Maven Wireless publish interim report for third quarter 2023. The interim report is available as an attached document and at www.mavenwireless.com
Improved gross margin strengthen profitability and cash flow
Third quarter 1 July – 30 September 2023
- Net sales amounted to SEK 53,345 thousand (26,470)
- EBITDA amounted to SEK 12,845 thousand (2,935)
- Operating profit amounted to SEK 11,029 thousand (1,770)
- Order intake amounted to SEK 24,001 thousand (57,885)
- Orders from 19 customers, of which 6 new customers during the period
- Cash flow from current operations amounted to SEK 12,175 thousand (3,773)
- Earnings per share 0.20 (0,03)
The period 1 January – 30 September 2023
- Net sales amounted to SEK 159,852 thousand (60,749)
- EBITDA amounted to SEK 27,749 thousand (-2,156)
- Operating profit amounted to SEK 23,310 thousand (-5,600)
- Order intake amounted to SEK 93,925 thousand (107,293)
- Orders from 45 customers, including 13 new customers during the period.
- Cash flow from current operations amounted to SEK 9,237 thousand (1,596)
- Earnings per share 0,44 (-0.12)
- Life Cycle Assessment -68% kg CO2e during operation
The group's net sales of SEK 53 million during the quarter represent a sales growth of 102% compared to the same period last year. Cumulative turnover for January to September 2023 is SEK 160 million (61). We maintain a high turnover level even though deliveries during the quarter are affected to some extent by the annual shutdown of the factory in Estonia for a couple of weeks in July.
During the quarter, we reach a gross margin of 40%, which is significantly higher than the same period last year (35%). The improvement in the gross margin is partly due to the normalisation of component prices without expensive spot market costs and partly to the fact that the deliveries that are now taking place are against orders with new higher prices for our products. With this higher gross margin, we deliver an EBITDA result of approximately SEK 13 million, which gives an EBITDA margin of 24%. The operating profit is SEK 11 million (2) with an operating margin of 21%.
With shorter lead times on components and improved logistics, we now offer a normal delivery time of 9–16 weeks on our standard products, which is significantly shorter than during the same period last year and also shorter than last quarter. This means that the order book is converted to revenue much faster, from around 12 months last year to around 3 months today. For our framework agreement customers, this means that they do not have to plan and order their projects with as much advance notice. As the production for the framework agreements for the year has already been laid, order intake regarding the framework agreements has decreased during the period. Order intake was SEK 24 million during the quarter, which results in an order book at the end of the period of SEK 139 million.
Cash flow from current operations before changes in working capital amounted to 12 million during the third quarter. During the period, cash flow has been affected by increased component inventory and overdue accounts receivable. Tied up capital in the form of inventory of components and modules has increased from SEK 15 to 20 million during the quarter. About half of this stock is IC components and modules that will be used in production at our new production partner. In addition, we have a certain stock of modules that we now keep in stock and distribute further to the various factories. Thereby we tie up some capital but at the same time make the product cheaper to produce and thus increase the gross margin. Finally, we have also built up a certain stock of new products.
The Group's expansion continues within existing regions where, in addition to existing framework agreements, we win new customers and projects in more countries. During the quarter, our repeater is approved by Stadler so that our product can be built into train cars already in the factory. Australia is a relatively new market with great potential, which is why a person is employed with placement in Sydney to win new projects in this market. Furthermore, the Group has taken home another 4 business for Microsoft's data halls spread across Europe. In Ireland, we win a first deal with a neutral host for an indoor project with a unique combination solution.
Sustainability and cyber security continue to be important areas with increasing focus from both our partners and end customers. Our energy-efficient and maintenance-free solutions are attractive both from an energy and cost perspective, but also from a sustainability perspective. We also offer secure systems that meet the requirements for cyber security in the future where end customers can be confident in meeting future local laws on cyber security based around the EU directive NIS-2.
Finally, I am very satisfied that the group is continuing the global expansion in new countries at the same time as the expansion in existing markets continues according to plan. We continue and contribute to the digitization of society with our climate-smart and secure products with high bandwidth, both for 5G and for other critical communications.
Kista, October 27, 2023
Fredrik Ekström – Group CEO
Significant events during the third quarter
Maven Wireless expands to Australia
Maven Wireless Sweden AB (publ) expands the sales and marketing organization with a new technical salesperson based in Sydney. The group has already sold products in this market and now has the ambition to take a larger part of the local market in Australia and New Zealand. The Maven Wireless addressable market in Australia, New Zealand and Singapore is approximately USD 100M in 2023 and it is growing at 6% CAGR (from Market&Markets 2022).
Maven Wireless is granted a fifth patent in South Korea
Including the new granted patent, Maven Wireless possesses 69 patents worldwide and has additionally 10 patent applications pending. This new patent protects Maven Wireless digital DAS products and the way how the products transport data over the fibre network. This patent supports and protects Maven Wireless’ business especially in the APAC region.
Maven Wireless receives product approval and order for train repeaters worth SEK 3.4 million
The Swiss train manufacturer Stadler Rail approves the Maven Wireless TOR repeater product for cellular coverage on board their KISS train family and at the same time orders 15 pieces of TOR for trains to the end customer Transitio in Sweden. Transitio has a frame agreement where an additional 60 KISS trains can be ordered configured with Maven Wireless TOR. At the same time, the TOR product is now available as an option for other customers of Stadler's KISS trains. The deals for Stadler Rail are done together with Maven Wireless' Swiss partner Strapag.
Maven Wireless hires Erik Nilsson as new global sales manager
Maven Wireless Sweden AB (publ) hires Erik Nilsson as the new Chief Sales Officer for the group. Erik was previously CEO at OptiMobile. He has extensive experience in leading sales roles in the telecom and DAS industry from, among others, MIC Nordic, JMA Wireless, iBwave, ADC, Andrew (now Commscope) and Ericsson. Furthermore, Erik has broad international experience through overseas postings in, for example, the USA, Brazil and Italy.
Significant events after the end of the period
MAVEN WIRELESS AB's nomination committee appointed for the 2024 annual general meeting
The nomination committee for the 2024 AGM has been appointed in accordance with the instruction for the nomination committee resolved by the AGM 2021. The committee shall consist of representatives appointed by the three largest shareholders and the chairman of the company. The nomination committee consists of Gunnar Malmström as the largest shareholder, Jonas Ahlberg, appointed by Fredrik Ekström, Karin Ebbinghaus, appointed by Göran Grosskopf and Anders Björkman, chairman of Maven Wireless. Gunnar Malmström was elected chairman of the committee. Shareholders who wish to submit proposals to the nomination committee can do so via e-mail to email@example.com, telephone 08-760 43 00 or by letter to Maven Wireless AB, Attn: Valberedning, Torshamnsgatan 39 B 164 40 Kista, Sweden, Sweden, no later than March 1, 2024.
Maven Wireless is granted a first patent in India
Maven Wireless has been granted a first patent in India. Including the newly granted patent, Maven Wireless has 70 patents worldwide and has an additional 9 patent applications pending. The new patent in India covers key elements of how DAS (Distributed Antenna System) equipment automatically configures itself depending on the external environment as well as how to make DAS redundant and resilient. This patent supports and protects Maven Wireless' operations globally.