Enersize H1 2022 company Brief

Enersize's H1 company brief can be found on the company's website enersize.com. Below is a translation of selected parts of the H1-report originally published in Swedish on August 25, 2022, with the title "Enersize offentliggör halvårsrapport 2022".

April – June 2022

• Net sales for the second quarter 2022 amounted to EUR 53,340 (49,156).
• Operating profit (EBIT) for the second quarter 2022 amounted to EUR -495,603 (-517,825).
• Profit before appropriations and taxes for the second quarter 2022 amounted to EUR -516,355 (-610,293).
• Average number of employees for the second quarter 2022 amounted to 11.0 (10.0).

January - June 2022

• Net sales for the second quarter 2022 amounted to EUR 89,532 (121,905).
• Operating profit (EBIT) for the second quarter 2022 amounted to EUR -936,880 (-915,141).
• Profit before appropriations and taxes for the second quarter 2022 amounted to EUR -964,849 (-1,024,870).
• Average number of employees for the second quarter 2022 amounted to 11 (9.5).

Significant events during 2022

First quarter

• Enersize renews strategic partner agreements with two previous partner companies, SCOPP Solutions SARLAU Capital 100,000 DH and Momentum Industrial AB. The agreements form the basis of Enersize's new business model.
• Enersize Advanced Research AB has received an order from the Indonesian company PT Cicor Panatec, which includes both hardware and software related to Enersize's SaaS platform.
• Enersize signs a letter of intent with Akila Information Systems Ltd, which is a milestone towards a partnership for Enersize products to be integrated into Akila Services and data platform.

Second quarter

• Scania extends and expands its pilot agreement with Enersize by 12 months for energy savings and, in parallel, Enersize and Scania intend to start joint development projects in autumn 2022.
• Scania orders hardware for the plant in Södertälje.
• Enersize takes out bridging loans of a total of SEK 5m from two existing shareholders to continue the establishment of the new SaaS business model.
• Enersize Partner SCOPP receives new African orders from Vivo Energy Maroc and Maghreb Steel.
• DAS Korea installs its first pilot as part of Enersize onboarding.

Significant events after the quarter

• No significant events after the end of the period.

Summary of the Group’s indicators

EUR	2022 Q2	2021 Q2	2022 H1	2021 H1
Net sales	53,340	35,384	89,352	89,285
Gross margin, %	53	48*	50	51*
Operating profit (EBIT)	-495,603	-373,937	-936,880	-705,105
EBIT margin, %	Neg.	Neg.	Neg.	Neg.
Profit before appropriations and taxes	-516,335	-414,638	-964,849	-758,274
Profit margin, %	Neg.	Neg.	Neg.	Neg.
Earnings per share before and after dilution	-0.0011	-0.0041	-0.0021	-0.0074
Equity ratio, %	82.0	83.2	82.0	83.2
Balance sheet total	1,766,382	3,886,925	1,766,382	3,886,925
Cash flow from operating activities	-411,332	-121,528	-675,265	-501,002
Average number of employees	11,0	10,5	11,0	8,5

*To increase comparability, consulting fees have been deducted from material and services when calculating the indicator since the consultant is now a permanent employee of the company.

COMMENTS FROM CEO ANDERS SJÖGREN

The company invests in the new business model with multi-year contracts where the customer and Enersize share the profit. The company breaks new ground and offers something that does not exist on the market. Know-how, focus and patience are needed, and Enersize CEO, Anders Sjögren, explains how this is done;

Describe the development during the second quarter?
The profit-based business model has been refined and offers and contracts have been sent out to a number of new customers. We invest in pilot projects together with new customers to be able to tell others what we do. We are working on starting up these deals in Q3 and Q4 as the sales cycle is long. In parallel, we have worked on slimming the organization and reducing overheads to make Enersize even more interesting in the longer term.
Our development organization has started, and we now see the advantages of combining deep know-how in compressed air with competence in mathematics, physics and software. What Enersize builds in the cloud is not available on the market, and Compressed Air Services Generation 2, which will be released next year, will further boost the company's business.

How have the sales gone and what do the results look like?
As CEO, I am constantly working to increase the sales rate, and I myself am active in the dialogues with our reference customers and the larger projects, such as the work with Scania that starts in the fall. I also work closely with our salespeople and participate in presentations to new customers, partly to develop our own sales work, partly to show customers that we are serious in our commitment to deliver energy optimization and improved quality. Sales during Q2 amounted to EUR 53,340 (35,384), which is in line with what we expected. EBIT amounted to -495,603 (-373,937) EUR, which is mainly due to the company being burdened by one-off costs from financing and the work on the reverse takeover with Finnish Batteries ("TeraFactory").

What are the most important events of the year?
Two important milestones are that we now have a unique, well-reviewed agreement for profit sharing with the industry, and that Scania chose to go ahead with us in the pilot project and deepen the collaboration.
In June, we submitted two patent applications where we want, among other things, to prevent future competitors from linking the use of compressed air to the production results in individual production lines. As different production lines can use very different amounts of air, I am convinced that this will give Enersize an important strategic advantage in the long run. Based on the power measured at the second level on each compressor, we calculate the amount of air that is generated and through regression analysis we can then calculate how much air is consumed by each production line. Our patent-pending technology works without measuring the flow of air to each production line. As flow meters are expensive and unreliable, this creates a good head start for Enersize.
Another important event is that Enersize got a brand new board in June. The new board is appointed by Enersize's new main owner who invested in the company at the end of 2021, and will be able to contribute to the company's success through its deep expertise in business development, industrial sales and financing.

You work more with direct sales in Sweden, what does the market look like in Sweden?
The Swedish industry consumes 48 TWh of electrical energy each year and 10% of this goes to compressed air. With energy prices skyrocketing, especially in the south of Sweden, there is increasing pressure on savings that can be implemented quickly without the industry having to make large investments or change their working patterns. Enersize unique and complete service for improvement and energy saving in industrial compressed air systems is perfect to use as it saves huge amounts of energy for the customers without affecting the operation. It requires little or no extra effort for its own staff, quickly produces large profits, and the savings can be extensive even in medium-sized manufacturing companies. As a bonus, you get scientifically measured results in the form of reduced energy use and scope-2 CO2 emissions.

What do you expect from the coming six months?
Increased sales based on profit sharing! It is extremely important that we can demonstrate success with sales in order to gain trust from our shareholders to continue the journey and scale up the business in Sweden, the Nordics and the markets where we have partners. From the signed contract, it only takes a month or so before the income reflects this because we work with profit sharing, which means that results from the autumn's work will above all be seen in the results in the spring.
Our own software will mean a paradigm shift in the compressed air industry in the long term and we continue to further develop both it and the company with the goal of becoming a leading supplier of energy efficiency for industrial compressed air.

Anders Sjögren
CEO, Enersize

For more information about Enersize, please contact:

---

Anders Sjögren, CEO
Phone: [phone]
E-mail: [e-mail]

The English text is an in-house translation of the original Swedish text. Should there be any disparities between the Swedish and the English text, the Swedish text shall prevail.

About Enersize

---

Enersize develops and delivers smart software, tools, and services to enable energy optimisation of industrial compressed air systems. The industry expertise of our people and solutions, together with a commitment to become the global leader in compressed air efficiency software, has made Enersize a recognised leader for customers around the world. Enersize is a merger of multiple Nordic companies with experience from more than 7,000 customer projects.

The company is listed on Nasdaq Stockholm First North Growth Market under the ticker: ENERS.
For more information visit https://enersize.com

Certified Adviser 
Mangold Fondkommission AB
E-mail: [e-mail]
Phone: [phone]

Attachments

---

Enersize H1 2022

© Modular Finance, source Nordic Press Releases