Half-Year Financial Report, January – June 2021

Half-Year Financial Report 2021

 

Second quarter highlights

 

Significant events during the quarter

 

KEY FINANCIALS

Change Change
EUR thousand Q2 2021 Q2 2020 in % H1 2021 H1 2020 in % FY 2020
Revenue 23,172 15,234 52 % 42,215 29,274 44 % 74,125
EBITDA 4,291 1,437 198 % 6,784 1,321 414 % 12,635
EBITDA margin 19 % 9 % 16 % 5 % 17 %
EBIT 2,230 -537 -516 % 2,722 -2,528 -208 % 5,089
EBIT margin 10 % -4 % 6 % -9 % 7 %
Operational Cash Flow 1,277 387 230 % -1,917 1,080 -278 % 8,017
Operational Cash Flow % 6 % 3 % -5 % 4 % 11 %

* Q1/H1 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

Management overview of the second quarter

Following a strong Q1 2021, iLOQ was able to continue accelerating its growth in Q2 2021. For the fourth quarter in a row, the Group’s revenue growth was above 30% with Q2 2021 revenue growth being 52%. For the second quarter in a row, the Group was able to have a record quarterly revenue growth. Despite the strong revenue growth being partly due to COVID-19 negatively affecting the comparison quarter of Q2 2020, the strong financial performance proved 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 Q2 2021. Management successfully continued measures to secure delivery capability and to mitigate possible unforeseen supply chain disruptions in the second quarter to be able to meet customer demand. These actions continued the trend of higher inventory levels compared to Q2 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.Q2 2021 included multiple significant events for iLOQ: The launch of iLOQ Rapide in Finland, the awarded ISO/IEC 27001 Information Security Management certification and the start of cooperation with Bayer 04 Leverkusen in Germany. iLOQ Rapide is a fast and easy way to replace an outdated access management system with a modern iLOQ access management system by eliminating the need for an initial investment by offering a competitive and flexible monthly payment fee. The awarded ISO/IEC 27001 certificate highlights that iLOQ has the necessary tools and processes in place to defend against external cybersecurity threats and instill ongoing confidence in our customers, partners and end users. As for the cooperation with Bayer 04 Leverkusen, iLOQ looks forward to making life more accessible for staff and visitors to the BayArena stadium and to boost its reputation in key Residential, Commercial and Critical Infrastructure business areas in the important German market.Management believes that the strong financial results achieved in Q2 2021 were a result of keeping the organization fully employed and active during the COVID-19 pandemic in 2020. During this time, a significant focus was directed to supporting and virtually training our partner network in these unprecedented times. The management decided to heavily invest in digital marketing and sales channels in 2020 and has continued on the same path in 2021. Due to these and many other actions completed during the last twelve months, management believes that iLOQ is well positioned to continue executing its long-term growth strategy in 2021, as well as in the coming years.

Second quarter 2021

Total revenue grew 52% compared to Q2 2020, driven by strong sales across all regions. The record high revenue growth was partly due to the comparison quarter being weaker than normal due to COVID-19 negatively affecting Q2 2020. Management expects the quarterly growth rates to slow down closer to the Group’s long-term average due to the strong sales in the comparison quarters of Q3 and 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 4.3 (1.4), corresponding to a 19% (9%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes and operational leverage.EBIT amounted to MEUR 2.2 (-0.5), corresponding to a 10% (-4%) EBIT margin. The increase in EBIT was mainly caused by the increased volumes and operational leverage.Operational cash flow was MEUR 1.3 (0.4). The increased inventories to mitigate any possible COVID-19-related supply chain disruptions continued to have a material negative impact on the Q2 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.

First half 2021

Total revenue grew 44% compared to first half 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. Management expects the H2 2021 growth rate to be slower and closer to the Group’s long-term average due to the strong sales in the comparison period of H2 2020. Despite this, management believes that the company has been able to continue taking market share in H1 2021 and is well positioned to continue the growth momentum in all regions during the rest of 2021.EBITDA amounted to MEUR 6.8 (1.3), corresponding to a 16% (5%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes and operational leverage.EBIT amounted to MEUR 2.7 (-2.5), corresponding to a 6% (-9%) EBIT margin. The increase in EBIT was mainly caused by the increased volumes and operational leverage.Operational cash flow was MEUR -1.9 (1.1). The decrease was caused by continued efforts to mitigate any possible COVID-19-related supply chain disruptions. The increased inventories had a material negative impact on the H1 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.

Events after the reporting period

As of 1st of July, Agustín Llobet Pedrero has been appointed as Country Manager for iLOQ Spain. He takes over the role from Joaquim Serrahima who is now Director of Global Key Accounts for the telecom segment – a strategic move in order to further strengthen iLOQ’s focus on the critical infrastructure business.

Key Figures

FINANCIAL KEY FIGURES

H1 2021 H1 2020 FY 2020
Revenue (EUR 1,000) 42,215 29,274 74,125
Operating profit (EUR 1,000) 2,722 -2,528 5,089
Operating profit (%) 6,4 % -8,6 % 6,9 %
Return on equity (%) (ROE) 0,3 % -2,8 % 0,4 %
Equity ratio (%) 60,5 % 58,6 % 60,3 %
Average number of employees for the financial period 213 167 170

Quarterly Information

QUARTERLY INFORMATION

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Revenue 14,040 15,234 16,412 28,440 19,043 23,172
EBITDA -116 1,437 3,669 7,644 2,494 4,291
EBITDA margin -1 % 9 % 22 % 27 % 13 % 19 %
EBIT -1,991 -537 2,011 5,606 492 2,230
EBIT margin -14 % -4 % 12 % 20 % 3 % 10 %
Operational Cash Flow 693 387 1,509 5,428 -3,194 1,277
Operational Cash Flow % 5 % 3 % 9 % 19 % -17 % 6 %

 

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 half 2021.

Espoo August 20, 2021

Heikki Hiltunen                             Karl Petersson

President and CEO                         Member of the Board