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Orthex Oyj Interim / Quarterly Report 2021
3330_rns_2021-08-25_5592ab56-884f-44dd-b505-77599c4223c7.pdf
Interim / Quarterly Report
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Orthex Corporation
HALF YEAR FINANCIAL REPORT
January–June 2021
orthex
GROUP
Orthex H1: Strong growth in all markets and categories, high raw material price level continues
JANUARY–JUNE 2021 IN BRIEF
- Invoiced sales increased by 27.9% and totalled EUR 45.0 million (35.2)
- Net sales increased by 28.8% to EUR 43.8 million (34.0)
- Adjusted EBITDA was EUR 7.8 million (7.2) (adjusted for IPO related costs EUR 1.5 million)
- EBITA was EUR 4.4 million (4.8)
- Adjusted EBITA was EUR 5.9 million (5.1)
- Adjusted EBITA margin was 13.6% (15.0)
- Operating profit was EUR 4.3 million (4.8)
- Adjusted operating profit increased by 15.4% to EUR 5.9 million (5.1)
- Net cash flows from operating activities were EUR 5.4 million (4.5)
- Net debt / Adjusted EBITDA was 1.5x
- Earnings per share, basic was EUR 0.16 (0.18)
- Due to the share issue, equity ratio increased to 33.0% (23.4)
APRIL–JUNE 2021 IN BRIEF
- Invoiced sales increased by 22.7% and totalled EUR 22.5 million (18.4)
- Net sales increased by 25.5% to EUR 22.2 million (17.7)
- Adjusted EBITA was EUR 2.6 million (3.2)
- Adjusted EBITA margin was 11.9% (17.9)
- Operating profit was EUR 2.4 million (2.9)
- Net cash flows from operating activities were EUR 2.2 million (1.9)
- Snow toys moulds were sold to Wiitta Oy
- Raw material prices have risen to exceptionally high levels
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.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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ALEXANDER ROSENLEW, CEO:
Orthex's net sales growth in the second quarter continued strongly at +25,5% compared to the second quarter of 2020, contributing to total net sales growth of 28.8% for the first half of 2021 and amounting to 43.8 million euros (34.0). In line with our strategy, invoiced sales outside of the Nordics are growing faster than the sales growth in the Nordic market. Invoiced sales in the Nordic market grew strongly by 24.1% compared to the first half of 2020, amounting to 36.4 million euros (29.4). In the rest of Europe, invoiced sales grew as much as 40.1% and amounted to 7.2 million euros (5.1). Sales in the rest of the world grew by 98.0%, amounting to 1.4 million euros (0.7). The positive development is a continuation of the successful commercial strategy implementation, which includes launch of new products, widened distribution, and opening new customers.
All our product categories performed strongly during the first half of the year. The biggest category Storage, with the brand SmartStore, continued to deliver fast-growing sales, taking the first half growth to 31.7%, with total invoiced sales increasing from 21.6 million euros in 2020 to 28.4 million euros in 2021. Our second largest category Kitchen, with the GastroMax brand, performed at a convincing 17.0% growth rate. The smaller categories Home & Yard grew by 17.6% and the Plant Care category grew by 39.0%.
I am particularly impressed by the commercial team for showing resilience and determination in implementing the strategy leading to positive sales development during times of lower predictability due to COVID-19. With less opportunities to arrange physical customer meetings, visit shops, attend trade fairs or exhibitions, our ways of working had to be adapted to the circumstances. The aim is to be the best partner for our customers also under these times of restrictions and travel bans.
As anticipated, adjusted EBITA margin was relatively lower in the second quarter at 11.9%, mostly due to high raw material prices. For the first half of the year, adjusted EBITA margin was 13.6% (15.0). Adjusted EBITA for the second quarter was 2.6 million euros (3.2), taking the first half adjusted EBITA to 5.9 million euros from 5.1 million in 2020. The strong sales growth helped to bridge the negative cost development during the first half of the year.
The raw material prices continued to rise during the second quarter, but the availability of our main raw materials on the market has eased. At the moment raw material converters' margins are at historically extraordinary high levels. Raw material price fluctuation and measures to off-set the effects are common to the business. Unpredictable and fast increases in raw material prices create a short-term
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex GROUP
profitability challenge due to the delayed effects of implementing price increases or cost savings. Our long-term goal is to deliver adjusted EBITA margin exceeding 18%, and we are committed to ensure that our actions lead to reaching our goals.
As part of our sustainability strategy, we are continuously aiming to reduce our carbon footprint, and this includes increasing the use of recycled and bio-based raw materials. The energy we use in our production is another important factor that we can influence. In 2020, we switched our Finnish production site to use only renewable electricity, reducing our carbon footprint with more than 600,000 kg CO2e. In perspective, this compares to driving a car for 4.3 million kilometres or 100 times around the globe. We have now made the change to renewable energy also in our Swedish factories, which means that we have completed the switch to renewable energy in all our factories. The effect of the switch will be reported in our next sustainability report.
Orthex's innovations continued to perform well during the first half of the year and the pipeline of innovation both in terms of new products and new materials remains strong.
We have been able to ramp up capacity according to plan to secure our delivery performance. This is important to ensure being our customers' preferred partner during times of high sales growth. The installation of our new moulds and injection moulding machines strengthens our production platform and we have also strengthened the operations organisation to adjust for the increased demand and rising volumes in our Lohja and Tingsryd factories. A positive side effect of installing new machines is that energy consumption and efficiency improves overall, also resulting in improved sustainability of production, as less energy is needed per product produced.
The first half of the year has been positive, and we are prepared to continue to implement our growth strategy, with focus on accelerated international growth and sustainability. We have taken measures to reduce the impact of high raw material prices, and we are committed to continuing to take targeted action depending on the raw material price development. During uncertain times, optimally timing the corrective action is important to maintain positive growth momentum.
SmartStore Classic
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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KEY PERFORMANCE INDICATORS
| EUR million | 4–6/2021 | 4–6/2020 | Change | 1–6/2021 | 1–6/2020 | Change | 1–12/2020 |
|---|---|---|---|---|---|---|---|
| Invoiced sales | 22.5 | 18.4 | 22.7% | 45.0 | 35.2 | 27.9% | 77.9 |
| Net sales | 22.2 | 17.7 | 25.5% | 43.8 | 34.0 | 28.8% | 75.9 |
| Gross margin | 5.6 | 5.8 | -4.2% | 12.3 | 10.7 | 15.1% | 24.6 |
| Gross margin, % | 25.1% | 32.9% | 28.1% | 31.5% | 32.4% | ||
| EBITDA | 3.3 | 4.0 | -16.5% | 6.3 | 7.0 | -10.0% | 16.5 |
| EBITDA margin, % | 15.0% | 22.5% | 14.3% | 20.5% | 21.7% | ||
| Adjusted EBITDA | 3.6 | 4.3 | -16.1% | 7.8 | 7.2 | 8.2% | 17.1 |
| Adjusted EBITDA margin, % | 16.1% | 24.1% | 17.9% | 21.3% | 22.5% | ||
| EBITA | 2.4 | 2.9 | -17.7% | 4.4 | 4.8 | -9.6% | 12.3 |
| EBITA margin, % | 10.8% | 16.4% | 10.0% | 14.3% | 16.3% | ||
| Adjusted EBITA | 2.6 | 3.2 | -17.1% | 5.9 | 5.1 | 16.1% | 12.9 |
| Adjusted EBITA margin, % | 11.9% | 17.9% | 13.6% | 15.0% | 17.0% | ||
| Operating profit | 2.4 | 2.9 | -18.5% | 4.3 | 4.8 | -10.4% | 12.3 |
| Operating profit margin, % | 10.6% | 16.3% | 9.9% | 14.2% | 16.2% | ||
| Net cash flows from operating activities | 2.2 | 1.9 | 17.1% | 5.4 | 4.5 | 19.7% | 12.7 |
| Net debt / Adjusted EBITDA | 1.5x | n.a. | 1.5x | n.a. | 2.3x | ||
| Adjusted return on capital employed (ROCE), % | 8.0% | 9.9% | 18.3% | 15.9% | 40.3% | ||
| Equity ratio, % | 33.0% | 23.4% | 33.0% | 23.4% | 22.6% | ||
| Earnings per share, basic (EUR) | 0.09 | 0.13 | -33.3% | 0.16 | 0.18 | -8.2% | 0.47 |
| FTEs | 321 | 269 | 19.7% | 318 | 273 | 16.5% | 285 |
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 year of 2020 or the first half of 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.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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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. The COVID-19 pandemic continues to cause uncertainty in all geographic markets, and the company expects this uncertainty to continue in 2021.
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 in the first half of 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 first half of 2021, raw material prices have risen to exceptionally high levels.
SmartStore Collect
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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NET SALES AND PROFITABILITY
Net sales and invoiced sales
Invoiced sales split by geography:
| EUR million | 4–6/2021 | 4–6/2020 | Change | 1–6/2021 | 1–6/2020 | Change | 1–12/2020 |
|---|---|---|---|---|---|---|---|
| Nordics | 18.5 | 15.6 | 18.6% | 36.4 | 29.4 | 24.1% | 64.1 |
| Rest of Europe | 3.4 | 2.5 | 37.5% | 7.2 | 5.1 | 40.1% | 11.4 |
| Rest of the world | 0.6 | 0.3 | 119.6% | 1.4 | 0.7 | 98.0% | 2.4 |
| Total | 22.5 | 18.4 | 22.7% | 45.0 | 35.2 | 27.9% | 77.9 |
Invoiced sales split by product category:
| EUR million | 4–6/2021 | 4–6/2020 | Change | 1–6/2021 | 1–6/2020 | Change | 1–12/2020 |
|---|---|---|---|---|---|---|---|
| Storage | 13.6 | 10.7 | 27.1% | 28.4 | 21.6 | 31.7% | 49.4 |
| Kitchen | 5.0 | 4.3 | 17.4% | 9.5 | 8.1 | 17.0% | 19.0 |
| Home & Yard | 1.7 | 1.5 | 8.1% | 3.1 | 2.6 | 17.6% | 5.0 |
| Plant Care | 2.2 | 1.8 | 21.5% | 4.0 | 2.9 | 39.0% | 4.5 |
| Total | 22.5 | 18.4 | 22.7% | 45.0 | 35.2 | 27.9% | 77.9 |
H1
In January–June, the Group’s Net sales increased by 28.8% to EUR 43.8 million (34.0). Invoiced sales amounted to EUR 45.0 million (35.2). The increase of constant currency Net sales was 26.1% compared to the first half of 2020. Net sales growth was strong especially in the Storage product category and in export markets.
Q2
In April–June, the Group’s Net sales increased by 25.5% to EUR 22.2 million (17.7). Invoiced sales amounted to EUR 22.5 million (18.4). The increase of constant currency Net sales was 22.6% compared to the second quarter of 2020.
Development by geography
H1
Orthex’s core market area by geography is the Nordics, where the Group’s invoiced sales in January–June 2021 amounted to EUR 36.4 million (29.4). In the Nordic countries, the increase in sales was mainly due to increased sales to existing customers. Invoiced sales in the Nordics totalled 81.0% (83.4) of the Group’s total invoiced sales. Invoiced sales in the rest of Europe grew to EUR 7.2 million (5.1) and to EUR 1.4 million (0.7) in the rest of the world. In the export market, the increase in sales was due to increased sales to both new customers and existing customers. Orthex’s products are sold in more than 40
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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countries, and export to non-Nordic countries grew by 2.4 percentage points and accounted for 19.0% (16.6) of the Group's invoiced sales at the end of the period.
Q2
The Group's invoiced sales grew strongly in each geographic market. In the Nordic countries, growth was 18.6% compared to the second quarter of 2020 and 47.0% Outside the Nordics.
Development by product category
H1
Orthex has four product categories: Storage, Kitchen, Home & Yard and Plant Care. The largest category is Storage with invoiced sales totalling EUR 28.4 million (21.6) during January–June 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 9.5 million (8.1) which was both due to new customers and increased demand among existing customers.
Invoiced sales in the Home & Yard category increased to EUR 3.1 million (2.6).
Invoiced sales in the Plant Care category grew to EUR 4.0 million (2.9). The increase was mainly due to the increase in the cultivation of green plants, herbs and vegetables in flowerpots made of recycled plastic material.
Q2
Invoiced sales grew in all product categories during the second quarter. In Storage, which grew the fastest, growth was 27.1% compared to April–June 2020.
Profitability
H1
EBITA decreased by 9.6% to 4.4 million (4.8) during the period. Adjusted EBITA increased by 16.1% to EUR 5.9 million (5.1). Adjusted EBITA margin decreased to 13.6% (15.0). Operating profit was EUR 4.3 million (4.8). The company's listing costs affected the operating profit negatively with about EUR 1.5 million (0.0).
Orthex's financial income and expenses during the review period consisted of EUR 0.7 million net expenses (1.1). The decrease was mainly due to the impact of foreign exchange rates on Orthex's internal
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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loan arrangements. Also, no interest expenses incurred during the period from convertible loans as the convertible loans were repaid at the end of 2020. Interest on bank loans have decreased compared to the comparison period of the previous year.
Profit before taxes was EUR 3.6 million (3.7) and profit for the period was EUR 2.8 million (2.9).
Q2
EBITA decreased by 17.7% to EUR 2.4 million (2.9) during the period. Adjusted EBITA decreased by 17.1% to EUR 2.6 million (3.2). The adjusted EBITA margin decreased to 11.9% (17.9). Operating profit was EUR 2.4 million (2.9). The company's listing costs affected the operating profit negatively with about EUR 0.2 million (0.0).
Raw material prices continued to rise to exceptionally high levels affecting profitability.
FINANCIAL POSITION AND CASH FLOW
The balance sheet totalled EUR 87.9 million (73.4) at the end of the review period, of which equity constituted EUR 29.0 million (17.2). 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 27.2 million (38.1). Non-current interest-bearing liabilities were EUR 37.9 million (41.0) and Orthex's total interest-bearing liabilities were EUR 42.2 million (44.6). Interest-bearing liabilities include pension liabilities and lease liabilities.
During the period January–June 2021, the Group's net cash flows from operating activities were EUR 5.4 million (4.5) and cash conversion was 64.0% (87.7). Cash and cash equivalents amounted to EUR 15.0 million (6.6) at the end of the review period.
Net debt/adjusted EBITDA was 1.5x. 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 33.0% (23.4). Adjusted return on capital employed (ROCE) was 18.3% (15.9) and Return on equity (ROE) 12.2% (17.0).
INVESTMENTS, PRODUCT DEVELOPMENT AND ACQUISITIONS
Orthex's investments during January–June amounted to EUR 2.8 million (0.9) and were mainly related to increasing the production capacity for new and existing products.
The company's Board of Directors has decided to bring forward the production capacity increasing machinery investment originally planned for 2022 and, therefore, Orthex has committed to an EUR 1 million investment in machinery and automation in 2021. The machinery to be procured is a 650-tonne
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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injection moulding machine to produce larger storage boxes. The decision to bring forward the investment was made to have the machine in operation already in the end of 2021 for Orthex to be able to better respond to the demand for Storage category products.
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 group sales. The contract did not include any trademarks. The parties have agreed not to disclose the amount of the transaction.
SHARES AND SHAREHOLDERS
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 33.1 million and 3,672,563 shares. The highest price of the share was EUR 10.30 and the lowest was EUR 7.80. The closing price of the share at the end of June was EUR 9.52. 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 169.1 million. The company did not own any treasury shares at the end of the period.
The number of registered shareholders at the end of the review period was 18,978, including nominee registers. At the end of the period, the ten largest shareholders possessed a total of 54.2% of Orthex's shares and votes.
SUSTAINABILITY
Orthex has emphasised responsibility since the early 1990s. The company aims to be a pioneer in the industry in terms of responsibility 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 responsibility 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.
Orthex's 2020 Sustainability Report was published on 22 April 2021. In its sustainability report, the company states that it has continued its investments in 2020 in the use of bio-based and recycled materials and in reducing the carbon footprint of production.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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New products made from recycled materials had an increased interest in the domestic and export markets. In particular, the Red Dot-awarded SmartStore Collect sorting solution launched by Orthex in 2020, made from recycled materials, as well as buckets made from old fishing nets, were well received by customers.
One of the goals in Orthex's sustainability strategy is to decrease energy consumption. In 2020, Orthex improved its relative energy efficiency by 2.3 per cent and reached the energy consumption reduction goal. Orthex's production facility in Lohja, Finland, deployed a green energy solution from the beginning of 2020 reducing the carbon footprint with more than 600,000 kg CO2e. The change to renewable energy has now also been made in the Swedish factories which means that the switch to renewable energy is now completed in all Orthex factories. This is a significant step for Orthex on its way to carbon neutral production by 2030.
GOVERNANCE
Annual General Meeting
In the 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 responsibility for 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 and change the company's name to Orthex Corporation. At the same time, the company's share capital was increased from the company's invested unrestricted equity funds to the amount of EUR 80,000 required for a public company.
The Annual General Meeting decided to cancel the company's treasury shares and the Board of Directors was authorised to decide on a share issue to implement the public offering and on including the shares in the book-entry system managed by Euroclear Finland.
Extraordinary General Meeting
The Extraordinary General Meeting on 5 March 2021, decided to establish a Nomination Committee in the company and the Nomination Committee's rules of procedure were approved.
The Nomination Committee consists of the four (4) largest shareholders of the company as of 31st of August 2021 or, if the company has more than four (4) shareholders, whose shareholding and voting rights in the company are more than 10 per cent, the corresponding number of shareholders or persons appointed by them, and the Chairman of the Board.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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Board of Directors
On 30 June 2021 the company's Board of Directors consisted of the following members: Sanna Suvanto-Haarsae (chair), Satu Huber, Ari Jokelainen and Juuso Kivinen.
Auditor
The annual general meeting decided that Ernst & Young Oy will continue as the company's auditor, with Johanna Winqvist-Illkka as the responsible auditor.
CERTAIN 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.
The COVID-19 pandemic has caused significant disruption to the global economy and the Group's geographic market. Although the COVID-19 virus 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 Köskungen brand. Fluctuations in exchange rates and interest rates can have a material adverse effect on the Group.
The main principles of Orthex's financial risk management are described in the consolidated financial statements and the general principles of risk management on the website at https://investors.orthexgroup.com/.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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EVENTS AFTER THE REVIEW PERIOD
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 the Board of Directors of Orthex Corporation as of August 1, 2021. Jens-Peter Poulsen is independent of the company and the company's significant shareholders and has given his consent to the election.
GastroMax freezer boxes
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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GROUP
FINANCIAL RELEASES IN 2021
Orthex will publish its financial reports in 2021 as follows:
11 November 2021, Interim report January–September 2021
Espoo, 24 August 2021
ORTHEX CORPORATION
Board of Directors
Additional information:
Alexander Rosenlew, CEO, +358 (0)40 500 3826
Saara Mäkelä, CFO, +358 (0)400 838 782
Contacts:
Analysts and investors: Saara Mäkelä, CFO, +358 (0)400 838 782
Media: Hanna Kukkonen, CMO, +358 (0)400 538 886
The H1 results presentation will be held on 25 August 2021 at 11:00 am EEST 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
Principal media
https://investors.orthexgroup.com/
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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GROUP
ORTHEX HALF YEAR FINANCIAL REPORT JANUARY–JUNE 2021
Consolidated Statement of Comprehensive Income
| € 000 | 4–6/2021 | 4–6/2020 | 1–6/2021 | 1–6/2020 | 1–12/2020 |
|---|---|---|---|---|---|
| Net Sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| Cost of sales | -16,611 | -11,856 | -31,482 | -23,299 | -51,264 |
| Gross Margin | 5,565 | 5,812 | 12,329 | 10,707 | 24,601 |
| Other operating income | 148 | 127 | 200 | 155 | 278 |
| Selling and marketing expenses | -1,986 | -1,757 | -4,459 | -3,805 | -7,978 |
| Administrative expenses | -1,376 | -1,298 | -3,751 | -2,238 | -4,620 |
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Financial income and expenses | -352 | -152 | -702 | -1,108 | -2,423 |
| Profit before taxes | 1,998 | 2,733 | 3,616 | 3,713 | 9,858 |
| Income taxes | -440 | -593 | -810 | -801 | -2,165 |
| Profit for the period | 1,558 | 2,140 | 2,806 | 2,912 | 7,692 |
| Profit for the period attributable to: | |||||
| Equity holders of the parent | 1,558 | 2,140 | 2,806 | 2,912 | 7,692 |
| Earnings per share, basic (and diluted), EUR | 0.09 | 0.13 | 0.16 | 0.18 | 0.47 |
| Other comprehensive income/(loss) net of tax | |||||
| Items that may be reclassified subsequently to profit or loss: | |||||
| Translation differences | 385 | 1,454 | -249 | -156 | 1,261 |
| Items that will not be reclassified to profit or loss: | |||||
| Remeasurement gains/(losses) on defined benefit plans | - | - | - | - | -100 |
| Other comprehensive income/(loss) for the period, net of tax | 385 | 1,454 | -249 | -156 | 1,161 |
| Total comprehensive income/(loss) for the period | 1,942 | 3,594 | 2,556 | 2,755 | 8,853 |
| Total comprehensive income attributable to: | |||||
| Equity holders of the parent | 1,942 | 3,594 | 2,556 | 2,755 | 8,853 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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Consolidated Statement of Financial Position
| € 000 | 30 Jun 2021 | 30 Jun 2020 | 31 Dec 2020 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible assets | 24,210 | 23,342 | 24,149 |
| Property, plant and equipment | 12,352 | 10,454 | 11,382 |
| Right-of-use assets | 8,641 | 9,275 | 9,244 |
| Other non-current assets | 103 | 97 | 98 |
| Deferred tax assets | 1,090 | 1,260 | 1,070 |
| Total non-current assets | 46,396 | 44,429 | 45,944 |
| Current assets | |||
| Inventories | 12,375 | 9,820 | 9,906 |
| Trade and other receivables | 13,792 | 12,628 | 14,264 |
| Income tax receivables | 411 | - | 5 |
| Cash and cash equivalents | 14,964 | 6,548 | 5,250 |
| Total current assets | 41,543 | 28,996 | 29,424 |
| Total assets | 87,939 | 73,425 | 75,368 |
| Equity and liabilities | |||
| Equity attributable to the equity holders of the parent company | |||
| Share capital | 80 | 3 | 3 |
| Treasury shares | - | -71 | -71 |
| Invested unrestricted equity fund | 11,047 | 8,003 | 1,775 |
| Retained earnings | 15,967 | 8,481 | 13,161 |
| Translation differences | 1,904 | 736 | 2,154 |
| Total equity | 28,999 | 17,152 | 17,022 |
| Non-current liabilities | |||
| Loans from credit institutions | 25,185 | 22,937 | 26,652 |
| Convertible loans | - | 5,245 | - |
| Lease liabilities | 8,076 | 8,598 | 8,668 |
| Pension liabilities | 4,656 | 4,228 | 4,658 |
| Deferred tax liabilities | 566 | 382 | 572 |
| Total non-current liabilities | 38,483 | 41,390 | 40,550 |
| Current liabilities | |||
| Loans from credit institutions | 3,000 | 2,500 | 3,000 |
| Lease liabilities | 1,237 | 1,114 | 1,158 |
| Trade and other payables | 14,080 | 10,625 | 11,791 |
| Derivative financial instruments | 13 | 13 | 110 |
| Income tax liabilities | 2,127 | 632 | 1,736 |
| Total current liabilities | 20,457 | 14,883 | 17,796 |
| Total liabilities | 58,940 | 56,273 | 58,346 |
| Total equity and liabilities | 87,939 | 73,425 | 75,368 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
16
orthex
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 | 2,806 | 2,806 | ||||
| Translation differences | -249 | -249 | ||||
| Total comprehensive income/(loss) for the period | 2,806 | -249 | 2,556 | |||
| 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 30 June 2021 | 80 | - | 11,047 | 15,967 | 1,904 | 28,999 |
| As at 1 Jan 2020 | 3 | -97 | 7,997 | 5,569 | 893 | 14,365 |
| Profit for the period | 2,912 | 2,912 | ||||
| Translation differences | -156 | -156 | ||||
| Total comprehensive income/(loss) for the period | 2,912 | -156 | 2,755 | |||
| Transactions with owners in their capacity as owners: | ||||||
| Directed issue of treasury shares | 26 | 6 | 32 | |||
| At 30 June 2020 | 3 | -71 | 8,003 | 8,481 | 736 | 17,152 |
| 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–June 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.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
Consolidated Statement of Cash Flows
| € 000 | 1–6/2021 | 1–6/2020 | 1–12/2020 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before taxes | 3,616 | 3,713 | 9,858 |
| Adjustments: | |||
| Depreciation, amortisation and impairment | 1,949 | 2,142 | 4,177 |
| Financial income and expenses | 702 | 1,108 | 2,423 |
| Other adjustments | -2 | 66 | 43 |
| Cash flows before changes in working capital | 6,265 | 7,028 | 16,501 |
| Changes in working capital | |||
| Decrease (+) / increase (–) in trade and other receivables | 390 | -1,052 | -2,275 |
| Decrease (+) / increase (–) in inventories | -2,519 | -357 | -149 |
| Decrease (–) / increase (+) in trade and other payables | 2,735 | -43 | 1,299 |
| Cash flows from operating activities before financial items and taxes | 6,871 | 5,575 | 15,376 |
| Interests received | - | - | 0 |
| Interests paid | -739 | -827 | -2,319 |
| Dividends received | - | 7 | 7 |
| Income taxes paid | -730 | -244 | -355 |
| Net cash flows from operating activities | 5,401 | 4,511 | 12,709 |
| Cash flows from investing activities | |||
| Investments in tangible and intangible assets | -2,817 | -886 | -3,201 |
| Sale of tangible and intangible assets | 102 | - | - |
| Other investments | - | 5 | 4 |
| Net cash flows from investing activities | -2,715 | -881 | -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 | -635 | -582 | -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 | -1,500 | -1,666 | -2,500 |
| Capital return from the invested unrestricted equity fund | - | - | -6,228 |
| Directed issue of treasury shares | - | 32 | 32 |
| Net cash flows from financing activities | 7,008 | -2,217 | -9,516 |
| Net change in cash and cash equivalents | 9,694 | 1,413 | -3 |
| Net foreign exchange differences | 20 | -38 | 81 |
| Cash and cash equivalents at the beginning of the period | 5,250 | 5,173 | 5,173 |
| Cash and cash equivalents at the end of the period | 14,964 | 6,548 | 5,250 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
18
orthex
GROUP
NOTES TO THE GROUP'S INTERIM INFORMATION
Basis of preparation
Orthex's interim information has been prepared in compliance with the IAS 34 Interim Financial Reporting standard. Interim information does not contain all the notes presented in the consolidated financial statements for 2020 and should therefore be read in conjunction with the consolidated financial statements for 2020 prepared in accordance with IFRS. The same accounting principles have been applied to the interim information as to the consolidated financial statements taking into account.
Orthex's Board of Directors has approved this interim information in its meeting on 24 August 2021. This interim information is unaudited. Figures in the interim information have been rounded and consequently the sum of individual figures may deviate from the presented sum figure.
Accounting estimates and management judgements made in preparation of the interim information
The preparation of interim 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 interim information are identical to those applied in the consolidated financial statements for 2020.
Related party transactions
Transactions with related parties have been made on an arm's length basis.
During the review period January–June 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–June 2020, related party transactions consisted of accrued interest on convertible loans. The accrued interest from previous year amounted to EUR 83 thousand and was paid during the period. In January–June 2020, new accrued interest totalled EUR 249 thousand and convertible loans from related parties on 30 June 2020 amounted to EUR 5.2 million. The convertible loans including interest were repaid in full in November 2020.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
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 | 268 | 2,171 | 390 | 2,829 | |
| Disposals | -18 | -3,471 | -209 | -3,699 | |
| Translation differences | -141 | -662 | -64 | -867 | |
| Acquisition cost at 30 Jun 2021 | 1,185 | 23,931 | 66,279 | 12,199 | 103,594 |
| Accumulated depreciation, amortisation and impairment at 1 Jan 2021 | 858 | - | 56,859 | 2,837 | 60,555 |
| Depreciation and amortisation | 65 | 1,163 | 721 | 1,949 | |
| Accumulated depreciation and amortisation on disposals and transfers | -18 | -3,471 | -3,489 | ||
| Translation differences | -625 | -625 | |||
| Accumulated depreciation, amortisation and impairment at 30 Jun 2021 | 905 | - | 53,927 | 3,558 | 58,390 |
| Carrying amount at 1 Jan 2021 | 77 | 24,072 | 11,382 | 9,244 | 44,776 |
| Carrying amount at 30 Jun 2021 | 279 | 23,931 | 12,352 | 8,641 | 45,204 |
| Acquisition cost at 1 Jan 2020 | 904 | 23,337 | 63,971 | 11,064 | 99,277 |
| Additions | 1,067 | 377 | 1,444 | ||
| Disposals | -8 | -8 | |||
| Translation differences | -82 | -168 | -50 | -299 | |
| Acquisition cost at 30 Jun 2020 | 904 | 23,256 | 64,862 | 11,391 | 100,413 |
| Accumulated depreciation, amortisation and impairment at 1 Jan 2020 | 791 | - | 53,165 | 1,400 | 55,356 |
| Depreciation and amortisation | 26 | 1,399 | 716 | 2,142 | |
| Accumulated depreciation and amortisation on disposals and transfers | -8 | -8 | |||
| Translation differences | -148 | -148 | |||
| Accumulated depreciation, amortisation and impairment at 30 Jun 2020 | 817 | - | 54,408 | 2,116 | 57,341 |
| Carrying amount at 1 Jan 2020 | 113 | 23,337 | 10,806 | 9,665 | 43,921 |
| Carrying amount at 30 Jun 2020 | 87 | 23,256 | 10,454 | 9,275 | 43,072 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
Fair value of financial assets and liabilities
Financial liabilities
| € 000 | 30 Jun 2021 | 30 Jun 2020 | 31 Dec 2020 |
|---|---|---|---|
| Level 2 | |||
| Liabilities measured at fair value | |||
| Derivative financial instruments: | |||
| Foreign exchange forward contracts | 13 | 13 | 110 |
| Total | 13 | 13 | 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 | 30 Jun 2021 | 30 Jun 2020 | 31 Dec 2020 |
|---|---|---|---|
| Guarantees and mortgages given on own behalf: | |||
| Enterprise mortgages | 53,589 | 53,388 | 53,631 |
| Property mortgages | 10,192 | 6,192 | 10,192 |
| Other guarantees | 55 | - | 56 |
| Total | 63,837 | 59,580 | 63,879 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
APPENDIX:
Key Performance Indicators
| € 000 | 4-6/2021 | 4-6/2020 | 1-6/2021 | 1-6/2020 | 1-12/2020 |
|---|---|---|---|---|---|
| Net sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| Net sales growth, % | 25.5% | n.a. | 28.8% | n.a. | 14.2% |
| Constant currency invoiced sales growth, % | 22.6% | n.a. | 26.1% | n.a. | 14.8% |
| Invoiced sales | 22,544 | 18,376 | 44,987 | 35,185 | 77,877 |
| Invoiced sales growth, % | 22.7% | n.a. | 27.9% | n.a. | 15.5% |
| Gross Margin | 5,565 | 5,812 | 12,329 | 10,707 | 24,601 |
| Gross Margin, % | 25.1% | 32.9% | 28.1% | 31.5% | 32.4% |
| EBITDA | 3,324 | 3,979 | 6,267 | 6,962 | 16,458 |
| EBITDA margin, % | 15.0% | 22.5% | 14.3% | 20.5% | 21.7% |
| EBITA | 2,384 | 2,898 | 4,383 | 4,847 | 12,336 |
| EBITA margin, % | 10.8% | 16.4% | 10.0% | 14.3% | 16.3% |
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Operating profit margin, % | 10.6% | 16.3% | 9.9% | 14.2% | 16.2% |
| Items affecting comparability | 218 | 271 | 1,556 | 271 | 597 |
| Adjusted Gross Margin | 5,581 | 5,812 | 12,344 | 10,707 | 24,601 |
| Adjusted Gross Margin, % | 25.2% | 32.9% | 28.2% | 31.5% | 32.4% |
| Adjusted EBITDA | 3,567 | 4,250 | 7,824 | 7,233 | 17,054 |
| Adjusted EBITDA margin, % | 16.1% | 24.1% | 17.9% | 21.3% | 22.5% |
| Adjusted EBITA | 2,628 | 3,169 | 5,940 | 5,118 | 12,933 |
| Adjusted EBITA margin, % | 11.9% | 17.9% | 13.6% | 15.0% | 17.0% |
| Adjusted operating profit | 2,594 | 3,156 | 5,874 | 5,091 | 12,878 |
| Adjusted operating profit margin, % | 11.7% | 17.9% | 13.4% | 15.0% | 17.0% |
| Earnings per share, basic (and diluted), EUR | 0.09 | 0.13 | 0.16 | 0.18 | 0.47 |
| FTEs | 321 | 269 | 318 | 273 | 285 |
| Personnel expenses | 5,166 | 4,242 | 10,592 | 8,302 | 17,056 |
| Key cash flows indicators | |||||
| Net cash flows from operating activities | 2,209 | 1,885 | 5,401 | 4,511 | 12,709 |
| Operating free cash flows | 2,418 | 3,875 | 5,007 | 6,347 | 13,853 |
| Cash conversion, % | 67.8% | 91.2% | 64.0% | 87.7% | 81.2% |
| Investments in tangible and intangible assets | -1,149 | -375 | -2,817 | -886 | -3,201 |
| Financial position key figures | |||||
| Net debt | 27,190 | 38,073 | 27,190 | 38,073 | 38,886 |
| Net debt / adjusted EBITDA last 12 months | 1.5x | n.a. | 1.5x | n.a. | 2.3x |
| Net working capital | 12,087 | 11,191 | 12,087 | 11,191 | 12,379 |
| Capital employed excluding goodwill | 32,257 | 31,969 | 32,257 | 31,969 | 31,835 |
| Return on capital employed (ROCE), % | 7.3% | 9.0% | 13.5% | 15.0% | 38.4% |
| Adjusted return on capital employed (ROCE), % | 8.0% | 9.9% | 18.3% | 15.9% | 40.3% |
| Equity ratio, % | 33.0% | 23.4% | 33.0% | 23.4% | 22.6% |
| Return on equity, % | 5.6% | 13.9% | 12.2% | 17.0% | 49.0% |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
Reconciliation of APMs
| € 000 | 4-6/2021 | 4-6/2020 | 1-6/2021 | 1-6/2020 | 1-12/2020 |
|---|---|---|---|---|---|
| Net sales growth, % | |||||
| Net sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| Net sales growth, % | 25.5% | n.a. | 28.8% | n.a. | 14.2% |
| Constant currency Net sales growth, % | |||||
| Net sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| FX rate adjustment | - | 422 | - | 729 | - |
| Constant currency Net sales | 22,176 | 18,089 | 43,811 | 34,735 | 75,865 |
| Constant currency Net sales growth, % | 22.6% | n.a. | 26.1% | n.a. | 14.8% |
| Invoiced sales | |||||
| Net sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| Discounts and bonuses | 744 | 607 | 1,436 | 1,156 | 2,757 |
| Other sales and refunds | -376 | 101 | -260 | 22 | -746 |
| Invoiced sales | 22,544 | 18,376 | 44,987 | 35,185 | 77,877 |
| Invoiced sales growth, % | 22.7% | n.a. | 27.9% | n.a. | 15.5% |
| Gross Margin | |||||
| Net sales | 22,176 | 17,668 | 43,811 | 34,006 | 75,865 |
| Cost of sales | -16,611 | -11,856 | -31,482 | -23,299 | -51,264 |
| Gross Margin | 5,565 | 5,812 | 12,329 | 10,707 | 24,601 |
| Gross Margin (%) | 25.1% | 32.9% | 28.1% | 31.5% | 32.4% |
| EBITDA | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Depreciation, amortisation and impairment | 973 | 1,094 | 1,949 | 2,142 | 4,177 |
| EBITDA | 3,324 | 3,979 | 6,267 | 6,962 | 16,458 |
| EBITDA margin (%) | 15.0% | 22.5% | 14.3% | 20.5% | 21.7% |
| EBITA | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Amortisation and impairment | 34 | 13 | 65 | 26 | 55 |
| EBITA | 2,384 | 2,898 | 4,383 | 4,847 | 12,336 |
| EBITA margin (%) | 10.8% | 16.4% | 10.0% | 14.3% | 16.3% |
| Operating profit | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Operating profit margin, % | 10.6% | 16.3% | 9.9% | 14.2% | 16.2% |
| Items affecting comparability / adjustments (Gross Margin) | |||||
| Other items affecting comparability | 15 | - | 15 | - | - |
| Items affecting comparability / adjustments (Gross Margin) | 15 | - | 15 | - | - |
| Items affecting comparability / adjustments (EBITDA) | |||||
| Other items affecting comparability | 26 | - | 26 | - | - |
| Costs related to listing | 218 | 271 | 1,531 | 271 | 597 |
| Items affecting comparability / adjustments (EBITDA) | 244 | 271 | 1,556 | 271 | 597 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
| € 000 | 4-6/2021 | 4-6/2020 | 1-6/2021 | 1-6/2020 | 1-12/2020 |
|---|---|---|---|---|---|
| Adjusted Gross Margin | |||||
| Gross Margin | 5,565 | 5,812 | 12,329 | 10,707 | 24,601 |
| Adjustments (Gross Margin) | 15 | - | 15 | - | - |
| Adjusted Gross Margin | 5,581 | 5,812 | 12,344 | 10,707 | 24,601 |
| Adjusted Gross Margin (%) | 25.2% | 32.9% | 28.2% | 31.5% | 32.4% |
| Adjusted EBITDA | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Depreciation, amortisation and impairment | 973 | 1,094 | 1,949 | 2,142 | 4,177 |
| Adjustments (EBITDA) | 244 | 271 | 1,556 | 271 | 597 |
| Adj. EBITDA | 3,567 | 4,250 | 7,824 | 7,233 | 17,054 |
| Adj. EBITDA margin (%) | 16.1% | 24.1% | 17.9% | 21.3% | 22.5% |
| Adjusted EBITA | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Amortisation and impairment | 34 | 13 | 65 | 26 | 55 |
| Adjustments (EBITA) | 244 | 271 | 1,556 | 271 | 597 |
| Adj. EBITA | 2,628 | 3,169 | 5,940 | 5,118 | 12,933 |
| Adj. EBITA margin (%) | 11.9% | 17.9% | 13.6% | 15.0% | 17.0% |
| Adjusted operating profit | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Adjustments | 244 | 271 | 1,556 | 271 | 597 |
| Adj. operating profit | 2,594 | 3,156 | 5,874 | 5,091 | 12,878 |
| Adj. operating profit margin (%) | 11.7% | 17.9% | 13.4% | 15.0% | 17.0% |
| Earnings per share, basic (and diluted), EUR | |||||
| Profit for the period | 1,558 | 2,140 | 2,806 | 2,912 | 7,692 |
| Average number of shares | 17,759 | 16,277 | 17,088 | 16,277 | 16,277 |
| Earnings per share, basic (and diluted), EUR | 0.09 | 0.13 | 0.16 | 0.18 | 0.47 |
| Operating free cash flows | |||||
| Adj. EBITDA | 3,567 | 4,250 | 7,824 | 7,233 | 17,054 |
| Investments in tangible and intangible assets | -1,149 | -375 | -2,817 | -886 | -3,201 |
| Operating free cash flows | 2,418 | 3,875 | 5,007 | 6,347 | 13,853 |
| Cash conversion, % | |||||
| Operating free cash flows | 2,418 | 3,875 | 5,007 | 6,347 | 13,853 |
| Adj. EBITDA | 3,567 | 4,250 | 7,824 | 7,233 | 17,054 |
| Cash conversion, % | 67.8% | 91.2% | 64.0% | 87.7% | 81.2% |
| Net debt | |||||
| Total interest-bearing liabilities | 42,154 | 44,621 | 42,154 | 44,621 | 44,136 |
| Cash and cash equivalents | -14,964 | -6,548 | -14,964 | -6,548 | -5,250 |
| Net debt | 27,190 | 38,073 | 27,190 | 38,073 | 38,886 |
| Net debt/ Adj. EBITDA | |||||
| Net debt | 27,190 | 38,073 | 27,190 | 38,073 | 38,886 |
| Adj. EBITDA, 12 months | 17,644 | n.a. | 17,644 | n.a. | 17,054 |
| Net debt/ Adj. EBITDA | 1.5x | n.a. | 1.5x | n.a. | 2.3x |
HALF YEAR FINANCIAL REPORT | JANUARY-JUNE 2021 | 25 AUG 2021
orthex
GROUP
| € 000 | 4-6/2021 | 4-6/2020 | 1-6/2021 | 1-6/2020 | 1-12/2020 |
|---|---|---|---|---|---|
| Net working capital | |||||
| Inventories | 12,375 | 9,820 | 12,375 | 9,820 | 9,906 |
| Trade and other receivables | 13,792 | 12,628 | 13,792 | 12,628 | 14,264 |
| Trade and other payables | -14,080 | -11,257 | -14,080 | -11,257 | -11,791 |
| Net working capital | 12,087 | 11,191 | 12,087 | 11,191 | 12,379 |
| Capital employed excluding goodwill | |||||
| Total Equity | 28,999 | 17,152 | 28,999 | 17,152 | 17,022 |
| Net debt | 27,190 | 38,073 | 27,190 | 38,073 | 38,886 |
| Goodwill | -23,931 | -23,256 | -23,931 | -23,256 | -24,072 |
| Capital employed excluding goodwill | 32,257 | 31,969 | 32,257 | 31,969 | 31,835 |
| Return on capital employed (ROCE), % | |||||
| Operating profit | 2,350 | 2,885 | 4,318 | 4,820 | 12,281 |
| Average capital employed excluding goodwill | 32,257 | 31,969 | 32,046 | 32,037 | 31,970 |
| Return on capital employed (ROCE), % | 7.3% | 9.0% | 13.5% | 15.0% | 38.4% |
| Adjusted return on capital employed (ROCE), % | |||||
| Adjusted operating profit | 2,594 | 3,156 | 5,874 | 5,091 | 12,878 |
| Average capital employed excluding goodwill | 32,257 | 31,969 | 32,046 | 32,037 | 31,970 |
| Adjusted return on capital employed (ROCE), % | 8.0% | 9.9% | 18.3% | 15.9% | 40.3% |
| Equity ratio (%) | |||||
| Total Equity | 28,999 | 17,152 | 28,999 | 17,152 | 17,022 |
| Total assets | 87,939 | 73,425 | 87,939 | 73,425 | 75,368 |
| Equity ratio (%) | 33.0% | 23.4% | 33.0% | 23.4% | 22.6% |
| Return on equity, % | |||||
| Profit for the period | 1,558 | 2,140 | 2,806 | 2,912 | 7,692 |
| Total equity (average for the first and last day of the period) | 28,064 | 15,355 | 23,010 | 17,152 | 15,693 |
| Return on equity, % | 5.6% | 13.9% | 12.2% | 17.0% | 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.
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex
GROUP
Calculation of key figures
| Key Performance Indicators | Formula |
|---|---|
| Net sales | N.A. |
| Net sales growth, % | N.A. |
| 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 |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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) |
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
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 include the Nordics (i.e., Finland, Sweden, Norway, Denmark, and Iceland) and export markets, including Germany, France, and the United Kingdom. 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.
SmartStore Dry
HALF YEAR FINANCIAL REPORT | JANUARY–JUNE 2021 | 25 AUG 2021
orthex GROUP
Orthex Corporation
www.investors.orthexgroup.com