Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Operational development as expected in Q1 2013 Dantherm realised revenue of DKK 119m in Q1 2013, which is 5 % higher than that of Q1 2012. Operating loss (EBIT) amounted to DKK 0.9m, which is an improvement by DKK 2.9m relative to Q1 2012. The improved quarterly revenue, relative to 2012, is primarily attributable to increased sales to network suppliers within the Telecom business area. Expectations for the whole year are maintained.
President & CEO Torben Duer says: ”According to expectations, developments within the Telecom business area improved at the beginning of 2013, primarily as a result of increased sales to network suppliers. Efforts to increase revenue and improve earnings continue with measures within market presence, product development and cost-effectiveness. With regard to this, Dantherm established a subsidiary in Germany and a sales office in Russia in Q1." Development in Q1 2013
Revenue was DKK 119m relative to DKK 113m in Q1 2012.
An operating loss (EBIT) of DKK 0.9m was posted against an operating loss of DKK 3.8m in Q1 2012.
Dantherm’s earnings before tax (EBT) totalled a loss of DKK 3.8m against a loss of DKK 6.0m in Q1 2012.
Cash flows from operating activities were negative at DKK 10m against positive cash flows at DKK 6.1m in Q1 2012. This development is attributable to increasing working capital as a result of increased sales and stock building to meet increasing demands, especially from customers within Telecom.
Dantherm’s net interest-bearing debt amounted to DKK 202m at the end of Q1 against DKK 188m at the beginning of the year. The interest-bearing debt includes finance lease commitments and bank debt relating to buildings of DKK 101m, and a net amount of DKK 101m has been drawn under the company’s operating credit facilities.
As mentioned in company announcement no. 9 of March 25 2013, the Azure Hydrogen Energy Science and Technology Corporation, partner of Dantherm Power in China, has invested USD 2m in a ten-percent ownership interest in Dantherm Power.
Outlook for 2013
Dantherm maintains expectations for the whole year of revenue of DKK 525-550m and an operating profit (EBIT) of DKK 15-20m, on par with the levels of 2011.
Any enquiries concerning this announcement can be directed at CEO Torben Duer on tel.: +45 99 14 90 14.
In case of doubt the Danish version is applicable Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 1 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Contents Financial highlights ................................................................................................................................. 3 Management’s review .............................................................................................................................. 4 Development in the business areas ........................................................................................................... 5 Outlook for 2013 .................................................................................................................................... 6 Statement by the Board of Directors and Executive Board on the interim report............................................ 7 Income statement.................................................................................................................................... 8 Balance sheet .......................................................................................................................................... 9 Cash flow statement .............................................................................................................................. 10 Statement of changes in equity .............................................................................................................. 11 Statement of comprehensive income ....................................................................................................... 11 Notes ................................................................................................................................................... 12 Group chart .......................................................................................................................................... 13 Disclaimer ............................................................................................................................................ 13
About Dantherm Dantherm was founded in 1958 by Ejlert Olsen. The company’s first product was a warm air heater for heating workshops and industrial buildings. In the 1970s, the product portfolio was extended to include dehumidifiers and ventilation products, and in the 1980s also to include mobile heating and cooling units for the armed forces and aid organisations. In the 1990s, climate control products for the Tele-
experience within heating, ventilation, cooling and dehumidification of air. Within the Telecom business area, Dantherm is a leading global supplier of products for climate control in radio base stations. Dantherm’s special competencies comprise extensive know-how within climate control,
com industry were added.
product development expertise and state-of-
Today, Dantherm is divided into two business
Asia and North America.
areas: HVAC (Heating, Ventilation, Air Condi-
the-art production and test facilities in Europe,
tioning) and Telecom.
Dantherm was listed on NASDAQ OMX
Within the HVAC business area, Dantherm
3,500 shareholders.
is an important European provider of products and solutions based on more than 50 years of
Copenhagen in 2002 and currently has approx.
Read more at www.dantherm.com
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 2 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Financial highlights DKKm
Q1
FY
2013
2012
2012
118.5
112.5
482.1
3.1
1.0
12.5
Operating result (EBIT)
-0.9
-3.8
-6.2
Net financials
-2.9
-2.2
-11.7
Earnings before tax (EBT)
-3.8
-6.0
-17.9
Net profit/loss for the period
-3.8
-5.7
-16.5
72.9
83.2
61.8
Net interest-bearing debt
201.9
186.4
188.2
Balance sheet total
440.5
444.4
415.1
Equity
110.5
123.5
111.9
Invested capital
312.4
310.0
300.2
Cash flow from operating activities
-10.0
6.1
19.8
Cash flow from investing activities
-3.7
-5.5
-20.4
-1.8
-2.6
-10.8
-15.5
-2.0
-11.4
5.3% -10.5%
-12.4%
Income statement: Revenue Earnings before depreciation, amortisation etc. (EBITDA)
Balance sheet, end of period: Working capital
Cash flows:
Cash flow from financing activities Cash flow for the period RATIOS Financial ratios: Growth rate (growth in revenue) Profit margin (EBIT%)
-0.8%
-3.3%
-1.3%
Equity interest
25.1%
27.8%
27.0%
516
556
548
Earnings per share (EPS), DKK
-0.5
-0.8
-2.3
Diluted earnings per share (EPS-D), DKK
-0.5
-0.8
-2.3
Average number of employees Share-related ratios:
Cash flow per share, DKK
-1.4
0.9
2.8
Equity value, end of period, DKK
15.4
17.2
15.6
Share price, end of period, DKK
17.5
19.5
14.7
1.1
1.1
0.9
7,191
7,191
7,191
Price/equity value Number of shares of DKK 10 each, end of period (’000)
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 3 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
efficiency in all three factories in Denmark,
Management’s review
China and the USA.
Market development General market developments within HVAC are still affected by low growth in the European economy including low investment lev-
Comments on the Q1 financial statements Revenue was DKK 118.5m in Q1 2013, up 5.3 % relative to Q1 2012.
els within the armed forces and low activity in
REVENUE PER QUARTER
the construction sector. Within several of the product groups of HVAC, the focus on indoor
Amounts in DKKm
climate and energy-savings is still increasing.
150
Within Telecom, the preconditions of growth
100
within wireless communication are driven by an increasing number of mobile subscribers and increased data volumes. In Q1 2013, investments in Telecom networks are increas-
50
0
ing relative to 2012.
2013
Business development In Q1 2013, the management continued measures within the focus areas of market presence, product development and costeffectiveness; areas which will contribute to realising Dantherm’s growth strategy.
Q1
2012
An operating loss (EBIT) of DKK 0.9m was posted against an operating loss of DKK 3.8m in Q1 2012. The higher revenue is the main reason for the improved operating results.
With regard to increasing market presence, a
EBIT PER QUARTER
subsidiary has been established near Munich in Germany. Furthermore, a sales office has
Amounts in DKKm
been opened in Moscow, Russia, and local
5
representation has been established in Mexico. Likewise, the expansion of Dantherm’s website continues to feature local websites in
0 Q1
Dantherm's main markets. Developments and updates of the product
-5
range continued in Q1, according to the individual plans for each business area.
At the
beginning of 2013, a new product range was presented for home ventilation on the German market. The project for optimisation of administrative processes in Denmark, which was initiated in 2012, continues in Q1 and is expected to contribute to cost savings in 2013. Furthermore, measures were carried out to improve
2013
2012
Depreciation and amortisation amounted to DKK 4.1m in Q1 2013 against DKK 4.8m in the same period of 2012. Dantherm has upto-date, state-of-the-art property, plant and equipment, and the investment level is lower than depreciation and amortisation. Net finance costs were DKK 2.9m in Q1 and are thus higher than those of the same peri-
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 4 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
od in 2012, primarily as a result of increased
In addition, Dantherm owns approx. 38 % of
interest expenses.
the associate Dantherm Power, the revenue of which is not included in Dantherm’s con-
Earnings before tax (EBT) totalled a loss of
solidated revenue.
DKK 3.8m against a loss of DKK 6.0m in Q1 2012.
Cash flows and net interest-bearing debt A negative cash flow from operating activities
REVENUE PER BUSINESS AREA (DKKm)
2013
2012
HVAC
71.0
78.9
Telecom
47.5
33.6
118.5
112.5
of DKK 10.0m was generated in Q1 2013 against a positive cash flow of DKK 6.1m posted for the same period last year. This development is attributable to increasing working capital as a result of increased sales and stock building to meet increasing demands, especially from customers within Telecom. Cash flow from investing activities amounted to DKK 3.7m in Q1 2013 against DKK 5.5m in the same period of 2012. Dantherm granted a convertible loan of DKK 2.3m to Dantherm Power in Q1 2012, whereas no loans have been granted to the company in 2013. Cash flow from financing activities amounts to DKK -1.8m in Q1 2013, which is slightly lower than that of the same period in 2012. This is attributable to lower repayments of finance lease commitments. The group’s net interest-bearing debt totalled DKK 201.9m as at 31 March 2013 against DKK 188.3m at the end of 2012. The increase is primarily attributable to the higher working capital. The net interest-bearing debt includes finance lease commitments and bank debt relating to buildings of DKK 101.3m, and a net amount of DKK 100.6m has been drawn under the company’s operating credit facilities. Development in the business areas The activities in Dantherm are structured into two business segments – HVAC and Telecom.
Q1
Total
HVAC HVAC revenue was 10 % lower in Q1 2013 than in Q1 2012. The decline in revenue is primarily attributable to a fall within mobile heating and cooling by 35 % relative to same period of 2012. Sales were positive in 2012 due to large projects on one single market, whereas revenue in Q1 2013 has normalised.
Telecom In Q1 2013, Telecom revenue increased by 41 % relative to Q1 2012. The main reason for the increase in revenue is an increase in sales by 65 % to network
suppliers. At the end of 2012, Dantherm introduced a new product for its biggest customer, which contributes to the increased activity along with increased investments in Telecom networks. Sales to network operators increased by 13 % in Q1 2013, relative to the same period of 2012. Dantherm has carried out measures with regard to market presence and product development which contribute to the increasing revenue.
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 5 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Dantherm Power The activities in Dantherm Power comprise
Following the transaction, Ballard’s owner-
the development and sale of backup power
ship interest in Dantherm Power is approx.
plants, primarily within Telecom, and CHP
52 % and Dantherm holds approx. 38 %.
units for private households based on fuel cell technology. As mentioned in company announcement no. 9 of March 25 2013, the Azure Hydrogen Energy Science and Technology Corporation, partner of Dantherm Power in China, has in-
Outlook for 2013 Dantherm maintains expectations for the whole year of revenue of DKK 525-550m and an operating profit (EBIT) of DKK 15-20m, on par with the levels of 2011.
vested USD 2m in a ten-percent ownership interest in Dantherm Power.
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 6 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Statement by the Board of Directors and Executive Board on the interim report Today, the Board of Directors and the Executive Board have discussed and approved the interim report of Dantherm A/S for the period 1 January - 31 March 2013. The interim report, which has not been audited or reviewed by the company’s auditors, is presented in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies. In our opinion, the interim report gives a true and fair view of the group’s assets, equity and liabilities and financial position as at 31 March 2013 and of the results of the group’s operations and cash flows for the period 1 January - 31 March 2013. We also find that the management’s review contains a fair review of the development in the group’s activities and financial affairs, the results for the period and the group’s financial position as a whole as well as a description of the main risks and uncertainties facing the group.
Skive, Denmark, 1 May 2013 Executive Board:
Torben Duer
Bjarke Brøns
President & CEO
CFO
Board of Directors:
Jørgen Møller-Rasmussen
Preben Tolstrup
Chairman
Deputy Chairman
Søren Østergaard Hansen
Conni-Dorthe Laursen
Niels Kr. Agner
Nils R. Olsen
Per F. Pedersen
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 7 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Income statement DKKm
Revenue
Q1
FY
2013
2012
2012
118.5
112.5
482.1
0.0
0.0
1.3
Other operating income Costs of raw materials and consumables
-63.7
-56.3 -246.0
Other external expenses
-13.4
-14.9
Staff costs
-38.3
-40.3 -159.8
-65.1
Earnings before depreciation, amortisation etc. (EBITDA)
3.1
1.0
12.5
assets
-4.0
-4.8
-18.7
Operating result (EBIT)
-0.9
-3.8
-6.2
Net financials
-2.9
-2.2
-11.7
Earnings before tax (EBT)
-3.8
-6.0
-17.9
0.0
0.3
1.4
-3.8
-5.7
-16.5
-3.8
-5.7
-16.5
-3.8
-5.7
-16.5
Earnings per share (EPS), DKK
-0.5
-0.8
-2.3
Diluted earnings per share (EPS-D), DKK
-0.5
-0.8
-2.3
Depreciation, amortisation and impairment of property, plant and equipment and intangible
Tax on profit/loss for the period Profit/loss for the period Distributed as follows: Shareholders of Dantherm A/S
Earnings per share
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 8 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Balance sheet DKKm Note
31/3 2013
31/3 2012
31/12 2012
94.2
81.9
91.8
120.8
131.3
122.8
Financial assets
17.2
13.6
16.7
Other non-current assets
10.4
7.6
10.3
Total non-current assets
242.6
234.4
241.6
Inventories
101.9
111.8
87.3
Trade receivables
79.9
63.7
65.9
Other receivables
9.8
12.7
8.0
Cash
6.3
21.8
12.3
Total current assets
197.9
210.0
173.5
TOTAL ASSETS
440.5
444.4
415.1
The Dantherm A/S shareholders’ share of equity
110.5
123.5
111.9
Total equity
110.5
123.5
111.9
0.6
0.6
0.6
Credit institutions
94.5
101.0
96.3
Total non-current liabilities
95.1
101.6
96.9
2.5
7.1
2.5
113.7
107.2
104.2
Trade payables
63.9
51.2
42.4
Other payables
54.8
53.8
57.2
Total current liabilities
234.9
219.3
206.3
Total liabilities
330.0
320.9
303.2
TOTAL EQUITY AND LIABILITIES
440.5
444.4
415.1
Intangible assets Property, plant and equipment
Provisions
Provisions Credit institutions
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 9 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Cash flow statement DKKm
Q1
FY
2013
2012
2012
-3.8
-6.0
-17.9
7.5
5.2
25.8
3.7
-0.8
7.9
Change in inventories
-14.6
0.0
24.5
Change in receivables
-15.8
17.8
20.2
Change in trade payables
19.1
-8.7
-16.2
Cash flow from primary operations
-7.6
8.3
36.4
Financial items, paid
-2.4
-2.2
-14.2
-10.0
6.1
22.2
0.0
0.0
-2.4
Cash flow from operating activities
-10.0
6.1
19.8
Cash flow from investing activities
-3.7
-5.5
-20.4
Cash flow from financing activities
-1.8
-2.6
-10.8
-15.5
-2.0
-11.4
Earnings before tax (EBT) Adjustment for non-cash operating items etc. Cash flow from primary operations before change in working capital
Cash flow from ordinary operations Income tax paid
Cash flow for the period
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 10 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Statement of changes in equity DKKm
31/3 2013
31/3 2012
31/12 2012
111.9
129.6
129.6
-3.8
-5.7
-16.5
enterprises
1.1
-1.2
0.9
Value adjustment of hedging instruments
1.3
0.8
-2.1
Other comprehensive income, total
2.4
-0.4
-1.1
-1.4
-6.1
-17.7
110.5
123.5
111.9
Equity as at 1 January Comprehensive income Net profit/loss for the period Other comprehensive income Foreign currency translation adjustment, foreign
Total comprehensive income Total equity
Statement of comprehensive income DKKm
Q1
FY
2013
2012
2012
-3.8
-5.7
-16.5
enterprises
1.1
-1.2
0.9
Value adjustment of hedging instruments
1.3
0.8
-2.1
Other comprehensive income after tax
2.4
-0.4
-1.1
-1.4
-6.1
-17.7
Shareholders of Dantherm A/S
-1.4
-6.1
-17.7
Total comprehensive income
-1.4
-6.1
-17.7
Net profit/loss for the period Other comprehensive income: Foreign currency translation adjustment, foreign
Total comprehensive income Distributed as follows:
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 11 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
Notes Note 1: Accounting policies The interim report is presented in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and additional Danish disclosure requirements for the interim reporting of listed companies. The annual report for 2012 contains a full description of the accounting policies. The accounting policies have been applied consistently with the annual report for 2012, except that the group has implemented new accounting standards (IFRS and IAS) and interpretations (IFRIC) which have taken effect. The new standards and interpretations have not affected the recognition and measurement. Note 2: Estimates The preparation of interim reports requires the management to make certain accounting estimates which affect the application of the accounting policies and recognised assets, liabilities, income and expenses. Actual results may deviate from these estimates. The significant estimates made by the management in applying the group’s accounting policies and the considerable uncertainty associated with these estimates are the same for the preparation of the interim report and the preparation of the annual report as at 31 December 2012. Note 3: Segment information Reportable segments of Dantherm comprise the two strategic business areas HVAC and Telecom, which offer different products and services and are run by separate managements. Development within the business segments is assessed against the background of the profit/loss before depreciation, amortisation, impairment losses and write-downs (EBITDA). Internal financial reporting, which these assessments are based on, is consistent with the accounting policies of the group.
Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 12 of 13
Company announcement no. 11, 1 May 2013 Interim report for the period 1 January to 31 March 2013
DKKm
Q1 2013 HVAC
Telecom
Q1 2012
Total reportable
Group in
segments
total
HVAC
Total reportable
Group in
segments
total
Telecom
Revenue
77.7
48.6
126.3
118.5
87.2
33.9
121.1
112.5
Internal revenue
-6.7
-1.1
-7.8
0.0
-8.3
-0.3
-8.6
0.0
Total revenue
71.0
47.5
118.5
118.5
78.9
33.6
112.5
112.5
4.3
0.2
4.5
3.1
6.3
-4.5
1.8
1.0
EBITDA DKKm
FY 2012 HVAC
Revenue Internal revenue Total revenue EBITDA
Telecom
Total reportable
Group in
segments
total
336.2
145.9
482.1
482.1
31.5
3.5
35.0
0.0
367.7
149.4
517.1
482.1
35.8
-19.0
16.8
12.5
Group chart
(100%)
Dantherm Air Handling Holding A/S
(100%)
(DK)
Dantherm Air Handling A/S (DK)
(100%)
Dantherm Inc. (US)
(100%)
Dantherm Air Handling (Suzhou) Co. Ltd. (C N)
(100%)
Dantherm Air Handling Sp.z.o.o. (PL)
Dantherm A/S
(100%)
(DK)
Dantherm AS (NO)
(100%)
Dantherm Ltd. (GB)
(100%)
Dantherm AB (SE)
(100%)
Dantherm GmbH (DE
(38,7%)
Dantherm Power A/S (DK)
Disclaimer This announcement contains forward-looking statements that reflect the management’s current perception of future events and financial results. The statements made about 2013 are, in the nature of the case, subject to uncertainty, and Dantherm’s actual results may therefore deviate from the outlook. Factors which may cause the actual results to deviate from the outlook include, but not exclusively, changes in the group’s activities and market conditions, such as raw materials prices, exchange rates and the economic climate. This interim report should not be construed as an encouragement to buy or sell shares in Dantherm. Dantherm A/S, Marienlystvej 65, DK-7800 Skive, www.dantherm.com
Page 13 of 13