REVENUES EXCEEDED MSEK 500 FOR THE FIRST TIME (+11%), OPERATING PROFIT INCREASED BY 34% AND RECURRING REVENUES REACHED RECORD-HIGH MSEK 306 FOR THE FULL YEAR 2023 

• MSEK 124 Net revenue, +3%
• MSEK 79 Recurring revenue, +11%
• 7.8% EBIT margin (2.9%)

October – December 2023 in summary

• Net revenue MSEK 123.8 (120.1)
• Recurring revenue MSEK 78.5 (70.8)
• Order intake MSEK 89.6 (109.2)
• EBITDA MSEK 17.8 (-9.6)
• EBITDA margin 14.4% (-8.0%)
• Operating income (EBIT) MSEK 9.6 (-17.7)
• Operating margin 7.8% (-14.8%)
• Operating income (EBIT), adjusted MSEK 9.6 (3.5)
• Operating margin, adjusted 7.8% (2.9%)
• Earnings per share SEK 0.36 (-1.26)
• Cash flow from current operations MSEK 14.4 (9.6)

January – December 2023 in summary

• Net revenue MSEK 503.5 (455.2)
• Recurring revenue MSEK 306.3 (276.8)
• Order intake MSEK 395.4 (407.6)
• EBITDA MSEK 97.5 (59.8)
• EBITDA margin 19.4% (13.1%)
• Operating income (EBIT) MSEK 64.1 (28.6)
• Operating margin 12.7% (6.3%)
• Operating income (EBIT), adjusted MSEK 66.7 (49.8)
• Operating margin, adjusted 13.2% (10.9%)
• Earnings per share SEK 2.92 (0.89)
• Cash flow from current operations MSEK 62.6 (29.7)
• The Board of directors proposes a dividend of 0,60 SEK per share (0) for 2023

Significant events during the fourth quarter

• UNC Health signs framework agreement with QleanAir Scandinavia Inc in the US to provide consulting services for pharmacies.
• QleanAir delivered 6.96 billion cubic meters of cleaned air in the end of the third quarter.
• The election committee has been appointed for the 2024 AGM.
• An extraordinary general meeting has been held in QleanAir AB, where a partly new board was elected.
• QleanAir in Japan signs large order for high-performance air cleaners with NEC Networks & System Integration Corporation
• Huntsville Memorial Hospital in Huntsville, Texas purchases a cleanroom solution from QleanAir funded by Walker County Hospital District.

Significant events after the end of the period

• QleanAir delivered 7,21 billion m3 of cleaned air in the end of the fourth quarter.

A WORD FROM THE CEO
We achieve growth of 11% for the full year of 2023. We strengthen operating income by more than 30% for the full year. We have brought QleanAir back to profitable growth. In Q4, we brake both the half-billion mark for revenue and the 300 million mark for recurring revenue, a fantastic job by the entire organization. Growth for the fourth quarter reached 3%. Recurring revenue increased by 11%. We improve the operating income by approximately 170% in the quarter. EMEA and APAC exceeded our targets for 2023. Americas deviates in terms of profitability.

Operating margin was 7.8% in the quarter and 13.2% for 2023. This is a clear improvement compared to 2022, and our focus is on improving it further. The priority for 2024 is to achieve growth combined with improved profitability. A customer-centric approach and sales efficiency have really taken EMEA to a higher level with momentum going into 2024. APAC is focused on capitalizing on our market position in Cabin Solutions and continuing to grow Air Cleaners. The Americas, with a project-based cleanroom business, will be a game changer when we get our profitability right.

POSITIVE TURNAROUND IN EUROPE
EMEA represented 53% of net revenue and 47% of order intake in the fourth quarter. Activities leads to more activities and in the fourth quarter we see the result of our program for profitable growth. In Europe we have a strong market position within the Cabin Solutions category with a broad customer base. Air Cleaners had a strong development in Europe, with a growth of 42%, and more markets are contributing to a higher extent.

FOCUS ON EXPANSION IN JAPAN
APAC represented 41% of net revenue and 50% of the order intake in the quarter. Focus is on expansion and Japan is our sales center of excellence. During the fourth quarter Japan delivered stable sales within Cabin Solutions, despite the number of contracts due for renewal were lower than normal. The investments made in Air Cleaners is now delivering revenues with a growth of 73% and growing in importance.

FOCUS ON PROFITABILITY IN THE US
Americas represented 6% of net revenue and 4% of order intake in the fourth quarter. During the third and the fourth quarter we have re-worked our set-up in the US, due to unsatisfactory profitability. We have approached this from three perspectives: Volume – invested in senior sales resources and now have coverage from east to west with four salespeople, Product Cost – a combination of value engineering and renegotiation with suppliers, which in the long term will reduce our product cost by around 16-18% and Price – where we have updated our contracts to better hedge against cost inflation and disruptions in project delivery.

GROWTH AND PROFITABILITY
Growth and profitability are our goals and we will achieve this through our three priorities; Customer Focus, Sales Efficiency and Cost Control. We continue to work with these focus areas. Further, we intensify our work with operational efficiency where there is still cost savings to be made. We have gradually during the fourth quarter shifted focus towards the strategic product side.

BUSINESS MODEL
The QleanAir business model consists of a combination of rental and sales, including service. Revenue amounted to MSEK 123.8 (120.1) for the quarter, an increase of 3%. Our recurring revenue increased to MSEK 78.5 (70.8), a growth of 11%. On an annual basis, our recurring revenue amounts to MSEK 306.3 (276.8), representing an increase of 11%.

As a company, 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.

FUTURE OUTLOOK
In Europe, we continue to see customer restraint due to the geopolitical situation and higher interest rates. The geopolitical situation has been exacerbated by events in the Middle East. Despite this, we are seeing growth in EMEA. And we have a totally different tempo in the organization going in to 2024.

We expect growth in EMEA in 2024 despite regional uncertainties. We have a strong position in Cabin Solutions, combined with growth in our markets for Air Cleaners.

In APAC, we have positive expectations for 2024 with a clear strategy to broaden sales to small and medium-sized companies within Cabin Solutions and continue to invest heavily in industrial air cleaning with Air Cleaners.

In the Americas, we have initiated a number of measures that we expect will yield results in 2024.

I wish to thank all our dedicated employees, customers and partners for a wonderful collaboration.

Solna, February 9, 2024
Sebastian Lindström, CEO QleanAir AB

INVITATION TO THE PRESENTATION OT THE FOURTH QUARTER REPORT AND YEAR-END RESULT 2023

QleanAir invites you to a webcast/teleconference on February 9, 2024 at 10:00 am CET. The company's CEO, Sebastian
Lindström and CFO, Henrik Resmark, will present the company's quarterly report in English.

Link to watch the presentation online: https://ir.financialhearings.com/qleanair-q4-report-2023

Telephone number to dial-in and follow the presentation and ask questions: https://conference.financialhearings.com/teleconference/?id=50046667