"We put yet another challenging quarter behind us from a revenue and financial perspective that was negatively impacted by the loss of the Curexa deal in the US (MUSD 2.9), lower revenues in Japan due to the cyclically low base of renewable contracts to finance companies and a weak economic climate in Europe. In 2024 we have dealt with and finished the cleanroom projects from 2021. During the fourth quarter the recurring revenue increased sequentially to MSEK 77 compared to MSEK 73 in Q3 2024. We have significantly advanced our position from a product perspective with six product launches in the last quarter, " comments Sebastian Lindström, CEO of QleanAir.
IMPROVED CASH FLOW DESPITE WEAK SALES IN THE QUARTER
- MSEK 104 net revenue, -16%
- MSEK 77 recurring revenue, -2%
- -5.3% EBIT margin, adjusted -2.9%
October-December 2024 in summary
- Net revenue MSEK 103.6 (123.8), currency-adjusted net revenue amounted to MSEK 103.2
- Recurring revenue MSEK 77.0 (78.5)
- Operating profit (EBIT) MSEK -5.4 (9.6), adjusted MSEK -3.0 (9.6)
- Operating margin (EBIT) -5.3% (7.8%), adjusted -2.9% (7.8%)
- Earnings per share SEK -0.31 (0.36)
- Cash flow from current operations MSEK 17.1 (14.4)
January-December 2024 in summary
- Net revenue MSEK 450.3 (503.5), currency-adjusted net revenue amounted to MSEK 465.1
- Recurring revenue MSEK 299.0 (306.3)
- Operating profit (EBIT) MSEK 12.0 (64.1) adjusted MSEK 21.5 (66.7)
- Operating margin (EBIT) 2.7% (12.7%), adjusted 4.8% (13.2%)
- Earnings per share SEK -0.10 (2.92)
- Cash flow from current operations MSEK 39.7 (62.6)
- The Board of directors proposes no dividend for 2024 (SEK 0.60 per share)
Significant events during the fourth quarter
- QleanAir expands product portfolio with the launch of six new solutions for optimization of air quality in professional environments
- QleanAir signs USD 437,000 agreement with a large IDN in New York, marking the seventh cleanroom suite sold to the customer
- QleanAir signs MUSD 1.03 agreement with a Baltimore non-profit health system with over ten hospitals
Significant events after the end of the period
- QleanAir appoints Fredrik Sandelin to new CFO
A WORD FROM THE CEO
We put yet another challenging quarter behind us from a revenue and financial perspective that was negatively impacted by the loss of the Curexa deal in the US (MUSD 2.9), lower revenues in Japan due to the cyclically low base of renewable contracts to finance companies and a weak economic climate in Europe. In 2024 we have dealt with and finished the cleanroom projects from 2021. During the fourth quarter the recurring revenue increased sequentially to MSEK 77 compared to MSEK 73 in Q3 2024. We have significantly advanced our position from a product perspective with six product launches in the last quarter.
Sales in the fourth quarter amounted to MSEK 104 (124). As a result of the weak revenue, we have reduced personnel costs in sales management at the corporate office and in the US by approx. MSEK 6 annually with effect from Q1 2025. The weak sales affected the operating profit negatively in the fourth quarter. Adjusted, operating profit amounted to MSEK -3.0 compared to MSEK 9.6 the previous year.
We maintain our focus on three priorities: Customer Focus, Sales Effectiveness and Cost Control. Our focus on solutions for more critical application areas creates opportunities to improve our margins.
CUSTOMER FOCUS AND PRODUCT LAUNCHES
During the quarter we continued our work towards more critical solutions for specific industrial challenges, which will make us more resilient in the current weaker economy. The six products we launched during the fourth quarter 2024 have been well received by our industrial customers in EMEA and APAC.
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 set up new customer meetings and thus to close new deals. As a consequence, revenue dropped by 14% in the quarter. In response to the lower revenue, we have reduced costs in sales management at the corporate office. We continue our regional investments to strengthen our proximity to customers and our investment in France shows continued growth, especially in Air Cleaners, which grew by 50% in the quarter and 35% for the full year 2024.
SALES EFFICIENCY DRIVES GROWTH AND PROFITABILITY IN APAC
APAC continues to be the driving force in the QleanAir Group. Japan contributes with significant revenue, strong earnings and cash flow in local currency. However, the Japanese yen has weakened against the Swedish krona, which negatively affected sales in 2024 by approximately MSEK 15. We continue to see stable demand with long-term growth in Cabin Solutions and strong growth in Air Cleaners. The base of renewable contracts will be significantly higher in 2025 than it was in 2024. In local currency, Air Cleaners grew by 55% in the fourth quarter.
COST CONTROL AND STRATEGY IN FOCUS FOR PROFITABILITY IN THE AMERICAS
The loss of the Curexa deal (total order value of approximately USD 2.9 million) had a significant negative impact on sales and profitability in the fourth quarter. QleanAir has initiated legal proceedings for damages. In the US, we have reduced the number of employees and, consequently, costs to accommodate the lower revenue. The first partnership dialogues in the US have been initiated as part of the new strategy for our US operations. At the same time, we have a strong contracted order book for installations in 2025, amounting to just over USD 3 million.
BUSINESS MODEL
The QleanAir business model consists of a combination of rental and sales, including service. Revenue amounted to MSEK 103.6 (123.8) for the quarter, which is a decrease of 16.2% and 16.6% currency-adjusted. Our recurring revenue amounted to MSEK 77.0 (78.5), a decrease of 1.9% but, sequentially, recurring revenue increased by 5.9% from Q3 to Q4 2024.
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.
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 lease of life with the next customer.
OUTLOOK
In 2025, we will sharpen our focus. In EMEA and APAC, we will focus entirely on Air Cleaners and Cabin Solutions. Regarding Cleanrooms, the focus is on the US.
In Cabin Solutions, which we view as a mature market and where we are the market leader, we will stay with a broad approach. Here it will be all about maximizing the reach.
When it comes to Air Cleaners, which we view as a growth market, we will focus on the industrial segment primarily. Because this is the segment where we can leverage the versatility of our products; our ability to recirculate filtrated air, create negative and positive pressure in a room, work with clean zones and a combination of all these four.
As a company, we know where we are heading. In 2025, we will leverage our success in digital marketing in Japan in two of our focus markets in EMEA; Germany and Sweden.
Finally, I would like to thank all our dedicated staff, as well as our customers and partners, for a good collaboration during 2024.
Solna, February 7, 2025
Sebastian Lindström, CEO QleanAir AB
For more information, please contact:
Sebastian Lindström, CEO
sebastian.lindstrom@qleanair.com
+46 703 08 94 51
Henrik Resmark, CFO
henrik.resmark@qleanair.com
+46 702 60 09 17
About QleanAir
QleanAir is a niche premium provider of clean indoor environment solutions. The company's business model is based on rental contracts for modular solutions with a full-service offer. QleanAir's solutions are developed using filter technology that traps, filters and recycles indoor air. The company's main markets are EMEA, APAC and the Americas. QleanAir's head office is located in Solna, Sweden, and the share is traded on Nasdaq First North Premier Growth Market, ticker QAIR. FNCA Sweden is Certified Advisor. For more information go to qleanair.com.
This information is information that QleanAir AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-02-07 08:00 CET.
