Movinn H1 2023 - Interim Report: +21% topline growth, with weaker demand in secondary domestic markets resulting in disappointing bottom-line performance.

Growth remain substantial and Movinn Sverige is close to B/E point. Demand in Q2 did not pick up fast enough to offset a weak Q1 resulting in disappointing bottom line performance. Consequently, we are facing a downward adjustment to our full year guidance. 

Company Announcement nr. 30 - 2023
25 August 2022 09.00 CET. 
This company announcement contains inside information. 

Copenhagen, Denmark - The Interim Report covers results from the first half of the year (H1) of the year (1 January - 30 June 2022), as approved by Executive Management and the Board of Directors. 

In H1 Movinn has realized revenue of 41.3 mDKK - up from 34 mDKK in the same period last year - corresponding to a 21% revenue increase. 

As we have now launched in Sweden, we will be reporting on additional financial information on international markets going forward. The financial information concerning the existing danish operations will be reported seperately and consolidated figures containing information on international markets will be reported as consolidated figures. 

Realized EBITDA from existing danish operations was 1,669 tDKK corresponding to an EBITDA-margin of 4.3%. Realized EBIT was (1,417) tDKK in Denmark and (2,172 tkr) on Group Level corresponding to a (5.3%) EBIT-margin. Annualized Return On Invested Capital (ROIC) was (2.6%) for the existing danish operations. The same numbers for the consolidated group was 2.8% (EBITDA), (5.3%) (EBIT) and (3.7%) (ROIC). 
Bottom line metrics are less than the comparable period last year. This is due a higher cost base combined with a weaker than expected demand - primarily in secondary markets. 

The Swedish operations are closing in on a B/E point, which is in line with expectations, but the performance in Denmark has not been satisfactory. The core focus is therefor in domestic markets, mainly by ramping up demand and revenue while deploying a stricter cost management. We did see a pick-up in demand in Q2, but it came too late to have an inpact on the bottom line impact of the half year. Consequently, we are faced with a downwards adjustment to our full-year guidance. 

After the half year enden - and in line with our sourcing strategy of adding fewer, but larger projects to the portfolio - we signed a 94-unit project in Copenhagen due to be launced in 2025. We are applying strict criteria for the projects we aim to source, so we are limiting risk, investments and operational cash burn - thereby improving bottom line metrics and value drivers. 

Financial highlights in H1 2023: 

• Revenue increased by 21% to 41.3 mDKK (34 mDKK) 
• EBITDA margin from danish operations of 4.3% (11.8%)
• EBITDA margin from consolidated operations of 2.8% 
• EBIT margin of (5.3%) (9.3%)
• Return On Invested Capital (ROIC) of (2.6%) / (3.7%) (6.3%)
• Guidance adjusted downwards. 

Business highlights in H1 2023: 

• Focus on operations in existing, domestic markets.  
• Sweden was at B/E point in june. 
• Long term planning of pipeline - domestic and abroad - but short term focus on domestic operations. 

Patrick Blok, Movinn CEO states: 
"Following an underperforming first quarter, Q2 did not fare any better, which is disappoining of course. We did see a momentum around the end of april, but it was not enough. We have experienced a weakened demand mainly in the secondary domestic markets of Odense and Aarhus, so we are focusing on correcting this. We are also too cost-heavy at the moment in my opinion, so we will scutinize our cost base in parallel with a primary foces on improving sales. If we don't see a substantial pick up in demand in secondary markets, we will begin to reshape our local portfolios and cut fixed costs. It is not my favorite tool to use, but we have the flexibility and option to that if necessary. We can then deploy the operational assets to Copenhagen, Malmö or Lund which remains more steady markets with strong demand."

Disclosure regulation

The attached H1 Interim Report contains forward looking guidance. Such guidance are subject to risk and uncertainties as different factors, some of which are beyond the control of Movinn, may cause the actual development and results to differ from forward looking expectations. Interim Report has not been subject to audit or review.