Earnings Release • Feb 7, 2023
Earnings Release
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| Q4 | Full year | |||||
|---|---|---|---|---|---|---|
| Amount in USD million | 2022 | 2021 | Change | 2022 | 2021 | Change |
| Revenue | 191.4 | 171.2 | 11.8% | 776.7 | 610.5 | 27.2% |
| Gross profit | 100.9 | 100.8 | 0.1% | 436.8 | 326.6 | 33.7% |
| Gross margin % | 52.7% | 58.9% | -6.2 p.p. | 56.2% | 53.5% | 2.7 p.p. |
| EBITDA | 38.9 | 42.3 | -8.2% | 205.7 | 124.7 | 64.9% |
| EBITDA % | 20.3% | 24.7% | -4.4 p.p. | 26.5% | 20.4% | 6.1 p.p. |
| Operating profit (EBIT) | 27.0 | 32.2 | -16.2% | 161.6 | 86.9 | 85.9% |
| Operating profit % (EBIT) | 14.1% | 18.8% | -4.7 p.p. | 20.8% | 14.2% | 6.6 p.p. |
| Net profit after tax | 31.4 | 26.8 | 17.1% | 122.3 | 71.2 | 71.9% |
| Cash and cash equivalents | 379.1 | 279.3 | 35.7% | |||
| Order backlog | 838.8 | 1 686.7 | -50.3% | |||
| LTM Opex excluding depreciation / LTM revenue |
29.8% | 33.1% | -3.3 p.p. | |||
| Net working capital / LTM revenue | 21.6% | 17.8% | 3.8 p.p. | |||
| Equity ratio | 75.2% | 76.8% | -1.6 p.p. | |||
| Number of employees | 1 452 | 1 197 | 21.3% |
Revenue was USD 191.4 million in the fourth quarter 2022 and USD 776.7 million for the full year, corresponding to year-on-year growth of 12% and 27%, respectively. Bluetooth revenue increased by 26% year-on-year in the fourth quarter and 33% for the full year, despite that delivery capacity remained capped by limited supply of wafers throughout the year. Demand for proprietary products has declined, with more than a halving of proprietary revenue in the fourth quarter, generating a 10% decline in proprietary revenue for the full year. Cellular IoT market continued to be challenging resulting in a revenue decline of 14% in the fourth quarter, although cellular IoT reported revenue increase of 49% for the full year.
The value chains in the semiconductor market were under pressure also in 2022, with persistent Covid-19 challenges in China, the conflict in the Ukraine, and inflationary cost pressures.
Nordic Semiconductor and its suppliers and distributors overall remained fully operational, although Nordic continues to be affected by a wafer shortage that limits delivery capabilities for the company's Bluetooth Low Energy products.
As described in the third quarter report, Bluetooth Low Energy revenue in the fourth quarter depended on the amount and timing of wafer deliveries during the quarter. As it turned out, wafer deliveries came in slightly below the previous quarter. Combined with lower sales of proprietary products and cellular IoT this generated a 5% revenue decline from the third quarter.
Revenue increased 12% year-on-year in the quarter, and by 27% for the full year 2022. These top line figures hide significant changes in the revenue composition over the course of the year, in terms of both product technologies, customers, and geographies.
Bluetooth revenue increased by 12% in the quarter and 33% for the full year, and accounted for 86% of total revenue for the year. The increases reflected a combination of price increases and somewhat higher volumes.
Proprietary product revenue declined by 56% in the quarter and by 10% for the full year, and accounted for 10% of total revenue for the year. The declines mainly reflect lower demand for PC accessories and other home office equipment after a boost during Covid, technology migration to more modern standards like Bluetooth Low Energy.
Cellular IoT revenue declined by 14% in the fourth quarter although it increased by 49% for the full year, and accounted for 3% of total revenue for the full year. The slowdown towards the end of the year reflects more cautious customer investments and down-scaling or postponements of both existing and potential new projects. Nordic believes the slowdown in this market is temporary, given the amount of pre-commercial cellular IoT projects with high volume potential.
In terms of customers, Nordic saw significantly increased sales to its largest tier-1 customers through 2022. The company prioritized deliveries to these customers under the persisting wafer supply constraints, and this has partly been at the expense of small and medium sized customers. The top-10 customers accounted for 44% of Bluetooth revenue in 2022, up from 40% in 2021, with the revenue share increasing above 50% in the fourth quarter. Within the tier-1 customer base, the company has seen varying demand across verticals with relatively lower demand within PC accessories.
Nordic has also seen a significant shift in geographical terms, with strong growth in the US and Europe and an accelerating decline in sales in China through 2022. Revenue from domestic Chinese customers declined by 65% year-on-year in the fourth quarter, and by 30% for the full year, with the steepest decline for proprietary products and first generation Bluetooth products. Domestic Chinese customers accounted for more than 20% of revenue in 2021, but less than 10% towards the end of 2022.
The pace and potency of a potential market rebound in China is one of the key question marks with regards to product demand in the medium term.
The order backlog declined to USD 839 million from more than USD 1.1 billion at the end of the third quarter, reflecting both weaker demand and changes in order lead times. As described above, the company has seen a sharp decline in demand for proprietary products, and generally weaker demand in China also led to more order cancellations in the broad market towards the end of the year.
As described in the previous quarterly reports throughout 2022, the order backlog has reflected a significant supply and demand imbalance. This has implied that the order backlog development has not been a good revenue or demand indicator, and Nordic has been working with customers to better align the order backlog with actual delivery capacity.
Continuing this work through the fourth quarter, Nordic has encouraged its tier-1 customers to return to normal purchasing patterns of placing orders only for next two quarters. This reduction in lead-time has also contributed to the reduction of the backlog.
The wafer delivery capacity on the node technology required for Nordic's leading Bluetooth Low Energy products was constrained throughout 2022 and looks set to limit Nordic's output also for the first quarter 2023.
Nordic Semiconductor is committed to providing customers with leading technology at competitive cost, high quality, and reliable supply. The company seeks to balance these factors with a healthy mix of suppliers and technologies, formalized in a supply resilience and diversification program.
Semiconductor industry dynamics have changed drastically over the past few years, and manufacturing capacity and supplier diversification have emerged as increasingly critical elements in a semiconductor company's overall value proposition.
Nordic has taken decisive steps on multiple fronts to enhance its supply resilience in this market, from designing for multi-source capabilities to commercial and contractual initiatives. The company has entered into strategic manufacturing agreements with certain suppliers to enable capacity expansions in line with the company's growth ambitions. In combination, these initiatives are expected to strengthen the company's supply situation with effect from 2024 onwards.
Nordic had a market share of 38% of new design certifications in the Bluetooth Low Energy (Bluetooth LE) market in the fourth quarter 2022 and 39% for the full year 2022, according to FCC and Bluetooth SIG data compiled by DNB Markets.The full year numbers are
down 4 p.p. from 43% in 2021. This reduction comes as a result of the supply constrained market in which Nordic has focused its efforts at higher volume applications.
The total number of new Bluetooth LE design certifications was 303 in the fourth quarter, of which 116 had Nordic inside. For the full year, certifications were issued to 1,136 designs, of which 446 had Nordic inside.
Nordic customers launched a wide variety of new products powered by the company's Bluetooth Low Energy products also in the fourth quarter. New product launches included a professional podcast broadcasting system, a signature verification module for the Shanghai Metro, gateways and IoT data logging solutions, temperature monitoring for food service operations, livestock tracking and monitoring, a smart watch, a bike computer, other connected sports equipment, and toys such as a new Harry Potter smart wand.
Customers also launched new products combining Bluetooth Low Energy and cellular IoT, with new smart power plugs/sockets for energy metering and management, and a smartwatch with sensors and connectivity enabling remote healthcare.
During the fourth quarter, Nordic introduced full feature support for Matter 1.0 in its nRF Connect SDK, Nordic's scalable and unified development tool for building products based on its nRF52 and nRF53 Series Bluetooth Low Energy Systems-on-Chip (SoCs), the nRF9160 System-in-Package (SiP), and the nRF7002 Wi-Fi 6 Companion IC. Matter is emerging as an industry-changing standard for smart home device interoperability, and the Connectivity Standard Alliance's has now formally adopted the Matter specification version 1.0. Nordic joined the Board of Connectivity Standards Alliance as a Promoter Member last year.
Nordic continues to receive recognition for its innovative products, most recently for the Nordic Thingy:53 multi-protocol prototyping platform. Built around the flagship nRF5340 SoC, the Thingy:53 supports multiple protocols such as Bluetooth mesh, Thread and Zigbee, and includes a broad range of sensors for temperature, humidity, acceleration, position, light, etc.
In October 2022, the Thingy:53 was named the 'Best IoT Innovation of the Year' in the Electronics Maker Best Awards in India, and in December the product won the 'RF/Wireless/Microwave' category of the 2022 World Electronics Achievement Award in China.
Into the new year, Nordic's enhanced Power Profiler Kit II won its category in both the 2022 EE Awards Asia and the 2lic Electronic Network Top10 Power Awards in China.
Nordic is working to open the broad market for cellular IoT solutions with a scalable and flexible model combining leading-edge ultra-low power hardware, open-source software, strong technical support through DevZone and distributors, an expanding Nordic Partner Program, and global carrier certifications.
Nordic's end-customers have been working on cellular IoT projects across a wide variety of verticals, including smart cities, logistics and asset tracking, industrial and agricultural monitoring systems, metering, parking, and payment systems, etc. New product launches with Nordic's nRF9160 SiP in the fourth quarter included a wildlife tracking system, a microclimate sensor solution for remote crop monitoring of vineyards, a ski school management solution that tracks skier locations, and a waste-management solution measuring fill levels and scheduling collections.
As described in the interim report for the third quarter, the tougher economic climate has increased the risks related to demand forecasts, project timing and customer financing of many cellular IoT projects, especially from smaller companies. This has had an adverse effect on both current and near-term delivery volumes and revenues for Nordic's cellular IoT business.
Right at the beginning of 2023, Nordic announced the launch of a third product in its portfolio of power management ICs, the nPM1300 PMIC. Nordic entered the PMIC market because existing power management solutions were not optimized for compact, ultra-low power IoT applications. The nPM1300 integrates essential functions required for Bluetooth Low Energy embedded designs and is optimized for the efficiency and compact size requirements of advanced IoT. The new product will follow the nPM1100 launched in 2021 and the nPM6001 launched in the third quarter 2022, and is scheduled for launch mid-2023.
Nordic is now shipping its new nRF7002 Wi-Fi 6 companion IC, marking Nordic's entry into the Wi-Fi wireless IoT market. The nRF7002 is designed to provide seamless Wi-Fi connectivity and Wi-Fi based locationing as a 'companion IC' to Nordic's existing Bluetooth and cellular IoT products.
This makes Nordic one of few companies globally to offer all of the the world's three most popular wireless IoT technologies - Bluetooth, Wi-Fi, and cellular IoT.
Nordic has been a key contributor to the development of the DECT NR+ standard since the initial specification was published in July 2020, and in the fourth quarter, Nordic became a full member of the DECT (Digital Enhanced Cordless Telecommunications) Forum. The forum is responsible for driving the adoption of the new DECT New Radio plus (NR+) standard, which will be the world's first non-cellular 5G wireless standard.
The standard is being designed to support massive IoT at densities of a million devices per square kilometer and will enable enterprise IoT and public customers to build their own scalable, low-cost massive IoT networks. Typical use cases include asset tracking, smart city, and smart energy projects.
Nordic communicated in July 2022 that the company is investing to expand our scope and opportunity pipeline, with new technologies, new products, and new business models. As part of this process, Nordic in early July 2022 announced an agreement to acquire Mobile Semiconductor to expand into memory technology. Regulatory approval has taken longer than initially expected, and closing of the transaction is now expected in the first quarter 2023.
In December, Nordic was one of 283 reporting companies that was awarded an "A"-rating for its environmental reporting by CDP. The ranking included more than 15,000 companies. CDP is a global non-profit organization running the global disclosure system for both investors, companies, and public institutions. CDP's ranking is recognized as a leading global benchmark in climate and environment.
Earlier in 2022, Nordic was assigned an 'A' rating in Position Green's annual "ESG 100" report, reflecting that Position Green found Nordic's 2021 ESG reporting to be in line with best practice and standards.
| Q4 | Full year | |||||
|---|---|---|---|---|---|---|
| Amounts in USD thousand | 2022 | 2021 | Change | 2022 | 2021 | Change |
| Bluetooth | 171 935 | 135 996 | 26.4% | 669 112 | 503 147 | 33.0% |
| Proprietary wireless | 12 057 | 27 152 | -55.6% | 75 700 | 83 862 | -9.7% |
| Short range wireless components | 183 992 | 163 148 | 12.8% | 744 813 | 587 009 | 26.9% |
| Cellular IoT | 5 044 | 5 886 | -14.3% | 25 365 | 17 035 | 48.9% |
| ASIC components | 1 857 | 2 180 | -14.8% | 4 607 | 6 083 | -24.3% |
| Consulting services | 0 | 0 | —% | 0 | 400 | -100.0% |
| Other | 482 | 0 | —% | 1 951 | 0 | —% |
| Total revenue | 191 374 | 171 214 | 11.8% | 776 734 | 610 528 | 27.2% |
Nordic reported total revenue of USD 191.4 million in the fourth quarter 2022, which was an increase of 12% from USD 171.2 million in the fourth quarter 2021. Revenue was 5% lower than the previous quarter. The growth compared to last year mainly reflects higher prices and higher supply of wafers on Bluetooth, offset by reduced Proprietary revenue.
Nordic classifies its revenues into the following technologies: Short-range wireless components, long range (cellular IoT) wireless components, ASIC components, Consulting services and other. Other revenues include PMIC sales and development tool sales. Short-range wireless components are in turn split between Bluetooth and Proprietary solutions.
Bluetooth revenue amounted to USD 171.9 million in the fourth quarter 2022, an increase of 26% from USD 136.0 million in the fourth quarter 2021. The revenue increase mainly reflected higher supply of wafers and higher prices. Bluetooth share of total revenue was 90% in Q4 2022, highest number recorded.
Proprietary revenue was USD 12.1 million in Q4 2022, which was a decrease of 56% year-on-year and down 6% from the previous quarter. The decline mainly reflect lower demand for PC accessories and other home office equipment after a boost during Covid and technology migration to more modern standards like Bluetooth Low Energy.
Cellular IoT reported revenue of USD 5.0 million in Q4 2022, which was a decrease of 14% from Q4 2021 and 41% lower than the previous quarter.
ASIC component revenues amounted to USD 1.9 million in Q4 2022, compared with USD 2.2 million in Q4 2021 and USD 0.7 million in the previous quarter.
For the full year of 2022, revenue amounted to USD 776.7 million, an increase of 27% from USD 610.5 million in the full year of 2021. Bluetooth revenue increased by 33% to USD 669.1 million, whereas proprietary wireless revenue decreased by 10% to USD 75.7 million. Cellular IoT revenues increased by 49% in the full year of the year, to USD 25.4 million.
| Q4 | Full year | |||||
|---|---|---|---|---|---|---|
| Revenues by end-product markets Amounts in USD thousand |
2022 | 2021 | Change | 2022 | 2021 | Change |
| Consumer | 108 906 | 114 995 | -5.3% | 483 799 | 408 156 | 18.5% |
| Industrial | 51 739 | 38 500 | 34.4% | 191 543 | 141 936 | 34.9% |
| Healthcare | 22 303 | 10 217 | 118.3% | 67 623 | 35 575 | 90.1% |
| Other | 6 569 | 5 321 | 23.5% | 29 163 | 18 376 | 58.7% |
| Total revenue excl. ASIC & Consulting | 189 517 | 169 034 | 12.1% | 772 128 | 604 044 | 27.8% |
As described in the interim report for the fourth quarter 2021, Nordic has changed the end-market reporting structure to better mirror the internal sales and reporting structures and the underlying verticals. The new classification now also includes cellular IoT revenues.
The company reports on four end-user markets: Consumer, Industrial, Healthcare, and Others.
Note that the revenue developments across these verticals reflect customer allocations from Nordic as well the as underlying demand.
Consumer hence accounted for 57% of revenue, having decreased by 5% year-on-year to USD 108.9 million in Q4 2022. The main reason for the decline is reduced revenue for PC accessories for home offices and gaming as well as a weak overall Chinese market. For the full year of 2022, Consumer revenue increased by 19% to USD 483.8 million.
Industrial accounted for 27% of revenues, having grown by 34% year-on-year to USD 51.7 million. The main drivers have been industrial automation, utility sensors, asset tracking solutions and retail solutions. Especially the market in Europe is strong. For the full year of 2022, Industrial revenue increased by 35% to USD 191.5 million.
Revenue in the professional Healthcare vertical increased 118% year-on-year to USD 22.3 million, whereas Other revenue increased 23% to USD 6.6 million. For the full year of 2022, Healthcare increased by 90% to USD 67.6 million and Other increased by 59% to USD 29.2 million.
| Q4 | Full year | |||||
|---|---|---|---|---|---|---|
| Amounts in USD thousand | 2022 | 2021 | Change | 2022 | 2021 | Change |
| Gross profit | 100 893 | 100 831 | 0.1% | 436 793 | 326 640 | 33.7% |
| Gross margin | 52.7% | 58.9% | -6.2% | 56.2% | 53.5% | 2.7% |
| Operating expenses excl. depreciation and amortization |
62 021 | 58 481 | 6.1% | 231 125 | 201 922 | 14.5% |
| EBITDA | 38 872 | 42 349 | -8.2% | 205 668 | 124 718 | 64.9% |
| EBITDA % | 20.3% | 24.7% | -4.4% | 26.5% | 20.4% | 6.1% |
| Depreciation and amortization | 11 852 | 10 118 | 17.1% | 44 067 | 37 798 | 16.6% |
| EBIT | 27 020 | 32 232 | -16.2% | 161 602 | 86 920 | 85.9% |
Gross profit was USD 100.9 million in Q4 2022, unchanged from Q4 2021, with the gross margin decreasing to 52.7% from 58.9% in the same quarter last year and 57.3% in the previous quarter.
Gross margins in Q4 2021 were positively impacted by a price increase that was initiated in Q4 2021 with no corresponding supply price increase in that quarter. The lower gross margin level compared to the previous quarter mainly reflect changes in customer composition with high deliveries to large tier-1 customers.
The sequential decline reflect changes in the customer mix with higher sales to tier-1 customers and extraordinary scrapping of cellular IoT materials. Scrapping of materials was USD 3 million and impacted the gross margin by 1.6% this quarter.
For the full year of 2022, gross profit increased by 34% to USD 436.8 million, with the gross margin increasing to 56.2% from 53.5% in 2021.
Operating expenses amounted to USD 62.0 million in Q4 2022, excluding depreciation and amortization, an increase of 6% compared to USD 58.5 million in Q4 2021. The increase primarily reflects a higher activity level and a 21% growth in the workforce to 1 452 employees over the past year, partly offset by currency effects. Due to the strengthening of USD compared to other relevant currencies for Nordic including NOK and EUR, Nordic had a positive currency impact on payroll of around USD 6 million compared to Q4 2021. Adjusted for the currency effect, total operating expenses are up 15%.
R&D costs amounted to USD 45.2 million, compared to USD 39.9 million in Q4 2021. USD 27.3 million related to the short-range business, USD 13.5 million to cellular R&D and USD 4.4 million to Wi-Fi.
Nordic capitalized a total of USD 1.0 million in development expenses in Q4 2022, compared to USD 0.6 million in Q4 2021.
USD 0.4 million of this related to Wi-Fi investments, USD 0.2 million to long-range, and USD 0.4 million to the short-range business. Expenses related to equity compensation were USD 1.4 million in Q4 2022.
Total cash operating expenses amounted to USD 61.6 million in Q4 2022, when adding back capitalized development expenses and deducting depreciation and equity-based compensation from total operating expenses. This compares to USD 56.5 million in Q4 2021.
USD 42.2 million of the cash operating expenses were related to payroll expenses, compared to USD 41.3 million in Q4 2021. The company continues to invest and add new employees to support its growth ambitions. The number of employees in R&D has increased 19% over the past year to 1,086 people. The Sales & Marketing staff increased 22% to 134, whereas the supply chain organization increased 22% to 88 employees.
Other cash operating expenses were USD 19.4 million in Q4 2022, compared to USD 15.2 million in Q4 2021. The increase of 28% is explained by higher activity level, with more tape-outs, higher consulting fees and increased travel expenses.
For the full year of 2022, operating expenses amounted to USD 231.1 million, excluding depreciation and amortization, up from USD 201.9 million in the full year of 2021. Cash operating expenses increased to USD 229.8 million from USD 199.9 million in the full year of 2021.
EBITDA declined to USD 38.9 million in Q4 2022 from USD 42.3 million in Q4 2021, reflecting stable gross profits and higher operating expenses. Hence the reported EBITDA margin decreased to 20.3% from 24.7% in the same quarter last year.
Short-Range EBITDA was USD 55.3 million in Q4 2022, and the EBITDA margin for the short-range business 29.7%. This compares to USD 56.9 million and 34.4% in Q4 2021. These figures exclude the cellular IoT business and the Wi-Fi business.
For the full year of 2022, EBITDA was USD 205.7 million, compared to USD 124.7 million in the same period last year. The reported EBITDA margin increased to 26.5% from 20.4% in the full year of 2021.
Depreciation and amortization increased to USD 11.9 million in Q4 2022, compared to USD 10.1 million in Q4 2021. The increase mainly reflects higher amortization of cellular IoT and Wi-Fi intangibles. Amortization of internally developed R&D overall amounted to USD 2.6 million and amortization of leased assets to USD 2.1 million.
Operating profit (EBIT) was USD 27.0 million in Q4 2022, down from USD 32.2 million in Q4 2021. For the full year of 2022, EBIT increased to USD 161.6 million from USD 86.9 million in 2021.
Net financial loss was USD 2.2 million in Q4 2022, compared to a net financial income of USD 0.3 million in Q4 2021.
Profit before tax was USD 24.8 million in Q4 2022, compared to a profit before tax of USD 32.5 million in Q4 2021. Due to reversals of previously recorded FX gains in the underlying NOK taxable income and changes in tax treatment of equity compensation, a tax income of USD 6.7 million was recognized in the quarter, compared to tax expense of USD 5.7 million in Q4 2021. Net profit was hence USD 31.4 million in Q4 2022, compared to a net profit of USD 26.8 million in Q4 2021.
For the full year of 2022, profit before tax was USD 167.2 million and tax expense was USD 44.8 million or 27%. The company's statutory tax rate is 22%. The company presents its accounts in USD, with profits translated into NOK for taxation purposes. Net profit was USD 122.3 million. This compares to USD 87.3 million and USD 71.2 million, respectively, in the full year of last year.
| Amounts in USD thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Capitalized development expenses | 26 608 | 31 542 |
| Total non-current assets | 102 120 | 108 844 |
| Inventory | 102 091 | 54 943 |
| Cash and cash equivalents | 379 104 | 279 331 |
| Total current assets | 674 121 | 487 973 |
| Total assets | 776 241 | 596 817 |
| Total equity | 583 544 | 458 209 |
| Equity percentage | 75.2% | 76.8% |
| Total liabilities | 192 697 | 138 608 |
| Total equity and liability | 776 241 | 596 817 |
Total shareholders' equity amounted to USD 583.5 million at the end of Q4 2022, up from USD 458.2 million at the end of 2021.
The Group equity ratio was 75.2% of a total asset base of USD 776.2 million.
Cash and cash equivalents amounted to USD 379.1 million, compared to USD 279.3 million at the end of Q4 2021.
Net working capital increased to USD 167.6 million at the end of Q4 2022, up from USD 108.4 million at the end Q4 2021. Measured as a percentage of last 12 months revenue, net working capital increased to 21.6% from 17.8% at the end of Q4 2021. The increase is mainly driven by higher accounts receivables and inventory.
The changes in net working capital mainly reflect an increase in accounts receivable to USD 175.1 million from USD 141.7 million at the end of Q4 2021. This increase comes as a result of higher revenue. Inventory increased to USD 102.1 million from USD 54.9 million, mainly reflecting higher inventory of proprietary and legacy products and cellular IoT products. Inventory levels for Bluetooth products remain low.
Total current assets amounted to USD 674.1 million at the end of Q4 2022, up from USD 488.0 million at the end of the Q4 2021.
Non-current assets amounted to USD 102.1 million at the end of Q4 2022, compared to USD 108.8 million at the end of Q4 2021.
Current liabilities amounted to USD 177.2 million, compared to USD 123.7 million at the end of Q4 2021. The increase reflects timing of compensation plan settlements, increased taxes payable and public duties, as well as a moderate increase in accounts payable.
Non-current liabilities amounted to USD 15.5 million, compared to USD 14.9 million at the end of Q4 2021. Non-current liabilities mainly consist of lease liabilities. Nordic had no interest-bearing debt at the end of Q4 2022.
| Q4 | Full year | |||
|---|---|---|---|---|
| Amounts in USD thousand | 2022 | 2021 | 2022 | 2021 |
| Cash flows from operations | 36 137 | 42 474 | 142 711 | 95 818 |
| Cash flows from investing activities | -9 372 | -6 629 | -30 553 | -30 694 |
| Cash flows from financing activities | -2 057 | -1 697 | -11 336 | -27 250 |
| Change in cash and cash equivalents | 26 303 | 33 330 | 99 774 | 36 784 |
| Cash and cash equivalents at the end of the period | 379 104 | 279 331 | 379 104 | 279 331 |
Cash flow from operating activities was USD 36.1 million in Q4 2022, compared to USD 42.5 million in Q4 2021. The strong operating cash flow is a result of profits generated in the quarter.
Cash flows from investing activities was an outflow of USD 9.4 million in Q4 2022, compared to an outflow of USD 6.6 million in Q4 2021. Capital expenditures -including software- amounted to USD 8.4 million, up from USD 6.0 million in the fourth quarter last year, whereas capitalized development expenses increased to USD 1.0 million from USD 0.6 million in the same period last year.
Capex over the past years has been investments in lab equipment and purchase of test equipment to secure higher capacity when the wafer shortage eases. Higher capex during Q4 was mainly related to investments in IT infrastructure, test equipment and facilities.
Cash flows from financing activities was an outflow of USD 2.1 million relating to payment of lease liabilities. This compares to an outflow of USD 1.7 million in Q4 2021.
For the full year of 2022, cash flow from operating activities amounted to USD 142.7 million compared to USD 95.8 million in 2021, whereas cash outflow for investing activities was USD 30.6 million compared to USD 30.7 million in 2021. Net cash flow from financing activities was an outflow of USD 11.3 million, compared to USD 27.3 million in 2021, which included USD 20.8 million related to cash settlement of options contracts.
The Group's cash position was USD 379.1 million at the end of Q4 2022, compared to USD 279.3 million at the end of 2021. The cash is mainly kept in the Group's functional currency USD to minimize the impact of currency fluctuations.
Available cash including credit and overdraft facilities amounted to USD 529.1 million, including Nordic's right to borrow USD 150 million under sustainability linked RCF.
After the end of the year, the company will make a prepayment of USD 100 million related to ongoing initiatives to strengthen supply resilience and diversification.
As described in the Annual Report for 2021, the company has identified four major groups of risk: Strategic, Operational, Financial and Legal & Compliance. Some of these risks are outside of Nordic's control, including industry and specific cyclical risks. The supply of and demand for semiconductors and electronic products is sensitive to global economic conditions and international trade flows. While the underlying long-term market trends point towards increasing demand for Nordic's products, the operations are exposed to a variety of factors with real or perceived impact on the economy. The current macroeconomic headwinds have accentuated these risk factors.
Please refer to the Annual Report for 2021 for a thorough review of the company's main strategic risks and external factors, including geopolitical risk and trade tensions, the coronavirus, climate change and natural disasters, changes in the competitive landscape, risks related to the Bluetooth and cellular IoT technologies, and risks related to the dependency on key personnel.
The Annual Report also provides a review of operational risks related to product availability, quality, safety, and integrity, risks related to product ramp, and IT and cyber risk.
Nordic is continuing to monitor potential implications of geo-political risks, such as the Russian invasion of Ukraine, the increased tension between China and Taiwan, as well the ongoing efforts by the United States to protect its national security by imposing controls related to China with potential implications for the global supply chain of semiconductors and effects of both legislative and commercial nature. At the time of publication of the quarterly report, there is no indication of significant impact to revenue nor upstream supply.
Nordic's growth is dependent on demand for its customers' end products, primarily within the IoT, consumer, healthcare, and industrial sectors. Industry downturns that adversely affect the Group's customers or their customers could adversely affect demand for the Group's products. Additionally, global or regional economic slowdowns affecting business and consumer confidence generally could cause demand for semiconductor products to decline.
Although restrictions related to Covid-19 have been lifted in most countries, the pandemic continues to affect the availability and transportation logistics for a variety of components and products, particularly for shipments in and out of Chinese ports. Nordic's main suppliers and distributors are fully operational, although local restrictions and lockdowns temporarily have affected and can in the future affect production and shipments in some areas.
Nordic has a capital light business model, operating as a fabless semiconductor company with sales predominantly through third-party distributors, and with R&D and people as both its main resources and its main cost components. Nordic is exposed to third-party suppliers' ability to deliver the wafer volumes required to facilitate the company's sales volumes.
Nordic is in continuous dialog with its suppliers, distributors, and customers about the effects of the capacity constraints, and is doing its utmost both to secure additional wafers and help its customers manage the challenges brought about by the value chain imbalances.
The company has been working to establish additional sources and has entered into contracts that will improve access to material from 2024 onwards.
Nordic's module-based cellular IoT product is dependent on a large number of third-party suppliers, and shortage of one component can impact our ability to deliver.
The company has seen no major changes to the financial risk compared to the statements given in the Annual Report 2021. Nordic maintains a sharp focus on cost and cash flows and navigates from a strong position. Nordic's strategy and growth ambitions require an adequate cash position to fund the R&D activities needed to drive the technology and product roadmaps forward. The Group's cash position was USD 379.1 million at the end of the fourth quarter 2022. The Board of Directors continue to assess the liquidity risk as low.
Nordic holds no interest-bearing debt, and the direct risk associated with interest rate fluctuations is considered low. The company also assesses the credit risk as low.
Nordic is exposed to foreign exchange risk. Revenue and direct production costs are almost entirely nominated in USD. Payroll is predominantly nominated in other currencies than USD, where the largest currencies in Q4 are NOK (more than 50%) and EUR (more than 20%). Other operating expenses are nominated primarily in USD but also a range of other currencies. The company presents its accounts in USD, with profits translated into NOK for taxation purposes.
Nordic Semiconductor delivered 12% year-on-year growth to USD 191 million in the fourth quarter 2022. Revenue for the full year 2022 amounted to USD 777 million, up 27% from 2021.
Looking into 2023, Nordic currently sees lower demand for proprietary products and its first generation Bluetooth products in the nRF51 Series, a near-term slowdown for cellular IoT, and generally weak demand in China. Demand from tier 1 customers that mainly use the more advanced Bluetooth Low Energy products stays strong, although the wafer supply constraints continue to curb production of these products. In combination, these factors indicate a quarterly revenue level of USD 140-160 million in the first quarter 2023.
Nordic sees higher wafer allocations later in the year. This will increase delivery capacity. The first quarter is hence expected to be a low-point in terms of revenue.
Given the slow start to the year, Nordic no longer expect to meet its USD 1 billion revenue ambition already in 2023, although the company expects to reach an annual run-rate of USD 1 billion in the second half of the year.
Nordic maintains a positive longer-term market outlook, and the company's strong financial position enables the company to continue investing in to build a leadership position in a market with significant growth potential. However, these growth ambitions lean on assumptions of economic growth and increasing product demand from both consumers and industrial customers, and the company will adapt its investment plans as deemed necessary to reflect any persistent major changes in economic conditions and/or customer behavior.
Gross margin was 53% in the fourth quarter and 56% for the full year 2022. The company expects a gross margin level above 52% for the first quarter 2023. The company reiterates its long-term ambition to maintain a gross margin level above 50%.
15
Jan Frykhammar Birger Steen Anita Huun Board member Chair Board member
Board member Board member, employee Board member
Oslo, February 6, 2023
Inger Berg Ørstavik Svenn-Tore Larsen Endre Holen Board member Chief Executive Officer Board member
Øyvind Birkenes Jon Helge Nistad Annastiina Hintsa
Anja Dekens Gro Fykse Morten Dammen Board member, employee Board member, employee Board member, employee
| Q4 | Full year | ||||
|---|---|---|---|---|---|
| Amounts USD thousand | Note | 2022 | 2021 | 2022 | 2021 |
| Total revenue | 4 | 191 374 | 171 214 | 776 734 | 610 528 |
| Cost of materials | -90 480 | -70 382 | -339 941 | -283 415 | |
| Direct project costs | — | -2 | — | -472 | |
| Gross profit | 100 893 | 100 831 | 436 793 | 326 640 | |
| Payroll expenses | -42 806 | -43 320 | -161 440 | -149 824 | |
| Other operating expenses | -19 215 | -15 162 | -69 685 | -52 098 | |
| EBITDA | 38 872 | 42 349 | 205 668 | 124 718 | |
| Depreciation and amortization | 6 | -11 852 | -10 118 | -44 067 | -37 798 |
| Operating Profit | 27 020 | 32 232 | 161 602 | 86 920 | |
| Net interest income | 4 050 | 330 | 4 934 | -399 | |
| Net foreign exchange gains (losses) | -6 287 | -44 | 619 | 739 | |
| Profit before tax | 24 783 | 32 518 | 167 155 | 87 260 | |
| Income tax expense | 6 652 | -5 682 | -44 817 | -16 097 | |
| Net profit after tax | 31 435 | 26 837 | 122 339 | 71 163 | |
| Earnings per share | |||||
| Ordinary earning per share (USD) | 0.164 | 0.141 | 0.639 | 0.373 | |
| Fully diluted earning per share (USD) | 0.163 | 0.139 | 0.635 | 0.369 | |
| Weighted average number of shares | |||||
| Basic | 191 575 | 190 963 | 191 365 | 190 961 | |
| Fully diluted | 192 733 | 192 790 | 192 739 | 193 042 | |
| Net profit after tax | 31 435 | 26 837 | 122 339 | 71 163 | |
| Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |
|||||
| Actuarial gains (losses) on defined benefit plans (before tax) | 74 | -163 | 74 | -163 | |
| Income tax effect | -13 | 36 | -13 | 36 | |
| Other comprehensive income that may be reclassified to profit or loss in subsequent periods: |
|||||
| Currency translation differences | 2 167 | -883 | -593 | -1 186 | |
| Total comprehensive income | 33 663 | 25 826 | 121 807 | 69 850 |
| Amounts USD thousand | Note | 31.12.22 | 31.12.21 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 2 284 | 2 386 | |
| Capitalized development expenses | 5/6 | 26 608 | 31 542 |
| Software and other intangible assets | 5/6 | 11 655 | 15 764 |
| Deferred tax assets | 4 554 | 6 331 | |
| Fixed assets | 6 | 35 603 | 33 885 |
| Right-of-use assets | 6 | 21 416 | 18 935 |
| Total non-current assets | 102 120 | 108 844 | |
| Current assets | |||
| Inventory | 102 091 | 54 943 | |
| Accounts receivable | 175 120 | 141 748 | |
| Current financial assets | 267 | — | |
| Other current receivables | 17 539 | 11 951 | |
| Cash and cash equivalents | 379 104 | 279 331 | |
| Total current assets | 674 121 | 487 973 | |
| Total assets | 776 241 | 596 817 | |
| EQUITY | |||
| Share capital | 317 | 317 | |
| Treasury shares | -2 | -2 | |
| Share premium | 235 448 | 235 448 | |
| Other equity | 347 780 | 222 443 | |
| Total equity | 583 544 | 458 209 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Pension liability | 676 | 580 | |
| Non-current lease liabilities | 14 861 | 14 281 | |
| Total non-current liabilities | 15 537 | 14 861 | |
| Current liabilities | |||
| Accounts payable | 34 229 | 28 392 | |
| Income taxes payable | 43 758 | 17 427 | |
| Public duties | 6 455 | 7 599 | |
| Current lease liabilities | 6 280 | 5 594 | |
| Current financial liabilities | — | 520 | |
| Other current liabilities | 86 439 | 64 215 | |
| Total current liabilities | 177 160 | 123 747 | |
| Total liabilities | 192 697 | 138 608 | |
| Total equity and liability | 776 241 | 596 817 |
| Amount in USD thousand | Share capital |
Treasury shares |
Share premium |
Other paid in capital |
Currency translation reserve |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|---|
| Equity as of 1.1.22 | 317 | -2 | 235 448 | 1 829 | -806 | 221 421 | 458 209 |
| Net profit for the period | 122 339 | 122 339 | |||||
| Other comprehensive income | -593 | 61 | -532 | ||||
| Share based compensation | 7 769 | 7 769 | |||||
| Option exercise | -4 278 | -4 278 | |||||
| RSU and PSU exercise | 1 | -203 | -202 | ||||
| Board compensation (shares) | 0 | 241 | 241 | ||||
| Equity as of 31.12.22 | 317 | -2 | 235 448 | 5 358 | -1 399 | 343 821 | 583 544 |
| Equity as of 1.1.21 | 317 | -2 | 235 448 | 15 980 | 379 | 150 368 | 402 492 |
| Net profit for the period | 71 163 | 71 163 | |||||
| Other comprehensive income | -1 185 | -110 | -1 295 | ||||
| Share based compensation | 6 671 | 6 671 | |||||
| Option exercise | -20 821 | -20 821 | |||||
| Equity as of 31.12.21 | 317 | -2 | 235 448 | 1 829 | -806 | 221 421 | 458 209 |
| Q4 | Full year | ||||
|---|---|---|---|---|---|
| Amount in USD thousand | Note | 2022 | 2021 | 2022 | 2021 |
| Cash flows from operating activities | |||||
| Profit before tax | 24 783 | 32 518 | 167 155 | 87 260 | |
| Taxes paid for the period | -6 566 | -4 075 | -16 760 | -6 332 | |
| Depreciation and amortization | 11 852 | 10 118 | 44 067 | 37 798 | |
| Change in inventories, trade receivables and payables | -13 153 | -11 362 | -74 595 | -41 043 | |
| Share-based compensation | 1 430 | 2 168 | 7 794 | 6 670 | |
| Movement in pensions | 186 | 445 | 104 | 134 | |
| Other operations related adjustments | 17 605 | 12 663 | 14 947 | 11 332 | |
| Net cash flows from operating activities | 36 137 | 42 474 | 142 711 | 95 818 | |
| Cash flows used in investing activities | |||||
| Capital expenditures (including software) | 6 | -8 361 | -6 015 | -24 065 | -25 050 |
| Capitalized development expenses | 6 | -1 010 | -614 | -6 489 | -5 644 |
| Net cash flows used in investing activities | -9 372 | -6 629 | -30 553 | -30 694 | |
| Cash flows from financing activities | |||||
| Cash settlement of options contract | — | — | -4 727 | -20 758 | |
| Repayment of lease liabilities | -2 057 | -1 698 | -6 609 | -6 493 | |
| Net cash flows from financing activities | -2 057 | -1 697 | -11 336 | -27 250 | |
| Effects of exchange rate changes on cash and cash equivalents |
1 594 | -816 | -1 048 | -1 090 | |
| Net change in cash and cash equivalents | 26 303 | 33 330 | 99 774 | 36 784 | |
| Cash and cash equivalents beginning of period | 352 801 | 246 001 | 279 331 | 242 547 | |
| Cash and cash equivalents at end of period | 379 104 | 279 331 | 379 104 | 279 331 |
The Board of Directors approved the condensed fourth quarter interim financial statements for the three months ended December 31, 2022 for publication on February 6, 2023.
Nordic Semiconductor is a Norwegian fabless semiconductor company specializing in wireless communication technology that powers the Internet of Things (IoT). Nordic was established in 1983 and has more than 1,400 employees across the globe. The company's award-winning Bluetooth Low Energy solutions pioneered ultra-low power wireless, making it the global market leader. Nordic's technology range was later supplemented by ANT+, Thread and Zigbee, and in 2018 Nordic launched its low power, compact LTE-M/ NB-IoT cellular IoT solutions to extend the penetration of the IoT. The Nordic portfolio was further complemented by Wi-Fi technology in 2021.
Nordic Semiconductor ASA is listed on the Oslo Stock Exchange under the ticker NOD, and is a public limited liability company registered in Norway. The parent company's head office is located at Otto Nielsens veg 12, 7052 Trondheim.
The Group financial statements for Nordic Semiconductor ASA and its wholly owned subsidiaries, together called "The Group" have been prepared in accordance with IAS 34 Interim Financial Statements. The interim financial statements for Q4 2022 do not include all the information required for the full year financial statements and shall be read in conjunction with the Group Annual Accounts for 2021.
The financial statements are presented in thousand USD, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements may not add up to the total of that row or column.
In the interim financial statements for 2022, judgments, estimates and assumptions have been applied that may affect the use of accounting principles, book values of assets and liabilities, revenues and expenses. Actual values may differ from these estimates. The major assumptions applied in the interim financial statements for 2022 and the major sources of uncertainty in the statements are similar to those found in the Financial Statements for 2021.
Significant accounting principles are described in the Group Financial Statement for 2021. The group accounts for 2021 were prepared in accordance with International Financial Reporting Standards (IFRS), relevant interpretations of this, as well as additional Norwegian disclosure requirements described in the Norwegian GAAP and the Norwegian Securities Trading Act.
New standards, amendments to standards, and interpretations have been published, but are not effective at December 31, 2022 and have not been applied in preparing these condensed financial statements. The Group intends to adopt these standards, if applicable, when they become effective.
In accordance with IFRS 8, the Group has only one business segment, which is the design and sale of integrated circuits and related solutions.
The Group classifies its revenues into the following technologies: Short range wireless components, long range (cellular IoT), ASIC components and consulting services. Within Wireless components, the Group reports its revenues based on the markets to which its components communicate. These include: Consumer, Industrial, Healthcare, and Others.
The Group also reports its short range Wireless component revenue by proprietary wireless and Bluetooth protocols.
The Group recognizes intangible assets in the balance sheet if it is likely that the expected future economic benefits attributable to the asset will accrue to the Group and the assets acquisition cost can be measured reliably.
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.
| Note 6: Capitalization, depreciation and amortization | |||||||
|---|---|---|---|---|---|---|---|
| Q4 | Full year | ||||||
| Specification of capital expenditures, balance sheet | 2022 | 2021 | 2022 | 2021 | |||
| Capitalized development expenses (payroll expenses) | 799 | 550 | 4 234 | 4 121 | |||
| Capitalized acquired development expenses | 211 | 65 | 2 255 | 1 524 | |||
| Capital expenditures (including software) | 8 361 | 5 961 | 24 065 | 24 996 | |||
| Right-of-use assets (non-cash) | 6 356 | -2 015 | 8 810 | -100 | |||
| Currency adjustments | 346 | -112 | -243 | -468 | |||
| Total | 16 073 | 4 449 | 39 121 | 30 073 | |||
| Depreciation and amortization | |||||||
| Capitalized development expenses | 2 564 | 2 476 | 11 428 | 8 666 | |||
| Software and other intangible assets | 1 936 | 1 847 | 7 064 | 7 238 | |||
| Fixed assets | 5 269 | 4 263 | 19 247 | 16 018 | |||
| Right-of-use assets | 2 082 | 1 532 | 6 328 | 5 875 | |||
| Total | 11 852 | 10 118 | 44 067 | 37 798 |
The Group has a sustainability linked revolving credit facility, which enables it to borrow up to USD 150 million with an interest rate equal to SOFR + margin. The line of credit expires in June 2025, with option to extend. As of December 31, 2022, the Group had not drawn on the credit facility. The security for the credit line is provided by inventory, receivables and operating equipment.
Equity ratio shall not be lower than 40%.
Nordic has a stock option program for employees and management. Please see the annual report for 2021 for information about the program.
| Full year | ||
|---|---|---|
| 2022 | 2021 | |
| Outstanding options beginning of period | 545 203 | 2 548 589 |
| Granted | — | — |
| Forfeited | 705 | 28 992 |
| Exercised (cash settlement due to cap being reached) | 544 498 | 1 974 394 |
| Expired | — | — |
| Outstanding end of period | — | 545 203 |
With reference to the Annual general meeting held on April 28, 2022, Nordic Semiconductor, on May 6, 2022, granted 517 053 RSUs and performance shares to employees, including management. The shares vest over two and three years. The Annual General Meeting of Nordic Semiconductor ASA approved the issue of up to 550 000 Restricted Stock Units (RSUs) and Performance Shares, equivalent to approximately 0.3% of the company's outstanding share capital.
| Full year | |||
|---|---|---|---|
| 2022 | 2021 | ||
| Outstanding RSUs beginning of period | 1 058 947 | 690 617 | |
| Granted | 486 677 | 423 383 | |
| Forfeited | 50 340 | 55 053 | |
| Released | 492 780 | — | |
| Outstanding end of period | 1 002 504 | 1 058 947 |
| Full year | ||
|---|---|---|
| 2022 | 2021 | |
| Outstanding performance shares beginning of period | 142 990 | 114 020 |
| Granted | 30 376 | 28 970 |
| Forfeited | 7 921 | — |
| Performance adjusted | 55 813 | — |
| Released | 111 626 | — |
| Outstanding end of period | 109 632 | 142 990 |
Nordic is exposed to several risks, including currency risk, interest rate risk, liquidity risk and credit risk. For a detailed description of these risks and how the Group manages these risks, please see the annual report for 2021.
During the first quarter 2023, Nordic will make a prepayment of USD 100 million related to ongoing initiatives to strengthen supply resilience and diversification.
On February 1, 2023, Nordic received regulatory approval for the acquisition of Mobile Semiconductor. Closing of the transaction is expected during first quarter 2023.
No other events have occurred since December 31, 2022 with any significant effect that will impact the evaluation of the submitted accounts.
The financial information is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by EU. Additionally, it is management's intent to provide alternative performance measures (APM) that are regularly reviewed by management to enhance the understanding of the Group's performance.
The Group has identified the following APMs used in reporting (amount in USD million): Gross margin. Gross profit divided by Total revenue. Gross margin is presented as it is the main financial KPI to measure the Group's operational performance.
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Gross profit | 100.9 | 100.8 | 436.8 | 326.6 |
| Total revenue | 191.4 | 171.2 | 776.7 | 610.5 |
| Gross margin | 52.7% | 58.9% | 56.2% | 53.5% |
EBITDA terms are presented as they are commonly used by investors and financial analysts.
■ EBITDA. Earnings before interest, taxes, depreciation and amortization.
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Operating Profit | 27.0 | 32.2 | 161.6 | 86.9 |
| Depreciation and amortization | 11.9 | 10.1 | 44.1 | 37.8 |
| EBITDA | 38.9 | 42.3 | 205.7 | 124.7 |
■ EBITDA margin. EBITDA divided by Total Revenue.
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| EBITDA | 38.9 | 42.3 | 205.7 | 124.7 |
| Total revenue | 191.4 | 171.2 | 776.7 | 610.5 |
| EBITDA margin | 20.3% | 24.7% | 26.5% | 20.4% |
■ Total Operating Expenses. Sum of payroll expenses, other operating expenses, depreciation and amortization.
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Payroll expenses | 42.8 | 43.3 | 161.4 | 149.8 |
| Other operating expenses | 19.2 | 15.2 | 69.7 | 52.1 |
| Depreciation and amortization | 11.9 | 10.1 | 44.1 | 37.8 |
| Total operating expenses | 73.9 | 68.6 | 275.2 | 239.7 |
■ Cash operating Expenses. Total payroll and other operating expenses adjusted for non-cash related items including option expenses, receivable write-off and capitalization of development expenses. Nordic management believes that this measurement best captures the expenses impacting the cash flow of the Group.
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Total operating expenses | 73.9 | 68.6 | 275.2 | 239.7 |
| Depreciation and amortization | -11.9 | -10.1 | -44.1 | -37.8 |
| Option expense | -1.4 | -2.6 | -7.8 | -7.6 |
| Capitalized expenses | 1.0 | 0.6 | 6.5 | 5.6 |
| Cash operating expenses | 61.6 | 56.5 | 229.8 | 200.0 |
| Q4 | Full year | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Reported EBITDA | 38.9 | 42.3 | 205.7 | 124.7 |
| Long range (cellular IoT) EBITDA loss | 12.0 | 10.7 | 41.4 | 38.5 |
| Wi-Fi expense | 4.4 | 3.8 | 15.1 | 12.3 |
| Adjusted EBITDA | 55.3 | 56.9 | 262.2 | 175.6 |
| Total revenue (excluding cellular IoT revenue) | 186.3 | 165.3 | 751.4 | 593.5 |
| Adjusted EBITDA margin | 29.7% | 34.4% | 34.9% | 29.6% |
■ Last twelve months operating expenses excluding depreciation and amortization divided by last twelve months revenue. Nordic's business is seasonal and by dividing last twelve months operating expenses excl. depreciation by last twelve months revenue, management is able to track cost level trends in relation to revenue. As a growth business it is key to keep cost level under control while still growing the business, and this ratio keeps track on that.
| Q4 2022 | Q4 2021 | |
|---|---|---|
| Total operating expenses | 275.2 | 239.7 |
| Depreciation and amortization | -44.1 | -37.8 |
| Operating expenses excluding depreciation and amortization | 231.1 | 201.9 |
| Total revenue LTM | 776.7 | 610.5 |
| LTM opex / LTM revenue | 29.8% | 33.1% |
■ Net working capital divided by last twelve months revenue. Net working capital is a measure of both a company's efficiency and its short-term financial health, and by dividing the measure by last twelve months, seasonal effects are excluded. Nordic management uses this ratio to report on liquidity management to the financial market and internally to track performance.
| Q4 2022 | Q4 2021 | |
|---|---|---|
| Current assets | 674.1 | 488.0 |
| Cash and cash equivalents | -379.1 | -279.3 |
| Current financial assets | -0.3 | — |
| Current liabilities | -177.2 | -123.7 |
| Current financial liabilities | — | 0.5 |
| Current lease liabilities | 6.3 | 5.6 |
| Income taxes payable | 43.8 | 17.4 |
| Net working capital | 167.6 | 108.4 |
| Total revenue LTM | 776.7 | 610.5 |
| NWC / LTM revenue | 21.6% | 17.8% |
Norway | TRONDHEIM
Norway | OSLO Karenlyst Alle 5 0213 Oslo, Norway Phone: +47 22 51 10 50
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