Letter from the Chairman

Ulf Ivarsson Chairman of the Board

Challenging times – adaptation, growth, development, digital transformation

FlexQube entered 2020 with strong momentum. Order intake, sales growth, new – digital – product platform, eQart, and a sharpened organization. Everything seemed to suggest a ”record” on all fronts and the first quarter was the company's most successful to date.

But from February on we began registering ominous information about external events. The COVID-19 pandemic accelerated and although not all the consequences were yet known, FlexQube prepared itself for severe adverse effects. The dramatic change in market climate, demand and conditions for customer meetings etc that affected us, like most other companies, is difficult to describe to outsiders. But it also pales in comparison to the enormous challenge faced by the whole healthcare system and the many individuals who have directly or indirectly been affected by the coronavirus.

The corona pandemic is an external factor that we cannot ”wish away”, but individuals, companies and society alike must grasp the reality and adapt to the circumstances. In such a situation, it is gratifying to see how FlexQube's management and personnel have responded and taken on the challenges that have arisen. Short-term layoffs and other cost adjustments have been combined with creativity and transition, including digital demos and customer meetings.

Despite the much worsened market conditions since the second quarter, FlexQube has increased sales by 13 percent in 2020. Despite the challenges, sales work has intensified, although most meetings have been digital. Although only a few orders have been canceled, we have noted that sales cycles have become significantly longer, as many companies postpone investment decisions that are not strictly necessary. The intensive marketing and sales work, where resources have been focused on digital channels, means that FlexQube has a good ”pipeline” to resort to. This is one of the reasons why I firmly believe that the company's growth will accelerate again when the market normalizes. Other factors that strengthen FlexQube's competitiveness and future potential are the company's investments in digital transformation and building a global dealer network. The dealer strategy took off in 2020 and already the company has a strong presence in several important markets with more than 10 dealers complementing our own organization.

The need for automation solutions and digital structures has become even more clear over the past year. Through the eQart concept, FlexQube is uniquely positioned with smart robot carts combined with a design for material handling. The launch of eQart was adversely impacted by the pandemic in 2020, but there is significant potential over the next few years as the market for logistics robots will grow five times faster in the manufacturing industry than in warehousing and distribution over the next 7 years.

I have had the privilege of leading the board's work since 2017. It is time to hand over the baton, which I do with the firm conviction that FlexQube's expansion and growth will be sustained for many years. FlexQube has huge potential with a very strong product program that helps customers implement digital transformation and continued streamlining. This means that I have great optimism and confidence in the organization, management and board delivering significant results from 2021 onward.

Gothenburg, March 30, 2021

Ulf Ivarsson

CHAIRMAN OF THE BOARD, FLEXQUBE AB (PUBL)