Capnor Weasel Bidco Oyj, Interim Report January – September 2021

CAPNOR WEASEL BIDCO OYJ

Interim Report

January – September 2021

 

 

 

Interim Report for the third quarter of 2021

 

KEY FINANCIALS

 

 

Change

 

 

Change

 

EUR thousand

Q3 2021

Q3 2020

in %

YTD 2021

YTD 2020

in %

FY 2020

Revenue

21,282

16,412

30%

63,496

45,685

39%

74,125

EBITDA

3,986

3,669

9%

10,771

4,990

116%

12,635

EBITDA margin

19%

22%

 

17%

11%

 

17%

EBIT

1,902

2,011

-5%

4,624

-517

-995%

5,089

EBIT margin

9%

12%

 

7%

-1%

 

7%

Operational Cash Flow

-883

1,509

-158%

-2,799

2,589

-208%

8,017

Operational Cash Flow %

-4%

9%

 

-4%

6%

 

11%

Adjusted EBITDA

3,986

3,669

9%

10,771

6,230

73%

13,874

Adjusted EBITDA margin

19%

22%

 

17%

14%

 

19%

* YTD 2020 EBITDA, EBIT & Operational Cash Flow include an impact from goodwill bridge calculation in which there is an inventory fair value adjustment of MEUR -1.2. This adjustment was done in connection with Nordic Capital Fund IX’s acquisition of iLOQ and is an NRI. This impact has been eliminated in the Adjusted EBITDA

Management overview of the third quarter

 

Following a strong H1 2021, iLOQ was able to continue on its growth path in Q3 2021. Despite the strong comparison quarter Q3 2020, the Group’s revenue growth was 30% or higher for the fifth consecutive quarter with Q3 2021 revenue growth being 30%. The strong financial performance continued to prove that iLOQ has been able to continue accelerating its growth path.

 

The successful actions to mitigate potential supply-chain disruptions due to COVID-19 continued in Q3 2021. Management successfully continued measures to secure delivery capability and to mitigate possible unforeseen supply-chain disruptions in the third quarter to be able to meet customer demand. These actions continued the trend of higher inventory levels compared to Q3 2020. The company is likely to continue to hold higher than normal inventory levels in the coming quarters to mitigate any possible supply-chain disruption coming from the global component shortage. This increase in working capital had a material negative effect on the Group’s cash situation, but management sees that by strategically prioritizing delivery capability, the Group has been able to continue taking market share in Q3 2021.

 

Q3 2021 included multiple significant events for iLOQ: The iLOQ S50 APP became available for Huawei mobile phone users and, with it, the benefits of the iLOQ S50 mobile access sharing solution is reaching even further corners of the globe. Agustín Llobet Pedrero was appointed as Country Manager for iLOQ Spain. Agustín has widespread knowledge of the security industry. For over 20 years, he has worked for Casmar, one of the largest electronic security systems distributors in Iberia. His experience with distributing major brands of electronic locks and managing the Intrusion and Access Control Divisions will be an asset to iLOQ as business continues to grow in Spain. In September 2021, iLOQ was presented with the Product Innovation award at the Advanced Architecture Awards 2021 out of 256 candidates.

 

 

Third quarter 2021

 

The growth rate slowed down from the record high growth of Q2 2021 due to the strong comparison quarter of Q3 2020. Despite the strong comparison quarter, total revenue grew 30% compared to Q3 2020, driven by strong sales across all regions. Management expects the quarterly growth rates to continue to slow down closer to the Group’s long-term average in Q4 2021 due to the strong sales in the comparison quarter of Q4 of 2020. The stronger comparison quarters were caused by projects which were postponed from Q2 2020 to Q3 and Q4 2020.

 

EBITDA amounted to MEUR 4.0 (3.7), corresponding to a 19% (22%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes

 

EBIT amounted to MEUR 1.9 (2.0), corresponding to a 9% (12%) EBIT margin. The decrease in EBIT was caused by a correction to goodwill depreciations which were increased in Q3 due to H1 2021 having too low depreciation levels.

 

Operational cash flow was MEUR -0.9 (1.5). The increased inventories to mitigate any possible COVID-19-related supply-chain disruptions continued to have a material negative impact on the Q3 2021 Operational cash flow. The company is expected to continue to have higher than normal inventories during the COVID-19 pandemic and until the global component situation improves to guarantee its ability to produce and ship iLOQ products to customers. 

 

YTD September 2021

 

Total revenue grew 39% compared to YTD 2020, driven by strong sales across all regions. The high revenue growth was partly due to the comparison period being weaker than normal due to COVID-19 negatively affecting H1 2020 with Q3 2020 being the first stronger comparison period. Management expects the Q4 2021 growth rate to be slower and closer to the Group’s long-term average due to the strong sales in the comparison quarter of Q4 2020. Despite this, management believes that the company has been able to continue taking market share in YTD 2021 and is well positioned to continue the growth momentum in all regions during the rest of 2021 and 2022.

 

EBITDA amounted to MEUR 10.8 (5.0), corresponding to a 17% (11%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes and related operational leverage.

 

EBIT amounted to MEUR 4.6 (-0.5), corresponding to a 7% (-1%) EBIT margin. The increase in EBIT was mainly caused by the increased volumes and related operational leverage.

 

Operational cash flow was MEUR -2.8 (2.6). The decrease was caused by continued efforts to mitigate any possible COVID-19 and global-component-shortage-related supply-chain disruptions. The increased inventories had a material negative impact on the YTD 2021 Operational cash flow. The company is expected to continue to have higher than normal inventories during the COVID-19 pandemic and until the global component situation improves to guarantee its ability to produce and ship iLOQ products to customers. 

 

 

Quarterly Information

QUARTERLY INFORMATION

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Revenue

14,040

15,234

16,412

28,440

19,043

23,172

21,282

EBITDA

-116

1,437

3,669

7,644

2,494

4,291

3,986

EBITDA margin

-1%

9%

22%

27%

13%

19%

19%

EBIT

-1,991

-537

2,011

5,606

492

2,230

1,902

EBIT margin

-14%

-4%

12%

20%

3%

10%

9%

Operational Cash Flow

693

387

1,509

5,428

-3,194

1,277

-883

Operational Cash Flow %

5%

3%

9%

19%

-17%

6%

-4%

Adjusted EBITDA

1,123

1,437

3,669

7,644

2,494

4,291

3,986

Adjusted EBITDA margin

8%

9%

22%

27%

13%

19%

19%

Declaration of the Board

 

We confirm that, to the best of our knowledge, the condensed financial statements give a true and fair view of the Group’s assets, liabilities, financial position and results of operations for the period. We also confirm, to the best of our knowledge, that the management overview includes a fair review of important events that have occurred during the first nine months of 2021.

 

 Espoo November 12, 2021

 

 

 

                                                     Heikki Hiltunen                                             Karl Petersson

                                                  President and CEO                                         Member of the Board

INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT, IFRS

 

 

 

 

 

EUR Thousand

Q3 2021

Q3 2020

YTD 2021

YTD 2020

FY 2020

 

 

 

 

 

 

Revenue

21,282

16,412

63,496

45,685

74,125

Other income

0

0

0

1

1

 

 

 

 

 

 

Materials and services

-9,640

-7,173

-28,127

-21,976

-33,789

Employee benefit expenses

-4,756

-3,177

-15,456

-10,552

-15,474

Depreciation, amortisation and impairment losses

-2,084

-1,658

-6,147

-5,507

-7,545

Other operating expenses

-2,900

-2,392

-9,143

-8,168

-12,229

Operating profit

1,902

2,011

4,624

-517

5,089

 

 

 

 

 

 

Finance income

-1

32

37

93

133

Finance cost

-967

-1,066

-2,892

-3,114

-4,067

Net financial expenses

-968

-1,034

-2,854

-3,021

-3,934

 

 

 

 

 

 

Profit (-loss) before taxes

934

977

1,769

-3,538

1,155

 

 

 

 

 

 

Income taxes

-327

-194

-762

507

-637

 

 

 

 

 

 

Profit (loss) for the financial period

607

783

1,008

-3,031

518

 

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

 

0

Translation differences

-5

-9

-4

-11

-15

 

 

 

 

 

 

Total comprehensive income

602

774

1,004

-3,042

503

 

BALANCE SHEET

CONSOLIDATED BALANCE SHEET, IFRS

 

 

 

EUR Thousand

Sep 2021

Sep 2020

Dec 2020

 

 

 

 

ASSETS

 

 

 

Non-current assets

 

 

 

Intangible assets

101,238

102,899

102,650

Business value

91,672

91,672

91,672

Property, plant and equipment

4,728

3,409

4,519

Deferred tax assets

490

474

478

Total non-current assets

198,128

198,454

199,319

 

 

 

 

 

 

 

 

Inventories

19,765

9,781

10,246

Trade and other receivables

14,783

9,449

12,119

Cash and cash equivalents

1,785

3,773

8,013

Total current assets

36,333

23,002

30,378

 

 

 

 

Total assets

234,461

221,456

229,697

 

 

 

 

EQUITY & LIABILITIES

 

 

 

Equity

 

 

 

Share capital

80

80

80

Invested unrestricted equity fund

142,980

142,980

142,980

Translation difference

19

-11

15

Retained earnings

-3,568

-8,027

-4,568

Total equity

139,511

135,023

138,507

 

 

 

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Financial liabilities

54,354

54,175

54,218

Non-current lease liabilities

690

442

731

Non-current provisions

933

744

1,026

Deferred tax liabilities

18,107

18,444

18,743

Total non-current liabilities

74,085

73,806

74,719

 

 

 

 

Current liabilities

 

 

 

Short-term interest-bearing liabilities

2,535

0

0

Account payables and other liabilities

16,235

11,208

13,569

Current lease liabilities

942

565

1,017

Current provisions

735

435

460

Current tax liabilities

418

420

1,425

Total current liabilities

20,866

12,628

16,471

 

 

 

 

Total liabilities

94,950

86,433

91,190

 

 

 

 

Total equity and liabilities

234,461

221,456

229,697

 

STATEMENT OF CASH FLOWS

 

CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS

 

 

 

 

 

EUR Thousand

Q3 2021

Q3 2020

YTD2021

YTD2020

FY 2020

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW FORM OPERATING ACTIVITIES

 

 

 

 

 

Profit (Loss) for the financial period

608

783

1,008

-3,031

518

Adjustments:

 

 

 

 

 

Depreciation and amortization

2,084

1,658

6,147

5,507

7,545

Unrealized exchange rate gains and losses

0

0

0

0

-150

Financial Income

1

-32

-37

-93

-133

Financial Expense

968

1,066

2,892

3,114

4,067

Taxes

327

194

762

-507

637

Other adjustments

0

0

0

0

186

Change in Working Capital:

 

 

 

 

 

Change in trade and other receivables

89

-905

-2,664

1,372

-1,255

Change in inventory

-4,586

-1,834

-9,519

-1,309

-1,774

Change in trade and other payables

963

1,221

2,666

148

2,580

Change in provisions

41

146

183

405

712

Interest paid

-766

-949

-2,290

-2,506

-3,261

Interest received

0

0

0

0

1

Income tax paid

-348

-18

-2,446

-1,005

-1,050

Other financial items

-62

-52

-152

-220

-319

Net cash flow from operating activities (A)

-681

1,279

-3,450

1,876

8,304

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

Investments in intangible assets

-1,090

-754

-3,224

-2,396

-3,671

Investments in tangible assets

-262

-35

-988

-623

-1,210

Business acquisitions

0

0

0

0

0

Net cash flow from investing activities (B)

-1,352

-789

-4,212

-3,018

-4,881

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

Payments of lease liabilities

-289

-238

-848

-734

-1,027

Proceeds from short-term liabilities

2,535

0

2,535

10,000

10,000

Payments of short-tem liabilities

0

-10,000

0

-10,000

-10,000

Net cash flow from financing activities (C)

2,246

-10,238

1,687

-734

-1,027

 

 

 

 

 

 

CHANGE IN CASH AND EQUIVALENTS (A+B+C)

213

-9,748

-5,975

-1,877

2,396

 

 

 

 

 

 

Cash and cash equivalents, in the beginning of period

1,666

13,565

8,013

5,784

5,784

Net effect of exchange rate changes on cash and cash equivalents

-94

-44

-253

-135

-167

Cash and cash equivalents, at the end of period

1,785

3,773

1,785

3,773

8,013

Definitions of alternative performance measures

 

  1. EBITDA = EBIT before depreciation, amortization and impairments

 

  1. Operational Cash Flow = EBITDA + Change in trade and other receivables + Change in inventory + Change in trade and other payables + Change in provisions + Net cash flow from investing activities (C). Operational cash flow is used internally by the group to follow EBITDA which takes into account investments and change in working capital

 

  1. Operational Cash Flow % = Operational Cash Flow / Revenue

 

  1. Adjusted EBITDA = EBITDA excluding items affecting comparability

 

 

 

CONTACT

 

Additional information about the company can be found on the corporate website www.iloq.com. The company can be contacted by e-mail, vasb@vybd.pbz

 

For questions concerning this report please contact:

 

Heikki Hiltunen

CEO and President

urvxxv.uvyghara@vybd.pbz

 

Timo Pirskanen

CFO

gvzb.cvefxnara@vybd.pbz