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3 August 2021

FlexQubes report for the second quarter 2021

Press release 2021-08-03, 08:00

SECOND QUARTER 2021

  • Order intake increased by 54.4 percent to SEK 32.4 million (21.0). Adjusted for foreign exchange rate effects between the comparison periods, orders received increased by 75.1 percent.
  • Net sales increased by 47.3 percent to SEK 26.5 million (18.0). Adjusted for foreign exchange rate effects between the comparison periods, net sales increased by 67.1 percent.
  • Operating profit before depreciation (EBITDA) amounted to SEK -1.6 million (-1.8) and operating profit before financial items (EBIT) amounted to SEK -2.7 million (-3.0).
  • Profit before tax amounted to SEK -2.8 million (-3.0).
  • Earnings per share amounted to SEK -0.4 (-0.4)
  • Cash flow amounted to SEK 3.1 million (-4.0), of which SEK 3.9 million (-2.7) from operating activities, SEK -0.8 million (-1.3) from investment activities and SEK 0.0 million (-0.0) from financing activities.
  • Cash and cash equivalents amounted to SEK 15.4 million (13.4) at the end of the period. The group also has access to 2.3 + 10 MSEK in short term credit
  • Amazon has placed an initial order of approximately SEK 6.5 million for joint development of products belonging to our robotic eQart concept.
  • Lazar Material Handling Solutions, a FlexQube licensed dealer in South Africa, receives an order for over 500 carts from a prominent OEM in the automotive industry.
  • During the period, the Company has issued warrants to the Board of Directors, staff and senior executives. A total of 131,000 warrants were issued, which raised SEK 438,850 to the Parent Company.
  • The company has secured a guaranteed credit facility of SEK 10 million, which can be utilized if necessary.
  • The company has continued to strengthen the organization with new staff in R&D, sales, supply chain and key recruitments in the form of a new COO who took office in June and a new CFO who will join the company in August. The company is expected to continue to expand the organization during the year.

THE PERIOD 1 JANUARY – 30 JUNE 2021

  • Order intake increased by 32.8 percent to SEK 62.4 million (47.0). Adjusted for foreign exchange rate effects between the comparative periods, orders received increased by 49.5 percent.
  • Net sales decreased by 5.6 percent to SEK 41.8 million (44.3). Adjusted for foreign exchange effects between the comparison periods, net sales increased by 5.3 percent.
  • Operating profit before depreciation (EBITDA) amounted to SEK -6.6 million (-3.8) and operating profit before financial items (EBIT) amounted to SEK -8.9 million (-6.0).
  • Profit before tax amounted to SEK -9.2 million (-6.0).
  • Earnings per share amounted to SEK -1.2 (-0.8).
  • Cash flow amounted to SEK 2.0 million (-4.7), of which SEK 3.3 million (-2.5) from operating activities, SEK -1.2 million (-2.1) from investment activities and SEK -0.0 million (-0.1) from financing activities.

EVENTS AFTER THE END OF QUARTER

  • Tesla has awarded FlexQube a project for material handling carts worth approximately SEK 10 million for the new Gigafactory in Berlin.
  • The company wins an order of approximately SEK 2 million for shelves and pallet carts for a larger manufacturing company in Germany.
  • First order to China with order value of approximately SEK 650,000 to a company that manufactures wind turbines. The customer has for several years bought carts for factories in Europe and North America and is now taking the step with purchases to Asia.
  • Order intake for the company remains strong and July, which is usually a slow month seasonally, was one of the company’s best months ever with an order intake growth by 186% compared with the same month last year.

Link to the report for the second quarter 2021: https://www.flexqube.com/secure-file.php?file=081c9aac8297abb50f62ffe8f0d89de9.pdf

The entire report for the second quarter is also attached to this press release.

 

CEO LETTER

SALES AND ORDER INTAKE RECORDS, TOGETHER WITH BREAKTHROUGH ORDERS FROM AMAZON AND TESLA

Order intake for the second quarter reached SEK 32.4 million, which is the first time we have reached over SEK 30 million in a single quarter, and it is our strongest order intake ever. It’s also 54% higher than the second quarter of 2020. In addition, we reach SEK 26.5 million in sales, which is also a record for a single quarter and 47% higher than the second quarter of 2020.

During the quarter we have two outstanding highlights. The first is, of course, attributed to the deal with Amazon regarding products and joint development for our robotic eQart concept. The initial order value amounts to approximately SEK 6.5 million and this first project is expected to be completed by the end of 2021. This partnership with Amazon is by far our most important and biggest milestone in the company’s history and our team has done a fantastic job of running this project. Amazon is the company that is absolutely at the forefront when it comes to logistics robots and that FlexQube was able to win the tender around the robot concept is a fantastic evidence of FlexQube’s logistics cart system, where digital and mechanical building blocks are combined.

The deal with Amazon marks the definitive tipping point for our transformation from purely mechanical cart company to becoming a robotics tech company for internal logistics.

The second big highlight is our largest single deal to date of approximately SEK 10 million with none other than Tesla that was communicated in July. We have been awarded a cart contract for the new factory being built in Berlin, a factory that will be the most advanced Gigaafactory built to date and the largest factory to produce electric vehicles in the world with a capacity of 500,000 cars per year.

Our unique modular concept creates insurance for our customers to be able to take advantage if they need to rebuild or adapt the carts over time. This was a crucial factor for this project. When a new factory is being built, things will always have to be modified and adapted for changing requirements. With our concept, we ensure that the customer gets robust, safe and ergonomic carts that are also flexible to be able to handle this. With the Tesla project, we believe our brand will strengthen significantly in the German market but also globally. If we look at how volumes have developed with other customers after initial deals, the opportunities are good for continued increased order intake from Tesla in the future, both in Berlin but also at their other factories.

FlexQube’s concept can also come in handy when our customers are ready to automate more processes, as the modular nature of the building blocks makes it possible to upgrade mechanical carts to autonomous eQarts. This is something we are completely alone in offering.

SALES & PROFIT

We are again seeing strong growth for both sales and order intake in Europe, where order intake is growing by almost 350% compared to the second quarter of 2020. It is also 44% higher than our best quarter ever to date in Europe and the rest of the world (excluding North America). This is driven by the higher order intake in the DACH region as well as South Africa through our distributor Lazar Intralogistic.

The order book has surpassed SEK 30 million at the end of the quarter for the first time and it’s a substantial increase compared to the SEK 10 million we had at the end of 2020.

We also see a good development of our cash flow, which lands at approximately SEK 3.1 million. We have implemented several measures to ensure that despite continued investments in the business, we can still be on a cash flow level to grow our business in a satisfactory way.  Measures include working with suppliers, customers as well as inventory levels to reduce tied-up capital. There is still a lot to be done on this side, which we see will continue to have a positive impact during the year.

EBITDA also improved in the quarter, landing at SEK -1.6 million compared to SEK -5.0 million in the first quarter of this year and SEK -1.8 million in the second quarter of 2020.

During the beginning of 2021, the prices of raw materials, primarily steel, have affected us and our suppliers. It is not only large price increases, but also difficult to get hold of materials. Although this affects us, we have relatively short lead times between quotation and order and can compensate customers with increased prices. Furthermore, customers are understanding in cases where we have communicated delays as they experience the same from many different suppliers.

On the electronics side, there are longer lead times on many components, which can affect the ramp-up of sales in the eQart segment. However, we work closely with our main suppliers to secure access to components to handle larger volume increases. There is also continued high activity on the quotation side and in the second quarter our total quotation value was three times higher than in the second quarter of 2020 and 65% higher than in the first quarter of this year. The same high rate continued at the beginning of the third quarter.

FLEXQUBE’S ROBOTIZED EQART®

In mid-April, we won an order with four robotized eQarts to Apotea, a well know ecommerce company in Sweden. It is a very interesting order that gives us confidence to go into more ecommerce applications with our robotic eQart concept. Easy implementation and an extremely flexible concept like the eQart, makes us believe we have a winning concept for all different type of businesses going forward. The eQarts will be used to transport inbound material throughout the warehouse. This increases efficiency and has a payoff period for the investment on under a year. We’ve also made a similar deal with Siemens Mobility in Georgia USA where the easy implementation has been crucial.

June was our best delivery month to date for our robotic eQart concept with sales of SEK 1.7 million and we continue to see increased interest in our widely launched product line, the eQart Line. We expect order intake to grow sequentially in the third quarter again. As for our AMR concept, eQart Free, which Amazon has ordered, we are currently setting up the business plan for a major launch later in the year.

Most competitors work with similar navigation technology and the robots are very standardized regardless of the supplier. At FlexQube, we are instead driving the development with a focus on the application to move materials and present them to the operators in the warehouses and factories in an efficient and customized way for the business. This is possible through our modular building block concept where we combine cart and robot in one unit and can be customized indefinitely. The fact that we closed a deal with Amazon in June is proof that we have a unique concept that is timely and can quickly adapt to the needs customers have or will receive in their internal logistics.

DEVELOPMENT

We have seen a sharp increase in activity for corporate transactions in internal logistics recently. In early July, Fetch Robotics (sales of approximately SEK 85 million in 2020) was acquired by Zebra Technologies for approximately SEK 2.6 billion. In mid-July, ABB acquired the Spanish company ASTI, where ABB has stated that logistics robots are the future, and they estimate that the market will exceed SEK 120 billion in 2025. It is clear that more and more companies want to position themselves in the internal logistics market, which is expected to grow strongly over the next decade.

When we look at the market, we are surprised that not more companies focus on the knowledge of internal logistics and being able to create unique and optimal applications for the customer’s exact needs. We have a big head start with over 800 customers and more than 5000 unique customer applications for carts, both mechanical and robotic. We already have the corresponding technology used for both Fetch Robotics and ASTIs robots but in addition a modular concept for both the digital and mechanical building blocks.

Our competitors usually specialize in designing and manufacturing material carts or on offering robots to move these carts, where we are alone in offering both in one unit. At FlexQube, we combine these two into one concept within the framework of the eQart. Looking ahead, we believe that navigation technology and robotics will become more and more generic and that the value lies rather in offering a whole with a focus on the application itself for the user. Our modular concept for designing the cart application – to both transport and present materials in an efficient, ergonomic, and safe way – is key in this whole mindset.

So far, we are in the start-up phase of our dealer relationships (at the time of writing we have 16 active retailers) and it is primarily Lazar in South Africa that contributes to our sales volume. An important deal for our distributor in South Africa was to get an order for over 500 carts to a major international car manufacturer. We intend to continue to expand our dealer network to create greater leverage in our sales work.

Finally, I note that the second quarter was a breakthrough quarter for the company where we were recognized as a robot manufacturer with unique attributes through the order to Amazon. Through the deal to Tesla, I believe that we are establishing ourselves as the world’s leading supplier of material handling cars as Tesla may be considered a flagship customer many other companies look up to. I have pointed this out before, but we are only at the beginning of our journey, where every day we receive strengthening evidence that our unique offer and solution is very good, and in a market that will develop extremely aggressively over the next decade. .

Anders Fogelberg

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 800 customers in more than 30 countries with primary markets being North America and Europe.

FlexQube’s customers can be found within the manufacturing industry, distribution- and warehousing. Some examples of major customers are Volvo Cars, Siemens, Autoliv, Scania, Oda and Mann+Hummel.

For more information, contact:
CEO, Anders Fogelberg
[email protected]
+46 702 86 06 74

CFO, Mikael Lindbäck
[email protected]
+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 3 augusti 2021, at. 08:00 CET.

FlexQube UK Sales manager Tim Massey
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