Hello and welcome to today's webcast presentation with I-Tech. With us presenting today, we have the CEO, Philip Chaabane. If you have any questions for Philip, please use the form that is located to the right, and we'll take the questions up during the Q&A after the presentation. With that said, please go ahead, Philip, with your presentation. Very good. Thank you so much. All again, very welcome to I-Tech's quarter one report of 2023. We will walk you through this quarter, a quarter which is strong, sustained growth with increased profitability, reflecting the clear numbers that are given comparing both to the same quarter last year, but also to many other quarters as this are record numbers we're talking about. Very strong macro trends are clearly fueling our growth, and that's trends within shipping and the transition to more efficient fuel in the industry, and gaining then efficiency, lowering their emissions to air. That's the underlying driving force that is clearly so that it gives good momentum for strong hull performance technologies, which is the area where I-Tech is operating within. The 112% growth compared then to last year and the 33% EBITDA are amazing figures. Really strong EBITDA, certainly. And that comes from a strong not only growth, but also cost control, so to say. Come into that more later. This chart itself shows that we've been active in a lot of collaborations, both with customers and other industry partners. We are focusing on operational excellence, meaning producing and most importantly, delivering in time all throughout, which is important to gain trust. The industry is clearly focused on the 40% greenhouse gas savings by 2030. That is obviously the macro trends I'm talking about. That is changing the game a bit for their paints, going from more simple kind of products and sales processes to much more advanced sales processes with the products containing more technology. The part of the world that is mostly driving this is the Asian yard markets, although European-based owners are obviously clearly driving it. The actual change on the hull is mainly occurring in Asian countries. Selektope is hence, as a consequence, in the air or in the sea, as it should be, of course, being a technology that drives hull performance to new levels. Sorry. For you who are new to the company, I-Tech is listed on Nasdaq First North. I-Tech is Interface Technologies. We are relying on a strong IPR that includes patents, but also regulatory approvals throughout the countries that are important for the shipping industry. The product we have is an ingredient technology spun out of sciences within biotechnology. We call it Selektope, and it's part of a marine paint system, so-called antifouling system. The effect of using our technology and the reason why we believe so much in what we're doing is because there's a clear contribution to enhancing shipping efficiency by keeping hulls as smooth as possible over a long period of time, meaning avoiding attachment of marine biofouling. Hence, this is also linked to a more sustainable industry as there's less emissions to air, and hopefully, we can even reduce the transportation of invasive species or alien species around. All this comes into the purpose of what we're doing, which is so important to keep motivation at the top. Elaborating a bit more on those things. Shipping is, to many of your knowledge maybe, the biggest transportation sector. Doesn't mean it accounts for the biggest CO2 footprint, as it's already very efficient given the size of the vessels and the amount of goods you can freight on them. Yet, the some 100,000 vessels that are operating out there, not only commercial vessels, but yet 100,000 vessels are in some way responsible for 2.6% of global CO2 footprint. That is roughly the size of Germany's total emissions. It's quite significant industry in this parameter, looking at these figures. There is a huge potential to save, not only will they save due to the regulation, it's also so that it's identified through measures in the last 10 years or so that the coatings itself still have a quite potential, high potential to save more CO2s. In rough numbers, the industry is talking about 100 million tons of saving potential compared to a benchmark level at 2008. Focusing only on the hull and hoping then that all ships in the future will have the optimal coating condition. It's not only about fuel and emissions to air, it's also about trying to reduce the risk of transporting alien or even sometimes invasive species between marine ecosystems. This is an issue. When a foul is hulled, the risk increases dramatically, Authorities in some countries have implemented restrictions, meaning they will inspect or receive some sort of risk assessment from the ship before arriving at port. That may end up in a denial of a port approval and then hence a cleaning operation somewhere out in the ocean, all to protect the marine ecosystems. The more focused for the coating industry is obviously to take care of those two first items, but then try to do as good job as they can in optimizing their own products to avoid excessive leaching into the oceans of chemicals. Also to optimize their own CO2 footprint, building up the, and producing the paint, of course. In this case, we focus on trying to reduce the emissions to sea together with the industry by being part of the optimization potential in reducing this. Selektope is a clear candidate to address all of these three, and that's really one of the good aspects on the very long-term perspective for us. What is then Selektope? It's a biotech approach, as mentioned. It is spun out of research in this scientific domain from University of Gothenburg and also Chalmers. We call the product Selektope. It's actually a molecule with the generic name medetomidine. It has a receptor-stimulating behavior, so the barnacle army. As long as it is added to the paint matrix and the transition of the molecule from the paint to the surface is controlled, then there will be a repelling effect of this paint towards this organism. Barnacles that will otherwise settle and constitute a huge extra drag factor in moving the ship through water. That is then very counterproductive in terms of saving fuel and making emissions reduced. The technology has been around some time and it's now tested on a lot of different vessels. We're talking about some 1,000 vessels using the technology. In the figure here, there's an extreme case where a ship has been exposed to very static conditions over a long time using technology where you can see how powerful it is. It's throughout the years now been adopted into some 20 products plus at the six of the nine biggest paint makers in the world. This is what we do. It's a molecule-based product. It's sold as a powder into the chemical factories, and they then are responsible for the technology and bringing the best out of the product into their paint systems. We are basically facing nine big customers, if you talk commercial shipping or at least industrial shipping included. They represent almost 100% of that market. Six of them are clearly dominant, taking 80% market share together. The good thing here is that we are customers, sorry, suppliers to six of those nine biggest. We are running R&D activities, and they are themselves running R&D activities, sometimes with less involvement ourselves throughout all these customers. There is activity ongoing at all these different nine customers. Some of them, six again mentioned, have new building products on market. There's a specific paint containing Selektope to resist the long or to sustain the long outfitting periods that are normally associated with a newbuilding program. Some of these, three of them, of the paint makers, are also offering the products on the dry docking market, which means longer life expectancy, five years, compared to maybe one year on the newbuilding. The transition into this dry docking area is very important to drive further volumes in the years to come, as that's the largest market. There is some 10,000-15,000 dry docks going on per year compared to some 1,000 newbuilding projects per year. We really need to see the and a move towards this direction in the years to come. Far, it looks really good given the R&D activities, and we're confident that more will come. We're even quite confident that within 12 months, something will happen on the product launch side, in either of these two areas, should be said. The areas they perform the R&D in are general, generic, and obvious themes as they try to provide a higher overall performance, of course, to the ship owner, meaning not only hard fouling, but also soft fouling performance to the paints. Also trying to optimize, as I mentioned, in this case, referring to optimizing biocidal loading, reducing the amount in weight of biocides used in a paint to perform at a certain level. That is then without compromising this performance. Then there are different novel coating systems or half novel coating systems that are being used, and we see a tendency to try to adapt the technology into that area as well. All of this is obviously promising. The important remark is things takes time in this industry. It is not done overnight and normally, or in a multi-year development process, to say the least. Looking into shipping as such, because the macro trends are, after all, the ones that are driving the demand for improvement and stimulating the innovation throughout the value chain, I-Tech representing the innovation part of that still. You can see that shipping is improving, although maybe not as fast as many would hope or expect. Compared to 2008, there is a sharp improvement where the industry was roughly assumed to have an impact about one billion tons of metric tons of CO2, indicating a 3.2% footprint of the total of the world. It's now down to 845 according to Clarksons, with a footprint of 2.3% and this is expected to go down to 2.1% following this year. There is a step to be made, right, to reach the 600 million tons, which is a target for the industry by 2030. Alarming, one could maybe see that some of these improvements effects are given by itself as the total global CO2 is increasing, not decreasing. That itself is helping the industry look better. They are clearly, I mean, the shipping industry, clearly making some progress. Some of that is with slow steaming coming in. The next steps will be, fine-tuning various kind of efficiency technologies, where hull is one part of that, and we'll come back to that soon. We can also see that more cargo is being moved, yet, they keep the CO2 emissions under control, so larger ships are, being, put in place, helping this figure. In fact, it is, of all the transportation, means the most efficient from a CO2 standpoint, way to transport goods. That doesn't mean that, there is not room for improvements. There's actually a 245 metric tons CO2 needed to be saved from the industry on a yearly basis by 2030. We're really sticking to these macro trends as an underlying factor to what we and many others in the industry are seeing as value drivers for the products. As mentioned, it's not about the hull at all alone. It is about the combination of different investments that a ship owner needs to consider. It could be many different areas. The hull is obviously important, and it is super important if things go wrong. Damn, a hull with a lot of fouling will outplay any other investments, as the negative effect of heavy fouling is so high that other investments will not show their effect in that situation. Optimizing the hull, always choosing the right coating, maintaining the coatings in the best possible way, is very important to gain efficiency of other investments. At the end of the day, however, the big transition that's needed will come from transition to other fuels, used on board of ships, and they will be more expensive as they have lower energy density than current fuels, likely at least, meaning that the optimization work of the ship is much needed now rather than later to enable this transition to be as smooth as possible. In one way, we and others are enabling the transition to super clean fuels like synthetic fuels or hydrogen or whatever the industry needs to go to. We're therefore also hoping that that itself is a driving factor, not only the current or short-term effects of the investments. Looking into the quarter, really strong figures, SEK 30.8 million in net sales compared to SEK 14.5 million the same quarter the year before. Clearly taking a big leap out—a big portion out of the full year net sales last year. We're really heading towards an interesting situation. Gross margins fairly much on the same level. EBITDA is improved. This is a strong figure. The SEK 10.3 million is really, really big for this quarter comparing to the SEK 10.0 million for the full year last year and to the SEK 2.3 million for the quarter 2022. Cash flow is good, as is the cash balance. The growth is obviously containing currency effects and the non-currency adjusted or the currency adjusted effect is 92% in this quarter. That shows a strong growth on organic side. We should also mention that the growth at our key customer is still high, so a 100% growth at our main customer who has somewhere around 80%-85% of our revenue still growing compared to the first quarter last year. Not only that, our second-largest customer is also growing in this kind of magnitude, although from lower levels. Still very promising that we have such high attention from, in this case, Asian-dominating, paint makers. We see a higher, a slightly higher cost level in this quarter compared to the quarter one last year, showing that we really kept costs under control this quarter. Some are just slipping over to quarter, so, expecting higher costs maybe in the quarters to come. Let's see. There are some of those clear effects, but let's see how that plays out. This quarter, anyhow, was really strong when it comes to keeping cost under control. Look, giving you a feel of the frontmost rolling situation, we see the obvious growth, which is the key focus area, and almost like some sort of hockey stick. We've been seeing a large growth up until the COVID period, then it flattened out and now back in sharp growth. Obviously, we're experienced enough to understand that there will always be business cycles coming around, but for now, we're really enjoying a really good period here. The EBITDA is continuing to be increasing to new high levels, as mentioned. Actually, since quarter three, quarter four 2019, we've been on the positive side. Now we're really on the positive side, proving the business model where growth is occurring without costs growing in the same magnitude. This is exactly what this business model is expected to generate over time. There will be quarters with different figures maybe, but over time, this is clear indication that we can deliver a very interesting and compelling business plan and a business model. One part of this quarter was moving, transitioning to other new facilities quite nearby where we were located before. That's just our size. We're located in the GoCo House in Gothenburg, which is not only a house, it's in full area with biotech and health science companies of different sizes all trying to create an as innovative atmosphere as possible to help each other find new ways to grow and solve problems and so on. This would be an exciting year when we see more of these companies moving into this location, and we're currently very happy to be here. It's a bit south of Gothenburg, still in the municipality of Mölndal. For you who will come and visit us, we look forward to show you also our new premises. Looking at the business growth, on the opportunity side, we see the strong macro trends. They are not short-term. They are very long-term. This industry has targets reaching all the way to 2050, in terms of CO2 savings, it will likely be extended beyond that. We also see high creativity and activity within several customers trying to capture this opportunity of transitioning from maybe moderate-grade products to high-end products, and that is technology-driven and it's also creativity around other ways of making or fouling go away from the hull. Many of these are then fully compatible with the Selektope strategy. Regulations are in place. It is both from IMO level but also on EU level. Both looking at the ship design, the ship maintenance part, but also the EU Emissions Trading System fees that will apply if not reaching certain improvements. On the challenging side, there are always challenges. We are seeing some indications of ramp-up challenges at yards and dry docks, mainly driven by lack of or difficulties to find staff. Sometimes also materials shortages could be an issue. We're seeing that there is a high volatility in the timing of when projects were expected to be finished and when they actually finish as a consequence of this. That may play in also for us as we're relatively dependent on the newbuilding market throughout the year. So far we don't see that, but it may come as projects on newbuilding side may then be pushed out. Let's see. It's something we're hearing and we, we are open to communicate about that. There's also on the challenges side, more on the long-term side, slow steaming in the regulatory processes, talking about EPA as an example. Also EU are slow pushing out dates and, by these very long processes, there's also time to introduce new criteria or other views to evaluate certain criterias, which gives it a sort of moving target kind of thing. All this is just very annoying, of course, when you want to invest towards fixed targets, fixed timelines. That is not at all what's ongoing. Of course, that's a challenge itself. To really make the big step in the business, we need to have a much stronger impact or presence, I should say, in products selling to the dry docking, the five-year systems than what we have today. We see a good trend towards that direction. We're confident it will come. When it will come, that will fuel our growth further. Over a long period of time. That was my last content slide. I thank you for tuning in, please read more at our different web pages. The I-Tech one is the for the financial one. For investors. To read about case stories or the product itself, please visit selektope.com, which is the brand of our product. By that, I thank you and open up for questions. Thank you very much, Philip, for that presentation. Now we'll jump straight into the Q&A section. We'll take the first question. Would you expect that the growth from today's level will be driven by your CMP and your second-largest Asian customer or from customers named three to six? From today's level, we still see a potential to grow from our the two biggest ones. There is, yeah, yet, more to do. They have many products, launched, in different parts of Asia, some also in Europe. And those products will be the ones driving growth over this year. The other customers mentioned will contribute step by step, more the year to come, 2024 likely and 2025 than this year. That's what we predict at least. Thank you for that answer. What do you see as the largest challenges in the coming year for I-Tech? Well, challenges is most kind of industrial, so to say. Let's see where all this price kind of things move. We have been very fortunate so far to avoid hiccups on that side. Then there is a constant I was gonna say drive to explore technologies, and there is sometimes a negative trend towards chemicals and use of chemicals in general. It's important to be alert on those and really put forward how well-assessed our kind of chemicals are. I don't think that will be any challenge in the short term, but on the long term, maybe. All in all, those are minor compared to the really strong upsides that we're now seeing following years and years of development. That's not something that paint makers will step away from. If I have to answer your question, those are the ones I would highlight. Okay. Thank you. Could you please break down the revenue from maintenance and the new builds? Yeah. It is a bit difficult to do that as we don't have transparency. Most of the volumes is from Chugoku Marine Paints, our Japanese customer. They sell in all markets. I haven't a clear update from them as of this quarter on how much went to what kind of type operation. I would assume we're, on that account, maybe 50/50, maybe 60/40 even to newbuilding versus dry dock. For the other ones, clearly much more newbuilding. Maybe let's say 65%, 70% newbuilding. The rest, dry dock, is a guess from my side. Okay. Thank you. How large is your market share as of today, and what's a reasonable market share to aim for? Our market share is still very, very limited. There's a lot of work to be done. We are, you know, around some more than half, maybe 2%, depending on how you count and measure. We should be, you know, applicable in most antifouling coatings of premium range, which we think will be the growing segment. Without putting out a firm number on our market potential, I can just conclude that there is enormous potential out there, if we get into dry-docking products that we now expect and hope we will. Okay, thank you. Continuing on just dry docking, what is the timeframe for seeing significant revenues from dry docking? Yeah. We're also trying to chase down that. That's one of the more important things. We think it happens gradually. As I mentioned, three of the six customers are on the dry docking. For them, it's about proving and getting good feedback from the market that products work. As I mentioned, I think in many other quarters, this is not an industry where products are replaced and then all of a sudden you get a huge volume. It is so that every product has to make its own way and own recognition into their ship owners and management firms to be a candidate. And on top, the premium products are more tricky to sell. They require higher guarantee packages and more proof of performance, track records, and so on. It takes time. I think that, the growth ahead will, let's say from 2020 to 2025 and onwards, will come mainly from the dry-docking side rather than the newbuilding side. That's an estimation. Okay, thank you. What were the main drivers for your increase in, net sales? Well, it is the effect of the many good products that were launched during COVID, and they have now been performing a year or two, and that confidence is now given onwards to the ship owner. It shows, we mentioned one interesting maybe detailed thing is that Chugoku launched, I think it's called M1 PLUS product, during COVID, which we were open with to communicate. That is being specified very often on most ships on the flat bottom, which is on one-third of the surface. That is a more high-speed uptake way of introducing our technology as it's part of a larger system, and they can then go with this one for basically all premium ships independently of what's on the side, on the vertical side. We see a high uptake of that kind of product and on top of that, just an increased shipping activity with a premium focus in Asian countries where, I mean, we're shipping a lot into Japan, Korea, China, Singapore. Those countries are clearly driving the business. Could you give any indication of cost level going forward? Should one expect that current stable development continues? Yes, that's what one should expect. We have maintained this level and gross margins around... If you talk gross margins, it's been stable for some time in terms of that. Yes, it will be stable. Cost on the other side, we do see a variation between quarters. This quarter was tight on cost. We have moved to new facilities. That has some certain impact. We have from time to time, regulatory costs that will come up when we need to invest in studies or processes or administration. There is increased activity on the collaboration side, which will drive R&D costs, of course, for the sake of getting to market quicker and helping customers solve problems and so on. We will take on higher costs in the quarters to come. It will vary, but it's not significant, so to say. Have you seen any movement amongst new paints or ingredient technologies worth, mentioning? Ingredient technologies, no. We don't see any movement, and no one else would probably say anything else. It's clearly a really difficult task to find other ingredient technologies that work. As you have seen from I-Tech, it's a 20-year story to get anywhere close to revenue scheme. On different paint systems, there is in the Northern European side a lot of talking about so-called silicone systems that are quite popular. Many of those do contain biocides still. Of course, that's an interesting area to look into. Yet, on the global scheme, that's a marginal volume going into that kind of products, as they're still have some limitations and challenges around them. They have their place, while the current systems have their place, and that place, space is much bigger, clearly so. That's what we can see. If you read press and so on, you will see attempts to do ultraviolet light systems, ultrasound systems. Let's see where all that goes. That's, that's the technology press around this hull performance solution, so to say. Yet early stages there. Do you have any update on the work towards leisure paints with Pettit Marine Paint in the U.S.? I don't have much update other than what I expressed on the challenge side, that we're suffering from a very slow-steaming regulatory processes where It's not Selektope alone, it's the whole marine coatings industry that's facing these enormous delays. It's not a month delay, it's like missing their targets by 2 years in terms of responding, and that is clearly troublesome. Until we have responses back and have a clear pathway forward, there won't be much activity. What has been done under in meanwhile is obviously technology development, improving paint formulations, optimizing paint formulations, and all of that has been along the plans and performing as they expect. It is really a regulatory administrative issue right now. Okay. Thank you very much, Philip, for presenting for us today. Big thanks to all of you who followed along I-Tech's Q1 presentation today. I hope you have a great rest of the day and until next time. Thank you, Philip.