Interim Financial Report for the Period 1 January - 30 June 2023
August 17 2023 - 2:57AM
Interim Financial Report for the Period 1 January - 30 June 2023
Company Announcement No. 6 – 2023 to Nasdaq
Copenhagen
17 August 2023
Interim financial report
for the first
half of 2023
Second quarter sales and results were in line
with expectations, and AO continued to gain market shares.
As expected, market conditions were challenging
in the second quarter of 2023. Building and construction activities
softened in the period. The normalised price levels for
conventional energy sources, in particular gas and oil, reduced the
demand for heat pumps. The steep increase in interest rates
dampened the activity in the building and construction
industry.
Margins were under pressure in April and May. In
June, margins rebounded to the June 2022 level. B2B activities
continued to grow, and the B2B sales index reached 106.5 in the
first half of 2023. As expected, margins took a hit compared to
last year due to the one-off gains from price increases in 2022. In
the B2C sector, private consumers reacted stronger than B2B
customers towards the cost inflation, and the decrease in demand
continued from the first quarter into the second quarter. The B2C
sales index reached 85.5 in the first half of 2023.
Consolidated revenue for the second quarter of
2023 was DKK 1,266.1 million against 1,318.8 million for the second
quarter of 2022. At the end of the quarter, the overall sales index
ended at 96. The B2B sales index ended at 98 corresponding to index
100 when adjusted for negative foreign exchange impact and the
number of working days in the quarter. The B2C sales index ended at
83. Sales were in line with previous expectations for 2023.
Consolidated revenue for the first half of 2023 was DKK 2,670.3
million, which is DKK 100.2 million, or 3.9%, more than for the
same period last year. The gross profit margin for the second
quarter of 2023 was down by 0.9 percentage point when compared with
the second quarter of 2022. The main reason is the one-off gain
from price increases in 2022. Gross profit went down by DKK 24.6
million driven by the lower margin and the slightly lower
revenue.
EBITDA for the second quarter of 2023 totalled
DKK 92.6 million, corresponding to an EBITDA margin of 7.3%,
against DKK 119.4 million and 9.1% for the second quarter of 2022.
EBITDA for the first half of 2023 was DKK 214,5 million,
corresponding to an EBITDA margin of 8.0%, against DKK 230.3
million and 9.0% for the first half of 2022.
Profit before tax (EBT) for the second quarter
of 2023 was DKK 57.5 million, which is DKK 33.4 million less than
for the second quarter of last year. Profit before tax (EBT) for
the first half of 2023 was DKK 140.8 million, which is DKK 36.0
million less than for the same period last year. The reduced profit
before tax is impacted by DKK 7.0 million higher depreciation
expenses and DKK 13.3 million higher interest expenses. As at 30
June 2023, the Group’s total assets amounted to DKK 3,345.5
million, which is DKK 146.3 million more than at the same time in
2023. The increase is primarily attributable to investments in
property, plant and equipment, increasing inventories and trade
receivables.
As at 30 June 2023, the Group’s equity totalled
DKK 1,370.6 million, which is DKK 115.1 million more than at the
same time in 2022. The solvency ratio was 41.0% against 39.2% at 30
June 2022.
Cash flow from operating activities for the
second quarter of 2023 was DKK -159.2 million, which is DKK 122.8
million less than for the same period last year. The decrease is
primarily attributable to increased working capital, which is
affected by the timing of supplier payments. Inventories were
reduced by DKK 73 million in the second quarter of 2023.
Investments for the second quarter of 2023 totalled DKK 37.6
million, compared with DKK 61.5 million for the second quarter of
2022. Investments are primarily related to IT and store network
development, including the introduction of EA assortment in
relevant AO stores.
As at 30 June 2023, net interest-bearing debt
totalled DKK 940.3 million against DKK 722.7 million at the same
time in 2022. Net interest-bearing debt was 2.0 times the Last
Twelve Months EBITDA. Net gearing is expected to be reduced for the
rest of the year.
AO has re-assessed the estimated useful lives of
the automated warehouses. The re-assessment of the estimated useful
lives from 10 years to 15 years will reduce depreciation by
approximately DKK 17 million in 2023.
Expectations for the year
The first half of 2023 confirmed expectations of
a strong first quarter and a lower second quarter. Expectations for
2023 are updated and are as follows:
- Revenue updated to DKK 5,350-5,500 million from DKK 5.250-5.450
million.
- EBITDA unchanged in the range of DKK 435-465 million.
- Earnings before tax unchanged in the range of DKK 300-330
million. Due to the change in depreciation which will impact
full-year EBT positively by approximately DKK 17 million, EBT is
expected to be in the high end of the range of DKK 300-330
million.
The guidance assumes that demand will continue
to be negatively impacted by high cost inflation and increased
interest rates in the second half of 2023; factors that are
expected to dampen activities in the building and construction
industry. Revenue growth is expected to be flat to slightly
negative in the second half of 2023. Margins are expected to be
slightly lower than last year.
For further information, please
contact:
CEO Niels A. Johansen
CFO
Per Toelstang Brødrene A & O Johansen A/S Rørvang 3 DK-2620
Albertslund Denmark Telephone: +45 70 28 00 00
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