Ferroamp AB (publ)

Hej och välkomna till förhands kvartalrapport för Q1 2024. Det är jag, Kent Jonsson, vd, som håller i presentationen idag. Som vanligt så försöker jag göra utrymme på slutet för frågor. Feel free to contact them in the chat or via the email address publicatferroamp.com. As usual, I will briefly introduce Ferro Amp. Our vision is a world that is 100% driven by renewable energy. We believe that we can help property owners to take control. over both its production and energy consumption, and thus contribute to the green transition. We still have the same three trends that affect us, strong trends. One is the solar cell boom, one might say, and the electrification of transport, and the third is challenges in the electricity grid. Both production and mainly distribution. Our arm system helps to optimize production of solar energy, storage of excess solar energy in batteries, but also to be able to offer support services with the help of batteries. Det hjälper också till att styra elbilsladdningen och allt hålls ihop utav en intelligent inverter som är vår energihub och som är hjärtat och hjärnan i vårt system. Vi har då några bra patent. Ett av våra starkaste patent är PowerShare där man då between buildings behind the meter can share energy. So if you have a good solar roof, you can produce energy that can then be consumed and moved to other facilities. The alternative to sending overproduction out on the network is quite poorly paid and then you have to buy back the more expensive from the network into another facility. then you are both affected by transmission costs and taxes and various proposals. So to get a good and strong business case around solar electricity production, it is very important with its own level of consumption and this makes it possible to consume before the measurement, a much larger proportion of produced energy. And this is a function that is built into our energy hubs, so that what you need is actually only an energy hub in all houses that will participate in this energy division. Strong, good patent that we see a nice demand for out in Europe, but also in Sweden. Our customers, we have a wide range of customers. And that's because our platform is modular. Both in size, so you can start with a smaller one and then increase the effect. But also modular in the form of function. You can start with just the energy hub. which means that you get more of your electricity network connection or that you can secure down thanks to our patent on phase balancing. You also get a very high-end data that you can use to get control over your consumption and be able to see how your property uses the energy so you get a tool to optimize energy consumption in a facility. But you can also build on solar cell production, solar cells on the roof, for example, or batteries, as I talked about, but also chargers for electric cars. So it's modular, so you can build it out, both in size and function. So it's a very flexible system that suits many customers. The quarter one figures. A little bit about the market situation. We are primarily in three market segments. Solseller Villa, we see a continuous decline during this quarter compared to previous quarters. On the property side, we see that it starts to increase during quarter one. So it's a market where it happens more than at the villa. Support services is of great interest, both from villa owners and property owners. So it's a market that we're investing in, and I'll come back to our investments later. In the case of electric car charging, we see that the registration of electric cars and sales has gone down and is at a fairly low level now. The demand is low on ordinary AC chargers. We see, however, that there is an increased need for DC-DC chargers, where you see that you can charge the car faster and with lower energy losses. So that is something that increases, an interest that increases. And we also see a lot of inquiries about DC-DC via the grid. That is, the possibility that we have talked about to be able to move back energy from the car's battery back into the house and back to the network so that you can use the car's battery as a regular battery that you have in the cell. We are done with the technology and we are now mainly waiting for car manufacturers that they should decide to get started, but the market will come, but it does not exist today, but it will come in the future. Looking here at the solar sales market, there we have the dark green are pre-requisites that must be made to the energy companies and then the main part of them will be installed and will be connected. Here you can see that it was a very hot market in the first half of last year. I described it then as an unnatural high demand. there and then. We have seen that it has fallen and that it continues to go down even in Q1. However, you can also see here on the graph that both pre-registered and subscriptions will go up something in March. So we believe that we are on the way to a more normalized market. Vi kommer inte komma tillbaka till den onaturligt höga efterfrågan som var första halvåret förra året. Men vi tror på en normalisering under året. Business highlights då. Vi har utvecklat stödtjänster på balansmarknaden under perioden. We have also talked about the end of the after-period. We have also talked about We Go To Grid during the period, that we are technically far ahead of that. We have also talked about our agreement with Ära, which we will return to. And after the end of the period, we have also been out and communicated about a targeted new mission. Stödtjänsten är den marknaden som det är mycket efterfrågan på, både från villakunder och från fastighetsägare. Vi fick godkänt då i januari och det första budet lades i mars och det har fungerat bra. Vi är nu ett av endast tre godkända och aktiva virtual power plants, alltså där man då aggregerar ihop several smaller batteries, so that it becomes a virtually large battery and that you can then participate in the frequency support market. So there is a great interest from many actors, but there are three today who are active and we are one of the three. Vi har också en unik lösning där batteriet då kan användas till annat, inte bara stödtjänster. Så att vårt batteri är fortfarande inkopplat i systemet, kan lagra överbliven solenergi och peak shaving och göra en massa andra nyttor parallellt som batteriet kan delta i frekvensrättsmarknaden. Så det är en unik opportunities that we or our customers have with our technical solution. We have also talked here at the support service that we will move on and now we have gone out and said that we will now submit an application in short in SE4, the most southern electricity area in Sweden and we are opening up at the same time for more energy companies. The first one that we started and have offered is about electricity area 3 and Varberg Energi. A little more about the agreement with Ära. I think it's a fantastically good, fantastically important agreement for us. And a little short about Ära. They develop energy solutions to meet the need for gas for heating. And they focus on Europe. They have communicated a lot themselves. It exists on three markets today, sells and has its own installation capacity. These three markets are Germany, Italy and Great Britain. Vi har tecknat ett utvecklingsavtal samt ett tillverkningsavtal med Ära. Det innebär att vi anpassar våra produkter till Ära's koncept. Sedan kommer vi även att tillverka produkter till Ära. ERA has come a long way in creating a whole for the customer and being able to look at the entire energy needs of the property. And there we will contribute with technology that ERA can control via our open APIs and control solar production, battery storage, support services, electric charging and so on. Together with Ära's own heating points. So we see this as a very good partner for us, a strong partner and a good opportunity for us to come out into Europe. Vehicle to Grid. We have been developing in the lab here in Sundbyberg for a longer period of time. And we now have a small production of pre-series models of a DC-DC charger that works excellently. We have tested with most car brands and managed to charge 20 kilowatts and at the same time take out 20 kilowatts out of the car battery. So it works very well. We mainly see that this will be used as support services. This is a large battery, often in size 8-10 times larger than a villa battery, which is there at the garage entrance or in the parking lot today. that could be used for support services for the network, but also backup in case of a storm. As I said, it is a powerful battery that already exists in these cars. It is also a very cost-effective solution we have, where we reuse the technology and functionality that exists in our energy hubs. And this is one of the strengths of our parallel technology, that we see that we have already solved the difficult things with vehicle-to-grid. So that about half of the complexity and half of the cost is already taken in the energy hub. So adding a preamp vehicle-to-grid charger will and was significantly cheaper than buying a new one. We see a price of perhaps half of making a complete standalone vehicle to grid charger. So this is a great opportunity for us, we see. Here, as I said, we are finished and now we are waiting for the car companies to standardize their protocols. We think that this could be in place by the end of the year and that there can be some kind of launch and volume of this by next year. Financially, here we have a low sales in Q1. I have flagged for that in connection with the previous report when we were a bit into Q1 already. It is a weak market that we have seen in Q1 and a weak sales from our side. There I would like to remind you that we have a little delay effect with the fact that the installers have storage and they buy from the distributors who have storage and we sell in our turn to distributors. So there is a little delay effect for us there. Compared to last year's Q1, it is down 65%, so it is historically a bad quarter. However, we see a certain normalization of the market under Q2. So it's starting to look a little brighter, but it's hard to say when you're back on a normal level. We will not get back to a solar cell market that corresponds to the first half of last year. But it will be a good market anyway. And electric car sales will also start, but it is also unclear when it will start. But we still see some lightening there. The brutto margin, I have said since I came in a year ago that this is not good enough. Now, if you compare with a year ago, it looks good, but it is a poor comparison. So it's just to state that this is not where it should be. And I have previously said that a company like us, of our type, should have a gross margin of between 40 and 50 percent. Of course, we are not satisfied with this. In this, there are no spot purchase effects left. There will be no historical spot purchase costs from above either. Why has it gone down compared to the previous quarter? The component of the gross margin, i.e. the fixed costs, has become unnaturally large when we have had such a low turnover. It is the low turnover that makes the fixed costs, such as storage maintenance and so on, get a larger impact. That is the explanation for us going down towards the previous quarter, but as I said, regardless, we are not satisfied with this gross margin. I will come back to it a little later, how I see the gross margin, profitability forward. EBITDA, yes, minus 17.8 in the quarter. Det kan man väl säga att det är bättre än föregående års Q1. 10 miljoner bättre, ganska mycket bättre. Då får man komma ihåg att vi omsatte tre gånger så mycket i Q1. Varför det här ser... The cost savings we talked about last year, which is equivalent to 50 million SEK if you look at the whole year 2024 compared to the whole year 2023, are starting to have an effect now. We follow our plan there and are perhaps even a little ahead. Det är de åtgärderna som ger effekt nu. Det är glädjande att man kan se det i siffrorna också. Kassaflödet negativt, till stor del kopplat till resultatet. Det är dock markant bättre jämfört med de två tidigare kvartalen. Och då ska man igen komma ihåg att vi har ju en låg omsättning här. Men trots den låga omsättningen så förbättrar vi kassaflödet, och det är glädjande. Och här igen, det är kostnadsbesparingarna som börjar ge effekt här också. Tillsammans med att vi nu har tagit ner inflödet av finished products to a minimum. If you compare the key figures over time, you see the same here as well, that it is a weak turnover. Men ändå lite glädjande då att vi har en förbättring jämfört med tidigare på resultatraden och även på kassaflödesraden. Så att där går det åt rätt håll. Jag vill igen understryka att det här är trots den låga omsättningen så att det finns Det finns en... Det finns nåt positivt i det, skulle jag säga. Om man ställer det ljuset och tar den svaga omsättningen. If you look a little bit forward, it's profitability. I can point to the fourth box that I've had up since I started. The cost reduction is at about 50. We see that happening now, so it's a check on that. And what I have also talked about earlier in previous quarterly reports is that, yes, we can make a part of some percentage units on the gross margin, but if we are to get to where we are supposed to be, then we have to get out the new, completely industrialized products on the market. It is... The primary thing with these is that we have looked over the entire production phase of these and found a much more cost-effective way to produce these. A slightly changed design internally and production improvements, which means that we see a significantly lower production cost and that is the big difference with these products. And that will have a big impact on profitability, gross margin and profitability. So that's the last thing that I hope to put in here now in the future.

And then I think we should be on a profitability that we can be satisfied with. Growth then.

It is about working and developing our existing partners. That is the backbone of our business. We are also working on finding new commercial partners. Ära is a perfect partner for us. Very strong on the market and sales. A strong installation chain and installation capacity. And they are on the market where we are not today. Att få möjligheten att vara en teknikleverantör till Ära såg jag som ett stort erkännande och en stor möjlighet för oss. Det kommer att bidra till vår europeiska lansering. Where we are today, as you know, is in the Netherlands earlier. So it is the Nordic and the Netherlands we are in today. Then it is also, as I have talked about all the time, that we must develop as a company. Both our functions and our capacity. to be able to deal with growth and to go out to new countries. I said in the previous report that now we are ready to take the step out. I have great respect for going into new countries. And you have to be stable to be able to handle it. And now I feel that we are stable enough. We can of course be better than everyone else, but we are on a good enough level now to be able to take this step. Then we continue to work with dual source production, where we feel that we should be prepared to cope with such an upheaval. We weren't really ready for it at the end of 2022, when the solar boom started. Now we will be better equipped for when the market normalizes in Sweden, while we enter several European markets. So we have learned and we will be prepared. And dual source production is an important step. Innovation, of course, everything should result in the goal of getting a profitable growth, but the driving force for us and what we will never lose is that we are known for being innovative and we have built our business on innovation and we will continue to do so. We continue to develop our modularity so that we then A fairly easily manageable product portfolio can meet many different customer needs. This is a key. It is a much more complex business to have a large product portfolio where each product is super niched towards a small segment. That we can then build on the effect in steps from the customer's needs, that we can build on the functionality that we have talked about. It is an important thing for us and we refine this and build on our Lego idea that you can build blocks above and next to to get a better solution for the customer that the customer can grow with. Vi jobbar också vidare med våra öppna APIer. Vi har tagit fram snabbare APIer nu för stödtjänster till exempel. Där vi då vill knyta till oss viktiga, bra partners. Där ärra är ett bra exempel. Och vi vill fortsätta att expandera vårt ekosystem. Där igen, jag kan ta ärra som ett exempel, där vi nu då får en koppling till värmepumpar. where I see that our vehicle-to-grid is such a component that expands the ecosystem and makes our part of the ecosystem more valuable to partners and customers. Then we continue to build on the same stream of technology that we basically have, which means that vehicle-to-grid can be manufactured at half the cost, everything else is the same. And not to be forgotten, we have a unique opportunity where we can upgrade softwares over the air so that we can automatically shoot out newly updated softwares to facilities in operation. An example is that a facility that we took into operation with customers seven years ago, They are participating in the support service market today, in 2024. It is a strength that we can develop. Our solution can be part of the development and the time. In 2017, when we set up this facility, no one knew what a support service was. We kept the grid on the map. Nu kör den här anläggningen stödtjänster och kommer att kunna köra Vikert Grid när det lanseras. Just den här innovativa touchen är viktig för oss. Det håller vi fokus på.

Jag slutar där och öppnar upp för frågor. Jag vill bara påminna igen om att ni kan ställa era frågor direkt i chatten. We've got one question here, and it is... Grosses, like Rexall, have lowered their net price on Energy Hub 14, with about minus 30%. Is it you or them who have lowered the price?

I don't want to comment on that. It's the grosses who set the price, our partners, and how we... Jag vill inte kommentera på det, utan det är ett pris som sätts fritt i marknaden och som kommer att variera över tid.

Varelaget är 134 miljoner. Jämfört med 127 miljoner 31 december. Kan du vidareutveckla att varalaget inte minskar?

Yes, we have our installers and our distributors who, just like us and all our colleagues, saw that there would be a boom even in the fall last year. So everyone ordered and bought quite large batches. Then that boom came out and it has gone down, as we have talked about. We have known that we would not sell much of our core products. We have focused on selling batteries to our existing systems and to systems that are stored with our partners. So the sales from our perspective has been batteries, because that is not something that we keep in stock, but when we get an order from our customers, the grocers, then we take it home and ship it on. So our revenues have been mostly almost exclusive batteries and battery components under Q1. Which leads to the fact that our core products, which were in the storage at the beginning of the Q1, are largely still there, and a small inflow of more. But the main part of the turnover is batteries.

You recently mentioned costs, the 150 millions of kronor som skulle bli ren intäkt 2024, när kommer de?

Ja, vi pratade lite mer utifrån hur det såg ut med likviditeten och hur vi skulle How would the cash register be enough? That was a question I got. And then it points out that we have a warehouse with finished products, which now is about 130 million. And with a sales margin on that, it is a bit north of 150 million. And this is goods that we already have that have been manufactured by our partners that we have already paid for and that are on our warehouses ready to be sold. So when they are sold to our distributors, it will generate cash flow directly into our cash registers. So I think, if I understand it correctly, it was about the 150 million that we talked about. There we see that there will be a large battery sales during Q2. But we also see that during Q2, there are signals that show that it will start to move on the stores. We see that the sales will start with our core products during Q2. But exactly when that timing is, it depends a lot on when the market has normalized. And it's hard for me, I think it's hard for most companies to be able to point out which quarter you can say that the market is normalized again. But at least it goes in the right direction. Det är ett kurantlager med väldigt bra produkter så jag ser att när marknaden kommer igång så kommer vi att sälja dem.

Senast nämnde du kundfodringar som spillde över från Q4 2023 till Q1 2024. Har det dröjt?

I don't actually remember that question.

If I interpreted correctly, it might be that in Q4 we had quite high customer demand, since we sold a lot in December, a lot so much out then, and yes, it paid off.

Yes, yes, okay.

If I interpreted the question correctly. Yes, then I answered. I hope so.

We have actually received a question via e-mail, and I think we have actually dealt with it. When do you think the market will recover?

As I said, it is difficult to say. It will recover. This is a market where everything speaks for that this will continue to grow. Konjunkturen lite svag nu, elpriset lite lågt fortfarande, även om det är på väg upp. Men vi vet alla att efterfrågan kommer att komma, men exakt när. Det beror på centralbanker, elpriser, om det blåser mycket, vattenmagasinen är tomma, fulla. kärnkraftverk som stannar eller inte stannar. Det är helt enkelt jättesvårt att säga.

Men efter råden kommer det att komma.

Senast nämnde du att ni hade många patentintrång. Hur värderar ni era patent när ni inte stämmer intrången?

We have managed to defend ourselves so far. I see that we have strong patents and we have no really malicious business people out there. I think we have a running margin and we have managed to defend ourselves. I see it more as a quote on the fact that we have good patents, but also that they are strong patents that make it possible for us to compete with Intron. Yes, attractive and strong patents. So far, it feels manageable and mostly positive.

How do you avoid threats?

Do you run processes?

No, no processes, but so far it's just That we enlighten, that there is a patent and that there is an interest, and that's enough.

So no rush processes.

How quickly do you expect to be able to connect more users who are activated for support services? for example, in larger systems and new power units, as well as in customers?

Yes, I think we're starting to get the flow up now in SE3, in the queue of customers we have. And there we are filling up portfolios and expanding with more portfolios. At the same time as we go into SE4 with portfolios. So I feel that We are starting to get rid of the queue faster and faster now, so it will probably be removed in the near future, we hope. At the same time, it is a simpler process for us when we are already starting to get started with SC4. Jag räknar med att vi lämnar in ansökan inom några veckor och att det inte ska ta allt för lång tid hos SVK att godkänna det här. Så jag hoppas för att det ska kunna vara igång i SE4 innan sommaren och börja ta emot kunder och lägga in dem i portföljen.

Ja.

Det verkar som att det var alla frågor. Jag kan också passa på att nämna att inspelningen av den här webcasten kommer finnas tillgänglig på vår hemsida inom cirka någon timme.

Bra. Då får jag tacka för idag och önskar en fortsatt trevlig dag. Tack.

Hej.