XMReality AB (publ), Year-end report 2018
2018 was another year of growth for XMReality. The year ended with order intake up by 61 percent and net sales up by 52 percent. The gross margin increased to 70 percent (58) as an effect of increasing the share of software sales. Billed software sales rose by 122 percent.
The quarter: October–December 2018
- Net sales amounted to SEK 3,250 thousand (2,735)
- Costs before net financial income/expense totaled SEK -13,125 thousand (-12,222)
- The operating loss was SEK -8,337 thousand (-7,812)
- Net cash flow amounted to SEK 13,781, (-10,168) and the equity/assets ratio was 80.2 percent (85.0) at the end of the period
As in 2017, the final quarter of the year was strong. Order intake and billing both rose and represent a mix of new orders and extensions of previously sold subscriptions. The quarter delivered a higher number of requests for quotation and added to the Company’s prospect list and outstanding quotations.
Approximately 70 percent of billing during the period was for subscriptions to the Company’s software. The Company allocates prepaid subscription revenue and hardware rental revenue across the term of the contract on a straight-line basis. Invoiced sales that had not yet been recognized in revenue at the end of the period increased by 76 percent to SEK 4,035 thousand (2,291).
A directed new issue executed in November raised SEK 20.1 million for the Company after issue costs.
Full year 2018
- Net sales amounted to SEK 10,155 thousand (6,683)
- Costs before net financial income/expense totaled SEK -45,882 thousand (-36,282)
- The operating loss was SEK -29,250 thousand (-22,633)
- Net cash used amounted to SEK -8,443 thousand (24,141)
Net sales increased by approximately 52 percent compared to the preceding year. The gross margin improved to 70 percent (58) as an effect of increasing the share of software sales. The Company allocates prepaid subscription revenue and hardware rental revenue across the period on a straight-line basis. There is a positive effect on cash flow when orders are placed, but the effect of orders received on profit and loss during the period is limited. Hardware sales are recognized in income when the goods are delivered.
More efficient organization
Aimed at meeting customer needs more efficiently, XMReality implemented a new approach employing a number of small, agile teams. This also resulted in a reorganization and reduction of executive management. The executive management team now comprises CEO Johan Castevall, CFO Claes Pettersson, CSO Marcin Szymanski, CTO Per Unell and HR Manager Sara Wennstam. In conjunction, Henrik Krohn and Åsa Davisson stepped down from executive management. As an effect of this, profit for the year was reduced by a non-recurring transition cost of SEK 640 thousand.
Focus on total solutions without proprietary smart glasses
The Company's sharper focus on the software business is aligned with the established strategy. The software business generates the largest contribution to adding customer value. In hardware, XMReality offers third-party products. Competitive alternatives to smart glasses are currently available in the market and, in a logical progression, the Company will discontinue the development and sale of proprietary smart glasses during Q1 2019. The switch in customer interest from hardware to software combined with declining sales of proprietary smart glasses resulted in an impairment of previously capitalized hardware development costs by SEK 250 thousand, taken in connection with the close of books. The Company’s reported capitalized development costs refer thereafter exclusively to proprietary software development.
Significant events during the quarter, October–December 2018
- A global leading manufacturer of gas springs launched XMReality Remote Guidance for its customers
- International manufacturing group SACMI signed an agreement with XMReality for the global roll out of XMReality Remote Guidance
- XMReality registered its trademark in the United States
- An additional order was received from a US defense group
- XMReality executed a directed new issue of approximately SEK 21 million and announced that Investment AB Spiltan would become the new major shareholder
Significant events after the end of the quarter
- Bühler Consumer Foods signed an additional order and expanded use of XMReality Remote Guidance worldwide
Linköping, Sweden—XMReality AB (publ) (NASDAQ First North: XMR), an international leader in AR-enabled knowledge sharing, xxx.
For more information, please contact:
Johan Castevall, CEO XMReality
Phone: +46 (0)73 356 04 81
E-mail: johan.castevall@xmreality.se
About XMReality Remote Guidance™
XMReality Remote Guidance is an AR-enabled knowledge sharing tool that lets you communicate with gestures, speech, chat and pointers with someone at a completely different place. It includes:
- A unique hands-overlay technology that lets you guide someone else’s hands—as if you were there.
- A web portal to manage teams and users, and to measure usage
- Integration through client-side API’s
About XMReality AB
XMReality AB (publ) develops and sells solutions that revolutionizes knowledge sharing through augmented reality (AR). The company is a market leader in remote guidance, which uses AR to guide onsite staff and enable them to resolve or prevent problems. XMReality’s customers are mainly global industrial companies, including Bosch Rexroth, ABB, Siemens Industrial Turbomachinery, Electrolux and Bombardier. XMReality is headquartered in Linköping, Sweden, and is listed on Nasdaq First North (ticker: XMR).
www.xmreality.com
XMReality’s Certified Adviser is Redeye AB
Phone: +46 (0)8 121 576 90
The information in this news release is such that XMReality AB (publ) is required to make public in accordance with the Swedish Securities Market Act. The information has been released by the above-mentioned contact person for publication on Friday February 15, 2019 08:30 am.