Insplorion AB (publ)

Welcome to this episode of Investor Studios, where we have the privilege to talk about and with Insporium. The company released its Q1 report today and we will soon be able to take part in a presentation of this and then a Q&A. Those of you who are listening live can ask questions directly in the chat. With us from Insporium we have as usual the company's CEO Johan Rask. Welcome Johan.

Thank you so much Adam.

Och idag har vi också förmånen att ha med oss affärsutvecklare Martina Wendersjö. Välkommen Martina.

Tack så mycket. Kul att vara med.

Och med det sagt så lämnar jag över till er båda.

Tack så mycket Adam. Johan Raskett, jag har sagt vd och med mig har vi Martina Wendersjö på affärsutveckling. Och om någon har missat vad vi jobbar med så jobbar vi med vätgasensorer för en snabbare övergång till en hållbar framtid. Det går som en röd tråd genom allting vi gör. Lite kort om kvartalet, en summering. Omsättningen landade på ungefär 600 000 kronor och vi hade en något lägre burn rate i det här kvartalet jämfört med motsvarande kvartal 2024. Vi har fortsatt sett ett starkt intresse från marknaden för vår NPS P2 sensor som Martina också kommer prata lite grann om senare också. Among other things, we were assigned to the Top 10 Innovators of the Year by a company called Darcy Partners. We signed exclusive distribution agreements with Concilium Safety Group for the marine market. And very recently here, we received an order from a large American space company for 180,000 kronor for our hydrogen detectors. During the quarter, we have of course worked with launch preparations, which Martina also came up with. And of course also certification work. Just to recap very quickly what it is about and what we offer about the world and the hydrogen market in particular. Our sensors are very specific to hydrogen and you want to know that it is just hydrogen that you measure. You also want a fast response and we are very fast. We also work, unlike most others, in environments where oxygen levels have been lowered, which is a growing method to ensure the safety of critical hydrogen installations. But of course, you want to measure hydrogen anyway. If you look at what we have achieved over the past year, let's say, we have sold quite a few products to quite a few different companies, despite the fact that we have not actually launched now. And as you can see, there are a number of different areas and sectors. And the last thing we could add here now was also the space industry, which is very exciting. What everyone here has in common is that they want to measure hydrogen in different applications. And they have also come to the conclusion that what is out there does not really work and therefore they have come to us. Another thing that they also have in common is that it is, in most cases, large international companies, which we of course think is very nice to do business with. If you look at the way forward here, and I mentioned the certification work, so I'm going to talk a little bit about supply chain, because it's a very important part of getting a product certified. And what I'm about to present here now is the product in three parts. At the top left is the outer shell, In it, you can see a component where the optical components and the circuit board are located. And at the bottom, you can also see the sensor elements that are in the other part. Mostly, we work with Swedish or European manufacturing partners. However, we do final assembly and calibration at Explorion. And with the current setup, we have a capacity of about 1,000 units per year. This could be taken in black numbers, but when we scale past that, it is more about parallelization or the possibility of outsourcing certain pieces of assembly, for example. If you look at the sensor element itself, we do this on Wafers, on a local company not that far from here. We take these wafers and do some treatments afterwards, both ourselves and with a global partner. Then we take them here and put them in the sensor product. Here we have a large capacity of over 10,000 per year, so this part of the production is very scalable. If you look even further ahead, what is our focus? It is to continue selling sensors. For pilot tests, system design, validation and more. And that's what our industry and many other industries want to try and test in order to then be able to place volume orders. And we see that in our industry and you see that in other industries as well. One very important parameter for volume business is Atex, which means that they are allowed to sit in explosive environments. And that's what you need to be able to reach volume businesses. We will now launch in Q2 and will be ready for delivery during Q3. I mentioned supply chain scale up, partly for certification, of course, but also of course to be able to meet the demand that comes. Then we are a very partnership-driven company. We have dialogues with strategic partners for, of course, the commercial round-up of MPS P2, And possible specific areas where you can work together for specific applications. But we also see an interest in being able to step in on the owner's side to secure their position in this area. And that was actually what I was going to say in short about the quarter and the way forward. So that's why I was just going to hand it over to you Martina and talk a little about the launch.

Under the end of 2024, we started planning the launch of our first product, we call it NPS P2. Even if the marketing has not started yet, the pre-work is largely done and we are ready to start now under Q2. But before I tell you more about the plan and the different activities, I just want to put the launch in the right context. It has been an incredibly exciting time at InSplorion, where we have gone from prototype to prototype in a very short time. And now, only after two years, we have a product that is ready for ATEX certification. And over the years, we have had an investigative approach to define different customer needs and markets in depth. But now it is time to partly change this way of working and instead talk to the market about what it is that we actually offer. Explorion's position on the market has become clear. We offer a fast and specific hydrogen sensor for low-carbon environments. This need is primarily present in the forefront of the hydrogen market, where new applications are being developed. It is clear that today's sensors on the market are not enough. At the same time, we also see a great demand for fast and specific hydrogen detection in other already established market segments. And they have simply so far been able to get used to lower performance or complex and expensive solutions. Our message to the market is scaled down to the three pillars that we have identified as the most important under the prototype phase. Hydrogen detection with response time of under five seconds, specific for hydrogen, so it does not give a signal for other flammable gases, and it works in gas environments where the oxygen level is below 1-5%. This means removing oxygen from the hydrogen installation, as Johan said, it is a common safety barrier, but in new safety-critical hydrogen applications, there is a need to be able to measure in the low-oxygen environment. And this is something that no other sensor can do in a timely and fast way in the current situation. But we are also working on bringing out a version of this Inspiron MPS P2, which can also be used in higher side panels, as well as in normal air. The strategy for the launch of NPS P2 and the corresponding marketing is to prove the customer's benefit and find the right partnership to create an effective distribution. And this is what we are going to do by bringing out the product directly to end-users, which can be the basis for case studies and verification. And we have actually already developed a well-developed network with interested customers that we have already started to work with. And this is in the form of a kind of pre-launch. And we have seen a very large interest. So it will be incredibly exciting now to see what happens when we start with our planned marketing activities. That is, push out this message to a wider audience. And the major marketing activities will take place during our first exhibition at World Hydrogen Summit, which is in Rotterdam this year, on May 20th. And it is a strategic choice mostly to make, because all the hydrogen market actors are gathered there under the same roof. But before that, we are working on the pre-work, where we have already done a target group analysis, channel strategy, which is based on packaging, production of marketing materials. And after the official sale start, så har vi ytterligare planerade aktiviteter och även en till utställning bokad till hösten som är Hydrogen Tech Expo i Hamburg. Så det var jättekort om lanseringsplanerna.

Stort tack Martina och Johan för en matnyttig och spännande presentation. Mycket tjuv som händer, förstår jag. And to go into some questions, so yesterday we got to see a positive PM, as you also mentioned, Johan earlier here, about your first sale within the space industry. Can you give a little more background on this business and how you see the potential for your sensors in the space industry?

Yes, very important, of course, and exciting. Space industry is at the forefront of a lot and it is Många produkter som vi använder idag tas som självklara. Bland annat fick jag lära mig de här små sensorelementen i telefonkamerorna, har sin bakgrund där också. Det tycker vi är väldigt spännande och där finns också en potential för en bra volym. Det man kan säga i övrigt, det har gått relativt snabbt i dialogen.

Ni har ju en ganska lång rad projekt som ni är inne på här också, både projekt och affärer, att prata om. Finns det något intressant som ni kan dela med er av de andra aktuella och pågående pilotprojekten och affärerna som ni tidigare har kommunicerat?

Ja, de pågår. Det är viktigt att komma ihåg, som jag nämnde tidigare, att för oss är det en prioritet att ha så många sådana här som möjligt. på borden, för det är instegsaffärer till större volymer. Och det kan också vara vissa av utforskande karaktär där vi tittar på vad som skulle kunna vara intressanta vidareutvecklingsmöjligheter för vissa väldigt specifika miljöer, till exempel. Så där får vi kontinuerligt också feedback kring vad man önskar. Och fler sådana här vill vi ha, det kanske är det mest intressanta.

Martin, you mentioned that the ARTEX certification is close by. There is a lot of work behind this. Can you tell us a little bit about the development of the product, production, processes and the like that you have carried out to get closer to this certification?

There are many different parameters, but one of the first and important parts is that you set the spec that you should have, as Martin had just told about here, to this, and also it is an external organ that should look through these things and also make certain tests against different standards. And as I mentioned here, it is super important to be able to get such a sample that you actually have control of your supply chain and all those bits, because it must be defined there as well. And there must be a quality system around these pieces as well. So there are quite a lot of different pieces in this that we have worked with and will conclude with this.

Have you noticed a difference in your discussions with potential customers now that you can discuss an APEX certified sensor compared to before?

Absolutely, I think what many appreciate is that there is a concrete timetable. And then maybe for many it doesn't matter if it's week 25 or week 27, it may not be there, but there is a concrete timetable. At the end customer level, I think it's very positive. You like to buy there anyway, even in uncertified form, because you just want to test and evaluate and things like that. Den stora vattendelen är egentligen när man vill prata med distributörer och partners. Det de vill se är att de kan göra volymsaffärer. De vet precis som vi att då behöver man ha ATEX. Det blir en väsentlig skillnad i hettan i diskussionerna.

Vilka kundsegment eller applikationsområden ser ni bäst potential i de närmaste åren?

This is a detector, so we're talking about security applications in the first place, and that's also where we see a very, very large interest. We also see that there is a great potential on the process side, where you continuously measure different processes. But the security side is a little top of mind for many out there. And as you have seen here, in many different sectors, So you have this need, but what they have in common is that they have a security interest and they need to measure hydrogen specifically and quickly. And in this case with low-lying environments, we also find it very exciting because we hear more and more from different actors. And what you should remember about this type of installation is that they must also be insured in the end, for example. And if you have a good security approach and solution, it will be easier to get through their insurance pieces and conditions in the future. So we see that there is a very, very good potential.

And one of the markets you're talking about, which we've had a question about here, is the maritime market. How long do you reckon it will take for Consilium to get a sensor approved for maritime use?

I'm not going to speak for them, but the reason why we chose Consilium, apart from being the leading company in the marine sector, is that they have an eye on what is required for this type of type approval. It's a bit special in that industry as well, because that type of type approval applies to the whole world. when you do those pieces. There are a few different ways to take there and there is a consortium of experts to navigate in the best possible way in it. It may be that in some cases it is enough that our product is ATEX certified because when you connect to the system, they can kind of recognize everything in it. So there are clear paths forward there and we have done a lot of tests also about vibration and things like that that have fallen out well.

And after this big milestone around Atex, what do you see as the other big upcoming milestones for Återstolen this spring?

Big business. Big business, a lot of speed under the gauges and a strong demand. Jag ser gärna att vi får problem att möta efterfrågan produktionsmässigt. Men vi ser fram emot den och tittar man längre bortom det så finns det som Martina var inne på, och det är inte så långt bortom det heller för andelen, möjligheter till andra, nästa generationers, vi nämnde luft till exempel, vilket kommer bli den första och inte allt för långt bort. Sen finns det andra bitar som man nämnde på processidan också. Det kan finnas specifika miljöer, det kan finnas möjlighet att göra, för nu säljer vi en hel produkt, inklusive hölje och allting sånt. Det finns klara möjligheter att göra det här mer som en komponent som skulle kunna sitta i andra tillverkares höljen. Man kanske vill kombinera olika sensorer i ett hölje, till exempel. Det ser vi också som en intressant väg längre fram. Men fokus här och nu, det är Atex och sen Större Affärer så att vi bygger ett bolag.

Och kanske apropå Större Affärer så är det ju som ni nämnde, snart dags för den stora vätgaskonferensen World Hydro Summit i Rotterdam, där ni kommer att delta. Vad ser ni fram emot att få för utkomster av en sån mässa?

Det kan du få prata lite om Martina om du vill.

Så gärna. We have been there several previous years, and the big difference now is that we are participating as exhibitors, so it will be incredibly interesting to see which companies find us. Otherwise it is we who go around and talk to the different participants, but now we will be open to everyone, so that is probably the biggest difference.

And you also mentioned in the report that we have moved on to step 2 in an accelerator that can generate an estimated capital surplus. Have you been able to give some insight into what that process looks like?

Yes, we actually started this process already this fall. We see that there is a very interesting opportunity here. This is within the EU and they want to So, channelize investment in strategically important areas for the EU. And this is a very, very important area for the EU, because we could really accelerate this process. So we went through a first phase here just after Christmas and submitted a full application in the middle of March, I think it was. Vi har använt extern hjälp för de som är van vid den här typen av ansökningar och som vet vad som efterfrågas. Vi tycker att vi har en bra ansökan, vi har ett bra case som ligger i mitt våran för strategiskt intresset inom EU.

And I can add a little bit of the timeline forward there. So now the application is under the review phase and we will receive a message sometime at the end of May. We move on to the final step, which is a pitch for a jury in Brussels. So that's the last step you're going to go through, whether you're willing or not.

And you can add that what is on the table here is 2.5 million euros, and it is soft money that comes quite involuntarily. After that, there is the opportunity for equity investments, also where EEC matches 50-50 with external investors. In our case, I think we have pegged up for 7-8 million euros from EEC as their share in that case. Kan ropa ner om man vill, men man måste inte.

Jättespännande. Och med de orden så tycker jag att vi tackar Insplorion, Johan och Martina för en spännande presentation och bra svar på frågorna här.

Stort tack själv Adam. Tack så mycket.

Ha det gött.