Q3 2021/22 interim report
Roblon maintains its profit forecast for the year 2021/22
Interim report for the third quarter 2021/22 (the period from November 1, 2021 to July 31, 2022)
Highlights of the Roblon Group Interim Report:
As expected, the Group continued to experience the aftermath of COVID-19 in the first three quarters of 2021/22, primarily in the form of raw material supply shortages, logistical challenges and general market impacts. . This rise in inflation and the impacts of the war in Ukraine temporarily hurt revenues and profitability and led to an increase in inventories of essential raw materials.
As described in company announcement no. 1/2022, the Group acquired the Czech company Vamafil spol. sro on January 3, 2022 as part of Roblon’s growth strategy within its core business, the fiber optic cable industry. A preliminary allocation of the purchase price has been made, as detailed in note 5 of the interim report.
The relocation and installation of selected parts of the production facilities from Denmark to the Czech Republic is proceeding as planned. The first stage of relocation took place in early June 2022, the second stage of relocation took place in August 2022, and the third and final stage of relocation is expected to be completed by the end of 2022.
- In Q1-Q3 2021/22, order intake reached DKKm 313.1 (DKKm 223.4) and the order book as of July 31, 2022 was DKKm 123.7 (DKKm 83.0).
- The receipts amounted to 262.0 million DKK (169.4 million DKK). This covered an increase of DKK 61.3 million in the FOC product group and an increase of DKK 31.3 million in the composite product group, of which DKK 19.6 million related to Vamafil.
- Gross margin of 49.1% (45.8%) for the first half was positively impacted by a favorable product mix and improved profitability in the FOC product group.
- Operating profit before depreciation, amortization and special items (EBITDA) was DKK 10.9 million (a loss of DKK 18.7 million).
- EBIT before special items was a loss of DKK 9.2 million (a loss of DKK 33.5 million).
- Special items related to the acquisition of Vamafil in the Czech Republic amounted to a net charge of DKK 4.9 million (DKK 0 million).
- Roblon’s equity as of July 31, 2022 amounted to DKK 214.3 million (DKK 214.1 million).
- Cash flow from operations for Q1-Q3 2021/22 was a net outflow of DKK 21.2 million (an outflow of DKK 31.3 million), negatively impacted by an increase of approximately DKK 20 million DKK from working capital. The increase is mainly related to the higher level of activity, the increase in raw material prices and the increase in inventories of critical raw materials.
Guidelines for the whole of the year 2021/22
The forecast is still subject to uncertainty due to the negative aftermath of COVID-19 in all of the Group’s markets, which recently translated into a negative impact on the FOC product group in the United States.
Roblon ceased all sales to Russia and Belarus following the war in Ukraine. Historically, the Group has not had significant commercial activities in Russia, Belarus or Ukraine.
Supply shortages of certain raw materials and components are expected to remain a challenge.
At the end of the third quarter of 2021/22, management maintains the following guidance for the year 2021/22:
- Turnover between DKK 360 and 390 million (2020/21: DKK 249.9 million).
- Operating profit before depreciation, amortization and special items (EBITDA) of between DKK 17 and 27 million (2020/21: a loss of DKK 12.6 million).
- Operating profit/loss before exceptional items (EBIT) between a loss of DKK 10 million and a profit of DKK 0 million (2020/21: a loss of DKK 32.9 million).
- Special items related to restructuring costs amounting to a charge of approximately DKK 8 million (2020/21: DKK 0 million).
Head office building put up for sale
At the beginning of 2020, the Group decided to put its property in Frederikshavn up for sale. There are currently no potential buyers for the buildings, but the sale process continues. After the sale, the group’s Danish operations will all be located at Roblon’s facility in Gærum, which currently houses production and various administrative functions. In addition to generating positive synergies in day-to-day operations, this initiative should also have a positive impact on Roblon’s earnings and equity going forward.
Please note that short-term forecasts are subject to a high degree of uncertainty as all markets are impacted by COVID-19. The war in Ukraine raises additional uncertainty regarding the supply and transport of components and raw materials etc.
The above forward-looking statements, particularly revenue and earnings projections, are inherently uncertain and subject to risks. Many factors are beyond Roblon’s control and, therefore, actual results may differ materially from the projections expressed in this interim report. These factors include, but are not limited to, changes in market conditions and competition, changes in demand and buying behavior, fluctuations in exchange rates and interest rates, and economic, political and general trade.
Frederikshavn, September 15, 2022 Roblon A/S
Jorgen Kjaer Jacobsen Lars Ostergaard
Chairman of the Board Managing Director and CEO
Inquiries regarding this announcement should be directed to:
Managing Director and CEO Lars Østergaard, tel. +45 9620 3300
Company Announcement No. 14 – 2022