AVTECH SWEDEN AB (PUBL) YEAR-END REPORT JANUARY - DECEMBER 2020
KEY FIGURES AND EVENTS
|MSEK||Quarter 4||Quarter 3||Quarter 4|
|Operating profit before depreciation||-1.1||-0.2||+0.1|
|Net profit per share, SEK||-0.029||-0.011||-0.013|
|Cash and cash equivalents||12.1||10.2||13.3|
|Equity per share, SEK||0.47||0.50||0.50|
|Equity ratio, %||86.7%||94.4%||91.4%|
The fourth quarter's net sales remain significantly reduced due to reductions in air traffic during the Covid-19 pandemic.
- The negative net result is mainly an effect of the reduced revenues for the period and increased costs related to marketing investments, increased working hours and a certain depreciation of bad debts.
- The positive cash flow for the period is mainly a result of increased customer payments of outstanding invoices.
- Staff have mainly continued to work from home, as recommended by the Public Health Agency. Work time reductions in the form of short-term work have continued during the period, which has contributed to reduced costs in both development, marketing and administration. The strategy is to retain staff and skills for the turning point. From October 1, staff working hours were increased from 40% to 60% to enable, among other things, an increase in sales and marketing activities and the deployment of ClearPath to new customers.
- In December, AVTECH changed its CFO. Britt-Marie Lodenius has after about three years as CFO decided to take on new challenges and she was on December 3rd succeeded by Christina Zetterlund. Christina comes most recently from Bioteria Technologies AB with a great focus and interest in improving the company's financial processes. She brings with her extensive previous experience of finance and accounting work from companies in the biotechnology, software, medical technology, consulting, and construction industries.
- On October 20th, a first meeting was held with Eurocontrol, Network Management, Europe's central organisation for air traffic flow control, in an initiative to explore cooperation on the optimisation of flight profiles. The background to this is the current situation of reduced air traffic that 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 it becomes more crowded in the skies 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 deepening cooperation with Eurocontrol to maximize the possibility of flying the optimal profile from ClearPath. This process is progressing and as a first step AVTECH intends to get involved in ICAO's FF-ICE project. The ambition is to remove all obstacles, now and in the future, to fly the most optimal flight profile.
- A news article focusing on environmental impact and modern technology in cockpit was released on October 27th. This was 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 purpose is to enlighten the market about ClearPath optimization service with 1.6% savings with warranty, free trial and easy deployment without the need for investment in new equipment. The target is to drastically increase the number of airlines in the queue to test. During November, this news article has been disseminated and can now, for example, be read here and here.
- During November, sales efforts focused on ClearPath, partly with a webinar at aircraft commerce virtual conference, and partly through Advertising in AircraftIT and through direct contacts via email and linkedin. Airline decision makers are made aware of the possibility of fuel and environmental savings through AVTECH's services, without the need for investment in new equipment. Performed operational analysis of the service in six months of operation at Norwegian has given us the opportunity to promise a 1.6% cost reduction. A video recording of Norwegian's experiences is available here. This has generated a large number of formal customer meetings via videoconference and many phone calls with other companies. The focus remains on more customer contacts and meetings to increase the number of airlines in line for testing. ClearPath deployment is currently underway in two airlines for the commencement of testing periods.
- AVTECH participated on 25 November at Redeye Technology Day with a short company presentation. A recording is available here. 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.
- On November 27, proFLIGHT was launched commercially. This means that pilots can now purchase the service directly from AVTECH. The launch was launched with a campaign on Linkedin and with email to existing users. The service is also available for airlines. proFLIGHT is a professional weather briefing and optimization tool for pilots and has so far been tested by over 1730 pilots from more than 230 airlines. The service is appreciated by the pilots who tested it and includes a unique high-resolution meteorological forecast from the Met Office as well as additional weather data from IATA, NOAA and Airbus Defense and Space. Initially, users can choose between two subscription levels: Basic and Premium. With the launch, new and old users received an offer of a one-month free premium service if they signed up with a credit card. In December, the first premium users joined the proFLIGHT service. This means that after a free start month they start paying in January. With this, the journey also starts to increase the number of premium users through direct marketing and "influencers". When many pilots currently fly very sparingly, this is likely to take a little longer. SAS decided in December to whitelist the proFLIGHT app also on the new A350. With this, proFLIGHT can now be used by pilots on all SAS aircraft. Many SAS pilots use and acknowledges our proFLIGHT app.
- As part of the increased market focus previously communicated, the sales team was in November strengthened with Niklas Lindfors who comes with many years of experience as flight captain on the Boeing 737. Niklas also has practical experience with AVTECH's Aventus and ClearPath services.
- Niklaes Persson took over as Marketing Manager in December. Niklaes has a background as a traffic pilot and has worked with AVTECH in the area of R&D for many years where he has been a strong driving force in the development of proFLIGHT. At the same time, Niklaes has also often been involved in the sales and marketing area. Initially, Niklaes has had a special focus on the production of a new ClearPath webinar and the completion and launch of AVTECH's new website. The website has been delayed several times due to other priorities. In parallel, Niklaes is responsible for the sales/marketing team's coordination and maintains one foot on the technology side and the development of proFLIGHT.
- On November 12th, a change of ownership was announced in AVTECH. Lars Lindberg, former board member of AVTECH, sold his entire holding of Class A shares totalling 2,126,683, corresponding to approximately 3.8% of the capital and 16.9% of the votes. The buyers are other board members, most of the remaining A-shareholders and the company's CEO, David Rytter.
EVENTS AFTER THE PERIOD
AVTECH has from January changed the office space from floor 24 to floor 23 and now sits in a new and slightly smaller space at the same address. The office is perfectly adapted to our needs and involves an important, approximately 30%, cost reduction over the next five years.
On January 28, 2021, an Aircraft IT live webinar was held on AVTECH's ClearPath optimization service. The webinar generated great interest and was conducted in two separate and well-attended sessions with a total of 158 registered participants from 97 airlines. The aim was to give participants an overview of the challenges currently associated with flying an optimal flight profile as well as an understanding of ClearPath and how this service enables airlines to easily address these challenges and increase the effectiveness of their operation. The presentation is available via the following video link.
AVTECH's new website has now been launched. The site is built on a platform that moving forward makes it possible to continuously update with new pages, content, and news. A primary focus of the website is to give our customers a clear overview of our products and encourage further direct contact with our sales team. The product pages will therefore continue to be developed and updated in the coming months.
- Our strengthened market focus will continue during the first quarter of 2021, which will result in an increased number of customers joining AVTECH's services. In 2021, we are particularly hopeful of a continued and extended dialogue with our airlines nearby in Scandinavia around both our ClearPath and proFLIGHT products.
Planned information and marketing activities in the coming year:
- Follow-up on delivered Aircraft IT live ClearPath webinar
- ClearPath campaigns towards selected customers/segments
- proFLIGHT campaigns aimed at increasing the number of premium users (towards airlines, pilots, free premium plan tests)
- proFLIGHT campaign around IATA Turbulence Aware real-time turbulence data
- Electronic Flight Bag (EFB) Users Forum, Virtual Meeting, April 20-22
- 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 on this video, a webinar is planned together with the Met Office.
- Campaign on real-time CB (thunderstorm) information in proFLIGHT delivered by Airbus Space & Defence
- Webinar in September
- Update of AVTECH's graphical profile
For more information, please contact
David Rytter, CEO, +46 (0) 8 544 104 80
Christina Zetterlund, CFO, +46 (0) 8 544 104 80
This information is information that AVTECH Sweden AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (MAR). The information was submitted, through the above contact person's provision, for publication on February 12th, 2021, 08.30 CET. www.avtech.aero/press-release-english
Financial reports and documents can be found at www.avtech.aero/report. AVTECH Sweden AB (publ), corporate identity number 556568-3108, has its registered office in Stockholm. Address: 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), Phone: 08-121 576 90, e-mail address email@example.com. For explanation of technical terms, see glossary on page 73 of the Company's New Issue Prospectus 2011.