OXE Marine AB (publ)
Interim Report
Fourth Quarter 2022
Results presented in the interim report are consolidated from 16 February 2022 to 31 December 2022 following the completion of the acquisition of Diesel Outboards and Outdoor Network Manufacturing on 16 February 2022. Consolidated results include legal entities; OXE Marine AB (Sweden), OXE Marine INC (US) and OXE Marine Manufacturing INC (US). Furthermore, consolidated results do not have comparative figures as it is the first year of preparing consolidated financials. Where illustrated in the text, graphs and tables, prior year figures relate to OXE Marine AB only.
Fourth Quarter 2022
- Consolidated Net turnover amounted to SEK 32.2 m.
- Consolidated Gross Profit amounted to SEK 3.4 m with a gross margin of 11%.
- Consolidated EBITDA amounted to SEK -31.1 m.
- The consolidated result for the quarter amounted to SEK -45.7 m.
- Consolidated EPS and Diluted EPS amounted to SEK -0.17.
January - December 2022
- Consolidated Net turnover amounted to SEK 148.4 m.
- Consolidated Gross Profit amounted to SEK 32.2 m with a gross margin of 22%.
- Consolidated EBITDA amounted to SEK -60.9 m.
- The consolidated result for the period amounted to SEK -109.9 m.
- Consolidated EPS and Diluted EPS amounted to SEK -0.43.
Significant events during the Fourth quarter
- OXE Marine raised SEK 70 m in a directed share issue (SEK 69.8 m after transaction costs).
- OXE Marine signed an OEM agreement with Nimbus Group.
- OXE Marine conducted tests of the OXE300 on a popular recreational boat, showing that the gasoline alternative consumes 50 percent more fuel than the OXE300, proving its fuel efficiency.
- OXE Marine implemented biodiesel in all testing, reducing net CO2 emissions by up to 94% compared to gasoline alternatives.
Significant events after the reporting period
- OXE Marine presented a new concept outboard OXE Hybrid 450, the world’s first diesel electric hybrid outboard, premiered at the Miami International Boat Show.
- Oxe Marine's water jet engine was nominated for innovation of the year at the Miami international boat show.
A lost quarter
“Q4 is nothing but a significant disappointment caused by a combination of unfavorable circumstances. Now, to be fair – most of these circumstances cannot be blamed on anything else than our own performance, and at the same time it is encouraging to know we have during the last 6 months systematically put actions in place to mitigate these and establish professional processes and structures.”
Q4 will go down in history as a very bad quarter, full of learnings. Our overall sales performance during the quarter was disappointing and consolidated sales amounted to SEK 32.1 m. Sales in the Parent company amounted to SEK 31.8 m a decrease of 24% relative to Q4 2021. Total consolidated sales for the year, amounted to SEK 148.4 m. Total sales for the year in the Parent company amounted to SEK 133.1 m relative to SEK 99.8 m in 2021, which amounts to 33% growth –in a year with geopolitical stress and macroeconomicuncertainty this could be perceived as “not too bad”,but in our case – we are clearly striving for a higherlevel of performance.
We moved into Q4 full of energy with a positive outlook. However, towards the end of November and primarily December we did not see the traction of realizing orders as expected as several projects were moved forward and in combination with ramp-up challenges in our supply chain, this resulted in lower sales than expected.
In addition to this, during December, several conversations were initiated by customers to address outstanding warranties tracing back to deliveries and installations where there have been legacy challenges. These technical challenges have been managed and we are well underway in implementing improvements in the supply chain and in the field. As a result, our gross margin was heavily impacted and amounted to 11%. Excluding the higher than usual warranties, our gross margin would have amounted to approximately 27%.
EBITDA for the quarter was particularly hit hard by the lower gross margin, but also by large currency exchange losses (non-cash) as a result of revaluing foreign currency denominated working capital balances amounting to SEK 9.4 m as well as one-off legal costs amounting to SEK 5.2 m during the quarter which further impacted EBITDA negatively. Despite these events, we continue to have a cost control mentality as shown by a reduction in personnel costs during the quarter. We focus our resources carefully in what will grow the business. We continue to be active at trade shows as well as increase the awareness of our products through targeted marketing channels. It is very encouraging to see the growth of the OXE brand online with exponential growth in social media views and organic reach.
On a positive note, the Parts & Accessories (P&A) segment consolidated sales amounted to SEK 9.4 m for the quarter and continued with its strong performance. In the Parent Company sales amounted to SEK 8.5 m in this segment, an increase of 35% compared to Q4 2021. For the full year, consolidated P&A sales amounted to SEK 31.4 m. In the Parent Company P&A sales for the full year amounted to SEK 26,1 m, an increase of 37% compared to full year 2021.
We continue to be ambitious in our approach, positioning our “transition technology” in the marine industry. We already today probably deliver the world’s most environmentally friendly high-performance outboard engine. During the Miami International Boat show in February, we had a very successful launch of the world’s first high-power diesel electric outboard motor – the OXE Hybrid 450, with technological advancements driven by our patented lower leg design able to manage high torque and power. We have agreed to carry out the development testing with our partner in this project, Nimbus Group, and will commercially launch this unique product during the second part of 2023.
Together with the OXE Jet-Tech 300, which was nominated for an innovation award at Miami International Boat Show we are in a way reintroducing a new OXE Marine to the global marine market with a growing and innovative product line. The jet was developed to maximize the high torque of OXE outboard engines through a more effective design, delivering 100% of engine horsepower as water jet propulsion. The first jets will be delivered in Q1 2023.
During 2022 we have captured a lot of learnings that are now implemented into our company, our processes and by our colleagues. We paid a high price in Q4, but we are now moving forward with a positive feeling based on the conversations we have with our customers on both existing and future products. We are more committed than ever to delivering technically innovative upgrades to our current product families and carry this out with speed and execution.
We will continue to develop our supply chain to increase the stability and reduce complexity, but also to be able to faster ramp-up our volumes. Meanwhile, we are working closely with our production partners and suppliers to prevent further supply chain delays.
As we strive to create the most attractive partner in our industry, we continue to add dealers and distributors. We are also enhancing our service programs, Parts & Accessories distribution, and training programs, as well as adding key talents filling gaps in our competencies and skillsets. We are making progress creating availability and service, although we still are in the beginning of our execution.
We will continue to listen to everyone that owns and operates our product, regardless of where it is bought. This gives us insights to further enhance our products and services. Our development of the OXE Hybrid 450 concept is one example where we have developed this in close discussions with different partners. In our future product pipeline, using the unique belt drive technology that allows for increased torque transfer, we have additional interesting concepts.
Anders Berg, CEO
This disclosure contains information that OXE Marine AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 24-02-2023 07:00 CET.