First Quarter Report 2025

• Net sales amounted to KSEK 19 892 (14 174), an increase of 40%.
• EBITDA amounted to KSEK 669 (1 368), corresponding to an EBITDA margin of 3%.
• EBIT amounted to KSEK -1 339 (-522), corresponding to an EBIT margin of -7%.
• Cash flow from operating activities amounted to KSEK -3 140 (1 627).
• Earnings per share amounted to SEK -0.01 (-0.00).
• Earnings per average number of shares amounted to SEK -0.01 (-0.00)

Message from the CEO

Sales in the first quarter were in line with expectations, amounting to approximately 20 MSEK, resulting in an EBITDA of 0.7 MSEK. During the quarter, we received two orders from our partner Kaiser in Singapore, totaling approximately 4 MSEK in consumables. The end customer has purchased instruments through four separate orders. The continued orders of consumables indicate that the instruments are in frequent use. The customer operates within law enforcement, and the SERS consumables are used to identify narcotics in very low concentrations and mixtures that are typically difficult or impossible to detect with handheld Raman devices that lack the patented SERS capability.

During the quarter, we launched three new accessories that address challenges previously unsolvable with handheld Raman technology. These new accessories were demonstrated for partners and customers, and the feedback has been very positive. Combined with SERS and the Serstech Arx mkII, these additions enable the identification of narcotics and other hazardous substances down to 30 micrograms, as well as liquid traces as small as a few microliters. No other handheld Raman-based systems currently on the market offer this capability, which we refer to as trace identification. Competing technologies are limited to either trace detection (i.e., detecting the presence of a threat without identifying it – similar to what a dog can do) or bulk identification (i.e., identifying larger volumes of a chemical). Serstech now provides a complete solution encompassing bulk identification, trace sampling and collection, and trace identification. With our software and integration capabilities, we offer the most comprehensive solution on the market for identifying narcotics, hazardous substances, and chemical warfare agents.

In March, we began the liquidation of our Romanian subsidiary, Serstech Development SRL, and we expect the process to be completed by the end of the second quarter. As of the end of March, we had nine software developers working at the Romanian office. Following the pandemic, staff costs in Romania have increased significantly. By relocating these positions to our Lund office, we can reduce costs while also improving output. Most replacements have already been recruited, and we expect the team to be fully staffed before the end of summer.

We are observing promising trends in the market that are likely to positively impact our sales in the coming years. The threat of tariffs is making U.S.-based product pricing increasingly unpredictable. As a result, some customers are seeking non-U.S. suppliers – of which there are very few in our industry. All our major competitors are based in the U.S., while Serstech remains the only EU-based manufacturer of handheld Raman solutions. This trend is most prominent in Europe but is also emerging in other regions.

However, the threat of U.S. tariffs could negatively affect our U.S. sales in 2025, and we are closely monitoring the situation. While it is too early to draw definitive conclusions, a potential worst-case scenario is that our products could become too expensive for the U.S. market. We are currently evaluating and preparing potential solutions, such as establishing local production in the U.S. and/or building inventory in the U.S. before any higher tariffs are implemented.

The year has started positively, with a strengthened product portfolio, high demand, and the possibility of a trade conflict that could ultimately benefit Serstech in the medium to long term. As always, we should expect quarterly variations due to the nature of the industry, and given the current geopolitical volatility, these fluctuations may be more pronounced than usual. Nonetheless, we remain confident in our long-term growth and profitability. The investments we are making this year in sales, product development, and production will significantly contribute to our results for many years to come.

Stefan Sandor, CEO
April 2025

For further information, please contact:
Stefan Sandor,
CEO, Serstech AB Phone: +46 739 606 067
Email: ss@serstech.com

or

Thomas Pileby,
Chairman of the Board, Serstech AB Phone: +46 702 072 643
Email: tp@serstech.com
or visit: www.serstech.com

This is information that Serstech AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above at 11:30 CET on April 23, 2025.

Certified advisor to Serstech is Svensk Kapitalmarknadsgranskning AB (SKMG).

About Serstech
Serstech delivers solutions for chemical identification and has customers around the world, mainly in the safety and security industry. Typical customers are customs, police authorities, security organizations and first responders. The solutions and technology are however not limited to security applications and potentially any industry using chemicals of some kind could be addressed by Serstech’s solution. Serstech’s head office is in Sweden and all production is done in Sweden.
Serstech is traded at Nasdaq First North Growth Market and more information about the company can be found at www.serstech.com