PowerCell Sweden AB (publ)

Welcome to the PowerCell Group Q3 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to the CEO, Richard Berkling, and CFO, Torbjörn Gustafsson. Please go ahead.

Good morning everybody and a warm welcome to our quarter three report, live from a sunny Gothenburg morning. I'm joining today with Toru for the last time actually, reporting on quarter three, which was a very intense quarter with a lot of activity. We are happy to report that we have strong market activity. Previously in the year, we have communicated that we are operating in rather soft market conditions. We now see a significant improvement. Not necessarily all the way into the books of 2023, where we report a 3% growth in the quarter, 12% growth for the last 12 months. But especially in market activity and in the incoming order. We now, with the large order that we reported in September, 165 million of fuel cell systems sold to an Italian OEM manufacturer. that establish us in a position where we now have serial production for customers starting up. So we have a roadmap of more than 100 systems to be produced and that is for the first time in the course of history where we have an ongoing serial production which is really positive and a good trigger for what we see going forward. We also reported that we received approval in principle from Lofsky Veritas for the solution you see to the right here, a combined methanol reformer and a tube subsystem, which in essence is a five inflation solution where you have methanol as a fuel and then you have electricity out. Something that we believe is going to create massive value for the UB customers in the marine market and we will elaborate a bit more on that. Beside that we had a good order in July also from a European OEM manufacturer which was important to get the season started and we have seen a lot of activity after the summer. What is interesting to see in the market fundamentals is the fact that we see a rapid acceleration. And when we talk about that, it is from the start of negotiation to when we see a complete big delivery, where we see the invoice going to the end customer and money into our account. previously with the large orders to marine and also aviation typically it was a five-year period from initial negotiation to complete the delivery now we see that that time is limited to 80 months and that is a very significant indication of growth Because that also gives us an opportunity to grow faster, but also that we have more mature customers who have a good understanding of what to do with the products and how to put them into implementation. And it's also driven by the fact that we now have commercial customers that need to get products out there making money. So a significant change in the underlying characteristics of the business. which comes from the focus we have had on OEM business, where we now see marine and power generation driving the market, driving growth forward. As communicated, the order from a leading Italian marine OEM manufacturer is a milestone order for us we have talked about finding the first really strong OEM manufacturers designing in our solutions into their product offering and bringing it to market gives us a rather sticky business model but also strong value and large order numbers so for Powercell this was something that we've been working quite hard on and we're very happy to be able to So it is a milestone, not just for thousands, but for the full industry on the path towards decarbonization and the transition into new applications. One of the orders also that we were happy to report was agreement for a concept study for a vertical takeoff and landing aircraft confirms our very strong position in the aviation sector, where we have, as reported before, more than 20 Surabia is the leading entity pushing our technology and their point of print into aviation certification, which is going very good according to the plan. So aviation continues to be a strong segment for pharmaceuticals. We see continued growth and hopefully we can report on it in more progress with this. If we dig slightly deeper into the numbers of the three, I hand over to Tudor for explanation of this.

Thank you, Richard. And yes, regarding net sales development, we have previously in Quarter Calls also explained that we've been in a softer market situation. But with that said, we are then growing quarter over quarter, but also year over year now with 12 months rolling, growing with 12%. And given the fact that we've been in a softer market situation where the Dialogues have been more towards bigger OEM sales that have taken longer time. I think that the performance is good and like Richard mentioned before the order intake coming in supporting sales for the former. Gross margin development. We have seen Right now, a downward going trend on the gross margin side, but that is for powers of something that will happen quarter over quarter and not the trend that we can see going forward. So it's related to the product mix and how it works out. And at the moment, the product mix has been towards a gross margin of still healthy above 30% gross margin. But we also see that this product mix will change over time and will also vary then on the gross margin side.