Commercial Update

Saietta Group PLC

13 February 2024

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

13 February 2024

Saietta Group Plc

("Saietta", the "Company" or the "Group")

Commercial Update

Further to the announcement of 27 November 2023, Saietta Group plc (AIM: SED), the multi-national business which designs, engineers and manufactures complete electric drivetrain (eDrive) solutions for electric vehicles, provides an update on its commercial activities.

Contract Manufacturing Opportunity

The Company has received a proposal of £600,000 for the purchase of a redundant production line at the Company's manufacturing site in Sunderland, UK. This sale is a result of the Company being unable to reach commercial agreement on an electrical steering pump contract manufacturing opportunity at its Sunderland facility, announced previously. The envisaged contract manufacturing deal, although not for the development any of the Company's products, was scheduled to have contributed materially to Group revenue over the medium term, albeit at modest margins.

Progress with Lead OEM

The Company's joint venture, Saetta VNA, remains engaged with its lead OEM customer regarding the mass production of Saietta's proprietary AFT and RFT technology.  Set out below are each of the material contract opportunities with this customer, as referred to in the announcement of 27 November 2023, and the status of each.

·    Supply of AFT for 3-wheel eDrive vehicle

Status: Purchase order received, pilot production underway, commercial production expected to commence in October 2024

·    Supply of RFT for 3-wheel eDrive vehicle

Status: Purchase order received for pilot production as announced 13 November 2023, pilot production expected to commence in July 2024

·    Supply of AFT for 4-wheel eDrive vehicle

Status: Targeting initial purchase order by end of March 2024

Progress with Separate OEM

The Company remains in discussions with a separate OEM customer about the potential sale of its RFT eDrive for a 2-wheel vehicle. As previously indicated, the Company is targeting the receipt of a 'proof of concept' letter from the customer by the end of March 2024.

Working Capital

As previously stated, the Company has positive cash balances that take it through to the end of March 2024. The Company continues to engage with all its stakeholders regarding its funding requirements beyond the end of the quarter.

The Company remains confident in its financial forecasts for the financial year ended 31 March 2024 as set out 27 November 2023, however forecasts for the subsequent financial years will inevitably be impacted by today's update.

David Woolley, Chief Executive of Saietta, said:

"The strength of relationship with our lead OEM and the market opportunity for our eDrive solutions remains very compelling. Being unable to agree terms on a contract manufacturing opportunity is no reflection on the quality of the Company's products. The sale of the redundant production line in our manufacturing hub in Sunderland (UK) makes sense for Saietta in comparison to a relatively low margin contract to manufacture a non-core product under license. This route allows Saietta to remain 100% focused on our strategic focus of providing proprietary eDrive solutions to manufacturers of lightweight electric vehicles. Whereas it does mean that Saietta will not benefit from contract manufacturing revenue from August 2024, it will deliver the significant immediate benefit of pulling forward £600k of income and cash into the financial year ending March 2024.

Alongside this activity the Board continues to work hard on securing additional funding to take Saietta through to being self-financing. The Company will update the market as appropriate."

-Ends-

For any further enquiries, please contact:

Saietta Group Tony Gott, Executive Chair David Woolley, Chief Executive Officer	[e-mail]
Canaccord Genuity (Nomad and Broker) Henry Fitzgerald-O'Connor / Harry Pardoe	[phone]

About Saietta Group plc

Listed on the London Stock Exchange's AIM, Saietta is a global business that designs, develops and manufactures complete electric drivetrain (eDrive) solutions for established manufacturers of a broad range of electric vehicles. 

Saietta's breakthrough proprietary technologies include AFT (Axial Flux Technology) and RFT (Radial Flux Technology) motors, power electronics, powertrain controls, mechanical axles, transmissions and vehicle control units. Considerable flexibility is built into the core design, meaning solutions can be quickly and cost effectively tailored to a specific application.

Saietta works in a highly collaborative way with clients, driven by the belief that partnership is key to delivering world-class tailored solutions at pace. Saietta's engineering team takes time to deeply understand a client's brand, target market sector, competition and the services they require. Then Saietta develops a bespoke suite of products and services to fast-track the client to production with eDrive solutions which deliver a sustainable competitive advantage.

 

END