Metacon will announce its Q1 results on Thursday. We expect good revenue growth and relative profitability to improve slightly compared to the corresponding quarter last year. In our view, Metacon’s investment case and valuation relies on improving visibility on revenue growth, and clear signs of both increasing order intake and order book conversion to revenue would be important drivers of improving this visibility. Thus, we are keeping an eye on any information regarding progress of current and future projects. We expect Metacon to deliver on its order book We estimate Metacon’s Q1 revenue to rise to 17.0 MSEK compared to 14.2 MSEK in Q1’23, mainly driven by increased deliveries especially related to ongoing electrolyzer orders in Slovakia. Given that the company does not report its order book, revenue visibility is low and may vary significantly from our estimates, as was evident in the latest quarter. However, with delivery times for larger projects potentially extending up to 18 months and the company receiving payments as projects progress, we believe there is still potential for revenue growth based on the previously communicated orders. Profitability still in the red with limited revenues, but current funding allows for this We expect Metacon's Q1 adjusted operating profit to remain negative at -12.1 MSEK due to the still low absolute level of revenue, which does not yet cover the fixed costs. Given the company's relatively low debt levels, our net income estimate is roughly aligned with the operating profit. In terms of cash flow, we anticipate a negative operating result along with capital commitments that will put pressure on cash flow. Nonetheless, the financial situation should improve as Metacon completed a rights issue in early 2024, raising approximately 100 MSEK. This should cover the company's immediate financing needs, ahead of the planned investment in the electrolyzer factory. Progress of projects determines the direction in the near future We expect the primary growth drivers in 2024 and 2025 to be the three major announced electrolyzer projects with a combined order value of 289 MSEK. To achieve our revenue estimates, all three potential projects must be realized, and additional orders will need to be secured. However, as time progresses, the likelihood that one or more of these projects may not materialize or face further delays increases. Therefore, updates on the progress of these projects are crucial for assessing the report and the company's growth outlook. Moreover, Metacon recently announced a Memorandum of Understanding to collaborate with Siemens on manufacturing systems for green hydrogen production, which we have commented on here. In our opinion, this partnership represents a significant step toward establishing the capabilities for Metacon’s Gigafactory, which, if successful, could help Metacon achieve a larger commercial scale. Nonetheless, the financing options for the factory have not yet been finalized. Any comments on this would be valuable as the factory funding structure and terms would be key to Metacon’s investment case.

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