Hello, and welcome to this Q3 presentation and Q&A with Shape Robotics. With us today, we have the CEO of Shape Robotics, André Fehrn. First, there will be a presentation, and afterwards, a Q&A, where the CEO will answer questions submitted via Stokk.io. There have already been pre-submitted questions on Stokk.io, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to André from Shape Robotics to start the presentation. André, your line is now open.
Thank you very much, everyone, and thank you, Anders, and thank you for joining today. Well, as you can see on the picture here, I took the picture from Nasdaq, because normally we say that we are expected to be listed on the Nasdaq Main Market, Copenhagen, but this actually happened this week, but I will get back to that. So, briefly, I would say some of the topics I took today, and of course, as Anders says, please ask questions if you have any. I always take a brief introduction to the company and a little about the market we're looking into and the possibilities.
And then that we have moved our accounting principle to IFRS, the EU standard, from the Danish standard, which is normally when you move to the main market, you have to do that. So I will touch briefly on that also. Then some key figures, of course, from January to September, year to date, and a little about our—how our turnover, our revenue is distributed and how it's mixed. And then, of course, the main market, and then also take a status on our acquisition of Skriware, the Polish educational technology company. So that's what I brought to you today, and I will get started now. So briefly about Shape Robotics. We are, Shape Robotics is an educational technology company, and we promote technology, education, and basic science, digital skills, through our STEAM solutions.
STEAM is science, technology, engineering, arts, and math. And we built it on robotics, so that young students are taught introductory programming and learning about technology, math, and physics to prepare them for the future skills that will come, that will be needed for them in the future. If we go back now briefly to the history of Shape Robotics, then it actually dates back to 2011. We are a spin-off from the robot cluster. Two visionary engineers started the Shape Robotics. And then later, they moved to the Technical University of Denmark and continued their development. It took many years before we actually had a company that we were ready to present and go international with.
So in 2017, the actual company, Shape Robotics, was founded. And already the first year, we had the first sale of robots, and I would say from there on, it's just moved extremely fast. So in 2020, we were listed on Nasdaq First North. In 2021, we acquired a company in Romania and actually shifted a bit from only focusing on educational robots to actually focusing on the ecosystem that is required in, let's say, the future classroom, where you have robots, maybe you have 3D printing, laser cutters, etc. So we focused on an ecosystem, and this company that we acquired in Romania had at least a solution to how we could do that. So we acquired that company.
In 2022, we started a collaboration with Samsung on developing products together so we could have, yeah, in this ecosystem, develop products together. Also in 2022, we acquired another company in Romania, VTS, Video Technic Systems, because we were in a phase where we needed employees and distribution network quite fast because we're looking to fast a big pipeline. So therefore, we acquired this company. In 2023, we usually say, I usually say that we, that we are expecting to be listed on the main market, but as I showed you in the first, the first slide, that actually happened this Monday. So we, of course, are still sort of celebrating that we are now a main market-listed company.
And then, of course, we can get back to that if there's questions, what will happen after, but let's take that in the questions. So a little bit about our market and our opportunities. So in general, the whole world school systems are focused on bringing digital technologies into the classroom. We're looking into jobs that you don't know how will look in the future, but we do know it will require some digital and technology skills or knowledge about technology. So in both robotics and in general, educational technology, we are looking into a market that's growing significantly every year. There's a great deal of political focus on this topic, and there are allocated a lot of funds and money to implement technology very fast.
As an example, almost 100 billion DKK, approximately 13 to 14 billion EUR, are allocated just for investing in educational technology in the EU, in what we call the Recovery and Resilience Fund. But this, it doesn't stop here. It's general that there is a lot of focus on bringing technology into the classrooms. In Romania, our main market right now of these funds and political focus, approximately 20 billion DKK are allocated for educational purposes, whereof they expect that 60% to 70% of these will be invested in technology. So it is, yeah, a huge funds, a lot of focus, and it, they wanted to go very fast. So a big market we're looking into. Good.
As I said, we have changed our accounting standard principles, and that of course also brings a bit of difference to how we present our P&L. At least it has some differences between what we normally show when we use the, if I say, the old Danish standards. And this quarterly report that we came with last week is the first to follow this accounting standards. And we also had our 2021 and 2022 re-audited to the accounts accordingly. And if you go into our report on our website in investor relations, you can actually see what differences it has made from going to one standard to another.
I won't touch that so much, right now, but I'm just saying that there is an appendix on our website where you can see what changes has that occurred from going from one standard to another. Just stop me if you have questions on the way. If we look into our key figures from year to date, Q3 figures. In the third quarter, we realized almost DKK 29 million in revenue, compared to DKK 21 million at the same period last year. It is as such in the range we expected, I would say. But I will return to that on the next slide, and then I'll show you more on what we expected on the quarters in revenue.
But we would also say that we were hoping for more, and not saying that we are not satisfied, but we, of course, have a lot to do in Q4. But I will also come back to that because that is normally the best quarter for us. So we still have high confidence that we will reach the guidance that I will show you later. So in Q3 year to date, we realized an Adjusted EBITDA of almost DKK 1.5 million, which is basically at the same level as last year. But to that history or that narrative, there is also that we are investing a lot in what's going to happen next year.
So, in that sense, we are satisfied because we're seeding now, and we want to harvest not only this year, but also next year. So there's a lot of investment employees, sales promotions, etc., traveling, exhibitions, that we know will bring results next year. So it is in some frame in what we expected that Q3 would look like. In the year so far, we have realized a turnover of almost DKK 85 million, and, as I said, an adjusted EBITDA of DKK 1.5 million. This adjusted EBITDA, when we show it here, is because we are actually deducting or we are showing on the P&L what the costs are to acquire this company, because this is a one-off cost, and we want to present to our investors, stakeholders, that this is not related to normal operations. So, that's why we do this adjusted EBITDA.
Yes, if you look into the balance sheet, I didn't put it into the key figures here, but if you look into the balance sheet in our quarterly report, you will see that there's a high working capital tie in trade receivables and inventory, which is also, as we communicated earlier, according to our plan, because this Q4 has historically and is always the quarter where we deliver most of our revenue. So therefore, we have also in the, you know, used liquidity and built high inventories, and that is because we have to deliver a huge pipeline here in Q4. So that is why, and yeah.
If we look at the full year and what we expect this year, we are maintaining, as I said, these, this, full year outlook of our revenue of between DKK 145 million and DKK 155 million with, Adjusted EBITDA, 4 to 6 million crowns. That means that we have to realize a revenue in the last quarter of approximately DKK 60 million. But, you know, I, I don't want to break down it, but, but we have, as I also said, a huge pipeline. We have frame orders from a Network One Distribution, so we know these purchase orders are coming. So we have still, as I said, maintained a high confidence that we will reach this target.
And also, if I jump back to the key figure, so you can see if you take the last 12 months, I've taken in Q4 of 2022, you can also see if we include this one, in the last 12 months this year, then just taking in Q4 2022, we are almost at the level of our guidance this year. So it also shows that it is Q4 always, that we deliver the most revenue, and that has been historically, always, in the company because we follow this B2G cycles. Good. The last one I took, this is not on the right side. This is not our official guidance, but I have shown many times-...
To give a pointing stick on where the revenue lies in the quarters, we are almost on the level we indicated in the beginning of the year. So of course, as I said, it's not a guidance, but it is mostly or very much according to our plans on how the revenue will distribute during the year. Good. The next one I took is actually the product mix. It's kind of a new one, but I've had many questions on how our products are distributed and how the percentages are allocated on our revenue. So this is one of the focus I've brought to you today on this presentation. And it also appears in our quarter report, so you can read it there. There are also more information about them.
But let's say our own robot system, Fable, which is sold directly to schools or distributors, which was also the one we started with as a robot company, are included in the category below, and I will return to that. Sales thereof, let's say, have a medium-high margin, and are primarily sold from Shape Denmark and from Shape Robotics Romania. Now, also, Shape Robotics East or Shape Robotics Moldova. But at the beginning or the end of the quarter, it was insignificantly, but we also expect that Shape Robotics Moldova will have more of these, the sale of Fable robots. STEAM Lab solution, the next one, the next category, this is our tailor-made solutions, as I said, with robots, 3D printing, virtual reality.
Here we see that the margins are medium to low. I didn't put exactly percentages because it also varies from exactly what lab we send, sell. So, but it's medium to low if you take the whole product mix. And that is primarily due to the fact that also third-party products are included in this offering. But this is also the most selling category for Shape Robotics, but it's also a Trojan horse, so to speak, because Fable robots are actually included in this one. The last category I brought here is what we call the other or the rest category, and it's because it doesn't directly fall in between the first two categories. But nevertheless, it is linked to the first two categories.
Because it's normally upsells when we're at schools or educational institutions, that there are something else that they require to their STEAM Labs or to their solution, and then we have our company, VTS, that can provide that. So it's a kind of upselling method where we include other AV technologies. This category also includes a small portion of recurring revenue, which we still have, but it's not so significantly that we show it directly in our P&L or in this categories. Good. So moving on to the next one, you can actually see on this slide that the—when we started the year, we said that we expect that 20% of our sale will be our own robots, the own developed robots.
In this graph, if we take the robots out of the STEAM Labs and put them in their own category, robots, our own sale of robots is 22%. So it is in bottom line, it is according to what we said that our organic growth would be. We want it to be even more in the future because this is our high margin product, but it is according to our plans for sure. Yes, but basically, as you can see, as I also said before, STEAM Labs is the one that is driving the revenue right now. Good. As I said, I normally take the history and say that one of our plans is to list the company on the main market.
So we had some, let's say, promises or things, guidance we said to investor stakeholders when we began this year. One of them, of course, is the guidance on the revenue and the profitability. Another one was that we wanted to list the company on the Nasdaq Main Market, and that we could conclude this Monday that we now are a Main Market company on Copenhagen Nasdaq. So of course, we had a good celebration Friday, and we are really proud. But we also know that the work starts now. It's not the end. So we know that there are more pressure and more we have to live up to this status of being a Main Market company. But Monday, we celebrated, and we're very proud, and now we begin working again.
So this one is completed. Then, we also said earlier this year that we wanted to enter Poland. We had two objectives. We wanted to start a subsidiary in Moldova, and we wanted to enter Poland. And one of the tracks to enter Poland was to acquire a Polish EdTech company, and we started that acquisition in June. We had a long dialogue during the spring with this company, and in June, we started the acquisition, and in the autumn, we started the due diligence. And right now we are still in the process of concluding the SPA and finding the last details, but everything is according to plan, and we still have-...
Both, the Skriware investors and their management and us and our board of directors have high hopes and the willingness to close this acquisition at the end of the year. So still, we wanted to close it in October, November, but it seems it's going to be the end of the year. But everything is still according to plan. That is actually what I brought to you, Anders, so shoot away.
Perfect. Thank you for that, André. Let's move directly into the Q&A. So starting off with one of the live questions here, I think it's regarding the product mix. In the future, do you expect to be able or find it interesting to maybe acquire some companies that have other kind of school robots, 3D printers, or something else in this regards, so that you can increase margins and use your strong position in the market to sell more of your own products?
Yeah, the short answer is yes. So of course, you know, we are looking into that. We have an ecosystem, and we have our product mix and offering, and of course, we are looking into whether we can—how we can improve our offering and our margins. But there are no details on what products and where, but it is something we are discussing actively, how we can broaden our offering and how can we improve our margins? So I would say that the short answer is yes. That is something we look into in the strategies for the next years. Yes.
Okay. And then there's another live question. At the moment, revenue is growing while EBITDA is not, because of investments, as you say. At what point or what level of revenue do you believe that EBITDA will begin to increase as well and margins be better?
That's a tough question, but, as I, as I said, we are, we are expecting that the, the EBITDA, adjusted EBITDA will be the same or better than, than last year, and of course, we want to, we want to come with results next year that are better. But I think we're also at a stepping stone right now to say, how can I say that? If, if we took away the investments we have made this year in, in, in seeding something for the next years, if we took that away, this company would be profitable right now. So I think also it's a question whether board of directors, our board of directors, our investors, want to scale up things faster, or we say this, this is the level, and then we grow slowly from here.
So I can't say anything specifically because we haven't given any guidance next year or any strategy plans. But it is a part of our discussions. Do we grow organically slowly from here? We've never grown slowly, but or do we take it to the next level fast? So I can't really be precise, but the short answer is that if we took away the investments in seeding something from next year, then the EBITDA would be much better this year.
Okay, perfect. And then, let's take some of the pre-submitted questions. It seems like working capital is a big part of the business model. How should we think about this for the future when continuing to grow? Do you have enough capital and the right loan facilities in place to finance the tying up of working capital?
Yes. Again, the short answer, yes, we do. In the current business model we have right now and the business case we have right, we have the required liquidity to run the business model we have right now. But it is mostly a hardware business we have. Of course, I think there's also a question regarding to recurring revenue and artificial intelligence, but right now it is mostly a hardware business, and it is for that working capital is required. So for us, right now, we have large distributors that have long payment terms, and we are building up inventory for our Q4.
But the short answer is that the current business model has enough capital required, but if we need to scale it up faster, then it might be needed to have additional capital, yes. According to... The question also asked, do we have the credit facilities? Yes, we do have the credit facilities, and we can also expand them if needed. So right now, we're sustainable for sure. The question is, do we want to take it to the next level? So I think, you know, the answer is somewhat the same what I gave to the last question, I would say.
Yeah, perfect. And then, last time you mentioned that Skriware has a learning platform that you find interesting. Can you explain a bit more about what would that mean for the future of Shape Robotics? Will it be a feature to make the current and future product better and make you stand out, or will it also be a potential revenue stream?
I would say, it's both. So we think this is interesting. This, it's called Skriware Academy, and then again, you know, we haven't acquired them yet, so I can't really build them 100% into the strategy. We strongly and firmly believe it will happen, but, you know, hypothetically, let's say that we acquired them, and we are merged now, we are one group. Then what we find interesting about this is it's an academy more products can be built into the academy, making an ecosystem of different technologies, and then the teachers and students can enter this academy and get help on the products, and they can have learning content and go around the products.
And then also we can build a subscription model or an artificial intelligence model into this academy.... So that is why it's interesting, this academy. Yes, yeah, it's a platform that can connect different technologies, and it's also a platform where we can build subscriptions on the longer run. Yes.
Yeah, perfect. Do you have an overview that you can provide us with looking at the win rate when bidding on projects? And can you share why you usually win the different projects?
I do not have any specific percentage that I can show you. But I can say we, let's say in the past, we went to public tenders ourselves, but now the business model has more changed to that we are using distributors or integrators, and then we are helping them when they go into public tenders. So you could say that in some cases, we don't provide the whole portfolio or product mix to the tenders. So I can't say that we are winning them, it's the distributors that are winning them, but we are helping them with our products to say that this might fit the requirements that the tender needs.
But I don't have any percentages, but I would say at least in our main market, Romania, when we help distributors, integrators to go into public tenders, we have a high winning rate, but we also only focus on the ones that we think are likely that we can win. But I don't have any specific percentages. I hope that-
Okay.
Answered it.
I think that, that answered it as, as good as possible. Looking at your subscription possibilities, how far are you in the development and first applications of the AI teacher assistant? And secondly, I believe you previously mentioned something about also potentially in the future, look at premium subscription models for premium content. Is that correct? And in that case, how far are you in creating premium content and developing extra subscription on this?
Yes, I'll try. So the AI teacher assistant we have right now is more like a prototype that we are testing with the schools to see if this is sustainable. Can we use something like this in the schools? My best estimate right now is that this offering of AI teacher assistant will develop further and become something else. And also, I would say, you know, we might call it something else because AI is not, it's, it's evil for teachers. But it is something we are developing still, and we are looking into whether it has the highest priority in our strategy that we are building right now and our development that we want to do in the next coming years.
And AI will be the top priority because we want to embed this in our software and our offerings, and we are hoping, and we want to make sure that we build something that will help the teachers and help the students in a, how can you call it, a safe environment. So it's not just searching on the World Wide Web. We want to make sure that it's something that is sort of protected in an environment, but still can learn the students and the teachers about AI and also make their work and life easier when they use it. So it has the almost highest priority in our future development. On the subscription, of course, it is something we are also looking into our strategy.
We will always be a hardware company, but we want to build a base of recurring revenue, especially because we have so many schools and students and teachers using our product now. And if we acquire Skriware, it will be even more, then we have a Polish market also. So we want to find something that... We're looking into something that will be sustainable. We don't want to do a quick fix here. It needs to be something that is tied up to AI and to the academy, to using the content, and also maybe making the preparations for the teachers faster or making it easier for the students to learn about technology.
So this is something Moises, the founder, the CEO of the company, is looking actively to. There will be a subscription model as we go along, but we want to do it right.
Yeah, perfect. And then, the last question here: Have you considered making your mobile STEAM labs a service, so it will not be considered a CapEx spent by customers, but more of a service where they can share mobile labs in certain areas and rent it per use? Do you have any kind of pros and cons in this regard?
Yes, I do. It is something we are considering. The only aspect to that is if you want to do the subscription on the mobile STEAM lab, you have to find someone in between that finances the product, because otherwise it's very liquidity heavy for us. Because it will, the return of investment will be years, if they have to do it. And let's say that suddenly we sell 500 of these, then we can't finance it ourselves. But we are considering it, but right now, the demand for this mobile STEAM lab does not necessarily inquire that we need to do the service.
But if we have to do it, then we might have to find someone that is financing it in between, not to, not to take liquidity and working capital away from the rest of the business.
Perfect. That was actually all the questions. Before we end, I will hand over the mic to you for any final remarks.
I don't have any. I'm very glad that you listened, and I hope that you will. I answered all the questions, and I hope to see you next time. Thank you.
Perfect. Thank you, everyone, for listening in. This finalizes the presentation with Shape Robotics, so have a nice day.