YEAR-END REPORT January - December 2018
- The turnover of the AVTECH Group for the fourth quarter of 2018 amounted to MSEK 4.2 (4.1). Turnover for the twelve-month period amounted to 16.0 (14.1).
- Operating profit before depreciation for the fourth quarter of 2018 was MSEK +0.7 (+0.3) and for the 12-month period + 2.2 (+1.4)
- The net result for the fourth quarter of 2018 was MSEK +0.1 (-0, 3) and for the twelve-month period -1.9 (-3.5) or SEK -0.04 (-0.06) per share.
- During the financial year, investments in new products have been made in excess of MSEK 7.1, of which MSEK 4.3 (3.7) have been capitalized.
- Cash flow from operations for the fourth quarter of 2018 amounted to MSEK -1.0 (-1.3). Disposable cash reserves of the Group amounted at the end of the period to MSEK 15.7 (20.4 at the previous year-end).
- Shareholders' equity at the end of the period amounted to MSEK 28.1 (30.0 at the previous year-end) or SEK 0.50 (0.52) per share. The Group's financial solidity was 93.0 (95.9) percent.
- The financial year has resulted in increased investments in marketing and sales in excess of MSEK 3.0. The focus has been on an intensified participation in trade fairs, more individual customer visits and increased exposure in social media and trade journals. Trade fairs have included, as far as possible, a presentation of our products carried out by an existing customer. Customer visits and video conferences have also been carried out in collaboration with staff from Met Office. We note that the above efforts have led to increased awareness and inflow of customers. Among other things NDAs (non-disclosure agreements) have been signed with two airline customers.
- Norwegian presented at the Flight Ops conference in London on November 27-28, the effects of the Aventus system and our world-unique 10K weather in their operations. The presentation focused on the benefits the system has brought to the airline with regards to fuel and emission savings. During December a first contract was signed with Norwegian covering the Aventus wind up-link service. Continued development efforts in close cooperation with Norwegian have subsequently begun.
- During the financial year two development projects were initiated in the area of climb and cruise optimization. These projects will lead to products within the Aventus product family. Adaptation and testing are planned during the first half of 2019 to be carried out in collaboration with, among others, Norwegian. External part financing for this has been applied for by the Swedish Energy Agency.
- With the above complementary products, we can offer pilots a flight path optimization solution that considerably optimizes fuel saving and flight time. The solution is based on AVTECH's unique access to 10K weather and is no longer limited by the capacity of the aircraft's computer. This is of particular interest and in demand by Boeing 737 operators where the ability of the aircraft computer to optimize the flight based on favorable wind information is limited.
- In December 2018, a follow-up meeting was held with Southwest Airlines in Dallas. During the meeting an interest was expressed in deepening the cooperation. With the world's largest Boeing 737 fleet, our optimization solutions for this aircraft type seem to be of particular interest. Continued talks will take place during the spring of 2019 regarding AVTECH's decision support tool for turbulence warnings (SIGMA).
- The technical evaluation of the SIGMA turbulence warning system has been ongoing for most of 2018. Norwegian and easyJet have chosen to participate as evaluation customers. During 2018, Norwegian has operated SIGMA on all Atlantic flights with good results. During the first half of 2019, we expect the test phase to be converted into a commercial contract. However, the test phase with easyJet has been delayed due to technical limitations in easyJet's communication solution. This has also delayed the commissioning of Aventus. Due to the extended test period, the commercial introduction of SIGMA has been delayed. In 2019, an intensified marketing campaign is planned for the SIGMA product. The pictures below show the difference in turbulence forecast between standard resolution (140K) and our unique high resolution (10K) forecast. Users of the SIGMA service can thus choose a more comfortable flight path.
- The dialogue with airlines within the Lufthansa Group continues in a positive way. A larger meeting with the Lufthansa group is planned for the first quarter.
Events after the end of the period
- Decisions on further identification of marketing and sales have been made. An important part of our marketing plan is participation in trade fairs and conferences for the aviation industry. During the first quarter, the following fairs will be attended. During these events presentations will also be performed by AVTECH customers:
- Connected Aircraft Europe, Munich, March 12-13
- Flight Operations IT Conference, Amsterdam, March 26-27
- Met Office Tech Week, Exeter, March 26-27
- During the first quarter three major customer meetings are planned. These will be carried out together with staff from Met Office.
- During December, AVTECH was invited by the Swedish Energy Agency to participate in the "Cleantech Forum" in San Francisco. The intention was to present AVTECH to a large number of potential investors. After a closer assessment of the conference focus the Board of AVTECH decided that, being a company with an established product profile, AVTECH does not currently require additional innovation capital. Our focus is on market expansion with newly developed products. Together with representatives from the Swedish Energy Agency, the decision was made that AVTECH should not participate in this conference.
- The current focus for AVTECH is an in-flight concept that delivers decision support information to pilots regarding the most cost-effective and safe route choice during flight. More customers have expressed the need to use similar decision material during the planning phase ("pre-flight"). A technical meeting will be held in the near future with one of the largest airline flight planning providers. The ambition of the meeting is to evaluate the technical preconditions for integration of the Aventus family's various products in the pre-flight phase of the flight.
- In January, an initial planning meeting was held with representatives from both the technical and operational management at Gatwick airport. A definition phase of the project will be implemented and evaluated during the first half of 2019. A possible AVTECH project called TTAM (Target Time Arrival Manager) is planned to form part of the overall solution to streamline the traffic flow and increase the airport's capacity. Overall decisions on changes to take-off and landing procedures have been made and are publicly presented in the airport's perspective plan. Projects of this technical scope are time-consuming and resource-intensive. The entire project will be completed in the mid-2020s.
- AVTECH's proFLIGHT iOS weather app is currently used by hundreds of pilots from different airlines. More and more pilots show a great interest in using the app in their daily flight operations. In addition to be an attractive aid for the pilot during flight, the app also seems to be an effective way of demonstrating the complex technical processes that form the basis of the Aventus family products.
- The collaboration with Met Office will be intensified in 2019 with, among other things:
- More types of weather forecasts, besides turbulence, are planned to be added to SIGMA and the proFLIGHT app. Thunderstorms, lightning strikes, icing and volcanic ash are examples of such planned additions.
- Refined time accuracy, from 3h to 1h, in all weather forecasts. This results in a considerably better forecast, especially when the weather is changing rapidly. The effect of this improvement is expected to be in the same order of magnitude as when moving from 140K to 10K resolution. Through our unique weather delivery model, AVTECH can both utilize this technical increase in resolution and convert it into value for our customers.
- A joint evaluation of a specially designed weather application for airline ground personnel.
For further information, please contact
Christer Fehrling, CEO, +46 (0) 8 544 104 80
Britt-Marie Lodenius, CFO, +46 (0) 8 544 104 80
or visit the company's website www.avtech.aero
AVTECH Sweden AB ( publ), corporate identity number 556568-3108, has its registered office in the municipality of Stockholm.
Postal and visiting address: Färögatan 33, 24th floor, 164 51 KISTA, Sweden.
The company's B-share (short name AVT B) has been traded on NASDAQ OMX First North since February 2012. The company's A share is not traded on any marketplace. Certified Adviser is currently 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 such that AVTECH Sweden AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation . The information was submitted, through the agency of the above contact person, for publication on February 12, 2019 at 08.30 CET.