Quarterly Report • May 27, 2021
Quarterly Report
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CAMBI ASA | FIRST-QUARTER RESULTS 2021
Cambi boosts the green circular economy in many cities around the world, enabling municipal utilities to increase their resource recovery and improve local environments.
Using proprietary technology and detailed know-how built over several decades, Cambi delivers reliable and affordable waste treatment solutions. By processing effi ciently large volumes of sewage sludge and other raw materials, our proven solutions make green energy and high-quality soil products.
Cambi thermal hydrolysis systems are installed in 24 countries on all continents, mainly at wastewater treatment facilities owned by leading water utilities. Subsidiary company Grønn Vekst is the market leader in Norway for transforming sewage sludge and organic wastes into sustainable soil products.
Revenue
108
EBITDA
5.5
Key numbers in NOK million, Cambi ASA. EBITDA: before non-recurring items
The revenue for the fi rst quarter was NOK 108 million (NOK 76 million), an increase of 42% compared to last year. In the fi rst quarter there was a strong revenue growth in the Equipment subsegment of Cambi Group, while revenue declined in the Services subsegment due to fewer ongoing upgrade projects. As expected, revenue in Cambi Invest declined due to lower soil sales as a result of the winter weather compared to last year's mild fi rst quarter.
The fi rst quarter EBITDA before non-recurring items was NOK 5.5 million (NOK 3.7 million), an increase of 49% compared to last year. Product development costs are expensed and amounted to net NOK 1.5 million for the fi rst quarter. Cambi had non-recurring costs in the period of NOK 1.8 million. The costs were related to the listing on Euronext Growth.
Order backlog ended at NOK 483 million, an increase of 44% compared to last year. At constant currency (2020 rates), backlog was up 66% from the fi rst quarter last year.
Order intake for the fi rst quarter ended at NOK 153 million, an increase of 4.9% compared to NOK 146 million in the fi rst quarter 2020. At constant currency (2020 rates), order intake was up 18.7% from 2020. Cambi Group's Equipment subsegment signed three new thermal hydrolysis projects in the UK, USA and South Africa, in addition to an upgrade project in Norway.
The operating cash fl ow was NOK -8.2 million compared to NOK -31.8 million in the fi rst quarter of 2020.
On February 9, Cambi listed on Euronext Growth in Oslo, with DNB Asset Management and Handelsbanken Fonder as cornerstone investors.
Cambi THP plant. Ourense, Spain
Cambi signed a contract with Sasol, an integrated energy and chemicals company, to supply a thermal hydrolysis pilot plant to process industrial sewage sludge. The thermal hydrolysis process will treat sewage sludge from Sasol's Secunda coalto-liquids facilities in South Africa. Should the pilot be successful, there may be an opportunity for a full-scale project to support the reduction of Sasol's generated waste volumes and, consequently, the site's carbon footprint. This is Cambi's fi rst reference in Africa, a breakthrough in a promising market.
Cambi was awarded the contract to build a new digester for Ecopro, located in Verdal, Norway. The expansion will allow Ecopro to process more food waste and sewage sludge from participating municipalities and increase biogas output. Cambi delivered a turn-key plant to Ecopro in 2008, as a part of a three-year long build, operate and transfer project, including the thermal hydrolysis process. This project refl ects Cambi's experience in supplying components for the entire sludge line. Cambi inked its fi rst project with the utility Southern Water to commission a thermal hydrolysis process at the Goddards Green Sludge Recycling Centre (SRC) near Burgess Hill in West Sussex, UK. The plant will shift from lime stabilisation, a lowtech treatment method producing low quality and odourous biosolids cake, to advanced anaerobic digestion using Cambi's thermal hydrolysis process. Cambi will deliver a modular B2 system set to eliminate odour issues and provide a stable, high-quality fertiliser.
Cambi won a new contract to deliver a thermal hydrolysis system for Kansas City Water's (KCMO) Blue River Biosolids Facility. Goodwin Brothers Construction will be the construction partner, with Black & Veatch responsible for the engineering. The project will increase the capacity of existing digesters, reduce costs, and produce biosolids meeting the highest American quality standards. Blue River will be the fi rst THP facility in Missouri and Cambi's ninth reference in the US market.
The fi rst quarter ended with a total backlog of NOK 483 million, of which Cambi Group's share is 87%. Nearly half of the backlog is scheduled for delivery in 2021.
Cambi Group's backlog is primarily denominated in foreign currencies, while Cambi Invest's is all in Norwegian kroner from Grønn Vekst's upstream contracts.
The backlog distribution may be aff ected by foreign exchange rate fl uctuations and adjustments to the projects' percentage of completion.
in million NOK, equivalent at Q1 2021 FX
in million NOK
The manufacturing facility in Congleton, UK, is working on deliveries for the Piscataway and Raleigh projects in the US, Gaoantun in China, and Sasol in South Africa.
Mechanical installation of a THP system was completed at the Luoqi food waste treatment plant in Chongqing, China.
Services completed annual shutdowns at several sites in the UK and USA, with two more streams compared to last year. In the UK, Cambi is working towards taking full charge of the shutdowns at more of the plants served, stepping up from having a supervisory role to a recurring service model.
Cambi Group had high activity in the workshop and at sites without major disruptions or delays.
Segment revenue was NOK 90.3 million compared to NOK 57 million in the same quarter last year. Equipment revenue increased 116% compared to last year as a result of a strong opening backlog and order intake in the quarter.
Services spare parts and annual shutdown revenues ended at the same level as last year, but total subsegment revenue had a decline of 33% due to more upgrade projects in the same period last year.
EBITDA before non-recurring items was NOK 7.5 million (NOK 2.6 million), with margin increasing from 4.6% to 8.3%. The margin increase is
mainly due to higher revenue, partially off set by lower upgrades revenue and strengthening of the Norwegian kroner.
Product development costs are expensed and amounted to net NOK 1.5 million for the fi rst quarter. Cambi had non-recurring costs in the period of NOK 1.8 million. The costs were related to the listing on Euronext Growth.
Order intake ended at NOK 143 million in the fi rst quarter, an increase of 27% from NOK 112 million last year. At constant currency, order intake ended up 45% compared to last year. The Equipment subsegment accounted for 70% at NOK 99.7 million, while Services booked contracts for NOK 43.2 million.
Revenue 90
EBITDA 7.5
Numbers in NOK million, Cambi Group. EBITDA: before non-recurring items
million people contribute to and benefi t from an improved local environment, in municipalities serviced by Cambi's THP installations.
74 facilities have chosen Cambi's thermal hydrolysis solutions
0 reportable incidents
Cambi THP plant. Medina County, OH, USA.
Cambi THP plant. Hengelo, The Netherlands.
8 | Cambi ASA - Quarterly Results 2021 Q1 Cambi ASA - Quarterly Results 2021 Q1 | 9
The fi rst quarter of 2021 was characterised by typical Norwegian winter weather, with snow and freezing temperatures that slow down the soil seeding/mixing process. Nevertheless, soil sales were higher than expected, reaching 25,000 tonnes in the quarter (27,500 in 2020, 6,800 tonnes in 2019).
Four new production sites started operations during the quarter, one in Larvik and the others in the greater Oslo area. In February and March, Grønn Vekst delivered 10,000 tonnes of soil in Bærum to cover a closed landfi ll and create new farmland.
Wildfl ower habitats support a broad biodiversity of animals and insects, and the demand for soil suitable for wildfl owers is increasing. In response, Grønn Vekst has initiated a project looking into the eff ects of compost and stonemeal on plant growth, with the purpose to establish wildfl ower meadows. A three-month pilot trial aims to develop optimal fertiliser and irrigation regimes. The results will help plan a fi eld trial starting this summer.
The activity level on DBO project development has been high during the quarter, with several projects in tender-phase at the end of the quarter. In parallel, Cambi is actively initiating dialogues with potential customers and partners in various countries to identify and develop privately fi nanced projects.
Soil sales affected by winter conditions, compared to the mild fi rst quarter last year.
25,000 tonnes of peat-free soils sold
in Q1 2021
4
new production sites started operations during Q1 2021
0
reportable incidents
First-quarter revenue was NOK 18.0 million, down 6.8% from NOK 19.2 million in the same quarter last year. Lower revenue for Grønn Vekst is primarily due to a 10% volume reduction of soil sales compared to the mild winter last year.
The fi rst quarter EBITDA was NOK (2.0) million, down from NOK 1.1 million in the same quarter of 2020. The reduction is primarily due to lower revenue, higher costs due to challenging weather conditions for soil production, and DBO development costs. The EBITDA for the fi rstquarter 2020 did not include DBO development costs. Overall, the results exceeded low-season expectations.
Order intake for the quarter was NOK 10.1 million (NOK 33.6 million), entirely ascribed to Grønn Vekst. There were no new major tender awards in the Recycling subsegment during the fi rst quarter of 2021, whereas several major garden waste contracts were awarded during the fi rst quarter of 2020.
The order backlog currently refl ects the biosolids and garden waste management contracts of Grønn Vekst. The order backlog for the segment in the fi rst quarter was at the same level as one year earlier, NOK 64 million, of which NOK 44 million are fi rm orders.
Numbers in NOK million, Cambi Invest. EBITDA: before non-recurring items
Revenue 18
18 19.2 -2.0 Q1 2020 Q1 2021 Q1 2020 Q1 2021 1.1
Soil products in agricultural use. Near Aberdeen, UK.
The Board of Directors and the President and CEO of Cambi ASA approved the report and unaudited interim fi nancial statements.
Asker, 26 May 2021
There is growing interest in Cambi's solutions, as witnessed by an increase in website traffi c and higher participation in webinars compared to the same quarter last year, which ultimately brings new qualifi ed leads in the sales pipeline.
The tender activity is high, with the number of price submissions up 50% compared to the same period last year. The increase is seen across all regions, and in both the Equipment and the DBO subsegments, including early-stage interest from Middle East projects picking up.
During the second quarter, Cambi has so far signed two new contracts for thermal hydrolysis plants, both located in central Poland, in Warsaw and Jarocin. In Warsaw, a packaged B2 plant installed between two existing digesters will maximise the benefi ts of thermal hydrolysis, boosting biogas output and producing high quality, easier to handle biosolids. In Jarocin, the B2 plant will be at the heart of a new modern sludge line that produces
high quality biosolids intended for land application as biofertiliser. These will be Cambi's third and fourth references in the country, respectively.
In early May, Cambi received a Letter of Intent to deliver a thermal hydrolysis installation to Charlotte Water in Charlotte, NC, USA. THP was evaluated to have net negative greenhouse gas emissions due to the increase in biogas production and the ability to use renewable biogas to off set fossil fuels. The project contributes to the City of Charlotte's goal to become carbon neutral by 2050.
The revenue expected for 2021 remains between NOK 480 and 510 million. The EBITDA margin expectation is in the lower end of the previously communicated range of 12 to 14%.
The uptake of thermal hydrolysis and advanced anaerobic digestion for sludge treatment around the world remains strong. Cambi continuously monitors and analyses the drivers for the market and is confi dent in the increasing demand for reliable, energy-effi cient, environmentally friendly solutions for sludge treatment among cities, utilities, and businesses.
Though the company will continue to focus on organic growth, it will also assess the potential acquisition of companies that provide complementary technologies and solutions.
| Q1 2021 |
Q1 2020 |
|
|---|---|---|
| Operating income | 108.2 | 76.3 |
| Costs of goods sold | 53.7 | 27.9 |
| Payroll expenses | 33.6 | 30.1 |
| Depreciation & amortisation expenses | 2.3 | 1.6 |
| Other operating expenses | 17.3 | 14.6 |
| Operating expenses | 106.8 | 74.2 |
| Operating profi t | 1.4 | 2.0 |
| Net fi nancial items | -3.7 | -14.6 |
| Profi t (loss) before tax | -2.3 | -12.6 |
| Tax expense | 0.2 | - |
| Net profi t (loss) | -2.5 | -12.6 |
| Attributable to | ||
| Equity holders of the parent company | -1.8 | -11.9 |
| Non-controlling interests | -0.7 | -0.7 |
| EBITDA | 3.7 | 3.7 |
| Non-recurring items1 | 1.8 | 0 |
| EBITDA before non-recurring items | 5.5 | 3.7 |
Unaudited, in NOK million
Interim fi nancial statements Q1 2021
Cambi cake at Basingstoke, UK. 1) Cambi had non-recurring costs in the period of NOK 1.8 million. The costs were related to the listing on Euronext Growth.
| Unaudited, in NOK million | ||||
|---|---|---|---|---|
| Assets | Q1 | Q1 | Year | |
| 2021 | 2020 | 2020 | ||
| Total intangible assets | 47.9 | 47.0 | 45.4 | |
| Total tangible fixed assets | 20.4 | 17.5 | 20.2 | |
| Total financial assets | 1.9 | 2.4 | 2.1 | |
| Total non-current assets | 70.2 | 67.0 | 67.7 | |
| Inventories | 28.8 | 24.9 | 27.3 | |
| Total debtors | 138.9 | 113.1 | 141.6 | |
| Bank deposits | 348.0 | 41.4 | 46.0 | |
| Total current assets | 515.7 | 179.4 | 214.8 | |
| Total assets | 586.0 | 246.4 | 282.6 |
| Equity | Q1 | Q1 | Year |
|---|---|---|---|
| 2021 | 2020 | 2020 | |
| Total equity | 425.5 | 136.2 | 138.4 |
| Unaudited, in NOK million | |||
|---|---|---|---|
| Liabilities | Q1 2021 |
Q1 2020 |
Year 2020 |
| Non-current liabilities | 14.5 | 19.9 | 14.7 |
| Current liabilities | 146.1 | 90.3 | 129.5 |
| Total liabilities | 160.5 | 110.2 | 144.2 |
| Total equity and liabilities | 586.0 | 246.4 | 282.6 |
Unaudited, in NOK million
| Q1 | Q1 | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Cash flows from operating activities | |||
| Profit / loss before tax | -2.3 | -12.6 | |
| Tax paid for the period | -1.9 | -3.9 | |
| Ordinary depreciation | 2.3 | 1.6 | |
| Change in inventory | -1.6 | -3.9 | |
| Change in accounts receivable | 15.2 | -11.3 | |
| Change in accounts payable | -5.9 | -2.5 | |
| Effect of exchange rate fluctuations | -0.1 | 10.1 | |
| Change of other accrual items | -14.0 | -9.4 | |
| Net cash flow from operating activities | -8.2 | -31.8 |
| Net cash flow from operating activities | -1.3 | 4.2 |
|---|---|---|
| Payments for the purchase of shares in other companies | - | - |
| Proceeds from the sale of shares in other companies | - | 4.9 |
| Payments for the purchase of fixed assets | -1.3 | -0.7 |
| 311.6 | $-56.1$ |
|---|---|
| 0.2 ---- |
|
| 285.6 - - |
|
| $-5.0$ |
25.2 |
| . | $-81.0$ |
| $-0.2$ 0.4- - - - - - - - - - - - - - - - - - - |
$-0.4$ |
| 31.0 |
|
| Cash flows from operating activities | ||
|---|---|---|
| Profit / loss before tax | -2.3 | -12.6 |
| Tax paid for the period | -1.9 | -3.9 |
| Ordinary depreciation | 2.3 | 1.6 |
| Change in inventory | -1.6 | -3.9 |
| Change in accounts receivable | 15.2 | -11.3 |
| Change in accounts payable | -5.9 | -2.5 |
| Effect of exchange rate fluctuations | -0.1 | 10.1 |
| Change of other accrual items | -14.0 | -9.4 |
| Net cash flow from operating activities | -8.2 | -31.8 |
| Cash flows from investment activities | ||
| Payments for the purchase of fixed assets | -1.3 | -0.7 |
| Proceeds from the sale of shares in other companies | - | 4.9 |
| Payments for the purchase of shares in other companies | - | - |
| Net cash flow from operating activities | -1.3 | 4.2 |
| Cash flows from financing activities | ||
| Proceeds from the issuance of new short-term liabilities | 31.0 | - |
| Instalment payments of long-term liabilities | -0.2 | -0.4 |
| Instalment payments of short-term liabilities | - | -81.0 |
| Net change in bank overdraft | -5.0 | 25.2 |
| Net proceeds from private placement | 285.6 | - |
| Change investment equity method | 0.2 | - |
| Purchase of remaining 20% stake in Grønn Vekst | - | - |
| Net cash flows from financing activities | 311.6 | -56.1 |
| Net change in cash and cash equivalents | 302.0 | -83.8 |
| Cash and cash equivalents at the start of the period | 46.0 | 125.2 |
| Net change in cash and cash equivalents | 302.0 | -83.8 |
|---|---|---|
| Cash and cash equivalents at the start of the period | 46.0 | 125.2 |
| Cash and cash equivalents at the end of the period | 348.0 | 41.4 |
| Equity Q1 2021 | Share capital |
Own shares |
Share premium |
Other Equity |
Minority interests |
Total |
|---|---|---|---|---|---|---|
| Equity at 31 December 2020 | 2.8 | 0.0 | 17.9 | 116.5 | 1.2 | 138.4 |
| Profit first-quarter 2021 | -1.8 | -0.7 | -2.5 | |||
| Share capital increase | 0.4 | 288.9 | 289.3 | |||
| Currency effects | 0.3 | 0.0 | 0.4 | |||
| Equity at 31 March 2021 | 3.2 | 0.0 | 306.8 | 115.0 | 0.5 | 425.5 |
Unaudited, in NOK million
Cambi ASA is a limited liability company with headquarters located in Asker, Norway. The consolidated interim financial statements comprise Cambi ASA and its subsidiaries.
Cambi's interim financial statements are prepared following the Norwegian Accounting Act and generally accepted accounting principles in Norway ("NGAAP"). The condensed interim statements' accounting policies are consistent with the ones used to prepare the consolidated financial statements included in Cambi's annual report for 2020. They should be read in conjunction with the annual report for 2020. They do not include all the information required for a complete set of financial statements. However, selected explanatory notes are included to describe events and transactions significant to understanding the changes in financial position and performance since the last annual financial statements.
The preparation of the consolidated interim financial statements according to NGAAP requires management to make judgments, estimates and assumptions for each reporting period. The main judgements, estimates and assumptions are described in the annual consolidated financial statements for 2020. Actual results may differ from these estimates. Management's significant judgements in preparing this interim financial report were made applying the same accounting policies and principles as those described in the 2020 annual report.
| Unaudited, in NOK million | Cambi Group | Cambi Invest | ||
|---|---|---|---|---|
| Q1 2021 |
Q1 2020 |
Q1 2021 |
Q1 2020 |
|
| Operating income | 90.3 | 57.0 | 18.0 | 19.2 |
| Costs of goods sold | 41.9 | 16.6 | 11.8 | 11.2 |
| Payroll expenses | 29.0 | 25.5 | 4.6 | 4.6 |
| Depreciation & amoritsation expenses | 1.7 | 1.4 | 0.6 | 0.3 |
| Other operating expenses | 13.8 | 12.3 | 3.5 | 2.4 |
| Operating expenses | 86.3 | 55.7 | 20.5 | 18.5 |
| Operating profit | 4.0 | 1.3 | -2.6 | 0.8 |
| Net financial items | -3.4 | -13.9 | -0.3 | -0.7 |
| Profit (loss) before tax | 0.5 | -12.7 | -2.8 | 0.1 |
| EBITDA | 5.7 | 2.6 | -2.0 | 1.1 |
| Non-recurring items | 1.8 | - | - | - |
| EBITDA before non-recurring items | 7.5 | 2.6 | -2.0 | 1.1 |
Revenues from construction contracts are recognised on the percentage-of-completion method, measured by the percentage of costs incurred to date in relation to estimated total costs for each contract. The group has 13 ongoing construction projects at the end of the first-quarter 2021, and had 9 projects at the end of 2020. As of end of the firstquarter 2021, the accumulated contribution from ongoing projects was NOK 110.8 million, which has been recognised through profit and loss from the commencement of the projects.
Total share capital following the NOK 302.4 million private placement in the first-quarter 2021 is 3,201,474 divided into 160,073,700 shares with a face value of NOK 0.02. There was a share split 1:50 of existing shares and 21,000,000 new shares were issued and sold at NOK 14.40. The private placement transaction costs of NOK 13.1 million were offset giving an equity increase of NOK 289.3 million.
Unaudited, in NOK million
| Q1 2021 |
Q1 2020 |
|
|---|---|---|
| Earned, not invoiced project revenue (in BS) | 84.7 | 62.2 |
| Accrued project cost, provision and guarantees | 46.3 | 14.1 |
| Accumulated recorded revenue for ongoing projects | 206.6 | 272.9 |
| Accumulated cost related to recorded revenue | 95.8 | 103.5 |
| Net accumulated contribution from ongoing projects | 110.8 | 169.3 |
The Cambi Group segment comprises the sale of thermal hydrolysis process (THP) plants and ancillary equipment, together with related services, including plant upgrades, spare parts, site support, and consultancy.
The Cambi Invest segment aims to create investment opportunities connected to the THP technology, both in companies (e.g., portfolio company Grønn Vekst) and DBO projects (Design, Build and Operate).
Grønn Vekst recycles organic resources, i.e., sewage sludge, garden waste, and stonemeal from municipalities and industry. It produces high-quality soil products based on compost as substitutes for peat-based soils. Grønn Vekst is Norway's largest soil producer and leading sewage sludge recycling company.
DBO projects are investment opportunities, where Cambi (with partners) owns and operates sludge treatment lines powered by Cambi's thermal hydrolysis process. All projects in this area are currently in development stages, and Cambi is committed to investing and closing new DBO contracts.
Cambi ASA Skysstasjon 11A, Asker, Norway
Postal Address PO Box 78, 1371 Asker, Norway
This Report is strictly confidential and may not be reproduced or distributed, in whole or in part, to any other person. This Report is for information purposes only, and it is expressly noted that no representation or warranty, expressed or implied, as to the accuracy or completeness of any information included herein is given by CAMBI ASA and that no information, including projections, estimates, targets and opinions, contained in this Report is or can be relied upon as a promise or representation by CAMBI ASA.
This Report contains information obtained from third parties. Such information has been accurately reproduced and, as far as CAMBI ASA is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to be inaccurate or misleading. While all steps have been taken to ensure the accuracy of this Report, CAMBI ASA does not accept any responsibility for any errors or resulting loss or damage whatsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Enquiries about reproduction of content from this publication should be directed to CAMBI ASA.
This Report contains forward-looking statements that relate to the current plans, objectives, forecasts and estimates of CAMBI ASA. These statements only take into account information that was available up to and including the date that this Report was prepared. CAMBI ASA makes no guarantee that these forwardlooking statements will prove to be right. The future development of CAMBI ASA and its subsidiaries and the results that are actually achieved are subject to a variety of risks and uncertainties which could cause actual events or results to differ significantly from those reflected in the forward-looking statements. Many of these factors are beyond the control of CAMBI ASA and its subsidiaries and therefore cannot be precisely predicted.
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