– Elop’s operational development progressed in line with the company’s business plan in 2020 and into 2021.
The company has experienced a solid and growing interest for both Elop’s technology and Simplifai’s AI solutions, resulting in a 48% increase in customer leads for Elop since tech launch and several breakthrough contracts for Simplifai. Simplifai’s recuring revenues grew by 50% in 2020 and continue to grow fast. Moreover, approximately NOK 30 million in cost synergies have been identified between Elop and Simplifai for realisation in 2021.
“The main enablers for our growth plan are our unique patented ultrasound technology and Simplifai’s AI solutions and competence. So far we have only seen the start of the real effects we will generate by combining the technology and solutions from our two units. We expect the coming months and years to be very exciting,” says Øivind Horpestad, executive chairman of Elop.
Growing sales pipeline for Elop
In December last year, Elop successfully launched the world’s first rolling ultrasound scanner for commercial use. The pipeline of potential customers of the scanner continues to grow. Since the launch in December, the number of requests has grown by 48%. Even though Elop’s ability to demonstrate the technology has been somehow negatively impacted by limitations caused by Covid-19, the company is in advanced negotiations with numerous potential customers.
Elop is also in dialogue with several potential industry partners, including some with global distribution, that are looking at ways to integrate Elop’s technology into existing hardware offerings for inspection and monitoring of concrete infrastructure.
“The commercial launch in December opened up a global market for our technology. We are excited about industrial partnership and OEM opportunities that will make our technology and solutions available in different shapes for different segments. We are in discussions with several companies about integrating our technology into existing or new solutions that they have. This could also fast-track our SaaS revenue model,” says Øivind Horpestad.
ARR growth for Simplifai
Elop’s AI business unit, Simplifai, has made excellent progress in the fourth quarter an into 2021. Simplifai secured a bank sector breakthrough for its AI-powered digital employee technology in November last year. In 2021, Simplifai has secured similar market breakthroughs in India, Singapore and in the Norwegian public and online retail sectors.
Simplifai’s business was significantly impacted by Covid-19 in 2020. Despite this, the company’s recurring revenues were around 50% higher at year-end 2020 compared to the same time in 2019, increasing its recurring revenue share of total revenues to 38% from 20% in the same period.
“We see a very strong recuring revenue growth from Simplifai so far in 2021 and we expect this to continue going forward. The combination of several recent market breakthroughs and an attractive pipeline of contracts will contribute towards this,” adds Øivind Horpestad.
Elop’s management is currently working to on-board Simplifai’s capabilities and integrating them with the business. During this implementation work, Elop and Simplifai has together identified approximately NOK 30 million in potential synergies that they aim to realise in 2021. This includes development work that Simplifai can solve instead of Elop outsourcing it to third parties.
Full-year 2020 results
In line with its business plan, Elop had zero revenues in 2020 as its efforts were directed towards a successful commercial launch of its patented ultrasound technology in December 2020.
Elop held cash and cash equivalents of NOK 116 million at year-end 2020. The acquisition of Simplifai was completed in January 2021. Simplifai’s financial results will hence be consolidated into Elop AS from 1 January 2021.