Important key figures:
• 329% increase in total revenue Q3, 2021 compared to Q3, 2020
• 332% increase in gross profit in Q3, 2021 compared to Q3, 2020
• Slightly increased gross profit margin of 55.9% in Q3, 2021 compared to 55.5% in Q3, 2020
• Cash-based net operating cost savings of TSEK 1,213 (36%) in Q3, 2021 compared to Q3, 2020
• Solvency ratio of 84.4% at 30 September 2021 compared to 84.0% at 31 December 2020

During and after the period, Realfiction has experienced both positive and negative development in its business, including:

Project ECHO: In Q3 2021, the work on the ECHO OLED backplane continued with two world leading research organizations, Germany-based Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP (Fraunhofer FEP) and Interuniversity Microelectronics Centre (imec), Belgium. Realfiction is also progressing with the next phase of the patent application process, which is to pursue country-specific patents based on its PCT applications.

The company recruited two Electro-Optical Engineering experts in Taiwan with a combined 21 years of display experience from large electronics companies like Foxconn, Innolux and others, and they will be working on the ECHO LCD backplane with offices on the premises of Realfiction’s large shareholder Amtran (a large OEM LCD display manufacturer).

While the main vision for ECHO remains focused on large TVs and displays to enable truly immersive and social holographic experiences, the company is also pursuing some requests from the automotive industry to potentially deliver a smaller ECHO display in a favorable timeframe. This could potentially spark excitement for ECHO ahead of a broader, consumer-focused launch.

Recently Realfiction was awarded a 5 MDKK (6.8 MSEK) non-dilutive grant from Innovation Fund Denmark, enabling parallel development of the hardware and software side of ECHO. This is expected to speed up the process of creating the full ECHO hardware and software ecosystem, while also making Realfiction more attractive in commercial dialogues with large display manufacturers, which will be intensified in the coming months.
 

Magic-as-a-Service for Retail: Realfiction had a meeting with its German partner EDEKA in September, and while still being positive to the concept, they are currently refraining from pursuing an expansion due to shifted internal priorities. The company will not invest further in expanding this market model going forward as its primary focus is on succeeding with ECHO, but new opportunities will be evaluated when they arise, and existing agreements will be serviced.
 

Magic-as-a-Service for Exhibitions, and Experience (Hardware): The positive summer trend in these segments continued in Q3 2021 with deliveries to North America, Europe, the Middle East and Asia. These included solutions to a few events in September in North America and Europe and several Dreamoc XL4 and Diamond displays to an Asian and some European end-customers and partners. The company’s sales pipeline is getting closer to the pre COVID-19 level, and there is still room for improvement as several parts of the world are still heavily impacted by COVID-19.
 

CEO Clas Dyrholm comments: “Q3 2021 was an excellent quarter for Realfiction considering the key recruitments in Taiwan and ECHO development progress together with the world leading research organizations Fraunhofer FEP and imec. On top of this, our Sales Activities continued to recover towards pre-COVID sales levels, and we were recently awarded a 5 MDKK grant from Innovation Fund Denmark. Looking forward, I do however believe that 2022 will be even more exciting as we look to complete our ECHO integration license package in Q1 2022.”
 

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

Q3 2021 (1 July – 30 September 2021)
• Revenue: TSEK 6,709 (Q3, 2020: TSEK 2,038)
• Gross profit: TSEK 3,753 (Q3, 2020: TSEK 1,132)
• Gross profit margin: 55.9% (Q3, 2020:  55.5%)
• Result after financial items: TSEK 1,512 (Q3, 2020: TSEK -2,293)
• Earnings per share: SEK 0.11 (Q3, 2020: –0.12)
• Cash flow from operating activities: TSEK -1,095 (Q3, 2020: TSEK -2,873)

Q1-Q3 2021 (1 January – 30 September 2021)
• Revenue: TSEK 10,101 (Q1-Q3, 2020: TSEK 7,431)
• Gross profit: TSEK 5,461 (Q1-Q3, 2020: TSEK 4,105)
• Gross profit margin: 54.1% (Q1-Q3, 2020: 55.2%)
• Result after financial items: TSEK -3,276 (Q1-Q3, 2020: TSEK -7,800)
• Earnings per share: SEK -0.06 (Q1-Q3, 2020: –0.42)
• Cash flow from operating activities: TSEK -2,465 (Q1-Q3, 2020: TSEK -2,793)