AVTECH Sweden AB (publ) INTERIM REPORT January - September 2020
KEY FIGURES AND EVENTS
|MSEK||Quarter 3||Quarter 2||Quarter 3|
|Operating profit before depreciation||-0.2||+0.7||+1.5|
|Net profit per share, SEK||-0.011||+0.005||+0.011|
|Cash and cash equivalents||10.2||12.8||13.4|
|Equity per share, SEK||0.50||0.51||0.52|
|Equity ratio, %||94.4%||91.6%||98.1%|
During the third quarter, sales decreased significantly as a result of the sharp reductions in air traffic during the Covid-19 pandemic.
- A new agreement was signed in September with TUI airlines. The agreement covers the Aventus Full-flight service and is retroactively effective from December 2019.
- During the period, the Nasdaq Disciplinary Board decided on a penalty for AVTECH of SEK 0.4 million. The basis for this decision can be found in the press release published 2020-08-31.
- The negative net profit for the period is largely due to the penalty from the Disciplinary Board of the Exchange.
- The increased negative cash flow for the period is largely due to late customer payments, which resulted in increased trade receivables. This is explained by temporary delays in the flow of payments from customers. Most of these outstanding unpaid invoices were paid during October
- A new rental agreement for office premises was signed in September and will take effect from the end of the year. The agreement is 5-year and involves an approximately 30% cost reduction and that AVTECH stays at the same address with slightly less office space.
- Lars Lindberg, board member and founder of AVTECH Sweden AB, chose at his own request in September to resign from the board. Lars has lived in Spain since 2014 and has in recent years been increasingly busy with activities outside the aviation industry.
- The good cooperation with Met Office UK continues and during the period it has been decided to continue joint work on both the weather side as well as with sales and marketing efforts. An example of such a cooperation area is high-resolution airport forecasts as an important component of an airport optimisation project.
- During the period, all staff have mainly continued to work from home, as recommended by the Public Health Agency for reducing the spread of infection.
- The reduction in working time has continued during the period and has led to reduced costs for both development, marketing and administration. This gives us a stronger opportunity to retain staff and skills in the face of the situation turning.
- Preparations on both sides for an Aventus full-flight winds trial with Southwest Airlines have been completed. Now only one customer decision is expected to start the service, which may take a longer delay due to extended decision times in the current pandemic.
- Due to reduced working time, the market work of the period has been carried out at a significantly lower level than planned. The focus has, according to previous plans, been Optimizer, proFLIGHT and reduced environmental impact. Among other things, the following activities have been carried out:
- A proFLIGHT campaign on LinkedIn together with CB (thunderstorm) layer from Airbus.
- Optimizer and environmental campaigns on LinkedIn.
- Preparations for the launch of proFLIGHT
- Design of new website
- Preparation for this autumn's campaign with a focus on environment, optimizer and proFLIGHT.
- At the end of September, a well-attended webinar was conducted with 115 participants from 56 airlines. The focus was on proFLIGHT and the value of combining an accurate turbulence forecast from the Met Office as well as measured turbulence data from the aircraft in front via IATA Turbulence Aware. Both the Met Office and IATA Turbulence Aware participated with their own presentations. The follow-up work on this will continue for the rest of the year.
EVENTS AFTER THE PERIOD
- AVTECH will change CFO in December. Britt-Marie Lodenius has after around three years as the company’s CFO decided to take on new challenges at the beginning of next year. She is succeeded in December by Christina Zetterlund. Christina comes from Bioteria Technologies AB with a great commitment and interest in improving the company's financial processes. She brings with her a solid background of finance and accounting experience from various companies in the biotech-, software-, medtech-, consulting- and construction industry.
- An initiative to explore the possibility of cooperation around the optimisation of flight profiles was established in October at a high level between AVTECH and Eurocontrol, Europe's central organisation for air traffic flow control. A first meeting was held in October.
- The current situation of reduced air traffic makes it possible to fly each flight in an optimal manner, taking into account the weather and aircraft performance. A collaboration between AVTECH and Eurocontrol has the potential to increase the operational customer benefit of our optimization services even as traffic increases and the skies become more crowded in again.
- AVTECH has a unique access to the aircraft's 4-dimensional flight path in real time from take-off to landing which could be shared with Eurocontrol and other stakeholders.
- AVTECH's new flight profile optimization service has shown a potential to save 1.6%. Several airlines have indicated an interest in working with Eurocontrol to maximize the ability to fly the optimal profile from AVTECHs Optimizer.
- In October, a letter of intent was signed with another European airline for a test of AVTECH's Optimizer. Three airlines are already in line for tests.
- A news article focusing on environmental impact and modern technology in the cockpit was released on October 27. This is the start of a direct information campaign to inform the market about the possibility of restarting in a more sustainable and cost-effective way. The aim is to notify the market about AVTECH's optimization service with 1.6% savings with warranty, free trial, and easy deployment without the need for investment in new equipment. Link to article
- The proFLIGHT payment solution has now been completed, but its launch has been delayed due to Apple's new iPadOS 14, which has required a few updates to proFLIGHT. The number of proFLIGHT users today amounts to more than 1670 from more than 220 airlines. A launch should take place as soon as possible in quarter 4.
- Work on AVTECH's new website is in the final stages. It will be launched as soon as possible during quarter 4.
- In the fourth quarter, we increased staff work with a special focus on technical completion of proFLIGHT and increased sales efforts.
- Planned information and marketing activities during the autumn:
- A presentation at the "Aircraft Commerce Virtual Conference & Expo 2020 – Global" fair, the 16th – 20th of November 2020. Here Norwegian presents its experience with AVTECH's Cruise Optimizer.
- A video production in collaboration with the Met Office focusing on the benefits of high-resolution weather applied in AVTECH's services. In addition, as a follow-up to the video, a webinar is planned together with the Met Office.
- A comprehensive direct sales campaign that draws airline decision-makers' attention to the possibility of fuel and environmental savings through AVTECH's services, without the need for investments in new equipment. Here the performed operational analysis of the service in almost a year of operation at Norwegian has given us the opportunity to promise a 1.6% cost reduction. A video recording of Norwegian's experience is available here.
For further information, please contact
David Rytter, Chief Executive Officer, +46 (0) 8 544 104 80
Britt-Marie Lodenius, Chief Financial Officer, +46 (0) 8 544 104 80
AVTECH Sweden AB (publ), corporate identity number 556568-3108, has its registered office in Stockholm. Adress: Färögatan 33, 164 51 KISTA, Sweden.
The company's B-share (short-term AVT B) is traded on the NASDAQ First North Growth Market since February 2012. The company's A-share is not traded on any marketplace. Certified Adviser is Redeye AB (www.redeye.se), tel: 08-121 576 90, e-mail address firstname.lastname@example.org. For explanation of technical terms, see glossary on page 73 of the Company's New Issue Prospectus 2011.
The information in this press release is published in accordance with EU Market Abuse Regulation (MAR). The information was submitted, through the above contact person's provision, for publication on October 30th, 2020, 08.30 CET.