Capnor Weasel Bidco Oyj Interim Report January – September 2022
Interim Report for the third quarter of 2022
Significant events during the quarter
|Third quarter highlights
Interim Report for the third quarter of 2022
|EUR thousand||Q3 2022||Q3 2021||in %||YTD 2022||YTD 2021||in %||FY 2021|
|Operational Cash Flow||-2,358||-859||175%||1,520||-2,776||-155%||7,339|
|Operational Cash Flow %||-9%||-4%||2%||-4%||7%|
|Adjusted EBITDA margin*||17%||19%||19%||17%||22%|
|Adjusted EBIT margin||9%||9%||10%||7%||14%|
|Adjusted Operational Cash Flow||-2,358||-859||175%||2,009||-2,776||-172%||7,339|
|Adjusted Operational Cash Flow %||-9%||-4%||2%||-4%||7%|
* Q2 2022 EBITDA, EBIT & Operational Cash Flow included an impact from a market study conducted with an external company, which is an item affecting comparability. The impact of this study included in EBITDA, EBIT and Operational Cash Flow was 488 thousand euros and is not a recurring item. This cost has been excluded in the Adjusted EBITDA, EBIT and Operational Cash Flow figures above.
Management overview of the third quarter
Following a strong H1 2022, iLOQ continued its growth path in Q3 2022. The Group’s revenue growth was 29% year-on-year with strong performance across all regions and segments.
The successful actions to mitigate potential supply-chain disruptions due to the global electronics component shortages continued in Q3 2022. 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 2021. 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 continues to hold the view that, by strategically prioritizing delivery capability, the Group has been able to continue gaining market share in Q3 2022.
In addition to the global electronics component shortages, the timing of China's COVID-19 restrictions, the increased geopolitical risks related to the crisis in Ukraine and the rising inflation especially in building materials are having a material impact to global supply chains. Despite the above-mentioned uncertainties, iLOQ has been able to continue its strong growth trajectory and management continues to take necessary mitigation actions to secure delivery capability. Management continues to follow and evaluate the impacts the rising energy costs have on the real estate sector and therefore on iLOQ’s customers
Q3 2022 included multiple significant events for iLOQ: iLOQ acquired Kodinportti / IT-Salonen Ltd’s share capital and, through the acquisition, iLOQ will further strengthen its software development capabilities. Under the trade name DreamIt, IT-Salonen specializes in providing a wide range of IT services and various cyber services, including software product development. Kodinportti is a digital user interface for residential and commercial properties. The residents list, the noticeboard, and the reservations lists for common areas of an apartment building are replaced by a single touch-screen panel, and a remote interface that can be used with a computer or mobile phone’s internet browser. “The acquisition will strengthen iLOQ’s digital competence and competitiveness. By bringing DreamIt’s expertise to us, we will be able to develop new features for the iLOQ HOME access management system,” explains Heikki Hiltunen, President and CEO of iLOQ.
iLOQ continued to fulfill its growth strategy by expanding to Poland. Adding Poland to iLOQ’s country portfolio continues to fulfill the company’s growth strategy and allows iLOQ to introduce the benefits of its battery-free digital-locking and mobile-access-sharing technology to a new market. Grzegorz Korzeniowski has been appointed Country Manager in Poland. He will be responsible for building a winning team to establish the company’s commercial activities and developing a strong base of partners and customers.
Johanna Wretdal has been appointed as iLOQ’s Chief Marketing Officer from 15.8.2022, and she will also become a member of the Management Team. Prior to joining iLOQ, Johanna was the CMO for Silo AI. Johanna is equipped with two decades of global experience, ranging from local startups to internationally listed, leading organizations. She will take overall responsibility for the company’s marketing and communications agenda, along with playing a key role in ensuring an end-to-end brand development that ultimately supports the organization’s strategy.
Third quarter 2022
Total revenue grew 29% compared to Q3 2021, driven by strong sales across all regions and segments. iLOQ continues to rapidly gain market share with its leading self-powered digital solutions. To date, iLOQ has had no delivery issues despite the negative supply-chain disruptions affecting the industry.
EBITDA amounted to MEUR 4.7 (4.0), corresponding to a 17% (19%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes.
EBIT amounted to MEUR 2.4 (1.9), corresponding to a 9% (9%) EBIT margin.
Operational Cash Flow was MEUR -2.4 (-0.9). The decision to continue having increased inventories to mitigate any possible global component shortage situation related to supply chain disruptions continued to have a material negative impact on the Q3 2022 Operational Cash Flow. The company is expected to continue having higher than normal inventories until the global component situation improves to guarantee its ability to produce and ship iLOQ products to customers.
YTD September 2022
Total revenue grew 29% compared to YTD September 2021, driven by strong sales across all regions and segments. In addition to iLOQ’s strong product offering, the strong revenue and delivery performance can be partly credited to the management’s decision to strategically increase short-term inventory levels to mitigate any possible supply-chain disruptions and therefore be able to gain market share due to high delivery capability.
Adjusted EBITDA amounted to MEUR 15.2 (10.8), corresponding to a 19% (17%) EBITDA margin. The increase in EBITDA was mainly caused by the increased volumes and operating leverage.
Adjusted EBIT amounted to MEUR 7.9 (4.6), corresponding to a 10% (7%) EBIT margin.
Adjusted Operational Cash Flow was MEUR 2.0 (-2.8). The increase was mainly caused by increased profitability, partly offset by the continued higher inventory levels.
|QUARTERLY INFORMATION||Q3 2020||Q4 2020||Q1 2021||Q2 2021||Q3 2021||Q4 2021||Q1 2022||Q2 2022||Q3 2022|
|Operational Cash Flow||1,509||5,428||-3,194||1,277||-859||10,114||3,451||442||-2,372|
|Operational Cash Flow %||9%||19%||-17%||6%||-4%||26%||13%||2%||-9%|
|Adjusted EBITDA margin||22%||27%||13%||19%||19%||30%||21%||18%||17%|
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 2022.
Espoo November 14, 2022
Heikki Hiltunen Karl Petersson
President and CEO Member of the Board
|CONSOLIDATED INCOME STATEMENT, IFRS|
|EUR Thousand||Q3 2022||Q3 2021||YTD 2022||YTD 2021||FY 2021|
|Materials and services||-12,467||-9,640||-35,946||-28,127||-44,459|
|Employee benefit expenses||-5,927||-4,756||-18,912||-15,456||-22,072|
|Depreciation, amortization and impairment losses||-2,287||-2,084||-6,852||-6,147||-8,207|
|Other operating expenses||-4,343||-2,900||-12,333||-9,143||-13,802|
|Net financial expenses||-1,046||-968||-3,199||-2,854||-3,874|
|Profit (-loss) before taxes||1,368||934||4,703||1,769||10,507|
|Profit (loss) for the financial period||857||607||3,115||1,008||8,493|
|Items that may be subsequently reclassified to profit or loss|
|Total comprehensive income||864||602||3,134||1,004||8,474|
|CONSOLIDATED BALANCE SHEET, IFRS|
|EUR Thousand||Sep 2022||Sep 2021||Dec 2021|
|Property, plant and equipment||6,909||4,728||4,983|
|Deferred tax assets||381||490||494|
|Total non-current assets||201,854||198,128||198,461|
|Trade and other receivables||18,151||14,783||16,826|
|Cash and cash equivalents||1,961||1,785||7,536|
|Total current assets||48,888||36,333||44,165|
|EQUITY & LIABILITIES|
|Invested unrestricted equity fund||143,264||142,980||143,240|
|Non-current lease liabilities||1,331||690||680|
|Deferred tax liabilities||17,463||18,107||17,919|
|Total non-current liabilities||73,683||74,085||73,805|
|Short-term interest-bearing liabilities||2,167||2,535||0|
|Account payables and other liabilities||21,968||16,235||18,132|
|Current lease liabilities||1,401||942||933|
|Current tax liabilities||316||418||1,484|
|Total current liabilities||26,693||20,866||21,557|
|Total equity and liabilities||250,743||234,461||242,626|
STATEMENT OF CASH FLOWS
|CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS|
|EUR Thousand||Q3 2022||Q3 2021||H1 2022||H1 2021||FY 2021|
|CASH FLOW FROM OPERATING ACTIVITIES|
|Profit (Loss) for the financial period||857||608||3,115||1,008||8,493|
|Depreciation and amortization||2,288||2,084||6,852||6,147||8,207|
|Unrealized exchange rate gains and losses||0||0||0||0||9|
|Change in Working Capital:|
|Change in trade and other receivables||-942||89||-1,258||-2,664||-4,651|
|Change in inventory||-5,890||-4,586||-8,962||-9,519||-9,557|
|Change in trade and other payables||2,106||963||3,787||2,666||4,528|
|Change in provisions||-303||41||-936||183||330|
|Income tax paid||-944||-348||-3,257||-2,446||-2,868|
|Other financial items||-62||-62||-168||-152||-200|
|Net cash flow from operating activities (A)||-2,265||-681||1,502||-3,450||7,012|
|Cash flow from investing activities|
|Payments from tangible assets sales||14||14|
|Investments in intangible assets||-1,443||-1,090||-4,518||-3,224||-4,406|
|Investments in tangible assets||-602||-262||-1,346||-988||-1,495|
|Net cash flow from investing activities (B)||-3,746||-1,352||-7,565||-4,212||-5,900|
|Cash flow from financing activities|
|Common control merger||0||0||0||0||6|
|Payments of lease liabilities||-367||-289||-1,178||-848||-1,204|
|Proceeds from short-term liabilities||2,167||2,535||2,167||2,535||0|
|Payments of short-term liabilities||-6||0||-6||0||0|
|Net cash flow from financing activities (C)||1,794||2,246||983||1,687||-1,198|
|CHANGE IN CASH AND EQUIVALENTS (A+B+C)||-4,217||213||-5,080||-5,975||-87|
|Cash and cash equivalents, in the beginning of period||6,297||1,666||7,536||8,013||8,013|
|Net effect of exchange rate changes on cash and cash equivalents||-119||-94||-495||-253||-391|
|Cash and cash equivalents, at the end of period||1,961||1,785||1,961||1,785||7,536|
Definitions of alternative performance measures
- EBITDA = EBIT before depreciation, amortization and impairments
- Operational Cash Flow = EBITDA + Change in trade and other receivables + Change in inventory + Change in trade and other payables + Change in provisions + Investments in intangible assets + Investments and Payments in tangible assets. Operational Cash Flow is used internally by the group to follow EBITDA which takes into account investments and change in working capital
- Operational Cash Flow % = Operational Cash Flow / Revenue
- Adjusted EBITDA, Adjusted EBIT & Adjusted Operational Cash Flow = Same as above, but excluding the impact from a market study conducted in Q2 2022 with an external company, which is an item affecting comparability. The impact of this study included in EBITDA, EBIT and Operational Cash Flow was 488 thousand euros and is not a recurring item.
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CEO and President