Our historically strongest quarter – so far. We continue to experience strong, profitable growth. The last quarter of the year is W5 Solutions’ best so far. Our income amounted to MSEK 78.4 (54.8), which is a growth of 43 percent compared to the same period in 2022, of which the majority (85% YoY) is organic growth. The quarterly profit measured at EBITA level is MSEK 8.0 (2.4), an increase of a full 233 percent.

Significant events during quarter 4, 2022

  • On 30 November, W5 Solutions announce they are receiving a contract to supply a simulator cabin for the Archer artillery system on behalf of KMW.
  • On 13 December, W5 Solutions receive an order worth MSEK 32 in the Live-Fire Training business area.
  • In December, W5 Solutions establish a subsidiary in Finland, acquiring a business from Finnish Nastakiekko Oy.

Significant events after the end of the period

  • On 31 January, W5 Solutions sign an agreement to acquire 100% of the ArcQor AB shares, a defence-oriented company specialised in battery charging. The initial purchase price amounts to MSEK 65. The purchase price has partly been paid through a directed share issue of 626,342 shares to the seller of ArcQor AB.

FINANCIAL OVERVIEW


2022202120222021
MSEKOct-DecOct-DecJan-DecJan-Dec
Income78.454.8179.7143.5
EBITDA9.33.424.418.2
EBITDA-margin, %11.86.313.612.7
EBITA8.02.420.015.6
EBITA-margin, %10.34.511.110.9
Net profit for the period5.32.913.713.4
Earnings per share, SEK0.420.281.131.33
Cash flow from operating activities-33.416.3-40.917.6
Orders received80106208191
Order book192177192177

OCTOBER-DECMEBER 2022

  • Operating income for the quarter amounted to MSEK 78.4 (54.8), an increase of 43%.
  • Profit, EBITA, for the quarter amounted to MSEK 8.0 (2.4), an increase of 233%.
  • Cash flow from operating activities amounted to MSEK -33.4 (16.3).
  • Orders received during the period amounted to MSEK 80 (106) with an order book at the end of the period of MSEK 192 (177).

JANUARY-DECEMBER 2022

  • Operating income for the financial year 2022 amounted to MSEK 179.7 (143.5), equivalent to an increase of 25%.
  • Profit, EBITA, for the financial year 2022 amounted to MSEK 20.0 (15.6), equivalent to an increase of 28%.
  • Cash flow from operating activities amounted to MSEK -40.9 (17.6).
  • Orders received during the period amounted to MSEK 208 (191) with an order book at the end of the period of MSEK 192 (177).

Comments from Daniel Hopstadius, CEO W5 Solutions

Our historically strongest quarter – so far
We continue to experience strong, profitable growth. The last quarter of the year is W5 Solutions’ best so far. Our income amounted to MSEK 78.4 (54.8), which is a growth of 43 percent compared to the same period in 2022, of which the majority (85% YoY) is organic growth. The quarterly profit measured at EBITA level is MSEK 8.0 (2.4), an increase of a full 233 percent.

Sales continue to grow strongly, and we have had an order intake of MSEK 80 during the quarter. This gives a total order book of MSEK 192, an increase of about 10 percent compared to the same period last year. In conclusion, we have achieved an outstanding 2022. Total income for the year was MSEK 180 (144), a growth of 25 percent. Profit for the year, at EBITA level, increased by 28 percent – from MSEK 15.6 to 20.0.

A strong dedicated team
During the fourth quarter of 2022, our turnover was significantly higher than in all of 2019, which would not have been possible without the brilliant team behind the delivery to our customers. We
have managed to keep our promises by being flexible and able to adapt and set the right priorities quickly. At the same time, we have succeeded in raising the margins, even though there are still some component shortages in several areas that have negatively affected our margins during the year.

Expansion through partnerships
We have established a new strategic partnership with the U.S. defence technology company Shield AI. They are leaders in AI-enabled autonomous drones and offer one of the market’s best solutions for autonomous tactical flight systems. With them as a partner, we can deliver flight systems to our customers that are well suited for arctic and harsh conditions. Here we have high expectations due to growing demand in this market.

Good delivery capability brings continued confidence and new orders
We aim to become an integral part of the Nordic defence and grow further to contribute to other countries’ security. We continue to support the Nordic defence capability. During the quarter, we received two additional orders from a Nordic customer for the Life-Fire Training business area. Among other things, what we will deliver in 2023 until Q4 in 2024, is training material for realistic exercises to train soldiers in weapons skills.

Well positioned for continued profitable growth
We see continued profitable growth ahead, both organically and through further acquisitions. With the acquisition of ArcQor, we are adding another 100 million to our order book. In addition to their already strong order book, we expect increased sales with good profit margins for 2023.

Together, we will continue to develop and grow by creating synergies and economies of scale for increased profitable growth. We welcome ArcQor’s incredible team to the W5 family where we have now passed 100 employees.

The Group’s forecast for the coming year is very good, based on the fact that W5 Solutions’ organic growth in 2023 is expected to reach around 25%. Total sales growth in 2023 is estimated to amount to approximately 75%, including acquired growth for the W5 Group, which is also expected to lead to positive development for earnings per share.

From Swedish to Nordic Group – a major strategic move
Acquisitions are one of the pillars of our growth strategy, and we are actively working on further expanding our business internationally. Local presence is important as we have a strong focus on security and defence.

With the establishment of our subsidiary (W5 Finland Oy) in Finland, we are taking a major strategic step. This opens up many new opportunities and strengthens our growth journey for further international expansion. The subsidiary will have government agencies and the civilian market as customers.

Sweden and Finland have strong bilateral cooperation, and it is, therefore, an important market for us. Thanks to ArcQor’s good reputation in Finland and W5 Finland Oy, we have solidified our position in the Finnish market through new sales channels and already-established networks.

Another historic year in sight
Growing readiness and rising budgets of the Western world’s defence forces are increasing the volume of orders and requests for our products and services.

We are at the beginning of our growth journey and in 2023 we will see the results of new investments and initiatives. Taking into account the good performance, we are well positioned to reach our targets of at least MSEK 500 in sales with a 15% EBITA margin by 2025.

Daniel Hopstadius
CEO, W5 Solutions AB

The Year-end report is available for download at https://w5solutions.com/investor-relations/

For more information, please contact:

Daniel Hopstadius, CEO W5 Solutions
+46 (0) 476 559 85
daniel.hopstadius[at]w5solutions.com

About W5 Solutions

W5 Solutions supplies high-technology systems and solutions to government agencies and defence integrators.
We are experts in training and simulation, mission systems, communication, power supply, and integration. W5 Solutions’ support & service team ensures high reliability through the longevity of the system.

Learn more at www.w5solutions.com.

The company is listed on the Nasdaq First North Growth Market Stockholm. Redeye AB is the company’s Certified Advisor.

This information is information that W5 Solutions 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 persons set out above, at 2023-02-23 08:00 CET.

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W5 DANIEL Hopstadius CEO

Attachments

W5 Solutions Year End Report 2022

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