Interim Report for Q2 2016/17

EXPECTATIONS MAINTAINED - CHALLENGES IN SUPPLY CHAIN  AFFECTS REVENUE AND EBIT NEGATIVELY IN Q2

The Supervisory Board of RTX A/S has today considered and adopted the Group’s interim report for the second quarter of the 2016/17 financial year (covering the period 01.01.2017 – 31.03.2017).

SUMMARY FOR THE SECOND QUARTER OF 2016/17 FOR THE RTX GROUP
 

• Net revenue amounted to DKK 84.1 million for Q2 of the 2016/17 financial year, which is DKK 18.5 million less than last year’s net revenue of DKK 102.6 million. The decline was 18.0%. Corrected for the USD exchange rate effect, net revenue in Q2 2016/17 decreased by 20.1% compared to Q2 2015/16. Revenue apportioned across RTX’s business units as follows:
  • Business Communications decreased by DKK 21.1 million corresponding to a decline of 29.8%. After exchange effect the decline is 31.8%. The decreased revenue is due to changes in the supply chain, which have postpomed revenue from Q2 to Q3 2016/17. 
     
  • Design Services rose by DKK 2.5 million corresponding to an increase of 8.0%. After exchange effect the increase is 6.4%. 
     
• The Group’s gross profit was DKK 46.8 million in 2016/17, which is a decline of DKK 14.9 million compared to DKK 61.6 million in 2015/16, and as a consequence of the revenue mix, the gross margin decreased to 55.6% from 60.1% in 2015/16.
   
• In the quarter, capacity costs rose by DKK 7.2 million. This is primarily due to the significant own financed investments in development projects (headset platforms and a platform for gaming headset as mentioned in our annual report 2015/16).  The high level of activity in both operations and own financed development projects has made it necessary to increase staff by 41 more employees compared to last year.

• With reference to company announcement no. 18/2017 RTX has in Q2 launched a new product range complementing the existing communication solutions. The new product range consists of variants of headsets for office environments. The  products were presented at RTX’s stand at the CeBIT Fair in Hannover and has been well received by potential customers. In the quarter, RTX has also achieved a significant agreement with one of the leading brands within gaming headset, where RTX will deliver the wireless technology. Management expects increased revenue from this agreement in the coming financial year. These investments mean that RTX has capitalised DKK 4.8 million in the second quarter of 2016/17. 
   
• Operating profit (EBIT) amounted to DKK 4.7 million compared to DKK 21.8 million last year.
   
• The Group’s cash flow from operating activities in Q2 amounted to DKK 26.4 million compared to DKK 17.2 million in the same period last year.
   

SUMMARY OF THE FIRST SIX MONTHS OF 2016/17 FOR THE RTX GROUP
 

• In the first six months of 2016/17 RTX realised net revenue of DKK 195.4 million, which is in line with last year’s net revenue. Corrected for exchange effects and ceased income from lease the decline in revenue corresponds to 0.7%. Revenue apportioned across RTX’s business units as follows:
  • Business Communications decreased by DKK 4.8 million corresponding to a decline of 3.6%. After exchange effect the decline is 5.4%. 
     
  • Design Services rose by DKK 6.6 million corresponding to an increase of 10.7%. After exchange effect the increase is 9.3%. 
     
• The Group’s gross profit was DKK 106.9 million compared to DKK 115.8 million in 2015/16, and as a consequence of the revenue mix, the gross margin decreased to 54.7% from 59.6% in 2015/16.
   
• Compared to the first six months in 2015/16, capacity costs rose by DKK 12.1 million. This is primarily due to the significant own financed investments in development projects (headset platforms and a platform for gaming headset as mentioned in our annual report 2015/16).  The high level of activity in both operations and own financed development projects has made it necessary to increase staff by 41 more employees compared to last year. Furthermore, capacity costs in Q1 2016/17 included external lease compared to last year.
   
• Operating profit (EBIT) amounted to DKK 19.7 million compared to DKK 33.9 million in 2015/16.
   
• The Group’s cash flow from operating activities in the first six months amounted to DKK 13.8 million compared to DKK 19.9 million in the same period last year.
   
• Despite the unsatisfying development in Q2 Management maintains the announced expectations for 2016/17. RTX expects revenue in the range of DKK 420-435 million, EBIT in the range of DKK 68-75 million and EBITDA in the range of DKK 73-80 million.  
   

RTX A/S

Peter Thostrup
Chairman

Peter Røpke 
President & CEO