INTERIM REPORT Q INVESTOR CONFERENCE CALL. Company announcement no. 5/2017 August 29, 2017

Transcription

1 Company announcement no. 5/2017 August 29, 2017 INTERIM REPORT Q INVESTOR CONFERENCE CALL Welltec will discuss its results during an investor conference call today at 5pm CEST. The conference call will be available for bond holders, prospective investors, broker dealers and securities analysts and can be accessed by dialing in a few minutes before the start and informing the operator that you would like to participate in Welltec s investor conference call. Relevant dial-in details and conference ID can be obtained by contacting bkjelmann@welltec.com. Finally, the Interim Report will be available on the Investor section of Welltec s website at For further information, please contact: Michael Krabbe, Chief Financial Officer, mobile: Søren Søgaard Suhr, Director, Treasury & Investor Relations, mobile: Welltec International ApS Gydevang 25, DK-3450 Allerød Central Business Registration No:

2 WELLTEC / INTERIM REPORT Q2, CONSOLIDATED KEY FIGURES AND RATIOS Welltec International ApS Group Q2 Q2 H1 H1 FULL YEAR (USD in millions) STATEMENT OF COMPREHENSIVE INCOME/(LOSS) Revenue Earnings before interest, tax depreciation and amortization (EBITDA)* Operating profit/(loss) (EBIT) before special items 1 3 (1) (54) (50) Operating profit/(loss) (EBIT) 0 3 (2) (56) (53) Net financials (10) (8) (19) (18) (29) Loss before tax (10) (5) (21) (74) (81) Net loss for the period (8) (8) (19) (65) (70) CASH FLOWS Cash flows from operating activities Cash flows from investing activities (7) 5 (13) (3) (19) Cash flows from financing activities (1) (1) (14) (19) (49) Total cash flows 2 12 (11) 6 6 STATEMENT OF FINANCIAL POSITION Trade receivables Equity Total assets Investments in intangible assets** Investments in tangible assets** KEY RATIOS (%) EBITDA margin* EBIT margin before special items (0.7) (56.4) (26.6) ROIC excl. goodwill Return on equity (5.1) (4.4) (11.3) (30.6) (33.2) Number of employees, average EBIT margin before special items = Operating profit/(loss) [EBIT] before special items x 100 Revenue *EBITDA margin = Operating profit before special items, depreciation, amortization and impairment and adjusted for issued warrants (non-cash) x 100 Revenue Return on equity = Profit/(loss) for the year x 100 Average equity ROIC excl. goodwill = EBITA Average capital investment excl. goodwill *EBITDA is defined by Welltec as reported operating profit (EBIT) before special items, amortization, depreciation, impairment losses and issued warrants (non-cash). Depreciation for these purposes includes depreciation attributable to development and manufacturing which is capitalized because it is considered a part of the costs that are directly attributable to the manufacturing of products. Welltec s definition of EBITDA may differ from the definition of EBITDA used by other companies. EBITDA as defined by Welltec is reported to allow for a more accurate assessment of the business operations. Welltec s definition of EBITDA should not be considered in isolation from, as substitutes for, or superior to the reported results prepared in accordance with International Financial Reporting Standards (IFRS). **Investments in intangible and tangible assets are defined as addition of fixed assets including additions from financial leasing and additions through business combinations.

3 WELLTEC / INTERIM REPORT Q2, ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Q COMPARED TO Q1 AND Q (USD in millions) Q2 Q1 CHANGE Q2 CHANGE FULL YEAR % 2016 % 2016 Revenue (14.0) 189 Cost of services provided (29) (28) (3.3) (32) (7.8) (127) Gross profit Development and manufacturing costs (1) (1) (4.7) (1) (28.9) (3) Administrative and sales costs (13) (12) 0.9 (15) (14.3) (53) Amortization of acquired intangibles in a business combination (0) (0) 0.5 (0) (30.9) (56) Operating profit/(loss) (EBIT) before special items 1 (2) Nm 3 (62.7) (50) Special items (1) (1) 33.0 (0) Nm (2) Operating profit/(loss) (EBIT) 0 (3) Nm 3 (87.8) (53) Net financial expenses (10) (9) 12.5 (8) 28.8 (29) Income taxes (3) (66.7) 12 Loss for the period (8) (11) (20.0) (8) 31.7 (70) Revenue Revenues were 10% higher than last quarter at USD 44 million with varied regional contributions, including activity increase and changes in sales mix. Currency fluctuations did not impact the revenue compared to previous period. Cost of services provided The cost of services provided were USD 29 million, an increase of 3% compared to previous period. Combined with the increased revenue, gross margin increased to 34% against 29% in Q mainly driven by a lower relative share of depreciations and amortizations. The increased cost of services provided was due to higher staff costs and higher other operational costs partly offset by lower depreciations. Development and manufacturing costs The development and manufacturing costs were USD 1 million compared to USD 1 million in Q Administrative and sales costs Administrative and sales costs were 1% higher than last year at USD 13 million. Amortization and impairment of acquired intangibles in a business combination Amortization and impairment of acquired intangibles in a business combination was USD 0 million compared to USD 0 million last quarter.

4 WELLTEC / INTERIM REPORT Q2, Earnings before interest, tax, depreciation and amortization (EBITDA) EBITDA was 28% higher than previous quarter at USD 15 million, representing an EBITDA margin of 35%, against 30% in the first quarter Currency fluctuations had no significant impact on EBITDA compared to the previous quarter. Cash flows Cash flows from operating activities of USD 10 million compared to USD 6 million in the previous quarter was mainly driven by improved EBIT. Capital expenditures of USD 7 million, compared to 6 million in the previous quarter, reflects an increased investment in D&E activities. Operating profit/(loss) (EBIT) before special items EBIT amounted to a profit of USD 1 million compared to a loss of USD 2 million in the previous quarter. Special items Special items of USD 0.9 million compared to USD 0.7 million in the previous quarter primarily reflects the continued adjustments to the global organization. Outlook As a result of the volatile market back drop and the challenging industry environment, Welltec is not able to offer qualified guidance for full year Net financial expenses Net financial expenses amounted to USD 10 million, an increase of USD 1 million from the previous quarter. The increase is due to exchange rate losses. Income taxes Income tax amounted to an income of USD 1 million which is in line with the previous quarter. Loss for the quarter Loss for the second quarter was USD 8 million compared to a loss of USD 10 million in the first quarter of This development is a result of higher and partly offset due to increased financial expenses.

5 WELLTEC / INTERIM REPORT Q2, CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR WELLTEC INTERNATIONAL APS Statement of comprehensive income/(loss) (USD in thousands) Q2 Q2 H1 H1 FULL YEAR Revenue 44,155 51,370 84,164 96, ,012 Cost of services provided (29,164) (31,636) (57,405) (64,367) (126,902) Gross profit 14,991 19,734 26,759 32,188 62,110 Development and manufacturing costs (1,036) (1,457) (2,124) (3,205) (3,055) Administrative and sales costs (12,519) (14,602) (24,930) (27,633) (53,191) Amortization of acquired intangibles in a business combination (137) (198) (273) (55,773) (56,168) Operating profit/(loss) (EBIT) before special items 1,299 3,477 (568) (54,423) (50,304) Special items (930) (456) (1,629) (1,519) (2,393) Operating profit/(loss) (EBIT) 369 3,021 (2,197) (55,942) (52,697) Net financial expenses (10,020) (7,778) (18,923) (18,240) (28,647) Loss before tax (9,651) (4,757) (21,120) (74,182) (81,344) Income taxes 1,206 (3,443) 2,123 9,275 11,645 Loss for the period (8,445) (8,200) (18,997) (64,907) (69,699) Other comprehensive income/(loss) for the period Items that will be reclassified subsequently to the Income statement, when specific conditions are met: Unrealized exchange rate adjustments of foreign subsidiaries ,850 3,288 2,601 and branches Total comprehensive loss (8,300) (8,050) (17,147) (61,619) (67,098) Distribution of loss for the period Loss for the period attributable to: Welltec International ApS shareholders share of loss (8,445) (8,200) (18,997) (64,907) (69,699) Total comprehensive loss attributable to: Welltec International ApS shareholders share of comprehensive loss (8,300) (8,050) (17,147) (61,619) (67,098)

6 WELLTEC / INTERIM REPORT Q2, Statement of financial position (USD in thousands) H1 H1 FULL YEAR Non-current assets Intangible assets Goodwill 242, , ,340 Technology 2,899 3,194 2,914 Customer relationship Brand 13,924 13,924 13,924 Completed development projects 49,635 65,675 58,455 Development projects in progress 10,851 9,525 8,313 Patents and licences 17,314 15,269 16,473 Total intangible assets 336, , ,419 Tangible assets Land and buildings 9,912 10,178 10,031 Leasehold improvements 1,450 1,731 1,507 Plant equipment and fleet 61,784 70,928 65,578 Other fixtures and fittings, tools and equipment 2,966 5,523 3,852 Plant equipment and fleet under construction 19,331 22,006 22,804 Total tangible assets 95, , ,772 Financial assets Deferred tax assets 2, ,083 Other receivables 1,207 2,003 1,776 Total financial assets 3,485 2,835 3,859 Total non-current assets 435, , ,050 Current assets Inventories 5,168 4,709 4,223 Receivables Trade receivables 52,633 55,614 45,489 Tax receivables 13,689 5,616 6,835 Other receivables 5,281 5,951 7,271 Prepayments 3,438 3,992 3,119 Total receivables 75,041 71,173 62,714 Cash and cash equivalents 42,561 66,352 53,500 Total current assets 122, , ,437 Total assets 558, , ,487

7 WELLTEC / INTERIM REPORT Q2, Statement of financial position (USD in thousands) H1 H1 FULL YEAR Equity Share capital Currency translation reserve (31,140) (32,303) (32,990) Retained earnings 190, , ,180 Total equity 160, , ,040 Non-current liabilities Deferred tax liabilities 27,024 31,270 24,778 Finance lease commitments 6,862 7,702 7,465 Issued bonds 294, , ,241 Bank debt 28,267 27,329 26,029 Total non-current liabilities 356, , ,513 Current liabilities Current portion of non-current liabilities 2,124 1,963 1,398 Trade payables 8,627 9,604 8,354 Current tax liabilities 3,881 4,018 4,228 Other payables 27,495 34,903 27,954 Total current liabilities 42,127 50,488 41,934 Total liabilities 398, , ,447 Total equity and liabilities 558, , ,487

8 WELLTEC / INTERIM REPORT Q2, Condensed statement of changes in equity (USD in thousands) Share capital Currency translation reserve Retained earnings Total Equity at (35,591) 277, ,493 Loss for the period - - (64,907) (64,907) Unrealized exchange rate adj. of foreign subsidiaries and branches - 3,288-3,288 Total comprehensive income (loss) for the period 0 3,288 (64,907) (61,619) Purchase of own shares - - (695) (695) Capital increase Share-based payment to executives Other transactions Equity at (32,303) 212, ,145 Equity at (32,990) 209, ,040 Loss for the period - - (18,997) (18,997) Unrealized exchange rate adj. of foreign subsidiaries and branches - 1,850-1,850 Total comprehensive income (loss) for the period 0 1,850 (18,997) (17,147) Purchase of own shares - - (80) (80) Share-based payment to executives Other transactions Equity at (31,140) 190, ,368

9 WELLTEC / INTERIM REPORT Q2, Condensed statement of cash flow (USD in thousands) Q2 Q2 H1 H1 FULL YEAR Operating profit/(loss) (EBIT) 369 3,021 (2,197) (55,942) (52,697) Non-cash adjustments 13,228 13,012 26,966 87, ,922 Changes in working capital (2,652) (6,147) (6,851) 1,858 4,353 Income taxes paid (1,102) (2,222) (3,026) (5,626) (11,809) Other receivables, long-term (11) (128) 570 (248) (21) Cash flows from operating activities 9,832 7,536 15,462 27,080 61,748 Investments in intangible assets (3,426) (3,131) (5,869) (5,935) (12,290) Investments in tangible assets (3,954) (3,626) (7,533) (8,430) (17,754) Sale of tangible assets Sale and investment in securities 0 11, ,387 10,640 Financial income received Cash flows from investing activities (7,363) 4,750 (13,282) (2,747) (18,721) Financial expenses paid (521) (609) (12,696) (13,541) (27,230) Other financial expenses (100) (1) (261) (706) (487) Purchase of own shares and warrants (80) 0 (80) (695) (793) Purchase of own bonds (3,432) (19,099) Capital increase Installments on current debt and non-current debt (256) (287) (625) (648) (1,432) Cash flows from financing activities (957) (606) (13,662) (18,731) (48,736) Increase/decrease in cash and cash equivalents 1,512 11,680 (11,482) 5,602 (5,709) Cash and cash equivalents, beginning balance 40,733 54,696 53,500 61,040 61,040 Exchange rate adjustment at beginning of period 316 (24) 543 (290) (1,831) Cash and cash equivalents, ending balance 42,561 66,352 42,561 66,352 53,500 Hereof restricted cash

10 WELLTEC / INTERIM REPORT Q2, NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS Note 1: Accounting policies The interim financial statements are presented as condensed, consolidated interim financial statements in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. No interim financial statements have been prepared for the parent company. The interim financial statements are presented in thousands of US dollars (USD), which is the parent company s functional currency. The accounting policies applied in the consolidated interim financial statements are consistent with the accounting policies applied in the consolidated financial statement for 2016, which are in accordance with the International Financial Reporting Standards as adopted by the EU. The annual report for 2016 contains a more detailed description of the accounting policies applied. New financial reporting standards in 2017 Welltec International ApS has implemented all such new and amended financial reporting standards and interpretations adopted by the EU that apply to financial years beginning on or after January Welltec International ApS has assessed that the new and amended standards and interpretations that are effective for financial years beginning on or after January are either not relevant or not of significant importance. Change in accounting policies There have been no changes in accounting policies.