Ranplan Group AB Interim Report January - June 2022

The period in summary

First half of 2022 (first half of 2021)

• Total income amounted to SEK 13.9 million (17.4 million)¹
• Net sales amounted to SEK 8.0 million (8.3 million)
• Operating income amounted to SEK -13.7 million (-9.7 million)
• Net income amounted to SEK -13.7 million (-10.6 million)
• Earnings per share amounted to SEK -0.45 (-0.44)
• Cash flow from operations amounted to -SEK 13.5 million (-18.0 million)
• Cash at the end of the period amounted to SEK 3.9 million (1.8 million)

Significant events in the first half of 2022

• On 23 February 2022, Ranplan Wireless announced that it has been selected by CommScope Inc to upgrade the vast majority of its existing suite of Ranplan Professional licenses, acquire Ranplan Tablet licenses and obtain Ranplan training for a group of engineers.
• On 10 March 2022, Ranplan announced that it pauses business activities in Russia until further notice.
• On 16 May 2022, at the AGM in Stockholm, it was resolved that Tomas Isaksson be re-elected as chairman, and that Jie Zhang, Wendy Yang and Jon Ullmark be re-elected as ordinary members of the board.
• At the end of June 2022, Ranplan Wireless launched the latest version (6.6) of its flagship product PRO.

1 Total income comprises the sum of net sales (related to commercial products and services), other income (associated with research projects) and other operating income (derived from R&D tax credits).

Words from the CEO

Amid the escalation of military confrontations in Ukraine, re-enactment of stringent covid restrictions in mainland China and surging inflationary pressures (triggering soaring costs of capital and heightened risk aversion on a global scale), Ranplan managed to extend net sales and cash flow from operations largely along the average figures registered in calendar 2021.  Screening out the effects of special items and FX movements, one discerns that underlying operating income was broadly on a par with those of the comparative periods. While contributions from research projects, as anticipated, re-traced significantly and depreciation of the SEK constituted headwinds, operating expenses were well contained.  

In spite of the harsh external environment, activity levels remain high and market interest shows no signs of abating. On the contrary, the number of demos, proof-of-concepts and trials that we currently entertain hovers at an all-time high. New important accounts were added to the customer roster. Existing relationships with some of the world’s leading influencers were fortified. The commercial offerings continue to attract an increasingly more diverse and eclectic audience, encompassing world-leading mobile network operators, telecom equipment makers, system integrators and neutral hosts (asset owners).

Operationally, Ranplan made further strides forward. The latest incarnation of our flagship product, PROFESSIONAL, was introduced at the end of June – satisfying all prerequisites in terms of time-to-market, reliability and functionality with special enhancements devoted to its outdoor capabilities. With this tool, customers will enjoy material advantages in respect of campus-style design, of particular importance and relevance for the burgeoning market for private wireless (also known as enterprise cellular or Local 5G). Further advances were also made on the cloud development front in fruitful and trustful collaboration with an ambitious and innovative Japanese operator which aspires to secure an international following.

Feedback from our most prolific customers suggests that our software stands out in terms of useability, productivity (particularly the speed at which the environment can be modelled digitally) and versatility (especially the unique ability to accurately model radio propagation inside and outside the walls of buildings using a single, unified logic) – attributes that are likely to gather significance in the coming years as 5G is deployed at scale inside and in close proximity to the walls (floors and ceilings) of buildings. We can help customers ascertain that interference between private and public networks meet pre-set criteria.

Strategic partnerships constitute a central tenet of our future priorities. We aspire to strike alliances with inter alia highly qualified system integrators, strongly motivated resellers, proficient providers of measurement data and leading architects of communication platforms. Expansion of our sales channels is critical to bolstering our brand recognition and visibility in the marketplace – we will seek to be involved in all tenders where we deem to be well placed and possess a competitive edge. Incorporation of our software as components within larger systems is essential to unleashing our commercial potential – to be facilitated by making our software available as applications within the resources of the universal cloud. 

We will remain technology and supplier agnostic, setting us positively apart from some of the most entrenched incumbents. Our objectivity (independence from any hardware interests) will stand us in good stead when customers want to evaluate which type of equipment is most suitable in multi-vendor settings. This aspect seems poised to be conferred higher weight as O-RAN gets ready for prime time and the next generation of beamforming antennas emerges as a chief point of product differentiation. Thanks to our research at the absolute frontier of wireless technology, we will seek to help customers perfect implementation of network slicing and select materials most suitable before buildings are constructed. In so doing, we contribute actively to making the world a more connected, integrated and sustainable place.

The discussions we entertain with customers and partners such as market channels and hence the direction and guidance with obtain provide us with ample confidence, insights and a sense of purpose. Our knowledge packaged in the form of software will in all likelihood be much in demand as the industry embarks on realising the complete vision of 5G. Special attention will be devoted to the enterprise domain and industrial applications - characterised by indoor-centricity, utmost reliability and, in many cases, ultra-low latency (short response times – to which our expertise and tools are next to perfectly matched.

While several important use cases for private wireless applications have yet to be proven, we harbour no doubt that the market for enterprise (mission-critical) cellular will become a significant growth driver for all our principal customer segments in the years ahead. Early signs of what the future has in store emanate from Japan where 5G already today is deployed to perfect and refine advanced industrial processes – where the values of our competence and experience stand out in positive light. In the space of the last 2 years, our software has been chosen by more than a dozen well-known companies in Japan.

In sum, operating conditions have been far from ideal so far in 2022. Uncertainties related to FX, geopolitics, inflation, supply constraints and local covid epidemics are likely to dampen sentiments in the second half and probably, in our base scenario, well into 2023. While not protected from the effects of a recession, we ought to be relatively resistant to its ramifications. Thanks to the agility of our dedicated workforce, breadth of our customer base and benefits provided by our ever more sophisticated products and services, we feel equipped to cope with prolonged economic downturns. Irrespective of GDP figures, the inherent leverage built into our software- business model presents us with attractive economic upside. The successful conclusion to commercial trials, the realisation of significant orders and the timing of revenue recognition – often a function of certain acceptance criteria - carry greater weight than ‘macro’.

Per Lindberg, CEO        

The complete report is attached to this press release and is available at www.ranplanwireless.com

For further information, please contact:
Per Lindberg, CEO
Tel: +46 793407592
[email protected]
www.ranplanwireless.com

This information is information that Ranplan Group 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 person above, on 25 August, 2022 at 08.00 CET.

Certified Adviser
FNCA Sweden AB, +46(0)8-528 00 399 [email protected], is the Company's Certified Adviser at Nasdaq First North