6. May 2021

Significant AAR growth and business progress | Q1 2021 financial results

6 May 2021 – Numerous contract wins for Elop’s AI business unit Simplifai resulted in a monthly recurring revenue growth of 59 percent during the first quarter 2021. Subsequent to the quarter, Elop AS has entered into an industry partnership that opens the door to the Nordic market for scanning of concrete infrastructure.

“Simplifai’s win rate is impressive. However, what we have seen so far is just the tip of the iceberg. The market interest in Simplifai’s AI-based technologies is substantial, in multiple industry sectors both in Norway and abroad. We expect Simplifai’s impressive growth to continue in coming quarters and years,” says Øivind Horpestad, executive chairman of Elop AS.

Simplifai has developed AI-driven software that interprets text content in e-mails, documents, software platforms and other systems, and automatically decides and acts on this information. It is a unique solution to automate labour intensive work processes.

Simplifai signed international breakthrough agreements in both India and Singapore in the first quarter. The company also landed its first contracts in the Norwegian public sector and the online retail segment. Subsequent to the quarter, Simplifai has won its first municipality contracts in Norway, a potential high growth segment for the company as modernisation of the public sector is high on the government’s agenda.

During the first quarter 2021, Simplifai delivered a 59 percent growth in monthly recurring revenues (MRR). Year-on-year growth in MRR is 90 percent from the first quarter last year.

Integration of the Elop and Simplifai organisations continues its progress. Approximately NOK 30 million in potential cost synergies have been identified in conjunction with the integration. This includes development work that Simplifai can solve instead of Elop outsourcing it to third parties.

Progress for Elop’s ultrasound technology

In March, Elop announced that the company was in dialogue with several potential industry partners that were looking at ways to integrate Elop’s technology into existing service offerings for inspection and monitoring of concrete infrastructure. Subsequent to the first quarter, Elop has announced one such industrial partnership.  

The partnership is with Terratec AS, a Nordic provider of survey and inspection services, regarding the commercial use of Elop’s technology in combination with Terratec’s services.

Terratec is a leading service supplier of geomatics services, including provision of surveying and inspection services for buildings, infrastructure, construction projects and industry applications. Terratec will integrate the “Elop Insight” hand-held, rolling ultrasound scanner in its existing service portfolio, especially in combination with georadar measurement and 3D laser scanning.

Elop is also in advanced dialogue with international companies regarding potential industry partnerships.

“The Terratec partnership will help us build a technology track record which over time can help us generate substantial sales volumes. Infrastructure owners worldwide are hungry for technologies that can make inspection of concrete structure more efficient. The partnership with Terratec will take us an important step towards capitalising on this market opportunity,” adds Øivind Horpestad.

Covid-19 restrictions continue to make sales physical demonstrations of Elop’s technology very difficult. However, the company’s ultrasound technology continues to attract interest from a large number of companies and asset owners.

“One positive side effect of Covid-19 is that sales to elsewhere in Europe is no more challenging than sales in Norway. As a result, we have in the first quarter agreed demo projects with companies in France and Germany. However, Elop’s sales team will undoubtedly benefit from a re-opening of society,” says Øivind Horpestad.

First quarter 2021 results

Elop, which is still in a build-up phase, delivered revenues of NOK 2.3 million in the first quarter of 2021. Operating profit was NOK -20,4 million in this year’s first quarter, in line with guided ramp-up plan.  

Elop held cash and cash equivalents of NOK 116 million at end of Q1 2021.

Live webcast presentation at 08:00 CET

Elop AS invites to a live company update today at 08:00 (CET). Executive chairman Øivind Horpestad and VP Simplifai Bård Myrstad. Investors, analysts and media are invited to follow the webcast: WEBCAST


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