Interim report for the second quarter and first half of 2022: Smart building sales dominated top line again in Q2
Inside information
Today, LED iBond International’s (LED iBond) Board of Directors approved the interim report for the second quarter (Q2) and first half (H1) of 2022. Highlights of the report include:
Business development
- In Q2, the smart building market once again contributed the larger part of company revenue, driven by steady sales of Tracy for the kitchen segment, for solar carports and for canopy panels for industrial use. After the reporting period, LED iBond received additional Tracy orders for a larger indoor public area project and the first ever indoor parking facility.
- LED iBond still anticipates a significant global potential within the emerging vertical farming market. In general, vertical farming operators are currently working to develop farming blueprints before committing to larger orders for smart grow lighting. Nevertheless, LED iBond received a small, but fully paid pilot order during Q2 for the company’s vertical farming grow light technology.
- As previously announced, LED iBond is looking into the possibility of supplying UV disinfection components to third-party manufacturers of disinfection equipment. The company has engaged in dialogue with a US-based equipment manufacturer, who has expressed interest in the unique form factor and other features of LED iBond’s UV-elements.
- To accelerate top-line growth, LED iBond carried out a strategic review of its product offering, market focus and go-to-market approach towards the end of Q2 (see announcement no. 57, 13 July 2022). As a result, the company will in the short term focus its sales efforts on selected smart building market segments to boost short-term revenue growth and on vertical farming projects for longer-term growth. In addition, the company will unwind parts of its spin-off activities, reduce cost and reorganize to maximize internal focus on sales execution.
Outlook 2022
- Following the strategic and commercial review communicated in company announcement no. 57 of 13 July 2022, LED iBond maintains its revenue guidance for 2022 of DKK 5-10 million.
Financial development
- In Q2 2022, LED iBond generated revenues of TDKK 910, a decrease of TDKK 224 relative to Q2 of 2021. For the half-year, the revenues declined from TDKK 4,295 in H1 2021 to TDKK 1,724 in H1 2022. Most revenue in H1 of 2021 was, however, generated by sales to spin-off companies while almost all revenue generated in H1 of 2022 are sales to independent partners and clients. Compared to Q1 of 2022 revenues were up by TDKK 97 corresponding to an increase of 12%.
- In line with the change in accounting principles announced in the consolidated financial statement for 2021, grants and compensations have been reclassified as income to be recognized in coming years along with the depreciation of the assets relating to the grants.
During Q2 of 2022 an amount of TDKK 2,787 was received from the EUDP project managed by the Danish Energy Agency. At the end of H1 2022, an amount of TDKK 7,943 is carried in the balance sheet as deferred income relating to grants received.
- EBITDA came to TDKK -4,452 in Q2 2022, a deterioration of TDKK 540 relative to the year-earlier quarter. The decline in EBITDA mainly follows from the reduced sales to spin-off companies and higher administration costs. The same explanation applies to the half-year development in EBITDA.
- Q2 operating result, EBIT, came to TDKK -6,693 against TDKK -6,942 in Q2 of 2021, i.e., an improvement of TDKK 249. For the half-year EBIT declined from TDKK -11,362 in H1 2021 to TDKK -12,323 in H1 2022. The reason for the decline was the same as for the EBITDA development. Costs of certain development projects were fully depreciated at the end of 2021.
- For Q2, the profit before tax is a loss of TDKK 6,996 against a loss of TDKK 7,321 in Q2 of 2021 and for H1 2022 profit before tax was TDKK -13,139 against a loss in H1 2021 of TDKK 12,253.
- At the end of Q2 2022, total equity amounted to TDKK 60,842 (corresponding to a solvency ratio of 73%) compared to TDKK 71,090 (corresponding to a solvency ratio of 75%) on 31 December 2021.
- The net outflow of cash during Q2 2022 amount to TDKK 6,171 compared to TDKK 8,172 during the previous quarter. The improvement of TDKK 2,001 in cash outflow is due to the above-mentioned EUDP grant in June.
- The cash balance stood at TDKK 11,392 at the end of Q2 2022, as compared to TDKK 17,562 at the end of Q1 2022.
Commenting on the Q2 report, Martin Løbel, CEO of LED iBond International, says:
– LED iBond’s subdued performance during Q2 underlines the importance of the strategic initiatives we announced in July. Firstly, we are refocusing our smart building sales activities towards a small number of smart building segments where Tracy has a particularly strong edge. Secondly, we are working with vertical farming entrepreneurs to develop a sustainable recipe for indoor farming for the longer term. These two focal points must remain the top priority for the entire organization.
Financial key figures
| TDKK | Q2 2022 |
Q2 2021 |
Change | H1 2022 |
H1 2021 |
Change |
| Profit & Loss | ||||||
| Revenue | 910 | 1,134 | -20% | 1,724 | 4,295 | -60% |
| Grants & Compensation | 0 | 0 | 0% | 0 | 1,001 | -100% |
| EBITDA | -4,452 | -3,912 | -14% | -7,847 | -5,300 | -48% |
| EBIT | -6,693 | -6,942 | 4% | -12,323 | -11,362 | -8% |
| Net financial expenses | -303 | -379 | 20% | -816 | -891 | 8% |
| Profit before tax | -6,996 | -7,321 | 4% | -13,139 | -12,253 | -7% |
| Net Profit | -5,457 | -5,710 | 4% | -10,248 | -9,554 | -7% |
| Balance Sheet | ||||||
| Total assets | 83,826 | 104,288 | ||||
| Total equity | 60,842 | 83,010 | ||||
| Net working capital | 25,338 | 49,957 | ||||
| Net interest-bearing debt | 8,540 | 11,605 | ||||
| Cash | 11,392 | 43,022 | ||||
| Cash flow statement | ||||||
| Cash flow from operations | -3,345 | -4,691 | 29% | -8,397 | -4,842 | -73% |
| Cash flow from investments | -2,310 | -3,549 | 35% | -4,901 | -8,416 | 42% |
| Cash flow from financing | -516 | 47,327 | - | -1,044 | 46,422 | - |
| Cash flow for the period | -6,171 | 39,087 | - | -14,342 | 33,164 | - |
The full interim financial report for the second quarter and first half of 2022 is available here: https://ledibond.com/financial-reports/
Further Information
Martin Løbel, CEO
Mobile: +45 2722 6237
Email: mlo@ledibond.com
Company contact
LED iBond International A/S
Agern Allé 5A
2970 Hørsholm
Denmark
CVR 36041609
+45 7070 7855
info@ledibond.com
www.ledibond.com
Certified advisor
Västra Hamnen Corporate Finance
Jungmansgatan 12
211 19 Malmö
Sweden
Telephone: +46 40 200 250
Email: ca@vhcorp.se
About LED iBond International A/S
Founded in 2014, LED iBond International offers innovative solutions for integrating light and data, based on the company’s deep knowledge of modern LED technology and many years of development. The patented technology includes the lightest and thinnest LED basis available, offering a unique value proposition combining total design flexibility, and low total costs of ownership. LED iBond’s technology has been deployed in many projects, ranging from intelligent shelf lighting to large-scale outdoor and indoor illumination projects such as the installation of 3.2 kilometres of TRACY®, the company’s innovative flagship product, at DTU, the Technical University of Denmark.
Due to the superior form factor and cooling properties of the technology platform, LED iBond is focusing on three key business lines: Smart Building, Vertical Farming, and UV Disinfection, all projected to show significant growth in the years to come.
LED iBond International A/S is admitted to trading on Nasdaq First North Growth Market Denmark (ticker: LEDIBOND).