Important key information and figures:
• ECHO development progressing according to plan
• First ECHO display expected during the first half of 2023
• 63% decline in total revenue Q3-2022 compared to Q3-2021
• 53% decline in gross profit in Q3-2022 compared to Q3-2021
• 28% increase (15.9 points) in gross profit margin in Q3-2022 compared to Q3-2021
• Solvency ratio of 86.1% at 30 September 2022 compared to 87.2% at 31 December 2021

During the period Realfiction has experienced the following development in its business:

Project ECHO: We continue to patent protect the development while making progress in both the hardware and the software side of ECHO. Funding of the progress comes partly from the TSEK 1,753 received in Q1-Q3 2022 from Innovation Fund Denmark of an up to 5 MDKK Innobooster subsidy. The ECHO development continues to progress according to plan, with our highly talented and experienced team, now based in both Denmark and Taiwan, taking important steps forward towards the completion of the first ECHO display. This means that we are really starting to see the completion of this crucial milestone on the horizon. We continue to be on target of completing the first ECHO display during the first half of 2023.

Sales activities: As we expected, our Sales activities delivered lower sales numbers in Q3 compared to the previous quarter. This is due to normal seasonal behaviour in the market, where hardware purchases and event activities slow down during the summer. The decline in sales from Q3-2021 to Q3-2022 was due to Q3-2021 included a few large orders to an Asian and some European end-customers and partners. In Q3-2022, we delivered a very strong gross profit margin of 71.8% compared to 55.9% for the same period last year. The higher gross margin was mainly due to a different sales mix and higher USD exchange rate. Looking ahead, we expect our sales to increase in Q4 compared to Q3 as we enter the busy autumn and winter season, with many campaigns and events being planned by our end-customers and partners in all of our focus regions.

CEO Clas Dyrholm comments: “We are noticing a strong interest in the ECHO platform from leading players in the display and commercial/consumer electronics industries. In fact, we are being approached by a growing number of potential commercial partners/licensees from many parts of the world. These companies include display manufacturers as well as product providers in many industries, including large and global consumer segments, and discussions with some of them have been initiated. Based on the strong interest from potential commercial partners/licensees, we are now planning for presentations of our first ECHO display in the US, Europe and Asia. It is great to see such strong interest in ECHO from prominent companies, and I feel that we will have a strong position to enter into favourable agreements as long as we can deliver on our promises.”

We highlight the following key figures from the Q3 Interim Report:

Q3-2022 (1 July – 30 September 2022)
• Revenue: TSEK 2,481 (Q3-2021: TSEK 6,709)
• Gross profit: TSEK 1,781 (Q3-2021: TSEK 3,753)
• Gross profit margin: 71.8% (Q3-2021: 55.9%)
• Result after financial items: TSEK -1,191 (Q3-2021: TSEK 1,512)
• Earnings per share: SEK -0.01 (Q3-2021: 0.11)
• Cash flow from operating activities: TSEK -1,530 (Q3-2021: TSEK -1,095)

Q1-Q3 2022 (1 January – 30 September 2022)
• Revenue: TSEK 9,410 (Q1-Q3 2021: TSEK 10,101)
• Gross profit: TSEK 6,117 (Q1-Q3 2021: TSEK 5,461)
• Gross profit margin: 65.0% (Q1-Q3 2021: 54.1%)
• Result after financial items: TSEK -1,858 (Q1-Q3 2021: TSEK -3,276)
• Earnings per share: SEK 0.03 (Q1-Q3 2021: –0.06)
• Cash flow from operating activities: TSEK -2,540 (Q1-Q3 2021: TSEK -2,465)