CGit

Mölndal                                                                                     2023-10-26

Group financial overview

Aixia is delivering a positive result again and has thus broken a negative trend.

At the beginning of Q3, we initiated a savings package. In parallel with that, we have been working incredibly focused on our revenue areas. The purpose of the savings packages was to bring down our overhead expenses – partly to meet a weaker economy, partly to adapt the business to the new working methods that now prevail and have become almost permanent after the pandemic.

The biggest changes, where we can make the biggest savings, is where and how we work. That all our employees come to an office to do their job, to later leave when the work is done is no longer a matter of course or even likely. Therefore, we have decreased our office spaces by 40%.

We also see that our traveling has decreased significantly, as more and more meetings and tasks are performed digitally. This is the next savings area that we carry out. Our vehicle fleet within the company has decreased by approx. 50%. Some of the actions we can already see the effects of, but we will see the full effects of the saving packages during Q4. We continue to analyze our business and do not rule out more savings measures.

As we have described earlier, we have also put a lot of focus on increasing our service and contract revenues. Our contract revenues increased by 11% and our service revenue increased by 89%, compared to the previous year. What still is a challenge is our product deal, partly because of the component shortage. It has improved but is not yet back to normal levels, making our product business lose during Q3 compared to the same period last year. I see it as a statement of strength that we, despite declining product business, are delivering a positive result!

The revenue amounts to 35.2 MSEK (73.8 MSEK for the same period last year). Q3 is also affected by longer than normal delivery times for products and solutions. We also notice that investment decisions are taking longer than normal, connecting to the current economic situation.

The annual recurring revenue (ARR) from our ongoing operations is experiencing an 11% growth, reaching 7.25 MSEK (6.52 MSEK for the same period last year).

The gross margin for the ongoing operations stands at 35.5% (16% for the same period last year).

EBITDA stands at 1.74 MSEK (2.2 MSEK for the same period last year). Under Q3, we still have an increased cost for our name change and legal dispute with CGI.

The group’s earnings per share for Q3 amounts to 0.43 SEK (0.59 SEK for the same period last year).

During the third quarter, we concluded our litigation with CGI. Negotiations have been ongoing throughout 2023, which has negatively affected our results. It feels incredibly good to put that process behind us. We have always tried to keep the process on a constructive and pragmatic level, and now we just want to go back and wholeheartedly focus on our core business. We hope that CGI does the same.

A MESSAGE FROM THE CEO

We are in an exciting position! AI has never been as hot as it is right now. Everyone is entering a process of change that is unprecedented! All reputable analysts and analysis companies are comparing the development of AI with the development of penicillin or the invention of electricity. And it is fast, incredibly fast!

Aixia is a prominent player in advanced IT solutions, digitalization, and AI. We have extensive competence and a solid background in these areas, and I would say that Aixia has a leading position, not only within the borders of Sweden or Europe but on the global stage. This is confirmed by most of the leading manufacturers on the global market I have had the privilege of sitting down with to describe our offer and direction. During Q3, we worked on our cost structure but also accelerated our market presence in the Swedish industry, mostly in the fields of AI, ML Ops, and applied AI. As we have put our legal process with CGI behind us, we are resuming our collaboration with the OTC Market to create opportunities for us to reach the global market even more effectively.

Our goal is to be leading in advanced IT and AI and thereby deliver the entire lifecycle. Our holistic approach to AI in the coming years strengthens our focus. I am convinced that we will continue to lead the development in this area. Our offer, our experience, and our position are evidence of this, now that we see the market properly open to the implementation of AI in all industries. Even if some industries are further ahead than others. It also requires patience and faith in us as a company, especially when the development takes time, and the state of the economy affects the will to invest. The changes in the next few years will be historic!

I mention a holistic approach. In the long term, we are convinced of how the market will develop and we have an incredibly disciplined way of working based on that. Ant the changes are fast. Swedish, European, and Global industries are facing major and necessary changes that can be summarized within concepts such as Industry 4.0 and Industry 5.0. AI will be crucial for countless companies, and we already have the solutions. We will improve and clarify our way of communicating our progress, so the market understands and believes in our long-term potential.

Historic data and past performances may indicate Aixia’s ability to deliver. Although times are changing, a history of success and adaption can demonstrate that the company has the necessary skills to navigate through challenging times. Open and direct communication with the market is crucial. Aixia will increase and improve the communication around Aixia’s strategies, progress, and challenges.

”From data to visdom”

One of Aixia’s most prominent strengths is our ability to offer an integrated solution throughout the entire AI Process. The process begins with tailor-made infrastructural solutions, where Aixia directly implements solutions for customers.

Aixia has successfully developed our own advanced Machine Learning Operation software, AiQu, entirely within Sweden’s borders. Developed through advanced research and development, this software is a result of Aixia’s effort to eliminate the complexity that weighs down many of the popular schedulers. With AiQu, Aixia has also integrated features that greatly improve efficiency and control. This advanced software positions Aixia as an innovator in the field, with features that surpass competing solutions and make us unique in the market.

In the industrial sector, Aixia has also demonstrated the ability to apply AI on a practical level, resulting in several outstanding projects. By making AI available to a broader market, Aixia effectively contributes to strengthening Sweden’s technological infrastructure and competitiveness.

In a world where technological innovation is constantly changing and evolving, Aixia stands firm as a pillar of expertise and reliability. With a unique combination of technical knowledge, research, and practical application, Aixia positions itself as an indispensable partner for anyone seeking leadership in AI.

In conclusion, this quarter has been both challenging and incredibly rewarding. The technological landscape is constantly changing, but our mix of technical expertise, market insights, and unwavering commitment to innovation makes Aixia poised for continued growth and success

Significant events Q3 2023

2023/07/03 Aixia takes new order from Benify, value 4.3 MSEK.

Aixia has been entrusted to deliver next generation Hyperconverged Infrastructure (HCI) solution to customer. Benify is a fast-growing, independent HR tech company that helps companies and organizations around the world build a strong employer brand by aggregating and highlighting benefits and compensation offerings. The solution guarantees to secure the compute, and storage, needs of the customer for a long time and Aixia is incredibly proud and grateful for the trust. We look forward to working closely with the customer in the coming years.

2023/07/17 Aixia takes new strategic order with international energy company.

Aixia takes a strategically important order in communications! Aixia has been trusted to deliver the next generation communication solution to an existing customer. The customer, which is active in the international energy sector, has chosen to invest in a new communication platform to meet growth plans but also ensure availability and security. The choice of the solution and supplier is strategic for the customer as completely new requirements are set around security and accessibility linked to the environment we all find ourselves in. This is a first rollout of a new architecture which will then be delivered to many sites. The first rollout has a value of SEK 500,000.

2023/07/27 Aixia takes new order with new customer, value SEK 4.5 million.

Aixia has been trusted to deliver new AI infrastructure and the next generation data center solution to a new customer. The customer, which is the Bröderna Hansson and which is part of the international group Huitai Investment Group. Bröderna Hansson is a full range wholesaler in fish & seafood with a focus on the grocery trade, commercial kitchens, delicatessens, food wholesalers and food chains. Aixia is trusted to deliver the latest in AI infrastructure and next-generation data center solutions with associated services.

”We wanted the best in AI and IT support so we can invest in securing the best delivery of our services and products to our customers because we work with fresh produce and have Just-in-time deliveries, as well as investing in AI solutions for product control systems to future-proof our business” Says IT manager Amer Dzindic

2023/09/25 Aixia takes new hosting and operating orders with new customers, contract value SEK 3.5 million.

Aixia has been trusted as a new hosting and operation supplier to two new customers. The one customer is active in automation of production lines, robotics, PLC programming and machine construction. The other customer is active in communications and supplies simple and smart phones, watches and tablets. Aixia has been trusted to be responsible for the customers’ existing server/storage infrastructure including VMs, backup, server operation, VPN management and application operation of SQL and Exchange.

2023/09/29 Aixia takes on a new hosting and operating deal with a new customer, contract value SEK 1.1 million.

Aixia has been trusted as a new hosting and operation supplier to another new customer. The customer is active in digital security alarms for municipalities and other organisations. Aixia has been trusted to be responsible for the customer’s existing server/storage infrastructure including VMs, backup, server operation, VPN management and application operation of SQL and Exchange. The agreement is worth SEK 30,000/month and extends over 36 months. Aixia is incredibly proud and grateful for the trust. We look forward to continued close cooperation with this new customer as well and we are convinced that we will expand our commitment as this is the first of several steps in the customer’s plan to outsource their operations.

This information is information that Aixia Group AB (publ) is required to make public pursuant to the EU Market Abuse Regulation.
The information was provided by the above contact, for publication 2022-10-26.

FOR MORE INFORMATION /

Get in touch with the company at:

CEO Mattias Bergkvist
Phone: 031-762 02 40
info@aixia.se
www.aixia.se

Aixia Group AB
Taljegårdsgatan 11
431 53 Mölndal