Insplorion AB (publ)

Welcome to this episode of Investor Studios, where we once again have the privilege of talking about and with InSplorion. Today, the company released its Q3 report, and we will soon be able to take part in a presentation of it. After that, there will be a Q&A, and you who are listening live can already ask your questions in the live chat. With us from the company is, as usual, the company's CEO, Johan Rask. But today we also have with us CEO Olof Andersson. Med det sagt önskar jag er alla välkomna och jag lämnar över till er, teamet på Explorion. Så varsågoda.

Stort tack Adam. Johan Rask heter jag som sagt och jag är här tillsammans med Olof Andersson, Chief Operating Officer, sedan ganska nyligen för att prata lite om kartalsrapporten och givetvis svara på de frågor som kan komma upp. Så skicka gärna in sådana. But first, Olof, maybe you can say a few words about yourself to the audience.

Yes, I can do that. My name is Olof Andersson. I have been part of the company for quite a few years and my responsibility is primarily product development and production. So I hope that I can answer questions in the end that may concern our technology and our product.

Not least ATEX, which we know is a topic. So a little short about the quarter and a few comments. The joy is that we have continued to improve the results and lower burn rate than the corresponding quarter last year. And that is extra joy, since we still have continued investments in ATEX. During the quarter, some different things happened, but above all we did a targeted emission and corresponding technical options to a group of investors, which we are very grateful for. We also made an update on some strategic priorities and developments that are taking place, including an expected order from Consilium for about SEK 700,000. After the quarter, we are happy to confirm that this supply order has reached a value of SEK 720,000. We could also tell the market that we have signed an overview of a letter of intent with Mantec on fuel connections for hydrogen gas, a very exciting area. We also mentioned management changes, that is, that I will leave and that we are entering a strategic review of the company. And let me just comment on those two things a little bit briefly. There is no drama about me moving on. It is not me who actually develops the sessions that the company launches. So the company is in safe hands with Olof and Elin and the team. I will go to another company that I like more and be the CEO there a few times later in March-April. In terms of the strategic review, it was a good time, I think, for the company management to make a reflection on what the right priorities are in the future. As we wrote in the report, we see in some areas that the market is simply growing. There are a little longer processes, a little lower willingness to invest. On the whole, the number of projects out there is still increasing, but I want to say that it has subsided a little and the market is going through a maturity, which is not strange. And in that situation, to make a reflection on where to go and where to go, I don't think it's that dramatic. To go a little further about the commercial progress, I mentioned Concilium here before. Marknaden håller på att mognar, vi ser lite längre processer i vissa avseenden. Det gäller inte det marina området. Där ser vi att det händer väldigt mycket. Vi var bland annat nere på It's mostly here in Hamburg, around Vätgas, about a month ago. There was a lot of interest in the marina. We get indications that the certification bodies there more and more start to require that one should work with inert environments. Exactly what NPS B2 is developed for. And there were many dialogues that ended up with, oh, now we have to measure inert. But how are we going to do that? There is nothing that works. And then we said, then you have come to the right place. So that is an area where there will be more prioritization soon. And as I mentioned here, a new logo, Mantech, where we have an easy-to-use tent in place and where we see a pilot coming forward to demonstrate this concept around tank solutions, which also looks very exciting.

Let's turn to Oliver for some ATEX updates.

Yes, I can mention a few words about ATEX since we have talked about it a lot. It comes from the fact that this product that we have developed, NPS P2, is intended to be used in such an environment where there can be halts of hydrogen that can be mixed with oxygen. explosive. And then it is very important that the product as such is safe, that it can be placed in such an environment. And that is exactly what this ATEX directive is about. And ATEX is something that we have worked with all the time that we have developed and designed this product. It has been with us from day one. And where we are right now, I would say that it is just at the end of the ATEX certification. What we have done is that we have handed over all the documentation and the test sample of our product to an accredited laboratory, which is now always reviewing the subject and performing tests in order to be able to perform a type recognition for our product. Tidslinjen för det, så som vi ser det, ska kunna vara klart innan året är slut, så som det ser ut just nu.

worth adding. They will of course do different tests. One of the tests is that you have to press. You press it into the team. You won't remember what the requirement was, was it 25, 20? Yes, it can be 20 times. We tested much higher than that internally, so we feel quite secure in the job that the team has done around design. It's an important job.

And now we move forward.

We continue on the path we have embarked on. We sell hydrogen sensors. We also have, during Q1, some main sensors here and there for testing and monitoring in different areas. Worth noting in this context can also be that together with the order we received from Concilium, we will also send some non-certified sensors to that customer to test their systems. I would also like to remind you that the entire order is one customer. We see that there are many others interested. Olle talked about supply chain scaling. We have supply chains in place to meet demand and the volumes ahead of us. A little addition for those who are aware is that we will focus much more on the marine sector, because that is where we see that there is traction in a very good way right now. And, of course, partnerships continue. This is exemplified by the LOI that we have entered and that we review and get forward to full-scale partnerships. That said, So, I just want to remind you that hydrogen is a super important piece of the puzzle for us to be able to do the energy installation. And we are fully committed to being able to contribute so that it goes faster through safe and effective management of hydrogen.

Thank you. That was a short presentation from us.

A few questions, perhaps. Very good. Thank you very much, Johan and Olof, and we continue with questions and I will direct you first, Olof, about the ATX certification. We mention here the new timetable with type recognition at the end of the year. And for those who listen who are not completely involved in ATX and certification here, what does the type recognition mean and can the product be considered recognized according to ATX with the type recognition?

The Atex certification consists of two parts. Firstly, the product should be certified. And that means that it is tested and that the design meets all requirements and that the tests have been carried out and it has shown that the product is safe. The other part is that the product should also be able to be produced according to consensual rules. So that also includes a certification of the quality management system for the production process. And that is a process that also takes place in parallel. And we include that in this ATEX certification, so to speak. So we are also working on that work in parallel with the tests that are carried out, quite simply.

One might add that we had a first review of our quality management system here a month ago. We have a lot of space. We have a few things to fix, but no oddities. The most important thing is the type investigation. It's crucial.

Yes, exactly.

Exciting. How do you ensure that the new timeline is followed? What measures and efforts do you take to ensure that it reaches the goals it should?

From the company's point of view, what we do is that we make sure that we have all the supplies that ARISE, which we work with and need, has been sent to them and that we are responsive and make sure that they have the test specimens that are needed. Then there is an independent process that takes place with them with tests that we are not really involved in, because that should be done, so to speak, without us control that process. So what we have done is that before, as Johan mentioned, we have done our own tests internally in the house and also in different ways, verifying that we believe that our design and our product will meet these requirements. Sen är det ju en process som ska ta tid, för nu ska ju liksom våra ritningar och så som vi har valt att lösa säkerheten för våra produkter utredas av RISE i det här fallet.

Och så ringer vi varannan då. Ja, det kan man väl tillägga. Tack.

Congratulations to the order from Concilium. I would like to ask what you think is required for several of your flood projects and initial orders to go that way and reach greater volumes?

Of course, a lot depends on ATEX. It is a basic assumption that there will be larger volumes. So it depends a little bit on what type of partnership we are talking about. If you take Mantec as an example, then it is more of an integration in their solution to make a combined solution that becomes very attractive on the market. So there are a few things to do about how we How to work with the flow, where to put the sensor and things like that. So there are some practical things to take into account as an example. But if we are talking about a more pure sales partner, without the development that it will be integrated, then it is more Atex to get those pieces in place.

Let's dive a little deeper into what you mentioned earlier, Johan, with your decision that you made this week to move on from the role as CEO of Explodion in the future. Would you like to tell us a little more about this decision and how you see the way forward from this point forward?

What can I say? It is a company that I have been involved with for quite a long time in a different role as chairman. It is a company that I also believe in very much, that I believe in Explorion. And now came a time when there was a possibility and after careful consideration I felt that it was the right way to go. That does not mean that I do not believe in InSplorion, and as I said earlier, it is not me who is designing our hydrogen sensors and making sure that it meets all the requirements and that we can measure. So I'm not worried about that part, but the company is in safe hands on the team here. The way forward, as I said earlier, we have always been careful to have a focus in the company, and in the case that we are now communicating here, So I think that the marine area will be an important springboard for future growth, and growth in itself, one might say.

Thank you for that.

You mentioned in the Q2 report that you would like to apply for EU money by the end of October. When do you plan to get the message?

You never really know that, but somewhere... In the middle of December is perhaps an estimate. Eight to ten weeks after delivery. The date was October 1st. But there you have a little bit in the hands of the reviewers who are there as well, and how many who submitted and so. We think we have a good case. We think it fits well together with the EU's ambitions within the energy sector in general and the greenhouse gas sector in particular. But somewhere there in the middle of December without

And for those who don't remember exactly what the EU money is about, can you tell us a bit more about that?

It's basically to take our sensor to the next level, you could say. more of a component that can be integrated into many other companies. For example, what we are talking about here, Atex, is actually the shell in many ways. There are other companies that have the shell where it could fit very well with a component that can be integrated into it. The contribution in this application is 2.5 million euros. In addition, there will also be an opportunity to get equity, which is usually 50-50 against external investors, up to 10 million euros. That is optional for the company, nothing you have to do. It can also be a good opportunity if you feel that it is time to scale up.

Exciting.

You recently received an order from an Amnesty Rym company.

Have you received inquiries from other companies within that sector? Not much. What is interesting is that they also want to measure in the net environment. The sensors there are delivered after about a month and are now waiting for testing in their environment. Hoppas och tror kommer att gå bra, och då kan det bli betydligt större orders efter det.

Utveckla gärna att vidare har styrelsen beslutat att göra en strategisk genomgång av bolagets förutsättningar framåt.

Ja, det är ju en styrelsefråga, ska jag väl först nämna, och jag ska inte tala för styrelsen på det sättet så, men som jag sa tidigare så tycker jag att det är väldigt naturligt att man i ett läge där... The CEO is changing tracks, but as I said earlier, we see that the industry is going through a phase of growth. There is still growth, there are still a lot of things happening, It's a bit of a long timeline. The will of companies and investors to invest has taken a lot. And that in that situation, to sit down and think about what the right priorities are for the company is quite wise, I think. You shouldn't read too much drama in that either. But it's also something that we as a company are responsible for informing about, that now we think it's time to do this, quite simply.

Thank you.

You recently participated in some fairs here with Smart Engine Week in Tokyo and Hydrogen Technology Expo in Hamburg. What response and invitations do you get when you go internationally here, both regarding customers and competitors and the market in general?

Yes, that's a big question. But we see that we have a unique solution and that's clear. And sometimes you wish that... so that more people could join the fair, because you get a lot of positive feedback and a lot of direct integration with customers and potential partners. So it's absolutely rewarding to be out there. And as I wrote in the introduction, it was extra good in the marine area, as I mentioned earlier, where you are in a situation where you experience that Nu måste vi ha en öppen miljö för att vi ska kunna gå igenom certifieringen av de här skeppen. Men vi behöver fortfarande mäta och hur tusan gör vi det? Det tycker jag var ett väldigt bra kvitto från att vara ute och prata.

Bra, tack för det.

Vi har tömt chatten och ni har svarat ypperligt på våra frågor tycker jag. Så vi... I would like to thank both Johan and Olof for the presentation and the answers to the questions here. And from the University Studios side, we thank you for today.

Thank you very much, Adam.