11% GROWTH AND IMPROVED CASH FLOW

July – September 2023 in summary 

• Net revenue MSEK 123.9 (111.4), currency-adjusted net revenue amounted to MSEK 121.6 
• Recurring revenue MSEK 75.8 (67.2) 
• Order intake MSEK 86.7 (92.2)
• EBITDA MSEK 25.2 (25.4) 
• EBITDA margin 20.3% (22.8%) 
• Operating income (EBIT) MSEK 16.8 (17.5) 
• Operating margin 13.5% (15.7%) 
• Earnings per share SEK 0.70 (0.71) 
• Cash flow from current operations MSEK 18.3 (11.4) 

January – September 2023 in summary 

• Net revenue MSEK 379.8 (335.1), currency-adjusted net revenue amounted to MSEK 368.6 
• Recurring revenue MSEK 227.7 (206.0) 
• Order intake MSEK 305.7 (298.5)
• EBITDA MSEK 79.7 (69.4) 
• EBITDA margin 21.0% (20.7%) 
• Operating income (EBIT) MSEK 54.4 (46.3) 
• Operating margin 14.3% (13.8%) 
• Adjusted operating income MSEK 57.0 (46.3) 
• Adjusted operating margin 15.0% (12.9%) 
• Earnings per share SEK 2.55 (2.15) 
• Cash flow from current operations MSEK 48.2 (20.2)

Significant events in the third quarter

• QleanAir signs new USD 503,000 agreement with a large east coast IDN for an investigational drug cleanroom 
• QleanAir in the US signs three new cleanroom contracts in two days, totaling approximately USD 510,000 
• Staffan Persson has through Swedia Capital purchased another 1 Million shares in QleanAir. Qevirp 41 Ltd (Priveq) has sold its entire holding of shares 
• QleanAir signs a second contract with the German space industry for a new air cleaning solution 
• QleanAir Japan signs a large order for high performance air cleaners with a fruit and vegetable distribution and processing company. 

Significant events after the end of the period 

• Notice of extraordinary general meeting in QleanAir AB – In accordance with Chapter 7, Section 13(2) of the Swedish Companies Act, Swedia Capital AB, holder of approximately 26.5 percent of the shares and votes in the company, has requested that the board of directors calls an extraordinary general meeting to deal with electing new members to the board of directors. 
• UNC Health signs framework agreement with QleanAir Scandinavia in the US to provide consulting services for pharmacies 

A WORD FROM THE CEO 
"The priority for 2023 is to achieve our financial targets. Growth for the quarter amounted to 11%. The operating margin amounted to 13.5% for the quarter and was impacted negatively by higher costs for materials and installations for a couple of cleanroom projects in the US. Accumulated growth was 13% and the adjusted operating margin 15%, which is in line with our financial targets. Cabin Solutions grew in EMEA by 12%. Air Cleaners achieved growth of 30% with Japan growing by 173% in the quarter. Cleanrooms in the US grew by 152%. We continue to see results from our focus on sales follow-up and sales efficiency, which were introduced at the beginning of 2023", CEO Sebastian Lindström remarks.

GROWTH AND PROFITABILITY 
Profitable growth is our goal and we will achieve this through our three priorities; Customer Focus, Sales Efficiency and Cost Control. This is a focus that has yielded results in 2023 and will continue to provide good momentum into 2024.  
 
Customer focus 
So far in 2023, we have conducted workshops with customers and our own sales and service organization. More than 100 people have contributed valuable experience across all regions, APAC, EMEA and Americas, to lay the groundwork for an updated strategic plan for 2024. During these workshops, we reviewed our customer offering in order to identify future opportunities on the product side, and in our commercial approach. 
 
Sales efficiency 
During the third quarter, we continued to refine and systematize our follow-up on sales work and sales, starting the journey to simplify and streamline the sales process. 
 
In the US, we will hire two additional salespeople to better serve the demand in the US cleanroom market. 
 
Cost control 
We will continue to invest in our markets to build long-term growth. However, these efforts will be more carefully managed, with regions making decentralized decisions to implement marketing and sales activities, with clear requirements for returns. 
 
For the cleanroom projects in the US, we have begun work to streamline the installation process and reduce the cost of materials. This is combined with a review of the pricing of our cleanroom solutions. 
 
BUSINESS MODEL 
Our business model consists of a combination of rental and sales, including service. Revenue amounted to MSEK 123.9 (111.4). Our recurring revenue increased to MSEK 75.8 (67.2), an increase of 13%. On a rolling 12-month basis, our recurring income amounts to MSEK 299 and our total revenue to a record MSEK 500. 
 
We know where we are going. We have great opportunities to create value. Our business model is circular, i.e. our products have a long life with our customers through our strong service model, and at the end of the contract we recondition the product to give it a new life for the next customer. 
 
We clean indoor air by reducing harmful particles. The working environment for people is improved. Furthermore, customers see the quality of their products and the efficiency of their processes improved. We work systematically and are focused on growth combined with profitability. 
 
OUTLOOK 
In Europe, we continue to see customer restraint due to the geopolitical situation and higher interest rates. We find that customers have longer decision times today, which we try to address with an increased sales pipeline by approaching more customers. Right now, many of our customers pay extra attention to energy-efficiency. Our air cleaning solutions are energy efficient and contribute positively to the customer's overall energy consumption. 
 
In Japan, we have a positive outlook for 2023 with a clear strategy to broaden sales to small and medium-sized enterprises and continue to invest heavily in industrial air cleaning with air cleaners. 
 
In the US, we see an increasingly strong sales pipeline being converted into order intake and sales. Focus is on continuing this dedicated sales effort in order to contribute to the Group's financial development to a greater extent than before. 
 
Finally, I would like to thank all our dedicated employees, customers and partners for a good collaboration. 
 
Solna, November 9, 2023 
 
Sebastian Lindström, CEO QleanAir AB