Rovsing — Interim / Quarterly Report 2019

Feb 17, 2020

1

Rovsing

INTERIM REPORT

FIRST HALF YEAR 2019 / 20

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2

PROFILE

Rovsing A/S (Rovsing) develops, manufactures and delivers systems for functional and electrical testing of spacecrafts (primarily satellites) and their payloads.

The products and systems are used for testing of spacecraft sub-systems, including external communication connections and instruments.

The Company's products are modular and are sold either on a stand-alone basis or used as modules in system solutions, customized for the specific spacecraft application. In connection with the configuration of system solutions, third parties' products are also used, and software is configured for the individual spacecraft needs.

The products, inclusive software packages, are flexible and configurable, facilitating tailor-made customer solutions.

More specifically, Rovsing offers, the following equipment solutions:

• Payload EGSE (Electrical Ground Support Equipment)
• Power & Launch EGSE
• Platform EGSE
• Instrument EGSE
• Avionics Test Beds
• Central Check-out Equipment
• Thermal EGSE
• Real-time Simulators

In addition, Rovsing develops software solutions, including solutions based on specific customer specifications, and performs independent software verification/validation (ISVV) for critical space-related software developed by third parties.

Rovsing also provides engineering support for large corporations in the space industry at various locations in Europe and in South America. For more than 15 years, Rovsing has been responsible for configuration control of ground installations at the European space base CSG in Kourou in French Guiana.

The main customers of Rovsing are European and US-based space groups such as Airbus DS, Thales Alenia Space, Boeing, Lockheed Martin and their key sub-suppliers. The European Space Agency (ESA), NASA and various national space agencies are also among Rovsing's customers.

LIST OF CONTENTS

PROFILE...2
HIGHLIGHTS OF THE HALF YEAR...3
FINANCIAL HIGHLIGHTS AND RATIOS...4
CORPORATE INFORMATION...5
MANAGEMENT STATEMENT...8
INCOME AND COMPREHENSIVE INCOME STATEMENT...9
BALANCE SHEET...10
BALANCE SHEET...11
STATEMENT OF CHANGES IN EQUITY...12
CASH FLOW STATEMENT...14
DEFINITION OF RATIOS...17
GLOSSARY...18

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HIGHLIGHTS OF THE HALF YEAR

• In H1-2019/2020 Rovsing has successfully completed a strategic project T6A EPS EGSE in Turkey, which is a milestone reference for Rovsing's future markets and business development. However, the project has consumed excess resources in the organization to finalize successful delivery, which affected H1-2019/2020 negatively
• In the first half year of 2019/20, the revenue amounted to DKK 9,4 million (2018/19: DKK 11,0 million)
• Gross profit of DKK 7,3 million (2018/19: DKK 9,7 million)
• Other external expenses DKK 1,0 million (2018/19: DKK 1,4 million) or an improvement of DKK 0,4 million
• Current order book and order intake are very solid, and the projected pipeline is at a higher level compared to prior years. This combined with delays in the upstart of larger ESA driven missions, many of Rovsing's activities have shifted to H2 2019/20 and into next financial year. Therefore, revenue in H2 2019/20 will be positively affected by upstart of some of these delayed missions
• H1 EBITDA is also negatively affected by one off costs of DKK 0,4 million re. replacement of two employees in Kourou at the European space base CSG in French Guiana
• Cash flow from operating activities of DKK -1,1 million (2018/19: DKK 1,8 million)
• The half year has suffered from delayed Kick-Off of new contracts which had been anticipated shortly after the summer. Rovsing worked under PATPs on both Plato SIS PFE and SMILE PLM EGSE projects until December 2019 and February 2020 respectively. These projects have picked up pace and deliveries will be rolling out during the second half year
• Rovsing has supported the industry primes with a high number of proposals during the half year on high profile missions such as the PLATO, Galileo Transition Satellites, Mars Sample Return and the six high-priority candidate missions for the EU's Copernicus programme. Overall the expected activity in Rovsing market segments is estimated to be on the rise in late second half year of 2019/20 as well as in the coming business years
• The finalization of the T6A EPS EGSE and the delayed kick-off of new ESA driven projects has caused a poor development in revenue and negative EBITDA in H1 2019/20. The expected revenue for 2019/20 is changed to the range of DKK 21 to 23 million and an EBITDA of DKK -1 to 0 million. This is an adjustment against the previous guided outlook for the revenue from a range of DKK 24 to DKK 26 million to a range of DKK 21 to 23 million and EBITDA from DKK 0 to 1 million, to an EBITDA in the range of DKK -1 to 0 million

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4

FINANCIAL HIGHLIGHTS AND RATIOS

| INCOME STATEMENT | 1H
2019/20 | 1H
2018/19 | Full year
2018/19 |
| --- | --- | --- | --- |
| DKK'000 | | | |
| Revenue | 9,426 | 10,958 | 28,184 |
| Earnings before interest, taxes, depreciation and amortisation, EBITDA | -1.792 | 85 | 341 |
| Operating profit (EBIT) | -3,988 | -1,506 | -2,929 |
| Financial income and expenses, net | -676 | -353 | -767 |
| Profit/loss for the year | -4,664 | -1,859 | -4,040 |
| BALANCE SHEET | | | |
| Non-current assets | 20,395 | 22,047 | 20,209 |
| Current assets | 12,150 | 9,531 | 14,265 |
| Total assets | 32,545 | 31,578 | 34,474 |
| Equity | 13,570 | 17,171 | 18,560 |
| Non-current liabilities | 590 | 4,000 | 4,080 |
| Current liabilities | 18,385 | 10,407 | 11,834 |
| Total equity and liabilities | 32,545 | 31,578 | 34,474 |
| CASH FLOW STATEMENT | | | |
| Cash flow from operating activities | -1,093 | 1,840 | 11 |
| Cash flow from investing activities | -176 | -370 | -1,040 |
| Cash flow from financing activities | 1,250 | -1,320 | 1,109 |
| Total cash flow | -19 | 150 | 81 |
| KEY FIGURES | | | |
| EBITDA margin, % | -19,0 | 0.8 | 1.2 |
| EBIT margin, % | -42,3 | -13.7 | -10.4 |
| Return on equity, % | -27,2 | -9.6 | -18.0 |
| Earnings per share (EPS) | -0.01 | 0.00 | -0.01 |
| Cash flow per share (CFPS) | -0.01 | 0.00 | -0.01 |
| Dividends per share of DKK 50 | - | - | - |
| Pay-out ratio, % | - | - | - |
| Equity per share, DKK | 0.03 | 0.04 | 0.04 |
| Solvency, % | 41.7 | 54.4 | 53.8 |
| Average number of shares | 453,957 | 406,901 | 429,844 |
| Number of shares at year-end | 456,479 | 415,030 | 457,881 |

The key figures are calculated in accordance with the recommendations issued by the Danish Society of Financial Analysts ("Finansforeningens") in 2015.

At the Annual General Meeting on 21 October 2019, a reverse share split was decided in a 1000:1 consolidation ratio. The reverse share split reduced the number of shares issued in the company, so that 1.000 shares at a nominal value of DKK 0.05 were merged into one share with a nominal of DKK 50 (1000: 1 ratio). The Key Figures above are adapted to this change.

Rovsing's financial year is from 1 July to 30 June.

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5

CORPORATE INFORMATION

The Company

Rovsing A/S
Dyregårdsvej 2
2740 Skovlunde, Denmark

Phone: +45 44 200 800
Fax: +45 44 200 801
Website: www.rovsing.dk
E-mail: info@rovsing.dk

Company reg. (CVR) no.: 16 13 90 84
Date of incorporation: 20 May 1992
Municipality of registered office: Ballerup, Denmark

Board of Directors

Michael Hove (Chairman)
Flemming Hynkemejer
Ulrich Beck
Steen Rosenkvist

Executive Management

Hjalti Pall Thorvardarson, CEO
Sigurd Hundrup, CFO

Auditors

BDO Statsautoriseret revisionsaktieselskab
Birk Centerpark 30
7400 Herning, Denmark

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6

MANAGEMENTS' REVIEW

REVENUE AND RESULTS

Revenue for the first half year 2019/20 amounted to DKK 9,4 million compared to DKK 11,0 million in the same period last year.

Gross profit for the period amounted to DKK 7,3 million compared to DKK 9,7 million in the first half of 2018/19. The drop in gross profit is attributable to the delayed finalization of the extensive T6A EPS EGSE project, which has tied up more resources in the organization resulting in more hours spend than expected.

Other external expenses amounted to DKK 1,0 million compared to DKK 1,4 million in the same period last year. The effect of the implementation of IFRS 16 (Leases) is lower external costs of DKK 0,6 million in the first half year of 2019/20.

Staff cost amounted to DKK 8,1 million or DKK 0,1 million lower compared to the same period in the financial year 2018/19. Staff cost is negatively affected by one off costs of DKK 0,4 million re. replacement of two employees in Kourou at the European space base CSG in French Guiana.

EBITDA for the period amounted to DKK -1,8 million compared to DKK 0,1 million in the same period of the financial year 2018/19.

The net profit for the first half year amounted to DKK -4,7 million compared to DKK -1,9 million in the same period last year.

Equity as per 31 December 2019 amounted to DKK 13,6 million (31 December 2018: DKK 17,2 million).

Cash flow from operating activities for the period amounted to DKK -1,1 million compared to DKK 1,8 million in the first half year 2018/19. Net cash flow from investing activities amounted to DKK -0,2 million (2018/19: DKK -0,4 million) and cash flow from financing activities amounted to DKK 1,3 million (2018/19: DKK -1,3 million) while net cash flow for the period amounted to DKK 0 million (2018/19: DKK 0,2 million).

OPERATIONAL REVIEW

The European market

The European institutional market remains the most important market to Rovsing, with an outlook to a market with increasing activity level with new large profile missions entering implementation phase. Here, Rovsing has supported the various industry Primes and consortiums on both ESA and national programmes.

The efforts and focus on diversifying the Company's market share to bring further stabilization and growth potential in activity level has continued, with the successful delivery of the T6A EPS EGSE and Solar Array Simulator systems to Boeing as testament to Rovsing's ability to deliver large systems on time, on quality and at competitive price range.

In the first half of the financial year 2019/20, Rovsing had less than projected revenues as a result of unbudgeted additional efforts and test time required to resolve EMC compliance violations of equipment provided by two different vendors. Although, these issues have had negative impact on the Company performance, their resolution with minimal schedule impact for our customer are a testament to the hard work and ingenuity of the staff.

Rovsing has continued support for the Orion Multi-Purpose Crew Vehicle (MPCV), especially the European Service Module (ESM). A fourth Solar Array Wing Front End Equipment (SAW FEE) system was delivered to Airbus DS in Bremen in October 2019. In addition, Rovsing engineers have provided onsite support at both Kennedy Space Center and during the TVAC campaign in Plumbrook during H1. As part of the NASA Artemis programme several ESMs are foreseen until 2028. In this connection Rovsing foresees to continue providing engineering support both remote and onsite as well as spare parts and possible upgrades.

Individual product sales refurbishments and upgrades of previously delivered test systems continues to be a revenue stream for Rovsing with work being carried out on programs such as Galileo, EnMAP, Electra and Copernicus.

During H1, Rovsing started work on two new missions. For Thales Alenia Space UK, Rovsing is providing Satellite Interface Simulator (SIS) Power Front-End (PFE) systems for supporting PLAnetary Transits and Oscillations of stars (PLATO), which is the third medium-class mission in ESA's Cosmic Vision programme. The PLATO SIS PFE project successfully concluded the Design Review in December 2019 and deliveries are scheduled throughout H2. Rovsing has been selected by Airbus DS Spain to provide the Payload Module EGSE for the Solar wind Magnetosphere Ionosphere Link Explorer (SMILE) mission which is a joint venture mission between the European Space Agency and the Chinese Academy of Sciences. Rovsing started work under a PATP in H1, followed by contract signature in February 2020,

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where also the Design Review will take place followed by system delivery anticipated in late H2.

Together with Critical Software from Portugal, Rovsing is responsible for writing the updated ESA handbook for Independent Software Verification and Validation.

Rovsing's onsite service business has undergone evaluation in the half year with regards to profitability and possible expansion of activities in Europe while some legacy activities have already been concluded or are expected to ramp down in the coming years.

The US market

Rovsing continues to pursue further opportunities in the US market on both the institutional and the commercial market building on the deliveries to Lockheed Martin and Boeing Space Systems and making Rovsing's products and solutions known in the US market.

The half year has been quiet in terms of US sales activities, but increased focus planned for the second half year.

Emerging Markets

Rovsing has continued interest emerging markets, with sales activities and inquiries in both Asia and South America.

Product development and production

In the financial year 2019/20, Rovsing has continued to improve the product base and related logistics, production and testing environments. Improvements in value chain and efficiency are a constant focus to improve the Company's competitive advantage.

Product development and feature improvements in the domains of both software and hardware remain key enablers for Rovsing abilities to deliver diverse market leading system solutions to customers.

Organisation and management

By the end of December 2019, Rovsing employed a total of 22 employees, counted on a full-time-equivalent basis. Most employees were employed at the company's head office in Skovlunde, Denmark, but the company also has employees at several local destinations where they provide support services and consultancy services.

At the Company's annual general meeting in October 2019 Michael Hove, Flemming Hynkemejer and Ulrich Beck were reelected to the

Board of Directors, while Steen Rosenkvist was elected as new member, replacing Jakob Have, who did not seek reelection.

Outlook for 2019/20

The finalization of the T6A EPS EGSE and the delayed kick-off of new ESA driven projects has caused a poor development in revenue and negative EBITDA in H1 2019/20. The expected revenue for 2019/20 is changed to the range of DKK 21 to 23 million and an EBITDA of DKK -1 to 0 million. This is an adjustment against the previous guided outlook for the revenue from a range of DKK 24 to DKK 26 million to a range of DKK 21 to 23 million and EBITDA from DKK 0 to 1 million, to an EBITDA in the range of DKK -1 to 0 million

EVENTS AFTER THE REPORTING PERIOD

After the balance sheet date, no events have occurred that materially affect the Company's financial position.

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8

MANAGEMENT STATEMENT

The Board of Directors and the Executive Management have today discussed and approved the interim report for Rovsing A/S for the period 1 July – 31 December 2019.

The interim report, which has neither been audited nor reviewed by the company’s auditor, has been prepared in accordance with IAS 34, “Interim Financial Reporting”, as adopted by the EU and in line with additional Danish interim reporting requirements for listed companies.

In our opinion, the financial statements give a true and fair view of Rovsing A/S’ assets, liabilities and financial position as at 31 December 2019 and of the results of the company’s operations and cash flow for the period 1 July – 31 December 2019.

Further, in our opinion, the management review gives a true and fair review of the development in the company’s operations and financial matters, the result of the company’s operations for the period and the financial position as a whole as well as a description of the principal risks and uncertainties that the company faces.

Skovlunde, 17 February 2020

Executive Management

Hjalti Pall Thorvardarson (CEO)

Sigurd Hundrup (CFO)

Board of Directors

Michael Hove (Chairman)

Flemming Hynkemejer    Ulrich Beck    Steen Rosenkvist

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INCOME AND COMPREHENSIVE INCOME STATEMENT

Note	INCOME AND COMPREHENSIVE INCOME STATEMENT	1H 2019/20	1H 2018/19	Full year 2018/19
	DKK'000
3	Revenue	9,426	10,958	28,184
	Production costs, external	-2,136	-1,230	-9,597
	Gross profit	7,290	9,728	18,586
	Other external expenses	-962	-1,443	-3,160
	Staff costs	-8,120	-8,200	-15,085
	Operating profit before depreciation and amortisation (EBITDA)	-1,792	85	341
	Depreciation, amortisation and impairment	-2,196	-1,591	-3,270
	Operating profit/loss (EBIT)	-3,988	-1,506	-2,929
	Financial income	6	21	43
	Financial expenses	-682	-374	-810
	Profit/loss before tax	-4,664	-1,859	-3,696
	Tax on profit/loss for the year	0	0	-344
	Net profit	-4,664	-1,859	-4,040
	Comprehensive income	-4,664	-1,859	-4,040
	Allocation of profit/loss:
	Shareholders of Rovsing A/S	-4,664	-1,859	-4,040
	Retained earnings	-4,664	-1,859	-4,040
	Earnings per share
	Earnings per share (EPS Basic)	-0.01	0.00	-0.01
	Earnings per share (EPS-D)	-0.01	0.00	-0.01

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BALANCE SHEET

Note BALANCE SHEET, ASSETS

	31/12/2019	31/12 2018	30/6 2019
DKK'000
Non-current assets
Intangible assets
3 Completed development projects	14,764	15,259	16,274
3 Patents and licenses	937	1,219	1,078
3 Development projects in progress	176	1,811	0
	15,877	18,289	17,352
Property, plant and equipment
Other fixtures and fittings, tools and equipment	59	194	121
Leases	1,959	0	0
	2,018	194	121
Other non-current assets
Tax	0	484	236
Deferred tax	2,500	3,080	2,500
	2,500	3,564	2,736
Total non-current assets	20,395	22,047	20,209
Current assets
Inventories	2,997	1,570	2,810
Trade receivables	2,018	2,473	1,428
Contract work in progress	6,186	4,353	7,750
Tax	236	0	484
Other receivables	391	364	1,004
Prepaid expenses	117	479	565
Cash	205	292	224
Total current assets	12,150	9,531	14,265
TOTAL ASSETS	32,545	31,578	34,474

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BALANCE SHEET

Note BALANCE SHEET, EQUITY AND LIABILITIES

	31/12/2019	31/12 2018	30/6 2019
DKK'000
Equity
Share capital	22,894	20,752	22,894
Reserves for development costs	3,235	2,710	3,215
Retained earnings	-12,560	-6,291	-7,750
Total equity	13,570	17,171	18,560
Non current liabilities
Bond loans	0	4,000	4,080
Leasing liabilities	590	0	0
Total non current liabilities	590	4,000	4,080
Current liabilities
Credit institutions	6,247	3,617	6,326
Convertible credit facility	0	3,850	0
Bond loans	6,272	0	0
Leasing liabilities	1,129	0	0
Prepayments, customers	1,440	0	396
Trade payables	1,326	953	2,550
Other payables	1,971	1,987	2,562
Total current liabilities	18,385	10,407	11,834
Total liabilities	18,975	14,407	15,914
TOTAL EQUITY AND LIABILITIES	32,545	31,578	34,474

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STATEMENT OF CHANGES IN EQUITY

Note
STATEMENT OF CHANGES IN EQUITY
DKK'000

2018/19	SHARE CAPITAL	RESERVES FOR DEVELOPMENT COSTS	RETAINED EARNINGS	TOTAL
Equity at 1 July 2018	20,243	2,399	-4,433	18,210
Comprehensive income for the period
Comprehensive income	0	0	-1,859	-1,859
Transferred between reserves	0	311	-311	0
Total comprehensive income for the period	0	311	-2,170	-1,859
Other transactions
Issue of new shares
Costs of issuing new shares	509	0	391	900
Warrant programme	0	0	-80	-80
Total transactions with owners	509	0	312	820
Equity at 31 December 2018	20,752	2,710	-6,291	17,171

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| 2019/20 | SHARE
CAPITAL | RESERVES
FOR
DEVELOP-
MENT COSTS | RETAINED
EARNINGS | TOTAL |
| --- | --- | --- | --- | --- |
| Equity at 1 July 2019 | 22,894 | 3,215 | -7,550 | 18,560 |
| Comprehensive income for the period | | | | |
| Comprehensive income | 0 | 0 | -4.664 | -4.664 |
| Transferred between reserves | 0 | 20 | -20 | 0 |
| Total comprehensive income for the period | 0 | 20 | -4.684 | -4.664 |
| Other transactions | | | | |
| Buy own shares in connection with reverse stock split | 0 | 0 | -78 | -78 |
| Costs reverse stock split | 0 | 0 | -249 | -249 |
| Total transactions with owners | 0 | 0 | -327 | -327 |
| Equity at 31 December 2019 | 22,894 | 3,235 | -12,560 | 13,570 |

At the Annual General Meeting on 21 October 2019, a reverse share split was decided in a 1000:1 consolidation ratio. The reverse share split reduced the number of shares issued in the company, so that 1.000 shares at a nominal value of DKK 0.05 were merged into one share with a nominal of DKK 50 (1000: 1 ratio).

Own shares	No. of own shares 2018/19	Nominal value 2018/19	In % of total share capital 2018/19
1 July before stock split	143,659	7,183	0.03%
Own shares after stock split	143	7,150	0.03%
Buy own shares in connection with reverse stock split	1,259	62,950	0.27%
Own shares 31 December	1,402	70,100	0.31%

The company has purchased own shares in connection with the reverse share split in November 2019 for DKK 78 thousand cf. above.

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CASH FLOW STATEMENT

| Note CASH FLOW STATEMENT | 1H
2019/20 | 1H
2018/19 | Full year
2018/19 |
| --- | --- | --- | --- |
| DKK'000 | | | |
| Profit/loss for the year | -4,664 | -1,859 | -4,040 |
| Adjustment for non-cash operating items etc.: | | | |
| Depreciation, amortisation and impairment | 2,196 | 1,591 | 3,270 |
| Other non-cash operating items, net | 82 | 0 | -262 |
| Financial income | -6 | -21 | -43 |
| Financial expenses | 682 | 374 | 810 |
| Tax on profit/loss for the year | 0 | 0 | 344 |
| Cash flows from operations before changes in working capital | -1,710 | 85 | 79 |
| Change in working capital | 811 | 1,902 | 492 |
| Cash flow from operations | -899 | 1,987 | 572 |
| Interest receivable | 6 | 21 | 43 |
| Interest payable | -682 | -374 | -810 |
| Tax reimbursement | 482 | 206 | 206 |
| Cash flow from operating activities | -1,093 | 1,840 | 11 |
| Acquisition of intangible assets | -176 | -707 | -1,376 |
| Received development subsidies | 0 | 337 | 337 |
| Cash flow from investing activities | -176 | -370 | -1,040 |
| Debt raised | 2,192 | 1,350 | -781 |
| Repayment of debt with credit institutions | -79 | -3,490 | -2,500 |
| Leases | -537 | 0 | 0 |
| Capital increase, net proceeds from issue | 0 | 900 | 4,550 |
| Buy shares in connection with reverse stock split | -78 | 0 | 0 |
| Capital increase/ reverse stock split, costs | -249 | -80 | -159 |
| Cash flow from financing activities | 1.250 | -1,320 | 1,109 |
| Net cash flow for the period | -19 | 150 | 81 |
| Cash, beginning of year | 224 | 143 | 143 |
| Cash, end of year | 205 | 292 | 224 |

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15

NOTES

ACCOUNTING

1 POLICIES USED

The interim report has been prepared in accordance with IAS 34, Interim financial reporting, as adopted by the EU and further Danish disclosure requirements in respect of interim reports for listed companies.

Relevant new accounting standards

Except for the below described changes in the accounting policies used for the interim report the accounting policies used for Annual Report 2018/19 is the same, to which we refer for a full description.

Rovsing has with effect from 1 July 2019 implemented the following new and amended standards and interpretations:

• IFRS 16 Leases

Effect of IFRS 16:

Rovsing has implemented the new leasing standard IFRS 16 using the modified retrospective method and has therefore not adjusted comparative figures, which continue to be presented in accordance with the rules in IAS 17 and IFRIC 4.

As of 1 July 2019, all leasing and lease contracts on the balance sheet are recognized with a leasing asset (the right to use the assets) and a lease obligation, respectively.

In accordance with the transitional provisions of IFRS 16 Rovsing has, when implanting the standard, chosen not to recognize leases with a maturity of less than 12 months or with low value.

The average alternative loan interest rate used for discounting future lease payments in connection with the measurement of the lease obligation on initial recognition of IFRS 16 is set at Rovsing's alternative loan interest rate which is approx. 6.5% p.a.

Impact of implementation of IFRS 16:

As per 1 July 2019 Rovsing has recognised leasing assets of DKK 2,5 million and a lease commitment of DKK 2,5 million. The equity effect is hereby DKK 0.

Leasing assets consist of a property lease and photocopying/printers. At the transitional date, the total leasing assets constitute DKK 2,5 million. Leasing assets are amortized on a straight-line basis over the expected useful life, which is:

Property lease, Skovlunde	2 years
Photocopying/printer	3,75 years
machines
DKK thousand	1/7/19
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Operational leasing 30/06/19	2.483
Additions and corrections by adopting IFRS 16	41
Leasing liabilities 1/7/19	2.524

The half-year report is prepared in DKK.

2 SEASON

The company's activities have not been affected by any season in the period.

3 INTANGIBLE ASSETS

The company has during the period 1 July - 31. December 2019 incurred costs for intangible assets for DKK 0,2 million. As described in the management's report in the 2018/19 annual report, future earnings are related to product development projects. Earnings size and timely realization is subject to uncertainty. Impairment test for intangible assets will be carried out per 30 June 2020, after completion of budgets, etc. for the next 3 years period. See also the section "Risk factors" in the annual report 2018/19.

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16

4 CONTINGENT ASSETS AND LIABILITIES

The company has a co-financing obligation in the agreements entered into where the company itself hold about 50% of estimated costs.

5 TRANSACTIONS BETWEEN PARTNERS AND RELATED PARTIES

The company has no related parties or partners with a controlling influence.

The company has registered the following shareholders as holding 5% or more of the share capital:

• 6,85% Catpen A/S

The company’s related parties include also the board of directors and management.

6 EVENTS AFTER THE 31 DECEMBER 2019

The company knows of no events or issues after 31 December 2019 that has a substantial influence on the financial position of the company.

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17

DEFINITION OF RATIOS

Ratio	Explanation
No. of shares, end of period	The total number of outstanding shares at any given time, exclusive of the Company's treasury shares.
Cash flow per share (DKK)	Cash flows from operating activities divided by average number of shares.
EBITDA margin (profit margin before depreciation and amortisation) (%)	Earnings before interest, tax depreciation and amortisation as a percentage of revenue.
EBIT margin (profit margin) (%)	Earnings before interest and tax as a percentage of revenue.
Equity ratio	Equity, end of year, as a percentage of total assets.
Return on equity (%)	Profit/loss for the year after tax divided by average equity.
Average no. of outstanding shares (1,000)	Average number of outstanding shares at any given time.
Net asset value per share (DKK)	Equity at year-end divided by number of shares at year-end.
Payout ratio (%)	Total dividends distributed divided by profit/loss for the year.
Earnings per share (DKK)	The Company's share of profit/loss for the year divided by average no. of shares.
Solvency ratio (%)	Traditional way of expressing the Company's financial strength.
Dividend per share of DKK 50	Dividend payment in Danish kroner per share.

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GLOSSARY

Term	Explanation
Application	Specific use of a product
Airbus Defense & Space	French, German, British and Spanish company operating in the defense, space and telecommunications industry
ARTES	Advanced Research in Telecommunications Systems
Check-out system	System for testing and controlling a satellite or instrument
DSTE	Digital Simulation & Test Equipment
ESA	The European Space Agency
ESTEC	European Space Research and Technology Centre
ExoMars	European rover mission to Mars led by ESA
EUCLID	ESA medium class astronomy and astrophysics space mission
Copernicus	Earth Observation Satellite programme under EU
EarthCARE	Satellite project under ESA
Electra	Public Private Partnership programme developed under ARTES
EnMAP	Environmental Mapping and Analysis Program (EnMAP) is a German hyperspectral satellite mission
Galileo	European satellite navigation system
Industrial collaboration agreement	Agreement signed by non-Danish suppliers of defense material to Denmark with the Danish Enterprise and Construction Agency to ensure that the supplier undertakes in return to acquire defense material manufactured by Danish companies.
ISVV (Independent Software Verification & Validation)	Independent verification and validation of software
Kick-Off	Kick-Off meeting to start up a project
Command control system	Guidance system
Critical software	Software, the failure or breakdown of which may cause loss of life, loss of spacecraft or loss of performance of the planned task, or software for which error rectification may prove very costly.
MPCV	Multi-Purpose Crew Vehicle
Outsourcing	The outsourcing of part of or a whole assignment with a subcontractor
Prime Contractor	The company with the main responsibility for carrying out a major ESA project
Project manager	Person in charge of carrying out a project
Thales Alenia Space	European space and defense industry company
EGSE	Electrical Ground Support Equipment
RF Suitcase	Radio Frequently test equipment for testing satellite communication links
Power SCOE	Special Checkout Equipment for testing satellite power systems
SAS	Solar Array Simulator
SLP	Second Level Protection
MASC	Measurement, Acquisition, Simulation & Commanding
MetOp-SG	Meteorological Operational Satellite - Second Generation

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Rovsing A/S
Dyregårdsvej 2
2740 Skovlunde, Denmark
Company reg. (CVR) no. 16 13 90 84
Tel: +45 +45 44 200 800
Fax: (+45) 45 44 200 801
Website: www.rovsing.dk