Artificial Intelligence driven Marketing Communications
STOCKHOLM— Third quarter of 2019 (July- September 2019)
First nine months of 2019 (January – September 2019)
Significant events in the Third quarter
Significant events after the reporting period
COMMENTS BY THE CEO
In the third quarter the company continued with a positive sales development. The company achieved a gross profit of SEK 2.77 million and a gross margin of 12% during the period. This was primarily driven by sales of the OXE200, which has a higher gross margin as well as unit sales directly to an end user at a higher margin. Whilst I expect the trend to continue, the gross margin growth may not be linear.
Following strategic discussions and review, in order to prepare for the future, the company will continue to have a focused approach to developing sales in the shorter term and ensure it maintains delivery of quality to its end users. As a consequence, the company decided not to push for 600+ units for 2019 but instead maintain a steady and sustainable ramp-up in close collaboration with customers and continue to invest into quality and support to the customers which has given good results in the last few months. In addition, new updated long term objectives for the years 2020-2024 will be as follows:
In July we announced the company entered into a €14 million credit facility with the European Investment bank (“EIB”), which over time will help support more aggressive sales and marketing initiatives, finance development projects, operational expenses and working capital needs. This is a very significant endorsement by a well-respected financial institution (backed by EU member states), who carried out detailed due diligence on the company over a twelve-month period. We received the first tranche of €4 million from EIB in mid-September. Further funding has also been secured following the exercise of share warrants as well as directed share issue totalling SEK 50.8 million in October. If we fulfil certain conditions, this will enable us to draw the second tranche of €4 million from the EIB, most likely during Q1 2020.
With funding secured, we are fully focused on our operational performance. As described in our previous interim report, I now have completed the appointment of my senior management team, following the appointment of Jerry Ojala as Chief Operating Officer (COO) at the end of September. I am highly confident of our senior management team to deliver the full potential of the OXE.
We continue with an immense focus on quality, which includes sourcing parts from Tier 1 automotive suppliers, the meticulously testing of improvements and upgrades by our engineers, assembly improvements and after sales care with our customers. Ultimately quality drives sales and with our disruptive technology, being the only provider of commercial high-powered diesel outboard engines in the world, it is imperative we work closely with the end users and better understand their demands and requirements.
We have been very detailed with our planning of the OXE300 – we officially launched the marketing of this game changing product at the Genoa boat show in September. Start of production of the OXE300 is May 2020 and we expect to have built a significant order book just prior to start of production.
I am confident of meeting our key objectives and delivering commercial success of our patented belt propulsor system.
CEO – Cimco Marine AB