Interim report July-September 2022

Outcome –July - September
•    Net sales amounted to  1 556 (554) kSEK
•    Profit after net financial items amounted to  -3 142 (-1 188) kSEK
•    Basic and diluted earnings per share -0,24 (-0,09) kSEK
•    Cash flow from operating activities and investing activities -4 926 (-5 860) kSEK

Significant events July-September
•    Insplorion sells two research instruments
•    Insplorion presents the updated strategy: Insplorion focus fully on hydrogen

Watch CEO Johan Rask and CFO Per Giljam comment and answer questions about the interim report at 3.00pm today October 27, https://www.finwire.tv/webcast/insplorion/q3-2022/

During the third quarter, Insplorion's updated strategy was published. Based on a joint effort by the Board of Directors and the management, it was decided that the business would focus on hydrogen as that is where the technical and commercial prospects for the company hold the most promise.
The strategy can briefly be summarized as follows:

• Focus on hydrogen with a maintained instrument business, and down-prioritize areas where sufficient technology and market conditions are currently lacking—that is, the volume sensor for battery measurements and the nitrogen dioxide sensor.
• Prove the technology in customer-financed hydrogen projects and achieve commercial success.
• Accelerate the path to the commercial phase by exploring alternative ways in the form of acquisitions, mergers, and partnerships.

In connection with the refocusing, we are also recognizing an impairment on the work carried out on nitrogen dioxide sensor of approximately MSEK 3.3.

It is beyond doubt that hydrogen will need to be produced on a large scale in the future. In particular, a vast amount of green hydrogen will be required in the coming decades just to replace the hydrogen currently produced from fossil fuels such as natural gas and coal.  Subsequently, the gas must be stored, transported, and used in a wide range of end applications. Throughout these stages, hydrogen measurements will be needed to ensure that hydrogen in processes does not exceed or fall below specified values significant for efficiency and safety, or simply to detect the presence of hydrogen where it is not supposed to be. Hydrogen is highly explosive. 
The estimates of investments required in the future span a wide range of figures. Hydrogen Council is a CEO-led global initiative involving more than 130 leading energy, transport, industry, and investment companies sharing a long-term vision of developing hydrogen power. Their estimate is that the hydrogen value chain will attract investments of up to USD 500 billion until 2030. It is clear that major investment is under way and will continue in this field to manage climate change.
At Insplorion, we are looking forward to pursuing the hydrogen area with determination together with partners and customers, thus building value in the company. Our team recently visited Safran, a French company amongst other things active in the aviation industry. We were there chosen for its Explore H2 program, and by extension we also participated in their Innovation Day held in Paris on October 20.

During the quarter, it was also gratifying that we sold three instruments to universities in England (M8), Poland (Acoulyte), and Finland (S2). In addition, four new publications that make use of our technology and instruments were released recently, which indirectly provides important marketing of our skills and technology. 
All in all, I have great confidence in our decision to focus our business, and within Insplorion we look forward to purposefully work together with partners and customers and thereby create value for the company.
 

Gothenburg, Sweden, October 27th, 2022
Johan Rask, CEO