Hello and welcome to this Q2 presentation with I-Tech. With us today, we have CEO Philip Chaabane. My name is Christopher Lagerqvist, and I work for Finwire Media. After the presentation, there will be a Q&A session, so if you have any questions, please visit finwire.tv and click on this Q2 webcast where you can write your questions. With that said, I hand over the word to Philip. Thank you so much. I'm pleased to be here to present our Quarter 2 report for 2021, and we jump straight into the presentation. So, introduction slide for those of you who may be new to the company. I-Tech is located in Gothenburg, more specifically within the innovation hubs of AstraZeneca. We originate from the biotech sector, but we bridge technology from that area into the more traditional chemical industry, and more precisely into the marine coating industry, which you will hear a lot more about in just a few seconds. The product has been brought up from a university spin-out research, but is now available globally. It is approved by various regulators and regulatory authorities, which is one of the key hurdles here in this industry. We address the global market, which shipping is a part of. We have a lot of evidence that it works. We claim it's proven, we know it's effective, and there's a lot of vessels out there using the technology. By that, we move into what the product actually is. As you can see in the middle of the picture here, it's actually a molecule that we call Selektope. This is an ingredient technology into marine coating systems that are used under the waterline. They are called anti-fouling coatings, which have the purpose of keeping biofouling away from the surface. If biofouling occurs, there is a big loss in fuel because of the extra drag. These coatings need to contain various active agents, i.e., biocides, to control the growth of biofouling on the hull. The more efficient you control that, the less fuel consumption you have, the more you save, and the less emissions to air. So, our molecule comes as a novel technology to actually repel barnacle larvae, which are the hard-fouling creatures that grow on hulls. We repel them from the surface to keep surfaces clean, even in the most critical and difficult situations. At the bottom, you see a test patch in which Selektope is included. Photos come from the largest customer, Chugoku Marine Paints, taken from a ship that's been exposed to severe fouling conditions, which means warm waters. There are certain areas around the world where we have much more growth than in other places, and then also exposed to static conditions over a long time. So, it certainly proves the high efficacy of this technology. We sell to the marine coating industry, and that is basically what we do. Into the second quarter 2021, which includes some positive key events, but it's also so that we are continuing to act within a challenging business cycle, which we have spoken about also in the earlier quarters presented. Starting off with the key developments, we see a decline in revenue growth comparing to the second quarter last year. If we just look on the volume side of it, then the decline is not as big, driven by then currency effects that are included, but nevertheless, we see a decline in growth here, a decline in revenue. That also has, by consequence, an effect on the EBITDA and also on the EBIT level, which does include certain costs, which I will come back to in the next slide. When we say a challenging business cycle, it's mainly because we still see a large part of influence from external factors. And although we may, in Sweden and in the northern part of Europe, be quite distant from the pandemic effects in terms of not-so-regulated guidance from authorities, that is not at all what we hear from our Asian friends in the countries where we make the business. So, local restrictions are still very common, sometimes even lockdowns of larger workspaces, such as yards. So, we do see an impact and a continued concern about the future. That impacts investment appetites, but also puts a slow speed in developing new opportunities, as people cannot meet and make business in the same way as before. Also, which is something that's come into the reality the last two quarters, is the high raw material costs. That includes metal prices, but also cost on chemicals. Our customers are spending a lot of time on trying to defend the cost side, which means a lot of tough negotiations on the price side, probably a lot of decisions on what products to focus on. And of course, they try to raise prices, which is not always so easy when you come to the high-end level of products, which are quite pricey in some people's minds already from the beginning. But those are the two external factors that actually are impacting this. So, we don't see any other effects to the business, actually, other than these so-called trends, macro trends. In terms of the customer development, you probably know from before that CMP, Chugoku Marine Paints, have a very strong contribution to our top line. Last quarter was a record quarter, so no real surprise that under these conditions, there is a decline, in this case, a 20% decline, which is considerable, but given the circumstances, it's what it is. On the positive side, we see other customers coming up. We have unnamed customers who are active in the commercial field in Asia who are increasing, and also other minor accounts that are increasing. So, for us, it's important that we start to grow a broader customer portfolio, and I think this shows that. I don't think that the decline in the Chugoku space is going to remain for long, and I'll come back to that. Important events, however, and that's what we mean with the positive key events here, is the launch of new products, in this case from Chugoku Marine Paints, a new product called Seaflo Neo M1 that is compatible with most of the other anti-fouling products they sell, and certainly intended for the dry docking market, as well as the new building market. We also received over the quarter a new frame order from Chugoku showing there is light in the tunnel, and that gives comfort that things are stable, more stable now than a year ago, and that there are some signs or outlooks of light in a shaded tunnel driven by these external factors. Into the numbers a bit more specifically, we have a revenue line of SEK 12.8 million to be compared to SEK 16.2 million same quarter last year, and as I mentioned, last year was our all-time high in the second quarter when it comes to the top line. Comparing then half year to half year, the differences are not so big, and let's see if we can recap on the second half of this year. The impact is mainly this quarter compared to the same quarter last year. Gross margins are a bit higher than the same quarter last year, but as you saw, quite in line with the quarter one of this year. We're quite happy with maintaining these despite the disturbances that may occur here and there on freight costs and so on. This is a positive number. As mentioned earlier, we see an EBITDA and EBIT level, which has declined sharply, and obviously, the decline in revenue is a contribution to that, but also the implementation of an incentive program, which actually was signed to subscribe by 93% of the total offering, meaning staff believes in this and are willing to invest in this for a long-term positive future. So, that's one of the costs that comes in here. It's also important to highlight the cash flow here, which is a big difference from the same quarter last year, and that is to the very large extent driven by the fact that we build up inventory, we move around inventory to secure delivery capabilities. As you know, production is located in India, where outbreak is large and sometimes not even controlled, which means we need to take precautions to make sure we can deliver from other places in the world. So, we are investing in inventory, which explains a large part of these figures. I think that says it all. It's a challenging quarter. Again, comparing to the best quarter ever, it probably puts even more pressure on the numbers. Market is untapped, of course. It's still in the sense that it remains big. There's nothing that changes on it. There are some temporary effects, as you know, from these macro trends that are in play at the moment, but we still see a super big opportunity here in the commercial fleet of these 54,000 vessels and a certain big contribution to be expected at some point also by the industrial boats, almost as many. And then we're now step by step walking into the leisure boats market, specifically then in the United States. So, all of this remains as a big potential, and nothing is changed on that end. What we do see then, to elaborate a little bit more on the growth opportunities, which I understand that some of you may be a bit concerned about reading this report. On the challenge side, we see external factors, as mentioned, right? We also see, and we hear from customers, that it is a bit more challenging now to drive innovation and new products into the market than before, because ship owners, certainly the deep-sea market space, which are these larger ships, tend to prioritize something they have tested before. They play safe, so to say. So, traditional coatings are maybe to a larger extent selected than new types of products. Maybe that is in line with the general mindset of not being sure if this pandemic is over or not. We have also seen, and that's been reported before, a quite weak output from the new building yards that comes from lower orders two years ago, partially expected, but obviously even worsened by lockdowns and so on. A certain part of our revenue top lines do come from the new buildings, certainly for the customers who are not Chugoku Marine Paints, but also a large part of their volumes go into new buildings. So, the decline we have reported here from Chugoku is likely very much related to the general new building situation and the lower output of vessels. That's on the challenge side. If we then look on the opportunity side, we have a lot more Chugoku products on market right now than at the same time last year. Actually, 100% more products are on market. I will show you a slide on that. Also, and almost as importantly, IMO, who actually is the only body who tries to regulate this global industry, has now decided to implement different efficiency indices to incentivize ship owners and operators to build, design as efficient ships as possible, but also to operate them in as efficient a way as possible. And certainly in the way they operate, we contribute by providing strong and really fuel-saving anti-fouling systems. So, this will now, the focus on efficiency gains and technology supporting that will now take a new phase of accelerated speeds. This is now implemented this quarter, and obviously it takes time to see real effects, but listening to the industry, a lot of things are now ongoing, and I think already on the news yesterday, there were announcements from big container lines to switch fuels and so on, meaning that efficiency needs to be in the highest priority of decision-making. We think that's good for us. We see more references coming in from various ships. Again, we don't have the full transparency because we are one step, one level behind the ship operators and ship owners, but we do see signs of good uptake here in a number of ships and also strong performance. Rounding off this slide and going back to the new building discussion, we do see, as I mentioned, challenges right now, but there is also the fact that a lot of contracts are being discussed at the moment for new building, and those ships, once the contracts are signed, are then delivered around two to three years later, depending on which ship type there is. So, 2023, 2024, we would expect a strong uptake here, and probably driven by the implementation of these IMO indices, which means it becomes mandatory to have more efficient ships than today, and building new is one way of doing that. All right, speaking of the product uptake then, we said 100% higher, more products from Chugoku, and you can see which these are. Some of these are for the Japanese market only. Now, that happens to be a quite big market, Japan, with all its islands and complete dependency on the rest of the world. So, these products are applied at yards in Japan only. With great excitement, we will follow the development of these over the next few years. When we write new here, they launched either the past quarter, quarter two, or the previous quarter. So, new in 2021. Also, a new introduction here of a coating for the leisure boat market in Japan. Some of this is news to you from the previous quarter, but this SeaFlo Neo M1 PLUS is new for this quarter. That sets ground to what we believe is important factors to see a growth curve coming closer and closer to us again. Speaking then of reference vessels, we have in many different events talked about this Calypso vessel, an MR tanker, which was the first one ever coated with a unique coating containing Selektope, in that case, a full-blown copper-free product, taking maximum advantage of the Selektope technology. Up until now, we have had some challenge in getting real reliable numbers, but we found ways of doing that, and we have compiled reports that can be found on the website, which actually shows the numbers that are so convincing. And these are then derived from a large set of data points and then applied through the ISO standard calculation guidance, and therefore, numbers are comparable in the industry in general. And what we see then is a 0.5% speed loss compared to a general known number of 5.9% on the general global fleet. 5.9 is the average of a large part of the trading fleet, and this ship reports 0.5. There is a significant opportunity to save fuel if we can transform, together with our customers, the whole fleet into a 0.5% speed loss instead of the average of 5.9. That is a significant amount of fuel and emissions that is possible to save here. And that's why we think technology, together with the rest of the ingredients and the technology that our customers bring into this equation, will have a bright future. Moving on to this product, the new one that we just saw being launched this quarter, it's copper-based Selektope product. It is characterized by an ultra-smooth surface, meaning that when it's all newly applied, the surface roughness is very, very low. In this case, the producer and customer has achieved much lower VOCs, which goes also alongside the environmental discussion in this industry. That means lower use of solvents in the coating, which is one of the things that needs to be addressed from a coating manufacturer perspective to actually comply with future expectations on environmental footprints, so lower solvents, that's important. This coating in particular has been optimized for flat bottom, and that's approximately one-third of the surface of any ship, and it's compatible with all other SeaFlo Neo products. SeaFlo Neo is Chugoku's high-end range of products, so we hope that this one actually will be then specified on all, or at least most of the premium opportunities Chugoku is involved in, and it actually, in this case, replaces another product, so it should have a good opportunity to pick up some momentum here. The other news of the quarter was this order, SEK 53 million over a period of 18 months. We're excited to have predictability, at least over the time period here, but also taking the positives from this, that there is belief in a more stable future with strong opportunity for product uptake. Sales from our side will hopefully then be not at these levels, but higher over the time frame. But it's a sign of confidence from our customer, and that's important following the last year of uncertainties that the pandemic brought to all of us. We talked last quarter about the very positive and strong indication that actually six of the nine biggest contributed top line. The variation between quarters is large, so we don't expect to go into that detail of discussions on every quarter, but we can confirm that we're still very active with all of them and even a few more. I think that's an important message that even if we from quarter to quarter cannot move these arrows really, we are confident in the work that is ongoing with all of these. Again, at different speeds and at different priority levels, but underlying activity is still very positive. Coming to the end of the presentation here soon, I want to just demonstrate that just recently, one big ship owner, Marinvest of Gothenburg, who is involved in a larger new building program of MR tankers, have launched from the yard into sea then the first in series of eight ships, all of them being fully coated with Chugoku's CF Premium. That is a Selektope-based copper-free product, and the picture here shows the first one being launched into sea. And the ship itself is high-tech in all different senses. It uses different fuels, it has all kinds of sophisticated technologies, and we're really pleased together with our customers, of course, that they have selected this novel anti-fouling coating to support the gains in emissions to air and fuel savings throughout the journey of this ship. So, first out of eight in water, that's good. Finally, we are still part of this sustainability agenda that is underlying and also part of the IMO decisions for introducing these indices. So, it's all about reducing emissions. The shipping industry is super important. It's 80% of all goods transported is on ships. The industry accounts for 2.6% of global CO2, and of course, it's a super high priority to lower the impact of this industry, and there's a lot of things that can be done, and we're happy to see that focus is now clearly oriented towards sustainability and fuel savings, meaning lower emissions to air. There's also this continued discussion on reducing spread of invasive species. More and more ship owners report nervous, what do you call it? They are a bit scared, so to say, and they're certainly prioritizing the hull in the sense that if they cannot prove hulls are clean, ports in different parts of the world could actually reject or force cleaning activities to avoid the spread of invasive species. So, the hull is super important in this context, and that's also another driving force for why ship owners are looking towards the more sophisticated anti-fouling systems than towards the more traditional ones. A very important trend that is less highlighted in the agenda compared to the fuel and emission savings, but if you speak to a ship owner, they certainly are concerned about this. And then finally, it's always about trying to use as low amounts of natural resources as possible to achieve a certain objective. And with the low levels of Selektope that are used, which are then 0.1%-ish compared to some 50% of metals used, of course, we would be happy to be part of the equation of at least reducing the amount of metal oxides and other things that are used and cannot be recycled. So, all of these are important in the same priority line as indicated here. So, by that, I conclude the presentation, and I look forward to questions. Great, thank you Philip. Now you're on the camera as well, so we can see you. Thanks for the presentation, and let's kick off the Q&A session then. So, the first question, what's your view on the general shipping market? Do you see any specific trends emerge that will affect your company? Yes, I do. I see a dual effect, so to say. The one is a positive one where we see a lot of investments and planning for investments in new technologies. The interest for new technologies has never been larger, and that is from the ship owner perspective, but also if you see what's going on in the supplier base, a lot of innovation with different measures such as sail systems on vessels, all kinds of different fuel experiments or evaluations, optimization of propulsion systems, as well as hull, of course, so the activity and discussion around those are clearly indicating a positive outlook in investing in new things. On the other side, a lot of ship types are actually not doing quite so good business. They're suffering quite a lot. That is not the container industry, as you have read in the newspaper, but a lot of the other ones are suffering. So, hopefully, things will balance out and actually make ship owners more profitable, and then they can use that to invest in these technologies. So, that's basically what we see. Okay, thank you for your answer. You touched on this during the presentation, but if you look at the general increase in material costs, could you please elaborate a bit on how it's affecting you and what's the feedback from clients? How are your clients affecting, and is that in turn affecting your business? Yeah, material prices have become a concern for our customers as of the first quarter, and some of them actually officialized statements that price increases are inevitable because of the higher material costs. I don't know how much of that has been happening in the real world, but it's a clear indication that they're concerned about their cost line and the ability to get compensation for that. If you take I-Tech specifically, the copper, which is one of the co-ingredients normally to Selektope in most products, except one actually, there has been a sharp increase in the first quarter, and up until spring, they had a really high price tag on it. Now it's come down a little, but seen over a few years, it's still very high. Of course, if we are combined with copper sulfide, the total cost will be a problem for our customers, and as those products are then already in the high end, that discussion of being compensated for those material increases is probably tougher. That's likely one of the reasons why it's been a bit tough in this quarter. Then there's also an issue on solvents and so on, but that goes for all the different coatings. So, it does have an impact, and let's just hope that things normalize or that prices can be put on a level that it justifies to continue innovation. Okay, thank you. I have a question here for Marcus at Norron. Can you please elaborate your expectations going into H2 2021 and H2 2022? Do you see any difference this spring versus right now and going forward? We do see next year as a much more interesting year than 2021, provided that pandemic effects and so on are declining all over. The general trend has to go in that direction that things become more optimistic when it comes to these things. Selektope is certainly in a good range, and the number of products out there now, which are reported from Chugoku, certainly gives us a good feeling that better times are ahead. If that's this for the coming half year or next, to be seen, but things take time in this industry, so maybe next half year will be the one where we'd start to see the positive effects of this, combine them with the general attitude of investing in fuel-saving technologies. So, I think that's the answer I can give at this point. Okay, thank you. Next question here is from Mattias at Red Eye. Last quarter, you highlighted the near-term uncertainty and turbulence caused by the pandemic in a very clear way. Could you shed some extra light on how the outlook for I-Tech has changed, if it has changed, from where you stood at the end of Q1 2021 relative to today? Or is the outlook relatively unchanged? Quite a long question there, but hopefully you grasped it. Maybe we were thinking that the pandemic would actually be less of a problem moving forward here when we talked to you in quarter one, but as you know, things are accelerating all over the place right now, and of course, that puts some concerns on things. Hopefully, the impact on that on business will be less pronounced because other things will be more important, hopefully, such as driving innovation in the field of sustainability and so on, but generally, it's not too far from what we have been expecting or fearing for throughout the year. It is a challenge market, and Asia is in a completely different situation than Sweden. It's easy to be here and see that things are back to normal with traffic jams and a lot of people in the commuting here and there. That is not at all what is going on in many countries in Asia, and I think we have seen that for quite some time, and therefore, we're not too surprised. And please remember, I mean, we're comparing to the best quarter ever, and this quarter itself is one of the five best ones the last three years, so it's not, you know, there's no really big dark clouds. It's temporary things that we hope will resolve quite soon. Okay, thank you. I think you've touched on this during the presentation, but maybe this question, we received it during or after you have presented it, but how much of the total revenue in the quarter came from the unnamed customer and others? I must say that that's still a relatively small number. Chugoku is by far the biggest one in contributing to the top line, and even a bit more contributing than last quarter because we had a less broad customer mix this quarter than the first quarter. So, Chugoku is up there in the, what, 75%-80% dominance of the top line. So, it will take some time before we see a bigger shift there, and as I've been talking about previously, when these new customers are starting to do their ramp-ups or initial offerings to the customers, the difference between quarters will be enormous. So, but our aim is definitely to grow the other customers, an unnamed customer, to a bigger portion of the top line. That's highly important for us. Okay, thank you. I have a question here from Viktor at Carnegie. The former sales target of SEK 100 million in 2021 is not that relevant anymore. Are you planning to update your mid-term financial targets, for example, 2025 target? We have that discussion ongoing, and of course, we will try to give some new guidance at some point as soon as we start to see a more stable outlook from our customers. And right now, it's, yes, we do have this SEK 53 million order, which gives us comfort that things are normalized, but I still want to see what we can expect from the new products that have been launched and the new activity from these other customers in what kind of product segments they're actually aiming and what they feel about their potentials in this. So, one of the effects of this pandemic is that we can't travel and meet them, so it's much more difficult now to get any reliable input or serious dialogues on the future, which, you know, never are occurring over email and certainly not on phone either. So, I think we need to get back to the stage where we can meet and get a real good understanding for these customers before we come up with any meaningful numbers. Okay, thank you. You mentioned your new product. Could you please elaborate a bit on the ones you have launched? What's the feedback from your clients so far? From I-Tech's perspective, it's one and the same product all the time, so please be aware. What has happened is that our customer, in this case, Chugoku Marine Paint, launched a range of new products. The feedback is unknown to me. Obviously, Chugoku is claiming they are a lot better than their alternatives or their predecessors. It will take a bit of time, as I said. That's why H2 this year will not have so much impact or effect from these products. It will be later on. It's very difficult for us to see. They are launched. They are applied on a bunch of ships. If they perform or not, it's one and a half, two years away before we know. I'm not sure. I'm just confident that they see a need for driving Selektope into almost all product segments they offer, at least in the more upper end of the product portfolio. Okay, great. Thanks for clarifying. This is quite a tough question to answer, but I will ask it to you anyway. It's regarding the vision a few years ahead. How large are the long-term markets, say, five years in different segments? That is a difficult question, which I'm not able to or willing to elaborate on like this. It requires a bit more analysis and thinking. So, whoever asked that question, we can try to set up a possible separate session on understanding the background to the question and so on, but certainly, things have been delayed due to the pandemic, but the overall picture has not changed. So, things still look good on the long term. We do have a two-year delay, as many others. At some point, it will go back, and then we can be, yeah, saying more and understanding more on what a possible five-year target could be in different segments. Yeah, great. Thank you. If we just look out, let's say, two, three, four quarters, what will be I-Tech's main focus in these quarters? We remain with the focuses we have tried to convey before, meaning broadening the product portfolio, broadening the customer portfolio, meaning high contribution from others, and to try to engage in various R&D activities to help take better advantage of our technology, not only adding it to something that already exists, and that requires some R&D activity, which we have invested in through the year in resources and new test sites in Barcelona and so on. We also are talking to several other industry players on different ways of collaborating and so on, so I think that, but those are long-term things, but also very important to drive the business. That's core. Then, if you move your vision to beyond this half year, maybe we would expect to see some uptake on the new products and also on the new building output, hopefully at some point, in which most other customers are involved. Okay, great. Thank you for the replies to all of these questions, and thank you all for sending in questions to Philip during this presentation. And with that said, I thank you, Philip, for taking your time to present I-Tech's second quarter for us. And to our viewers, thank you again, and I hope to see you again on the next presentation with I-Tech. Have a good day. Thank you so much. Bye-bye.