18.8.2022 08:00:01 EEST | Norrhydro Group Oyj |
Company Announcement
NORRHYDRO GROUP PLC – COMPANY ANNOUNCEMENT 18 August 2022 at 8:00
This announcement is a summary of Norrhydro Group Plc´s half-year report January-June 2022. The complete half-year report is attached and available on Norrhydro´s website at https://www.norrhydro.com/en/sijoittajat-tiedotteet.
Norrhydro is a Finnish forerunner in motion control and one of the leading providers of energy-efficient hydraulic cylinders in the Nordic countries.
January–June 2022 in brief
Turnover increased 40.0% to EUR 16,617 (11,871) thousand
EBITDA was EUR 1,662 (1,485) thousand
EBITDA margin was 10.0% (12.5%)
Operating profit was EUR 1,281 (1,099) thousand
Earnings per share were EUR 0.07 (0.08) (Number of shares on 30 June 2022: 10,901,638; 30 June 2021: 8,242,394)
Thousand euros
1 January–30 June 2022
1 January–30 June 2021
Change
1 January–31 December 2021
Turnover
16,617
11,871
40.0%
24,693
EBITDA
1,662
1,485
11.9%
2,968
EBITDA, %
10.0%
12.5%
12.0%
Operating profit
1,281
1,099
16.6%
2,177
Operating profit, %
7.7%
9.3%
8.8%
Profit for the financial period
777
631
23.2%
353
Profit for the financial period, %
4.7%
5.3%
1.4%
Cash flow from business operations
112
1,177
756
Return on investment, %
7.2%
10.8%
15.2%
Return on equity, %
6.8%
18.8%
4.8%
Equity ratio, %
50.1%
21.5%
50.7%
Current ratio
1.81
1.21
1.74
Quick ratio
0.68
0.54
1.09
Earnings per share, undiluted, €
0,07*
0.08
0.04
Earnings per share, diluted, €
0,07*
0.08
0.04
Personnel at the end of the period
159
126
144
* Number of shares 30 June 2022: 10,901,638; 30 June 2021: 8,242,394
Guidance for 2022
Company repeats its guidance given in April 2022: Turnover in 2022 is expected to grow by approximately 15–25% compared to 2021 and hence to amount to EUR 28.3–31.0 million euros (24,7 million €).
The geopolitical situation and the effects of the Covid-19 pandemic may bring challenges to the availability and cost development of the manufacturing materials used by the company or its customers. Availability problems, if they materialise, could cause disruptions in the company’s own and customers’ production. The company will pass on the cost of inflation to product prices based on market conditions and customer contracts, and the impact on sales prices will occur with a 3–6-month lag.
The new production facility will be completed in August 2022, after which the ramp-up of production will start at the new facility. Due to the impact of the relocation, the ramp-up and cost inflation, no precise guidance on profitability is given for 2022.
CEO´s review
Norrhydro’s turnover grew strongly in the first half of 2022, despite challenging market conditions. Growth was strongest in the segments of construction, mining and material handling machinery and equipment. Demand in the forest machinery industry also increased, driven by the good price development for forest industry products and high utilisation rates of machinery. Only in the marine segment did demand fall slightly. I am particularly pleased that in challenging conditions we were able to increase our market share by offering new product groups to our existing customers. With our new factory about to be completed, our cylinder manufacturing capacity will double, and we will be in a stronger position to seek additional growth with new customers.
During the spring, material and logistics costs increased significantly, affecting our relative profitability in the year’s first half. However, we will be able to pass on the cost increases to product prices with a lag of around 3–6 months. There were also delays in component availability and logistics, but we still managed to deliver all products to our customers as planned. Business growth, higher raw material prices and increased inventories increased our working capital needs. However, we are quite satisfied with the result, considering the raw material price development and the market situation. The war in Ukraine and the closure measures in China continue to add to the uncertainty in the markets.
In addition to the manufacture of hydraulic cylinders, the development of our new digital services continued well in the first half of the year. We have several active development projects in our portfolio, and we have identified several new customers interested in our digital services. Although these projects are still some way from going into series production, the progress has been encouraging, and we believe that there will be demand for our digital services from both existing and new customers.
Our latest digital concept is NorrData, which we started developing early this year. NorrData is a continuation of our digital products and it supports, in particular, the NorrDigi® motion control system. With NorrData, we process data from machines and equipment into a service product that enables our customers to improve their business productivity and equipment availability. With the development of NorrData, we are preparing for a future in which intelligent machines with large amounts of data become more common, and the processing and efficient use of data becomes an important part of everyday operations.
Our new environmentally friendly production plant in Rovaniemi is on track for completion, despite minor delays in equipment deliveries, and we will start ramping up production at the end of August. The plant will reduce emissions from our production by an estimated 20 per cent compared to today, increase our capacity and enable us to start mass production of NorrDigi®. The ramp-up and the production shutdown caused by the move will continue to affect our operations in the second half of the year, but our order book is at a good level, and we are confident as we approach the end of the year. The biggest price increases for materials and components seem to be over, and we will be able to pass on the earlier ones to sales prices with a slight delay.
With this in mind, I welcome our new CEO Matias Parviainen, who will start at Norrhydro in November. With his strong management experience, Matias is well placed to continue and develop Norrhydro’s successful future. I will also continue with Norrhydro’s growth story: in my role as Chairman of the Board, I will focus on driving Norrhydro’s growth strategy.
Yrjö Trög,
CEO
Results webcast
Norrhydro Group Plc will arrange a half-year report 2022 webcast on Thursday 18 August 2022 at 10:00 a.m.
Yrjö Trög, CEO of Norrhydro Group Plc and Hanne Sarajärvi, CFO, will represent and comment on half-year´s result and development in the webcast. The webcast will be held in Finnish and can be viewed in https://norrhydro.videosync.fi/2022-h1-tulosjulkistus
Presentation and webcast recording will be available afterwards on Norrhydro´s website at https://www.norrhydro.com/en/sijoittajat-tiedotteet.
Further information:
Yrjö Trög, CEO, Norrhydro Group Oyj
Tel. +358 40 029 1229
Email: yrjo.trog@norrhydro.com
Certified advisor:
Translink Corporate Finance Oy
Jari Lauriala, Managing Partner
Tel. +358 40 091 8855
Email: jari.lauriala@translinkcf.fi
Sami Miettinen, Partner
Tel. +358 400 735 835
Email: sami.miettinen@translinkcf.fi
Distribution:
Nasdaq Helsinki OyKey mediahttps://www.norrhydro.com/fi
Norrhydro Group Plc in brief
Norrhydro, founded in 1985, is a Finnish pioneer in motion control, a provider of energy-efficient hydraulic cylinders and a system supplier specialising in high-quality, customised and energy-efficient hydraulic cylinders and demanding linear motion control systems and mobile machinery. The company has more than 35 years of experience in developing and manufacturing customised hydraulic cylinders and linear motion control systems for the most demanding conditions and environments. In 2021, the company had a turnover of EUR 24.7 million, an EBITDA of EUR 3.0 million and an operating profit of EUR 2.2 million.
Attachments
Download announcement as PDF.pdf
Norrhydro_Half-year report 2022_Eng.pdf
