25% GROWTH AND IMPROVED OPERATING MARGIN

April–June 2023 in summary
- Net revenue MSEK 134.9 (108.3), currency adjusted net revenue amounted to MSEK 128.7.
- Recurring revenue MSEK 77.5 (69.8)
- Order intake MSEK 105.0 (89.3)
- EBITDA 29.7 MSEK (18.9)
- EBITDA margin 22.0% (17.4%)
- Operating income (EBIT) MSEK 21.1 (11.3)
- Operating margin 15.6% (10.4%)
- Earnings per share SEK 1.18 (0.51)
- Cash flow from operating activities MSEK 18.9 (9.0)

January–June 2023 in summary
- Net revenue MSEK 255.9 (223.7), currency adjusted net revenue amounted to MSEK 247.0.
- Recurring revenue MSEK 152.0 (138.8)
- Order intake MSEK 219.1 (206.3)
- EBITDA MSEK 54.5 (44.0)
- EBITDA margin 21.3% (19.7%)
- Operating income (EBIT) MSEK 37.7 (28.8)
- Operating margin 14.7% (12.9%)
- Adjusted operating income MSEK 40.3 (28.8)
- Adjusted operating margin 15.7% (12.9%)
- Earnings per share SEK 1.86 (1.44)
- Cash flow from operating activities MSEK 29.9 (8.8)

Significant developments during the second quarter 
- QleanAir received information that Qevirp 41 Ltd. has reduced its ownership. The new major shareholder is Staffan Persson (Swedia Capital) with 12.5% of the votes and capital. After the sale, Qevirp 41 Ltd (Priveq) controls 10.9% of the shares and votes in the company before dilution.

Significant events after the end of the period
- QleanAir signs new $503,000 agreement with a large east coast IDN for an investigational drug cleanroom.
- QleanAir in the US signs three new cleanroom contracts in two days, totaling approximately $510,000.

A WORD FROM THE CEO
We prioritize to reach our financial targets. Q2 2023 continues to show that we are on the right track. Demand for premium indoor air solutions increased. All three geographies and all three product categories grew during the quarter. Japan continues to exhibit a high level of growth in APAC and grew by 18%. In EMEA revenue increased by 14%. In the Americas, USA, revenue increased strongly by 188% from a low level. Cabin Solutions increased by 9%, Air Cleaners by 40% and Cleanrooms by 218% during the quarter. We already see an effect of the focused work on sales follow-up and sales efficiency. We are growing organically and revenue increased by 25%. Operating income amounted to MSEK 21.1, an improvement from MSEK 11.3. The operating margin showed a positive increase to 15.6% (10.4%).

GROWTH AND PROFITABILITY
Growth and profitability is our goal and we will achieve this through our three priorities; Customer Focus, Sales Efficiency and Cost Control. We started this work at the beginning of 2023 and we see that things are gradually improving, which had a positive impact on the second quarter.
 
Customer focus
So far, we have conducted some 30 workshops with customers and our own sales and service organization. More than 100 people have contributed valuable experience across all regions, APAC, EMEA and the Americas, to lay the groundwork for an updated strategic plan. During these workshops, we reviewed our customer offering in order to identify future opportunities on the product side and in our commercial approach. The meetings were extremely rewarding and appreciated and will lead to a greater involvement of both customers and employees in our strategic plan.
 
Sales efficiency
During the second quarter, we have continued to refine and systematize our follow-up on sales work and sales, starting the journey of simplifying and streamlining the sales process. The aim is to get more out of the existing salesforce.
 
Cost control
We will continue to invest in our markets in order to build long-term growth. However, these investments will be made more carefully and regions will make the decision to carry out marketing and sales activities, with clear requirements for return on investment. Through this shift to the regions, we will be more accurate in identifying the activities that actually contribute to increased sales. This work has already begun on each individual market.
 
BUSINESS MODEL
The foundation of our business, the installed base of products and solutions, delivered a stable revenue of MSEK 135 (108) and a gross margin of 68% (72%). The installed base increased by 7%. Our recurring revenue increased by 11%. Our rolling 12-month revenue now amounts to MSEK 487.
 
We know where we are going. We have great opportunities to create value. Our business model is circular, i.e. our products have a long life with our customers through our strong service model, and at the end of the contract we recondition the product to give it a new life for the next customer.
 
We clean indoor air by reducing harmful particles. The working environment for people is improved. Furthermore, the quality of customers' products and the efficiency of their processes is improved. We work systematically on growth combined with profitability.
 
OUTLOOK
In Europe, we continue to see customer restraint due to the geopolitical situation and higher interest rates. Right now, many of our customers are mainly interested in energy efficiency. Our air cleaning solutions are energy efficient and contribute positively to the customer's overall energy consumption.
 
In Japan, we have a positive outlook for 2023 with a clear strategy to broaden sales to small and medium-sized companies and continue to invest heavily in industrial air cleaning with air cleaners.
 
In the US, we see an increasingly strong sales pipeline being converted into order intakes and sales. Focus is on continuing this dedicated sales effort in order to contribute to the Group's financial development to a greater extent than before.
 
Finally, I would like to thank all our dedicated employees, our customers and partners for a great collaboration.
 
Solna on August 10, 2023
 
Sebastian Lindström, CEO QleanAir AB