INTERIM REPORT

1 JULY TO 30 SEPTEMBER 2020

INTERIM REPORT, Q4 2019 OXE MARINE AB (PUBL)

www.oxemarine.com

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OXE MARINE AB (PUBL) 556889-7226

OXE Marine AB (publ)

INTERIM REPORT

Third quarter 2020

  • Net turnover of SEK 3.4m (SEK 23.3m)
  • Gross Profit of SEK 0.8m (SEK 2.8m) or gross margin of 24% (12%)
  • Operating Loss/EBIT of SEK -25.1m (SEK -18.7m)
  • Net loss for the period of SEK -27.3m (SEK -20.8m)
  • Order book grew by 77% to EUR 9.6m or SEK 101m (EUR 5.4m or SEK 57m as at end of Q2 2020).

January - September 2020

  • Year to date net turnover of SEK 35.4m (SEK 50.9m)
  • Gross Profit of SEK 4.9m (SEK -7.6m) or gross margin of 14% (-15%)
  • Operating Loss/EBIT of SEK -54.9m (SEK -65.3m)
  • Net Loss for the period of SEK -61.2m (SEK -76.4m).
  • YTD the order book has grown 137% to EUR 9.6m or SEK 101m at the end of Q3 2020 (EUR 4.1m or SEK 43m as at end of Q4 2019).

Significant events during the Third quarter

OXE Marine AB ("The Company") announced the following significant events during the quarter:

  • Following the successful collaboration with the BMW Group of marinizing their 3 litre, 6 cylinder bi-turbo engine for use in the OXE300s, OXE Marine AB and BMW agreed to co-brand the OXE300.
  • The Company entered into a Preliminary Development Agreement (PDA) with the BMW Group to carry out a preliminary study of its 2.0 litre, 4 cylinder turbo diesel engine for marine application - to power the Company's next generation of OXE200 series.
  • The Company received its first commercial order from the US Coast Guard following testing and validation.
  • The Company agreed on EUR 2,8 m order for 2021 and resolved not to pursue 50 percent revenue growth target for 2020.
  • The Company entered into a cooperation agreement with Evoy AS, an electric marine propulsion company based in Norway, to assess the technical and market viability of a high powered electric outboard.
  • The Company announced that the European Patent Office intends to grant OXE Marine AB (publ) a European patent for an electric duoprop outboard.

Significant events after the reporting period

  • 2 October: The Company carried out a directed share issue of SEK 65.9m to strategic and qualified investors to finance an accelerated growth strategy.

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Key Figures

2020

2019

2020

2019

2019

2018

Jul-Sep

Jul-Sep

Jan-Sep

Jan-Sep

Jan-Dec

Jan-Dec

Net turnover, KSEK

3 362

23 265

35 427

50 993

91 100

40 578

Gross Margin %

24%

12%

14%

-15%

-4%

-41%

EBITDA, KSEK

-21 189

-14 771

-43 255

-54 811

- 73 676

- 74 367

Net loss for the period, KSEK

-27 335

-20 847

-61 181

-76 401

-101 938

-108 213

Burn Rate, KSEK

-29 815

-21 004

-75 907

-69 021

-101 948

-87 605

Burn Rate excl R&D, KSEK

-18 823

-15 335

-46 551

-42 541

-63 376

-55 376

Order Book Value, KSEK

100 942

n/a

100 942

n/a

43 230

n/a

Earnings per share basic, SEK

-0.17

-0.16

-0.37

-0.91

-0.80

-4.04

Earnings per share diluted* SEK

-0.13

-0.11

-0.30

-0.54

-0.68

-4.04

*Refer definitions.

INTERIM REPORT, Q3 2020 OXE MARINE AB (PUBL)

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OXE MARINE AB (PUBL) 556889-7226

COMMENTS BY THE CEO

As explained in my previous interim report, we expected subdued sales for this quarter due to lack of completed units available from inventory following our strategic decision to stop production at UFAB for the OXE200 series and move the facility to the US, where production will commence in January 2021. Sales amounted to SEK 3.4m (SEK 23.3m) for Q3 whilst gross profit amounted to SEK 0.8m (SEK 2.8m) with a gross margin of 24% (12%). In the meantime, the company increased its order book by 77% to SEK 101m at the end of Q3- see bar chart below in respect to order book development during the last twelve months.

The Company has monitored performances of its distributors and have identified poor performers or territories that have suffered from the COVID19 lockdown and have taken appropriate actions to mitigate losses by transferring units held in stock by those distributors/dealers to distributors/end customers in other territories that require our product. This does not equate to new sales but will help with our recoverable in accounts receivables.

Nevertheless, we have prudently made provisions for bad debts due of around SEK 2.7m. We are continuing such actions in Q4 and therefore should expect similar or lower revenues for Q4.

Our strategic decision of moving the OXE200 production away from UFAB is well underway and it was announced recently that the chosen facility is based in Albany, Georgia in the south east of the US with Outboard Network Manufacturing (ONM) as our assembly partner. Our parts have now been shipped from Sweden and we expect to start production in January 2021.

Our preparation for series production of the OXE300 with our assembly partner, PanLink, with its operations in Poland, is going according to plan. We have built a number of pre-series in Ängelholm and continued with extensive durability testing. We have made further improvements to the product and have updated our supply chain with these improvements. We are now aligning delivery of parts to Poland and expect to start series production in Q1 2021. The Company successfully concluded the certification run for EPA and IMO emission test and recently received the certificates for these.

We continued with our collaboration with BMW through a co-branding initiative for the OXE300, which is powered by BMW's 6 cylinder bi-turbo 3 litre engine. Additionally, the Company entered into a preliminary development agreement to assess BMW's 4-cylinder two litre turbo diesel engine for marine application - to power its next generation OXE200 series. The Company also entered into a cooperation agreement with Evoy A/S to assess the viability and marketability of a high-powered electric outboard.

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Order Book Development (SEKm)

Geographical split in Order Book (%)

INTERIM REPORT, Q3 2020 OXE MARINE AB (PUBL)

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OXE MARINE AB (PUBL) 556889-7226

The Company awarded Parsun, the largest Chinese engine outboard manufacturer, the mainland China distribution rights for our products. The initial batch of OXE200 engines was sold during the quarter. The company also achieved its first commercial order from the US Coast Guard ("USCG") for the OXE200s, after three years of validation and testing. The USCG has a significant fleet, running in the hundreds that will require repowering. We also sold units to the Russian Rescue Service and expect more orders in due course.

Finally, at the end of the quarter, we awarded the Distribution rights of our products for Florida and US Gulf Coast territory to ODN, which was secured through an initial order worth EUR 2.8 million. The territory represents the largest outboard market in the world - approximately 25% of global high- powered outboard sales are generated from this region.

During the quarter, the Company began trading its shares on the OTC platform (OTCQX: CMMCF), which would allow US investors to trade in our shares, given that over half of the Company's Revenues will be generated in the US - this platform should also improve liquidity of share trading as well as diversify our shareholder base. In September, the Company was promoted to the OTCQX, OTC's market's top tier platform - this should encourage further liquidity and visibility to US retail investors.

The Board and Management remain confident of the future and look forward to growing the business in a sustainable and profitable manner.

Myron Mahendra

Chief Executive Officer

Following the end of the quarter, the Company raised SEK 65.9m from a directed share issuance to strategic and qualified investors to finance our accelerated growth strategy. I am grateful for the continued support by our shareholders and various stakeholders.

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Sales Development (SEKm)

Combined Sales and Order Book (SEKm)

Due to delay in SOP, the Order Book will not be fulfilled in 2020 and as such our financial target of 50% will not be met in 2020, with the Order Book carried over to 2021.

INTERIM REPORT, Q3 2020 OXE MARINE AB (PUBL)

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OXE MARINE AB published this content on 24 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2020 06:40:04 UTC