Hi, Marcus, CEO of Bawat. You just released your Q3 results this morning. Let's run through some of the key messages here just in the short, and then I have some questions afterwards, where we can go a little bit more into depth to some of the areas. For full information, if you want the full disclosure and all the small details and the numbers, go to the investor website at Bawat. This is to run through the key messages. Marcus, for now, I think I will let the word go over to you.
Thank you, Michael. Thanks very much. Welcome to Bawat Water Technologies' Q3 overview. As Michael says, the information was released 3rd of November at 10:00 Central European Time. My name is Marcus Hummer, and I'm the CEO of Bawat. Bawat is a commercial scale-up company, and we were listed in March this year in Stockholm at Nasdaq First North as a premier company. With that background, top-line reporting and guidance has been our core indicators from the outset, and this is also where I will start today. From commercial performance point of view, we closed orders in third quarter SEK 7.6 million. That brings our total order intake for the first three quarters to SEK 16.9 million.
In our half-year report, we guided for the full year order intake, and we guided for SEK 35 million-SEK 50 million for the full year, and this is also where we are guiding based on our third quarter's performance. We are doing that based on the depth and maturity of the negotiations that we currently are having, both with repeat customers but also with new customers. We are also doing it because we can see that the orders we expect to close in the fourth quarter of the year is a mix between our Mobile systems and our ship systems. Recognizing that mobile systems are normally ordered in the range between SEK 6 million-SEK 10 million and ship systems between SEK 1 million-SEK 2 million, that gives us confidence that we'll reach our year-end guidance that thus stands unchanged. Our commercial activity is still high.
We quoted for more than SEK 50 million in the Q3, and this is in line with the high activity we also saw for the first half of the year. In the bottom of the slide, you can see our 12-month trailing order intake. Basically, each point of this graph indicates the sum of the former 12 months, and you can see that a steady growth, and we are, as I said, a commercial scale-up company, which is also proved by this graph below. Top line alone does not make it. We also need to convert orders into sales and into margin. We have previously guided and said that we will reach at least 20% margin on our Ship Solutions, and this is what we are seeing already now in the Q3 numbers.
The sales that we had in the Q3 numbers to a very large extent reflect newly sold Ship Solutions, and we are hereby proving that we can convert newly sold sales orders into sales and also into a 20% profit. In the years to come, with a mix between both mobile systems and also Ship Solutions, we will expect, and we are you know, looking forward to see that we are predicting at least 30% margin going forward based on the sales mix. We have reported SEK 3.3 million sales for the quarter, but it's more importantly for us today to communicate that this sales actually reflects our conversion rate from orders to sales, and we have guided in our IPO and in our first half-year results that we can do that on a six-month average.
This is exactly what we are seeing now, that we see that the orders that we took in the first half of the year, we are converting that into sales, and we are expecting that we can convert the full half-year order intake into sales into the second half of the year, thus delivering on the promise that we have around a six-month maximum turn period from order intake to sales and thus to bottom line. The last slide and the last couple of points I'd like to take you through today is what is also happening in the, what we call the machine room in Bawat. It's not only about selling, it's also about how are we delivering to our customers and how are they portraying us as a supplier.
We took, among others, two ships, commissioned them and delivered them with a ballast water management system here in Q3. Why am I bringing this up? Well, because the system were dual heat system, meaning that they can now operate both with a heat source on when they are sailing, but also with a heat source when they are at port, giving larger flexibility. More importantly, as of first of June this year, all new ballast water systems has to be tested, and the water quality has to be tested, so it lives up to the discharge criteria under BWM Convention. Naturally, both our system passed with flying colors. We did one in Asia, we did one in Western Europe, and needless to say, everything we have delivered so far has always lived up to the discharge criteria.
Heat treatment simply works in the space of ballast water. We are growing our sales and agent network, including our own internal sales, which was also part of what we said we would do after the IPO. Right now, in Q3 and also after Q3, we have closed contracts with Germany, Japan, Greece, also Taiwan. I would say that we now have all the cornerstones in place in the most relevant maritime places in the world, close to our customers. Our sales network, the cornerstones are now in place and working very well. We will, of course, you know, extend our sales network, but the core is in place as of today. Last but not least, a quick note on supply chain.
The supply chain generally in the world has been challenged over the last couple of many months, but with the Bawat business model of where we are having a wide variety of OEM suppliers with simple standard components, we have, for all practical reasons, been able to deliver on time to our customers, even in these challenging times. Thank you, Michael. Back to you.
I have some questions. You know, everybody, as you said, it's the top line, it's the order momentum who is important for you. We can see the acceleration, but you still need a pretty strong fourth quarter on the order side. Can you give a little bit more, you know, color to why you are expecting this? Is this your pipeline times some probability of orders coming in? Is it the Mobile solutions which you mentioned you already closed one, and they are pretty big in order size. What is giving you this comfort?
It's actually, as I said, the depth and maturity of negotiations we have both with current but also new customers. It's not a conversion rate on the pipeline, it's actually individual contract negotiations that we are summing up, and we can see that by that we are still guiding in the area of SEK 30-SEK 50 million. It is a mix, as you say, between both mobile systems and ship systems, and that mix together brings us from the SEK 17 million we have today, SEK 17 million in order intake, to at least the SEK 35 million that we are guiding for as the bottom. It's actually not a percentage conversion. I think we are too early and have too little experience to have that figures from an experience point of view.
It is actually looking at each individual contract negotiation with individual ship owners, individual end users that we are looking for in order for giving this guidance.
Perfect. It's too early for me to ask SEK 50 million in order growth. You have a percentage point that's too early in the conversation phase to really give a firm percentage-wise what you should expect.
That is too early. You know, what we are happy to see is that the high activity continues, and that means, of course, that we are planting the seed for the order intake into 2023.
Secondly, already the 20%. Last time I spoke to you said that was your long-term ambitions. Now you're reaching it and maybe even upping the targets to 30% gross margin. Is it, are you expecting a higher mix of the Mobile solutions who has higher margins, or is it your supply chain, or is it the prices of customers where the value you can see that you can charge a little bit more? Can you give some elaborations on why you now are upping your gross margins expectations?
I think it's actually the mix. We went out in the IPO, and I think also in our half year result and said for Ship Solutions we were targeting 20%. What we are seeing now is that we can reach that. With the mix of Mobile solutions, where the competitive situation is much less intense, that's why we are long-term targeting, you know, at least what we're saying, a 30%+ gross profit, because we can see that the mix has a very large influence on this gross profit. Right now that we are happy to show that we can see that we can sell ships under fully commercial conditions, and we've done that for a long time.
Now in a quarter, which is relatively clean on, you know, sales converted for new sold ships, we can see that we are already now at the 20% mark. That means that going further, we also have opportunities to improve based on our, you know, supply chain in terms of purchasing power once we grow in volume. That's why we are comfortable going out and saying that we are now targeting the 30%.
Grabbing you a little bit on the supply chain. Now as an investor, I can see that your order momentum is okay, but you also need to deliver on it. I know you're dual-sided. I know you use standard components from the marine industry. I know that everywhere in the world the supply chain looks better. Is that also what you are seeing, you know, what you also need to deliver this order intake next year, you know? Are your supply chains good and getting better like we hear from others?
I think we can confirm that as well. We see two things. We see an ease on the general global supply chain, and then we are behind on the few very critical and core components, especially the electrical components into our systems. There we are, let's say, putting in stock with our sub-supplier, a small buffer stock so we also have something to buffer with. We are putting it into the suppliers. We are sticking with our promise that we are not using working capital, but are actually releasing capital in our projects as we also described in our IPO. Right now we are seeing an ease on the global supply chain, and then on critical components we are working with our sub-suppliers to have a stock, a buffer stock with them.
Perfect. Lastly, you know, what is also interesting for an investor, I think, you know, in a scale-up company, your partnerships where you're building up your sales muscles, you know?
Yeah.
You now mentioned three more partners here. You have the Damen Green Solutions , a big ship builder. The question is, you announced earlier the Damen Green Solutions. Are you already seeing some traction order quotes from there, so you can confirm that when you get a partner? Secondly, how big are maybe those new partnerships that you are making compared to this earlier announcement?
Yeah. I think we need to distinguish, you know, Damen is a partner on the yard side, and what we are announcing here is sales agents. They are basically sales people going out and promoting our system. The Damen cooperation is full in work. They are identifying potential targets and we will, you know, use that as part of our base projection for volume also going into 2023. They have to know us and we have to know them, but the partnership is good and growing. For sales agents it's a faster traction of them getting to know our technology and knocking on our customer's door.
As I said earlier, we now have sales agent in place in the most, you know, interesting and largest shipping hubs close to our customers. So the core of that sales force is now in place, supported with our own sales agent. We will of course gradually grow it continually for smaller places in the world, but the cornerstones are in place now.
Thank you, Marcus.
Welcome.