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Message from the CEO

A tough ending to 2017 but looking ahead to accelerate in 2018!

2017 was an eventful year that saw the performance of our company fall somewhat lower than our projected forecast. Net sales for the year were MSEK 75.7 (61.6), compared to MSEK 80 forecast. The beginning of the fourth quarter saw a continuation of the strong sales and success from the previous quarter.. In December, however, sales fell sharply, due in part to the reduction in order intake from our distributors in Asia. Our business is affected of seasonal fluctuations, and this drop will hopefully be corrected in 2018. As a result, fourth quarter sales amounted to MSEK 19.8 (20.2). Annual growth rate was approximately 22% (25% excluding currency effects), disappointing since we had projected a growth rate of at least 30% for 2017. Although we did not reach our (2017) sales target, we managed to drive down costs in time so that our earnings before interest and tax (EBIT) ended at -6.1 MSEK instead of the forecast -5.5 MSEK. This demonstrates that we have solid cost control and that there is room to compensate for unexpected fluctuations in sales.

The adjusted operating profit (excluding currency effects and withholding tax) for 2017 ended at MSEK -1.3, indicating that we are heading in the right direction. The U.S. dollar remained strong last year, which did not work to our advantage, causing a currency loss of MSEK -2.4. The withholding tax is still a cost for us but will be recoverable within a fiveyear period when our previous tax deficits are used.

During the fourth quarter, we have begun to implement a new business system, Microsoft Dynamics NAV, which is a prerequisite for streamlining the administrative work for accounting and back office functions. As we grow, we must take advantage of economies of scale by working smarter and by using better systems and tools.

As of January 1, 2018, we began to prepare the company’s financial statements according to International Financial Reporting Standards (IFRS) in order to prepare Polygiene for the transition from Nasdaq First North to Nasdaq First North Premier and onwards. After consulting specialists, we decided to transition to a new revenue model for the portion of our revenue that is derived from royalties. The effect does not effect the gross profit in Swedish kronor, which remains unchanged. However, the revenue reported will be somewhat lower and the cost of goods sold will decrease by the same amount.


“I am very proud and happy to have this amazing team at my side as we strive to take Polygiene to the next level”



My main task as newly appointed CEO is to build an organization that is equipped to take Polygiene on a profitable five year growth journey where we achieve a turnover of more than MSEK 400 while at the same time delivering a profit margin of at least 20%. Moreover, my ambition is to ensure that Polygiene delivers shareholder value and gains shareholder trust.

To succeed, it is important to have an organization that is both motivated and committed to achieving our goal of a more than fivefold increase in revenues over the next five years. To do so, we must build a more sales-driven organization, expand our sales resources, and streamline our sales process to speed growth. The appointments of two new sales executives–one for Europe and one for North America–is one example of the efforts that we are undertaking to strengthen our organization.

Driving change requires not only a change of mindset but also a strong, competent and well-established management team who share a common agenda, work well together and with the team, and can communicate the company’s vision to everyone in our organization.

In early February 2018, our entire organization –18 employees from six different countries – met in Malmö, Sweden, to create a long-term strategic plan and to inspire and motivate everyone for the challenges ahead. We had two extremely positive  energy-filled days of exchanging ideas and looking forward with confidence to the future. Our people, our corporate culture and our brand are enormously important assets that will play a crucial role in our success. 

Sport & Outdoor

This segment is our absolute largest and will continue to be so in the future. Most of our revenues come from this segment and, not surprisingly, it is here that we allocate most of our marketing budget and resources. The December 2017 issue of the Polygiene News highlights our new collaborations, the trade fairs we participated in and our most recent activities. Noteworthy fourth-quarter news: Adidas, in collaboration with N.E.R.D and Pharrell Williams, launched a collection of Polygiene-treated products. The launch garnered a lot of media attention, which helped promote Polygiene too, and demonstrates how important it is for our brand to be seen alongside our brand partners. By 2022, our goal is to generate approximately MSEK 172 million in this segment.

Home Design

Asia continues to deliver strong growth in the home design segment. This is particularly true in China where existing customers most likely will double their volumes in 2018. Our success and lessons learned in Asia will serve us well as we work to open up the corresponding market segments in North America and Europe. To gain a better understanding of the industry and the value chain in these regions, Business Sweden conducted a major survey in Q3 2017 and survey findings will provide the basis to extend our reach and penetrate this market segment further. Unlike other market segments, home design is not a seasonal one. This means that sales will be more uniform from quarter to quarter, with a steady increase in volumes. It also means that, generally speaking, the annual sales window will be longer. Our goal is to generate approximately MSEK 65 million from this segment by 2022.


One of the most important focus areas for our growth journey is the footwear segment. Successfully breaking into the footwear segment in a big way offers enormous potential for Polygiene. We are currently identifying key players who can be instrumental to our success. The value chain in the footwear segment is essentially different from the sport and outdoor segment, which we know very well from many years of experience. Our efforts here, however, demonstrate that we are moving in the right direction; our partner Adidas chose to treat a model in its Terrex Collection with Polygiene Stays Fresh Technology. Although the initial volume was modest, there is great potential to open up other possibilities not only at Adidas, but also at other brands. The addressable market for odor control within the footwear segment comprises an estimated 450 million pairs of shoes. We aim to generate approximately MSEK 62 from this segment by 2022.


The next major segment identified as an key element in Polygiene’s growth journey is the lifestyle segment. This includes fashion, shirts, pants, jackets, underwear, socks and travel products. We are already well established with several brands within athleisure wear, a subsegment of lifestyle that combines the functionality and comfort of sportswear with everyday casual wear. This provides great opportunities for Polygiene to take the next step and extend our brand into fashion as well. To reach our forecast volumes within a five-year period, we must strategically select the brands that can help us achieve our goal in terms of volume.

Like the sport and outdoor segment, the lifestyle segment is demanding more functionality and technology. The Polygiene Wear More, Wash Less© concept with its focus on sustainability, environment and time-savings is therefore very appealing. The prospects for the lifestyle segment to become one of the dominant segments for Polygiene in the future are strong. Our goal is to generate approximately MSEK 93 from this segment over the next five years.


The market analysis conducted last spring indicated that workwear is the segment that offers Polygiene the least potential for growth. Therefore fewer resources will be allocated to it. The value that consumers place on workwear with odor control is high, but the market is relatively small. Our focus going forward will be on taking care of our existing customers within this segment, but also on cultivating a handful of strategically important partners. We aim to generate approximately MSEK 8 from this segment by 2022.

Protective Surfaces

Continuously on the upswing, this segment with a dozen-strong customers generates stable growth with floor, paint and plastic solutions primarily for the food industry. The business model and activities here are different; there is no need to establish Polygiene as an ingredient brand. Polygiene originated from this segment and we are committed to managing these customer relations well while, at the same time, developing long-term relationships with new partners. The potential for protective and anti-bacterial solutions is huge, especially in Asia where consumer interest in hygiene and bacteria-free surfaces is high.

The road ahead

We will continue to develop partnerships with many new interesting brands, and we will continue to grow and carry out activities with our existing customers. We will always provide the best support throughout the entire value chain. We will continue to build our brand and maintain and extend our position as a market leader within odor control and Stays Fresh solutions. And finally, we will strengthen our team and create a corporate culture based on sound values and cooperation. We will introduce working methods that are both effective andwell-structured. And finally, we will continue to build a pleasant work environment that is both creative and productive.

I look humbly forward to my first year as CEO of Polygiene. There are many exciting projects going on that I hope to be able to share with you in the future. Now more than ever, global trends are focusing on greater environmental awareness and sustainability, which is completely in line with what we believe in and work towards. I am convinced that we are equipped to begin a fantastic journey, building a world-leading odor control company and Stays Fresh solutions. The market is there – it is now up to us to lay claim to it!

Ulrika Björk
Chief Executive Officer