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Orthex Oyj Earnings Release 2021
3330_rns_2022-03-09_3e49282e-4b66-4a69-ac8a-51de33700138.pdf
Earnings Release
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Orthex Corporation
FINANCIAL STATEMENTS RELEASE
January–December 2021
orthex
GROUP
Orthex financial statements release 2021: Strong growth under increasingly challenging conditions
JANUARY–DECEMBER 2021 IN BRIEF
- Invoiced sales increased by 16.3% and totalled EUR 90.6 million (77.9)
- Net sales increased by 16.9% to EUR 88.7 million (75.9)
- Adjusted EBITDA was EUR 14.8 million (17.1)
- EBITA was EUR 9.4 million (12.3) and adjusted EBITA was EUR 11.0 million (12.9)
- Adjusted EBITA margin was 12.4% (17.0)
- Operating profit was EUR 9.3 million (12.3), adjusted operating profit EUR 10.9 million (12.9)
- Items affecting comparability totalled EUR 1.6 million (0.6)
- Net cash flows from operating activities were EUR 9.0 million (12.7)
- Net debt / Adjusted EBITDA was 1.7x (2.3)
- Earnings per share, basic was EUR 0.35 (0.47)
- Equity ratio increased to 35.8% (22.6)
- Orthex was selected as a pioneering company to the Finnish Innovation Fund Sitra’s list of the most interesting companies in circular economy in Finland
- The Board of Directors proposes a capital return of EUR 0.18 per share, totalling EUR 3.2 million. It is proposed that the capital return be paid in two instalments.
OCTOBER–DECEMBER 2021 IN BRIEF
- Invoiced sales increased by 7.1% and totalled EUR 23.5 million (22.0)
- Net sales increased by 6.8% to EUR 23.1 million (21.6)
- Adjusted EBITA was EUR 1.8 million (3.8)
- Adjusted EBITA margin was 7.6% (17.5)
- Operating profit was EUR 1.7 million (3.4)
- Net cash flows from operating activities were EUR 1.8 million (2.6)
- Orthex was granted an ISO 45001 certification, an international standard that specifies requirements for an occupational health and safety management system
Orthex has no Russian or Ukrainian suppliers nor any other business in Russia, so the effect of the Ukrainian crisis is not directly impacting Orthex’s business.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
ALEXANDER ROSENLEW, CEO:
With the first year as a listed company completed, I am very pleased with the strong performance during turbulent conditions and the important strategic steps taken in 2021. I am especially proud of how well our personnel has navigated through the volatile times flavoured by uncertainty and the COVID-19 pandemic. Although the sight is already set on 2022, I am happy to share what we have accomplished together at Orthex in 2021.
Orthex's net sales growth in the fourth quarter was +6.8% compared to the fourth quarter of 2020, contributing to a total net sales growth of 16.9% for the period January–December 2021 and amounting to 88.7 million euros (75.9). Invoiced sales in the Nordic market grew strongly by 13.9% compared to January–December 2020, amounting to 73.0 million euros (64.1). In line with our strategy, invoiced sales outside of the Nordics grew even faster: in the rest of Europe, invoiced sales grew by 33.4% and amounted to 15.1 million euros (11.4). Invoiced sales in the rest of the world were at the same level as last year at 2.4 million euros (2.4). In total, invoiced sales in 2021 amounted to 90.6 million euros (77.9).
When comparing the quarters between the years, it is important to keep in mind that the demand was weakened in the first half of 2020 due to the beginning of the COVID-19 pandemic but had a strong rebound in the second half of 2020. Demand for our products was more stable and predictable in 2021 due to fewer COVID-19 related restrictions or store closures. Sales growth generated by new customers and new product launches is at a good level, even without the opportunity to conduct a normal number of physical, new business driving customer meetings.
The positive sales development is a result of successful commercial strategy implementation, which includes launch of new products, widened distribution, customer collaboration and new customers.
I am happy to see COVID-19 related obstacles gradually being removed and hopefully we can soon meet our customers in person more often. However, we had higher than usual sick-leave absence rates in our factories. High sick-leave absence rates in production or logistics generally result in less smooth activity planning and some inefficiencies.
As anticipated, adjusted EBITA margin decreased in the fourth quarter to 7.6% (17.5), mostly due to high raw material prices. For January–December, the adjusted EBITA margin was 12.4% (17.0). Adjusted
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
EBITA for the last quarter was 1.8 million euros (3.8), taking the January–December adjusted EBITA to 11.0 million euros (12.9).
Raw material prices started to increase sharply towards the end of 2020 and reached their highest levels so far during the last quarter of 2021. The cost of freights and electric power have also risen and continued to rise in the fourth quarter. Our understanding is that raw material availability has been scarce on the market. However, we have been able to source the needed raw material for production. To ensure stable operations, we deliberately increased our inventories of high-runner products and critical raw materials, which is visible in the increased net working capital. Unpredictable and fast increases in raw material prices create a short-term profitability challenge due to the delayed effects of implementing price increases or cost savings. Our long-term target is to deliver an adjusted EBITA margin exceeding 18%, and we are committed to ensuring that our measures are in line with that target.
Sustainability is at the heart of our strategy. At Orthex, we strive to minimise our impact on the environment and the climate, and all our three factories in Finland and Sweden are already ISO 14001 and 9001 -certified for environmental and quality management. In December 2021, we were granted a new ISO 45001 certification. It is an international standard that specifies requirements for an occupational health and safety management system. The goal with an ISO 45001 certification is to enable organisations to provide safe and healthy workplaces by preventing work-related injuries and health issues.
Orthex has been able to ramp up capacity according to plan to secure delivery performance. We have also been able to speed up our capacity increase which has affected our delivery performance positively. The result can also be seen in a quite sharp increase in inventory value during the fourth quarter. The inventory value is affected by the higher raw material prices and by higher stock of our best-selling products in preparation for continued sales growth.
We are committed to implementing our growth strategy with a focus on accelerated international growth and sustainability. We will continue to actively take measures depending on the raw material prices and cost development. Currently, raw material prices, freight cost and energy price are all still on high levels and future development is hard to predict. Orthex has no Russian or Ukrainian suppliers nor any other business in Russia, so the effect of the Ukrainian crisis is not directly impacting Orthex's business. However, there can be negative business impacts from volatility or cost increases due to the crisis.
With many good learnings from 2021, we are thrilled to start our second year as a listed company. I take this opportunity to thank the whole Orthex team, our stakeholders, and investors for an exciting year 2021.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
KEY FIGURES
| EUR million | 10–12/2021 | 10–12/2020 | Change | 1–12/2021 | 1–12/2020 | Change |
|---|---|---|---|---|---|---|
| Invoiced sales | 23.5 | 22.0 | 7.1% | 90.6 | 77.9 | 16.3% |
| Net sales | 23.1 | 21.6 | 6.8% | 88.7 | 75.9 | 16.9% |
| Gross margin | 5.1 | 7.1 | -28.3% | 23.2 | 24.6 | -5.7% |
| Gross margin, % | 22.2% | 33.1% | 26.2% | 32.4% | ||
| EBITDA | 2.7 | 4.4 | -38.7% | 13.2 | 16.5 | -19.6% |
| EBITDA margin, % | 11.7% | 20.3% | 14.9% | 21.7% | ||
| Adjusted EBITDA | 2.8 | 4.7 | -41.7% | 14.8 | 17.1 | -13.0% |
| Adjusted EBITDA margin, % | 11.9% | 21.9% | 16.7% | 22.5% | ||
| EBITA | 1.7 | 3.5 | -50.6% | 9.4 | 12.3 | -24.0% |
| EBITA margin, % | 7.4% | 16.0% | 10.6% | 16.3% | ||
| Adjusted EBITA | 1.8 | 3.8 | -53.3% | 11.0 | 12.9 | -15.0% |
| Adjusted EBITA margin, % | 7.6% | 17.5% | 12.4% | 17.0% | ||
| Operating profit | 1.7 | 3.4 | -51.3% | 9.3 | 12.3 | -24.7% |
| Operating profit margin, % | 7.2% | 15.9% | 10.4% | 16.2% | ||
| Net cash flows from operating activities | 1.8 | 2.6 | -32.9% | 9.0 | 12.7 | -29.3% |
| Net debt / Adjusted EBITDA | 1.7x | 2.3x | 1.7x | 2.3x | ||
| Adjusted return on capital employed (ROCE), % | 5.1% | 12.3% | 33.0% | 40.3% | ||
| Equity ratio, % | 35.8% | 22.6% | 35.8% | 22.6% | ||
| Earnings per share, basic (EUR) | 0.06 | 0.14 | -60.5% | 0.35 | 0.47 | -26.7% |
| FTEs | 302 | 302 | 0.1% | 314 | 285 | 10.2% |
LONG-TERM FINANCIAL TARGETS
As long-term financial targets the company has adopted to an average annual organic Net sales growth to exceed 5 per cent at the Group level and to exceed 10 per cent outside the Nordics (growth in local currencies), adjusted EBITA margin (adjusted for items affecting comparability) to exceed 18 per cent over time and net debt to adjusted EBITDA ratio to stay below 2.5x. Leverage may temporarily exceed the target range (for example, in conjunction with acquisitions).
The company aims to distribute a stable and over time increasing dividend with a pay-out of at least 50 per cent of net profit, in total, on a biannual basis.
Orthex does not publish a short-term outlook.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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MARKET OVERVIEW
Orthex operates in Europe in the home storage, food storage and kitchenware market, which has historically been stable and resilient throughout different economic cycles. The market size was estimated at EUR 8.0 billion in 2019. Household goods are purchased on demand and unit prices are generally low, which means that market downturns have a smaller impact on consumers' purchasing power and demand.
The market for household products in Europe is fragmented. Orthex estimates that it had a leading market position in the Nordic home storage market, with an estimated market share of 20–25 per cent in 2019. Additionally, the company had a strong position in the food storage and kitchenware market. The size of the Nordic home storage market was estimated to be approximately EUR 140 million in 2019.
There were no significant changes in Orthex's market position or competitive situation during the financial years of 2020 and 2021. The management's view is that the fast growth in Europe outside the Nordic market comes from a steadily improving competitive position with presence in new customers and widened distribution in existing customers' shop assortment.
There has typically not been significant seasonal variation in Orthex's sales. However, the uncertain market situation caused by the COVID-19 pandemic may affect the comparability of sales between quarters and financial years. The COVID-19 pandemic affected Orthex's business both positively and negatively during the review period.
As a result of the pandemic, restrictions on movement in some markets had a positive impact on Orthex's sales, as people spent more time at home and focused on, for example, cooking and interior design solutions, including storage solutions. However, in some export markets, restrictions on movement adversely affected the company's sales, as stores selling the company's products were closed for part of 2020 and 2021. Raw material prices fell exceptionally much in the spring of 2020 due to the COVID-19 pandemic, but prices started to rise during the latter part of 2020. During the review period, raw material prices have risen to exceptionally high levels.
Orthex Cultivate plant pots
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
NET SALES AND PROFITABILITY
Net sales and invoiced sales
Invoiced sales by geography:
| EUR million | 10–12/2021 | 10–12/2020 | Change | 1–12/2021 | 1–12/2020 | Change |
|---|---|---|---|---|---|---|
| Nordics | 18.8 | 17.8 | 5.9% | 73.0 | 64.1 | 13.9% |
| Rest of Europe | 4.3 | 3.3 | 28.1% | 15.1 | 11.4 | 33.4% |
| Rest of the world | 0.5 | 0.9 | -48.5% | 2.4 | 2.4 | -0.4% |
| Total | 23.5 | 22.0 | 7.1% | 90.6 | 77.9 | 16.3% |
Invoiced sales by product category:
| EUR million | 10–12/2021 | 10–12/2020 | Change | 1–12/2021 | 1–12/2020 | Change |
|---|---|---|---|---|---|---|
| Storage | 16.6 | 14.8 | 11.9% | 59.4 | 49.4 | 20.4% |
| Kitchen | 5.2 | 5.5 | -4.7% | 20.1 | 19.0 | 5.6% |
| Home & Yard | 1.1 | 1.0 | 3.3% | 5.4 | 5.0 | 7.6% |
| Plant Care | 0.7 | 0.7 | 2.5% | 5.7 | 4.5 | 26.3% |
| Total | 23.5 | 22.0 | 7.1% | 90.6 | 77.9 | 16.3% |
January–December 2021
In January–December, the Group's Net sales increased by 16.9% to EUR 88.7 million (75.9). Invoiced sales amounted to EUR 90.6 million (77.9). The increase of constant currency Net sales was 15.7% compared to January–December 2020. Net sales growth was strong especially in the Storage product category and in export markets.
October–December 2021
In October–December, the Group's Net sales increased by 6.8% to EUR 23.1 million (21.6). Invoiced sales amounted to EUR 23.5 million (22.0). The increase of constant currency Net sales was 6.5% compared to the fourth quarter of 2020.
Development by geography
January–December 2021
Orthex's core market area by geography is the Nordics, where the Group's invoiced sales in January–December 2021 amounted to EUR 73.0 million (64.1). In the Nordic countries, the increase in sales was mainly due to increased sales to existing customers. Invoiced sales in the Nordics totalled 80.6% (82.3) of the Group's total invoiced sales. Invoiced sales in the rest of Europe grew to EUR 15.1 million (11.4). In the rest of the world invoiced sales were at the same level as last year at EUR 2.4 million (2.4). In the export market, the increase in sales was due to increased sales to both new and existing customers.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
Orthex's products are sold in more than 40 countries, and export to non-Nordic countries grew by 1.7 percentage points and accounted for 19.4% (17.7) of the Group's invoiced sales at the end of the period.
October–December 2021
The Group's invoiced sales grew especially in the rest of Europe. In the Nordic countries, growth was 5.9% compared to the fourth quarter of 2020 and 12.0% outside the Nordics. The rest of the world fourth quarter comparison shows a decline in invoiced sales against a record quarter that was driven by the release of cumulated demand due to COVID-19 shop closures in the US market.
Development by product category
January–December 2021
Orthex has four product categories: Storage, Kitchen, Home & Yard and Plant Care. The largest category is Storage with invoiced sales totalling EUR 59.4 million (49.4) during January–December 2021. Products in the Storage category will play a key role in Orthex's expansion in Europe, as Orthex often uses them as flagship products when seeking agreements with new retailers.
Orthex has a strong position in the Nordics in food storage and kitchenware markets. The Group's invoiced sales in the Kitchen category grew to EUR 20.1 million (19.0) which was both due to new customers and increased demand among existing customers.
Invoiced sales in the Home & Yard category increased to EUR 5.4 million (5.0).
Invoiced sales in the Plant Care category grew to EUR 5.7 million (4.5). The increase was mainly due to the increase in the cultivation of green plants, herbs and vegetables in flowerpots made of recycled plastic material.
October–December 2021
Invoiced sales grew in Storage and Plant Care categories during the fourth quarter. In Storage, growth was 11.9% compared to October–December 2020. The sales decline in the Kitchen category in the fourth quarter is explained by availability issues in sourced products and somewhat lower demand of seasonal products.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Profitability
January–December 2021
EBITA was 9.4 million (12.3) during the period and decreased by 24.0%. Adjusted EBITA decreased by 15.0% to EUR 11.0 million (12.9). Adjusted EBITA margin decreased to 12.4% (17.0). Operating profit was EUR 9.3 million (12.3). Items affecting comparability totalled EUR 1.6 million (0.6), of which listing costs affected the operating profit negatively with about EUR 1.5 million (0.6).
Orthex's financial income and expenses during the review period consisted of EUR 1.6 million net expenses (2.4). No interest expenses incurred during the year from convertible loans as the convertible loans were repaid at the end of 2020. Also, the impact of foreign exchange rates on Orthex's internal loan arrangements is smaller compared to last year.
Profit before taxes was EUR 7.7 million (9.9) and profit for the period was EUR 6.0 million (7.7).
October–December 2021
EBITA was EUR 1.7 million (3.5) during the period and decreased by 50.6%. Adjusted EBITA decreased by 53.3% to EUR 1.8 million (3.8). The adjusted EBITA margin decreased to 7.6% (17.5). Operating profit was EUR 1.7 million (3.4).
Raw material prices continued at exceptionally high levels affecting profitability. The cost of freights and electric power have also risen and continued to rise in the fourth quarter.
FINANCIAL POSITION AND CASH FLOW
The balance sheet totalled EUR 88.8 million (75.4) at the end of the review period, of which equity constituted EUR 31.8 million (17.0). The listing carried out during the first quarter of the year had a net effect of EUR 9.3 million on the company's equity.
At the end of the review period the Group's net debt was EUR 25.9 million (38.9). Non-current interest-bearing liabilities were EUR 36.0 million (40.0) and Orthex's total interest-bearing liabilities were EUR 40.2 million (44.1). Interest-bearing liabilities include pension liabilities and lease liabilities.
During the period January–December 2021, the Group's net cash flows from operating activities were EUR 9.0 million (12.7) and cash conversion was 67.7% (81.2). Cash and cash equivalents amounted to EUR 14.3 million (5.3) at the end of the review period.
Net debt/adjusted EBITDA was 1.7x (2.3). Orthex's long-term target is to keep Net debt/adj. EBITDA below 2.5x.
At the end of the review period the Group's Equity ratio was 35.8% (22.6). Adjusted return on capital employed (ROCE) was 33.0% (40.3) and Return on equity (ROE) 24.7% (49.0).
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
INVESTMENTS, PRODUCT DEVELOPMENT AND ACQUISITIONS
Orthex's investments during January–December 2021 amounted to EUR 4.8 million (3.2) and were mainly related to increasing the production capacity for new and existing products.
The company's Board of Directors decided to bring forward the machine investment originally planned for 2022 to increase production capacity and decided to purchase a 650-ton injection moulding machine for the manufacture of larger storage boxes. The investment was brought forward from the plan so that the machine would be put into production as early as the end of 2021, so that Orthex would be better able to meet the demand for the Storage category products. In January–December 2021, Orthex has made a total of 5 significant machine investments at the Tingsryd and Lohja factories, as well as investments in automation and product moulds.
Orthex focuses on the most important product categories and markets and has decided to exit local snow toy manufacturing to make room for growth by selling its snow toys moulds to Wiitta Oy in June 2021. Snow toys accounted for a small share of Orthex's Home & Yard product category sales. The contract did not include any trademarks. The parties have agreed not to disclose the amount of the transaction.
SHARES AND SHAREHOLDERS
Trading in Orthex's share began on the Nasdaq Helsinki pre-list on 25 March 2021 and on the Nasdaq Helsinki main list on 29 March 2021. In the Initial Public Offering, Orthex issued 1,481,854 new shares, in addition to which funds managed by Sponsor Fund IV Ky and certain other shareholders in the company sold a total of 10,668,937 shares. Orthex accumulated gross proceeds of approximately EUR 10 million in the Initial Public Offering. The final subscription price of the share in the IPO was EUR 6.82 per share.
In connection with the company's listing, the Group's personnel subscribed for 156,236 shares in the personnel issue. The subscription price of EUR 6.14 per employee share was 10 percent lower than the subscription price of the shares offered to others in the listing. In accordance with IFRS, the discount received by the personnel, EUR 106 thousand, has been recognised in its entirety in personnel expenses as a share-based payment.
All shares carry one vote and have equal voting rights. There are no voting restrictions associated with the shares. The shares hold no nominal value. The trading code of the shares is "ORTHEX", and the ISIN code is FI4000480504.
The company's registered share capital is EUR 80,000.00 and at the end of the period the company held 17,758,854 fully paid shares. Trading in the company's shares on the Nasdaq Helsinki main list began on 29 March 2021. Orthex has one series of shares, and each share entitles to one vote in the company's general meeting. There are no voting restrictions associated with the shares. Trading volume during the period was EUR 180.3 million and 21,933,614 shares. The highest price of the share was EUR
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex GROUP
12.50 and the lowest was EUR 7.30. The year-end closing price of the share was EUR 11.04. These figures include share sales related to the IPO. At the end of the review period, the market value of the share capital stood at EUR 196.1 million. The company did not have any treasury shares at the end of the period.
The number of registered shareholders at the end of the review period was 18,523, including nominee registers. At the end of the period, the ten largest shareholders possessed a total of 48.2% of Orthex's shares and votes.
The stock exchange releases on notifications of changes in holdings (flaggings) are available on the corporate website at https://investors.orthexgroup.com/.
SUSTAINABILITY
Orthex has emphasised sustainability since the early 1990s. The company aims to be a pioneer in the industry in terms of sustainability by offering timelessly designed, high-quality, safe, and long-lasting products, reducing the carbon footprint of its operations and products, and sourcing more and more of its raw materials from bio-based and recycled materials. Orthex has set as a main target to reach carbon neutrality in production by 2030.
Orthex's responsible choices are based on the United Nations Sustainable Development Goals and the company has identified four sustainable development goals: (i) decent work and economic growth, (ii) sustainable industry, innovation and infrastructure, (iii) responsible consumption and production, and (iv) climate action. Orthex reviews its sustainability strategy annually and sets targets and key performance indicators for three-year periods. Orthex publishes an annual sustainability report, which sets out the company's sustainability goals, achievements and investments.
One of the goals of Orthex's sustainability strategy is to reduce energy consumption, and investments in energy-efficient machines have helped reduce Orthex's energy consumption. The company's energy efficiency goal is to reduce energy consumption by 5 percent compared to the average of the previous three years. Improving energy efficiency is also an essential part of reducing emissions. Orthex pays special attention to reducing the use of fossil-based electricity, and in 2021, all our factories used 100% fossil-free hydropower. This was a major step for Orthex towards carbon-neutral production by 2030.
In September 2021, Orthex was selected as a pioneering company to the Finnish Innovation Fund Sitra's list of the most interesting companies in circular economy in Finland. The list presents 41 pioneering companies that offer circular economy solutions to the global sustainability crisis.
Orthex's all three factories in Finland and Sweden are ISO 14001 and 9001 -certified for environmental and quality management. In December 2021, Orthex was granted an ISO 45001 certification. It is an international standard that specifies requirements for an occupational health and safety management system. The goal with an ISO 45001 certification is to enable organisations to provide safe and healthy workplaces by preventing work-related injuries and health issues.
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
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Orthex will publish its Sustainability Report for the year 2021 as a part of the Annual Report on the corporate website on 16 March 2022. As will be brought up in the Sustainability Report, the company has continued its investments in the use of bio-based and recycled materials and in reducing the carbon footprint of the production.
GOVERNANCE
Decisions of General Meetings
Orthex Corporation held three general meetings of shareholders during the year.
In Orthex Oy's Annual General Meeting held on 28 February 2021, shareholders decided to approve the parent company's Financial Statements for the financial period 1 January–31 December 2020. The members of the Board of Directors and the CEO were discharged from liability for the year 2020. It was decided that no dividend will be distributed and that the profit for the financial year of EUR 1,002,216.03 will be recognised in retained earnings.
Shareholders decided to change the company's company form into a public company, change the company's name to Orthex Corporation, and include the company's shares in the book-entry securities system managed by Euroclear Finland Ltd. At the same time, the company's share capital was increased from the company's invested unrestricted equity fund to the amount of EUR 80,000 required for a public company, and the Articles of Association were amended to incorporate these changes in the articles.
The Annual General Meeting further decided to issue 15,880,000 new shares without payment to the company's existing shareholders in proportion to their existing shareholdings to implement the public offering. Each share entitled its holder to receive 40 new shares. It was also resolved to cancel all 3,000 treasury shares held by the company. Further, the Board of Directors was authorised to decide on a directed share issue with payment deviating from the shareholders' subscription right. The Board of Directors was authorised to issue a maximum of 2,000,000 shares to Orthex Group personnel and members of the Board of Directors and other management to facilitate their participation in the public offering.
The shareholders decided to elect four members to the Board of Directors and to re-elect Sanna Suvanto-Harsaae, Juuso Kivinen and Satu Huber to the Board. Ari Jokelainen was elected as a new member to the Board. He has been the company's Board member previously between the years 2016 and 2017.
The Annual General Meeting decided that Ernst & Young Oy, a firm of Authorised Public Accountants, will continue as the company's auditor, with Johanna Winqvist-Ikka, Authorised Public Accountant, as the signing audit partner.
On 3 March 2021, the Board of Directors resolved to elect Sanna Suvanto-Harsaae as the new Chair of the Board of Directors. The election of the new Chair was conditional upon the successful completion
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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of the public offering and became effective when the company shares were admitted to trading on Nasdaq Helsinki's main list on 29 March 2021. Juuso Kivinen chaired the Board prior to that.
The Extraordinary General Meeting held on 5 March 2021 decided to establish a Shareholders' Nomination Board for the company and approved the Charter of the Shareholders' Nomination Board.
At the Extraordinary General Meeting held on 3 July 2021, the number of members of the company's Board of Directors was confirmed to be five, and Jens-Peter Poulsen was elected as a new member of Orthex Corporation's Board of Directors as of 1 August 2021.
Board of Directors
On 31 December 2021 the company's Board of Directors consisted of the following members: Sanna Suvanto-Haarsae (Chair), Satu Huber, Ari Jokelainen, Juuso Kivinen and Jens-Peter Poulsen.
Shareholders' Nomination Board
Based on the shareholder register of Orthex Corporation as of 31 August 2021, the shareholders represented in the Shareholders' Nomination Board were Conficap Oy, Sponsor Fund IV Ky, Alexander Rosenlew and Thomasset Oy.
In accordance with the Charter of the Shareholders' Nomination Board, Juuso Kivinen resigned from the Nomination Board on 1 December 2021 as the shareholder he represented, Sponsor Fund IV Ky, the company's former majority shareholder, sold the rest of its shares in an accelerated book-building process on 17 November 2021 following the expiry of the lock-up period agreed on in connection with the Company's IPO.
Resulting from Sponsor Fund IV Ky's share sale, Mutual Pension Insurance Company Ilmarinen became one of the Company's four largest shareholders and announced that it will appoint its representative to the Shareholders' Nomination Board.
As a result, the representatives of the four largest shareholders in the Nomination Board are:
- Maarit Toivanen, CEO, Chair of Board of Directors, Conficap Oy
- Alexander Rosenlew
- Annika Ekman, Head of Direct Equity Investments, Ilmarinen Mutual Pension Insurance Company
- Mats Söderström, CEO, Thomasset Oy
and as an expert member Sanna Suvanto-Harsaae, Chair of Orthex's Board of Directors. Maarit Toivanen chairs the Nomination Board.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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Group structure
In order to simplify the Group structure, Orthex Corporation’s Finnish subsidiary Oy Orthex Group Ab was merged into Orthex Corporation as of 31 October 2021.
SHORT-TERM RISKS AND UNCERTAINTIES
Plastic polymers are the largest group of raw materials, and the prices are typically negotiated annually. Fluctuations in raw material prices and supply disruptions may have a negative effect on profitability. The Group is not hedged against fluctuations in raw material prices but can better manage risks by tying prices to the plastic polymer supply chain. There is less volatility in the prices of bio-based and recycled materials and merchandise. However, there has been shortage on the market because of higher demand and this can lead to higher prices also in bio-based and recycled materials.
The COVID-19 pandemic has caused significant disruption to the global economy and the Group’s geographic market. Although the COVID-19 pandemic did not materially impair the Group’s operating profit during the review period, prolonged or extended restrictions could have a material adverse effect on business, financial condition and / or operating profit.
Thanks to its own production, the Group can control the quality of its products and the health and environmental aspects of production and products. Significant disruptions or interruptions in production and operations would materially impair the Group’s ability to deliver its products and adversely affect its business and operating profit.
Orthex has operations in several countries, so the company is exposed to transaction and translation risk. The Group is typically not hedged against currency risk, except for certain large purchases under the Kökskungen brand. Fluctuations in exchange rates and interest rates can have a material adverse effect on the Group.
Further information on the company’s risk management principles and on the main strategic, operative and financial risks is included in the Board of Directors’ report for the year 2021. The main principles of Orthex’s financial risk management are described in the notes to the consolidated financial statements. The company’s annual report, which includes the Board of Directors’ report and the consolidated financial statements with notes for the year 2021, will be published on 16 March 2022 and will be available on the corporate website as of said date.
BOARD PROPOSAL FOR CAPITAL RETURN
According to the balance sheet to be adopted for the financial year ending 31 December 2021, the parent company’s distributable funds amount to EUR 11,198,022.37, including the loss for the period of EUR 64,539.03.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
The Board of Directors proposes to the Annual General Meeting of Orthex Corporation to be held on 6 April 2022 that no dividend will be distributed for the financial year ended on 31 December 2021. Instead, the Board of Directors proposes that shareholders be paid a capital return of EUR 0.18 per share from the invested unrestricted equity fund totalling approximately EUR 3.2 million.
The capital return is proposed to be paid in two instalments so that the first instalment amounting to EUR 0.09 per share will be paid to a shareholder who is registered in the company's shareholder register on 8 April 2022 that is the record date for the first instalment of the capital return. The Board of Directors proposes that the first instalment of the capital return be paid on 21 April 2022.
The second instalment of the capital return amounting to EUR 0.09 per share will be paid to a shareholder who is registered in the company's shareholder register on 3 October 2022 that is the record date for the second instalment of the capital return. The Board of Directors proposes that the second instalment of the capital return be paid on 11 October 2022.
EVENTS AFTER THE REVIEW PERIOD
On 28 January 2022, Orthex Corporation disclosed the Shareholders' Nomination Board's proposals to the Annual General Meeting 2022 regarding the composition and remuneration of the Board of Directors.
The Shareholders' Nomination Board proposes that the Board of Directors would consist of five members and that Sanna Suvanto-Harsaae, Satu Huber and Jens-Peter Poulsen would be re-elected to the Board and that Markus Hellström and Jyrki Mäki-Kala elected as new members to the Board, all for a term of office ending at the end of the next Annual General Meeting.
The Shareholders' Nomination Board further proposes that the remuneration of the members of the Board of Directors remains the same and that the Chair of the Board of Directors be paid a monthly fee of EUR 4,000 and other members of the Board of Directors a monthly fee of EUR 2,000.
MARKET OUTLOOK 2022
To ensure effective implementation and adoption of its strategy Orthex is constantly evaluating consumer trends, customer demands and market conditions. The strategy is designed to deliver the specified long-term financial goals. In addition, an overall focus on sustainability is at the heart of business development. It is likely that the unpredictable market conditions seen in 2021 will continue, including volatile cost drivers with quick changes in cost components and high overall or increasing cost levels compared to the year 2020.
Orthex will strive to navigate as efficiently as possible, adopting swiftly to potentially fast changing conditions. In 2021, we successfully increased the production capacity in our factories, and we are prepared for growth. We are also prepared to further increase capacity when needed. Product and process innovation and testing new sustainable materials will have a continued important role in the
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
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GROUP
commercial strategy. The focus will be on growing the sales of our branded products throughout Europe, thus improving everyday life with practical sustainable products.
Orthex has no Russian or Ukrainian suppliers nor any other business in Russia, so the effect of the Ukrainian crisis is not directly impacting Orthex's business. However, there can be negative business impacts from volatility or cost increases due to the crisis.
FINANCIAL RELEASES IN 2022
Orthex will publish its financial reports in 2022 as follows:
11 May 2022, Interim report January–March 2022
25 August 2022, Half year financial report January–June 2022
11 November 2022, Interim report January–September 2022
The company's annual report, including the financial statements, the Board of Directors' report and the auditor's report for the financial period 2021, will be published on 16 March 2022 and will be available on the corporate website as of said date. Orthex Corporation's Annual General meeting will be held on 6 April 2022 at 10.00 a.m.
Espoo, 8 March 2022
ORTHEX CORPORATION
Board of Directors
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Additional information:
Alexander Rosenlew, CEO, +358 (0)40 500 3826
Saara Mäkelä, CFO, +358 (0)40 083 8782
Contacts:
Analysts and investors: Saara Mäkelä, CFO, +358 (0)40 083 8782
Media: Hanna Kukkonen, CMO, +358 (0)40 053 8886
The results presentation will be held on 9 March 2022 at 11:00 am EET as a webcast meeting.
Webcast meeting
Access meeting online here.
Q&A
Questions to the management can be sent through the meeting chat.
Presentation material and on-demand recording
The presentation material will be shared in the online meeting, and it can be downloaded on Orthex's website at https://investors.orthexgroup.com/. A recording of the event will be available later at the same address.
Distribution:
Nasdaq Helsinki Ltd
Main media
https://investors.orthexgroup.com/
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
ORTHEX FINANCIAL STATEMENTS RELEASE JANUARY–DECEMBER 2021
Consolidated Statement of Comprehensive Income
| € 000 | 10–12/2021 | 10–12/2020 | 1–12/2021 | 1–12/2020 |
|---|---|---|---|---|
| Net Sales | 23,076 | 21,609 | 88,694 | 75,865 |
| Cost of sales | -17,952 | -14,464 | -65,490 | -51,264 |
| Gross Margin | 5,124 | 7,144 | 23,204 | 24,601 |
| Other operating income | 93 | 67 | 549 | 278 |
| Selling and marketing expenses | -2,308 | -2,439 | -8,468 | -7,978 |
| Administrative expenses | -1,237 | -1,337 | -6,035 | -4,620 |
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Financial income and expenses | -435 | -415 | -1,586 | -2,423 |
| Profit before taxes | 1,237 | 3,020 | 7,664 | 9,858 |
| Income taxes | -225 | -670 | -1,629 | -2,165 |
| Profit for the period | 1,012 | 2,350 | 6,035 | 7,692 |
| Profit for the period attributable to: | ||||
| Equity holders of the parent | 1,012 | 2,350 | 6,035 | 7,692 |
| Earnings per share, basic (and diluted), EUR | 0.06 | 0.14 | 0.35 | 0.47 |
| Other comprehensive income/(loss) net of tax | ||||
| Items that may be reclassified subsequently to profit or loss: | ||||
| Translation differences | -198 | 1,663 | -622 | 1,261 |
| Items that will not be reclassified to profit or loss: | ||||
| Remeasurement gains/(losses) on defined benefit plans | -58 | -100 | -58 | -100 |
| Other comprehensive income/(loss) for the period, net of tax | -256 | 1,563 | -680 | 1,161 |
| Total comprehensive income/(loss) for the period | 756 | 3,914 | 5,355 | 8,853 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent | 756 | 3,914 | 5,355 | 8,853 |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Consolidated Statement of Financial Position
| € 000 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Intangible assets | 23,901 | 24,149 |
| Property, plant and equipment | 13,131 | 11,382 |
| Right-of-use assets | 8,030 | 9,244 |
| Other non-current assets | 94 | 98 |
| Deferred tax assets | 1,163 | 1,070 |
| Total non-current assets | 46,320 | 45,944 |
| Current assets | ||
| Inventories | 12,647 | 9,906 |
| Trade and other receivables | 15,528 | 14,264 |
| Derivative financial instruments | 14 | - |
| Income tax receivables | - | 5 |
| Cash and cash equivalents | 14,334 | 5,250 |
| Total current assets | 42,522 | 29,424 |
| Total assets | 88,842 | 75,368 |
| Equity and liabilities | ||
| Equity attributable to the equity holders of the parent company | ||
| Share capital | 80 | 3 |
| Treasury shares | - | -71 |
| Invested unrestricted equity fund | 11,047 | 1,775 |
| Retained earnings | 19,138 | 13,161 |
| Translation differences | 1,532 | 2,154 |
| Total equity | 31,798 | 17,022 |
| Non-current liabilities | ||
| Loans from credit institutions | 23,720 | 26,652 |
| Lease liabilities | 7,544 | 8,668 |
| Pension liabilities | 4,742 | 4,658 |
| Deferred tax liabilities | 742 | 572 |
| Total non-current liabilities | 36,748 | 40,550 |
| Current liabilities | ||
| Loans from credit institutions | 3,000 | 3,000 |
| Lease liabilities | 1,214 | 1,158 |
| Trade and other payables | 13,692 | 11,791 |
| Derivative financial instruments | - | 110 |
| Income tax liabilities | 2,390 | 1,736 |
| Total current liabilities | 20,296 | 17,796 |
| Total liabilities | 57,044 | 58,346 |
| Total equity and liabilities | 88,842 | 75,368 |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Consolidated Statement of Changes in Equity
| Equity attributable to the equity holders of the parent company | ||||||
|---|---|---|---|---|---|---|
| € 000 | Share capital | Treasury shares | Invested unrestricted equity fund | Retained earnings | Translation differences | Total equity |
| As at 1 Jan 2021 | 3 | -71 | 1,775 | 13,161 | 2,154 | 17,022 |
| Profit for the period | 6,035 | 6,035 | ||||
| Translation differences | -622 | -622 | ||||
| Remeasurement gains/(losses) on defined benefit plan | -58 | -58 | ||||
| Total comprehensive income/(loss) for the period | 5,977 | -622 | 5,355 | |||
| Transactions with owners in their capacity as owners: | ||||||
| Increase in share capital | 78 | -78 | - | |||
| Cancellation of treasury shares | 71 | -71 | - | |||
| Share issue | 10,000 | 10,000 | ||||
| Expenses related to the share issue | -686* | -686 | ||||
| Discount related to the personnel share issue | 106 | 106 | ||||
| At 31 Dec 2021 | 80 | - | 11,047 | 19,138 | 1,532 | 31,798 |
| As at 1 Jan 2020 | 3 | -97 | 7,997 | 5,569 | 893 | 14,365 |
| Profit for the period | 7,692 | 7,692 | ||||
| Translation differences | 1,261 | 1,261 | ||||
| Remeasurement gains/(losses) on defined benefit plan | -100 | -100 | ||||
| Total comprehensive income/(loss) for the period | 7,592 | 1,261 | 8,853 | |||
| Transactions with owners in their capacity as owners: | ||||||
| Capital return from the invested unrestricted equity fund | -6,228 | -6,228 | ||||
| Directed issue of treasury shares | 26 | 6 | 32 | |||
| At 31 Dec 2020 | 3 | -71 | 1,775 | 13,161 | 2,154 | 17,022 |
*In January–December 2021, the company's fees and expenses related to the listing amounted to EUR 2,281 thousand, of which EUR 857 thousand was recognised as expenses in connection with the offering against the funds received in the invested unrestricted equity fund less deferred tax of EUR 171 thousand.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Consolidated Statement of Cash Flows
| € 000 | 1–12/2021 | 1–12/2020 |
|---|---|---|
| Cash flows from operating activities | ||
| Profit before taxes | 7,664 | 9,858 |
| Adjustments: | ||
| Depreciation, amortisation and impairment | 3,976 | 4,177 |
| Financial income and expenses | 1,586 | 2,423 |
| Other adjustments | -48 | 43 |
| Cash flows before changes in working capital | 13,179 | 16,501 |
| Changes in working capital | ||
| Decrease (+) / increase (–) in trade and other receivables | -1,489 | -2,275 |
| Decrease (+) / increase (–) in inventories | -2,905 | -149 |
| Decrease (–) / increase (+) in trade and other payables | 2,326 | 1,299 |
| Cash flows from operating activities before financial items and taxes | 11,112 | 15,376 |
| Interests received | - | 0 |
| Interests paid | -1,331 | -2,319 |
| Dividends received | - | 7 |
| Income taxes paid | -801 | -355 |
| Net cash flows from operating activities | 8,979 | 12,709 |
| Cash flows from investing activities | ||
| Investments in tangible and intangible assets | -4,797 | -3,201 |
| Sale of tangible and intangible assets | 132 | - |
| Other investments | - | 4 |
| Net cash flows from investing activities | -4,665 | -3,197 |
| Cash flows from financing activities | ||
| Proceeds from share issue | 10,000 | - |
| Costs from share issue recognised in equity | -857 | - |
| Repayment of lease liabilities | -1,286 | -1,183 |
| Proceeds from long-term borrowings | - | 27,000 |
| Repayment of long-term borrowings | - | -29,637 |
| Proceeds from short-term borrowings | - | 3,000 |
| Repayment of short-term borrowings | -3,000 | -2,500 |
| Capital return from the invested unrestricted equity fund | - | -6,228 |
| Directed issue of treasury shares | - | 32 |
| Net cash flows from financing activities | 4,857 | -9,516 |
| Net change in cash and cash equivalents | 9,172 | -3 |
| Net foreign exchange differences | -88 | 81 |
| Cash and cash equivalents at the beginning of the period | 5,250 | 5,173 |
| Cash and cash equivalents at the end of the period | 14,334 | 5,250 |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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NOTES TO THE GROUP'S FINANCIAL STATEMENTS RELEASE
Basis of preparation
Orthex's financial statements release has been prepared in compliance with the IAS 34 Interim Financial Reporting standard. The same accounting principles have been applied to the financial statements release as to the previous consolidated financial statements taking into account.
Orthex's Board of Directors has approved this financial statements release in its meeting on 8 March 2022. Figures in the financial statements release have been rounded and consequently the sum of individual figures may deviate from the presented sum figure.
The figures in the financial statements release are based on Orthex Corporation's 2021 financial statements. The figures are unaudited.
Accounting estimates and management judgements made in preparation of the financial statements release information
The preparation of financial statements release information requires management to make accounting estimates and judgements as well as assumptions that affect the application of the preparation principles and the accounting estimates on assets, liabilities, income, and expenses. Actual results may differ from previously made estimates and judgements. Estimates and judgements are reviewed regularly. Changes in estimates are presented in the period during which the change occurs if the change only affects one period. If it affects both the period under review and following periods, the changes are presented in the period under review and following periods.
The significant management judgements and accounting estimates concerning key uncertainty factors in connection with the preparation of this financial statements release information are identical to those applied in the consolidated financial statements for 2021.
Related party transactions
Transactions with related parties have been made on an arm's length basis.
During the review period January–December 2021, the company's related party transactions consisted of one purchase of EUR 25 thousand from a member of the Board.
In the comparison period January–December 2020, related party transactions consisted of accrued and new interest on convertible loans, which totalled EUR 542 thousand. The convertible loans including interest were repaid in full in November 2020.
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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Property, plant and equipment, Intangible assets and Right-of-use assets
| € 000 | Intangible asset | Goodwill | Property, plant and equipment | Right-of-use assets | Total |
|---|---|---|---|---|---|
| Acquisition cost at 1 Jan 2021 | 935 | 24,072 | 68,241 | 12,082 | 105,331 |
| Additions | 5 | 4,547 | 607 | 5,159 | |
| Disposals | -18 | -4,721 | -209 | -4,948 | |
| Transfers | 268 | -268 | - | ||
| Translation differences | -392 | -861 | -167 | -1,420 | |
| Acquisition cost at 31 Dec 2021 | 1,189 | 23,680 | 66,938 | 12,313 | 104,121 |
| Accumulated depreciation, amortisation and impairment at 1 Jan 2021 | 858 | - | 56,859 | 2,837 | 60,555 |
| Depreciation and amortisation | 129 | 2,401 | 1,446 | 3,976 | |
| Accumulated depreciation and amortisation on disposals and transfers | -18 | -4,721 | -4,739 | ||
| Translation differences | -733 | -733 | |||
| Accumulated depreciation, amortisation and impairment at 31 Dec 2021 | 969 | - | 53,807 | 4,283 | 59,059 |
| Carrying amount at 1 Jan 2021 | 77 | 24,072 | 11,382 | 9,244 | 44,776 |
| Carrying amount at 31 Dec 2021 | 221 | 23,680 | 13,131 | 8,030 | 45,062 |
| Acquisition cost at 1 Jan 2020 | 904 | 23,337 | 63,971 | 11,064 | 99,277 |
| Additions | 19 | 3,117 | 714 | 3,850 | |
| Disposals | -433 | -31 | -464 | ||
| Translation differences | 12 | 735 | 1,586 | 334 | 2,667 |
| Acquisition cost at 31 Dec 2020 | 935 | 24,072 | 68,241 | 12,082 | 105,331 |
| Accumulated depreciation, amortisation and impairment at 1 Jan 2020 | 791 | - | 53,165 | 1,400 | 55,356 |
| Depreciation and amortisation | 55 | 2,684 | 1,438 | 4,177 | |
| Accumulated depreciation and amortisation on disposals and transfers | -433 | -433 | |||
| Translation differences | 12 | 1,443 | 1,455 | ||
| Accumulated depreciation, amortisation and impairment at 31 Dec 2020 | 858 | - | 56,859 | 2,837 | 60,555 |
| Carrying amount at 1 Jan 2020 | 113 | 23,337 | 10,806 | 9,665 | 43,921 |
| Carrying amount at 31 Dec 2020 | 77 | 24,072 | 11,382 | 9,244 | 44,776 |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
Fair value of financial assets and liabilities
Financial assets
| € 000 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Level 2 | ||
| Assets measured at fair value | ||
| Derivative financial instruments: | ||
| Foreign exchange forward contracts | 14 | - |
| Total | 14 | - |
Financial liabilities
| € 000 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Level 2 | ||
| Liabilities measured at fair value | ||
| Derivative financial instruments: | ||
| Foreign exchange forward contracts | - | 110 |
| Total | - | 110 |
The derivatives have been presented in the note above. The carrying amounts of other financial assets and liabilities in the balance sheet equal their fair value.
Commitments
| € 000 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Guarantees and mortgages given on own behalf: | ||
| Enterprise mortgages | 53,558 | 53,631 |
| Property mortgages | 10,192 | 10,192 |
| Other guarantees | 55 | 56 |
| Total | 63,806 | 63,879 |
Contingent liabilities
Orthex Group was subject to a tax audit of Orthex Corporation regarding the financial years 2020 and 2021. Orthex Corporation received in February 2022 a tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and tax increases amounting to a total of EUR 0.3 million, relating to the VAT deductibility of IPO related costs. The company disagrees with the interpretation made in the tax audit and has filed a claim for adjustment.
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
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APPENDIX:
Key Performance Indicators
| € 000 | 10-12/2021 | 10-12/2020 | 1-12/2021 | 1-12/2020 |
|---|---|---|---|---|
| Net sales | 23,076 | 21,609 | 88,694 | 75,865 |
| Net sales growth, % | 6.8% | n.a. | 16.9% | 14.2% |
| Constant currency invoiced sales growth, % | 6.5% | n.a. | 15.7% | 14.8% |
| Invoiced sales | 23,546 | 21,989 | 90,552 | 77,877 |
| Invoiced sales growth, % | 7.1% | n.a. | 16.3% | 15.5% |
| Gross Margin | 5,124 | 7,144 | 23,204 | 24,601 |
| Gross Margin, % | 22.2% | 33.1% | 26.2% | 32.4% |
| EBITDA | 2,693 | 4,396 | 13,226 | 16,458 |
| EBITDA margin, % | 11.7% | 20.3% | 14.9% | 21.7% |
| EBITA | 1,704 | 3,451 | 9,380 | 12,336 |
| EBITA margin, % | 7.4% | 16.0% | 10.6% | 16.3% |
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Operating profit margin, % | 7.2% | 15.9% | 10.4% | 16.2% |
| Items affecting comparability | 60 | 326 | 1,616 | 597 |
| Adjusted Gross Margin | 5,184 | 7,144 | 23,279 | 24,601 |
| Adjusted Gross Margin, % | 22.5% | 33.1% | 26.2% | 32.4% |
| Adjusted EBITDA | 2,753 | 4,722 | 14,842 | 17,054 |
| Adjusted EBITDA margin, % | 11.9% | 21.9% | 16.7% | 22.5% |
| Adjusted EBITA | 1,764 | 3,776 | 10,996 | 12,933 |
| Adjusted EBITA margin, % | 7.6% | 17.5% | 12.4% | 17.0% |
| Adjusted operating profit | 1,732 | 3,761 | 10,867 | 12,878 |
| Adjusted operating profit margin, % | 7.5% | 17.4% | 12.3% | 17.0% |
| Earnings per share, basic (and diluted), EUR | 0.06 | 0.14 | 0.35 | 0.47 |
| FTEs | 302 | 302 | 314 | 285 |
| Personnel expenses | 4,981 | 4,641 | 19,693 | 17,056 |
| Key cash flows indicators | ||||
| Net cash flows from operating activities | 1,769 | 2,637 | 8,979 | 12,709 |
| Operating free cash flows | 1,637 | 3,162 | 10,046 | 13,853 |
| Cash conversion, % | 59.5% | 67.0% | 67.7% | 81.2% |
| Investments in tangible and intangible assets | -1,116 | -1,560 | -4,797 | -3,201 |
| Financial position key figures | ||||
| Net debt | 25,887 | 38,886 | 25,887 | 38,886 |
| Net debt / adjusted EBITDA last 12 months | 1.7x | 2.3x | 1.7x | 2.3x |
| Net working capital | 14,482 | 12,379 | 14,482 | 12,379 |
| Capital employed excluding goodwill | 34,004 | 31,835 | 34,004 | 31,835 |
| Return on capital employed (ROCE), % | 5.0% | 11.2% | 28.1% | 38.4% |
| Adjusted return on capital employed (ROCE), % | 5.1% | 12.3% | 33.0% | 40.3% |
| Equity ratio, % | 35.8% | 22.6% | 35.8% | 22.6% |
| Return on equity, % | 3.2% | 12.9% | 24.7% | 49.0% |
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
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Reconciliation of APMs
| € 000 | 10-12/2021 | 10-12/2020 | 1-9/2021 | 1-12/2020 |
|---|---|---|---|---|
| Net sales growth, % | ||||
| Net sales | 23,076 | 21,609 | 88,694 | 75,865 |
| Net sales growth, % | 6.8% | n.a. | 16.9% | 14.2% |
| Constant currency Net sales growth, % | ||||
| Net sales | 23,076 | 21,609 | 88,694 | 75,865 |
| FX rate adjustment | - | 68 | - | 813 |
| Constant currency Net sales | 23,076 | 21,676 | 88,694 | 76,679 |
| Constant currency Net sales growth, % | 6.5% | n.a. | 15.7% | 14.8% |
| Invoiced sales | ||||
| Net sales | 23,076 | 21,609 | 88,694 | 75,865 |
| Discounts and bonuses | 937 | 947 | 3,067 | 2,757 |
| Other sales and refunds | -468 | -567 | -1,209 | -746 |
| Invoiced sales | 23,546 | 21,989 | 90,552 | 77,877 |
| Invoiced sales growth, % | 7,1% | n.a. | 16,3% | 15.5% |
| Gross Margin | ||||
| Net sales | 23,076 | 21,609 | 88,694 | 75,865 |
| Cost of sales | -17,952 | -14,464 | -65,490 | -51,264 |
| Gross Margin | 5,124 | 7,144 | 23,204 | 24,601 |
| Gross Margin (%) | 22.2% | 33.1% | 26.2% | 32.4% |
| EBITDA | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Depreciation, amortisation and impairment | 1,021 | 961 | 3,976 | 4,177 |
| EBITDA | 2,693 | 4,396 | 13,226 | 16,458 |
| EBITDA margin (%) | 11.7% | 20.3% | 14.9% | 21.7% |
| EBITA | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Amortisation and impairment | 32 | 15 | 129 | 55 |
| EBITA | 1,704 | 3,451 | 9,380 | 12,336 |
| EBITA margin (%) | 7.4% | 16.0% | 10.6% | 16.3% |
| Operating profit | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Operating profit margin, % | 7.2% | 15.9% | 10.4% | 16.2% |
| Items affecting comparability / adjustments (Gross Margin) | ||||
| Other items affecting comparability | 60 | - | 75 | - |
| Items affecting comparability / adjustments (Gross Margin) | 60 | - | 75 | - |
| Items affecting comparability / adjustments (EBITDA) | ||||
| Other items affecting comparability | 60 | - | 85 | - |
| Costs related to listing | - | 326 | 1,531 | 597 |
| Items affecting comparability / adjustments (EBITDA) | 60 | 326 | 1,616 | 597 |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
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GROUP
| € 000 | 10-12/2021 | 10-12/2020 | 1-12/2021 | 1-12/2020 |
|---|---|---|---|---|
| Adjusted Gross Margin | ||||
| Gross Margin | 5,124 | 7,144 | 23,204 | 24,601 |
| Adjustments (Gross Margin) | 60 | - | 75 | - |
| Adjusted Gross Margin | 5,184 | 7,144 | 23,279 | 24,601 |
| Adjusted Gross Margin (%) | 22.5% | 33.1% | 26.2% | 32.4% |
| Adjusted EBITDA | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Depreciation, amortisation and impairment | 1,021 | 961 | 3,976 | 4,177 |
| Adjustments (EBITDA) | 60 | 326 | 1,616 | 597 |
| Adj. EBITDA | 2,753 | 4,722 | 14,842 | 17,054 |
| Adj. EBITDA margin (%) | 11.9% | 21.9% | 16.7% | 22.5% |
| Adjusted EBITA | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Amortisation and impairment | 32 | 15 | 129 | 55 |
| Adjustments (EBITA) | 60 | 326 | 1,616 | 597 |
| Adj. EBITA | 1,764 | 3,776 | 10,996 | 12,933 |
| Adj. EBITA margin (%) | 7.6% | 17.5% | 12.4% | 17.0% |
| Adjusted operating profit | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Adjustments | 60 | 326 | 1,616 | 597 |
| Adj. operating profit | 1,732 | 3,761 | 10,867 | 12,878 |
| Adj. operating profit margin (%) | 7.5% | 17.4% | 12.3% | 17.0% |
| Earnings per share, basic (and diluted), EUR | ||||
| Profit for the period | 1,012 | 2,350 | 6,035 | 7,692 |
| Average number of shares | 17,759 | 16,277 | 17,426 | 16,277 |
| Earnings per share, basic (and diluted), EUR | 0.06 | 0.14 | 0.35 | 0.47 |
| Operating free cash flows | ||||
| Adj. EBITDA | 2,753 | 4,722 | 14,842 | 17,054 |
| Investments in tangible and intangible assets | -1,116 | -1,560 | -4,797 | -3,201 |
| Operating free cash flows | 1,637 | 3,162 | 10,046 | 13,853 |
| Cash conversion, % | ||||
| Operating free cash flows | 1,637 | 3,162 | 10,046 | 13,853 |
| Adj. EBITDA | 2,753 | 4,722 | 14,842 | 17,054 |
| Cash conversion, % | 59.5% | 67.0% | 67.7% | 81.2% |
| Net debt | ||||
| Total interest-bearing liabilities | 40,220 | 44,136 | 40,220 | 44,136 |
| Cash and cash equivalents | -14,334 | -5,250 | -14,334 | -5,250 |
| Net debt | 25,887 | 38,886 | 25,887 | 38,886 |
| Net debt/ Adj. EBITDA | ||||
| Net debt | 25,887 | 38,886 | 25,887 | 38,886 |
| Adj. EBITDA, 12 months | 14,842 | 17,054 | 14,842 | 17,054 |
| Net debt/ Adj. EBITDA | 1.7x | 2.3x | 1.7x | 2.3x |
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
| € 000 | 10-12/2021 | 10-12/2020 | 1-12/2021 | 1-12/2020 |
|---|---|---|---|---|
| Net working capital | ||||
| Inventories | 12,647 | 9,906 | 12,647 | 9,906 |
| Trade and other receivables | 15,528 | 14,264 | 15,528 | 14,264 |
| Trade and other payables | -13,692 | -11,791 | -13,692 | -11,791 |
| Net working capital | 14,482 | 12,379 | 14,482 | 12,379 |
| Capital employed excluding goodwill | ||||
| Total Equity | 31,798 | 17,022 | 31,798 | 17,022 |
| Net debt | 25,887 | 38,886 | 25,887 | 38,886 |
| Goodwill | -23,680 | -24,072 | -23,680 | -24,072 |
| Capital employed excluding goodwill | 34,004 | 31,835 | 34,004 | 31,835 |
| Return on capital employed (ROCE), % | ||||
| Operating profit | 1,672 | 3,435 | 9,250 | 12,281 |
| Average capital employed excluding goodwill | 33,742 | 30,689 | 32,920 | 31,970 |
| Return on capital employed (ROCE), % | 5.0% | 11.2% | 28.1% | 38.4% |
| Adjusted return on capital employed (ROCE), % | ||||
| Adjusted operating profit | 1,732 | 3,761 | 10,867 | 12,878 |
| Average capital employed excluding goodwill | 33,742 | 30,689 | 32,920 | 31,970 |
| Adjusted return on capital employed (ROCE), % | 5.1% | 12.3% | 33.0% | 40.3% |
| Equity ratio (%) | ||||
| Total Equity | 31,798 | 17,022 | 31,798 | 17,022 |
| Total assets | 88,842 | 75,368 | 88,842 | 75,368 |
| Equity ratio (%) | 35.8% | 22.6% | 35.8% | 22.6% |
| Return on equity, % | ||||
| Profit for the period | 1,012 | 2,350 | 6,035 | 7,692 |
| Total equity (average for the first and last day of the period) | 31,420 | 18,179 | 24,410 | 15,693 |
| Return on equity, % | 3.2% | 12.9% | 24.7% | 49.0% |
Orthex presents alternative performance measures as additional information to financial measures presented in the consolidated income statement, consolidated balance sheet and consolidated statement of cash flows prepared in accordance with IFRS. In Orthex's view, alternative performance measures provide significant additional information on Orthex's results of operations, financial position and cash flows to management, investors, analysts and other stakeholders.
Alternative performance measures should not be viewed in isolation or as a substitute to the IFRS financial measures. All companies do not calculate alternative performance measures in a uniform way, and therefore Orthex's alternative performance measures may not be comparable with similarly named measures presented by other companies.
FINANCIAL STATEMENTS RELEASE | JANUARY-DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
Calculation of key figures
| Key Performance Indicators | Formula |
|---|---|
| Constant currency invoiced sales growth, % | Invoiced sales growth calculated by using previous year’s revenue translated at average foreign exchange rates for the current year |
| Invoiced sales | Product sales to resale customers excluding off invoice discounts, customer bonuses and cash discounts |
| Invoiced sales growth, % | Increase in invoiced sales |
| Gross Margin | Net Sales less Cost of sales |
| Gross Margin, % | Gross Margin / Net Sales |
| EBITDA | Operating profit before depreciation, amortisation and impairment |
| EBITDA margin, % | EBITDA / Net sales |
| EBITA | Operating profit before amortisation and impairment |
| EBITA margin, % | EBITA / Net sales |
| Operating profit | Operating profit |
| Operating profit margin, % | Operating profit / Net sales |
| Items affecting comparability | Material items outside ordinary course of business including restructuring costs, net gains or losses from sale of business operations or other non-current assets, strategic development projects, external advisory costs related to capital reorganisation, impairment charges on non-current assets incurred in connection with restructurings, compensation for damages and transaction costs related to business acquisitions |
| Adjusted Gross Margin | Gross Margin excluding items affecting comparability |
| Adjusted Gross Margin, % | Adjusted Gross Margin / Net Sales |
| Adjusted EBITDA | EBITDA excluding items affecting comparability |
| Adjusted EBITDA margin, % | Adjusted EBITDA / Net Sales |
| Adjusted EBITA | EBITA excluding items affecting comparability |
| Adjusted EBITA margin, % | Adjusted EBITA / Net sales |
| Adjusted operating profit | Operating profit excluding items affecting comparability |
| Adjusted operating profit margin, % | Adjusted operating profit / Net Sales |
| Earnings per share, basic (and diluted), EUR | Profit for the period attributable to the owners of the parent divided by weighted average number of shares outstanding |
| FTEs | Full-Time Equivalents |
| Personnel expenses | Total personnel expenses during the period |
| Key cash flows indicators | Formula |
| --- | --- |
| Net cash flows from operating activities | Net cash from operating activities as presented in the consolidated statement of cash flows |
| Operating free cash flows | Adjusted EBITDA less investments in tangible and intangible assets |
| Cash conversion, % | Operating free cash flows / Adjusted EBITDA |
| Investments in tangible and intangible assets | Investments in tangible and intangible assets as presented in the consolidated statement of cash flows |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
| Financial position key figures | Formula |
|---|---|
| Net debt | Current and non-current interest-bearing liabilities less cash and cash equivalents |
| Net debt / adjusted EBITDA last 12 months | Net debt / Adjusted EBITDA |
| Net working capital | Inventories, trade and other receivables less trade and other payables |
| Capital employed excluding goodwill | Total equity and net debt and less goodwill |
| Return on capital employed (ROCE), % | Operating profit / Average capital employed excluding goodwill |
| Adjusted return on capital employed (ROCE), % | Adjusted operating profit / Average capital employed excluding goodwill |
| Equity ratio, % | Total equity / Total assets |
| Return on equity, % | Result for the period / Total equity (average for the first and last day of the period) |
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
orthex
GROUP
ORTHEX IN BRIEF
Orthex is a leading Nordic houseware company. Orthex designs, produces, and sells household products with a mission to make consumers' everyday life easier: Orthex strives to create functional, long lasting, and sustainable high-quality household products. Orthex's products cover multifunctional assortment of storage boxes, kitchen products and products for home and yard. Orthex markets and sells its products under three main consumer brands: SmartStore, GastroMax and Orthex. In addition, it sells externally produced kitchen products under the Köksungen brand.
Orthex has more than 100 years of experience in the production, design, and marketing of household products, and it has approximately 800 customers in more than 40 countries. Orthex's core geographic markets are the Nordics and the export markets. The export markets are divided into the rest of Europe and the rest of the world. Orthex is headquartered in Espoo, Finland, and it currently has seven local sales offices located in the Nordics, Germany, France, and the United Kingdom. Orthex's production facilities are located in Tingsryd and Gnosjö, Sweden, and in Lohja, Finland. In addition, Orthex has centralised warehousing in Sweden and Finland in connection with its Tingsryd and Lohja production facilities, as well as an outsourced warehouse in Überherrn, Germany.
Orthex aims to be the industry forerunner in sustainability by promoting safe and long-lasting products, reducing the carbon footprint of its operations and products, as well as by sourcing an ever-increasing amount of raw materials from bio-based and recycled materials. Orthex aims for its production process to be carbon neutral by 2030.
Orthex Bucket 10L from old fishing nets
FINANCIAL STATEMENTS RELEASE | JANUARY–DECEMBER 2021 | 9 MARCH 2022
SmartStore Compact. On the front page GastroMax BID nylon
orthex GROUP
Orthex Corporation
www.investors.orthexgroup.com