FINANCIAL RESULTS FOURTH QUARTER 2024
FINANCIAL RESULTS FULL YEAR 2024
BUSINESS HIGHLIGHTS DURING THE FOURTH QUARTER 2024
BUSINESS HIGHLIGHTS AFTER THE PERIOD
[1] Metals for electrolysis are for certain customers invoiced in a cost-neutral manner not affecting operating profit.[2] Comparative number includes a one-time gain of SEK 4.0 million.[3] Includes the part of the inventory that has been financed by customer pre-payments.[4] Future agreed leasing revenue of SEK 10.4 million over 51 months for a production line in Coating Service Center China is not included in the backlog figures.[5] Comparative number includes severance pay for the former CEO of SEK 3.0 million.
CEO’s COMMENTARY
The fourth quarter marked a successful end to 2024, a year that clearly showed that our strategic priorities are starting to yield results. Our continued growth and reported net sales of over SEK 100 million for the full year underline our ability to deliver according to plan. At the same time, we recognize that we have a lot of work ahead of us and are closely following market developments to adapt our activities to the changing needs of our customers. The year’s successes, together with a continued focus on standardization, efficiency and increased cost control, have prepared us well for 2025.
Stability and progress in the fourth quarterNet sales during the fourth quarter amounted to SEK 42.4 million (38.4) and showed progress in several key areas. In particular, the development in China has been strong, where our operations within Coating Services continue to grow. Another delivery of an INLINECOATER™ IC2000 during the period further strengthens our presence in this strategically important market and demonstrates stable growth and continuity in system sales over the year.
A major focus has been on increasing revenue and maintaining good cost control. Operating income for the quarter amounted to SEK -3.8 million (0.6), where the comparable figure for 2023 includes a one-time gain of SEK 4.0 million. To increase profitability, we have increased cost control further during the fourth quarter and the beginning of 2025. As part of this work, several targeted measures have been implemented to optimize our organization, including a reduction in personnel. The changes aim to create operational efficiency while allowing the business to grow with the right key competencies.
Cash flow from operating activities amounted to SEK -33.5 million (-7.7) for the quarter and SEK -72.9 million (-42.1) for the full year. An investment in working capital is largely linked to a deliberate inventory build-up in connection with the transition to standardized system production against forecast, which strengthens our delivery capacity and shortens lead times for customers. With year-end inventory levels, we are well-prepared to meet demand without further inventory investments in the short term. The move to new facilities during the period resulted in one-time costs, including relocation expenses and temporary double leasing costs.
We closed the year with a significant accounts receivable balance, from which we expect to collect cash gradually during the year, which is expected to strengthen liquidity. We expect significantly improved cash flow in the first quarter of 2025 compared to the preceding quarter.
Focus on sales and customer relationshipsOur push-pull strategy – where we work to build relationships with strategic players across several stages of the value chain – remains successful in sales development. During the year, we welcomed a total of 29 new customers in our entry-stage business Coating Services, of which eight in the fourth quarter. The customers are distributed across North America, Europe and Asia, with the strongest development in China. Several of these customers have been recurring and have continuously increased their test volumes, which shows an active commitment and trust in our solutions. The test phases are not only an important gateway to larger deals, but also give us the opportunity to be active in the customers’ development stage where we can fine-tune our offering and ensure that we meet the market’s needs.
In the beginning of 2025 we announced a cooperation with Feintool and SITEC, manufacturers of high-precision components for fuel cells and electrolyzers, where Impact Coatings was named preferred supplier of coating solutions. This type of agreements mark important developments in our work to strengthen our presence in the hydrogen industry and open the possibility of further joint opportunities in the future.
Market overviewIn 2024, the global hydrogen market was characterized by challenges, with several major players facing setbacks. Despite this, we have seen strong growth in China, which is now our most dynamic market. Our presence there, with several systems in commercial operation and a local Coating Service Center, has been crucial in meeting demand and consolidating our position in the region.
In North America, the market showed signs of recovery during late 2024 despite a challenging year overall. We see an increase in new relationships and recurring business, indicating that our offering is relevant and continues to generate interest. Europe has remained stable during the year, with ongoing activities in hydrogen and metallization, but also in other coating applications.
Through our global presence and strategic establishment in key geographic markets such as Europe, the US and China, we can quickly identify and act on growth opportunities in regions where the market is developing the fastest. Our locations place us close to our customers and potential partners, which helps us adapt our offering effectively and create long-term relationships. This approach ensures that we remain relevant on a global level and strengthen our competitiveness and deepen our presence in regional markets.
During the year, our strategic focus has been on ensuring that supplied coating systems are fully utilized in customers’ production. This has meant working closely with our customers to optimize the systems under real-world conditions, resulting in valuable feedback and technical improvements. This process strengthens our technical capabilities and makes us well-prepared to meet accelerating demand as the market grows.
OutlookWe enter 2025 with strong momentum and continue on our chosen path. By further standardizing our production and shortening lead times, we are creating a more efficient business. Improved efficiency is enhanced by increased cost control, as we continue to optimize resource utilization and streamline operations to reach profitable growth.
We also continue to intensify our commercial efforts, with the goal of reaching new customers and deepening relationships with existing customers and partners. Among other things, we are working to strengthen our offering within electrolysis and fuel cells by expanding it to include a wider variety of coating technologies that are compatible with our existing systems.
The move of the head office and Coating Service Center to new premises in Linköping is now complete, marking a significant step forward for our business. Our new, modern facilities strengthen our operational platform and improve our conditions for continued growth and development.
I would like to extend a warm welcome to Lena Åberg, who joined us as permanent CFO during the quarter, and offer my thanks to our outgoing CFO Bengt Vernerson. Lena’s experience and leadership will be an important asset in our continued development. I would also like say thank you to our employees, customers and shareholders for your contributions and trust during the past year. Together, we will continue to build on Impact Coatings’ strengths and opportunities. I look forward to sharing a successful and dynamic 2025 with you.
Jonas Nilsson, CEO
The full report is attached, and can be retrieved on the company’s website at www.impactcoatings.com/finansiella-rapporter-arkiv/.
Presentation
Impact Coatings invites investors, analysts and the media to a presentation of this Year-End Report on Friday, February 14 at 10:00 am (CET). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Year-End Report and take questions. The presentation will held via webcast in English.
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