CAPNOR WEASEL BIDCO OYJ, Interim report January – March 2021

Interim report for the first quarter of 2021

First quarter highlights
• Revenue increased by 36% to MEUR 19.0 (14.0).
• EBITDA increased to MEUR 2.5 (-0.1), corresponding to a 13% (-1%) EBITDA margin.
• EBIT increased to MEUR 0.5 (-2.0), corresponding to a 3% (-14%) EBIT margin.
• Operational cash flow decreased to MEUR -3.2 (0.7) due to strategic actions to mitigate possible global supply chain disruptions caused by global component shortages.

Significant events during the quarter

• The world’s three millionth iLOQ key was delivered.
• New logistics center opened in Oulu, Finland to facilitate future growth.
• Market operations started in UK.
• COVID-19 mitigation actions continued successfully.
• Global component shortage situation mitigation actions started successfully.

Management overview of the first quarter

Following a strong Q4 2020, iLOQ was able to continue accelerating its growth in Q1 2021. For the third quarter in a row, the company’s revenue growth was above 30% with Q1 2021 revenue growth being 36%. This is the highest quarterly revenue growth since Q3 2017. Despite the third wave of COVID-19 hitting iLOQ’s main markets in Q1 2021, the strong financial performance proved that iLOQ has been able to continue and even accelerate its growth path in these unprecedented times.

The successful actions to mitigate potential risks of possible supply chain disruptions due to COVID-19 continued in Q1 2021. Management successfully continued measures to secure delivery capability and to mitigate possible unforeseen supply chain disruptions in the first quarter to be able to meet customer demand. These actions continued the trend of higher inventory levels compared to Q1 2020. To secure profitable growth, 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. Despite the mitigation activities, management sees a potential risk of continued global component shortage having an impact to the second half of 2021.

Since iLOQ established its first subsidiary outside Europe in Canada in Q4 2020, the market entry has continued to be successful in Q1 2021. The quarter also saw the first actual project in Canada with the first iLOQ S50 being sold to Core Data Centers. The iLOQ S50 solution helps the customer to eliminate security risks related to physical keys and, with no batteries or cabling, lifecycle costs and environmental impacts are minimized.

Management believes that the strong financial results achieved in Q1 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 continued to invest in digital marketing and sales channel development in 2020 according to iLOQ’s long-term profitable growth strategy. Due to these and many other actions completed during 2020 and in Q1 2021, management believes that iLOQ is well positioned to continue executing its long-term profitable growth strategy in 2021, as well as in the coming years.

First quarter 2021

Total revenue grew 36% compared to Q1 2020, driven by strong sales across all regions. The management’s decision to keep investing in digital marketing and sales channels has proven to be the right decision and the benefits of the work done to support the continuously growing partner network can be seen in the strong performance in Q1 2021. Management believes that the company has been able to continue taking market share in Q1 2021 and is well positioned to continue the growth momentum in all regions during the rest of 2021.

EBITDA amounted to MEUR 2.5 (-0.1), corresponding to a 13% (-1%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes and operational leverage.

EBIT amounted to MEUR 0.5 (-2.0), corresponding to a 3% (-14%) EBIT margin. The increase in EBIT was mainly caused by the increased volumes and operational leverage.

Operational cash flow was MEUR -3.2 (0.7). 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 Q1 2021 Operational cashflow. 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.

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 quarter 2021.


Espoo May 12, 2021

Heikki Hiltunen
President and CEO

Karl Petersson
Member of the Board