Good momentum in our software business – Clean energy a focus segment

Q1 Highlights

  • Modelon Impact Annual Recurring Revenue quarter-to-quarter growth of 88% (7%) at constant currency compared to Q4 2020
  • Financial results for the period is in line with expected earnings published in the listing prospectus and reflects the start of an investment phase for accelerated growth
  • Net revenue is 20.6 MSEK (28.6)
  • Operating EBIT is -6.7 MSEK (-1.6)
  • Earnings per share is -0.85 SEK (-0.13), and -0.82 SEK after dilution

Significant events during the first quarter

  • Extra general meeting on Feb 26 decides on two types of shares, series A and B.
  • Modelon Impact version 2021.0 released

Significant events after the end of the period

  • Modelon shares listed on Nasdaq First North Growth Market, as MODEL B, with gross proceeds of 150 MSEK

Comments from the CEO
A major milestone in our company history
This time we start the report with a major event after the period – namely the successful listing of Modelon on Nasdaq First North Growth Market in Stockholm on April 28! This constitutes a major milestone in our company history and means entering a new phase for the company with major diversification of ownership and solid capitalization to fuel the continued growth journey ahead. We are hereby accelerating investments in commercial expansion and the Modelon Impact platform, and the continued transformation towards a SaaS business. All the organization is thrilled about this step and very proud to earn the trust from all our new institutional and retail investors.

Good momentum in our software business
The first quarter of 2021 continues the trend of restoration of the simulation & analysis market from pandemic effects and we see good momentum in our software business with strong order intake in the period. We are very excited to see the growth rate of annual recurring revenue (ARR) for Modelon Impact continue to pick up and reach a quarter-to-quarter rate of 77% in Q1 (88% compensated for currency effects), albeit still from moderate volumes in this early phase with the platform. This momentum is also manifesting in our pipeline which shows steady growth in qualified leads for Modelon Impact.

Clean energy a focus segment
We continue to see strong activity in clean energy applications and are very happy to see many of our Modelon Impact customers coming from this segment.
A great example is MAN Energy Solutions in Germany who are developing critical sustainable state-of-the-art energy systems to meet growing global demand and decarbonization targets. We are extremely proud and energized by MANs recent testimonial that “Modelon’s established authority and credibility in energy systems modeling and their pace for developing a cloud-based platform [Modelon Impact] aligned with our roadmap and mission – to bring advanced thermal energy and storage systems to a global market with speed and assurance”.
Another great example of a customer in the clean energy segment that leverages Modelon solutions is Malta in the USA, a frontline renewable energy storage company incubated by Google and with a mission to bring advanced thermo-electric energy storage systems based on molten salt technology to the market. Malta’s energy storage solutions address the challenges of varying energy production from renewable energy sources such as wind and solar on full-scale power grids. A series of video testimonials from Malta was published in the period and complements a previously published case study with quotes like “Modelon’s simulation software and expertise have enabled us to build, test, and validate our design which is critical for executing on our design”.
We are also seeing a lot of activity in hydrogen-based energy applications, where Modelon has strong related vertical solutions in our portfolio. Hydrogen is gaining momentum as a means to decarbonize parts of the global economy that are not suitable for electrification, and this emerging market is a magnificent opportunity for Modelon.

Modelon’s journey to the cloud – release 2021.0 Modelon Impact
We are also continuing the high pace in product development with the 2021.0 release of Modelon Impact in February with solid improvements in performance and user interfaces and several significant new capabilities including the support for Modelon’s industry proven Vehicle Dynamics Library and Aircraft Dynamics Library, stronger support for large-scale design-of-experiments, a new Python package for accessing Modelon Impact APIs to create and automate custom workflows, and more. These capabilities and improvements are in high demand by our clients, as manifested by the increased sales and pipeline growth. Digital marketing activities are also being intensified in the period with a good number of published blogs and well attended webinars held globally.

Positive trend in the service business pipeline and slow-down in co-development
Our services business continues to show a positive trend from the pandemic 2020 and pipelines and activity is approaching pre-pandemic levels, with most new customer engagements being related to Modelon Impact adoption. The co-development project with an international customer that has been contributing to Modelon Impact development over 2018-2020 is being ramped down in Q1 according to plan and previous communication. From the middle of the second quarter, we experience an increased slow-down in this project compared to previous estimates, with expected low activity level in the second half of 2021, which means that the contribution to full year services revenues now is estimated to decrease by 30 – 40 MSEK instead of the previous estimate of up to 30 MSEK compared to 2020 and thereby accelerating the shift towards self-funding of product development according to our strategic plan.

Charged by the IPO funds we are now engaging the next gear in our investments for accelerated growth with Modelon Impact!

Magnus Gäfvert, CEO Modelon
Lund, May 31, 2021

Investor presentation
Modelon invites to presentation of Q1 interim report at 10am CET on May 31, 2021. CEO Magnus Gäfvert and CFO Jonas Eborn will present the Q1 earnings in an audiocast: www.financialhearings.com/event/13916.

Complete Q1 interim report is attached to this press-release and is also made available on the company webpage: www.modelon.com/investor-relations.

For further information, please contact:

Magnus Gäfvert, CEO
Cell phone: +46-73-324 59 04
magnus.gafvert@modelon.com
 
Investor Relations: ir@modelon.com

About Modelon

Modelon offers systems modeling and simulation software that accelerates product innovation, development and operations in a range of industries. Modelon’s flagship product, Modelon Impact, is a cloud-native system simulation software platform featuring a collaborative browser-based interface and thousands of proven models and components spanning a broad range of applications. Headquartered in Lund, Sweden, and with global reach, Modelon is an expert industry leader in model-based systems engineering with a focus on leveraging open standard technologies.
Modelon AB is listed on Nasdaq First North Growth Market with ticker symbol MODEL B. FNCA Sweden AB is appointed the Company’s Certified Adviser, info@fnca.se, +46 (0)8-528 00 399.

This information is information that Modelon 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 2021-05-31 08:00 CEST.

Attachments

Modelon 2021Q1 Interim Report

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