LANDIS+GYR GROUP AG MANAGE ENERGY BETTER
Half Year Report 2021
Contents
Letter to Shareholders | 3 |
Key Figures | 5 |
Interim Consolidated Financial Statements (unaudited) | 6 |
Supplemental Reconciliations and Definitions | 28 |
Information for Shareholders | 32 |
Letter to Shareholders
Dear Landis+Gyr Shareholders,
2021 marks a special year in our company's history, as we celebrate our 125th anniversary. Reflecting on this legacy, we are proud of our heritage as an early industry pioneer, which shaped the way utilities and people managed energy at a time when the use of electricity was in its beginnings. Today, as a leading global provider of Smart Metering, Grid Edge Intelligence and Smart Infrastructure solutions, we continue to shape and support utili- ties' and people's journeys to build a greener tomorrow and stronger communities.
Our strategic vision is driven by the desire to provide unrivaled customer value as the leading partner for integrated energy and resource management solutions with sustainability at the heart of everything we do. Our comprehensive portfolio of products and services uniquely positions us to empower utilities, energy consumers and communities by helping them to reduce their CO2 footprint and manage energy in a more informed and sustainable way. Our customers' ambitions to serve communities around the world with safe and reliable energy, inspire us every day and we are proud to be a part of the global effort to decarbonize the grid.
The long-awaited regulatory approvals that our customers received over the course of the last few months, and the resulting orders we were able to celebrate, are a testament to our leading technology and the relationships we have built with our customers over the course of our successful history as an industry leading provider of critical infrastructure. Our record backlog of USD 3.2 billion inspires all of us every day to continue to develop and deliver innovative technology solutions with sustainable impact in mind.
As the global supply chain developments remain challenging, our solid balance sheet with a substantial cash position has proven resilient and we continue to carefully manage cash and liquidity. As an essential business with mission critical infrastructure equipment and services, we continue to be committed to our customers' success and we are pleased to say that the momentum resulting from our record book-to-bill ratio of 2.55 in the first half of our financial year 2021 allows us to look to the future optimistically.
We continue to serve our customers with unwavering dedication, leading-edge technology and the passion to manage energy better. Our three strategic pillars Smart Metering, Grid Edge Intelligence and Smart Infrastructure are the cornerstones in our efforts to drive profitable growth.
Landis+Gyr - Half Year Report 2021 | 3 |
Half Year FY 2021 Financial Results
The results of the first half of financial year 2021 reflect the recovery from the impact of COVID-19 in the corresponding prior year period and also the constraints in the supply chain area. Order intake for the first half of FY 2021 almost quadrupled to USD 1,786.9 million, driven by major contract wins in the Americas and EMEA regions, resulting in a record high committed backlog that increased by 55.5% to USD 3.2 billion. Net revenue increased by 12.4% or 9.1% in constant currency, to USD 700.9 million in the first half of financial year 2021 compared to the corresponding prior period. The EMEA region was the main contributor to the growth as net revenues recovered strongly, up 31.4% in constant currency. The adjusted EBITDA increased by 41.3% to USD 70.8 million, translating into a margin of 10.1%, an improvement of 210 basis points. The constrained supply chain situation negatively dampened revenue growth and led to additional component and freight costs of approximately USD 10.5 million. We continued to invest in Research & Development, which accounted for 11.1% of our net revenues on an adjusted basis, in line with our strategic initiatives.
After a small loss in last year's corresponding period, net income attributable to shareholders turned positive, reaching USD 35.0 million and an earnings per share amount of USD 1.21.
Free Cash Flow (excl. M&A) of USD 41.6 million was strong despite headwinds and continued investments. We managed to maintain a solid balance sheet with low net debt of USD 79.3 million after the dividend payment and several acquisitions. The ratio of net debt to Adjusted EBITDA was 0.5 times.
We have undertaken strict cost control measures throughout the organization, while maintaining key portfolio investments. This allows us to strengthen our position for the future and we are excited about the transformation we are driving to serve our customers even better and to create sustainable shareholder value.
Creating the Future on a Solid Foundation
With our focus on creating value for our customers and shareholders, we are excited about the transformation of Landis+Gyr. Our strategy is designed to broaden our core offering of Smart Metering and further expand our reach in Grid Edge Intelligence and Smart Infrastructure with the objective to transform the business and to position Landis+Gyr for mid- and long-term profitable growth.
Essential to this is solidifying our position with a sharp focus on execution and a commitment to continue investing in R&D, while recovering from COVID-19 effects.
Organic investments in Smart Ultrasonic Gas and Water technology and the acquisition of Luna, which is expected to close at the end of calendar year 2021 and complements our portfolio with a cost-competitive metering platform, are strengthening our core in Smart Metering.
Landis+Gyr - Half Year Report 2021 | 4 |
The acquisitions of Rhebo, a cybersecurity company protecting critical infrastructure technology through anomaly and threat detection down to the grid edge, which is critical for utilities as they modernize the grids, and Telia, further enhancing our managed services business in EMEA, are driving the expansion of our Grid Edge Intelligence offering.
As grid complexity increases, we are actively shaping our Smart Infrastructure offering with the acquisitions of Etrel, offering electric vehicle (EV) management software and corresponding hardware technology, and True Energy, an application provider managing the demand of charging processes for increased cost-efficiencies and sustainable energy usage, as well as the strategic investment in the charge point operator Allego. With investments in EV infrastructure technology, we are building on our strong market position and leverage our close relationships with the leading utilities in key markets by expanding our offering with EV charging hardware and smart charging software, including demand response and flexibility management to allow utilities to better manage the grid. In addition, our seven-year strategic partnership with Google enables our customers to manage the grid with real-time information and data analytics insights, leveraging machine learning and artificial intelligence. As a result, we ensure that we are well equipped to remain a leading force in the future of energy while doing so in a sustainable way as we continue to invest in efforts to decarbonize the grid and elevate our ESG efforts.
Outlook for FY 2021
For financial year 2021, we confirm our guidance provided in May 2021 with 7-11% organic net revenue growth, an Adjusted EBITDA margin between 9.0-10.5% and a Free Cash Flow (excl. M&A) of between USD 80-100 million, but we expect results at the lower end of the guided ranges due to the ongoing constrained supply chain situation. We expect the negative financial impact from the supply chain situation to increase in the second half-year compared to the first half of 2021.
Industry-wide supply chain constraints, in particular global shortages of electronic components and plastic resins as well as increased freight rates, continue to pose challenges for cost and on-time delivery performance, with impacts continuing into the second half of financial year 2021. Our teams are committed to support customers and mitigate potential impacts through effective supply chain management.
Sustainability is part of our DNA
Actively driving sustainable impact is not just what we do, but who we are. Our strategic vision is driven by the desire to provide unrivaled customer value as the leading partner for integrated energy and resource management solutions with sustainability at the heart of everything we do. Our comprehensive portfolio of products and services uniquely positions us to empower utilities, energy consumers and communities by helping them to reduce their CO2 footprint.
Expressing our deeply rooted commitment to our ESG (Environmental, Social, Gover- nance) targets, in the past financial year, we introduced an ESG component of 10% in our short-term incentive (STI) for all bonus-eligible employees, driving sustainable progress in support of the UN Sustainable Development Goals.
For the current financial year, we have increased the weight of the ESG component in our short-term incentive to 20%, while raising the number of ESG-related STI targets from three to eleven. These targets include environmental topics, such as the reduction of the company's and its product portfolio's carbon footprint, while increasing the benefits generated. In addition, the targets cover initiatives enhancing diversity, ESG-driven supplier management and governance topics, including employee training on compliance.
Having made the commitment to become Carbon Neutral by 2030, we are proud of our achievements and convinced that we are driving the right priorities to continue to support sustainable resource management all over the world.
Our customers' ambitious goals to serve communities around the globe with safe and reliable energy and to decarbonize the grid, inspire us every day and we would like to thank our customers and partners for their continued trust and partnership.
As we celebrate 125 years of success this year, we are excited about our transformational journey and continue to focus on offering leading innovative technology to our customers, expanding our strong partnerships, driving profitable growth and, thus, contributing to sustainable global development.
On behalf of all of us at Landis+Gyr, we thank you, our shareholders, for your continued support and ownership in Landis+Gyr, and that you have joined us in driving our mission to manage energy better - together.
Yours sincerely,
Andreas Umbach | Werner Lieberherr |
Chairman | Chief Executive Officer |
Key Figures
Committed Backlog
3,236
in million USD
3,236 | ||||
2,514 | 2,224 | 2,081 | 2,166 | |
9-19 | 3-20 | 9-20 | 3-21 | 9-21 |
Net Revenue
700.9
in million USD
862.8 | 836.2 | 623.5 | 733.9 | 700.9 |
H1-19 | H2-19 | H1-20 | H2-20 | H1-21 |
Landis+Gyr - Half Year Report 2021 | 5 |
Six months ended September 30, | CHANGE | ||||||||
(in million USD, unless otherwise | Constant | ||||||||
indicated) | 2021 | 2020 | USD | Currency | |||||
Order Intake | 1,786.9 | 456.9 | 291.1% | 277.4% | |||||
Committed Backlog | 3,235.6 | 2,080.7 | 55.5% | 54.6% | |||||
Net revenue | 700.9 | 623.5 | 12.4% | 9.1% | |||||
Reported EBITDA | 86.2 | 31.8 | 171.1% | ||||||
Adjusted EBITDA | 70.8 | 50.1 | 41.3% | ||||||
Adjusted EBITDA as % of net | |||||||||
revenue | 10.1% | 8.0% | - | ||||||
Operating income (loss) | 46.3 | (9.9) | - | ||||||
Net income (loss) attributable | |||||||||
to Landis+Gyr Group AG | |||||||||
Shareholders | 35.0 | (2.0) | - | ||||||
Earnings per share - basic (USD) | 1.21 | (0.07) | - | ||||||
Earnings per share - diluted (USD) | 1.21 | (0.07) | - | ||||||
Free Cash Flow excluding M&A1 | 41.6 | 45.3 | (8.2%) | ||||||
Cash provided by operating and | |||||||||
investing activities | 0.2 | 45.9 | (99.6%) | ||||||
Net (Debt) Cash | (79.3) | 12.1 | - | ||||||
1 Net cash provided by operating activities, minus net cash used in investing activities, excluding | |||||||||
merger & acquisition activities. |
Adjusted EBITDA
70.8
in million USD
124.9 | 112.3 | |||
89.5 | ||||
70.8 | ||||
50.1 | ||||
H1-19 | H2-19 | H1-20 | H2-20 | H1-21 |
Free Cashflow
(excluding M&A)*
41.6
in million USD
87.3 | ||||
33.1 | 45.3 | 52.3 | 41,6 | |
H1-19 | H2-19 | H1-20 | H2-20 | H1-21 |
NET REVENUE TO EXTERNAL CUSTOMERS | |||||||||
Americas | 325.4 | 332.6 | (2.2%) | (2.4%) | |||||
EMEA | 300.1 | 213.9 | 40.3% | 31.4% | |||||
Asia Pacific | 75.4 | 77.0 | (2.1%) | (6.7%) | |||||
Total | 700.9 | 623.5 | 12.4% | 9.1% | |||||
ADJUSTED EBITDA | |||||||||
Americas | 50.2 | 40.7 | 23.3% | ||||||
EMEA | 13.1 | (4.3) | - | ||||||
Asia Pacific | 3.3 | 5.7 | (42.1%) | ||||||
Corporate unallocated | 4.2 | 8.0 | - | ||||||
Total | 70.8 | 50.1 | 41.3% |
- Net cash provided by operating activities minus net cash used in investing activities, excluding merger&acquisition activities.
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Landis&Gyr Group AG published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 05:30:05 UTC.
