ELMO Rent AS audited annual report 2022
The Management Board of ELMO Rent AS (hereinafter ELMO) submitted the company’s audited annual report for 2022 to the Supervisory Board and the Supervisory Board approved it. ELMO hereby publishes its audited consolidated annual report for 2022.
Activities and financial results in 2022
In the period from December 2021 – January 2022, the company conducted a second public offering of shares (hereinafter SPO). The SPO was successful – 1,535 investors in total participated and the minimal offering was oversubscribed 1.8 times. 256,363 new shares of the company were issued as a result of the SPO and additional capital in the amount of €1.4 million was raised.
The biggest achievement in 2022 is that ELMO obtained the validation of the Transport Administration for its second generation electric vehicle remote-control technology and became the first in the world to start offering remote-controlled cars for car-sharing. Also, testing the technology, introducing it to potential customers and active sales started in different cities of the world (Berlin, Munich, Paris, Toulouse, Helsinki, Los Angeles and many others), which has guaranteed ELMO the leading position in the development and escalation of remote-control technology.
Environmental sustainability is a priority for ELMO in the company’s development. As a holder of the Responsible Business Quality Label, the ELMO community has prevented the emission of over 420,000 kg of CO2 in urban spaces in 2022 and, through its car-sharing service, reduced the need to produce new and buy personal cars.
The company’s plan to open a subsidiary on a foreign market – in France – was realised in the first half of the year. The aim of the establishment was to buy new electric cars, including the Premium class, and sell them to a larger market when the fleet is changed. The establishment of a subsidiary in France is also supported by the potential to offer advanced remote-controlled car technology to local car manufacturers (Renault, Peugeot, which accounts for 31% of the current fleet of ELMO) and transport companies. This included a demonstration of remote-controlled car technology in France and Germany in last June, which attracted a lot of interest and proved to be successful.
In 2022, ELMO increased its investments in various technologies – fleet operation software, car controllers and, as the main focus, development of remote-controlled car technology. A new version of the domestic app for sharing environmentally friendly vehicles, the new branding and the unique service of booking a remote-controlled car (the deliver services started already in September 2021), were also launched in November 2022, which makes ELMO the world’s first car sharing company that has remote-controlled cars on public roads every day. During the service, the customer can pre-order a vehicle (initially within Harju County and Tartu) to a location of their choice and it will be delivered to them by way of remote control. The share of booking a car to be brought to one’s location among all orders is growing fast, which supports the demand of remote-controlled technology to provide the car-sharing service to clients at considerably lower labour costs and a shorter waiting time, i.e. more cost-efficiently.
The first generation remote-controlled car technology passed the first part of the site test of the Transport Administration in late 2021, the technology has been developed further and generation 2 was put into public car sharing service in 2022 in order to gather additional kilometres in traffic and the real service environment. ELMO’s generation 2 remote-controlled car technology passed the official test of the Transport Administration on 30 June 2022. Enterprise Estonia (EAS) also supports the development of the remote-control technology with €374,094.
There were the following differences in the financial performance (numbers were rounded) in the audited annual report in comparison with the unaudited interim reports for the first and second half of the year published on 31 August 2022 and 31 March 2023 and adjusted in the correction notice of 16 June 2023:
· current assets €747 thousand in the annual report, €916 thousand in the interim report;
· fixed assets €2,878 thousand in the annual report, €2,886 thousand in the interim report;
· total assets €3,626 thousand in the annual report, €3796 thousand in the interim report;
· total liabilities €3,048 thousand in the annual report, €3234 thousand in the interim report;
· equity €578 thousand in the annual report, €580 thousand in the interim report;
· sales revenue €1,580 thousand in the annual report, €1,586 thousand in total in the interim reports;
· other operating income €92 thousand in the annual report, €81 thousand in the interim reports;
· operating loss €-1,435 thousand in the annual report, €-1,441 thousand in total in the interim reports;
· loss for the reporting period €-1,557thousand in the annual report, €-1,563thousand in total in the interim reports.
The company’s fixed assets increased by 25% compared to the end of 2021 to €2,878,353. According to the Management Board, the actual market value of the cars in fixed assets is about 500,000 euros higher - this is supported by the fact that 10-30% self-financing was paid for the purchase of some electric cars, and random market value assessments have been made in 2023. The increase in fixed assets was mainly financed by the proceeds from the SPO and leveraged by loans and leases, which increased the company's debt to €3,047,577 at the end of the period.
The balance sheet total of ELMO on 31.12.2022 was €3,625,569 (31.12.2021: €3,010,629), an increase of 20% in comparison with 2021. Current assets comprised €747,216 (31.12.2021: €699,467), i.e. 21% of total assets. Fixed assets comprised €2,878,353 ((in reality, due to the higher market value of some cars, approx. 500,000 euros higher, 31.12.2021: €2,311,162), i.e. 79% of total assets. The liabilities of ELMO totalled €3,047,577 (31.12.2021: €2,268,924) and the company’s equity was €577,992 (31.12.2021: €741,705).
The consolidated sales revenue of ELMO increased from €1,109,311 to €1,580,343, i.e. by 42%, in 2022 when compared to 2021. The total loss for the period amounted to €1,557,081 (same period in 2021 – €308,528), mainly due to the development of the remote technology and a new app for short-term rental services, and the costs of launching the service on the external market, as well as revenue being lower than expected because the plan to launch a taxi service was shelved.
The higher amount raised following the successful SPO was used to recruit new staff (mainly technology development, engineers, marketing and sales, fleet operations) and this increased the salary costs. Labour expenses (including taxes) for 2022 amounted to €753,511 (2021: €289,681).
Overall, ELMO’s EBITDA for 2022 was €-950,254, while EBITDA for 2021 was €109,777.
The Management and Supervisory Board of ELMO both find that the preparatory work done in 2022 (investments, asset growth, team expansion and loss absorption) will provide the necessary preconditions for the realisation of the plans for 2023 and beyond.
ELMO has contributed and will continue to contribute actively to the development of remote-controlled technology alongside the provision of the service on public roads, which creates a prerequisite for strong sales growth also in the future.
The company is constantly analysing and developing the market and its service portfolio with the aim of ensuring innovation and growth of business volumes. ELMO is raising capital from private investors for the expansion of the service and product portfolio into a new customer segment in two phases (raising €2.6 million was launched in the first half of 2022 and completed in April 2023, and the second major capital raising was launched in Q2 2023) within the scope of private placements. The company will use the raised capital mainly for the further development of remote-control vehicle technology and expanding to foreign markets, but also to expand the car fleet, including the range of services.
ELMO also continues to work closely with companies in the field, the Transport Administration, the Ministry of Economic Affairs and Communications, the Police and Border Guard Board, and others in the steering group of the Traffic Act and technical conditions of remote-control and self-driving vehicles, with the aim of establishing new requirements by the end of 2023. The amendments to the Act and the requirements also serve as an input to the same documents to be drawn up by the EU Commission.
The consolidated annual report for 2022 of ELMO and the auditor’s statement are enclosed with the notice and will also be made available on the company’s website https://www.elmorent.ee/investeeri.
For further information, please contact:
Enn Laansoo
Member of the Management Board
enn@elmorent.ee
ELMO is an Estonian company focused on the development of innovative deep tech technology for remote-controlled cars (see elmoremote.com) and the provision of an environmentally friendly vehicle sharing service (see elmorent.ee). Elmo is the first car rental company in Estonia to be awarded the Responsible Car Rental Quality Label.
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