Plejd : Interim report Q2 2023

Interim Report

Second Quarter of 2023

Plejd AB (publ)

Interim Report

Second Quarter of 2023

Second Quarter │ April-June 2023

Net sales amounted to TSEK 110,328 (106,392),

which is an increase of 3.7 % compared to the same period last year.

The gross margin amounted to 57.4 % (58.6).

Operating profit before depreciation (EBITDA) amounted to TSEK 21,232 (29,911), which corresponds to an operating margin before depreciation of 19.2 % (28.1).

Operating profit (EBIT) amounted to TSEK 7,947 (20,589), which corresponds to an operating margin of 7.2 % (19.4).

Earnings per share before dilution amounted to SEK 0.53 (1.48).

(Comparative figures in parentheses refer to the corresponding period in the previous year.)

Half-year│ Jan-June 2023

Net sales amounted to TSEK 231,624 (205,698),

which is an increase of 12.6 % compared to the same period last year.

The gross margin amounted to 56.9 % (58.8).

Operating profit before depreciation (EBITDA) amounted to TSEK 49,691 (58,462), which corresponds to an operating margin before depreciation of 21.5 % (28.4).

Operating profit (EBIT) amounted to TSEK 24,047 (40,446), which corresponds to an operating margin of 10.4 % (19.7).

Earnings per share before dilution amounted to SEK 1.69 (2.96)

(Comparative figures in parentheses refer to the corresponding period in the previous year.)

2	PLEJD AB | INTERIM REPORT FOR THE SECOND QUARTER OF 2023

Events during the quarter

• Plejd launches a smart luminaire series and shows a wireless sensor.
• The initial order book for luminaires amounts to over 100,000 units, which is larger than expected.
• Plejd announces the outcome of the exercise of warrants of series 2020/2023.

Events after the quarter

• Montanaro Asset Management has increased its holding in Plejd to 571,500 shares, corresponding to 5.11% of votes and capital.

Financial overview

Amounts in TSEK	April-June	April-June	Jan-June	Jan-June	Jan-Dec
2023	2022	2023	2022	2022
Net sales	110,328	106,392	231,624	205,698	430,823
Gross margin, %	57.4	58.6	56.9	58.8	58.7
Operating profit	7,947	20,589	24,047	40,446	79,407
Operating margin, %	7.2	19.4	10.4	19.7	18.4
Profit after tax	5,637	15,811	18,081	31,678	61,991
Share price as of the last balance	0.53/0.53	1.48/1.43	1.69/1.69	2.96/2.87	5.79/5.62
sheet date, SEK
Equity/assets ratio, %	70.9	68.7	70.9	68.7	69.7
Cash and cash equivalents	26,519	97,788	26,519	97,788	43,012

About the company

Plejd is a leading Nordic supplier of smart lighting controls. By focusing on the user experience, smart lighting controls are made easy and available to everyone.

PLEJD AB | INTERIM REPORT FOR THE SECOND QUARTER OF 2023

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Comments from the CEO

New product category launches

The quarter's absolute highlight is that we reached a big milestone, the launch of our new smart luminaire series. It is shown for the first time at Elfack in Gothenburg and is our first new product category since the puck series for lighting control was launched in 2016. The reception has exceeded our expectations, with an order book that already exceeds the whole planned production of 100,000 units for 2023. To meet the demand, we are increasing our production rate further and are now expec­ ting to deliver more units than originally was ­planned for 2023.

We see a dip in the growth curve during the second quarter due to the current macro­ economic conditions, which is reflected in the installations mainly on the Swedish market. The dip in the growth curve for installations is observed at the end of April but recovers again at the end of June. Growth in installations for the quarter is on average at 8 %, of which 4 % in April and 12 % in June. In periods of bigger volatility in turnover, growth in installations is a better measure of the underlying demand.

The profitability is negatively affected during the quarter. The primary factors are the dip in the growth curve and also costs related to the launch of our new luminaire series

and our ­international expansion in Germany, ­Switzerland and Spain.

Our international markets with Norway at the front continue to show strong growth in instal­ lations. The Netherlands shows an impressive growth and is on their way to replace Finland as our third largest market. During the ­quarter, we are also open up for sales to Denmark which means that we are now represented in all Nordic countries. During 2024 a launch is planned for the long-awaited product adapta­ tions for our international markets.

It expects to lead to increased growth on these markets in the future. Provided that installations of our new luminaire series reflect the initial interest, Sweden's growth curve also expects to turn this autumn.

In summary, I would like to thank the team for a great work during the second quarter and we are now looking forward to a new wave of strong growth driven by our new luminaire series and our strongly growing international markets.

Babak Esfahani

CEO

4	PLEJD AB | INTERIM REPORT FOR THE SECOND QUARTER OF 2023

Market development

The market for connected smart lighting has grown strongly in recent years and is expected to continue to grow strongly for many years to come. The market growth is affected by several underlying factors where the overall transition to connected electronics, also known as the Internet of Things, is the strongest driver. Other driving factors are cost savings and greater flexibility in installations with wireless control instead of drawing cables. Energy savings can be made through simple scheduling and proximity-sensor control, which is both cost-effective and good for the climate. Increased mobile phone use is also a factor that is driving the transition to connected lighting, where the mobile phone as a tool is paving the way for simple and powerful configuration, at the same time that the acceptance of using an "app" for configuration and control is growing. Plejd is active in the professional market for lighting control, which put simply means fixed lighting that is installed by electricians for both private and commercial use.

As a B2B supplier, Plejd primarily has direct customer relationships with electrical wholesalers in every market the company is active in. Our indirect main customer is the electrician who in turn installs our products at the end user, which may be either a private or commercial installation.

Examples of installations are apartments, single-family homes, stores, restaurants and offices.

Significant risks and uncertainties

The company's operations are exposed to certain risks that may have varying impacts on earnings and financial position. When assessing the Group's future development, it is important to take into account the risk factors, alongside any opportunities for profit growth. The foremost risk to take into account in the phase that the company is in is mainly potential quality-related problems that may arise as a result of strong growth and a relatively complex product that consists of both hardware and software in high volumes.

Quality problems are a normal risk for a rapidly growing technology company, but it is extra sensitive in the industry that the company is active in, where trust among electricians is incredibly important. The background of this assumption is that a potential return visit to a customer due to faulty products is costly for both the electrician and end user, which makes operational reliability a key factor in the selection of suppliers. As yet, the company has not had any quality problems of an impacting nature and it works with very strict quality control throughout the development work to manage this risk.

The company is at risk of being involved in legal or administrative proceedings within the framework of the operating activities, and in so doing risks also being subject to claims regarding contractual issues, product liability and alleged errors in the delivery of the company's products and services, which may relate to damage claims or other claims for payments, including damage claims from customers or competitors for breaches of competition law and patent and trademark issues. There are inherent difficulties in anticipating the outcome of legal, regulatory and other negative outcomes or claims and if the outcome of any future legal and administrative proceedings becomes unfavorable to the company, this may have a negative effect on the Group's financial position and operating profit.

There is still a global component shortage that affects the supply of components on the market, but because of the measures we have taken, our delivery capacity remains unaffected. Through a combination of good inventory levels and production-related processes, we can easily redesign products to work with more components. This provides us with more options when purchasing and reduces the risk of component shortages, but for us, like other companies, the future is difficult to predict, which means that the situation may change.

PLEJD AB | INTERIM REPORT FOR THE SECOND QUARTER OF 2023

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