Continued Demand Growth; Supply Challenges Persist
Announcement
To Nasdaq Copenhagen A/S and the press
Nørresundby, Denmark, 3 May 2022
Announcement no. 12/2022
Interim report for Q2 and H1 2021/22
(the period 01.10.2021 - 31.03.2022)
“The strong improvement in demand continued in second quarter of 2021/22 and led to revenue increasing by more than 50% compared to last year. I see the growth opportunities for RTX from our large framework agreements and our product platforms as significant and the continued demand improvement after the pandemic underlines this belief. The global component scarcity in the electronics industry and other supply chain disruptions such as temporary lockdowns have had a negative effect on the second quarter for RTX – without such challenges our strong order book would have led to a significantly higher revenue. We maintain our outlook for the year based on a record strong order book but with uncertainty from the supply chain challenges.”
Peter Røpke, CEO
HIGHLIGHTS Q2 2021/22
- Net revenue increased by 51.7% to DKK 134.3 million in Q2 2021/22 (Q2 2020/21: DKK 88.5 million). The strong growth is driven by continued demand improvement in the quarter. Growth continued to be adversely impacted by supply challenges primarily related to global component scarcity in the electronics industry and secondarily to supply chain disruptions in production and logistics due to temporary lockdowns, especially in China. These supply challenges postponed deliveries and revenue of approx. DKK 90 million into future periods. As revenue of approx. DKK 55 million had been postponed from Q1 into Q2, the net effect on revenue from these supply challenges in Q2 has been a negative effect of approx. DKK 35 million.
- Enterprise segment: Revenue increased by 43.4% to DKK 84.0 million. The increase is seen broadly in the segment and the demand is generally high across products and customers. Revenue was adversely impacted by the component scarcity.
- ProAudio segment: Revenue increased by 63.3% to DKK 35.2 million. The effects of COVID-19 on demand have been limited in the quarter. Recurring revenue from product sales and royalty increased over last year due to continued increase in demand for RTX’s product platforms in the ProAudio segment in accordance with the strategy for the segment. Revenue from engineering services decreased compared to last year in line with the strategy to focus on creating recurring revenue.
- Healthcare segment: Revenue increased by 79.8% to DKK 15.1 million with growth broadly in the segment.
FX corrected revenue growth was 42.0% as revenue compared to last year was positively impacted by the stronger US dollar.
- Gross profit increased by 34.5% to DKK 67.0 million in Q2 2021/22 (Q2 2020/21: DKK 49.8 million) driven by the revenue growth. The gross margin decreased to 49.9% (Q2 2020/21: 56.3%) negatively impacted compared to last year by the revenue mix with a lower share of revenue from engineering services and by increased component costs compared to last year due to the component scarcity and high prices on component spot buys. Increases in sales prices have partly counterbalanced the component price increases.
- Operating performance improved over last year driven by the increase in revenue with EBITDA of DKK 11.7 million in Q2 2021/22 (Q2 2020/21: DKK -4.0 million) and EBIT of DKK 1.7 million in Q2 2021/22 (Q2 2020/21: DKK -11.3 million).
- Cash flows from operations (CFFO) in Q2 2021/22 amounted to DKK 6.6 million compared to DKK -20.8 million in Q2 2020/21. Compared to last year, CFFO was positively impacted by the increased earnings and by the working capital development.
SUMMARY H1 2021/22
- Net revenue increased by 74.0% to DKK 260.7 million in H1 2021/22 (H1 2020/21: DKK 149.8 million) with the strong growth driven by the improvement in demand. The growth could have been even stronger had it not been for the global component scarcity in the electronics industry and other supply chain impediments. In H1 2021/22, Enterprise segment revenue increased by 84.8% to DKK 173.8 million, ProAudio segment revenue increased by 49.6% to DKK 60.8 million and Healthcare segment revenue increased by 72.6% to DKK 26.1 million. FX corrected revenue growth of RTX in H1 was 64.1% as revenue compared to last year was positively impacted by the stronger US dollar.
- Gross profit in H1 2021/22 increased by 58.6% to DKK 127.4 million (H1 2020/21: DKK 80.3 million) due to the revenue growth – corresponding to a gross margin of 48.9% (H1 2020/21: 53.6%) impacted, compared to last year, by a lower share of revenue from engineering services and by increases in component costs partly counterbalanced by sales price increases. The significantly higher revenue increased earnings in H1 2021/22 with EBITDA of DKK 16.7 million (H1 2020/21: DKK -22.7 million) and EBIT of DKK -3.1 million (2020/21: DKK -36.6 million).
- Cash flow from operations (CFFO) amounted to DKK 20.9 million in H1 2021/22 (H1 2020/21: DKK 9.9 million).
OUTLOOK FOR 2021/22
- RTX maintains the outlook for the financial year 2021/22 with revenue above DKK 520 million, EBITDA above DKK 50 million and EBIT above DKK 10 million. As stated in the annual report for 2020/21 when announcing the outlook, uncertainty for the financial year remains higher than normal especially due to the component situation.
- The order book for 2021/22 is very strong at a record level with high demand and a significant order backlog. The order book for 2021/22 has improved further in Q2. This provides a strong revenue visibility for the year. However, the global component shortage – especially related to semiconductors and other electronic components – and the supply chain disruptions from temporary lockdowns in Asia and the global logistic challenges continue to create uncertainty for the financial year and therefore for the outlook for 2021/22. The component shortage situation and other supply chain impediments appear to continue throughout 2022 and the situation has not improved in Q2.
- The increasing component costs, including the increasing costs for securing components in the spot buy market and through other channels, creates added uncertainty for the year related to the outlook regarding earnings (EBITDA and EBIT).
- For the list of assumptions behind the outlook, refer to the annual report for 2020/21 (pages 22-23).
SHARE CAPITAL REDUCTION COMPLETED
- As decided by the General Meeting in 2022, RTX’s share capital has been reduced by nominal DKK 875,000 via cancellation of 175,000 treasury shares acquired through share buy-back programs. The share capital reduction was finally completed and registered on 7 April 2022 (cf. company announcement 10/2022).
RTX A/S
PETER THOSTRUP PETER RØPKE
Chair President and CEO
Investor and analyst conference call
On Tuesday, 3 May 2022 at 15.00 (3.00 pm) CET, RTX will hold a conference call for investors and analysts hosted by Danske Bank. In this conference call, the Company’s management will comment on the interim report for the second quarter and first half of the financial year 2021/22.
To register for the conference call, please e-mail [email protected].
Enquiries and further information:
CEO Peter Røpke, tel +45 96 32 23 00
CFO Morten Axel Petersen, tel +45 96 32 23 00
RTX’s homepage: www.rtx.dk
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