Annual Report 2021/22
The English-language edition of the Annual Report will be
published in January 2023 at www.roblon.com
Roblon reports improved revenue and earnings for 2021/22
as expected
Selected financial highlights
- Order intake of DKKm 415.4 (DKKm
301.7).
- Revenue of DKKm 380.9 (DKKm
249.9).
- Gross profit of DKKm 181.2 (DKKm
116.7) and a gross margin of 47.6% (46.7%).
- Operating profit before
depreciation, amortisation and impairment and special items
(EBITDA) of DKKm 23.4 (a loss of DKKm 12.6).
- Depreciation, amortisation and
impairment of DKKm 27.2 (DKKm 20.3). The increase over the previous
year was due to investments in capacity and productivity-enhancing
production equipment, particularly in the USA, as well as
depreciation amounting to DKKm 3.8 in Vamafil, the company acquired
in 2022.
- Operating loss (EBIT) of DKKm 3.8 (a
loss of DKKm 32.9).
- EBIT margin negative at 1.0%
(negative at 13.2%).
- Net loss for the year of DKKm 1.4 (a
net loss of DKKm 29.3).
- Return on invested capital (ROIC)
before tax negative at 2.0% (a negative 20.1%).
- Earnings per B share negative at DKK
1.3 (negative at DKK 11.6).
- Cash outflow from operations for the
year of DKKm 27.0 (an outflow of DKKm 42.3).
- Cash inflow from investments in
property, plant and equipment and intangible assets of DKKm 20.5
(DKKm 15.1). The inflow included investments in production capacity
in Roblon US and investment in new electricity-based production
technology that will reduce the use of fossil fuels (natural gas)
in the Group’s production.
Highlights
As expected, the Group continued to suffer aftereffects of the
COVID-19 pandemic in 2021/22, mainly in the form of supply
shortages of raw materials, logistics challenges and general market
impacts. In certain product groups, this resulted in a temporary
reduction of profitability and an increase in inventories of
critical raw materials.
- Revenue was up 52.4% to DKKm 380.9
(DKKm 249.9) for the full year 2021/22. In the first half, revenue
increased by 72.9% to DKKm 178.1 (DKKm 103.0), while in the second
half it increased by 38.1% to DKKm 202.8 (DKKm 146.9).
- The Composite product group reported
revenue for 2021/22 of DKKm 108.7 (DKKm 42.7), of which DKKm 28.6
(DKKm 0) was derived from Vamafil. The level of activity in
offshore oil & gas rose, resulting in a growing order intake
for the Group in 2021/22, unlike in 2020/21, when COVID-19 caused
orders to be postponed for expected execution at a later date.
- The FOC product group reported
revenue of DKKm 272.2 (DKKm 207.2), driven by the expansion of
production capacity in Roblon US and favourable market conditions
in the USA. However, the Group’s sales potential was negatively
affected in the second half by difficulties in sourcing the
components and raw materials required to maintain the expected high
and increasing production level in this part of the business. Also,
a few of the Group’s customers experienced delays in completing
capacity expansions.
- Gross profit and gross margin for
the full year 2021/22 were adversely affected by soaring
manufacturing costs, which Roblon has not been able to fully pass
on to selling prices. The higher manufacturing costs were driven by
increasing prices of raw materials, components, freight and energy.
Conversely, gross profit and gross margin were supported by a
favourable product mix and improved profitability in the FOC
product group, resulting in a year-on-year increase in gross
margin.
- On 3 January 2022, the Group
acquired Czech company Vamafil, spol. s r.o. A preliminary purchase
price allocation of DKKm 54.4 has been made.
- In 2021/22, Roblon increased its
long-term credit facilities by DKKm 75 and raised mortgage loans of
approximately DKKm 10 to support the acquisition of Vamafil and the
Group’s growth strategy.
- Working capital was up by 55.6% to
DKKm 155.9 (DKKm 100.2) as a result of an increase in receivables
due to significantly higher levels of activity and revenue in Q4
2021/22 compared with the previous year. In addition, working
capital was affected by higher inventory levels of critical raw
materials and components and soaring raw materials prices as well
as additions from the acquired Czech company, Vamafil.
Based on the reported loss for the year 2021/22, the Board of
Directors proposes to the shareholders in general meeting that no
dividend be distributed.
Guidance for 2022/23
Management expects an increase in Group revenue and to record a
profit for the 2022/23 financial year. The following significant
factors are expected to apply:
- The FOC market is expected to grow
from the beginning of 2023 and to contribute to lifting revenue
from the second quarter of the 2022/23 financial year.
- In the US market, Roblon is
well-positioned with a central location as one of only a few local
suppliers of cable components. The Group has previously implemented
a major investment programme and has launched additional
initiatives which are expected to be completed in the spring of
2023. This will increase the total production capacity in the USA
by more than 50%, and additional improvements are expected in
production profitability.
- Management expects substantial
improvements in the Composite product group compared to reported
2021/22 levels, particularly in shipments to the offshore oil and
gas industry. This prospect is supported by the larger order book
at the beginning of the 2022/23 financial year and the much higher
level of business activity.
- The Group expects to achieve
profitability improvements in connection with the ongoing
relocation and installation of selected parts of the FOC production
facilities from Denmark to the recently acquired subsidiary Vamafil
in the Czech Republic.
Revenue and earnings guidance for 2022/23:
- Revenue in the range of DKKm 430-470
(DKKm 380.9).
- Operating profit before
depreciation, amortisation and impairment and special items
(EBITDA) in the range of DKKm 40-55 (DKKm 23.4).
- Operating profit before special
items (EBIT) in the range of DKKm 10-25 (a loss of DKKm 3.8).
Management expects Q1 2022/23 revenue to be challenged due to a
revenue shortfall in the FOC product group. Based on the
expectations of accelerating growth in the FOC product group over
the coming quarters, a positive revenue performance is expected in
the subsequent three quarters of the financial year.
Head office building put up for sale
In early 2020, the Group decided to put its head office in
Frederikshavn up for sale. While showings have been arranged from
time to time for prospective buyers and the sales process
continues, there are currently no specific buyers for the property.
After the sale, the Group’s Danish activities will be centred at
Roblon’s facilities in Gærum, which currently house production and
various administrative functions.
As well as generating positive synergies in the day-to-day
operations, this initiative is also expected to have a positive
impact on Roblon’s results, liquidity and equity going forward.
Forward-looking statements
Due to the war in Ukraine, the guidance provided is subject to
uncertainty regarding the supply and transport of components and
raw materials, energy supply and energy costs. It should also be
noted that the guidance is subject to a high degree of uncertainty
in the short term due to the aftereffects of the COVID-19 pandemic
in many of Roblon’s markets.
The above forward-looking statements, in particular revenue and
earnings projections, are inherently uncertain and subject to risk.
Many factors are beyond Roblon’s control, and actual results may
consequently differ significantly from the projections expressed in
the annual report. Such factors include, but are not limited to,
changes in market conditions and the competitive situation, changes
in demand and purchasing behaviour, foreign exchange and interest
rate fluctuations and general economic, political and commercial
conditions.
Frederikshavn, 20 December 2022
Roblon A/S
Jørgen Kjær Jacobsen
Lars Østergaard
Chariman of the Board
Managing Director and CEO
Enquiries regarding this announcement should be
addressed to:
Managing Director and CEO Lars Østergaard, tel. + 45 9620
3300
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