Continued Growth in RTX in Q2 2022/23
02 May 2023 - 9:25PM
Continued Growth in RTX in Q2 2022/23
Announcement To
Nasdaq Copenhagen A/S and the press
Nørresundby, Denmark, 2 May 2023Announcement no.
13/2023
Interim
report for
Q2 and H1
2022/23(the
period 01.10.2022 - 31.03.2023)
“In the second quarter of 2022/23, RTX continues
to create solid revenue growth, and we have had a very strong first
half of the financial year with revenues growing by 49% over last
year and significant growth in earnings. This demonstrates the
long-term growth opportunities in our large framework agreements
with leading global customers. Despite the solid revenue growth, we
still see consequences of electronics component shortages affecting
customer inventory levels and demand patterns. Consequently, the
realized product mix in the quarter impacts the gross margin
negatively. Overall, the macroeconomic situation still creates
uncertainty also for RTX reflected in our outlook for 2022/23 which
we maintain.”
Peter Røpke, CEO
HIGHLIGHTS Q2
2022/23
-
- Net revenue
increased by 34.0% to DKK 180.0 million in Q2 2022/23 (Q2 2021/22:
DKK 134.3 million) with continued strong demand in the Enterprise
and ProAudio segments.
-
Enterprise segment: Revenue increased by 37.7% to
DKK 115.7 million. The growth is driven by the large framework
agreement customers and is aided by the launch of headset product
to an existing framework agreement customer.
-
ProAudio segment: Revenue
increased by 49.8% to DKK 52.8 million. Increased recurring revenue
from product sales via strong demand for RTX’s product platforms
and modules in the segment and via continued strong demand for
products related to live events drive the growth.
-
Healthcare segment: Revenue decreased by 23.4% to
DKK 11.5 million due to a planned changeover to a next generation
product also to be supplied by RTX (from Q3/Q4 onwards) and
therefore more cautious customer purchasing of the current product
generation during Q2.
The supply situation with component scarcity in
the global electronics industry was stable in the quarter. There
are still some constraints in component availability and
electronics component prices remain high, but the situation was
stable during Q2 and in general the component availability is
approaching a normal level. Therefore, the supply situation had net
neutral effect on revenue in Q2. FX corrected revenue growth was
28.7% as revenue compared to last year was positively impacted by
the stronger average US dollar in the quarter (although the USD:DKK
rate generally declined during Q2 of this financial year and thus
was lower than during Q1).
- Gross profit
increased by 10.6% to DKK 74.2 million in Q2 2022/23 (Q2 2021/22:
DKK 67.0 million) driven by the revenue growth. The gross margin
decreased to 41.2% (Q2 2021/22: 49.9%) and was negatively impacted
compared to last year by the product mix realized, by a lower share
of revenue from engineering services and royalties 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 gross margin is
expected to continue to be adversely impacted by the product mix in
the coming quarters as the supply and demand situations are not yet
fully normalized. While the component availability situation is
gradually normalizing, component prices are not yet fully
normalized, and demand is not yet fully normalized after the period
with shortages on electronics components and due to macroeconomic
uncertainty so demand by specific customers and for specific
products is not at normal levels across the portfolio impacted the
product mix. We expect the product mix to be more normalized during
the next financial year (2023/24) again leading to higher gross
margin especially toward the latter part of next financial
year.
- Operating
performance was positively impacted by the higher revenue
and negatively impacted compared to last year by the lower gross
margin and higher capacity costs. Therefore,
EBITDA decreased to DKK 7.8 million in Q2 2022/23
(Q2 2021/22: DKK 11.7 million) and EBIT amounted
to DKK -1.9 million in Q2 2022/23 (Q2 2021/22: DKK 1.7
million).
- Cash
flows from operations (CFFO) amounted to DKK 14.5 million
in Q2 2022/23 compared to DKK 6.6 million in Q2 2021/22. Compared
to last year, CFFO was positively impacted by the working capital
development.
SUMMARY H1 2022/23
- Driven by a
strong improvement in demand and aided by an improvement in
component availability, net revenue increased
significantly by 48.6% to DKK 387.5 million in H1 2022/23 (H1
2021/22: DKK 260.7 million). The growth is driven by strong demand
in the Enterprise and ProAudio segments. Enterprise segment revenue
increased by 55.7% to DKK 270.5 million and ProAudio segment
revenue increased by 50.3% to DKK 91.4 million in H1 2022/23.
Healthcare segment revenue were roughly flat compared to last year
and decreased by 1.8% to DKK 25.7 million. The supply situation
with component scarcity in the global electronics industry,
improved in the first half of 2022/23 (improvement in Q1 and stable
situation in Q2). All in all, deliveries and revenue of approx. DKK
35 million were postponed from H1 into Q3 – a net improvement of
approx. DKK 30 million from the approx. DKK 65 million postponed
from Q4 2021/22 into Q1 2022/23. FX corrected revenue growth of RTX
in H1 2022/23 was 37.9% as revenue compared to last year was
positively impacted by the stronger US dollar (although the USD:DKK
exchange rate has been declining over H1 2022/23).
- Gross
profit in H1 2022/23 increased by 37.9% to DKK 175.6
million (H1 2021/22: DKK 127.4 million) driven by the strong
revenue growth. The gross margin was 45.3% in the first half of
2022/23 (H1 2021/22: 48.9%). Compared to last year, the gross
margin is impacted by a lower share of revenue from engineering
services and royalty, by the product mix realized 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 higher revenue
has significantly increased earnings in H1 2022/23 with
EBITDA growth of 198.4% to DKK 49.8 million (H1
2021/22: DKK 16.7 million) and EBIT growth to DKK
30.4 million (H1 2021/22: DKK –3.1 million).
- Cash
flow from operations (CFFO) amounted to DKK 36.6 million
in H1 2022/23 (H1 2021/22: DKK 20.9 million) aided by the improved
earnings and the working capital development.
ENTERPRISE PRODUCT LAUNCH
- During the
quarter, RTX finalized the tailoring of a product based on the
wireless headset platform to an existing large framework agreement
customer and started deliveries of this new product to the
customer. This is an important milestone for the RTX headset
platform and will lead to an expected increase in the size and
scope of the cooperation with this customer in the years to
come.
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 a 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. Also, the specific product mix
that will be realized in 2022/23 given the not yet fully normalized
demand situation across the portfolio and given new product
introductions may impact the earnings performance. The USD FX rate
has been declining relative to DKK in 2022/23 and this also creates
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 communicated when announcing the
outlook for the year, the revenue and earnings distribution over
2022/23 is not expected to be backloaded in the way it has been in
recent years as can also be seen by the implied outlook for the
second half of 2022/23. For the remainder of the year, revenue in
the fourth quarter is expected to be higher than revenue in the
third quarter.
RTX A/SPETER
THOSTRUP PETER
RØPKEChair
President and CEO
Investor and analyst
conference callOn Tuesday, 2 May 2023 at 3.30 pm
(15.30) 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
second quarter and first half of the financial year 2022/23. To
register for the conference call, please e-mail
vonh@danskebank.dk.
Enquiries and further
information: CEO Peter Røpke, tel +45 96 32 23 00CFO
Morten Axel Petersen, tel +45 96 32 23 00RTX’s homepage:
www.rtx.dk
- RTX CA No 13-2023 - 02.05.23 - Interim Report Q2 2022-23
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