02/15/2021 | Press release | Distributed by Public on 02/15/2021 01:04
'We are continuing to increase the number of installed units during the fourth quarter and are increasing the share of recurring revenues. For the full year, recurring revenues amounted to SEK 259m (191m), corresponding to 52% of sales and an increase of 35%. This gives us a good visibility regarding future revenues going into 2021. Sales and order intake continued to be affected by the corona pandemic during the fourth quarter of 2020 compared to the fourth quarter of 2019. However, compared to the third quarter of 2020, we increased both order intake and sales. We are delivering high margins. EBIT margin for the fourth quarter came in at 19.3% (15.6%). I am very pleased that, in the fourth quarter, we received groundbreaking orders in our two newest product categories; Facility Solutions and Room Solutions, and that we have had the opportunity to help create healthy working environments where they are needed the most during the pandemic,' says CEO Christina Lindstedt.
GROWTH IN NUMBER OF UNITS INSTALLED, INCREASING SHARE OF RECURRING REVENUES AND IMPROVED OPERATING PROFIT DESPITE THE IMPACT OF CORONAVIRUS
October - December 2020 in summary
January - December 2020 in summary
Significant events during the fourth quarter
Significant events after the end of the period
Innovation, product launches, new markets, and customer segments
2020 was a record year for QleanAir in terms of the number of launches of new air cleaning solutions for indoor environments within the Facility Solutions product category. During the fourth quarter, we saw a continued positive development in sales within Facility Solutions compared to the same period last year. The last product launch in 2020 was the FS 30, which we developed in close cooperation with Karolinska University Hospital and recently started to deliver. The FS 30 is a specially adapted, efficient air cleaner that delivers HEPA-cleaned air with a very low sound level. In 2020, we started selling Facility Solutions to new customer segments, including healthcare, schools, and offices, and we have also introduced our FS range in Japan, one of our most important markets, where our strong position in the office segment is very well aligned with Facility Solutions. We are moving into 2021 stronger, with a broader and more competitive product range than ever before.
The pandemic - continued increased awareness of the importance of air cleaning, but the second wave of lockdowns had a negative impact on the fourth quarter
The pandemic continues to contribute to an increase in awareness of the importance of clean indoor air. We are seeing an increased demand for air cleaning for public spaces, where e.g., in Germany, a major investment in air cleaning for schools has been heavily subsidized. QleanAir won a significant order for the school segment in the fourth quarter (an order delivered in Q1 2021) and we announced an additional order of the same size after the end of the period. We have also seen increased demand for air cleaning in healthcare and office environments, where the importance of air cleaning as a tool for improving the working environment has increased significantly. In Europe, we saw a sharp increase in order intake in the fourth quarter of 2020 compared to the previous year (+28%), as well as a sharp increase in new contracts for shorter periods, an increase of 492% to 231 (39) units.
In the Japanese market, we had a harder lockdown in society during the fourth quarter than during the spring outbreak of the coronavirus. However, sales for the quarter were in line with the previous year, and for the full year 2020, we achieved a growth of 26%. This is the strongest year ever for our Japanese business, which is linked to the exceptional start of 2020, ahead of the implementation of the new Health Promotion Act from 1 April. Due to that, short term we see a lower sales and order intake in 2021 in Japan. In the medium and long term, we see continued good growth opportunities in Japan, within both Cabin Solutions and Facility Solutions. In the United States, both order intake, and sales dropped compared to the corresponding quarter of the previous year. The USA has continued to be hit hard by the coronavirus, not least in our healthcare segment, and decision-making processes have been longer than normal. However, 2020 in the US ended with the largest ever order in Room Solutions, totaling almost USD 1m, and we continue to see good growth opportunities for our business in the US.
Increasing margins, better cash flow, and an increase in the number of units installed
Net sales for the quarter amounted to SEK 106.4m (SEK 123.8m). The EBITDA margin for the quarter was 26.5% (20.1%). Cash flow increased to SEK 19.7m (SEK 10.2m). Order intake* dropped by 35% to SEK 66.6m (102.5m). (*Order intake are defined as longer rental contracts with a defined end date, as well as sales of products - i.e., short-term rental contracts are not included.) The number of installed units continues to grow, reaching 9,551 units at the end of 2020, an increase of 14% on the previous year. We increased the amount of air we cleaned by 21% in 2020.
Our business model with a high and increasing share of recurring revenues benefits QleanAir during the coronavirus pandemic
Recurring revenues increased to 61% (42) of total sales in the fourth quarter. In absolute terms, recurring revenues increased to SEK 64.6m (51.8m). For the full year, recurring revenues increased by 35% to SEK 258.7m, corresponding to 52% of total sales. Such a high percentage of recurring revenues gives us a good outlook going into 2021. An increase in the number of units on our balance sheet indicates an increase in the share of recurring revenues. This also means an increased share of revenue in the form of current monthly rental income, and a reduced share of the revenue from sales of contracts to finance companies and direct sales to customers, i.e., payment upfront. This explains part of the drop in sales compared to the same period last year. We continue to deliver very good margins in our underlying business, and the focus on controlling costs and cash flow in the early stages of the pandemic has had a positive impact on profits. Our model of working with strategic partners for production and service also gives us good resilience in times of more difficult market conditions.
We expect the increased awareness of the importance of indoor air quality to continue to contribute to increased demand for air cleaning, although in the short term we continue to see a high degree of uncertainty in our markets. Our medium and long-term growth strategy remains in place, including its focus on developing and growing our new product categories Facility Solutions and Room Solutions, and maintaining our strong position within Cabin Solutions. We are proud to be involved in improving the working environment in settings that have been hit particularly hard by the coronavirus, such as intensive care units in hospitals and student environments in schools. We are also grateful to have developed valuable new strategic partnerships, such as with Karolinska University Hospital, where we continue to develop our expertise in advanced air cleaning solutions together with our customers. We will continue to launch new innovations, and we will continue to strengthen our offering geographically.
Finally, we are now leaving an extraordinary 2020 behind. I am very pleased that, in a year like 2020, for the full year, we are delivering organic growth of 9% (currency-adjusted) and an EBIT-margin of 19.3%, fully in line with our financial targets. We bring with us experience and new opportunities that we did not expect to have a year ago. I would like to thank our dedicated and committed employees, and our customers and partners for much appreciated collaboration.
Solna, 15 February 2021
Christina Lindstedt, CEO QleanAir
For more information, please contact:
Christina Lindstedt, CEO
E-mail [email protected]
Cell +46 70 677 28 77
QleanAir is a niche premium provider of clean indoor environment solutions. The company's business model is based on lease contracts for modular solutions with a full-service offer. QleanAir solutions are developed using filter technology that traps, filters and recycles indoor air. The company has approximately 9,400 installed units at more than 2,500 customers on the markets for EMEA, APAC and the Americas. For full year 2019, net sales amounted to 457 MSEK and adjusted operating margin was 18 percent. QleanAir's head office is in Solna in Sweden, and the share is traded on Nasdaq First North Premier Growth Market, ticker QAIR. FNCA Sweden is Certified Adviser +46 8 528 00 399. For more information go to qleanair.com.
This information is information that QleanAir Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2021-02-15 08:00 CET.