FlexQube

THE PERIOD 1 JANUARY – 31 DECEMBER 2023

• Order intake decreased by 35.5 percent to 115.0 MSEK (178.4). Adjusted for foreign exchange rate effects between the comparison periods, order intake decreased by 38.7 percent.
• Net sales decreased by 43.8 percent to 115.0 MSEK (204.6). Adjusted for foreign exchange rate effects between the comparison periods, net sales decreased by 47.3 percent.
• Operating profit before depreciation (EBITDA) amounted to -52.1 MSEK (-1.5) and operating profit before financial items (EBIT) amounted to -58.1 MSEK (-6.4).
• Profit before tax amounted to -60.6 MSEK (-7.0).
• Earnings per share amounted to –6.4 SEK (-0.9).
• Cash flow amounted to 19.8 MSEK (-5.6), of which -57.3 MSEK (-22.0) from operating activities,
  -14.4 MSEK (-8.1) from investment activities and 91.5 MSEK (24.5) from financing activities.

FOURTH QUARTER 2023

• Order intake decreased by 19.2 percent to 31.3 MSEK (38.8). Adjusted for foreign exchange rate effects between the comparison periods, order intake decreased by 16.0 percent.
• Net sales decreased by 35.2 percent to 31.5 MSEK (48.6). Adjusted for foreign exchange rate effects between the comparison periods, net sales decreased by 38.8 percent.
• Operating profit before depreciation (EBITDA) amounted to -5.2 MSEK (-2.2) and operating profit before financial items (EBIT) amounted to -7.1 MSEK (-3.5).
• Profit before tax amounted to -7.5 MSEK (-3.8).
• Earnings per share amounted to -0.6 SEK (-0.5).
• Cash flow amounted to 6.0 MSEK (-4.8), of which -11.5 MSEK (-5.9) from operating activities, -4.1 MSEK (-2.6) from investment activities and 21.6 MSEK (3.6) from financing activities.
• Cash and Cash Equivalents was 48.6 MSEK (30,5) at the end of the period.
• The Company receives AMR-order worth about 5.2 MSEK from a Swedish customer.
• FlexQube receives an AGV-Order in Mexico worth about 3.1 MSEK.

Link to the report for the fourth quarter 2023: https://flexqubegroup.com/secure-file.php?file=427abb7a84302a276f4a9d04e9bcf3c4.pdf

The entire quarterly report is also attached to this press release.

CEO LETTER

INCREASED SALES ACTIVITIES AND FIRST COMMERCIAL AMR-ORDER

Both order intake and sales increased in relation to the previous quarter but are still below expectations. However, it is important to state that we are moving in the right direction and sales increased by 86% compared to the third quarter. However, we are working towards significantly larger volumes, and we can see that the increased activity has led to an increase in our pipeline, but the lead times from request to completion have been longer than we predicted. Here we work hard to shorten the lead time to conversion, increase conversion and add additional prospects to our pipeline. The positive thing is that we see great interest in our solutions in all our product areas. In terms of shortening the lead time to conversion, we are working on an internal project where we are changing our sales and design process for increased scalability, which makes it possible to get turnover on new sellers faster and to be able to handle more projects.

At the end of the quarter, we received our first commercial order for our brand new AMR system, the FlexQube Navigator, to a very reputable customer that is a multinational truck manufacturer. In this case, our system replaces forklifts with drivers, in two shifts. The customer made an extensive procurement and in the end it was between us and an autonomous forklift, which is a common solution on the market. This particular case where forklifts are used to move materials of different sizes, is a very common process in the manufacturing industry or warehouse where many people want to move away from such a solution because. accident risks and increased efficiency. We therefore see a great possibility that this first order will be followed by many more. The order was also an important confirmation that our concept, with a non-load-carrying AMR that connects with motorized carts to form a joint autonomous solution, meets the customer requirements we set out to achieve. The fact that our system provides flexible and efficient material handling, with a very high level of security, and is thus a better choice than the competitors' solutions, is very positive. We look forward to 2024 with great confidence, where we see that in addition to increasing the volumes of our new AMR system, we will also continue to work on expanding the solution with further clearly value-creating products that will also make our solution relevant to other areas of use and customers.

The result for the fourth quarter is weak and mainly driven by the relatively low sales compared to the previous financial year. Costs, but mainly the margin, are better than expected. The cost mass will continue to fall during the beginning of 2024 in line with the savings program that has been implemented, which involves a reduction in OPEX and investments in development of approximately SEK 17 million. The margin and profit development is going in the right direction and is a significant improvement compared to the previous quarters in 2023.

The market is still somewhat tentative in Europe. Mexico and the US have a more positive market situation and there is no shortage of business in the market. During the fourth quarter, we have seen that our customer projects took longer to decide or that they were pushed forward to the new budget year, i.e. until 2024.

The focus going forward is to increase sales, balance our operational costs, increase revenue from our robot systems and to further shift focus from development to sales of both AGV and AMR systems.

In order to continue to increase our sales, we are doing a number of activities. Our sales organization is complete in the US since the third quarter, which is important as it is our largest and most important market. In Europe and Mexico, we still have open positions where recruitment is ongoing. We work to simplify our sales process and continue to train the sales force in our products. We can see a steady increase in our pipeline and order intake is increasing. We have a positive momentum and expectations are greater for future volumes than what we are showing right now, but need to constantly work on and make the necessary changes to continue to increase prospects and order intake.

Our goal is to reach profitability and a positive cash flow by the end of 2024 with the implemented cost savings, as well as surpass or be in line with the sales volumes we had in 2022, meaning over SEK 200 million in sales. In order to realize the latter, we have a continued need for a strong sales organization. a well-adapted product and development organization and an efficient supply chain. A further prerequisite and focus is to significantly increase sales of our AGV and AMR solutions.

AMR
During the quarter, we continued to work on final tests for the necessary certifications of our new AMR system, FlexQube Navigator, for both the EU and the US. Certification by TÜV for the EU is complete and approved, and the corresponding certification for the US will be completed in the first quarter of 2024.

We have continued to work on the final details regarding pricing and packaging of the product offering. We have a big focus on customer value when the product is packaged, where efficiency, flexibility and safety are a big part. Clearly packaged solutions for different types of customer use cases will help further convince our customers of the value that FlexQube's AMR system can bring.

Work on establishing partnerships with system integrators who will sell and install the AMR system to end customers has increased during the quarter. The majority of discussions are ongoing with potential partners in the Nordics, the rest of Europe, Mexico and the US. We concluded an agreement during the quarter and see great interest and therefore expect to have concluded agreements with a further number of integrators during the first quarter of 2024.

AGV
The product has now proven to be the solution for the majority of customer challenges and shows good growth during the fourth quarter. We have designed solutions with the AGV system as an active load carrier in picking and assembly, as well as to solve transport between warehouse and production. We have also made solutions where we used the knowledge and modularity of our trolley concept, where the AGV system enables both transport and an ergonomic and efficient material presentation. Our focus is to scale up sales and we have also reduced the development resources linked to the product. Increased focus on training the sales force in our AGV product has led to greater processing and increased interest from our customers. We expect this to increase throughout 2024.

Although we increased total sales by 86% compared to the third quarter, the quarter was below our expectations, but the direction is right and we continue to work according to our plan. Through reduced cost mass, increased sales activity and our strong product portfolio, we are still very well positioned to deliver on our plan and I look forward to 2024 with great confidence.

Mårten Frostne

CEO FlexQube AB (publ)

About FlexQube

FlexQube is a technology company headquartered in Gothenburg, Sweden with subsidiaries in USA, Mexico, Germany and England. FlexQube offers solutions for cart-based material handling using a patented modular concept. FlexQube develops and designs customized solutions for both robotic and mechanical cart logistics. Through the own developed and unique automation concept FlexQube can offer robust and self-driving robotic carts. FlexQube has more than 1000 customers in 37 countries with primary markets being North America and Europe.

FlexQube’s customers can be found within the manufacturing industry, distribution- and warehousing. We represent some of the most successful companies in the world with a significant share being represented on the Fortune 500 list. These companies exist within automotive, electric vehicle manufacturing, online retail, heavy-duty trucks, industrial automation and retail logistics.

For more information, contact:  
CEO, Mårten Frostne
marten.frostne@flexqube.com
+46 721 55 19 37

CFO, Mikael Lindbäck
mikael.lindback@flexqube.com
+46 761 04 10 28

The share (FLEXQ) is traded on Nasdaq First North. FNCA Sweden AB, telephone +46 8-528 00 399, is the Company's Certified Adviser. Read more at www.flexqube.com

This information is insider information that FlexQube AB (publ) is obliged to disclose in accordance with EU Market Abuse Regulation. The information was provided by the above contact persons for publication on Feb 21, 2024, at. 08:00 CET.