Enersize – CEO letter January 2019

Translation in English of earlier released news: A new year is now beginning, and I am about a month into my new role as CEO of Enersize. I am very grateful for the positive attitude the employees are giving me, supporting the changes I am setting in motion. As CEO I have a different and more complete picture of the company and I would like to give you an insight regarding what I have learned so far and what my plan is for the near future.

China and Bo Kuraa

Since the company was listed on Nasdaq Stockholm First North in June 2017, the focus has been on the Chinese market and profit sharing through large energy saving projects. The market situation in China is promising for Enersize with many leads as well as contracts currently being implemented, but so far, in all fairness, Chinese business have led to little revenue. What is the reason for this and what are we doing about it?

As we have communicated earlier, energy saving projects have been delayed due to reasons outside of our control such as complete plant refurbishments and management changes. However, we have also encountered a clear obstacle in that many Chinese factories are in great need of maintenance of their compressed air systems, which may require large investments and capture the customers’ focus before substantial savings can come to life. With our current business model, a history of mismanaged maintenance at the factories becomes a hindrance that delays energy saving projects in the early stages.

Additionally, the partnerships in China has relied on Enersize providing expertise and resources in a manner that the company could not meet until recently.

The above-mentioned issues have led to uncertainty between customers, partners and Enersize, and therefore have slowed the progress from sales to installation and optimization. I am already working to change these things for the better and we look forward to coming discussions with our Chinese partners to set new rules and responsibilities of our cooperation to optimize the business. Enersize is inevitably moving more towards becoming a software company, a change that is reinforced by the acquisition of LEAQS (see press release from 2018-11-06), and we expect that we will do business based on other models than profit sharing also in China.

Bo Kuraa, who has been working for Enersize since the spring 2018 has been spending most of his time in China as a hired consultant and now provides crucial information that is helping us focus our efforts. We are going through every customer project and setting clear actions together with the customers for how to perform the minimum level maintenance needed for our software to be put into action and generate suggested savings in our Chinese profit-sharing business.

Bo has grown to become a crucial asset to Enersize and I am very happy to announce that we have now performed an acqui-hire of his Danish company, BKU Consult. Bo from now on works exclusively for Enersize and joins our new management team. He will work regularly from the Lund office to provide input to the software development team to sharpen our algorithms and automated analysis tools.

Bo holds a degree in Mechanical Engineering from The Danish Technical University in Copenhagen and has a proven track record in Energy Management, Industrial Energy Auditing and Compressed Air System Optimization through his career over the last 27 years. Bo has had various key positions in the implementation of energy saving projects for many different types of companies in Denmark, the Middle East and Asia. Bo has in-depth knowledge of industrial energy efficiency in compressed air, cooling, HVAC, pumps, heat exchangers and heat recovery. He is a certified expert according to the UN (UNIDO) International Energy Management System, and to the UN (UNIDO) International Compressed Air System Optimization and has personally managed several compressed air optimisation projects on behalf of UN and the World Bank.

Europe and LEAQS

With the recent acquisition of LEAQS and Daniel Winkler (CEO of LMS Nordic AB), Enersize is kick-starting its European business. Daniel has more than 25 years’ experience from leakage management in compressed air systems and his proprietary LEAQS Software as a Service (SaaS) is built to support the process of finding leaks and even more importantly managing the repair of the leaks. We will of course work to integrate our two SaaS (LEAQS and Enersize cloud software), but the fact is that we will do quite well even with the current setup. LEAQS already has thousands of customers registered, and their leakage management benefits greatly from monitoring which is what Enersize can do. This will enable us to quickly expand our number of installations and gain direct contact to customers where we can introduce our unique methods of optimizing compressed air systems. The combination is unbeatable, and I can’t wait to see Daniel and Bo acting together on this opportunity!

It is with pleasure that we also welcome Daniel to the management team of Enersize. He is a very experienced salesman, who has been acting on his own for a long time. Now that he is a part of our team, we will take up that which he has learned over the years. LEAQS have been working with compressed air training for more than 17 years. We will drastically increase our activities and offerings in this area. Compressed air systems are complex, and it is important that customers understand how the various parts in a system interact. Managing and interpreting measuring data is central in achieving results but takes time to explain. Providing a forum for training and exchange of ideas is ideal in order to understand the Enersize concept. We are planning to conduct several seminars this year throughout the Nordic region starting with Lund in March. It is the perfect event for energy-, sustainability- and facility management to participate. It is a model we expect will work globally.

Contact us at sales@enersize.com if you want further details or want to participate.

Daniel brings Enersize another exciting opportunity through which the company could take a leap in its European business; we are going to approach the largest service providers in the industry, such as facility management companies with thousands of customers in the Nordics and offer our SaaS as part of their well packaged sales offer. This opportunity is in line with our aim to rapidly scale the business through license deals.

Organisation

A natural thing to do as new CEO is to review the organization. Some changes are already done or in action. The reshaped management team consists of Bo, Daniel and me. Costs have been reduced, and efficiency improved by some down-sizing of the team in Helsinki. I believe that what LEAQS has in its pipeline will change how we operate in Enersize, which is bound to also affect the Chinese business. We may decide to strengthen sales in Europe to support this change.

Final words

I am proud to work for Enersize. There are many out there doing good sales, software development or compressed air maintenance. We at Enersize are good and are getting better at the cross-disciplinary work of combining these things. There are not many companies doing this. We have with Daniel and Bo added two of the most experienced people in Europe in compressed air systems sales and maintenance, and together with my own expertise in research and development we have a core team that is a starting point for a new era for Enersize. We are committed to Enersize and we look forward to working with you on this journey ahead.

Anders Sjögren, CEO