Capnor Weasel Bidco Oyj, Interim Report January - March 2024

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CAPNOR WEASEL BIDCO OYJ

Interim Report

January – March 2024

 

Interim Report for the first quarter of 2024

 

 

 

 

 

Change

 

EUR thousand

Q1 2024

Q1 2023

in %

FY 2023

Revenue

20,288

32,000

-37 %

141,318

EBITDA

-3,098

6,060

-151 %

31,367

EBITDA margin

-15 %

19 %

 

22 %

EBIT

-5,835

3,542

-265 %

20,493

EBIT margin

-29 %

11 %

 

15 %

Operational Cash Flow

10,433

7,753

35 %

11,180

Operational Cash Flow %

51 %

24 %

 

8 %

Adjusted EBITDA*

-3,098

6,438

-148 %

32,673

Adjusted EBITDA margin*

-15 %

20 %

 

23 %

Adjusted EBIT

-5,835

3,920

-249 %

21,799

Adjusted EBIT margin

-29 %

12 %

 

15 %

Adjusted Operational Cash Flow

10,433

8,131

28 %

12,504

Adjusted Operational Cash Flow %

51 %

25 %

 

9 %

*  Year 2023 and Q1 2023 EBITDA, EBIT & Operational Cash Flow included an impact from the IT Salonen transaction and a brand renewal together with
   costs related to iLOQ 20 years anniversary, which have been treated as items affecting comparability. The adjustment related to brand renewal in Q1
   2023 was 378 thousand euros. The adjustment related to IT Salonen acquisition was 60 thousand and iLOQ 20 years anniversary events 870 thousand
   euros. Both took place in Q3 2023. These costs have been excluded in the Adjusted EBITDA, EBIT and Operational Cash Flow figures above.

 

Management overview of the first quarter

iLOQ Group’s revenue decreased compared to the corresponding period of the previous year. Negative market sentiment in the Nordics in the first quarter of the year was a main driver of this, as continued postponement in decision making in the renovation market affected overall demand. Due to the poorer market sentiment, the anticipated distributor restocking, which is normal this time of the year, did not yet take place at the same scale as previous years, weighing on revenue in Q1 compared to prior years. Management is confident that the long-term growth potential and drivers in the market remain intact despite a short-term slowdown, due to delayed investments by customers, and that iLOQ is well positioned to continue to outgrow the market also during periods of softer market activity.

 

Stronger performance continued in the rest of the world compared to the same period in the previous year.iLOQ signed material sized contract in Denmark and got strategically important first multifamily-housing deals in the US. In addition, Everest Infrastructure Partners and iLOQ signed an agreement in April to roll out battery-free smart locks at telecom towers throughout the U.S.

 

iLOQ continues to invest in future growth and the market entry in the US – an enormous market and opportunity for iLOQ - is on schedule and progressing as planned. iLOQ has a local sales organization in place, which has already generated a solid pipeline in the US market. Logistic channels and partner networks are being built and the US standard ANSI cylinder products were launched at the year-end in 2023. At the ISC West Fair in the US iLOQ introduced its latest smart-locking software and B2B2C offering, consisting of a solution which can be used and managed by the consumer. The new offering aims to enhance the user experience of the people that actually use the products, making it easier for them to move around all their access points using just their cellphone as a key. The solution is enabled by iLOQs complete product portfolio covering the end-to-end opening process, through a combination of its hardware (for example, lock cylinders and padlocks), mobile keys, apps, online readers, administration solutions, portals, and value-adding integrations.

 

The continued material investments in future growth weighed on profitability in Q1, as operating expenses increased by 19.6%. The organization for future growth is now fully established, and hence ILOQ expects efficiency and margins to improve over the coming quarters.

 

There are indications of improving market sentiment as in April iLOQ Group revenue increased by 18% compared to the previous year, including improved performance in the Nordics. Management expects iLOQ Group revenue to grow in 2024 over 2023 driven by international expansion.

 

Operational cashflow improved compared to the previous year driven by receivables collections and inventory levels remaining seasonally on a normal level.

 

Capnor Weasel Bidco Oyj successfully priced senior secured floating rate notes of EUR 55 million with a tenor of five years in March. The New Notes have a floating rate coupon of 3 months EURIBOR + 4.00 per cent per annum and final maturity in March 2029. Capnor Weasel Bidco Oyj intends to apply for listing of the New Notes on the corporate bond list of Nasdaq Stockholm.

 

First quarter 2024

 

Total revenue decreased 37% compared to Q1 2023. Low activity in the multi-residential new construction and renovation markets in the Nordics continued, but good performance in the rest of the world continued compared to the same period in the previous year.

 

EBITDA amounted to MEUR -3.1 (6.1), corresponding to a -15% (19%) EBITDA margin. Gross margins have remained unchanged at the historical healthy levels. Continued investments in growth, including costs related to the US market entry, continued to increase opex and impacted EBITDA negatively in the quarter, which in combination with lower delivery volumes resulted in the negative EBITDA.

 

EBIT amounted to MEUR -5.8 (3.5), corresponding to a -29% (11%) EBIT margin. Finance costs include items affecting comparability of MEUR 1.5 related to the refinancing mentioned above.

 

Operational cashflow was MEUR 10.4 (7.8), underpinned by receivables collections and inventory levels remaining seasonally on a normal level.

 

 

Quarterly Information

 

QUARTERLY INFORMATION

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Revenue

25,716

28,790

27,439

51,003

32,000

29,135

22,905

57,278

20,288

EBITDA

5,368

4,684

4,701

16,625

6,060

2,840

1,679

20,786

-3,098

EBITDA margin

21 %

16 %

17 %

33 %

19 %

10 %

7 %

36 %

-15 %

EBIT

3,083

2,405

2,414

13,952

3,542

305

-948

17,594

-5,835

EBIT margin

12 %

8 %

9 %

27 %

11 %

1 %

-4 %

31 %

-29 %

Operational Cash Flow

3,451

442

-2,372

7,065

7,753

-6,893

-3,639

12,295

0

Operational Cash Flow %

13 %

2 %

-9 %

33 %

24 %

-24 %

-16 %

21 %

0 %

Adjusted EBITDA

5,368

5,172

4,701

16,625

6,438

2,840

2,609

20,786

-3,098

Adjusted EBITDA margin

21 %

18 %

17 %

33 %

20 %

10 %

11 %

36 %

-15 %

 

 

 

Declaration of the Board

 

We confirm that, to the best of our knowledge, the condensed financial statements give a true and fair view of the Group’s assets, liabilities, financial position and results of operations for the period. We also confirm, to the best of our knowledge, that the management overview includes a fair review of important events that have occurred during the first three months of 2024.

 

 

 

 

Espoo May 14, 2024

 

 

 

 

 

                                                     Heikki Hiltunen                                             Magnus Hammarstöm

                                                  President and CEO                                         Member of the Board

INCOME STATEMENT

 

CONSOLIDATED INCOME STATEMENT, IFRS

 

 

 

EUR Thousand

Q1 2024

Q1 2023

FY 2023

 

 

 

 

Revenue

20,288

32,000

141,318

Other income

5

0

35

 

 

 

 

Materials and services

-9,303

-13,171

-59,724

Employee benefit expenses

-9,027

-7,547

-26,908

Depreciation, amortisation and impairment losses

-2,738

-2,518

-10,873

Other operating expenses

-5,061

-5,221

-23,355

Operating profit

-5,835

3,542

20,493

 

 

 

 

Finance income

163

80

278

Finance cost

-3,248

-1,434

-6,330

Net financial expenses

-3,085

-1,354

-6,051

 

 

 

 

Profit (-loss) before taxes

-8,921

2,188

14,442

 

 

 

 

Income taxes

259

-479

-3,338

 

 

 

 

Profit (loss) for the financial period

-8,662

1,709

11,104

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

Translation differences

-47

9

25

 

 

 

 

Total comprehensive income

-8,710

1,718

11,129

 

BALANCE SHEET

 

CONSOLIDATED BALANCE SHEET, IFRS

 

 

EUR Thousand

Mar 2024

Mar 2023

Dec 2023

 

 

 

 

ASSETS

 

 

 

Non-current assets

 

 

 

Intangible assets

107,949

104,071

107,750

Goodwill

92,467

92,412

92,467

Property, plant and equipment

6,285

7,083

6,989

Deferred tax assets

400

427

395

Total non-current assets

207,102

203,994

207,601

 

 

 

 

 

 

 

 

Inventories

25,972

30,100

24,477

Trade and other receivables

17,722

17,115

36,908

Current tax receivables for the financial year

828

0

143

Cash and cash equivalents

6,832

7,847

7,397

Total current assets

51,354

55,062

68,925

 

 

 

 

Total assets

258,456

259,056

276,526

 

 

 

 

EQUITY & LIABILITIES

 

 

 

Equity

 

 

 

Share capital

80

80

80

Invested unrestricted equity fund

143,240

143,240

143,240

Translation difference

-14

16

33

Retained earnings

19,002

18,534

27,972

Total equity

162,307

161,870

171,325

 

 

 

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Financial liabilities

55,187

54,888

54,979

Non-current lease liabilities

1,426

1,168

1,716

Non-current provisions

751

710

880

Deferred tax liabilities

16,051

17,027

16,316

Total non-current liabilities

73,414

73,793

73,891

 

 

 

 

Current liabilities

 

 

 

Short-term interest-bearing liabilities

62

62

5,062

Account payables and other liabilities

20,484

21,178

22,401

Current lease liabilities

1,497

1,544

1,597

Current provisions

494

518

386

Current tax liabilities

198

92

1,864

Total current liabilities

22,735

23,393

31,309

 

 

 

 

Total liabilities

96,149

97,186

105,201

 

 

 

 

Total equity and liabilities

258,456

259,056

276,526

 

STATEMENT OF CASH FLOWS

 

CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS

 

 

 

EUR Thousand

 

 

Q1 2024

Q1 2023

FY 2023

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW FORM OPERATING ACTIVITIES

 

 

 

 

Profit (Loss) for the financial period

 

 

-8,662

1,709

11,104

Adjustments:

 

 

 

 

 

Depreciation and amortization

 

 

2,738

2,518

10,873

Unrealized exchange rate gains and losses

 

0

0

-306

Financial Income

 

 

-163

-80

-278

Financial Expense

 

 

3,248

1,434

6,330

Taxes

 

 

-259

479

3,338

Other adjustments

 

 

-370

0

-817

Change in Working Capital:

 

 

 

 

 

Change in trade and other receivables

 

 

19,185

13,009

-6,886

Change in inventory

 

 

-1,495

-3,983

1,640

Change in trade and other payables

 

 

-1,907

-3,762

-1,417

Change in provisions

 

 

-21

-50

-12

Interest paid

 

 

-2,804

-1,045

-5,127

Interest received

 

 

1

0

35

Income tax paid

 

 

-2,334

-2,291

-4,117

Other financial items

 

 

-23

-38

-138

Net cash flow from operating activities (A)

 

7,135

7,899

14,223

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

Payments from tangible assets sales

 

 

 

 

18

Investments in intangible assets

 

 

-2,225

-3,134

-12,892

Investments in tangible assets

 

 

-7

-386

-621

Business acquisitions

 

 

0

0

0

Net cash flow from investing activities (B)

 

-2,232

-3,520

-13,495

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

Common control merger

 

 

0

0

0

Payments of lease liabilities

 

 

-448

-449

-1,851

Withdrawals of short-term loans

 

 

0

0

8,365

Proceeds from short-term liabilities

 

 

-5,000

0

-3,365

Payments of long-tem liabilities

 

 

0

0

-62

Net cash flow from financing activities (C)

 

-5,448

-449

3,087

 

 

 

 

 

 

CHANGE IN CASH AND EQUIVALENTS (A+B+C)

 

-545

3,930

3,814

 

 

 

 

 

 

Cash and cash equivalents, in the beginning of period

7,397

4,087

4,087

Net effect of exchange rate changes on cash and cash equivalents

 

 

-20

-170

-504

Cash and cash equivalents, at the end of period

 

6,832

7,847

7,397

 

 

 

Definitions of alternative performance measures

 

  1. EBITDA = EBIT before depreciation, amortization and impairments

 

  1. Operational Cash Flow = EBITDA + Change in trade and other receivables + Change in inventory + Change in trade and other payables + Change in provisions + Investments in intangible assets + Investments and Payments in tangible assets. Operational Cash Flow is used internally by the group to follow EBITDA which takes into account investments and change in working capital

 

  1. Operational Cash Flow % = Operational Cash Flow / Revenue

 

  1. Adjusted EBITDA, Adjusted EBIT & Adjusted Operational Cash Flow = Same as above but excluding an impact from the IT Salonen transaction, the brand renewal and the iLOQ 20 years anniversary events, which have been treated as items affecting comparability. Year 2023 and Q1 2023 EBITDA, EBIT & Operational Cash Flow included an impact from the IT Salonen transaction and the brand renewal together with costs related to iLOQ 20 years anniversary, which have been treated as items affecting comparability. The adjustment related to brand renewal in Q1 2023 was 378 thousand. The adjustment related to IT Salonen acquisition was 60 thousand and iLOQ 20 years anniversary events 870 thousand euros. Both took place in Q3 2023. These costs have been excluded in the Adjusted EBITDA, EBIT and Operational Cash Flow figures.

 

 

CONTACT

 

Additional information about the company can be found on the corporate website www.iloq.com. The company can be contacted by e-mail, info@iloq.com

 

For questions concerning this report please contact:

 

Heikki Hiltunen

CEO and President

Heikki.Hiltunen@iloq.com

 

Timo Pirskanen

CFO

Timo.Pirskanen@iloq.com