Strong Beginning to 2022/23
To Nasdaq Copenhagen A/S and the press
Nørresundby, Denmark, 26 January 2023
Announcement no. 03/2023
Interim report for Q1 2022/23
(the period 01.10.2022 - 31.12.2022)
“The first quarter of our financial year 2022/23 is the strongest first quarter in the history of RTX. We see this quarter as further confirmation of the long-term growth and scaling opportunities in our business model and from our large framework agreements. The supply challenges related to component availability in the global electronics industry continued to improve during the quarter although the supply situation is not yet fully normalized. While the macroeconomic volatility and the impact of potential recessions create uncertainty for 2023, this strong first quarter is a solid basis for the remainder of the financial year, and we maintain our outlook for 2022/23.”
Peter Røpke, CEO
HIGHLIGHTS Q1 2022/23
- Net revenue increased by 64.2% to DKK 207.5 million in Q1 2022/23 (Q1 2021/22: DKK 126.4 million) driven by strong demand in all segments and by continued improvements of component availability in the global supply markets.
- Enterprise segment: Revenue increased significantly by 72.4% to DKK 154.8 million. The demand has been strong broadly in the segment in the quarter, while being especially strong for the large framework agreement customers.
- ProAudio segment: Revenue increased by 51.0% to DKK 38.6 million. The growth is driven by recurring revenue from product sales via strong demand for RTX’s product platforms and modules in the segment and via continued increasing demand for products related to live events.
- Healthcare segment: Revenue increased by 27.5% to DKK 14.1 million with solid demand for RTX’s full ODM products as well as modules in the segment.
The supply situation with component scarcity in the global electronics industry, which has been impacting deliveries and revenue for close to two years, improved in the quarter. There are still some constraints in component availability and electronics component prices remain high but the component availability continued to improve for the second quarter in a row. All in all, deliveries and revenue of approx. DKK 35 million were postponed from Q1 into Q2 – an improvement of approx. DKK 30 million from the DKK 65 million postponed from Q4 2021/22 into Q1 2022/23.
FX corrected revenue growth was 47.8% as revenue compared to last year was positively impacted by the stronger average US dollar in the quarter.
- Gross profit increased by 68.2% to DKK 101.5 million in Q1 2022/23 (Q1 2021/22: DKK 60.3 million) driven by the strong revenue growth. The gross margin increased slightly to 48.9% (Q1 2021/22: 47.7%) positively impacted by the product mix realized and negatively impacted by the lower share of revenue from engineering services and by customer payments to cover extraordinary component costs (meaning that such extraordinary additional component costs are carried by the customers, but at roughly zero margin for RTX).
- The strong growth in revenue drove significant improvements in operating performance with EBITDA increasing by 740.9% to DKK 42.0 million in Q1 2022/23 (Q1 2021/22: DKK 5.0 million) and EBIT increasing to DKK 32.3 million in Q1 2022/23 (Q1 2021/22: DKK -4.8 million).
- Cash flows from operations (CFFO) amounted to DKK 22.1 million in Q1 2022/23 compared to DKK 14.3 million in Q1 2021/22. Compared to last year, CFFO was positively impacted by the increased earnings and negatively impacted by the working capital development.
OUTLOOK FOR 2022/23
- RTX maintains the outlook for the financial year 2022/23, as communicated on 29 November 2022 in our annual report for 2021/22, with revenue of DKK 700-760 million, EBITDA of DKK 85-105 million and EBIT of DKK 45-65 million. As stated in the annual report, especially the macroeconomic volatility creates uncertainty for demand in the financial year.
- The outlook is based on a strong order book for 2022/23 and an expectation of continued normalization of the component shortages in the global electronics industry. The main uncertainty for the year continues to be the impact of macroeconomic volatility on customer demand and inventory replenishment towards the latter part of the year. The growth in 2022/23 is expected to occur within product sales which in turn is expected to impact gross margin. The USD FX rate has been declining relative to DKK over the latter part of Q1 and this also create some uncertainty regarding the full-year outlook as the vast majority of revenue and cost of sales are USD denominated. For a full list of assumptions behind the outlook, refer to the annual report for 2021/22 (pages 20-21).
- As the normalization of the supply situation is especially expected to occur in the early part of 2022/23, the revenue and earnings distribution over 2022/23 is not expected to be backloaded in the way it has been in recent years.
ANNUAL GENERAL MEETING ON 26 JANUARY 2023
- RTX will hold its Annual General Meeting on 26 January 2023. Among other things, the Board of Directors has proposed to the Annual General Meeting that authorization is given to the Board of Directors to acquire own shares over the period until 25 January 2028 of up to 10% of the Company’s share capital.
PETER THOSTRUP PETER RØPKE
Chair President and CEO
Investor and analyst conference call
On Friday, 27 January 2023 at 9.00 am CET, RTX will hold a conference call for investors and analysts hosted by Danske Bank. In this conference call, the Company’s management will comment on the interim report for the first quarter of the financial year 2022/23.
To register for the conference call, please e-mail [email protected].
Enquiries and further information:
CEO Peter Røpke, tel +45 96 32 23 00
CFO Morten Axel Petersen, tel +45 96 32 23 00
RTX’s homepage: www.rtx.dk