Important key information and figures:
• Successful completion of a first version of an ECHO holographic 3D display in January 2023
• Wow-impact presentations of the first ECHO display to invite-only industry participants in Q1-2023
• 94% increase in total revenue Q4-2022 compared to Q4-2021
• 121% increase in gross profit in Q4-2022 compared to Q4-2021
• 14% increase (7.7 points) in gross profit margin in Q4-2022 compared to Q4-2021
• Solvency ratio of 79.9% at 31 December 2022 compared to 87.2% at 31 December 2021

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

Project ECHO: We held presentations of the first ECHO display in Taiwan with potential commercial partners and other parties of interest from the end of February 2023. As expected, these presentations went well, with multiple priceless “wow” moments from prominent invitees. Following the demonstrations, we are now in continued discussions under NDA with several potential collaboration partners active in the display and consumer electronics industries. Additionally, more demonstrations are planned in coming months. Looking ahead, we will continue to build on our strong momentum in our ECHO development and commercialisation, and our aim is to progress from current discussions with potential commercial partners to signing actual agreements.

Sales activities: With the return of in-person events after the pandemic, and the usual seasonal strength in Q4 when many industry events are held, our MaaS for Exhibition and Hardware sales segments showed strength and contributed with a positive cash flow for the period. It is great to see that we have been able to come back leaner and stronger in this part of our business, which is now financially supporting our continued ECHO development activities. Group net revenue amounts to TSEK 4,799 for Q4-2022, representing an increase of 94% from Q4-2021 of TSEK 2,474. Approximately 64% of the increase comes from our Magic-as-a-Service concept that also contributes to an increased gross profit margin.

CEO Clas Dyrholm comments: “In addition to the positive cash flow from our Exhibition and Hardware sales segments during Q4-2022, we also received a cash inflow of 3.9 MSEK related to 2021 R&D activities qualified for Denmark’s R&D tax credit program, and an Innobooster subsidy payment of 1.2 MSEK. This enabled us to become cash flow positive in Q4-2022, and our cash position was stronger at the end of Q4-2022 compared to the end of Q3-2022. Furthermore, we expect the next Innobooster subsidy payment of 1.2 MSEK in the near future. Realfiction thus has a strong financial position, and our currently planned activities are fully funded into 2024, even without considering any potential ECHO licensing or commercial ECHO development-related income during 2023. Looking ahead, we will continue to build on our strong momentum in our ECHO development and commercialisation, and our aim is to progress from current discussions with potential commercial partners to signing actual agreements.”

We highlight the following key figures from the Q4 Interim Report:

Q4-2022 (1 October – 31 December 2022)
• Revenue: TSEK 4,799 (Q4-2021: TSEK 2,474)
• Gross profit: TSEK 3,063 (Q4-2021: TSEK 1,387)
• Gross profit margin: 63.8% (Q4-2021: 56.1%)
• Result after financial items: TSEK -208 (Q4-2021: TSEK -1,278)
• Earnings per share: SEK -0.10 (Q4-2021: 0.00)
• Cash flow from operating activities: TSEK 7,053 (Q4-2021: TSEK 2,465)

Q1-Q4 2022 (1 January – 31 December 2022)
• Revenue: TSEK 14,209 (Q1-Q4 2021: TSEK 12,575)
• Gross profit: TSEK 9,180 (Q1-Q4 2021: TSEK 6,848)
• Gross profit margin: 64.6% (Q1-Q4 2021: 54.5%)
• Result after financial items: TSEK -2,066 (Q1-Q4 2021: TSEK -4,554)
• Earnings per share: SEK -0.07 (Q1-Q4 2021: –0.05)
• Cash flow from operating activities: TSEK 4,513 (Q1-Q3 2021: TSEK -1)