European
Creotech Instruments has wrapped up an intense 2022, a year which saw the company generate PLN 35.8m in total revenue, with net sales revenue of PLN 21.7m. After factoring out R&D costs, the gross sales margin persisted above the 22% threshold for another consecutive year, reaching 22.1% in contrast to 22.7% in 2021. To realize the company’s key projects, R&D spending surged by a substantial 78% year-on-year, totaling PLN 20.2m. This investment is expected to provide additional revenue streams in future years, but it currently weighs on EBITDA, which stands at -PLN 4.5m. As of 31 December 2022, cash reserves rose to PLN 26.1m, an increase largely attributed to the resounding success of Creotech Instruments’ public share offering in July 2022. Amid a challenging market environment, the company raised approximately PLN 40m and transitioned its share listings from NewConnect to the Warsaw Stock Exchange’s Main Market. Currently, the company prioritizes the development of the space and quantum segments, with the inaugural launch of its proprietary satellite slated for Q1 2024.
“2022 represented a period of intensive development for Creotech Instruments as we evolved from an advanced start-up to a more mature organization boasting a well-established portfolio of technological products all across the board. I’m pleased that we successfully achieved our primary goals for every business segment, including individual departments, despite navigating through considerable economic uncertainty, an inflationary climate, and global supply chain disruptions. Our ability to promptly respond and adapt to the dynamic environment enabled us to secure a series of profitable contracts, bolstering our international standing. Consequently, we’re becoming a desired partner in high-profile international projects within the space sector and the burgeoning quantum field. I am confident that 2023 will offer ample opportunities to get ready for the anticipated surge in demand for our products. Further, the commercialization of Creotech’s offerings is set to gain momentum following the launch of our inaugural satellite into Earth’s orbit in Q1 2024 as part of the EagleEye mission. This significant milestone will mark the culmination of our extensive efforts on our proprietary HyperSat satellite platform,” comments Grzegorz Brona, PhD, President of the Management Board (CEO) of Creotech Instruments S.A.
Creotech Instruments is Poland’s only company capable of building microsatellites, i.e. satellites ranging from 10 kg to several dozen kilograms. A significant achievement in the company’s growth is the EagleEye Project, which involves the development of an Earth observation satellite set to launch in Q1 2024 atop SpaceX’s Falcon 9 rocket. Additionally, Creotech Instruments plays a pivotal role in the PIAST project, under which the company plans to deploy a constellation of three observation satellites in 2025. These satellites will be built on the company’s proprietary HyperSat platform. Furthermore, the company is involved in a pioneering project to build the first large quantum computer for the European Union as a member of an international consortium. The European Commission selected the consortium members, with Creotech Instruments signing the implementation agreement as the sole representative from Central and Eastern Europe.
“We are currently preparing to scale up our operations, making substantial investments in key projects and organizational changes within the company. This includes our transition to a new headquarters and increasing the manufacturing capacity of our Piaseczno plant. In 2022 alone, we expanded our team from 149 to 180 employees. All these efforts were made possible thanks to our highly successful public share offering, where we raised nearly PLN 40m amid a turbulent financial market, thus executing the largest initial offering on the Warsaw Stock Exchange (WSE) in 2022. This offering also coincided with our transition from the NewConnect market to the WSE’s Main Market, a move that enhanced the liquidity of our shares and sparked increased interest among foreign investors,” explains Grzegorz Brona, PhD, President of the Management Board of Creotech Instruments S.A.
In 2022, Creotech Instruments reported total revenues of PLN 35.8m, reflecting a 15% reduction compared to the year prior. The net revenue from sales stood at PLN 21.7m, with a profit margin of 22.12%, a slight dip of 0.62 pp from 2021. EBITDA turned out negative, registering at -PLN 4.5m, a result of the significant costs involved in research and development, particularly in relation to the company’s proprietary satellite projects. As of 31 December 2022, the company’s cash reserves had grown to PLN 26.1m, a significant boost credited in part to the successful public share offering carried out in July 2022.
“Our 2022 financial results were greatly influenced by the decision to adopt a selective approach when bidding for new contracts. Up until now, we had been actively seeking all available contracts that aligned with our competencies. However, beginning in 2022, we prioritized intensifying and finalizing research associated with our key in-house projects, leading to a deliberate reduction in contract acquisition in areas not consistent with our goals – specifically, the development of small satellites and quantum systems. The past year also saw a reshuffling in our R&D project teams as we implemented a vertical competency section structure to improve the management of our engineering talent and optimize resource allocation across various projects. In addition, we introduced a system for controlling information access, expanded the quality assurance team and system architects group, and deployed advanced project management tools. All these changes were indispensable to manage the expected revenue influx in the upcoming years, as well as to ensure our readiness for executing government contracts,” comments Paweł Górnicki, CFO of Creotech Instruments S.A.
In addition to carrying out its own projects, Creotech Instruments has been repeatedly selected for international-scale ventures. One such initiative was the JUICE mission, executed by the European Space Agency. On 14 April 2023, a probe was launched via the Ariane 5 rocket, aiming to explore Jupiter’s system and its icy moons. Creotech Instruments was responsible for the assembly of electronics for two research instruments outfitted on the probe. Another noteworthy project is a contract secured to develop the first large-scale quantum computer for the European Union. In this venture, Creotech Instruments will be responsible for supplying the control electronics for the computer’s CPU. In April 2023, the company cemented its involvement in this prestigious project by signing a contract with the European Commission. This agreement stipulates a consortium-wide budget of approximately EUR 20m, with around EUR 2.2m allocated to Creotech. The objective is to develop a 100-qubit quantum computer by 2025 and to attain the technological readiness necessary to build a 1000-qubit solution by 2029. The global quantum computer market is projected to reach USD 1bn by 2026, up from a USD 472m valuation in 2021.
“Winning and formalizing this contract represents not merely a significant honor and mark of prestige, but above all, it endorses our proficiency and readiness to actively participate in the nascent European quantum computing market, where we stand to achieve a leading position in supplying specialized electronics for the sector. The allocation of approximately PLN 10 million to us for the execution of the project, marking us as the only selected entity from Central and Eastern Europe, signifies one of our initial, substantial steps towards gaining exposure in this rapidly growing sector, where at this early stage, we have a firm foothold. I am confident that the quantum segment will emerge as a cornerstone for Creotech Instruments, paralleling the importance of our space segment in the forthcoming years,” states Grzegorz Brona, PhD, President of the Management Board of Creotech Instruments S.A.
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