Ferroamp AB (publ)

If you look at our system, you have an energy hub in the middle. It controls solar energy, battery storage and electric car charging. It will be able to control a heat pump and also vehicle 2X, which I will come back to later. That you can use your car, even as a regular battery, that you can charge from the car. Apart from just being able to charge, as is the case today. That is our system. And now it has become so complex that you need help as a consumer to be able to control this in a smart way. And there comes AI in to be able to do a qualified and optimized control. And now it can be a bit complex, but I will try to keep it simple. On the right side is what happens inside the measure, that is, what happens in my house. On the left side, a little more green, is the market that exists outside the measure, where you can participate with your resources to make money. The one that has been most known is FCRD. You have earned less in the last year compared to 2023. But above all, you should remember that a number of other services will come now. And that market will be relevant in 2025 and even in the future. Because you stack different services on top of each other. Men lite mer, många veckor små ger ändå en bra och lukrativ marknad att vara med på. Så att den marknaden bör man vara med på som husägare även framöver. Men det jag ska fokusera på mest nu är den till höger, alltså innanför mätaren. Everyone knows that you have a fixed fee that depends on the insurance. We have often had a phase balancing that makes it possible to have a significantly lower insurance and a lower fixed fee compared to if you do not have an energy hub installed. De här fasta nätavgiften har ju höjts ganska kraftigt under förra året och idag så är det faktiskt så att en stor del av husägarna har en större fast avgift än den rörliga avgiften. Så att det som kostar mest för en husägare är fasta avgifterna i många fall. Det som har tillkommit nu är effekttariffer. You had a large network operator, E.ON, which introduced this on the 1st of January this year. And this hits pretty hard on homeowners. Then it worked like this. The electricity company usually looks at the three hours during the month that you have consumed the most energy. That is, when you have bought the most electricity from the electricity company. The three hours where you have bought the most electricity. And then you take an average of the worst hours. And then it becomes what I would call a fixed fee that affects all the hours you have bought over the whole month. So then it becomes a bit complicated, because then it can be that you have seen that there is a low spot price in an app, and then you have to charge the electric car, you charge your battery in the cellar, you start the heat pump, you start the washing machine, and you maybe take a toilet or something like that. Then you get an extremely high consumption during those hours when it is a low spot price. The problem is that you get extremely high effect rates So at the end of the day, there is a very big risk that you will lose money if you only look at the spot price. I can stop there in that complexity. You can weigh in several factors in this. Marknaden för en vanlig användare blir extremt komplex när jag måste hålla koll på vad mycket kostar elen nu den här timmen och samtidigt hålla koll på att man inte förbrukar för mycket så att man får en sån här dålig timme som driver upp priset på alla timmarna under hela månaden. Att göra den här avvägningen blir ganska svår egentligen. And especially if you add to the left side, if you want to be with and make money on the open market outside the measure, then it can be that you lock up your own battery for the external market and then you may not have the opportunity to cut an effect top. So then you can lose money on your your lack of cutting effect tops, while you can earn money on the open market. And then you have to be careful that the money I earned on the VPP or on the FCRD or something like that, it must be bigger than what I lost on the effect tariff inside. And when you see this complexity, then you understand that it will be difficult for most of them to make these deviations, actually in real time, every hour. And from there, I see a great need for AI in the future. And we have a solution now that we have finalized and will launch in April, where we take into account all these All these things I have talked about, about tariffs and consumption, but also look at and make predictions on how you will consume energy in the future, how the sport price looks, how the weather looks, etc. So you weigh in a lot of factors and make the right choice with the help of the system. And what is a little unique with us is that we not only control one battery in the source, but we also control the solar cells and your electric car charging. So it becomes more powerful if you can control not only the battery in the source, but also the solar cells and the electric car charging. We believe that we have a very good solution here that will show that it gives a great added value to the customers. This is what a lot of people are talking about on the market now, that it's getting complex. And then you have to understand what it is that AI solves, which factors it takes into account, as well as which resources it manages to control. And what you want is that you take into account a lot of different factors and that you can control a lot of different resources. Then you get the best effect on this. And there we think we have succeeded well with that consideration. Moving on to business highlights. What I'm going to highlight here is the collaboration with Ära in early 2024. A very exciting, very good collaboration that we believe in a lot. And we continue to work with it and develop it. We have also talked a lot about savings programs during the year. The market has been slow. We saw the solar cell installations had gone down with... They are less than halved, that market. So we have had to adapt there via savings programs and deductions. Vi har också lanserat nya finansiella mål i slutet på förra året. Sedan har vi i början på det här året hunnit komma ut med tre lite större nyheter. Det är den här AI-tjänsten som jag pratade om tidigare och som jag kommer tillbaka till lite senare. Vi har också gått ut med en lansering av en förserie. to Vehicle2x. This means that you can use your car battery both to support your house, you can support another car and you can also support the network via WPP services. And the last news we released was a cooperation agreement with Svea Solar, which we released on Monday this week.

Financial highlights.

If you start with sales, you can see that Q4 was historically low compared to previous quarter. It is minus 73% compared to previous year's quarter. Keep this in mind when you see this decline. It is less than a third compared to Q4 2023. We see that this is due to the fact that it is still a watchful market. I can also say that a large part of the sales in Q4 has been batteries. What is a bit exciting is that the installations of our systems are still at a stable and okay level during Q4. So we don't see any wear and tear there. This is simply due to the layer displacement that I talked about earlier. The layers of the installers that were added in 2023 are now empty. The layers of the distributors that were also added in 2023 are now normalizing. And when they are also normalized, it will be a normal flow from us in the form of sales and product mix. The gross margin is still not satisfactory. I have previously said that a company like ours should have a gross margin of at least 40%. We hold on to the fact that this is where we should end up at the end of the day. We have two primary things that will take us to a higher gross margin, and that is the product mix. We now mainly sell batteries that have a lower product gross margin. And we also have new cost-optimized products that are about to be finished and will be taken into production. And they also have a significantly stronger margin. You have to keep in mind that Q4 is only a third of the turnover compared to Q4 last year. But despite the much lower turnover, we are improving EBITDA. So it is still negative, it is still not good in any way. But it is still an improvement with 11 million on a significantly lower turnover. So this is a very clear sign that the cost savings we have made, that is, they give effect completely according to plan. And as I said earlier, it will be fully approved in Q2 this year. And then the cost will go down to 20 million. So we have made adjustments to a tougher market and I think that we have a cost level now that is de facto significantly lower and it is on a good level, I would say. Vi har fortfarande en väldigt bra fungerande verksamhet. Vi har inte varit tvungna att göra några dumdristiga nedskärningar, utan det har varit kalkylerade nedskärningar som vi har tagit dem gradvis och genomtänkt. Jag tycker att vi ligger på en bra nivå ur alla aspekter. And the full effect will be in Q2. The cash flow. The negative cash flow is mainly linked to the result and the change in revenue capital. The main part of the storage we have consists of finished products, and these are finished, paid products. This storage has an expected resale value of about 190 million. And when we now get started, when the law has been normalized, not only with installers, but also with distributors now, then this distribution to the distributors will have a great effect on the cash flow. And you can also see on the law that it is starting to go down slowly now, and we see that this will continue this trend during this year, the coming year, 2025. Focus then for 2025. We had a strategy that we communicated at the end of last year together with the new financial goals. There were three parts, there were new sales channels, it was to increase the support of sales in existing ones and it was to create recurring revenues. And there we have actually done a lot. And you start with new sales channels. I can present an example with Svea Solar. It is one of Sweden's leading solar cells and battery installers. They have a capacity for large, very large sales volumes. And we believe that we can present a good Swedish alternative in Svea Solar's portfolio. Then... Coming back to the service that we launched. This is a service that has been requested in our existing sales channels and will strengthen our existing packages. This will be a sales boost, we think, in existing channels. It is also our first real promotion service. So it will have a monthly cost and that means that we have a recurring income flow. I described it quite thoroughly earlier, but if you have any more questions, you can come back when we open up for questions. But here you see a picture on the left of how it will look in the app. Fokus kring utvecklingen för 2025 är förstås samarbete med Ära. Det jobbar vi på väldigt tätt med Ära och vi har en bra progress i i de utvecklingsprojekten. Vi har lanserat nu en förserie med Vehicle2X och här kommer vi att fortsätta att utveckla den. Vi ser att den måste ner i pris och vi måste övertyga biltillverkarna om att de öppnar upp their cars to be able to also charge the car batteries there. We hope and believe that it will come during 2025, but yes, we work a lot on that front. We have talked earlier about next generation cost-optimized products and we are finishing them at the end and we have them ready for production during this year. Then, of course, there is a lot of time that goes into our softwares, to develop optimization and support services. And here I want to point out again that these are optimization and support services that do not need any extra hardware. So there is no extra gateway, or any puck, or any accessory that is needed. Man behöver inte skicka ut någon installatör heller. Den här mjukvaruuppdateringen som det rör sig om kan vi göra på alla våra system over the air. Det finns en massa fördelar med vår stödoptimeringstjänster. Det kommer förstås fortsatt att lägga ned tid på vår mjukvaruutveckling. Tänkte stanna där, öppna för frågor.

Ja, då kan jag påminna er igen om att ni kan ställa era frågor direkt här i chatten eller via mailboxen public.fairramp.se. Och vi har fått in några frågor på mejlen. Nu ser jag också att vi fick en fråga här i chatten direkt. I'll start with that in the chat. When do you reckon that the storage situation has normalized?

Yes, as I said earlier, it depends of course on the market out there. But we see that it varies between grocers. Vi har någon grossist som jag skulle säga är i stort sett normaliserad nu. Och sen har vi ett antal som har en del och några har lite mer kvar. Så att det varierar, men gradvis under året. Med start nu då, den första redan nu i Q1 då. Som är normaliserad.

How many Ferro Amp systems have been installed during 2024?

I haven't commented on that and we haven't thought of starting to communicate that either, so I'll take care of that.

How much of the year's sales in 2024 comes from batteries?

Yes, I would say the absolute main part, without going out on any numbers, but it is a significant part. And that makes our... It simply depends on the fact that the laws in Grossist do not normalize it. And since we then... If we do not store batteries, but we buy and deliver directly to the distributor, then it is they who go, because no one has batteries stored. Then it is a sale, while our own products are stored at Krosister, still.

Hur stor del av besparingarna kommer slå igenom under Q1, givet att det är fullt genomslag i Q2?

Ja, jag tittar på William här, men jag skulle säga att huvuddelen slår igenom i Q1. Jag kan väl säga då, om vi tar en kostnadspost då, så har vi, vi hade 15 konsulter under Q4. Vi har 5 I think in the beginning of Q1, and in Q2 we have zero. And other costs follow a similar scheme. Det hänger ihop med att vi har försökt att spara snabbt och mycket, men ändå spara klokt. Vi vill gärna att man slutför projektet på ett ordnat sätt. Det där var genomfört nu och det är därför vi känner att vår omkostnadsnivå när vi är färdiga i Q2 är på en bra nivå ur alla aspekter. So we have avoided panic measures there. But then it gradually becomes. But the main part is through to Q1.

Do you have any plans for international expansion?

We have it then via ERA, I would say. ERA has launched in Germany, Italy and England. De har gått ut på kapitalmarknadsdagar och pratat om sin omsättning. De har ju redan nu en imponerande omsättning. Där ser vi ju att när vi är färdiga med våra produkter tillsammans, then there will be sales in those markets. So it is then ERA that is both our distributor and our installer and our sales channel in Germany, Italy and England. And this is a model that we like because this does not mean that we are forced to make an establishment. på de marknaderna annat än att vi har produkter utvecklade tillsammans med Ära som är godkända och fungerar väl på de marknaderna så att vi kan då skala upp den volymen internationellt utan att det innebär att vi behöver att dra på oss en massa internationaliseringskostnader det kommer att vara om några så kommer det att vara blygsamma extra costs. So the overall plan is around internationalization is with help or together with honor, I would say. Then we have cooperation in the Netherlands, which we see positive in, and we hope to be able to come up with some news about the Netherlands. Vi pratar även med intressanta partner i våra nordiska grannländer. Vi jobbar på och hoppas kunna presentera någonting här kommande månader, kvartal. Men huvudspåret och där vi har gått ut med tidigare är Ära, som jag... Som jag tror mycket på. Det är ett bra bolag, bra affärsidé och det känns som en väldigt attraktiv och bra samarbetspartner för oss.

Vi har en fråga som inte följer in på det här. Samarbetet med Aeroa, när kan det leverera försäljning på Aeroa?

Jag skulle väl säga att kring årsskiftet borde vi kunna se någonting, men jag skulle inte Jag skulle inte våga säga någonting innan dess.

Räknar ni med att kassan kommer att räcka tills ni når positivt kassaflöde?

Jag skulle säga att allt beror på vår försäljning.

Alltså om nu då marknaden...

fortsätter som den är, den blir lite bättre, så påverkar det mycket. Vi tittar i våra befintliga kanaler med de nya paketerna nu med AI, så går de lite bättre. Svea, om vi kommer igång med det här nu under första halvåret och får lite volymer där, så then it looks optimistic. Why I say a little in these different aspects is that it is not necessary at all now with the cost base we have. We have adapted very much from a lower sales and we do not need anything big at all that will happen, but at the same time we see that we would need a little more sales from our own warehouse to feel completely comfortable. But at the same time, there are 190 million there in sales value, so there is potentially a lot of capital bound to the warehouse that can be solved via a small sales increase.

Another question related to this. How important is the agreement with Svea to reach a positive cash flow and närbörjarleveranser?

Svea is a very large, powerful distributor and distribution channel that has succeeded very well. And I think that a small part of the distribution there will have a pretty big impact on us. So of course it would affect a lot if we started Svea. But we also have other existing channels and partners that we believe in a lot. And that's where we're going, and it's a much shorter starting line there. And yes, when we start with Svea, I can't answer that, but it depends a lot on training and so on, to get started in a good way.

Will Svea sell Swedish suppliers also internationally where they grow?

I don't know. It's a decision for Svea actually. I hope that we can prove now together with Svea to create a sales success here in Sweden to start with. And then I think that There is more and more talk about the safety aspect of connecting controllable equipment to our e-network. And there is of course a benefit that we are Swedish and that we save all our data in Sweden and the EU. So I think that if these discussions that are going on now, especially in Lithuania and Germany, if they continues and you see that this is a real threat, then of course, but then we are in good hands and then it would be natural for Svea to use our solution, which is then to try to know that it works, that you can launch it in other countries. So that Yes, I see it as a possibility, but first we need to create success here in Sweden.

What is the demand for Vehicle to Grid?

We have launched a pre-series production. I would say that everything depends on when the car manufacturers say that they are opening up. Because it is first when they open up and put themselves behind the possibility of being able to charge a car to their house or to another car or to participate in the support service market and support the network. It is first when the car manufacturers say that. that the potential really opens up for the market, and that's when it becomes a volume demand. And that's when you can start producing these trucks in larger volumes, and that's when the price goes down on it. So there is some kind of momentum 22 there, where in the current situation the car manufacturers have not approved this and gone out with that they support this opportunity to refuel the car batteries. And therefore there is no market, volume market, and therefore they cost too much today. So it has to be solved, and those who can solve this are car manufacturers. But now we have at least gone out and for them, we have a a lot of ambassadors out there and we have had pressure on us for a long time now to just release it anyway. So we have given up that pressure and started this pre-series and had an surprisingly good demand given the high price level. But we believe that when it comes out well, then maybe the car manufacturers also see that Now it starts, there is an interest, it works. This may help them feel safe and say okay.

Is there any plan for a cheap, simple DC charger that could work for all existing electric chargers?

Not today. I see that the big world is double-oriented. It almost feels like it's not relevant to do a single-oriented. A single-oriented can almost as well run an AC charger. But just when you get a DC double-oriented, Will you be able to use a battery that is, compared to those batteries that you put in the basement today, and buy and sell in the basement, then this battery is 8-10 times bigger. And you have already paid for it, since you have bought a car. So to open up that potential with customers, when you already have a car paid and ready, or you lease it, but it is at least paid in some way. And then you have a gigantic battery. To be able to use it to store solar energy, to be able to- to be able to supply the house, to be able to participate in the support market. Therein lies the great potential. So we have no plans today. Would there be any demand? Absolutely. It's quite easy for us, or very easy for us to do such a thing, but-

Vi satsar på dubbelriktad. Ja, det var alla frågor i chatten.

Jag påminner igen om att ställa er frågor där. På mailen har vi fått ett par frågor, men jag tycker att vi har täckt in de flesta. Det handlar lite om vehicle to grid. Den har vi täckt in. Samarbete med Svea Solar har vi täckt in bra, tycker jag. En fråga här om vad kommer AI att kosta och när börjar ni ta betalt?

Ja, som sagt har vi lanserat den i, släpper den till kunder ska jag säga, i april. Och vi har inte satt priset än utan där kommer vi se till att sätta ett pris som är konkurrenskraftigt och som då är relevant in relation to how much savings we can show. There we have the opportunity to be able to show black and white how much you would have earned if you had had the AI service connected earlier. So it will be relatively easy for us to prove the value and we would put a price as som är relevant i förhållande till besparingen. Men vi har inte satt den, utan vi får återkomma till det under våren.

Det verkar som att vi har täckt in alla frågor. Ni är välkomna att skicka in frågor framöver annars.

Bra. Då säger jag tack för den här. Frågestunden, tack för alla frågor. Hoppas ni fick den information ni eftersökte. Tack för idag.