"Freestanding air cleaning solutions in the Facility Solutions product category continue to grow. Revenue increased by 104 per cent in the quarter compared to the previous year and the product category accounted for 19 percent (10) of our total sales. Both total order intake and sales in the quarter increased compared to Q3 last year. Order intake increased by 29 percent and sales increased by 5 percent. We increased our installed base by 17 percent and the volume of cleaned air delivered increased by 30 percent compared to the previous year. The installed base drives our recurring revenues, which amounted to 62 percent (62) of total sales in the quarter. I am very pleased that Facility Solutions continues to grow, and that we deliver very strong profitability with an EBIT margin of 22.6 percent in the quarter," CEO Christina Lindstedt remarks.
FACILITY SOLUTIONS INCREASED REVENUE BY 104%. TOTAL ORDER INTAKE INCREASED BY 29%.
July – September 2021 in summary
Summary January – September 2021
Significant events in the third quarter
Significant events after the end of the period
Continued strong growth in the Facility Solutions product category - up 104 percent
During Q3 2021, revenue from air cleaning solutions in the Facility Solutions category increased by 104 percent and totaled SEK 20.7m, corresponding to 19 percent of total revenue. The growth of Facility Solutions takes place both within our traditional customer segments; industry, warehousing/logistics and Food, as well as in new customer segments such as schools, offices and healthcare. In Europe, Facility Solutions developed very well in Germany where we continue to deliver significant orders to the office segment. Important to our growth in Facility Solutions are the new product launches from 2020 and we expect our continued investments in innovation and product launches to generate further growth within Facility Solutions in the future.
The overall revenue increase of 5 percent was due to strong sales in Japan and Germany. In Germany, as described above, growth was largely driven by the Facility Solutions product category. In Japan, the growth mainly came from renewed contracts within Cabin Solutions. In the US, we are in negotiation with an existing customer to convert a MUSD 1 contract for the development of a large cleanroom to prioritize other cleanrooms for that customer. The delay in the project had a negative impact on Room Solutions revenue in the third quarter.
Higher activity levels particularly in Europe – order intake increased by 29 percent
A higher activity level led to an increase in order intake in the quarter, totaling SEK 89.9m. Order intake increased significantly in Europe, mainly due to two previously announced major cleanroom orders in the Room Solutions category in Sweden. The value of these two transactions amounts to SEK 20m in total. In addition, we experienced continued strong order intake in Germany, including increased establishment through additional sales to the Facility Solutions office segment. Japan was negatively affected by the Olympic Games, with higher rates of corona and a continued state of emergency in Tokyo. This resulted in fewer opportunities to meet our customers. However, during September there was a recovery and at present there is a significantly improved situation regarding the number of new corona cases in Japan.
Growth of 17 percent in the installed base increased the volume of cleaned air
The coronavirus pandemic has raised awareness of the importance of clean indoor air, which we see as having a positive impact on demand for our solutions, both in the short and longer term. During the corona pandemic we have delivered air cleaning solutions to new customer segments such as schools, hospitals, offices, and public environments. We provide a healthy working environment in the areas where it is needed most. Our view is that the increased demand for healthy working environments will continue after the corona pandemic ends.
Our installed base increased by 17 percent to 10,980 units at the end of the quarter. The amount of clean air we supply increased by 30 percent. A growing installed base also means that our base for future revenues is growing. Recurring revenue represented 62 percent (62) of total revenue in the third quarter. In absolute terms, recurring revenues increased to SEK 67.9 (64.9) m. A high proportion of recurring revenues gives us continued good visibility for 2021/2022. An increase in the number of installed units in our own balance sheet means an increase in recurring revenue. It also means an increased share of revenue in the form of ongoing monthly rent and a reduced share of revenue from the sale of contracts to finance companies with prepayment and direct sales to customers with payment on delivery.
High margins in a challenging quarter
We continue to deliver very good margins in our underlying business where more than 75 percent of contracts are extended or renewed, while continuing to invest in sales resources, innovation and brand building. Our EBITDA margin for the quarter was 29.3 percent (23.7) and our EBIT margin was 22.6 percent (17.0).
During Q3, corona related restrictions were eased in most of our markets, which makes it easier for us to perform our sales process. However, we are not through the pandemic yet and there is still uncertainty about how the number of infected people will develop in our markets and how this will impact future restrictions.
The uncertain situation in the world, as well as the turbulent world markets with high raw material prices, high transportation costs and component shortages, affect us and make our sales process more challenging. Also, challenges in our supply chain and with our production partners required a lot of focus and hard work from our teams and our partners during Q3. We expect this turbulence to continue for parts of 2022.
We have a high activity level in the company and expect the increased awareness of the importance of indoor air quality to continue to contribute to an increased demand for air cleaning solutions. Our growth strategy remains firm, with a focus on developing and growing our new product categories Facility Solutions and Room Solutions, as well as maintaining our strong position in Cabin Solutions. We continue to see good growth opportunities in all our markets, with our cleanroom solutions in the US, Facility Solutions and Room Solutions in Europe and Cabin Solutions and Facility Solutions in Japan. We see an opportunity both to increase the level of penetration within existing customer segments and to further develop newer customer segments and markets. We will continue to expand our business geographically and we will continue to invest in innovation in our brand and in our organization. I would like to take this opportunity to thank the team at QleanAir for a fantastic job in a challenging quarter and our customers and partners for a good collaboration.
Christina Lindstedt, CEO, QleanAir
Solna November 11, 2021
QleanAir invites to teleconference and audio cast on November 11th, 2021, at 10.00. The company’s CEO, Christina Lindstedt, and CFO, Henrik Resmark, present the interim report for the third quarter of 2021 in English.
The presentation will start at 10 am and can be joined via the web or by telephone. It will be available on demand on the same weblink shortly after the event.
Join us via the web: https://tv.streamfabriken.com/qleanair-holding-q3-2021
Or call in via telephone: