Announcement
To Nasdaq Copenhagen A/S and the press
Nørresundby, Denmark, 23 January 2020
Announcement no. 06/2020
Interim report for Q1 2019/20
(the period 01.10.2019 - 31.12.2019)
“In general, I am satisfied with the first quarter of our financial year 2019/20 which developed according to plan. With 10% revenue growth and doubling of EBITDA in Q1 2019/20, RTX continues to develop positively and we maintain our full-year expectations. Q1 witnessed the continued implementation of our strategy to achieve profitable growth. We managed the continued ramp-up under newer framework agreements and we further continued the execution of development activities related to renewal of existing agreements as well as related to framework agreements announced in Q4 2018/19.”
Peter Røpke, CEO
SUMMARY Q1 2019/20 FOR THE RTX GROUP
- Highlights: Best first quarter ever with growth in both revenues and earnings. Revenue up by 10% to DKK 128.3 million driven by continued growth in the Enterprise segment within Business Communications. EBITDA increased by 102% to DKK 21.4 million and EBIT increased by 109% to DKK 16.3 million. Growth strategy implementation continues according to plan. 2019/20 financial outlook maintained.
- Net revenue increased by 10.2% to DKK 128.3 million in Q1 2019/20 (Q1 2018/19: DKK 116.4 million) driven by continued organic growth in Business Communications:
- Business Communications: Revenue grew 15.8% to DKK 89.5 million especially driven by the execution of its growth strategy within the Enterprise segment through large framework agreements. The two major framework agreements announced in 2017/18 contribute significantly to the growth, however quarter-on-quarter fluctuations are to be expected in the ramp-up phase of such agreements. The new major framework agreement announced at the end of Q4 2018/19 is in the development phase prior to product sales with negligible impact on revenues and will continue in the development phase in 2019/20.
- Design Services: Revenue decreased by 0.9% to DKK 38.8 million. While recurring revenues from product sales and royalties increased slightly in line with the strategy to increase resource scalability within Design Services, revenues from engineering services (hourly-based engineering) decreased slightly compared to last year as the development activities in the division focus increasingly on generating recurring revenues instead of executing pure engineering projects.
FX corrected revenue growth amounted to 7.3% as revenue, compared to Q1 last year, was positively impacted by the USD exchange rate development.
- Gross profit increased by 13.2% to DKK 75.5 million in Q1 2019/20 (Q1 2018/19: DKK 66.7 million). The gross margin increased by 1.6%-point to 58.9% (Q1 2018/19: 57.3%).
- Operating performance improved with EBITDA increasing by 101.8% to DKK 21.4 million in Q1 2019/20 (Q1 2018/19: DKK 10.6 million). EBIT increased by 109.2% to DKK 16.3 million in Q1 2019/20 (Q1 2018/19: DKK 7.8 million). EBITDA and EBIT are impacted by the growth in revenue and gross profit as well as by increasing capacity costs related to ramp-up of activities and investments in capacity related to the major framework agreements announced over the last years. Thus, the average number of FTEs reached 291 in Q1 2019/20 compared to 267 in Q1 2018/19. Earnings in Q1 are positively impacted compared to last year as last year included one-time costs related to exploration of further acceleration of growth – and there was no recurrence of such costs in 2019/20. Finally, EBITDA and EBIT are impacted by implementation of IFRS 16 regarding capitalization of leasing costs, which increases EBITDA (and to a minor degree EBIT).
- Cash flows from operating activities (CFFO) amounted to DKK 6.5 million in Q1 2019/20 compared to DKK 12.9 million in Q1 2018/19 impacted by earnings growth, working capital fluctuations and tax payments in Q1 of 2019/20.
OUTLOOK FOR 2019/20
- Management maintains the expectations for revenue between DKK 620-650 million, EBITDA between DKK 105-120 million and EBIT between DKK 75-90 million for the financial year 2019/20. As stated in the annual report for 2018/19, it is expected that the revenue distribution over 2019/20 will be relatively backloaded.
NEW SHARE BUY-BACK PROGRAMME INITIATED AS ANNOUNCED
- As announced in company announcement 61/2019, RTX has initiated a new share buy-back programme for an amount up to DKK 20 million. The programme is being executed during the period 1 January 2020 to 30 June 2020.
RTX A/S
PETER THOSTRUP PETER RØPKE
Chairman CEO
Investor and analysts meeting
On Friday, 24 January 2020 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 first quarter of 2019/20. To register for the meeting, please e-mail invitations@abgsc.dk.
Enquiries and further information:
CEO Peter Røpke, tel +45 96 32 23 00
CFO Morten Axel Petersen, tel +45 96 32 23 00
RTX’s homepage: www.rtx.dk
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