TCM Group A/S
Interim Report July-September 2023
November 17, 2023
Business update Q3 2023
- Revenue in Q3 of DKK 258 million vs. DKK 265 million last year.
- Organic revenue decline of 23.5% in the quarter.
- B2C sales remained weak in the quarter, although we did see an improvement in order- intake towards the end of the quarter.
- Underlying gross margin improvement on Q2, up from 20.0% to 20.3%
- Continued demand uncertainty in the market
- 112 branded stores, hereof 21 AUBO stores in Denmark.
- Cost base adjusted in November to reflect the expected demand, and to improve operating margins going forward.
2
Q3 Revenue development weaker than expected
Revenue | |
258 mDKK | |
(265 mDKK) | |
Cash conversion | 3% |
88.1% | revenue decline |
(54.9%) | y-o-y |
NWC ratio | Adjusted EBIT |
3.1% | 3 mDKK |
(-0.8%) | (21 mDKK) |
Adjusted
EBIT margin
1.0%
(7.8%)
3
Q3: Revenue development
2023 | 2022 | 2023 | 2022 | ||
Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | ||
Net revenue (mDKK) | 258 | 265 | 795 | 871 | |
- Revenue decline | -2.8% | -8.7% | |||
Q3 comments:
- Organic revenue declined by 23.5% y-o-y.
- Reported revenue in Denmark decreased by 14.8% y-o-y
- Revenue outside Denmark increased by 114.3% driven by the acquisition of AUBO Production A/S as of 3 July 2023.
4
Income statement highlights
2023 | 2022 | 2023 | 2022 | |
Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | |
Net revenue (mDKK) | 258 | 265 | 795 | 871 |
- Gross Margin | 18.3% | 18.7% | 18.9% | 20.5% |
Adjusted EBIT (mDKK) | 3 | 21 | 38 | 86 |
- Adjusted EBIT margin | 1.0% | 7.8% | 4.8% | 9.8% |
Q3 comments:
- Reported margins negatively impacted by the correction of transit fees related to Q1 and Q2.
- Underlying gross margin of 20.3% up from 18.7% in Q3 LY, supported by the AUBO acquisition.
- EBIT further impacted by provisions for potential losses on trade receivables of DKK 5.4 million in Q3.
5
Net working capital and NIBD
2023 | 2022 | |
Sep | Sep | |
Net working capital (mDKK) | 34 | -9 |
NWC ratio | 3% | -1% |
NIBD (mDKK) | 417 | 335 |
Leverage (incl. IFRS 16) | 5.21 | 2.52 |
Q3 comments:
- Increase in NWC compared to Q3 LY due to the acquisition of AUBO Production A/S.
- AUBO carries a higher NWC than the remaing TCM business due to a different operating model.
- Inventories reduced in the quarter as a result of the decision to decrease the stock of components and raw materials after the supply situation in the marked has stabilized.
- Net interest-bearing debt increased by DKK 158.6 million in Q3 due to the acquisition of AUBO Production A/S.
- Leverage ratio was 5.21 (2.52).
6
Cash flow
2023 | 2022 | 2023 | 2022 | |
Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | |
Operating profit (mDKK) | 2 | 16 | 33 | 79 |
Depreciation and amortization (mDKK) | 8 | 5 | 18 | 13 |
Other non-cash operating items | 0 | 0 | 0 | 0 |
Change in NWC (mDKK) | 17 | -21 | -31 | -79 |
Tax a.o (mDKK) | 0 | 0 | -11 | -7 |
Capex excl. acquisitions, net (mDKK) | -10 | -6 | -29 | -19 |
Free cash flow excl. acquisitions (mDKK) | 17 | -6 | -20 | -13 |
Cash conversion | 88.1% | 54.9% | 88.1% | 54.9% |
Capex ratio | 1.8% | 1.3% | 1.6% | 1.4% |
Q2 comments:
- Free cash flow was DKK 17m compared to DKK -6m in Q3 LY.
- Development primarily driven by the change in NWC.
- Capex ratio was 1.8% of revenue compared to 1.3% LY.
- Cash conversion LTM Q3 of 88%.
7
Financial outlook 2023
TCM Group
Financial outlook on earnings re-iterated:
- Net revenue: DKK 1,040-1,090
- EBIT: DKK 40-50m
(EBIT excluding non-recurring items)
Revenue development
DKKm
1,146
1,1081,040-1,090
1,007 1,025
2019 2020 2021 2022 2023 (guidance)
Adjusted EBIT development
DKKm
154
140 138
103
40-50
2019 2020 2021 2022 2023 (guidance)
8
Q&A
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TCM Group A/S published this content on 17 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 November 2023 09:08:12 UTC.