FlexQubes report for the second quarter 2024

SECOND QUARTER 2024

• Order intake increased by 121.3 percent to 41.8 MSEK (18.9). Adjusted for currency effects between the comparison periods, order intake increased by 122.6 percent.
• Net sales decreased by 33.0 percent to 24.9 MSEK (37.2). Adjusted for currency effects between the comparison periods, net sales decreased by 32.6 percent.
• Operating profit before depreciation (EBITDA) amounted to -11.1 MSEK (-8.7) and operating profit before financial items (EBIT) amounted to -13.4 MSEK (-10.1).
• Profit before tax amounted to -13.9 MSEK. (-10.8).
• Earnings per share amounted to -1.0 SEK (-1.3).
• Cash flow amounted to -3.4 MSEK (-13.3), of which 1.4 MSEK (-4.5) from operating activities. -1.4 MSEK (-4.2) from investing activities, and -3.4 MSEK (-4.6) from financing activities.
• Cash and cash equivalents amounted to 40.7 MSEK (18.4) at the end of the period.
• The company receives a cart order worth approximately 7.5 MSEK from a Canadian customer who is a subcontractor in the automotive industry.
• The company wins its second project for FlexQube Navigator AMR in Sweden.

THE PERIOD 1 JANUARY – 30 JUNE 2024

• Order intake increased by 32.3 percent to 72.3 MSEK (54.6). Adjusted for currency effects between the comparison periods, order intake increased by 33.1 percent.
• Net sales decreased by 7.2 percent to 61.8 MSEK (66.5). Adjusted for currency effects between the comparison periods, net sales decreased by 6.2 percent.
• Operating profit before depreciation (EBITDA) amounted to -20.2 MSEK (-20.6) and operating profit before financial items (EBIT) amounted to -24.8 MSEK (-23.4).
• Profit before tax amounted to -26.2 MSEK (-24.4).
• Earnings per share amounted to -2.0 SEK (-3.0).
• Cash flow amounted to -8.8 MSEK (-12.3), of which -12.2 MSEK (-27.7) from operating activities. -2.6 MSEK (-8.2) from investing activities, and 6.0 MSEK (23.6) from financing activities.
• Cash and cash equivalents amounted to 40.7 MSEK (18.4) at the end of the period.

EVENTS AFTER THE END OF QUARTER

• FlexQube receives an order of approximately 4.7 MSEK from an existing customer in Mexico for cart products.
• The company is granted additional patents concerning the AMR system FlexQube Navigator AMR in China and the USA, with several other countries pending.

Link to the report for the second quarter 2024: https://flexqubegroup.com/secure-file.php?file=e148077e710c127b14dfe74405a1ecd1.pdf

The entire quarterly report is also attached to this press release.

CEO LETTER

SHARPLY INCREASED ORDER INTAKE AND LOWER COSTS TAKE US TOWARDS THE GOAL OF POSITIVE CASH FLOW AND PROFITABLE GROWTH

Order intake increases sharply compared to the second quarter of 2023 and amounts to 41.8 MSEK, which is an increase of 121.3% compared to the second quarter of 2023 and is the highest since the second quarter of 2022. The focus on sales, where a new organization and more efficient and value-creating processes, has clearly increased the quality of both our pipeline and our ability to convert leads into orders. We can note that the increase in order intake came in a still challenging market – although we all see signs of positive market conditions. The industry in general continues to face various uncertainties, the American market is affected by the presidential election, which creates uncertainty and influences customers investment decisions. The European market remains weak, while Mexico continues to be a market with many opportunities. We see the increase in order intake as clear evidence of satisfied customers, the strength of our installed base with existing customers, strong interest from new exciting customers. and our broader product offering.

Sales amounted to 24.9 MSEK, which is a decrease of 33% compared to the second quarter of 2023. This is of course far below our target, but it is a result of weaker order intake in previous quarters and that several larger orders have a planned delivery in the coming quarters. For example, AMR projects often have a longer delivery time than a typical cart project, but also several larger cart projects with longer delivery times are in the order book. We therefore see that the second half of the year will be stronger in terms of sales than the first.

Cash flow from operating activities is positive for the first time since the second quarter of 2021 mainly influenced by our focused efforts to reduce our working capital by among other things, reducing inventory and accounts receivable, as well as our efforts to lower our operating expenses. Our cost reductions have gradually continued to have an effect during the second quarter and are approaching the target, which also contributes to improved cash flow. We continue to work towards the goal of achieving positive cash flow for the business during the end of 2024.

The operating margin is lower, mainly driven by low sales, which is itself a result of lower order intake in previous quarters. We have also chosen, in certain strategic deals to accept a slightly lower margin either to win a new strategic customer, where we know from experience that margins improve over time, or to reduce our inventory in favor of improved cash flow. We expect margins to return to higher levels in the second half of 2024.

Increased interest in our AMR system

During the quarter. we won our second AMR order from a global customer in Aerospace through a well-renowned integrator. This is very encouraging and the result of a successful collaboration where our AMR creates clear customer value for the project. Delivery will take place in the first quarter of 2025.

During the spring we have worked purposefully and successfully with our first AMR customer. Scania. The first phase of the project at Scania has been delivered a few months ago and operates according to the customer's requirements for delivery reliability. The system works two shifts in a high-frequency and production-critical process. delivering truck seats to the assembly line.

We are of course very pleased with this and look forward to the second phase, which will be delivered in the third quarter. The successful first phase at Scania is very positive as it creates even greater trust in our unique solution. We now have the strongest AMR pipeline since the launch and continue to add new interesting projects. We are also very pleased to have been entrusted to share the project through the white paper we recently published. and which can be found on our website* as well as video material.

The material shows how our AMR, with its unique solution, creates clear value for Scania by replacing their previous solution with forklifts with a now fully automated flow where the AMR delivers seats and doors to the assembly line. The solution creates a robust, safe and efficient process that Scania is satisfied with and sees the system’s benefits are important conditions for creating additional business in the future.

We have now very deliberately ensured that our first customer Scania's initial solution with the AMR has become a mutual success. We are now ready to take the next step with Scania and new customers in Europe, Mexico and the USA.

We have also received preliminary approval for additional granted patents, which confirms that our AMR is unique and ensures that our concept is well protected for the future.     

We anticipate that order intake and sales will gradually improve during the third and fourth quarters, where stability in our cart business, combined with increased robot sales, will contribute to improved margins and cash flow. This is a result of a more efficient organization, our increased focus on sales to relevant customer segments and growing interest in our AMR. We are working hard to achieve our target of profitability and positive cash flow in the end of 2024, and we are very hopeful that it will be reached. A big shout-out to all our employees who work tirelessly every day to help us achieve our goals.

The upcoming quarters are extremely important for us as we aim to demonstrate that we have successfully turned around the financial performance through continued increased order intake and good cost control, while also establishing ourselves as a respected and sought-after robot supplier and comprehensive provider of material handling equipment. We are very much looking forward to the rest of the year!

Mårten Frostne

CEO FlexQube AB (publ)

* https://www.flexqube.com/flexqube-amr-robot-system/

About FlexQube

FlexQube is a technology company headquartered in Gothenburg, Sweden with subsidiaries in USA, Mexico, Germany and England. FlexQube offers solutions for cart-based material handling using a patented modular concept. FlexQube develops and designs customized solutions for both robotic and mechanical cart logistics. Through the own developed and unique automation concept FlexQube can offer robust and self-driving robotic carts. FlexQube has more than 1000 customers in 38 countries with primary markets being North America and Europe.

FlexQube’s customers can be found within the manufacturing industry, distribution- and warehousing. We represent some of the most successful companies in the world with a significant share being represented on the Fortune 500 list. These companies exist within automotive, electric vehicle manufacturing, online retail, heavy-duty trucks, industrial automation and retail logistics.

For more information, contact:  
CEO, Mårten Frostne
marten.frostne@flexqube.com
+46 721 55 19 37

CFO, Mikael Lindbäck
mikael.lindback@flexqube.com
+46 761 04 10 28

The share (FLEXQ) is traded on Nasdaq First North. FNCA Sweden AB, telephone +46 8-528 00 399, is the Company's Certified Adviser. Read more at www.flexqube.com

This information is insider information that FlexQube AB (publ) is obliged to disclose in accordance with EU Market Abuse Regulation. The information was provided by the above contact persons for publication on Aug 7, 2024, at. 08:00 CET.