
• 1. Product strategy

Q2 2023 Results (non audited)

Introduction

• 1. LION Group is reporting results per operating entity LION Smart GmbH & LION Smart Production GmbH. We will generate quarterly consolidated group results in the near future.
• 1. Q2 quarter over quarter comparison is made between LION Smart (LS) & LION Smart Production (LSP) 2023 numbers compared Q1 2023.
• 1. In a 1HY 2023 YoY comparison with 1HY 2022, only LION Smart is included in 2022.
• 1. Q2 sales are a mix of purchased packs, inventory and packs already of our own production with shipping started mid May.

Non audited

Prel. Figures EUR M	2023 Q2 LS & LSP	2023 Q1 LS & LSP	2023 1HY LS&LSP	2022 1HY LS	1HY YoY
External sales	11.33	8.11	19.44	24.24	-4.80
Total output	11.61	8.08	19.69	24.34	-4.65
Gross profit	2.56	1.56	4.13	3.58	0.55
EBITDA	0.38	-0.41	-0.04	0.96	-1.03
EBIT	0.33	-0.45	-0.12	0.90	-1.46
Result for the period	0.10	-0.66	-0.56	0.90	-1.46

*LS: LION Smart GmbH, Garching **LSP: LION Smart Production GmbH, Hildburghausen

• 1. Following up the last earnings call, Q2 2023 revenue has increased 40% compared to Q1 this year.
• 1. Despite lower revenue 1HY 2023 compared YoY 1HY 2022, gross profit improved up to EUR 4.1M.
• 1. Q2 2023 result turned positive.

Sales and Income - non audited

2023	2023	2023	2022
Q2	Q1	1 HY	1 HY
LS & LSP	LS & LSP	LS & LSP	LS
11.329.422	8.114.341	19.443.763	24.242.219
0	0	0	0
0	(34.713)	(34.713)	98.795
280.951	0	280.951	0
11.610.373	8.079.628	19.690.001	24.341.014
(9.045.795)	(6.514.986)	(15.560.782)	(20.762.388)
2.564.578	1.564.642	4.129.220	3.578.626

• 1. Q2 2023 sales higher compared to Q1 2023
  2. sales of EUR 11.3M compared to EUR 8.1M in Q1 2023
  3. some customers still use stock from last year
  4. Sales started for products produced by LION Smart Production
• 1. Material rate stayed the same at 80% compared to Q1 2023
• 1. Gross profit up to EUR 2.6M in Q2 2023 from EUR 1.6M in Q1 2023

LS: LION Smart GmbH, Garching

People cost and D&A- non audited

	2023	2023	2023	2022
	Q2	Q1	1 HY	1 HY
EUR	LS & LSP	LS & LSP	LS & LSP	LS
Gross profit	2.564.578	1.564.642	4.129.220	3.578.626
Other operating income	68.023	39.718	107.741	140.183
Personnel expenses	(1.341.838)	(1.340.797)	(2.682.635)	(1.846.032)
Other operating expense	(914.980)	(678.041)	(1.593.021)	(909.053)
Earnings before interest, taxes, depreciation and amortization (EBITDA)	375.783	(414.478)	(38.696)	963.723
Depreciation and amortization of intangible fixed assets and tangible fixed assets	(46.140)	(39.897)	(86.037)	(63.459)
Earnings before Interest and Taxes (EBIT)	329.643	(454.375)	(124.733)	900.264

1. Personal Expense stayed the same at EUR 1.3M

2. Operating Expense in Q2 2023 EUR slightly higher compared to Q1 2023, mainly based on production start

3. 1. Depreciation slightly up compared to previous quarter
4. 1. EBIT in Q2 2023 turned positive to EUR 0.3M compared to EUR -0.5M in Q1 2023

LS: LION Smart GmbH, Garching

	2023	2023	2023	2022
	Q2	Q1	1 HY	1 HY
EUR	LS & LSP	LS & LSP	LS & LSP	LS
Earnings before Interest and Taxes (EBIT)	329.643	(454.375)	(124.733)	900.264
Other interest and similar income	28.554	23.813	52.367	25.491
Interest and similar expenses	(255.505)	(228.992)	(484.497)	(21.830)
Financial result	(226.951)	(205.178)	(432.130)	3.661
Earnings before taxes	102.691	(659.554)	(556.862)	903.925
Taxes on income	0	0	0	0
Other tax	(10)	(197)	(207)	0
Earnings after tax	102.681	(659.751)	(557.069)	903.925

• 1. Q2 2023 Financial result lower compared to Q1 2023, mainly due to higher interest paid.
• 1. No tax costs in Q2 2023.
• 1. Earnings after tax in Q2 2023 is now positive EUR 0.1M compared to EUR -0.7M in Q1 2023.

LS: LION Smart GmbH, Garching

Balance Sheet and Cash Flow Q2 2023

Assets - non audited

	LS & LSP	LS & LSP
EUR	30.06.2023	31.03.2023
ASSETS
A. Fixed Assets	19.744.109	12.142.570
I Intangible Assets	3.550.114	3.275.023
II Tangible Assets	11.603.435	4.276.987
III Financial Assets	4.590.560	4.590.560
B. Current Assets	27.386.427	11.152.657
I Inventories	7.726.337	3.936.409
II Receivables and other assets	11.362.944	4.570.594
III Bank balances, cash and cash equivalents	8.297.146	2.645.654
C. Prepaid expenses	150.563	262.068
Total assets	47.281.099	23.557.294

In a Q1/Q2 comparison total assets up EUR +24M to EUR 47M due to:

• 1. Tangible assets increase to EUR 11.6M at LION Smart Production: production line, factory and facilities.
• 1. Bank up EUR +5.7M to EUR 8.3M mainly based on a EUR 6M loan from parent company

LS: LION Smart GmbH, Garching

Balance Sheet and Cash Flow 1HY 2023

Equity and Liabilities - non audited

	LS & LSP	LS & LSP
EUR	30.06.2023	31.03.2023
EQUITY AND LIABILITY
A. Equity	5.475.517	5.372.836
I Subscribed capital	154.500	154.500
II Capital reserve	9.766.550	9.766.550
III Accumulated losses brought forward	(3.888.463)	(3.888.463)
IV Result for the period	(557.069)	(659.751)
B. Accruals	716.327	708.658
C. Liabilities	41.089.254	17.475.800
1. Loans, of which convertible	0	0
2. Liabilities to banks	0	0
3. Payments received on account of orders	233.222	674.738
4. Trade payables	20.377.453	4.099.527
6. Payables to affiliated companies	650.979	799.524
7. Payables to companies in which participations are held	16.691.503	10.435.997
8. Other liabilities	3.136.099	1.466.015
Total equity and liabilities	47.281.099	23.557.294

• 1. Equity up from EUR 5.4M to EUR 5.5M from Q1 to Q2 2023 due to positive Q2 result
• 1. Liabilities increased from EUR 17M to EUR 41M (+EUR 24M) from Q1 to Q2:
  2. Trade payables increased by EUR 16M for especially stock purchased to ramp up the production and a license liability.
  3. Additional loan from AG in June 2023 of EUR 6M.

LS: LION Smart GmbH, Garching

LSP: LION Smart Production GmbH, Hildburghausen

Cash Flow Q2 and 1HY 2023

Non audited

	2023	2023	2023
	Q2	Q1	1HY
EUR	LS + LSP	LS + LSP	LS + LSP
Cash flow from operating activities	258.195	112.605	370.799
Cash flow from investing activities	(606.703)	(14.718)	(621.421)
Cash flow from financing activities	6.000.000	-	6.000.000
Net change in cash and cash equivalents	5.651.492	97.887	5.749.379

LS: LION Smart GmbH, Garching LSP: LION Smart Production GmbH, Hildburghausen

• 1. Overall cash flow from operations positive by EUR 0.3M in 2023 compared to EUR 0.1M in Q1 2023
• 1. Cash flow from investments EUR 0.6M higher compared to Q1 2023 due to additional production investments
• 1. Cash flow from financing shows the EUR 6M loan from parent company in June 2023.
• 1. Overall net change in cash and equivalents of EUR 5.7M in Q2 2023 versus EUR 0.1M in Q1 2023.

Q2 2023 Key Messages

• 1. Company is prepared for growth
  2. Production site in Hildburghausen is shipping.
  3. 1. Deliveries in Q2 2023 was a mixture of pre-produced packs, inventory and own production from mid May on.
  4. 1. Bank funding via AG is established and backs LION's production ramp up and sales strategy.

Agenda

• 1. Q2 2023 Result (non audited)
• 2. Update LION Smart Production
• 1. Product strategy

Update LION Smart Production

Hildburghausen plant fully on target

First truck left Hildburghausen plant to customer on May 10th

Official opening of the production plant with the local authorities and the state of Thuringia, which committed to future support. The event was accompanied by the press, including a TV broadcast by MDR (Mitteldeutscher Rundfunk).

LION Smart made a strong appearance at "The Smarter E Europe 2023" in Munich. On an eyecatching and appealing stand, the company presented a selection of its products: from the LION SE09 Battery Pack to the prototype of a LION LFP module and a high-voltage battery management system (BMS) specially developed for industrial applications.

Agenda

• 1. Q2 2023 Result (non audited)
• 1. Update LION Smart Production
• 3. Product strategy

Product strategy

Roadmap

• 1. LFP and higher energy product:
  2. both should be market ready in 2HY 2024
  3. We are working already with suppliers on technology
• 1. LIGHT Battery:
  2. Sample Battery pack is built and awaits testing at customer

DISCLAIMER

THE MATERIALS SET FORTH IN THIS PRESENTATION DO NOT CONSTITUTE EITHER AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF OFFERS TO BUY SECURITIES. ANY SUCH OFFER OR SOLICITATION WILL ONLY BE MADE PURSUANT TO A SUBSCRIPTION AGREEMENT, A FINAL PRIVATE PLACEMENT MEMORANDUM, OR ANOTHER OFFICIAL DOCUMENT DELIVERED IN ACCORDANCE WITH REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR OTHER APPLICABLE SECURITIES LAWS.

WE HAVE NOT PROVIDED FINANCIAL INFORMATION FOR LION E-MOBILITY GROUP HEREIN. HISTORICAL FINANCIAL INFORMATION WAS PREPARED IN ACCORDANCE WITH GERMAN GENERALLY ACCEPTABLE ACCOUNTING PRINCIPLES. INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL ADVISORS TO UNDERSTAND THE BASIS ON WHICH THE INCLUDED FINANCIAL STATEMENTS HAVE BEEN PREPARED.

THIS PRESENTATION ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES, INCLUDING STATEMENTS THAT RELATE TO, AMONG OTHER THINGS, THE COMPANY'S OBJECTIVES, GOALS, STRATEGIES, INTENTIONS, PLANS, BELIEFS, EXPECTATIONS AND ESTIMATES, AND CAN GENERALLY BE IDENTIFIED BY THE USE OF WORDS SUCH AS "MAY", "WILL", "COULD", "SHOULD", "WOULD", "LIKELY", "EXPECT", "INTEND", "ESTIMATE", "ANTICIPATE", "BELIEVE", "PLAN", "OBJECTIVE" AND "CONTINUE" (OR THE NEGATIVE THEREOF) AND WORDS AND EXPRESSIONS OF SIMILAR IMPORT. SUCH STATEMENTS INVOLVE RISKS, UNCERTAINTIES, AND ASSUMPTIONS, AND UNDUE RELIANCE SHOULD NOT BE PLACED ON SUCH STATEMENTS. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF PERFORMANCE, AND NO REPRESENTATION OR WARRANTY OF ANY KIND IS GIVEN WITH RESPECT TO THE ACCURACY OF SUCH STATEMENTS. CERTAIN MATERIAL FACTORS OR ASSUMPTIONS ARE APPLIED IN MAKING FORWARD-LOOKING STATEMENTS, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM EXPECTATIONS INCLUDE BUT ARE NOT LIMITED TO: GENERAL BUSINESS AND ECONOMIC CONDITIONS (INCLUDING BUT NOT LIMITED TO CURRENCY RATES AND CREDITWORTHINESS OF CUSTOMERS); COMPANY LIQUIDITY AND CAPITAL RESOURCES, INCLUDING THE AVAILABILITY OF ADDITIONAL CAPITAL RESOURCES TO FUND ITS ACTIVITIES; LEVEL OF COMPETITION; CHANGES IN LAWS AND REGULATIONS; LEGAL AND REGULATORY PROCEEDINGS; THE ABILITY TO ADAPT PRODUCTS AND SERVICES TO THE CHANGING MARKET; THE ABILITY TO ATTRACT AND RETAIN KEY EXECUTIVES; AND THE ABILITY TO EXECUTE STRATEGIC PLANS. SUCH FORWARD-LOOKING STATEMENTS HAVE BEEN PREPARED BASED UPON INFORMATION AVAILABLE AT THE TIME MADE. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE, AND THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE PUBLICLY OR TO REVISE ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY LAW. ALL PROJECTIONS CONTAINED HEREIN HAVE BEEN PREPARED BY THE MANAGEMENT OF THE COMPANY AND HAVE NOT BEEN REVIEWED OR COMPILED BY INDEPENDENT PUBLIC ACCOUNTANTS OR FINANCIAL ADVISORS.

MARKET DATA INCLUDED HEREIN WAS OBTAINED FROM VARIOUS CONSULTANTS' REPORTS, TRADE PUBLICATIONS, INDUSTRY SOURCES AND COMPANY ESTIMATES. SUCH SOURCES AND ESTIMATES ARE INHERENTLY IMPRECISE. ACCORDINGLY, THE ACCURACY AND COMPLETENESS OF SUCH INFORMATION IS NOT GUARANTEED. ALTHOUGH THE COMPANY BELIEVES SUCH INFORMATION TO BE RELIABLE, IT HAS NOT INDEPENDENTLY VERIFIED SUCH MARKET DATA.