I-Tech AB (publ) Interim report Q1 2023

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Summary of the period
Sustained growth with increased profitability

• Net sales for the first quarter amounted to 30,757 (14,478) kSEK, which corresponds to a sales increase of 112% (0). Operating profit amounted to SEK 8,347 (333) kSEK.
• The currency-adjusted growth amounted to 92% (-10).

Januari to March 2023

• No significant events.

Significant events after the end of the period

• No significant events have been reported after the end of the period.

Financial summary

CEO Comments
Driven by a strong macro trend towards a more fuel efficient and clean shipping industry, the reported growth during the fourth quarter maintains its strength into this year´s first quarter.

Net sales amounted to 30.8 (14.5) MSEK and the net result amounted to 8.4 (0.3) MSEK. The operating profit reached, with strong margin, a new record level during any isolated quarter and the profit margin amounted to 27 (2) percent.

To once more report a turnover just above 30 MSEK is convincing, even when considering the relatively high currency effects. Topline is primarily driven by a strong organic growth which, during the quarter amounted to 92 (-10) percent.

Our largest customer, Chugoku Marine Paints, increased their organic growth by 102 percent and at the same time our second largest customer, also based in Asia, reported an organic growth of 167 percent. It symbolizes a clear signal that Asia, with its strong position in ship new-building and repair is and will remain the driving force in our growth journey. The approval process of new paint products in the region is clearly more rapid from a regulatory perspective, stimulating innovation.

During the quarter, an EBITDA margin of 33% is reported, representing a record level in the company’s history. It proves, alongside the fourth quarter performance last year, that the business model works and that costs do not increase with the same ratio as the revenue is growing. At the same time investments are made in new more appropriate premises that will be commissioned during the second quarter. In addition, the R&D organization has strengthened its capabilities during the past quarter with the purpose to continue to grow our business.

Besides the reported growth, Selektope® has a relatively small market share, hence, there is still a considerable growth opportunity at all paint makers. We can see a strong customer activity in the area of developing more paint products using Selektope. The sustainability-driven factors are clear and we see a higher interest to invest in keeping hulls clean. In some market segments, there are ambitions to lower emissions from paints into the marine environment. For Selektope, these trends equal potential opportunities.

Following periods of steady growth and increased profitability, I am humble towards the possibility that, above all, volumes towards the new-building market may be somewhat limited during the year, this as a consequence of COVID which has led to understaffing and component shortages at the shipyards.

In summary, with respect for unforeseen events, we look forward to an exciting year and years to come as the industry step by step start to shift gears to reach the targeted 40% reduction on emissions to air by 2030 and thereafter achieve even further reductions by 2050. A clean hull is one of the essential components to achieve these targets.

Philip Chaabane
CEO I-Tech