Intellego Quarterly Report 1 April to 30 June 2024

• Net sales was TSEK 54 691 (44 839)
• Cash flow from operating activities was TSEK 9 886 (-10 040)
• Profit after financial items was TSEK 18 029 (15 358)
• Profit after tax was TSEK 13 224 (11 737)
• Earnings per share, before dilution, were TSEK 0,48 (0,47)

The entire quarterly report is available at: https://intellego-technologies.com/sv/rapporter/

A message from the CEO
Intellego’s journey of growth continued during Q2 and we are on track of achieving our goal of reaching over 300 million SEK in revenue with a connected EBIT of over 110 million SEK in 2024. In addition, Intellego now sees significant improvements in cash flow, which will continue, and the company foresee an operational cash flow of around 100 million SEK in 2024 based on the development so far this year and what’s to come in 2024.

The year, so far, can be summarised as a record year for the Intellego group. These results come from our long-term focus on our customers and partners, where close collaborations lead to the best products in the market in each category. At the same time, we have a fast and efficient development process that can quickly respond to market needs. Proof of that success is that we achieved both turnover and profit records in 2024. Furthermore, we now see how Intellego is transforming from a young company into a more mature business with positive operational cash flow. This transition becomes clear when looking at where the company is now compared to a year ago:

Part of the reason for the above results, especially the improved cash flow, is because Intellego is now getting paid faster compared to in 2023. For the full year 2023 Intellego’s receivables were approximately 44% of the company’s revenue by the end of the year. In 2024, so far, the same metric is at approximately 21% which is something the company keeps improving. In 2023 Intellego ended the year with 83 million SEK which came about during 2023. With a revenue of 187 million SEK and receivables of 83 million SEK gives a 44% ratio.

During Q2 the group continued to invest in its future growth which can be seen by the increase in other external costs and on the investment side. These are one-time costs and investments that will ensure Intellego is prepared for the coming market and growth. Examples of these investments are that the company is now preparing to become ISO 9001 and 14001 certified, something that is required by more and more of Intellego’s customers. The investments in capital UV equipment continued also in Q2 where we added several new products to the product portfolio adding to future growth. The investments made in Q2 were significant and Intellego does not plan to make as large investments for the foreseeable future with the focus switching to transforming these investments into cash. Due to this, the company is expecting to have a significantly higher cash position by the end of 2024 compared to the end of Q2, which is supported by improving cash flow since the end of Q2.

It is expected that the investments completed so far shall create hundreds of millions of SEK in cashflow for the company in the coming years. One part of this is coming from Yuvio where as of today we have distributed around tens of systems and by end of the year we expect to have distributed around 60 systems in the market. In 2025 that number should be significantly higher. Revenues and cash flows from Yuvio will come from both the sale and leasing of equipment and increased usage of dosimeters. With Yuvio, Intellego can significantly increase the sales of dosimeters as we see that a system that is distributed by Yuvio usually uses 2-5x more dosimeters compared to a system sold by a UV disinfection company which buys the dosimeters and then resells them to e.g. a hospital. Through Yuvio, Intellego can speed up the process of dosimeter implementation into the UV disinfection cycle and therefore increase the sales volume of dosimeters.

Daro delivered another good quarter and we continue to expect Daro to deliver 15% sales growth in 2024. Profit growth will be significantly higher due to increased gross margins as the Group continues to expand its specialist divisions, Lighting and UV & Water. The acquisition of UV Light Technology further accelerates this expansion and Intellego’s growth in the disinfection and curing areas. During Q2 we continue to work with our partners in the curing industry and the onboarding process with the global curing partner has been completed. The goal of a global launch in 2024 remains.

In June we announced a collaboration with Likang which is one of the largest companies active in the disinfection industry in China with a reach of around 3 000 hospitals. Yuwell, the parent company of Likang, has a global reach of approximately 300 000 healthcare institutions. The collaboration is moving ahead well and we look forward to work with Likang on Intellego’s existing dosimeters but also exploring additional products to collaborate on.

Intellego have also started to market its software systems to the curing and disinfection industry where the company provides a subscription model on top of the sales of dosimeters. Intellego’s software can be used as a quality control tool where the software translates the colour change of the dosimeter into a more specific energy range which e.g. is implemented into UV disinfection devices to verify that the disinfection has been properly undertaken.

On the IP front, we continuously evaluate how we can strengthen our position and we recently received information that two patent applications were in the process of being granted, which later on they were. One of the patents is for our core ink technology, where the development and upgrades we have done in the last years are covered. The other patent is for the software Intellego have developed described above. These two patents protect Intellego’s technology for another 20 years.
Looking ahead we see that the business is moving in a positive direction where sales in the main business areas, disinfection and curing, continue to increase and are expected to continue to do so. This is the result of Intellego’s continuous work to improve every aspect of its business. Furthermore, especially the disinfection business is expected to benefit from new market standards and up and coming regulations where UV disinfection devices are facing more stringent demands for quality control. Based on this, Intellego’s long term goal is that within three to five years, the company shall have a revenue of over 1 billion SEK with a connected EBIT of over 300 million SEK. This will be achieved primarily by geographic expansion and sales of both existing and new products.

Claes Lindahl
CEO of Intellego Technologies