A Strong Start for Xplora's Watch Sales

This is a translated version of the article posted in the Norwegian newspaper Finansavisen on January 17, 2021.
Read the original article here.

STRONG START: Sten Kirkbak and Xplora Technologies have sold 50.000 smartwatches before the start of Q1 2021.

At the beginning of 2021, Xplora has already achieved 10 percent of their sales target, and the company is among the best technology shares on Euronext Growth in 2021.

On Friday, Xplora Technologies reported an increase of 228 percent in 2020, to 200 million NOK in operating revenues, and 216,000 children’s smartwatches sold. The growth in the fourth quarter was as high as 361 percent, during what CEO Sten Kirkbak called a messy quarter due to challenges with a pressured transport industry.

- It was all hands on deck from the 3rd quarter, and everyone has worked hard to get the products out, says Kirkbak, and continues:

- In the weeks before Christmas, we stood in the warehouse and worked, while we constantly followed the products and their journey from Hong Kong to Europe.

Germany performs well

In addition to the strong growth, the company has already received an order for 51,000 watches at the start of Q1.

- Some orders have already been signed by various distributors and retail chains. It is the first time in our history that we have had such visibility, says the Xplora boss.

Even though corona has affected the retail market in countries such as the United Kingdom and Spain far more negatively than in the Nordic countries, the company beat the budget that was set towards the end of 2019, Kirkbak says.

Germany, where the agreement with Deutsche Telekom and the launch of eSIM means a lot, has become the largest market, followed by the Nordic countries, says Kirkbak.

The company has stated that they have aimed to sell 500,000 units in 2021 and 1 million in 2022.

This is based on projected additional sales that will come from the USA market.

- At the end of 2020, the watches were launched as planned via Amazon in the US. It is certainly a market that will grow a lot in 2021, says Kirkbak.

Aiming for increased ARR

Of the turnover of 200 million NOK in 2020, 8 million NOK was repeatable service income. It includes revenue such as mobile subscriptions and exclusive content.

"The ambition in 2021 is to raise service sales, ie ARR, to approximately 20 percent of turnover"
- Sten Kirkbak, Xplora Technologies

On December 22, just over a month after Xplora was listed on Euronext Growth, the company also announced a partnership with German Gigs to launch integration for Xplora Connect.

It will make it easier and cheaper to onboard watch owners, compared to the traditional sim cards, and it is expected that it will generate revenue from the second half of the year.

The ambition in 2021 is to raise service sales, ie ARR, to approximately 20 percent of turnover. Last year, service sales accounted for about 4 percent of revenues, says Kirkbak.