17.2.2023 08:00:01 EET | Norrhydro Group Oyj |
Company Announcement
Norrhydro Group Plc – Company Announcement 17 February 2023 at 8:00 AM
This announement is a summary of Norrhydro´s Financial Statement Bulletin, period January-December 2022. Financial Statement Bulletin is attached and also available on Company´s website:
https://www.norrhydro.com/en/investors-reports-and-presentations
Norrhydro is a Finnish pioneer in motion control and one of the leading providers of energy-efficient hydraulic cylinders in the Nordic countries. Topics in Financial Statements Bulletin
July-December 2022 in brief
Turnover increased 2.1 % to EUR 13,088 (12,822) thousand
EBITDA was EUR 36 (1,483) thousand
EBITDA margin was 0.3 % (11.6 %)
Operating profit was EUR -457 (1,078) thousand
Earnings per share were -0.07 euro (-0,3)
The move to the new production facility, the ramp-down of the old factory and the resulting production shutdowns, as well as the ramp-up of the new production facility, had an estimated impact of EUR -1.5 million on profitability. The effects on profitability caused by the atypical production shutdown, the commissioning of the new production facility and the ramp-up of production machinery could not be accurately estimated in advance.
January-December 2022 in brief
Turnover increased 20.3 % to EUR 29,705 (24,693) thousand
EBITDA was EUR 1,697 (2,968) thousand
EBITDA margin was 5.7 % (12.0 %)
Operating profit was EUR 825 (2,177) thousand
Earnings per share were 0.004 euro (0.04)
Return on equity was 0.4 % (4.8 %)
Equity ratio was 38.3 % (50.7 %)
Cash flow from business operations was EUR -408 (756) thousand
The Board of Director´s proposes a capital repayment of EUR 0.06 (0.06) per share, paid in two instalments
Thousand euros
1 July –31 Dec. 2022
1 July –31 Dec.2021
Change
1 Jan. –31 Dec. 2022
1 Jan. –31 Dec. 2021
Change
Turnover
13,088
12,822
2.1 %
29,705
24,693
20.3 %
EBITDA
36
1,483
-97.6 %
1,697
2,968
-42.8 %
EBITDA, %
0.3 %
11.6 %
5.7 %
12.0 %
Operating profit
-457
1,078
-142.4 %
825
2,177
-62.1 %
Operating profit, %
-3.5 %
8.4 %
2.8 %
8.8 %
Profit for the financial period
-735
-278
43
353
Profit for the financial period, %
-5.6 %
-2.2 %
0.1 %
1.4 %
Cashflow for business operations
-408
756
Return on investment, %
4.2 %
15.2 %
Return on equity, %
0.4 %
4.8 %
Equity ratio, %
38.3 %
50.7 %
Current ratio
1,53
1.74
Quick ratio
0.53
1.09
Earnings per share, undiluted €
-0.07
0.03
0.004
0.04
Earnings per share, diluted, €
-0.07
0.03
0.004
0.04
Personnel at the end of the period
175
148
Guidance for 2023
The Group’s turnover is expected to be EUR 34–38 million and EBITDA 8–11 per cent of turnover in 2023.
Estimate of probable future development
Assessing the development of the Group’s turnover in the current, still uncertain global economic situation is challenging. The Group aims to continue its growth-oriented strategy and expand its business by increasing its own market share in the hydraulic cylinder market and launching new digital, energy-efficient, and smart products and services to the market. Over the next few years, growth is expected to accelerate significantly as a result of the additional capacity provided by the new facility and the market introduction of the aforementioned digital products and services. The Group’s target for 2027 is turnover of over EUR 70 million, digital products and services accounting for over 30 per cent of turnover and EBITDA of at least 16 per cent of turnover.
The investments in product development and the commercialisation of digital solutions will continue during the current financial period. With the new production facility and the investments in machinery and equipment made there, the growth in turnover is expected to continue in the coming years. Similarly, the improvement in productivity and competitiveness is expected to improve with new investments made and planned.
Proposal fo the distribution of profit
The parent company’s distributable funds on 31 December 2022 were EUR 10,894,766.06. The Board of Directors’ proposal for measures concerning the company’s profit/loss: The parent company’s profit of EUR 554,678.28 shall be transferred to the account “Retained earnings/loss” and no dividend shall be distributed.
The Board of Directors proposes that a capital repayment of EUR 654,098.28, or EUR 0.06 per share, be distributed from the invested unrestricted equity reserve of the parent company and paid in two instalments.
CEO´s review
Norrhydro’s business developed strongly again in 2022 and, for the second year in a row, the growth was faster than expected, especially considering the simultaneous ramp-up of the new facility. Thanks to strong demand and new customer acquisition, the Group’s turnover grew to EUR 29.7 million, or approximately by 20 per cent, from the previous year. Sales for 2022 amounted to approximately EUR 32,000 thousand, which corresponds to an increase of approximately 30 per cent compared to the previous year, but, due to the ramp-up of the new facility, some deliveries were postponed to 2023. Sales growth was driven by strong demand for the Group’s products and new, growing customer relationships.
Norrhydro’s EBITDA was EUR 1.7 million and EBITDA margin was 5.7% (2021: 12.0%). During the second half of the year, profitability was affected by the move to the new facility, the closure of the old factory, and the resulting production shutdowns and the ramp-up of the new facility. In its guidance for the financial year 2022, the Company estimated that the new production facility project could affect profitability and did not provide precise profitability guidance for the financial year. In the autumn, operations had to be carried out in two production facilities at the same time. All of the aforementioned issues tied the company’s human resources to the move and ramping up the new production facility, caused significant additional costs and kept production and delivery volumes at a lower level than usual. The move and the ramp-up of the new production facility also tied significant amounts of capital to stocks and work in-process. The impact of these is estimated to have weakened EBITDA in the second half of the year by approximately EUR 1.5 million compared to normal operations. The increase in the prices of raw materials and components that continued throughout the year also affected profitability, as the increased prices could be transferred to customer prices with a delay due to the agreements in force.
Demand was good in almost all of our customer sectors and segments. Most of our growth came again from our profitable and steadily cash flow-generating cylinder business, but we still expect the share of digital solutions to grow to more than 30 per cent of our turnover by 2027.
In 2023, we will focus on the commissioning of the new production facility and on improving productivity as well as on acquiring new international customers outside Scandinavia. The importance of our digital solutions for our future is very high, which is why, during 2023, we will increase the focus and resources on the implementation of these solutions’ current projects and the acquisition of new customers, so that we can increase our market share in terms of energy efficiency and environmentally friendly solutions according to our strategy.
We believe that the difficult geopolitical situation, energy-related challenges, and possible recession will not slow down our growth rate in the coming year either. Our business is based on several segments in traditional hydraulics. The versatility of our operations is a factor that provides a strong basis for the company’s growth despite many threats. The still-evolving hydraulics market is blowing tailwinds to our growth.
During 2023, we will also offer our customers tailor-made solutions for both traditional cylinder and digital business. We want to continue to be a long-term strategic partner for our customers, helping them to succeed, and at the same time succeeding ourselves. Our motto is “Partner in success”.
Matias Parviainen
CEO
Release Event
Norrhydro Group Plc´s Financial Statement 2022 will be released on webcast on Friday 17th February at 10 AM.
Matias Parviainen, CEO of Norrhydro Group Plc and CFO, Hanne Sarajärvi represent and comment on year´s 2022 result and development. Webcast is in Finnish and can be viewed in: https://norrhydro.videosync.fi/tulosjulkistus-2022
Presentation and webcast recording are available afterwards in Norrhydro´s website:
https://www.norrhydro.com/fi/sijoittajasivut.
Further information:
Matias Parviainen, CEO
Norrhydro Group Plc
Tel. +358 400 175 107
Email: matias.parviainen@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 Oy
Key media
https://www.norrhydro.com/en
Norrhydro Group Plc in brief
Norrhydro, founded in 1985, is a Finnish forerunner in motion control and a provider of energy-efficient hydraulic cylinders and system suppliers specialising in high-quality, customised and energy-efficient hydraulic cylinders and demanding linear motion control systems and mobile equipment. The company has more than 35 years of experience in developing and manufacturing customised hydraulic cylinders and liners motion control systems for the most demanding conditions and environments. In 2022, the company generated revenues of EUR 29.7 million, EBITDA of EUR 1.7 million and operating profit of EUR 0,8 million.
Attachments
Download announcement as PDF.pdf
NHG_Financial Statement Bulletin_2022 – FINAL.pdf
