Li-Cycle Reports First Quarter 2023 Operational and Financial Results; Announces Plans for a Significant European Recycling Hub with Glencore
Highlights
-
Li-Cycle and Glencore to commence definitive feasibility study (DFS) to co-develop Portovesme Hub, expected to be largest resource recovery facility to produce key recycled critical battery materials in
Europe ; - Advanced the construction of Rochester Hub, maintaining budget and schedule to commence commissioning in late 2023;
-
Optimized North American Spoke network for battery material feed with solid operating performance; Advanced development of three European Spokes, with
Germany start-up on track for mid-2023; -
Completed definitive agreement with VinES, the largest battery manufacturer in
Vietnam ; -
Progressed
loan commitment from$375 million U.S. Department of Energy (DOE), with close on track for mid-2023; and -
Cash on hand of
as of March 31, 2023.$409.2 million
“As we indicated at the end of March, we continue to deliver on our strategic objectives and further Li-Cycle’s position as a leading pure-play resource recovery player in the battery supply chain. In
“Consistent with our strategy, we are extending the modular approach deployed in
Commercial Arrangements
On April 12, 2023, Li-Cycle and VinES, the largest battery manufacturer in
Global Network Expansion Update
We continued to make great progress developing and operationalizing our network growth plans in both
The Rochester Hub has continued to make significant strides on construction milestones, with procurement of long lead process equipment ahead of schedule and detailed engineering largely completed. The project remains on schedule for commissioning in late 2023 with construction costs within budget, trending at the higher end of the
On May 9, 2023, Li-Cycle announced the Company has signed a Letter of Intent with Glencore, one of the world's largest globally diversified natural resource companies, to jointly study the feasibility of, and later, to develop a new Hub facility in Portovesme,
Balance Sheet Position
At March 31, 2023, Li-Cycle had cash on hand of
On February 27, 2023, the Company entered into a conditional commitment with the DOE for a loan of up to
Financial Results for the Three Months Ended March 31, 2023
Revenues from product sales and recycling services before fair market value adjustments were
Operating expenses increased to
Net loss was
Adjusted EBITDA1 loss was
Webcast and Conference Call Information
Company management will host a webcast and conference call on Monday, May 15, 2023, at 8:30 a.m. Eastern Time. The related presentation materials for the webcast and conference call will be made available on the investor section of the Li-Cycle website: https://investors.li-cycle.com/overview/default.aspx. Investors may listen to the conference call live via audio-only webcast or through the following dial-in numbers:
Domestic: (800) 579-2543
International: (203) 518-9783
Participant Code: LICYQ123
Webcast: https://investors.li-cycle.com
A replay of the conference call/webcast will also be made available on the Investor Relations section of the Company’s website at https://investors.li-cycle.com.
About Li-Cycle Holdings Corp.
Li-Cycle (NYSE: LICY) is on a mission to leverage its innovative Spoke & Hub Technologies™ to provide a customer-centric, end-of-life solution for lithium-ion batteries, while creating a secondary supply of critical battery-grade materials. Lithium-ion rechargeable batteries are increasingly powering our world in automotive, energy storage, consumer electronics, and other industrial and household applications. The world needs improved technology and supply chain innovations to better manage battery manufacturing waste and end-of-life batteries, and to meet the rapidly growing demand for critical and scarce battery-grade raw materials through a closed-loop solution. For more information, visit https://li-cycle.com/.
Non-IFRS Financial Measures |
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Adjusted EBITDA (loss) |
||||||
The table below reconciles adjusted EBITDA (loss) to net loss: |
||||||
|
Three months ended |
|||||
March 31, |
||||||
Unaudited - $ millions |
2023 |
2022 |
||||
Net loss |
$ |
(39.4 |
) |
$ |
(10.1 |
) |
Income Tax |
|
0.1 |
|
|
— |
|
Depreciation |
|
3.7 |
|
|
1.9 |
|
Interest expense |
|
3.9 |
|
|
3.8 |
|
Interest income |
|
(5.0 |
) |
|
(0.2 |
) |
EBITDA |
|
(36.7 |
) |
|
(4.6 |
) |
Non-recurring costs |
|
0.8 |
|
|
— |
|
Fair value (gain) loss on financial instruments¹ |
|
0.7 |
|
|
(14.9 |
) |
Adjusted EBITDA (loss) |
$ |
(35.2 |
) |
$ |
(19.5 |
) |
1 Fair value (gain) loss on financial instruments relates to convertible debt, and to warrants, which were redeemed and no longer outstanding as of March 31, 2022. |
Li-Cycle reports its financial results in accordance with the International Financial Reporting Standards (“IFRS”). The Company makes references to certain non-IFRS measures, including adjusted EBITDA. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of the Company’s results of operations from management’s perspective. Accordingly, it should not be considered in isolation nor as a substitute for the analysis of the Company’s financial information reported under IFRS. Adjusted EBITDA is defined as earnings before depreciation and amortization, interest expense (income), income tax expense (recovery) adjusted for items that are not considered representative of ongoing operational activities of the business and items where the economic impact of the transactions will be reflected in earnings in future periods. Adjustments relate to fair value (gains) losses on financial instruments and certain non-recurring expenses. Foreign exchange (gain) loss is excluded from the calculation of Adjusted EBITDA.
Cautionary Notes - Forward-Looking Statements and Unaudited Results
Certain statements contained in this press release may be considered “forward-looking statements” within the meaning of the
These forward-looking statements are provided for the purpose of assisting readers in understanding certain key elements of Li-Cycle’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of Li-Cycle’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and is not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability.
Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Li-Cycle, and are not guarantees of future performance. Li-Cycle believes that these risks and uncertainties include, but are not limited to, the following: Li-Cycle’s inability to economically and efficiently source, recover and recycle lithium-ion batteries and lithium-ion battery manufacturing scrap, as well as third party black mass, and to meet the market demand for an environmentally sound, closed-loop solution for manufacturing waste and end-of-life lithium-ion batteries; Li-Cycle’s inability to successfully implement its global growth strategy, on a timely basis or at all; Li-Cycle’s inability to manage future global growth effectively; Li-Cycle’s inability to develop the Rochester Hub, and other future projects including its Spoke network expansion projects in a timely manner or on budget or that those projects will not meet expectations with respect to their productivity or the specifications of their end products; Li-Cycle’s failure to materially increase recycling capacity and efficiency; Li-Cycle may engage in strategic transactions, including acquisitions, that could disrupt its business, cause dilution to its shareholders, reduce its financial resources, result in incurrence of debt, or prove not to be successful; one or more of Li-Cycle’s current or future facilities becoming inoperative, capacity constrained or if its operations are disrupted; additional funds required to meet Li-Cycle’s capital requirements in the future not being available to Li-Cycle on acceptable terms or at all when it needs them; Li-Cycle expects to continue to incur significant expenses and may not achieve or sustain profitability; problems with the handling of lithium-ion battery cells that result in less usage of lithium-ion batteries or affect Li-Cycle’s operations; Li-Cycle’s inability to maintain and increase feedstock supply commitments as well as securing new customers and off-take agreements; a decline in the adoption rate of EVs, or a decline in the support by governments for “green” energy technologies; decreases in benchmark prices for the metals contained in Li-Cycle’s products; changes in the volume or composition of feedstock materials processed at Li-Cycle’s facilities; the development of an alternative chemical make-up of lithium-ion batteries or battery alternatives; Li-Cycle’s revenues for the Rochester Hub are derived significantly from a single customer; Li-Cycle’s insurance may not cover all liabilities and damages; Li-Cycle’s heavy reliance on the experience and expertise of its management; Li-Cycle’s reliance on third-party consultants for its regulatory compliance; Li-Cycle’s inability to complete its recycling processes as quickly as customers may require; Li-Cycle’s inability to compete successfully; increases in income tax rates, changes in income tax laws or disagreements with tax authorities; significant variance in Li-Cycle’s operating and financial results from period to period due to fluctuations in its operating costs and other factors; fluctuations in foreign currency exchange rates which could result in declines in reported sales and net earnings; unfavorable economic conditions, such as consequences of the global COVID-19 pandemic; natural disasters, unusually adverse weather, epidemic or pandemic outbreaks, cyber incidents, boycotts and geo-political events; failure to protect or enforce Li-Cycle’s intellectual property; Li-Cycle may be subject to intellectual property rights claims by third parties; Li-Cycle’s failure to effectively remediate the material weaknesses in its internal control over financial reporting that it has identified or if it fails to develop and maintain a proper and effective internal control over financial reporting. These and other risks and uncertainties related to Li-Cycle’s business are described in greater detail in the section entitled “Risk Factors” and “Key Factors Affecting Li-Cycle’s Performance” in its Annual Report on Form 20-F filed with the
Li-Cycle assumes no obligation to update or revise any forward-looking statements, except as required by applicable laws. These forward-looking statements should not be relied upon as representing Li-Cycle’s assessments as of any date subsequent to the date of this press release.
Li-Cycle Holdings Corp. |
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Condensed consolidated interim statements of financial position |
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|
March 31, |
December 31, |
|||||
Unaudited $ millions, as at |
2023 |
2022 |
|||||
|
|
|
|||||
Assets |
|
|
|||||
Current assets |
|
|
|||||
Cash and cash equivalents |
$ |
409.2 |
|
$ |
517.9 |
|
|
Accounts receivable |
|
3.7 |
|
|
4.3 |
|
|
Other receivables |
|
5.7 |
|
|
10.0 |
|
|
Prepayment and deposits |
|
78.2 |
|
|
95.2 |
|
|
Inventories |
|
5.1 |
|
|
8.3 |
|
|
|
|
501.9 |
|
|
635.7 |
|
|
|
|
|
|||||
Non-current assets |
|
|
|||||
Plant and equipment |
|
295.6 |
|
|
210.4 |
|
|
Right-of-use assets |
|
49.0 |
|
|
50.8 |
|
|
Other assets |
|
4.1 |
|
|
4.2 |
|
|
|
|
348.7 |
|
|
265.4 |
|
|
Total assets |
$ |
850.6 |
|
$ |
901.1 |
|
|
|
|
|
|||||
Liabilities |
|
|
|||||
Current liabilities |
|
|
|||||
Accounts payable and accrued liabilities |
$ |
53.5 |
|
$ |
75.9 |
|
|
Lease liabilities |
|
5.5 |
|
|
5.6 |
|
|
|
|
59.0 |
|
|
81.5 |
|
|
Non-current liabilities |
|
|
|||||
Lease liabilities |
|
46.9 |
|
|
48.3 |
|
|
Convertible debt |
|
282.3 |
|
|
272.9 |
|
|
Restoration provisions |
|
0.4 |
|
|
0.4 |
|
|
|
|
329.6 |
|
|
321.6 |
|
|
Total liabilities |
|
388.6 |
|
|
403.1 |
|
|
|
|
|
|||||
Equity |
|
|
|||||
Share capital |
|
775.4 |
|
|
772.4 |
|
|
Other reserves |
|
19.1 |
|
|
18.7 |
|
|
Accumulated deficit |
|
(332.4 |
) |
|
(293.0 |
) |
|
Accumulated other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) |
|
Equity attributable to the Shareholders of Li-Cycle Holdings Corp. |
|
461.8 |
|
|
497.8 |
|
|
Non-controlling interest |
|
0.2 |
|
|
0.2 |
|
|
Total equity |
|
462.0 |
|
|
498.0 |
|
|
Total liabilities and equity |
$ |
850.6 |
|
$ |
901.1 |
|
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
Li-Cycle Holdings Corp. |
|||||||
Condensed consolidated interim statements of loss and comprehensive loss |
|||||||
|
|||||||
Unaudited $ millions except for per share amounts, for the three months ended March 31, |
2023 |
2022 |
|||||
|
|
|
|||||
Revenue |
|
|
|||||
Product sales |
$ |
3.1 |
|
$ |
7.7 |
|
|
Recycling services |
|
0.5 |
|
|
0.3 |
|
|
|
|
3.6 |
|
|
8.0 |
|
|
|
|
|
|||||
Expenses |
|
|
|||||
Employee salaries and benefits |
|
14.8 |
|
|
10.3 |
|
|
Share-based compensation |
|
3.2 |
|
|
7.0 |
|
|
Office, administrative and travel |
|
4.5 |
|
|
3.1 |
|
|
Professional fees |
|
3.0 |
|
|
3.2 |
|
|
Raw materials and supplies |
|
8.7 |
|
|
1.1 |
|
|
Depreciation |
|
3.7 |
|
|
1.9 |
|
|
Plant facilities |
|
1.9 |
|
|
0.9 |
|
|
Marketing |
|
0.7 |
|
|
0.6 |
|
|
Freight and shipping |
|
0.8 |
|
|
0.3 |
|
|
Research and development |
|
0.5 |
|
|
0.5 |
|
|
Change in finished goods inventory |
|
(0.9 |
) |
|
0.2 |
|
|
Other |
|
1.8 |
|
|
— |
|
|
Operating expenses |
|
42.7 |
|
|
29.1 |
|
|
|
|
|
|||||
Loss from operations |
|
(39.1 |
) |
|
(21.1 |
) |
|
|
|
|
|||||
Other income (expense) |
|
|
|||||
|
|
|
|||||
Interest income |
|
5.0 |
|
|
0.2 |
|
|
Interest expense and other costs |
|
(4.5 |
) |
|
(4.1 |
) |
|
(Loss) gain on financial instruments |
|
(0.7 |
) |
|
14.9 |
|
|
|
|
(0.2 |
) |
|
11.0 |
|
|
|
|
|
|||||
Net loss before taxes |
|
(39.3 |
) |
|
(10.1 |
) |
|
Income tax |
|
0.1 |
|
|
— |
|
|
Net loss |
$ |
(39.4 |
) |
$ |
(10.1 |
) |
|
|
|
|
|||||
Net loss attributable to |
|
|
|||||
Shareholders of Li-Cycle Holdings Corp. |
$ |
(39.4 |
) |
$ |
(10.1 |
) |
|
Non-controlling interest |
|
— |
|
|
— |
|
|
Net loss and comprehensive loss |
$ |
(39.4 |
) |
$ |
(10.1 |
) |
|
|
|
|
|||||
Loss per common share - basic and diluted |
$ |
(0.22 |
) |
$ |
(0.06 |
) |
Li-Cycle Holdings Corp. |
|||||||
Condensed consolidated interim statements of cash flows |
|||||||
|
|
|
|||||
Unaudited $ millions, for the three months ended March 31, |
2023 |
2022 |
|||||
Operating activities |
|
|
|||||
Net loss for the period |
$ |
(39.4 |
) |
$ |
(10.1 |
) |
|
Items not affecting cash |
|
|
|||||
Share-based compensation |
|
3.2 |
|
|
7.0 |
|
|
Depreciation |
|
3.7 |
|
|
1.9 |
|
|
Foreign exchange loss on translation |
|
0.2 |
|
|
0.3 |
|
|
Loss (gain) on financial instruments |
|
0.7 |
|
|
(14.9 |
) |
|
Interest expense |
|
4.0 |
|
|
3.8 |
|
|
Interest paid |
|
(1.0 |
) |
|
(0.5 |
) |
|
Interest received |
|
5.3 |
|
|
0.2 |
|
|
Interest income |
|
(5.0 |
) |
|
(0.2 |
) |
|
|
|
(28.3 |
) |
|
(12.5 |
) |
|
Changes in non-cash working capital items |
|
|
|||||
Accounts receivable |
|
0.6 |
|
|
(5.9 |
) |
|
Other receivables |
|
4.1 |
|
|
(0.1 |
) |
|
Prepayments and deposits |
|
(3.3 |
) |
|
(7.8 |
) |
|
Inventories |
|
3.2 |
|
|
(2.0 |
) |
|
Accounts payable and accrued liabilities |
|
3.0 |
|
|
9.5 |
|
|
Cash used by operating activities |
|
(20.7 |
) |
|
(18.8 |
) |
|
|
|
|
|||||
Investing activities |
|
|
|||||
Purchases of plant and equipment |
|
(106.6 |
) |
|
(17.5 |
) |
|
Prepaid equipment deposits |
|
20.3 |
|
|
1.1 |
|
|
Cash used by investing activities |
|
(86.3 |
) |
|
(16.4 |
) |
|
|
|
|
|||||
Financing activities |
|
|
|||||
Repayment of lease principal |
|
(1.7 |
) |
|
(1.1 |
) |
|
Cash used by financing activities |
|
(1.7 |
) |
|
(1.1 |
) |
|
|
|
|
|||||
Net change in cash and cash equivalents |
|
(108.7 |
) |
|
(36.3 |
) |
|
Cash and cash equivalents, beginning of the period |
|
517.9 |
|
|
563.7 |
|
|
Cash and cash equivalents, end of the period |
$ |
409.2 |
|
$ |
527.4 |
|
|
|
|
|
|||||
Non-cash investing activities |
|
|
|||||
Purchase of plant and equipment in payables and accruals |
$ |
25.4 |
|
$ |
4.6 |
|
1 Adjusted EBITDA is not a recognized measure under IFRS. See Non-IFRS Financial Measures section of this press release, including for a reconciliation of adjusted EBITDA to net profit (loss).
View source version on businesswire.com: https://www.businesswire.com/news/home/20230515005309/en/
Investor Relations
Nahla Azmy
Sheldon D'souza
Email: investors@li-cycle.com
Media
Louie Diaz
Email: media@li-cycle.com
Source: Li-Cycle Holdings Corp.