OXE Marine AB (publ) Interim report 1 July to 30 September 2022

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OXE Marine AB (publ)

Interim Report

Third Quarter 2022

Results presented in the interim report are consolidated from 16 February 2022 to 30 September 2022 following the completion of the acquisition of Diesel Outboards and Outdoor Network Manufacturing on 16 February 2022. Consolidated results include legal entities; OXE Marine AB (Sweden), OXE Marine INC (US) and OXE Marine Manufacturing INC (US). Furthermore, consolidated results do not have comparative figures as it is the first year of preparing consolidated financials. Where illustrated in the text, graphs and tables, prior year figures relate to OXE Marine AB only.

Third Quarter 2022

  • Consolidated Net turnover amounted to SEK 39.1 m.
  • Consolidated Gross Profit amounted to SEK 10.1 m with a gross margin of 26%.
  • Consolidated EBITDA amounted to SEK -10.7 m.
  • The consolidated result for the quarter amounted to SEK -20.1 m.
  • Consolidated EPS and Diluted EPS amounted to SEK -0.08.

January - September 2022

  • Consolidated Net turnover amounted to SEK 116.3 m.
  • Consolidated Gross Profit amounted to SEK 28.7 m with a gross margin of 25%.
  • Consolidated EBITDA amounted to SEK -37.1 m.
  • The consolidated result for the period amounted to SEK -64.2 m.
  • Consolidated EPS and Diluted EPS amounted to SEK -0.25.

Significant events during the Third quarter

  • There were no significant events during the reporting period.

Significant events after the reporting period

  • OXE Marine AB (publ) conducted tests of the OXE300 on a popular recreational boat, shows that the gasoline alternative consumes 50 percent more fuel.

A word from the CEO

Q3 2022 was a true ‘roller coaster’. Year to date our sales have increased 100% relative to 2021 with Q3 2022 sales increasing by 49% relative to Q3 2021. In addition, we set a new record for P&A sales as well as improving the gross margins from last quarter.

July and August were very slow months, impacted by both summer vacations and disturbances in the supply chain hampering our performance. Towards the end of August and through September the intensity in the business increased.  And then, the quarter finally ended with Hurricane Ian in USA impacting our team in Florida, our customers, and our ability to strike a fine balance between the supply and demand. At the end of the day – what matters is that all our colleagues, customers and friends in the business are all safe, and our thoughts are with the ones who were not that lucky. We’re now back to ‘business as usual’ in Q4.

During the quarter we saw a continued trend of an increase in the number of buying customers. We had more than 15 different buying customers, some new and the majority repeat customers. We are seeing customers who have run well over 1000 hours who have also ordered their second generation of engines for the same application. Compared to a year ago this is a significant improvement and very positive as we are starting to see a meaningful step by step increase in the population of engines in many different applications, with many different customers, from commercial work boats, tourism, fish farming, taxi boats and governmental users; and in many different locations around the world.  We appreciate this belief in us and our disruptive products and our highest priority is ensuring our users receive the service and support they need where we have extensive plans to continue to develop the lifecycle support concepts. No doubt - the OXE engines continue to have a positive impact on the marine environment.

Each new application gives us valuable insights into the performance of the engines, and valuable feedback for future product development. Since the beginning of the year, we have been developing our routes to market – working with distributors, dealers, OEM and boatbuilders as well as fleet customers and governmental bodies. This enables us to sharpen our offering and provide the right level of support and service to the end user.  

The work we have carried out on the supply chain, investments in tooling and selecting and setting up strategic partners has enabled us to grow to date in a steady manner. We do however see a need to increase the supply chain capacity and capabilities further to keep up with the growing demand for the OXE engines.

Playing in the arena of “transition technology” we already today probably deliver the world’s most environmentally friendly high-performance outboard engine. During the quarter this was further proven in performance tests where we had a leisure application which normally runs with twin gasoline 300HP. We ran extensive tests with twin OXE300’s and under the same conditions performed not only with higher top speed and cruising speed, but also significantly reduced fuel consumption, as the gasoline outboards consume more than 50% fuel, limiting the range and costing the end user more money. Running OXE300’s on this application would save the user approximately SEK 1,000 per hour. There are several other reference applications that indicate that running an OXE instead of gasoline equivalent outboards would more half the fuel consumption.

Apart from the fuel savings, we also ran this application exclusively on fossil free HVO100 which translated into reduced net CO2 emissions of 92%. We therefore believe the OXE is the best solution on the market today for the environmentally conscious user who also has high demands on performance, fuel savings, range and reliability. And we know this is only the beginning.

Our consolidated sales amounted to SEK 39 m, an increase of 49% relative to Q3 2021. Year to date sales amounted to SEK 116m, an increase of 100% relative to 2021 Q3 YTD. We have sold more in the first three quarters this year than we did the entire 2021. With this comes very low accounts receivable considering the volume growth, a sign of the collaboration we are developing with our customers. We also saw a healthy improvement in gross margin to 26% compared to the previous quarter.

The Parts & Accessories segment of our business continues to grow with SEK 9.5 m sales, a 90% growth relative to Q3 2021. In addition, this quarter saw the first delivery of our trademarked containerized life cycle support concept, “C-CRES” to a US governmental organization.

We have focused very hard on keeping our cost base low, improving processes, productivity, and teamwork and this now starts to yield results. The Swedish headcount has reduced by over 30% since Q1 2021 while over the same period our sales have grown 25% consistently quarter on quarter. This demonstrates the transformation happening in the organization, where the 30 colleagues today working in Sweden and 18 in the US are in sync and aligned in building the OXE of the future. Adding to this, we see a great interest in joining our team where we in a responsible way will continue to add new members to the team adding new capabilities and competencies.

Anders Berg, CEO

This disclosure contains information that OXE Marine AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 28-10-2022 07:00 CET.

Certified Adviser
FNCA Sweden AB is Certified Adviser for OXE Marine AB (publ). Contact details to FNCA Sweden AB: tel. +46 8 528 00 399, e-mail info@fnca.se.

For further information, please contact:
Anders Berg, CEO, anders.berg@oxemarine.com, +46 70 358 91 55
Jonas Wikström, Chair of the board, jonas.wikstrom@oxemarine.com, +46 70 753 65 66

OXE Marine AB (publ) (NASDAQ STO: OXE) has, after several years of development, constructed the OXE Diesel, the world's first diesel outboard engine in the high-power segment. The Company’s unique patented engine-to-propulsion power transmission solutions have led to high demand for the Company’s engines worldwide.