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

Attachments

Disclaimer

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.