Announcement
To Nasdaq Copenhagen A/S and the press
Nørresundby, Denmark, 27 August 2019
Announcement no.39/2019
Interim report for Q3 2018/19
(the period 01.04.2019 – 30.06.2019)
The financial performance in both Q3 2018/19 and the first nine months of 2018/19 continues to be strong with revenue growth of 30.4 % and 25.3 % respectively and EBITDA growth of 89.2 % to DKK 29.7 million in Q3. The execution of RTX’s strategy continues to lead to growth in both business areas. RTX upgraded its financial outlook for 2018/19 on 19 August 2019 and maintains this upgraded outlook.
SUMMARY FOR THE THIRD QUARTER OF 2018/19 FOR THE RTX GROUP
- Net revenue increased by 30.4 % to DKK 148.9 million in Q3 2018/19 (Q3 2017/18: DKK 114.2 million) due to strong organic growth in both Business Communications and Design Services:
- Business Communications: Revenue grew 31.6 % to DKK 102.3 million. With the execution of its strategy, Business Communications achieved growth both in the handset related product ranges and in the headset product range. Revenue from the two larger framework agreements announced during 2017/18 continue to gain momentum and contribute significantly to the growth.
- Design Services: Revenue grew 27.9 % to DKK 46.6 million especially driven by growth in product sales (customized modules) in line with the strategy to increase recurring revenue and strengthen resource scalability within Design Service.
FX corrected revenue growth amounted to 23.3 % as revenue, compared to last year, was positively impacted by the USD exchange rate development. Conversely, revenue in Q3 was negatively impacted compared to last year by the implementation of IFRS 15 regarding timing of revenue recognition.
- Gross profit increased by 32.7 % to DKK 83.9 million in Q3 2018/19 (Q3 2017/18: DKK 63.3 million). Gross margin increased by 1.0 %-point to 56.4 % (Q3 2017/18: 55.4 %).
- Operating performance improved with EBITDA increasing by 89.2 % to DKK 29.7 million in Q3 2018/19 (Q3 2017/18: DKK 15.7 million). EBIT increased by 94.7 % to DKK 26.2 million in Q3 2018/19 (Q3 2017/18: DKK 13.5 million). The improvement in operating performance highlights the effect of RTX’s growth strategy where, as expected, the revenue growth in Q3 more than outweighs the increasing capacity costs. The planned increase in capacity costs is related to the ramping-up of activities for the two major framework agreements announced during 2017/18, increasing the average number of FTEs to 281 in Q3 2018/19 compared to 247 in Q3 2017/18.
- Cash flows from operating activities (CFFO) amounted to DKK 34.5 million in Q3 2018/19 compared to DKK 18.1 million in Q3 2017/18 aided by the earnings growth and the working capital development.
SUMMARY FOR THE FIRST NINE MONTHS OF 2018/19 FOR THE RTX GROUP
- Net revenue increased by 25.3 % to DKK 403.2 million in the first nine months (9M) of 2018/19 (9M 2017/18: DKK 321.8 million). Both Business Communications and Design Services have achieved revenue growth:
- Business Communications: Revenue growth of 27.8 % to DKK 271.3 million. Growth is driven by both the handset related product ranges as well as headsets as the new adjacency expansion. The two larger framework agreements announced during 2017/18 have both contributed to the growth.
- Design Services: Revenue growth of 20.4 % to DKK 131.9 million primarily driven by growth in product sales (customized modules) in line with strategy and secondarily by continued high activity within customer financed projects
FX corrected revenue growth amounted to 19.2 % as revenue compared to last year was positively impacted by the USD exchange rate development. In addition, revenue for the first nine months was positively impacted, compared to last year, by the implementation of IFRS 15 regarding timing of revenue recognition.
- Gross profit increased by 23.7 % to DKK 229.0 million in 9M 2018/19 (9M 2017/18: DKK 185.1 million). The gross margin decreased by 0.7 %-points to 56.8 % (9M 2017/18: 57.5 %) due to changes in the revenue mix with relatively higher product sale revenues compared to revenues from customer financed projects (engineering revenues).
- Operating performance improved with EBITDA increasing by 25.2 % to DKK 63.4 million in 9M 2018/19 (9M 2017/18: DKK 50.6 million). EBIT increased by 18.6 % to DKK 53.6 million in 9M 2018/19 (9M 2017/18: DKK 45.2 million). EBITDA and EBIT are impacted by the growth in revenue and gross profit and by increasing capacity costs related to ramp-up of activities and investments in capacity related to the two major framework agreements announced in 2017/18. Thus, the average number of FTEs reached 273 in 9M 2018/19 compared to 241 in 9M 2017/18.
- Cash flows from operating activities (CFFO) amounted to DKK 62.4 million in 9M 2018/19 compared to DKK 56.3 million in 9M 2017/18.
OUTLOOK FOR 2018/19
- RTX confirms its financial outlook for 2018/19, which was upgraded on 19 August 2019 in company announcement 37/2019. The financial outlook is now expected revenue between DKK 550-565 million, expected EBITDA between DKK 90-100 million and expected EBIT between DKK 77-87 million.
NEW SHARE BUY-BACK PROGRAMME INITIATED AS ANNOUNCED
- As announced in company announcement 31/2019, RTX has initiated a new share buy-back programme for an amount up to DKK 20 million. The programme is executed during the period 1 August 2019 to 31 December 2019.
RTX A/S
PETER THOSTRUP PETER RØPKE
Chairman CEO
Investor and analysts meeting
On Friday, 30 August 2019 at 9.00 am, RTX will hold a meeting for investors and analysts at ABG Sundal Collier, Forbindelsesvej 12, 2100 Copenhagen. At this meeting, the Company’s management will comment on the interim report for the third quarter of 2018/19. To register for the meeting, please e-mail [email protected].
Enquiries and further information:
CEO Peter Røpke, tel +45 96 32 23 00
RTX’s homepage: www.rtx.dk
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