FINANCIAL RESULTS THIRD QUARTER 2023
FINANCIAL RESULTS JANUARY-SEPTEMBER 2023
SIGNIFICANT EVENTS THIRD QUARTER 2023 [4]
SIGNIFICANT EVENTS AFTER THE PERIOD [4]
[1] Metals for electrolysis are invoiced in a cost-neutral manner and do not affect operating profit. [2] Currency exchange rate at period end.[3] Includes a provision for severance pay for the departing CEO of SEK 2,960 thousand. [4] Significant events refer to events that comprise insider information and shall be made public via press release.
CEO’s COMMENTARYContinued growth, first impressions as new CEO
I am honored and excited to have been appointed CEO of Impact Coatings, a role that I assumed on October 1. This interim report summarizes the company’s performance for the period July 1-September 30, thus prior to my arrival. However, I will provide my first impressions of the business as CEO and reflect on the strategic priorities I see ahead.
Third quarter net sales growth and commercial progress in line with our strategyThe third quarter of 2023 demonstrated continued growth in net sales and execution on the strategic plan communicated in conjunction with the March 2023 rights issue. Net sales amounted to SEK 10,819 thousand (4,207) during Q3 2023 and SEK 50,763 thousand (13,945) for the year to-date period, excluding metals for electrolysis. On a rolling 12-month basis, net sales at the end of Q3 2023 amounted to SEK 68,081 thousand, excluding metals for electrolysis.
Coating Services sales were roughly flat compared to Q2 2023, with robust sales activity compensating for the seasonally slower summer holiday period during the third quarter. Electrolysis coatings for green hydrogen remained the main sales driver. No coating systems were delivered during the third quarter, in line with previous communications.
At the end of the third quarter, the order backlog for coating systems was SEK 36,478 thousand while the order backlog for Coating Services was SEK 750 thousand, which is a snapshot at the end of the period. Although there was no order backlog for electrolysis at period end, a part of customer pre-payments for raw materials are intended for future Coating Services for electrolysis. We cannot, however, guarantee the timing or volume of future Coating Services orders. Electrolyzer stack manufacturing is in a ramp-up phase and coating orders vary in timing and size. We expect the activity level in Coating Services to remain high during Q4 2023 and into 2024.
In conjunction with hydrogen trade shows in Germany and South Korea, and at the official inauguration of our Coating Service Center in China, we launched a new premium coating for fuel cell plates in heavy duty applications during September. In parallel with our focus on electrolysis, the premium FC coating is an important step in strengthening our offering in the fuel cell segment. Heavy duty applications are driving the demand for long lifetime fuel cells, which require more durable bipolar plates. Today, China is the main market for fuel cells globally. Our Shanghai facility is therefore offering the premium FC coating initially while we provide samples and qualify the coating with customers in other regions.
Coating Services – our growth engineAt the end of September, Regional President Yaowen Wang hosted the inauguration of the Coating Service Center in Shanghai together with customers, local officials and team members, and visitors from our Swedish headquarters. The facility in Shanghai is the cornerstone of expanding our Coating Services offering and will help meet the growing demand for fuel cells in the Chinese market.
The Shanghai facility launched operations during late spring 2023 and activity has been high throughout the third quarter. Production volumes have increased while we have in parallel performed customer qualifications of the new premium FC coating for heavy duty applications. The premium coating strengthens our offering for the growing fuel cell vehicle industry in the region. The sales pipeline in China is strong and growing, comprising regional stack producers as well as global automotive and industrial OEM’s.
The advanced, efficient facility in Shanghai will serve as a template for the planned North American Coating Service Center. The Shanghai facility also offers lessons and best practices for the new headquarters in Linköping to be opened during 2024. Having Coating Service Centers in three distinct global regions will over time yield meaningful synergies in terms of sales and service levels to global customers, cost and quality management, and production processes.
The Coating Service Center in North America will bring us closer to current and potential customers, accelerate delivery times, and increase market awareness. The facility will be located in Upstate New York. Proximity to customers, inbound/outbound logistics, and access to employees with coating and vacuum equipment experience are key considerations in our facility search. With Regional President Robert Mamazza leading the efforts, we aim to have the facility operational during the first half of 2024.
At our Capital Markets Update held on September 18, Yaowen Wang and Robert Mamazza described the company’s market assessments and commercial progress in China and North America, respectively. China is a commercially active market for fuel cells – still in its early stages but with a viable industry ecosystem and functioning supply chains. North America is emerging quickly, with electrolysis (more so than fuel cells) driving demand initially. We expect strong commercial and regulatory drivers in the hydrogen segment to stimulate activity in these regions during the coming years. Impact Coatings is well-positioned to capitalize on the resulting growth in the market’s pursuit of robust coatings.
First impressions and a look aheadAfter just three weeks as Impact Coatings CEO, I am deeply impressed with the expertise and drive of our team members; with the rigorous demands and technological leadership of our customers; and with the size of the commercial opportunities before us.
Looking ahead, I see several areas where I hope to make a lasting difference together with my new colleagues.
We can do more for our customers after they have purchased and installed INLINECOATER™ systems, driving increased after-market sales. This is an area that has received increased attention in recent years, but looking at the average revenue generated per system over its useful life, there is more we can do. As with all our activities, we will start by listening to our customers and adapt our offering to help them do more for longer with our market-leading PVD coating systems.
To facilitate sales growth and increase margins, I look forward to working with the team to reduce machine delivery lead times, so that we produce coating systems according to qualified market forecasts more so than reacting to incoming orders. We will work closely with our suppliers and other partners to accelerate production while reducing our bill of materials and labor costs.
In the organization, we have world-class coating experts that help our customers develop tailored coating solutions that solve emergent problems in, for example, water electrolysis or waveguide antenna production. We can work more closely with these customers at an early stage in their product development, then stay with them through commercial growth and long-term support to deliver value during an entire product life cycle. By working closely with our customers, we can help them translate their business and technical requirements into coating solutions that help create competitive advantages in the marketplace. We can also extend our technical expertise into a larger qualified sales team that drives more revenue, with deep technical expertise relevant for our most promising application areas.
These are only a few early thoughts after a busy but energizing first three weeks at the helm. In the next several weeks, I will continue my one-on-one conversations with the team and will be meeting customers visiting Linköping while also traveling abroad to see customers and prospects.
I look forward to further elaborate on the company, our progress, and priorities in the coming quarters. Once again, I am very happy to be here and thankful to be entrusted to lead the company in the next step of its journey.
Jonas Nilsson, CEO
The full report is attached, and can be retrieved on the company’s website at www.impactcoatings.com/finansiella-rapporter-arkiv/.
Impact Coatings announces that Jonas Nilsson has assumed the role of CEO of Impact Coatings today, October 1, 2023.
Jonas Nilsson was named as incoming CEO in a press release on June 16, 2023. Jonas has a relevant background in the technology and engineering industry, with experience that includes previous CEO positions and board assignments in growing technology companies, and has been active in the semiconductor, automotive and coatings industries. He comes most recently from LiU Invest, where he was Investment Manager. As of September 30, 2023, Jonas owned 250,000 Impact Coatings shares privately and via a privately held company.
“The Board is pleased to welcome Jonas as CEO of Impact Coatings. The change of CEO opens an exciting new chapter for the company as it enters the next phase of its commercial development, with a focus on further industrializing and internationalizing Impact Coatings. Jonas has a deep understanding of the industry, extensive experience, and strong leadership abilities – all of which will help strengthen our market position and drive the company forward,” said Mark Shay, Chairman of the Board at Impact Coatings.
Impact Coatings AB (publ) (“Impact Coatings”) hosted a Capital Markets Update in Stockholm today. The event was live-streamed and can also be viewed afterwards. Leading representatives for the company gave their views on the development during the year to-date and presented upcoming actions and initiatives. Incoming CEO Jonas Nilsson, who will assume the CEO position from October 1, introduced himself at the event.
The update followed the completion of a rights issue in March 2023, and provided insights into the potential the company has identified within the green hydrogen market, which is entering a ramp-up phase and is expected to grow sharply during the coming decade. The development of green hydrogen presents an exciting growth opportunity in which Impact Coatings’ market-leading coating services are well-suited to meet the market’s increasing volume needs and demanding technical requirements.
During the Capital Markets Update, Torbjörn Sandberg Kanon (departing CEO), together with Yaowen Wang (Regional President China), Robert Mamazza (Regional President North America), and Jonas Nilsson (incoming CEO), explained the company’s strategic priorities and growth ambitions related to hydrogen solutions. They elaborated on how the company’s coating technology aligns with the increasing demands of fuel cells and electrolysis, which comprise the company’s most significant business opportunity.
The company described its Coating Service Centers in China (launched mid-2023) and the US (to be established 2024), which serve two exciting growth markets driven by technological advancement and government incentives. The presenters discussed the company’s different business and delivery models, where Coating Service Centers serve as the main growth engine to meet customers’ production needs in all development stages, supporting the scale-up of the hydrogen industry in a controlled manner throughout each production phase.
Finally, the Impact Coatings team described the journey ahead toward becoming the leading Coating Services provider in its prioritized markets. Take part of the full Capital Markets Update here.
Impact Coatings has launched a next generation premium fuel cell (FC) coating for heavy duty applications. The new premium FC coating offers enhanced properties and protection for anode and cathode metal plates in LT-PEM FC stacks. The coating is currently available as job coating at the company’s Coating Service Center in China.
During the last decades, focus on ways of leaving fossil fuel-based powertrains has increased. Electrical vehicles transferring hydrogen into electricity in fuel cells have become increasingly interesting for OEMs to pursue, especially for long distances and heavy-duty applications. The most common technology in this field is the LT-PEM (Low Temperature Proton-Exchange Membrane or Polymer Electrolyte Membrane) based fuel cell system. LT-PEM fuel cells rely on anode and cathode plates arranged in the fuel cell stack, plates that are either made of metal or graphite. From a production point of view metal plates are the emerging solution, thanks to the higher power density, and to lower cost, size and weight. To assure a long lifetime and efficiency in the stack’s challenging environment, a surface treatment, such as PVD coating, is necessary. During recent years heavy-duty applications have been driving an increasing demand for components that can withstand higher voltages without degradation of the protective coating. To meet this demand, Impact Coatings has developed and introduced the new premium FC coating in the group’s fuel cell coating portfolio. The coating is currently offered as job coating to best support customer needs in verification stages. Impact Coatings’ new robust premium FC coating mitigates metal ion leakage into the fuel cell stack at potentials up to 1.6 V. Leaking metal ions damage the stack membranes, reducing both stack life and performance. With the new, premium FC coating, which offers good adhesion and electrical conductivity, as well as stable and low contact resistance, the stack’s performance will be maintained throughout the stack’s lifetime.
Impact Coatings is a center of expertise and a leading provider of PVD coating solutions for metal plates in the hydrogen industry. Development of the company’s fuel cell coatings started over fifteen years ago. The company’s mid-end coating, Ceramic MAXPHASE™, for LT-PEM fuel cell plates has almost a decade of field qualification in automotive applications. Today, the company continues to work closely with customers in coating development to meet coming market demands for fuel cells, as well as for electrolyzers and the production of green hydrogen.
Impact Coatings invites investors, analysts, financial media, and other stakeholders to its Capital Markets Update on September 18, 2023. Torbjörn Sandberg Kanon (departing CEO) will together with Yaowen Wang (Regional President China), Robert Mamazza (Regional President North America), and Jonas Nilsson (incoming CEO) give an update on Impact Coatings’ recent development and strategic priorities with a focus on the emerging market for green hydrogen and coating services.
The capital market update will be held as a physical event at Inderes Studio, Västra Trädgårdsgatan 19 in Stockholm, on September 18, 12:00-13:30 CEST, and will simultaneously be streamed live. Speakers:
Registration is open on https://tv.streamfabriken.com/impact-coatings-cmu-2023/register. If you wish to attend the physical event at Inderes Studio, please register as soon as possible.
FINANCIAL RESULTS SECOND QUARTER 2023
FINANCIAL RESULTS JANUARY-JUNE 2023
SIGNIFICANT EVENTS SECOND QUARTER 2023 [4]
[1] Metals for electrolysis are invoiced in a cost-neutral manner and do not affect operating profit.[2] Includes a provision for severance pay for the departing CEO of SEK 2,960 thousand. Adjusted operating profit SEK -6,760 thousand and SEK -15,891 thousand, respectively.[3] Currency exchange rate at period end.[4] Significant events refer to events that comprise insider information and shall be made public via press release.
CEO’s COMMENTARYStrong quarter lays the foundation for the rest of 2023
The second quarter of 2023 showed strong revenue growth, in line with the previously reported order status. Net sales for the group amounted to SEK 22,677 thousand (4,379), excluding metals for electrolysis. In comparison to the same quarter in 2022, the second quarter of the year includes a system delivery and was our strongest period to-date for Coating Services.
Coating Services achieved net sales during the period of SEK 8,599 thousand (2,362), excluding metals for electrolysis, with the primary contribution from electrolysis coatings for green hydrogen. As in the previous report, we focus on sales figures excluding the metals used for electrolysis within Coating Services, since these are invoiced cost-neutrally and do not affect operating profit.
Coating Services is expected to grow further in the long term after we, during the quarter, brought our Coating Service Center in Shanghai into full operation and in 2024 will open a Coating Service Center in the USA and move to a larger more modern facility in Linköping. These three initiatives will lead to a marked increase in capacity.
The order book for Coating Services is reported at the end of the second quarter with a value of SEK 3,250 thousand, excluding the value of metals for electrolysis. Orders within Coating Services are normally delivered over 1-4 months and the order book at the end of the quarter is a snapshot. Our large American customer, with whom we entered into a Letter of Intent in February 2023, has continued to place electrolysis coating orders for separator plates and porous transport layer plates.
In June, we received the first order for an INLINECOATER™ IC2000, our new coating system for volume production to be used for the production of fuel cell plates for the automotive industry at SEKSUN in China. Delivery of the IC2000 system is planned for 2024. The order book for coating systems amounted to SEK 36,318 thousand at the end of the period.
The increasing sales volume generated improved earnings compared to previous quarters; at the same time, we are continuing to invest in our growth strategy with the goal of becoming profitable.
We continue to deliver on our strategyThroughout the first half of 2023, we have intensified the company’s focus and investments in the hydrogen area in accordance with our strategic agenda. As specified in connection with the March 2023 rights issue, the growth journey can be summarized in four points:
1. Investments in electrolysis and green hydrogenIt is becoming increasingly clear that green hydrogen produced by electrolysis using renewable energy and water will play a central role in the future global energy mix and will be a cornerstone in the transition to sustainable energy systems with low carbon dioxide emissions.
The company’s coating technology is well-adapted to the two-dimensional metal plates found in both electrolyzers and fuel cells. Over the past year we have made significant investments in coating solutions for electrolysis and our new INLINECOATER™ IC2000 enables cost-effective coatings and production solutions that are competitive in meeting the industry’s needs.
Impact Coatings’ strong focus on hydrogen makes us unique in relation to other PVD suppliers who work broadly across many industries and applications. The focus means that today and in the future we can be at the forefront and quickly respond to customers’ needs in an industry undergoing intense development.
2. Expansion in North AmericaOur investment in North America continues. In mid-June, we completed the registration of our subsidiary in the USA. The establishment improves our capability to meet the growing demand in the North American market. We move closer to customers and facilitate contract processes, at the same time increasing market awareness of Impact Coatings.
In the wake of strong regulatory and commercial developments, North America in general and the USA in particular have established themselves as our main markets in green hydrogen electrolysis. It is a central part of our strategic agenda, with significant commercial potential. We look forward to continuing our work in the region, with a focus on establishing a Coating Service Center, planned for operation in 2024.
3. Development of Coating Service CentersToday, Coating Services is the cornerstone of our business. A great advantage lies in the fact that we even out both our cash flows and work efforts, which increases predictability. But above all, it enables customers to use our production solutions without significant investment, which lowers the threshold for an initial commitment. Our approach also creates the conditions for meeting customer demand immediately. Coating Services creates a solid platform to drive and scale up our business. Continuing to develop our existing Coating Service Centers in Linköping and Shanghai will be crucial to reaching larger sales volumes over time.
In Linköping, we increased production during the second quarter to include a second shift. At the same time, planning is underway for a move in Linköping to larger and more modern premises in the company’s new headquarters, with planned occupancy in autumn 2024.
Our new Coating Service Center in Shanghai became fully operational in the second quarter, following the installation of the center’s first coating machine, an INLINECOATER™ IC500, which arrived in April. The new facility now supplies bipolar plate coatings produced in the same region to fuel cell customers in China. The Shanghai facility will also serve as a model for future Coating Service Centers, first in the USA and later in the new facility in Linköping.
4. IndustrializationContinuing to industrialize the company will be of the utmost importance to ensure competitiveness and profitability over the long term. This includes automation, system solutions, securing components, and new facilities – activities that make it possible to reduce the relative share of costs as the business grows.
In addition, the capitalization of the company is an important part of our growth journey. It enables, in addition to investments, our ability to secure component supplies and purchase in advance central components such as machine bodies for coating systems. We tie up capital for a period of time, which is later released in connection with system sales and Coating Services.
Thank youOn September 18, Impact Coatings will host a capital markets update as a follow-up to the completed rights issue and our strategy. It will be my last investor presentation as CEO of the company. Incoming CEO Jonas Nilsson will participate and will introduce himself at the event.
I am pleased to pass the baton to Jonas Nilsson. Jonas brings solid experience in the coating industry and in technology companies in general. He has the right qualities to lead the company into its next phase. I am also proud that we have achieved so much during 2023, with the company in a stable position and with the right conditions for future growth and profitability.
I would like to thank all colleagues, customers, partners and shareholders for our collaboration during these past years.
Torbjörn Sandberg Kanon, CEO
On September 18, 2023, Impact Coatings will host a Capital Markets Update at Inderes Studio, Västra Trädgårdsgatan 19, in Stockholm. At the event, Torbjörn Sandberg Kanon, outgoing CEO, and management representatives will present the business.
The Capital Markets Update provides an opportunity for investors, media, and other stakeholders to get an update on the strategy and development of Impact Coatings.
The event will be live streamed for those who cannot attend in person (number of seats is limited). More detailed information will be provided closer to the event. The event will start at 12:00 CEST and is estimated to finish by 13:30 CEST.
Date: September 18, 2023Time: 12:00 CESTVenue: Inderes Studio, Västra Trädgårdsgatan 19, Stockholm
If you wish to participate, please register at https://tv.streamfabriken.com/impact-coatings-cmu-2023/.
Torbjörn Joelsson has decided to leave Impact Coatings after 18 years. He is stepping down as CTO and as a member of the management team, effective August 24, 2023. Recruitment of a new CTO has begun.
“Torbjörn Joelsson has played a central role in building up Impact Coatings from a start-up to a growth company, in the development and industrialization of our INLINECOATER™ systems, including coating technology and coating processes, as well as in building long-term relationships that have generated business with several key customers. During my tenure as CEO, he has also been a driving force in refining the company’s strategy to focus on solutions for hydrogen and autonomous safety systems. I want to thank Torbjörn for his defining contributions to the company over many years,” said Torbjörn Sandberg Kanon, CEO of Impact Coatings.
Impact Coatings is moving to new headquarters in Linköping in the autumn of 2024. The new facility is under construction and situated in Kåparp, directly adjacent to Mjärdevi and Linköping Science Park, as well as Linköping University. The new two-story building will mean significantly expanded opportunities for production and development of the company’s sustainable coating solutions within PVD technology. Wilzéns Fastighetsförvaltning will own and manage the property. Groundwork has begun and construction will start in the fall.
With the new headquarters, amounting to nearly 3,000 m2, Impact Coatings doubles the production area in Linköping, together with departmentalized office spaces, conference rooms, and with the possibility of expansion over time. This means an increased capacity to deliver coating services from the company’s Swedish Coating Service Center, which also serves as a demo center for customers. It allows for greater production of industrial PVD systems for customers and for the company’s own coating operations, while offering larger development areas and a new lab for the company’s R&D department. Impact Coatings is in an expansive phase, underpinned by a rapid global development in green fossil-free hydrogen, where coating technology is needed and demanded in the area. The construction project in Linköping takes place at the same time as the company has started production in a new Coating Service Center in Shanghai, China, and plans for another establishment in the USA in 2024. “The new headquarters is an important puzzle piece in our growth journey. With a new attractive location, an advantageous logistical placement, and production-optimized workspaces in a modern environment we will be able to continue to attract the region’s best talent. At the same time, we can grow our business and streamline as well as automate our production flows. Key aspects to be able to fully support the fast-growing industries that together with us work on the next generation of energy and transportation solutions,” said Torbjörn Sandberg Kanon, CEO of Impact Coatings. “It is gratifying to carry out this project for Impact Coatings – not least considering their commitment in the green technology sector and use of sustainable production methods, which goes hand in hand with our values,” said Andreas Wilzén, CEO at Wilzéns Fastighetsförvaltning. “I would also like to commend Linköping municipality, for the fast pace and positive attitude throughout the planning process,” he continued.
The Coating Service Center set up by Impact Coatings in Shanghai has entered into operation, now supplying fuel cell customers in China with bipolar plate coatings produced in the country. The facility has an initial capacity to produce 1 million fuel cell plates annually, with the facility prepared to scale up volumes. The formal inauguration of the site will take place after the summer.
With a local coating partner specializing in hydrogen applications, Chinese fuel cell customers speed up coating qualification and production scaling. Domestic production also reduces costs, administration, and environmental impact related to international transportation of the fuel cell plates.
In April, Impact Coatings’ site in Shanghai saw arrival of its first INLINECOATER™ machine, optimized for fuel cell bipolar plate coatings. In addition to the coating line, the Coating Service Center includes a high-capacity cleaning line, quality control lab, logistics areas and office spaces – forming a complete production facility to serve customers in the region. After a run-in period of the production line and customer qualification procedures, the facility has now entered into operation.
The local organization, including a team of eleven led by Regional President Yaowen Wang, can now directly address customers’ demands in China. At the beginning of this year, several team members participated in education and training at the headquarters in Sweden. Knowledge exchange and training are key activities to eventually ramp up production, from 1-shift to multiple-shift operations. In addition, the facility offers the possibility of expanding coating machine capacity in the future.
The formal inauguration of the new Coating Service Center will take place after the summer, planned to bring customers, local officials, representatives from Swedish Consulate in Shanghai, and visitors from the Swedish headquarters together. Information of the exact date will be announced later on.
“After dedicated and intensive work, we have now started local production in China. With the facility in place and up and running we can help customers reduce risks, speed up the knowledge exchange, and respond faster to changing demands. Our presence and production capacity will be critical to meet the demands of the accelerating hydrogen market in China,” said Yaowen Wang, Regional President, China at Impact Coatings.
We use cookies to improve your user experience and to collect information about your visit. You can read more about our cookies and change your settings here. Read more
Cookies save information about how you use the website, data that can be reused. Read more
Necessary for the website to function.
Read more
These cookies are necessary for our website to function and therefore cannot be turned off. They are used, for example, when you set personal preferences, log in or fill out a form. You can set your browser to block or warn you about these cookies, but some parts of the website will not work then.
close-cookie-bar
wants-ec-cookies
wants-fc-cookies
wants-mc-cookies
wants-ac-cookies
Measures user patterns and creates statistics.
These cookies allow us to count the number of visits and traffic sources so that we can measure and improve our website. The information these cookies collect is completely anonymous. If you do not allow these cookies, we will not know when you have visited our website.
_ga_LWPJB5WV5Z
_ga
__hssc
__hssrc
__hstc
hubspotutk
_cfuvid