QleanAir first quarter – Stable gross margin, slightly weaker revenue

STABLE GROSS MARGIN, SLIGHTLY WEAKER REVENUE 

• MSEK 116 net revenue, -2.5%
• MSEK 70 recurring revenue, -6%
• 7.2% EBIT margin, (9,7%)

January-March 2025 in brief

• Net revenue amounted to MSEK 116.1 (119.1), currency-adjusted net revenue amounted to MSEK 115.4 (124.4)
• Recurring revenue MSEK 70.5 (75.2)
• Operating profit (EBIT) MSEK 8.4 (11.6)
• Operating margin (EBIT) 7.2% (9.7%),
• Earnings per share SEK 0.18 (0.53)
• Cash flow from operating activities MSEK 2.4 (0.2)

Significant events during the first quarter

• QleanAir expands cooperation with a large regional healthcare system in Pennsylvania with the sale of three new cleanrooms totaling MUSD 1.39

Significant events after the end of the period

• Fredrik Sandelin takes over as new CFO
• QleanAir launches innovative FS 60 air cleaner for industrial facilities with limited floorspace
• QleanAir Launches QleanGuard Environmental Monitoring: A Cost-Effective, Full-System Monitoring Solution for Cleanroom Facilities

A WORD FROM THE CEO
Sequential improvement compared to last quarter thanks to improved performance in Japan and the US. Europe, especially Germany, remains challenging although the order situation has improved towards the end of the quarter. Revenue of MSEK 116 (119) was 2,5% lower than last year with a slight currency tailwind of MSEK 0.8.
 
Our operating profit, a sequential improvement compared to the fourth quarter, was weaker due to a lower demand in Europe compared with the previous year. EBIT amounted to MSEK 8.4 (11.6), in this we have handled both legal costs on the cleanroom side and a more conservative obsolescence assessment of inventory.

Our newly launched products are gaining ground and accounted for about 6% of the volume of air cleaners in Q1. Focusing on critical application areas for our customers gives us more resilience in difficult market conditions. We can clearly see that the base of renewable contracts to finance companies in Japan has come back from the low point in Q4 2024. Recurring revenue remains low compared to last year, as the cancellations of school orders mainly came in the second quarter of 2024. The renewal rate is stable.
 
We remain focused on our three priorities: Customer Focus, Sales Effectiveness and Cost Control.

CUSTOMER FOCUS AND PRODUCT LAUNCHES
We continue to work towards more critical solutions for specific industrial challenges, which will make us more resilient in the current, weaker economy. In Q1, our recently launched products represented 6% of our mobile air cleaner sales. We are working on another critical solution for the manufacturing industry on a related theme. During the quarter, we conducted workshops in all regions to further strengthen the solutions we offer to the industry.
 
CONTINUED EFFORTS IN EMEA
In EMEA, we continue to see restraint among our customers, particularly in Germany and Sweden, as a result of the weaker economy. It takes longer to book new customer meetings and thus to close new deals.  We have raised our activity level but the quarter ended in a 12% decline compared to the same quarter in 2024. We are continuing our regional efforts to strengthen our proximity to customers in both Germany and France.
 
SALES EFFICIENCY DRIVES GROWTH AND PROFITABILITY IN APAC
APAC continues to be the driving force in the QleanAir Group. Japan contributes significant revenue, strong earnings and cash flow in local currency. Japan has passed the low point when it comes to renewable contracts to finance companies. New sales increased for Cabin Solutions but decreased for Air Cleaners due to large installations in the first quarter of 2024.
 
FOCUS ON COST CONTROL AND STRATEGY FOR PROFITABILITY IN THE AMERICAS
We are definitely seeing the effects of our work on the cost side now that revenue is back after the interruption linked to the absence of the Curexa deal. Gross margin and installation costs are on track.
 
We have continued our work on partnerships and have several good dialogues underway. The order backlog looks good for 2025 and consists of a balanced number of projects to deliver, no singular dependencies like last year with Curexa.

BUSINESS MODEL
The QleanAir business model consists of a combination of rental and sales, including service. QleanAir cleans indoor air by reducing harmful particles. The working environment for people is improved. Furthermore, the quality of customers’ products and the efficiency of their processes is improved. We work systematically on growth combined with profitability.
 
OUTLOOK
As a company, we know where we are going. Our business model is circular, 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 with the next customer. In 2025, we will continue to invest in our digital marketing to increase awareness of QleanAir and to further broaden our customer acquisition.
 
In conclusion, I would like to thank all our dedicated employees, as well as our customers and partners for their good cooperation.
 
Solna, May 9, 2025
 
Sebastian Lindström, CEO QleanAir AB

PRESENTATION
QleanAir invites to teleconference and audio cast on May 9th, at 10.00 am CEST. The company’s CEO, Sebastian Lindström, and CFO, Fredrik Sandelin, present the interim report for the first quarter 2025 in English.

The presentation will start at 10 am and can be joined via the web or by telephone. It will be available on demand on the same weblink shortly after the event and on our website.
Join us via the web https://qleanair.events.inderes.com/q1-report-2025/register. Register for direct access to the webcast. Written questions can be asked via the webcast.

To participate via teleconference call, register via the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. https://conference.inderes.com/teleconference/?id=5006838