I-Tech AB (publ) (ticker: ITECH) publish the interim report for the first quarter 2024

I-Tech's CEO, Philip Chaabane and I-Tech's CFO & Director Operations, Magnus Henell will present the report live on 7 May, at 10:30.
Follow the broadcast: here

Read the full report: here

Summary of the period
” Solid growth with record-high turnover and profit ”

Net sales for the first quarter amounted to SEK 38,270 (30,757) thousand, which corresponds to a sales increase of 24 (112) %. The operating profit amounted to SEK 9,119 (8,347) thousand and the profit margin (after tax) amounted to 21 (22)%.
Significant events January to March 2024
• Major marine coating company launches low biocidal premium antifouling product using Selektope®.
• The Nomination Committee of I-Tech AB proposes Philip Chaabane as new Chairman of the Board of Directors of the company.
• Philip Chaabane steps down as CEO of I-Tech AB with a view to taking office as the company’s Chairman of the Board.

Significant events after the end of the period
• No significant events occured after the period.

Financial summary

All amounts in kSEK 2024
Net sales 38,270 30,757 120,861 83,631
Operating result 9,119 8,347 23,389 12,024
EBITDA 11,180 10,288 31,371 20,045
Net result 8,186 6,660 20,203 10,617
Operating cash flow 14,562 11,161 35,143 20,125
Equity at end of period 144,424 122,695 136,238 116,035
Cash and cash equivalents at end of period 97,739 63,621 83,262 52,754

CEO Comments

The year is off to a strong start and the first quarter shows a solid revenue growth where turnover and profit amount to the highest ever in the company’s history. This report is also my last as CEO of I-Tech after just over 10 years at the helm.

After a weaker fourth quarter following otherwise strong comparative figures, it is with great pride that I note that sales for the quarter amounted to SEK 38.3 (30.8) million, which corresponds to a growth of 24% (112)%. At the same time, the operating profit amounted to SEK 9.1 (8.3) million with an operating cash flow of SEK 14.6 (11.2) million. Our already strong cash position therefore amounted to SEK 97.7 (63.6) million at the end of the quarter, which gives us confidence in our earlier decision to start a journey with direct returns.

Six different customers contributed to the turnover growth, of which the three largest were completely dominant with a distribution of 82%, 11% and 4% of total turnover. PPG’s launch of Nexeon 810 during the first quarter is already making a footprint in the turnover. In addition, Chugoku Marine Paints shows a strong growth of 30% compared to already high numbers in the previous year.

Although we achieved a record high operating profit before tax of SEK 11.2 (10.3) million during the quarter, the profit is burdened by high costs linked to, above all, the re- registration process in the EU, which is also expected to continue over the coming quarters. The EU-specific costs during the quarter amounted to SEK 1.3 million (almost 25% of Other external costs). Without the EU costs, the EBITDA margin amounted to 32% (33%), which also includes the full effect of moving to new premises with a competitive research laboratory.

It is extremely gratifying to demonstrate growth compared to a quarter, which in turn more than doubled compared to the previous year. Volatility between quarters may still occur, but in the long term we see a stable growth journey with long-term products on the market that gain more and more confidence. All of them respond to contributing to more efficient shipping with lower resistance through the water, lower risk of transporting foreign invasive species, and in some cases the value proposition is delivered with significantly lower concentrations of biocides thanks to Selektope’s unique properties.

Approaching the end of my time as CEO of I-Tech, I would like to express my deep gratitude to everyone who works and has worked at or with I-Tech. It has been an unprecedented development, and few are blessed to have been involved in taking an innovation all the way to a profitable growth business in an industry that has not had any new technology development for more than 20 years. It is the strength of everyone in the team that is behind the development, and together we have gone from an exciting innovation to commercial establishment with the majority of the dominant customers. Those that have not yet launched seem in most cases to be on track for future deployments.

It is with great intertest that I, as future chairman, look forward to take part of the continued growth journey in the Selektope business but also, through our strong position, to identify and seize new opportunities under the leadership of a new CEO. The recruitment process is proceeding according to plan and until a new candidate can be presented, the company will be in safe hands of the acting CEO, Magnus Henell (today CFO & Director Operations).

Philip Chaabane
CEO I-Tech