CEO Richard Berkling comments:

PowerCell’s net sales in the quarter increased by 25 percent to a record high of SEK 127.5 million, reflecting our continued progress on significant orders in aviation and marine sectors. The trend with faster increase in net sales than in operating expenditure continued. Operating cash flow was impacted by increased accounts receivable and material purchases related to 2024 deliveries. As we enter 2024, we are intensifying our focus on profitability and cash flow.

The year has been characterized by the ramp-up of our operations and during the fourth quarter we produced larger volumes and intensified project work to, among others, the two ferries that will operate Norway´s longest ferry route and the aircraft manufacturer ZeroAvia. We set a new sales record for the full year of SEK 310.3 million (244.7) with an increase of 27 percent and PowerCell strengthened its position as the leading supplier of hydrogen-electric solutions to aviation and marine industries.

Continued good gross margin

Gross margin amounted to 36.9 percent (56.8) in the quarter The decrease is mainly due to fluctuations in product mix and less royalty, but also positively impacted by SEK 5 million due to reversal of a previously recognized obsolescence reserve related to stack components, that now can be used in a 5 kW product. The reason being that we entered a new promising market segment with a 5 kW fuel cell system in 2023, namely vehicles that need auxiliary power to operate, for example, refrigerating or heating systems.

Operating income before items affecting comparability was SEK -3.1 million (2.7) in the quarter. Non-recurring items totaling SEK 5.0 million, related to the listing on Nasdaq Stockholm.

Operating cash flow amounted to SEK -48.7 million (-37.7) in the quarter and SEK -95.7 million (-120.5) for full year, negatively impacted by the timing of payments and purchase of material. Development of the cash flow is of high priority and we are confident that our focus and activities will improve cash flow going forward.

Megatrends drive growth

In 2023, the entire hydrogen industry has taken a big step by now implementing emission-free fuel cell systems in commercial applications. The hydrogen-electric market is growing rapidly driven by the strong megatrends of electrification and the transition to emission-free energy.

It is positive that we now see that the market is becoming increasingly agnostic when it comes to the production of hydrogen. Before the demand can be completely covered with green hydrogen, other sources such as methanol and ammonia are much better alternatives for the supply of hydrogen than continued use of fossil fuels.

Listing on Nasdaq Stockholm

In December 2023, we took the step from Nasdaq First North Growth Market Stockholm to Nasdaq Stockholm’s main list which enhances our visibility to investors and other stakeholders. From application date to first day of trading took about three months, which is just about as fast as this process could be done. This proves our maturity as a company and our ability to reach objectives fast. Our ambition is for more people to acknowledge the importance of PowerCell's leading hydrogen electric solutions and how they contribute to zero emissions in key commercial applications.

Profitability and cash flow in focus

While we continue our growth journey in an industry which contributes to the transitioning to zero emissions, we see that also our industry is affected by the general economy, although interest in our solutions is growing. We also notice that it is taking longer for customers to come to a decision with larger projects. This means that in our industry revenue and earnings can fluctuate between quarters. As we enter 2024, we therefore accelerate our focus on profitability and cash flow. I would like to conclude by thanking all employees for your fantastic efforts during the year. You have all shown motivation, professionalism and perseverance during 2023. We are now entering a new exciting year and I look forward to continuing our joint work for an emission-free world, concludes CEO Richard Berkling.

Link to the report: https://powercell.se/en/reports-and-presentations

Webcasted presentation: An online presentation will take place today at 02:00 pm CET. The presentation will be followed by a question-and-answer session. The presentation is held in English. If you wish to participate online, please use the link https://ir.financialhearings.com/powercell-group-q4-2023. You can ask questions in writing at the online presentation. If you wish to participate in the telephone conference, you can register using the link https://conference.financialhearings.com/teleconference/?id=5002029. Following registration, you will receive telephone numbers and a conference ID to log in to the conference. You can ask questions verbally at the telephone conference.

Next report: Interim report Q1 2024 Thursday 25 April

*As from 1 January 2023, PowerCell presents certain indirect costs related to the production as Costs of goods and services sold. Previously, these costs were presented as Selling and administrative expenses. The change impacts the gross margin negatively with 0.2 percentage points in the fourth quarter and 2.8 percentage points in the period January – December 2023. The operating income is not affected. The change is made prospectively as from 1 January 2023 which means that the comparative periods have not been adjusted. Please refer to the full report page 15, note 2 “Accounting policy” for further details.

The English version is an in house-translation. In case of any discrepancy, the Swedish text will prevail.