“Facility solutions continues to grow, sales increased by 102 percent in the quarter compared to the previous year, and I am proud to announce that the product category now accounts for more than 20 percent of our total sales, which is in line with our strategy. Total order intake increased by 28 percent compared to the previous year. We continue to increase the number of installed units by 17 percent, and the volume of cleaned air by 28 percent compared to the previous year. The installed units drive our recurring revenues, which amounted to 57 percent of total revenues for the quarter. During the quarter, we experienced partial continued shutdowns in our markets, but sales developed positively compared to the previous quarter. I am proud that we continue to deliver strong and stable profitability as well as an increase in our cash flow (of 3.7%), despite an exceptionally strong comparison quarter in 2020,” CEO Christina Lindstedt remarks
FACILITY SOLUTIONS INCREASED REVENUE BY 102%. TOTAL ORDER INTAKE INCREASED BY 28%
April – June 2021 in summary
• Net revenues totaled SEK 112.3m (137.0), currency-adjusted net revenues totaled SEK 123.4m (135.1).
• Installed units 10,746 (9,217)
• Recurring revenue SEK 64.0m (64.8)
• Order intake1 SEK 91.6m (71.6)
• EBITDA2 SEK 28.0m (32.4)
• EBITDA margin 24.9% (23.6%)
• Operating profit (EBIT) SEK 20.8m (25.3)
• Operating margin 18.5% (18.5%)
• Net profit for the period SEK 14.9m (17.4)
• Earnings per share SEK 1.00 (1.17)
• Operating cash flow SEK 36.2m (34.9)
Summary January – June 2021
• Net revenues SEK 222.8m (281.7), currency-adjusted net revenues amounted to SEK 244.9m (271.3)
• Installed units 10,746 (9,217)
• Recurring revenues SEK 128.9m (129.2)
• Order intake1 SEK 193.5m (217.1)
• EBITDA2 SEK 54.8m (70.7)
• EBITDA margin 24.6% (25.1%)
• Operating profit (EBIT) SEK 40.7m (56.7)
• Operating margin 18.3% (20.1%)
• Profit for the period SEK 35.7m (35.2)
• Earnings per share SEK 2.40 (2.37)
• Operating cash flow SEK 60.5m (30.1)
Significant events in the second quarter
• QleanAir wins its first significant Facility solution order in the healthcare segment in France.
• QleanAir wins its first major order for the new FS 30 HEPA from the office segment in Germany.
• QleanAir renews contract for six cleanrooms in the US.
• QleanAir held its Annual General Meeting on May 12, Towe Ressman and Johan Ryrberg were elected as new board members and a decision was made about a new incentive program. A total dividend of SEK 19.3m (0) was decided.
Significant events after the end of the period
• QleanAir Holding AB has changed its company name to QleanAir AB.
• QleanAir delivered cleaned indoor air equivalent to 10.97 Avicii arenas per hour by the end of the second quarter.
Continued strong growth in the Facility solutions product category – up 102 percent
Overall, 2020 was a record year in terms of launching new products in the Facility solutions category. The growth came both from the broader product offering, the new customer segments and greater geographical reach, with the introduction of Facility solutions in Japan in the fourth quarter of 2020. During the second quarter in 2021, demand for Facility solutions has been especially high in Europe, and total sales increased by 102 percent to SEK 23.5m, corresponding to just over 20 percent of total sales in the second quarter. This is to be compared to the eight percent of total sales in the second quarter of last year. The new products launched in 2020, FS70 HEPA and FS30 HEPA, have paved the way for creating healthy working environments in new contexts, such as schools, offices, and healthcare. We see that our investment into innovation and product launches will continue to generate growth in Facility solutions, both during 2021 and in future.
Sales were exceptionally strong during the second quarter of last year. This was primarily due to a very successful development of Cabin solutions in Japan, ahead of the new Health Promotion Act, which came into force on 1 April 2020. We continue to believe in good growth potential for our Japanese operations, both in Cabin solutions and Facility solutions, although in the short term we see a lower level of order intake and sales than in the corresponding period in 2020. In both Europe and the Americas, sales were higher in the second quarter of 2021 than in the corresponding period in 2020.
Order intake up 28 percent
High activity in the sales organization increased the order intake by 28 percent, to SEK 91.6m for the quarter. The general order intake increased significantly in Europe, mainly driven by increased demand and new products within Facility solutions, and especially in Germany, where we increased our presence in the office segment and in France where we increased our presence in the healthcare segment.
Within Room solutions, i.e., our flexible and scalable cleanrooms for the medical technology and pharmaceutical sector, healthcare, and pharmacies, we received a renewed contract for six cleanrooms in the US, an order valued at approximately USD 0.7m. We see this as a strong confirmation of customer satisfaction and the competitiveness of our solutions.
Increased volume of cleaned air and growth in the installed base of units – up 17 percent, more than 10,000 units
The corona pandemic has led to an increased awareness of the importance of clean indoor air, which has had a positive effect on demand for our solutions, both in the shorter and longer term. We see that this increased awareness will persist, and that it will continue to have a positive impact on demand, both in the short and long term, and with respect to the cleaning of other harmful particles such as mold, pollen, dust, and gases. In the second quarter, we saw a gradual opening of societies in most of our markets, which has had a positive impact on our business and the opportunity to conduct our sales work. During the second quarter, it was mainly in Japan that society remained shut down.
Our installed base increased by 17 percent, and we exceeded 10,000 installed units for the first time. The installed base now stands at 10,746 units, and the amount of clean air we supply increased by 28 percent. A larger volume of cleaned air means that our installed base for future revenue generation is growing. Recurring revenues represented 57 percent (47) of total sales in the second quarter. In absolute terms, recurring revenues amounted to SEK 64.0m (64.8). A high proportion of recurring revenues gives us a continued overview of revenues going into the third quarter of 2021. An increase in the number of installed units in our own balance sheet means an increase in recurring revenue. It also means an increased share of revenues in the form of ongoing monthly rent and a reduced share of revenue from the sale of contracts to finance companies and direct sales to customers, i.e. payment upfront. This explains part of the decline in sales compared to the same period last year when the proportion of direct sales to end customers was significantly higher.
High margins, positive development in working capital and strong cash flow
The underlying business, our installed base, continues to deliver very good margins. In terms of profitability, the EBITDA margin reached 24.9% (23.6) for the quarter. We delivered a positive development in working capital and cash flow, while continuing to invest in innovation and in our brand, while reducing our debt-equity ratio. The operating margin (EBIT), which is one of our financial key ratios, remained unchanged at 18.5 percent.
Our organization has a high level of activity, and we expect the increased awareness of the importance of safe and healthy indoor air will continue to grow the demand for air cleaning. Our growth strategy remains unchanged, with a focus on developing and growing our new product categories Facility solutions and Room solutions, while maintaining our strong position within Cabin solutions. We continue to see good growth opportunities in all markets, with our cleanroom solutions in Americas, Facility solutions and Room solutions in EMEA and Cabin solutions and Facility solutions in APAC. We see an opportunity to increase penetration levels within existing customer segments and develop more recent customer segments further. We will continue to expand our business geographically, and we will continue to invest in innovation and in raising awareness of our brand. I would like to take this opportunity to thank the entire team at QleanAir, and our customers and partners, for a good second quarter of 2021.
Christina Lindstedt, CEO, QleanAir
Solna August 12, 2021
QleanAir invites to teleconference/audiocast on August 12th, 2021, at 10.00. The company’s CEO, Christina Lindstedt, and CFO, Henrik Resmark, present the interim report for the second quarter of 2021 in English. The presentation will start at 10 am and can be joined via the web or by telephone. It will be available on demand on the same weblink shortly after the event.
Join us via the web: https://tv.streamfabriken.com/qleanair-holding-q2-2021
Or call in via telephone:
• SE +46 8 51 99 93 83
• UK +44 33 33 00 92 61
• US +1 63 19 13 14 22