I-Tech AB (publ) Interim report Q3 2021

I-Tech AB (publ) (ticker: ITECH) publish the interim report for the third quarter 2021

Click here on the 22 October 2021 at 11:00 to follow the webcast

Summary of the period

” Positive result with a strong contribution from a growing customer base ”

• Net turnover for the period amounted to 13 811 (11 956) kSEK, corresponding to an increase in turnover of 16% (-2%). Operating profit/loss amounted to 837 (-723) kSEK.

July to September 2021

• No important events occurred during the period.

Important events after the period

• I-Tech entered into a product development collaboration with IFF Microbial Control.

Financial Summary

CEO comments

The third quarter, which is often a challenging quarter, was relatively strong with a positive result on the bottom line. The net result amounted to 0,9 (-0,8) MSEK and net sales amounted to 13.8 (12) MSEK, an improvement of 16% on the corresponding quarter last year.

It is pleasing to show a positive net result and an EBITDA of SEK 2.8 (1.3) million in these continued uncertain times. From a sequential perspective the third quarter stands out as a strong quarter. This underlines that we are seeing unexpected fluctuations as an effect of high commodity prices, other external factors and previously announced inventory levels for some customers. I expect continued fluctuations for a while longer. At the same time, I see signs of increased ambitions among several customers which gives me hope for a return to sustainable growth in the future.

During the quarter, almost 35% of our sales came from sources other than our largest customer. In addition to progressively broadening our customer base, we are taking an increasingly active role in generating and sharing important know-how with our customers. Case by case, we are becoming a more integrated partner in their innovation processes. A milestone after the quarter closed was that we were able to announce an extensive collaboration with IFF Microbial Control. This cooperation aims to drive new innovative concepts that can inspire our joint customers to continually develop better and more sustainable antifouling products.

We also further developed our relationship with importers in Japan and Korea during the quarter so that they have become distributors towards several customer accounts. As such, they are a clearer part of our sales organisation. The importance of responding to our customers at a regional level is increasing in line with our customers becoming more and more proactive in their markets. We have developed relationships with the importers over time, and this development is a natural step as we look to progress our business.

Global trends continue to point in a favourable direction. Macro trends and regulations that come into force in 2023 underpin a long-term incentive to choose premium category antifouling products, regardless of the shipowners’ business models. For example, the entire shipping industry has begun to indicate a high level of ambition when it comes to responding to the IMO’s efficiency index. Furthermore, freight rates are high for several shipping segments, at the same time as oil prices are increasing with shorter payback times of efficiency- enhancing technology as a result. Moreover, I-Tech has recently shown in a study that with a periodicity of 3-4 years, situations arise where 25-30% of the merchant fleet is idling for more than 14 days. Furthermore, the number of idling vessels in warm waters has been steadily trending upwards since 2009. These factors increase the growth pressure from marine organisms and place obvious demands on selecting the right antifouling solution.

In conclusion, I note that the quarter provided a bottom-line profit, a maintained good gross margin and, again, a large contribution from a growing customer base. Furthermore, we continue to invest and take advantage of our strong cash situation to improve our position when the industry now looks set to begin a major turnaround to measurable improvements in efficiency measures. We want to be part of that!

Philip Chaabane, CEO
M: +46 73 910 37 08
E: philip.chaabane@i-tech.se

About I-Tech AB

 I-Tech is a biotechnology company that has developed the product Selektope®, an active agent that prevents barnacle attachment on submerged surfaces such as ships and boat hulls, but also other marine installations. By increasing the resistance to barnacle growth in marine paint systems (e.g. antifouling coatings), fuel and maintenance costs are reduced. I-Tech has obtained the necessary regulatory approvals for Selektope® and has several of the world's largest manufacturers of marine antifouling coatings as customers. The company's share is listed for trading on Nasdaq First North Growth Market in Stockholm with Erik Penser Bank as Certified Adviser, phone: +46 (0)8 463 83 00, email: certifiedadviser@penser.se. For more information visit our website www.i-tech.se.

About Selektope®

Selektope® introduces, for the first time, a pharmacological mode of action to combat barnacle settlement. By temporarily stimulating the octopamine receptor, the barnacle larvae’s swimming behavior is activated and the organisms are deterred from the hull. These ground-breaking discoveries enable unrivalled power at very low concentrations, yet within the limits of rigorous risk assessments. Selektope® is an organic, non-metal compound with efficacy proven at 0.1% w/w. For more information visit our website www.selektope.com

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