FlexQubes report for the third quarter 2024

THIRD QUARTER 2024

• Net sales increased by 49.0 percent to 25.2 MSEK (16.9). Adjusted for currency effects between the comparison periods, net sales increased by 50.4 percent.
• Order intake decreased by 1.9 percent to 28.5 MSEK (29.1). Adjusted for currency effects between the comparison periods, order intake decreased by 0.9 percent.
• Operating profit before depreciation (EBITDA) amounted to -4.5 MSEK (-26.3) and operating profit before financial items (EBIT) amounted to -6.9 MSEK (-27.6).
• Profit before tax amounted to -7.4 MSEK (-28.6).
• Earnings per share amounted to -0.6 SEK (-2.6).
• Cash flow amounted to -7.3 MSEK (26.1), of which -3.5 MSEK (-18.1) from operating activities.  -0.7 MSEK (-2.2) from investing activities, and -3.1 MSEK (46.4) from financing activities.
• Cash and cash equivalents amounted to 33.1 MSEK (44.6) at the end of the period.
• The company wins its first AMR system project in Mexico. An order worth 5.0 MSEK.
• FlexQube get its second project for AMR system in Sweden worth approximately 1.2 MSEK.
• The company widens it patent protection for FlexQube Navigator AMR with patents being granted in USA and China with more patents pending.
• FlexQube receives Cart system order worth 4.7 MSEK to an existing Mexican customer.
• The company receives order worth approximately 5.6 MSEK for cart- and tugger train system.

THE PERIOD 1 JANUARY – 30 SEP 2024

• Net sales increased by 4.2 percent to 87.0 MSEK (83.5). Adjusted for currency effects between the comparison periods, net sales increased by 5.4 percent.
• Order intake increased by 20.4 percent to 100.8 MSEK (83.7). Adjusted for currency effects between the comparison periods, order intake increased by 21.5 percent.
• Operating profit before depreciation (EBITDA) amounted to -24.7 MSEK (-46.9) and operating profit before financial items (EBIT) amounted to -31.7 MSEK (-51.0).
• Profit before tax amounted to -33.7 MSEK (-53.1).
• Earnings per share amounted to -2.0 SEK (-5.6).
• Cash flow amounted to -16.1 MSEK (13.8), of which -15.7 MSEK (-45.8) from operating activities. -3.3 MSEK (-10.4) from investing activities, and 3.0 MSEK (70.0) from financing activities.
• Cash and cash equivalents amounted to 33.1 MSEK (44.6) at the end of the period.

EVENTS AFTER THE END OF QUARTER

• FlexQube receives an order of approximately 3.0 MSEK from an existing customer in Mexico for cart products.

Link to the report for the third quarter 2024: https://flexqubegroup.com/secure-file.php?file=3891302391865dd347529b8c7a7b031d.pdf

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

CEO LETTER

GROWTH, LOWER COSTS, IMPROVED MARGINS, AND BETTER RESULTS - PROFITABLE GROWTH PROGRESSING AS PLANNED, FIRST AMR ORDER IN MEXICO, AND A SIGNIFICANTLY INCREASED INTEREST IN OUR AMR SYSTEM

Sales reached SEK 25.2 million, a strong increase of 49% compared to the third quarter of 2023. However, sales were lower than expected as we had to close our factory in South Carolina, which serves all of North America, at the end of September due to Hurricane Helene. The production and delivery disruptions caused by this were resolved in October.

Order intake was in line with 2023, amounting to SEK 28.6 million. We continue to focus fully on sales, with our new, more cost-effective organization delivering higher quality in both our pipeline and generated inquiries. Over the past six months, we have shifted our marketing strategy to increase traffic at a significantly lower cost while improving the quality of incoming inquiries. We are confident this will lead to sequentially increasing order intake, driven by our robotics operations and our broad portfolio of material handling solutions. Although the market remains slow, we see a notable increase in interest from both existing and new customers for our automation solutions. We continue the inspiring work of creating innovative and scalable solutions alongside our customers to enhance efficiency and workplace safety.

We are focusing more on Greenfield facilities, with Mexico standing out for its significant increase in new factories. Our CSO, Anders Fogelberg, recently returned from a Business Sweden-organized trip with other Swedish companies, visiting Monterrey, which has the highest concentration of new factories in all of Mexico. The trip confirmed the strategic importance of continuing our investment in Mexico.

In the U.S., we see that the market remains slow, but the upcoming presidential election may reduce uncertainty and potentially boost investment. Encouragingly, we’re seeing increased interest and more inquiries, primarily driven by our AMR system.

Operating cash flow continues to develop positively, thanks to our dedicated efforts to reduce working capital by lowering inventory and receivables, along with initiatives to reduce operating expenses. Cost reductions have gradually continued to show impact during the third quarter and are expected to contribute to improved results and cash flow going forward. We are moving towards our goal of achieving a stable, positive cash flow by the end of 2024.

Operating margins are higher, which we are pleased with. This is largely influenced by the mix of projects, and during the quarter, margins were at a level we aim to maintain over time, though they naturally vary depending on customer, project, and product.

First order in Mexico and significantly increased interest in our AMR system

The competitiveness of our AMR concept is reinforced with a follow-up order from a Swedish heavy truck manufacturer for our AMR system, as well as our first order in Mexico from another global heavy truck manufacturer. The Mexico order includes a towing solution for transporting carts with materials to the production line, with delivery planned for the end of the fourth quarter of 2024.

The customer chose our solution for its flexibility in managing various workflows with a single robot. We secured this order in competition with several global AMR suppliers. The aim is to expand the system with additional workflows and solutions after a successful installation.

These orders demonstrate the strength of our offering and the value our system creates through increased flexibility, safety, and efficiency. During the quarter, we have seen continuously growing market interest in our AMR system, driven by heightened awareness of our unique solution, which makes us very optimistic about future development. It's especially gratifying to see interest expanding beyond our core customer segments, such as automotive and general industry, into other sectors like retail and warehousing, including clothing and furniture. The AMR system's flexibility—enabling it to handle materials of varying sizes and weights safely using a standardized robot, Navigator—makes it an attractive solution for a broader customer base.

FlexQube's AMR system is built around a compact, non-load-bearing AMR unit, which can connect with motorized carts via an intelligent coupling mechanism. Similar to the robotic arm industry, where robots are equipped with various tools to handle different tasks, our system enables a flexible ecosystem with different motorized load carriers. This makes it possible to effectively manage a variety of applications in automated material handling.

We also have a productive partnership with Bluebotics, our navigation software provider. Bluebotics is well-regarded and has supplied navigation systems globally for over 20 years. Together, we aim to serve larger customers, where the strength of our innovative system combined with Bluebotics' robust navigation creates a compelling offering. Our close collaboration is a testament to the strength of our solution and our credibility as a partner.

In recent months, we have worked diligently and successfully on the second phase of our installation with a global truck manufacturer in Sweden. The first phase of the project was delivered a few months ago and operates according to the customer’s reliability requirements. The system runs on a two-shift basis in a high-frequency, production-critical process, delivering truck seats to the assembly line. The second phase is scheduled for installation in the fourth quarter, and we are also working on additional follow-up projects.

Additional patents have been granted for the U.S. and China, confirming the uniqueness of our AMR system and securing our concept for the future.

We expect order intake and sales to improve in the fourth quarter, with contributions from all product areas and increased robot sales ensuring better margins and cash flow. We remain committed to achieving profitability and positive cash flow by the fourth quarter of 2024, while building a long-term sustainable business across all product areas and markets.

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 38 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, 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 Nov 6, 2024, at. 08:00 CET.