Smart Eye Interim Report January - September 2018

Strenghtened financial position enables increased growth 

July–September 2018

• Net sales totalled SEK 15,324 thousand (12,945), which corresponds to an increase of 18 per cent.
• Operating profit/loss totalled SEK -9,759 thousand (-8,180). Earnings are developing according to plan as a result of investments, mainly in personnel, to meet the increasing level of activity in the Applied Solutions business area.
• Profit/loss after financial items was SEK -9,836 thousand (-8,285).
• Profit/loss after tax per share was negative.
• Cash and cash equivalents totalled SEK 104,568 thousand at 30 September. During the quarter, the company conducted a private placement that generated SEK 113,940 thousand before issue costs.
• The company announced that the design win announced in July was with Geely Auto Group.
• Smart Eye expanded its business with an existing customer by gaining a further five fem design wins during the quarter for models on the same platform where the company already has two design wins. 

January – September 2018

• Net sales totalled SEK 35,817 thousand (32,692), which corresponds to an increase of 10 per cent compared with the year-earlier period.
• Operating profit/loss totalled SEK -40,369 thousand (-26,649).
• Profit/loss after financial items was SEK -40,666 thousand (-27,002).
• Profit/loss after tax per share was negative.

Estimated value of obtained design wins

As of the report for the second quarter of 2018, the company provides information on the estimated market value of obtained design wins at the time of publication of the report. The figures in brackets show the levels at the time of the publication of the preceding report, which in this case was 20 August 2018.

• The total estimated value of the company’s 23 (18) design wins announced to date currently amounts to at least 675 MSEK (475) over a product life cycle.
• If the company’s system had been used in all car models on existing platforms by the five (five) car manufacturers with whom design wins have been communicated, the estimated value would amount to at least 2,000 MSEK (2,000) over a product life cycle.

Comments from CEO

Strong performance 

Looking back at the third quarter of 2018, three developments stand out in particular. In July, we announced Geely as a new customer, a breakthrough in China. In August, we achieved five new design wins with an existing customer, an acknowledgement that our business model is working. Finally, in September, a directed share issue was conducted totalling 114 MSEK, which will be invested in the strategically important mass market for driver monitoring. There was high demand for the stock, which exceeded the number of shares that the Board of Directors was authorised to issue. Consequently, the government-owned venture capital company Fouriertransform, which became an owner of the company back in 2012, was able to sell all of its shares. Fouriertransform’s decision to ultimately divest its full shareholding was in line with the Swedish government’s new ownership directive from 2016. In addition to contributing capital, Fouriertransform  also provided expertise, working on the Board of Directors and a broad industry network. This occurred at the critical stage when Smart Eye made the transition from a measuring technology company to a qualified subcontractor to the automotive industry. We would like to thank Fouriertransform for their commitment and, at the same time, welcome the new owners who take their place.  

Wind in the sails for research products

Research Instruments has honed its product offering to be able to accommodate new market trends, which is starting to yield results. In the third quarter, sales amounted to 9 MSEK, up 27 per cent compared with the third quarter of 2017. This represents an increase of 51 per cent compared with the second quarter of this year. There is a positive sales trend in all geographic markets and in all product families. Intensive work is currently under way to further refine the product portfolio and we will continue to introduce new products models in the autumn and winter.

Market leader in automotive driver monitoring

The situation for Applied Solutions continues to be characterised by intense market interest from essentially all major car manufacturers. Purchasing processes in various phases around the globe are being managed in a commendable manner by an efficient and well-structured organisation. Our main weapon for success in procurement processes is the market’s most mature and stress-tested software solution for automotive customers, developed in accordance with the car industry’s stringent standards and quality requirements. A safety system in a car simply must work, year after year, with the highest possible precision. This makes Smart Eye’s flexible and open solution unique at a time when the needs of the market are increasing at a steadily increasing pace. The new share issue ensures that the successful business model can be scaled up.  

High thresholds

The long and challenging qualification process for software for cars is an obstacle for new market players, who must take an extremely long-term and persistent approach to be incorporated in their first car. At the same time, Smart Eye can deliver the necessary functionality with high speed for this context. Applied Solutions’ sales of 6.2 MSEK represent an increase of 7 per cent compared with the same quarter in 2017. It is important to point out that this result has been achieved at the same time as a predominant share of the available resources was allocated to business opportunities in the mass market segment, with a future total value in excess of SEK 10 billion. Total sales for the Group amounted to 15.3 MSEK, an increase of 18 per cent compared with 2017. 

Martin Krantz

CEO Smart Eye

Contact

Martin Krantz, VD
Tel no. + (46) (0)70-329 26 98
Martin.krantz@smarteye.se

Anders Lyrheden, CFO
Tel no. + (46) (0)70-320 96 95
Anders.lyrheden@smarteye.se

Smart Eye develops AI-powered eye tracking technology that understands, assists and predicts human intentions and actions. Our eye tracking solutions can draw conclusions about an individual’s alertness, attention, focus and gain insights into a person’s awareness and mental status.

Smart Eye’s technology is embedded in the next generation of vehicles helping the automotive industry to take another step towards a safer and more eco-friendly drive. Our research instruments offer new insights in complex and real-world situations for aerospace, aviation, psychology, neuroscience and clinical research.

Smart Eye is headquartered in Gothenburg, Sweden, and has offices in USA, Japan and China. Clients include US Airforce, Geely, BMW, NASA, Lockheed Martin, Boeing and more.

Smart Eye is listed on First North. Erik Penser is Certified Adviser and can be reached at +46-8-463 8000.

This information is information that Smart Eye AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication on October 2018 25 at 8:30 CET.

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