ROBIT PLC INTERIM REPORT 1 JANUARY–30 SEPTEMBER 2023: PROFITABILITY IMPROVED FROM THE BEGINNING OF THE YEAR

ROBIT PLC          STOCK EXCHANGE RELEASE          23 OCTOBER 2023 AT 11.00 EEST

ROBIT PLC INTERIM REPORT 1 JANUARY–30 SEPTEMBER 2023: PROFITABILITY IMPROVED FROM THE BEGINNING OF THE YEAR

In the text, ‘review period’ or ‘third quarter of the year’ refers to 1 July–30 September 2023 (Q3), and ‘January–September’ refers to 1 January–30 September 2023. Figures from the corresponding time period in 2022 are given in parentheses. All the figures presented are in euros. Percentages are calculated from thousands of euros.

1 July–30 September 2023 in brief

  • Net sales EUR 23.7 million (28.4), change –16.6 per cent
  • EBITDA EUR 1.4 million (3.5); 5.8 per cent of net sales (12.3)
  • Comparable EBITDA EUR 1.5 million (3.5); 6.4 per cent of net sales (12.3)
  • EBITA EUR 0.3 million (2.2); 1.3 per cent of net sales (7.8)
  • Comparable EBITA EUR 0.4 million (2.2); 1.9 per cent of net sales (7.8)
  • EBIT EUR 0.3 million (2.0); 1.1 per cent of net sales (7.0)
  • Review period net income EUR -0.3 million (1.7); -1.2 per cent of net sales (6.0)
  • Net cash flow for operating activities EUR -0.7 million (2.9)

1 January–30 September 2023 in brief

  • Net sales EUR 70.0 million (85.8); change –18.4 per cent
  • EBITDA EUR 2.8 million (8.5); 3.9 per cent of net sales (9.9)
  • Comparable EBITDA EUR 3.0 million (8.5); 4.3 per cent of net sales (9.9)
  • EBITA EUR -0.6 million (4.8); -0.9 per cent of net sales (5.6)
  • Comparable EBITA EUR -0.3 million (4.8); -0.5 per cent of net sales (5.6)
  • EBIT EUR -1.1 million (4.1); -1.5 per cent of net sales (4.8)
  • Review period net income EUR -2.7 million (3.1); -3.8 per cent of net sales (3.6)
  • Net cash flow for operating activities EUR 1.3 million (4.0)
  • Equity ratio at the end of the review period 46.3 per cent (48.2)
Key financials Q3 2023 Q3 2022 Change % Q1–Q3 2023 Q1–Q3 2022 Change % 2022
Net sales, EUR 1,000 23,706 28,424 -16.6% 70,016 85,751 -18.4% 111,962
EBITDA, EUR 1,000 1,370 3,488 -60.7% 2,763 8,472 -67.4% 8,851
EBITDA, % of net sales 5.8% 12.3%   3.9% 9.9%   7.9%
Adjusted EBITDA, EUR 1,000 1,520 3,488 -56.4% 3,042 8,472 -64.5% 8,851
Comparable EBITDA, % 6.4% 12.3%   4.3% 9.9%   7.9%
EBITA, EUR 1,000 296 2,211 -86.6% -623 4,781 -113.0% 3,959
EBITA, % of sales 1.3% 7.8%   -0.9% 5.6%   3.5%
Adjusted EBITA, EUR 1,000 446 2,211 -79.8% -343 4,781 -107.2% 2,940
Adjusted EBITA, percent of sales 1.9% 7.8%   -0.5% 5.6%   2.6%
EBIT, EUR 1,000 265 1,984 -86.6% -1,076 4,111 -126.2% 3,071
EBIT, per cent of sales 1.1% 7.0%   -1.5% 4.8%   2.7%
Result for the period, EUR 1,000 -277 1,718 -116.1% -2,687 3,051 -188.1% 885
Result for the period, % of sales -1.2% 6.0%   -3.8% 3.6%   0.8%
Earnings per share (EPS), EUR 1,000 -0.02 0.08   -0.13 0.13   0.04
Return on equity (ROE), %       -7.7% 7.2%   1.6%
Return on capital employed (ROCE), %       -2.2% 5.8%   3.5%

MARKET OUTLOOK

Robit expects the global mining industry demand to remain at the current level. Demand in the construction industry has weakened during 2023, especially in Europe and Asia, and the company does not see a significant change in the short term.

GUIDANCE FOR 2023

Robit Plc expects its net sales for 2023 to be EUR 90–100 million and its comparable EBITDA profitability in euros to be EUR 3–6 million.

CEO ARTO HALONEN:

Market demand remained at the level of the second quarter, but lower than in the comparison period. The weakening of market demand particularly affected the construction industry in Europe and Asia. Demand in the mining industry remained at a good level. Orders received totalled EUR 24.9 million, down by 9.7 per cent from the comparison period. Orders received were at a higher level compared to the first two quarters of the year.

Robit net sales for the third quarter were EUR 23.7 million (28.4), down 16.6 per cent on the very strong comparison period. In constant currencies, there was a decrease of 11.6 per cent. The company's net sales grew in the Australasia and EMEA regions. In Australasia, growth came mainly from the Top Hammer business. In EMEA, it came from both the Top Hammer and Down the Hole businesses.  Net sales in the Asia region fell by 21.5 per cent due to low demand in the construction industry. Net sales in the Americas region also decreased as a result of lower deliveries to certain customers. The effect of ceasing sales to Russia on the review period was EUR 2.4 million compared to the comparison period. During the quarter, the company's order backlog increased, especially in the mining segment.

Net sales in the Top Hammer business decreased by 16.2 per cent in the third quarter compared to the comparison period. Top Hammer sales increased in Australasia and EMEA, driven by new customer accounts and high customer testing activity. The decline in sales in the East region was mainly attributable to Top Hammer and was the main reason for the decline in sales. Net sales in the Down the Hole business decreased by 9.4 per cent The decline came particularly from the Americas region. In the Geotechnical business, sales in the Americas increased, but sales in Europe, Geotechnical’s other main market, declined due to weaker demand in the construction industry.

Comparable EBITDA for the third quarter was EUR 1.5 million (3.5), clearly below the strong comparison period. However, thanks to the savings measures already implemented, the company's profitability continued to improve compared to the first two quarters of the year. The company shut down production at its Australian plant at the end of the quarter. This will strengthen the company's competitiveness in the Down the Hole business. The Australian unit will focus on sales, maintenance and distribution in the local market. The Geotechnical business’ profitability was burdened by the increased price competition for fewer construction projects. 

The company's measures are now focusing in particular on clarifying operations, improving profitability and competitiveness. The closure of manufacturing in Australia is part of this restructuring. In addition, the company will in future sell products only under Robit brand. Previously, the company has been active in the Down the Hole business under both the Robit and Halco brands. This brand change makes it possible to clarify both the organization, the company structure and the product offering.

The implementation of the Fit for Service programme, which focuses on developing working capital management, progressed in the third quarter. As a result of the measures taken, the company's inventories decreased by EUR 2.4 million during the quarter. The decline in inventory levels is expected to continue in the last quarter of the year.

NET SALES

Net sales by product area

In 2023, the company is reporting its net sales in three business units: Top Hammer, Down the Hole and Geotechnical. Previously, the company reported the Geotechnical unit as part of the Down the Hole unit. For more information on the change, see the principles in the Notes.

EUR thousand Q3 2023 Q3 2022 Change % Q1–Q3 2023 Q1–Q3 2022 Change % 2022
Top Hammer 13,829 16,492 -16.2% 40,862 50,086 -18.4% 66,834
Down the Hole 5,635 6,218 -9.4% 15,998 19,488 -17.9% 22,141
Geotechnical 4,243 5,713 -25.7% 13,156 16,177 -18.7% 22,987
Total 23,706 28,424 -16.6% 70,016 85,751 -18.4% 111,962

The Group’s net sales in the third quarter of the year period totalled EUR 23.7 million (28.4). Down 16.6 per cent from the comparison period. In constant currencies, net sales decreased by 11.6 per cent.

The Group’s net sales in January–September totalled EUR 70.0 million (85.8). Down 18.4 per cent from the comparison period. In constant currencies, net sales decreased by 15.0 per cent.

Top Hammer business net sales decreased by 16.2 per cent, net sales for the review period being EUR 13.8 million (16.5). The decrease in net sales was particularly affected by the discontinuation of sales to Russia and weaker demand in the Asia region. The Australasia and EMEA regions showed a positive development in net sales.

Down the Hole business net sales decreased by 9.4 per cent, net sales for the review period being EUR 5.6 million (6.2). Net sales decreased particularly in the Americas region due to reduced delivery volumes to certain distributors.

Geotechnical business net sales decreased by 25.7 per cent, net sales for the review period being EUR 4.2 million (5.7). The decline in net sales was mainly due to weaker demand in the construction industry in Europe but, in the Americas, the other main market, net sales increased.

Net sales by market area

EUR thousand Q3 2023 Q3 2022 Change % Q1–Q3 2023 Q1–Q3 2022 Change % 2022
EMEA 12,539 12,199 2.8% 36,459 36,105 1.0% 48,651
Americas 4,859 6,933 -29.9% 15,407 20,192 -23.7% 26,349
Asia 2,228 2,836 -21.5% 6,657 8,919 -25.4% 11,686
Australasia 3,920 3,671 6.8% 10,804 10,665 1.3% 13,892
East 160 2,785 -94.2% 688 9,870 -93.0% 11,384
Total 23,706 28,424 -16.6% 70,016 85,751 -18.4% 111,962

PROFITABILITY

Key figures

EUR thousand Q3 2023 Q3 2022 Change % Q1–Q3 2023 Q1–Q3 2022 Change % 2022
EBITDA, EUR 1,000 1,370 3,488 -60.7% 2,763 8,472 -67.4% 8,851
EBITDA, % of net sales 5.8% 12.3%   3.9% 9.9%   7.9%
Adjusted EBITDA, EUR 1,000 1,520 3,488 -56.4% 3,042 8,472 -64.5% 8,851
Adjusted EBITDA, percent of sales 6.4% 12.3%   4.3% 9.9%   7.9%
EBIT, EUR 1,000 265 1,984 -86.6% -1,076 4,111 -126.2% 3,071
EBIT, per cent of sales 1.1% 7.0%   -1.5% 4.8%   2.7%
Result for the period, EUR 1,000 -277 1,718 -116.1% -2,687 3,051 -188.1% 885
Result for the period, % of sales -1.2% 6.0%   -3.8% 3.6%   0.8%

Comparable EBITDA for the third quarter was EUR 1.5 million (3.5) Comparable EBITDA’s share of net sales was 6.4 per cent (12.3). The company’s EBIT was EUR 0.3 million (2.0). The EBIT was 1.1 per cent (7.0) of the review period net sales.

In January–September, comparable EBITDA was EUR 3.0 million (8.5). Comparable EBITDA’s share of net sales was 4.3 per cent (9.9). The company’s EBIT was EUR -1.1 million (4.1). EBIT was -1.5 per cent (4.8) of the review period’s net sales.

The decline in profitability was mainly due to lower sales during the review period. In addition, the company was not able to transfer the increased costs in full to the sales prices. The company continues to invest in sales development and is accelerating its cost-savings programme to support the strengthening of profitability.

Financial income and expenses in the third quarter of the year totalled EUR -0.6 million (-0.2), of which EUR -0.6 million (-0.3) was interest expenses and EUR 0.1 million (0.1) exchange rate changes. Net income for the quarter was EUR -0.3 million (1.7).

In January–September, financial income and expenses totalled EUR -1.8 million (-1.2), of which EUR -1.6 million (-0.9) was interest expenses and EUR 0.0 million (-0.1) exchange rate changes. Review period net income was EUR -2.7 million (3.1).

CASH FLOW AND INVESTMENTS

Consolidated cash flow statement

EUR thousand Q3 2023 Q3 2022 Q1–Q3 2023 Q1–Q3 2022 2022
Net cash flows from operating activities          
Cash flows before changes in working capital 1,196 3,323 2,330 8,904 10,014
Cash flows from operating activities before financial items and taxes -465 3,197 2,791 5,267 7,277
Net cash inflow (outflow) from operating activities -695 2,934 1,332 3,981 5,556
           
Net cash inflow (outflow) from investing activities -23 -177 -410 -982 -1,057
           
Net cash inflow (outflow) from financing activities -587 -2,697 -1,098 -5,809 -6,421
           
Net increase (+)/decrease (-) in cash and cash equivalents -1,305 59 -175 -2,810 -1,921
Cash and cash equivalents at the beginning of the period 8,616 7,079 7,688 9,525 9,525
Exchange gains/losses on cash and cash equivalents 42 -122 -159 300 84
Cash and cash equivalents at end of the period 7,353 7,016 7,353 7,016 7,688

The Group’s cash flow before changes in working capital during the third quarter was EUR 1.2 million (3.3). Net cash flow for operating activities was EUR -0.7 million (2.9). The changes in working capital had an impact of EUR -1.7 million (-0.1). The change in working capital was affected by the EUR 3.9 million decrease in accounts payable due to lower purchases as part of the company’s goal to reduce inventories. The growth in sales and other receivables had a negative impact of EUR 0.4 million on cash flow, and the decline of inventories a positive impact of EUR 2.6 million.

The net cash flow from investing activities for the third quarter was EUR -0.0 million (-0.2). Gross investments in production during the review period totalled EUR 0.0million (0.2). The share of investments in net sales was 0.2 per cent (0.8).

The net cash flow from financing activities for the third quarter was EUR -0.6 million (-2.7). Net changes in loans totalled EUR -0.0 million (0.1). The change in bank overdrafts was EUR 0.1 million (-2.4). Returns on equity were EUR -0.4 million. The repayment of lease liabilities reported in net cash flow from financing activities under IFRS 16 totalled EUR 0.3 million (0.4).

Depreciation, amortization, and write-downs totalled EUR 1.1 million (1.5).

FINANCIAL POSITION

  30 September 2023 30 September 2022 31 December 2022
Cash and cash equivalents, EUR thousand 7,353 7,016 7,688
Interest-bearing liabilities, EUR thousand 34,903 36,366 36,345
of which short-term interest-bearing financial liabilities: 5,102 5,480 8,922
Net interest-bearing liabilities, EUR thousand 27,549 29,350 28,657
Undrawn credit facility, EUR thousand 3,888 5,807 4,218
Gearing, % 58.9% 54.6% 56.4%
Equity ratio, % 46.3% 48.2% 46.5%

The Group had interest-bearing debt amounting to EUR 34.9 million (36.4), of which EUR 5.9 million (7.3) was interest-bearing debt under IFRS 16. The company had liquid assets of EUR 7.4 million (7.0) and an undrawn credit facility of EUR 3.9 million (5.8). Interest-bearing net liabilities were EUR 27.5 million (29.4), and interest-bearing net bank debt without IFRS 16 debt impact was EUR 21.7 million (22.1).

The Group’s equity at the end of the review period was EUR 46.7 million (53.6). The Group’s equity ratio was 46.3 per cent (48.2). Gearing was 58.9 per cent (54.6).

PERSONNEL AND MANAGEMENT

The number of employees decreased by 28 persons compared to the end of the comparison period and stood at 238 (266) at the end of the period, mainly due to the closure of the Australian factory and other organisational changes. At the end of the review period, 69.1 per cent of the company’s personnel were located outside Finland.

In addition to CEO Arto Halonen, the company’s Management Team at the end of the reporting period included Perttu Aho (VP Down the Hole), Ville Iljanko (VP Distributor Sales), Jorge Leal (VP Top Hammer), Ville Peltonen (CFO), Ville Pohja (VP Geotechnical) and Jaana Rinne (HR Director).

FINANCIAL TARGETS

Robit’s long-term target is to achieve organic net sales growth of 15 per cent annually and comparable EBITDA profitability of 13 per cent.

  Long-term target 2021 2022 1–9 2023
Net sales growth, p.a. 15% 10.0% 11.1% -8.2%
Comparable EBITDA, % of net sales 13% 7.5% 7.9% 5.3%

RESOLUTIONS OF THE ANNUAL GENERAL MEETING 2023

The Annual General Meeting of Robit Plc was held in Tampere on 15 March 2023. The decisions and other materials related to the meeting are available on the company's website at  https://www.robitgroup.com/investor/corporate-governance/general-meeting/.

SHARES AND SHARE TURNOVER

On 30 September 2023, the company had 21,179,900 shares and 5,601 shareholders. Trading volume in January–September was 7,001,449 shares (4,254,349).

On 30 September 2023, the company held 24,273 treasury shares (0.11 per cent of total shares). On 30 September 2023, the market value of the company’s shares was EUR 31.8 million. The closing price of the share was EUR 1.50. The highest price in January–September was EUR 3.48 and the lowest price EUR 1.31.

RISKS AND BUSINESS UNCERTAINTIES

The covenant of the Robit parent company’s financing agreement, net interest-bearing debt/EBITDA, did not meet the terms of the financing agreement on 30 September 2023. The company obtained the consent of its main financier to the breach of the covenant on 26 September 2023. This led to a higher financial cost and risk for the company. The company has hedged against interest rate risk with an EUR 10 million interest rate swap agreement, which entered into force on 30 June 2023 and expires on 30 June 2026.

The geopolitical situation, which is growing tenser, poses a risk to the company’s business. The war in Ukraine and the sanctions imposed on Russia affect the development of net sales and profitability especially in Russia, Belarus and Ukraine, which accounted for approximately 8 per cent of the company’s sales in the 2022 financial year.  The company has no business operations in Russia in 2023.

Other uncertainty factors include the exchange rate development, functioning of information systems, risks related to the security of supply and logistics as well as IPR risks. Fully transferring the increase in raw material costs to customer prices may pose a financial risk. Changes in export countries’ tax and customs legislation may adversely impact the company’s export trade or its profitability. Risks related to information security and cyber threats may also have a detrimental effect on Robit’s business. Potential changes in the business environment may adversely impact the payment behaviour of the Group’s customers and increase the risk of litigation, legal claims and disputes related to Robit’s products and other operations.

CHANGES IN GROUP STRUCTURE

There were no changes in the Group structure during the review period.

OTHER EVENTS IN JULY–SEPTEMBER 2023

Half-year Report

On 1 August 2023, Robit Plc published its financial reporting for 1 January–30 June 2023.

Shareholders' Nomination Committee

On 4 September 2023, the four largest shareholders of the company elected their representatives to the Shareholders' Nomination Committee on the basis of the list of shareholders dated 1 September 2023:

  • Harri Sjöholm, Chairman of the Board, Five Alliance Oy
  • Timo Sallinen, Senior Vice President, Investments, Varma Mutual Pension Insurance Company
  • Jukka Vähäpesola, Head of Equities, Mutual Employment Pension Insurance Company Elo
  • Markus Lindqvist, Director, Sustainability, Aktia Bank Plc

The Nomination Committee will submit its proposal regarding the members of the Board of Directors and the remuneration to the Board of Directors by 31 January 2024.

Acquisition of treasury shares

Based on the authorisation given to the Board of Directors by the Annual General Meeting on 15 March 2023, Robit Plc decided on 18 September 2023 to repurchase a maximum of 100 000 shares, corresponding to approximately 0.5 per cent of the company's share capital. The acquisition of shares was announced to start on 20 September 2023 at the earliest and to end on 30 November 2023 at the latest.  

Change in number of treasury shares

Robit Plc announced on 29 September 2023 that on 27 September 2023 a total of 2,500 of its treasury shares were returned to the company free of charge in accordance with the terms of the share-based compensation plan 2020 due to the termination of the employment of a key employee. After this transaction, the company held 24,273 treasury shares.

EVENTS AFTER THE REVIEW PERIOD

No events after the review period.

Lempäälä, 23 October 2023

ROBIT PLC Board of Directors

For more information, contact:

Arto Halonen, CEO +358 40 028 0717 arto.halonen@robitgroup.com

Ville Peltonen, CFO+358 40 759 9142ville.peltonen@robitgroup.com

Distribution:   Nasdaq Helsinki Ltd Key media www.robitgroup.com

Robit is a strongly international growth company servicing global customers and selling drilling consumables for applications in mining, construction, geotechnical engineering and well drilling. The company’s offering is divided into three product and service ranges: Top Hammer, Down the Hole and Geotechnical. Robit has sales and service points in seven countries as well as an active sales network in more than 100 countries. Robit’s manufacturing units are located in Finland, South Korea and the UK. Robit’s shares are listed on Nasdaq Helsinki Ltd. Further information is available at www.robitgroup.com.

The information presented above includes statements about future prospects. These relate to events or the company’s economic development in the future. In some cases, such statements can be recognised by their use of conditional words (such as “may”, “expected”, “estimated”, “believed”, “predicted” and so on) or other similar expressions. Statements such as these are based on assumptions and factors that Robit’s management have at their disposal and on current decisions and plans. There is always risk and uncertainty attached to any statements regarding future events because they pertain to events and depend on factors that are not possible to predict with certainty. For this reason, future results may differ – even significantly – from the figures expressed or assumed in statements about future prospects. CONDENSED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME  
           
           
EUR thousand  7–9/2023  7–9/2022  1–9/2023  1–9/2022 2022
Net sales 23,706 28,424 70,016 85,751 111,962
Other operating income 319 1211 1,092 3,817 4,117
Materials and services* -15,849 -18,860 -46,672 -56,120 -73,729
Employee benefit expense -3,724 -3,749 -11,694 -12,538 -17,075
Depreciation, amortisation and impairment -1,105 -1,504 -3,838 -4,361 -5,779
Other operating expenses* -3,083 -3,538 -9,979 -12,438 -16,425
EBIT (Operating profit/loss) 265 1,984 -1,076 4,111 3,071
           
Finance income and costs          
Interest income and finance income 1 711 205 2272 2,277
Interest cost and finance cost -603 -954 -1,986 -3,477 -4,010
Finance income and costs net -602 -243 -1,781 -1,205 -1,733
           
Profit/loss before tax -337 1,741 -2,857 2,906 1,338
           
Taxes          
Income tax 14 -15 7 -158 -533
Change in deferred taxes 46 -7 163 303 80
Income taxes 60 -22 170 145 -453
Result for the period -277 1,718 -2,687 3,051 885
           
Attributable to:          
Parent company shareholders -354 1,647 -2,823 2,788 819
Non-controlling interest** 77 71 136 264 66
  -277 1,718 -2,687 3,051 885
Other comprehensive income          
Items that may be reclassified to profit or loss in subsequent periods:
Cash flow hedges 5 221 75 587 633
Translation differences** 218 -1,019 -1,045 763 41
Other comprehensive income, net of tax 224 -798 -970 1,351 674
Total comprehensive income -53 920 -3,657 4,402 1,560
           
Attributable to:          
Parent company shareholders -143 849 -3,747 4,165 1,501
Non-controlling interest** 90 71 90 268 58
Consolidated comprehensive income -53 920 -3,657 4,402 1,560
           
Earnings per share          
           
Basic earnings per share -0.02 0.08 -0.13 0.13 0.04
                     

*In the condensed income statement, changes in inventories are presented in Materials and services, and manufacture for own use in Other operating expenses. **Founded in 2015 by Robit SA, Black Employees Empowerment Trust owns 26% of the shares of Robit SA.*** The Group has internal loans that are treated as net investments in foreign entities in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION      
EUR thousand 30 Sep 2023 30 Sep 2022 31 Dec 2022
ASSETS      
Non-current assets      
Goodwill 5,335 5,225 5,203
Other intangible assets 915 1,770 1,498
Property, plant and equipment 21,519 25,375 24,929
Loan receivables 377 264 248
Other receivables 0 0 6
Derivatives 941 790 848
Deferred tax assets 2,188 2,203 1,859
Total non-current assets 31,274 35,628 34,590
       
Current assets      
Inventories 40,347 45,847 44,311
Account and other receivables 21,768 23,471 22,342
Loan receivables 74 92 80
Current tax assets 178 200 108
Cash and cash equivalents 7,353 7,016 7,688
Total current assets 69,720 76,627 74,529
Total assets 100,994 112,255 109,119
       
EQUITY AND LIABILITIES      
Equity      
Share capital 705 705 705
Share premium 202 202 202
Reserve for invested unrestricted equity 82,178 82,570 82,570
Translation differences -2,744 -1,026 -1,744
Fair value reserve 753 632 678
Retained earnings -31,957 -32,794 -32,748
Profit/loss for the year -2,823 2,788 819
Equity attributable to parent company shareholders in total 46,313 53,077 50,482
Non-controlling interests* 429 541 339
Capital and reserves in total 46,743 53,618 50,822
       
Liabilities      
Non-current liabilities      
Borrowings 25,372 25,270 22,085
Lease liabilities 4,429 5,617 5,338
Deferred tax liabilities 926 683 690
Employee benefit obligations 540 754 732
Total non-current liabilities 31,267 32,323 28,846
       
Current liabilities      
Borrowings 3,680 3,813 7,278
Lease liabilities 1,421 1,667 1,644
Advances received 40 763 145
Income tax liabilities 27 3 321
Account payables and other liabilities 17,661 19,796 19,916
Other provisions 154 273 147
Total current liabilities 22,984 26,314 29,451
Total liabilities 54,251 58,637 58,297
       
Total equity and liabilities 100,994 112,255 109,119
           

* Founded in 2015 by Robit SA, Black Employees Empowerment Trust owns 26% of the shares of Robit SA.

CONSOLIDATED CASH FLOW STATEMENT           
EUR thousand  7-9/2023  7-9/2022  1-9/2023  1-9/2022 2022
Cash flows from operating activities          
Profit before tax -337 1,741 -2,857 2,906 1,338
Adjustments:          
Depreciation, amortisation and impairment 1,105 1,504 3,838 4,361 5,779
Finance income and costs 602 243 1,781 1,205 1,733
Share-based payments to employees -2 4 -67 93 115
Loss (+)/Gain (-) on sale of property, plant and equipment 7 0 -260 -24 -74
Other non-cash transactions -178 -169 -105 363 1,122
Cash flows before changes in working capital 1,196 3,323 2,330 8,904 10,014
           
Change in working capital          
Increase (-) in account and other receivables -364 2,694 -864 3,455 2,975
Increase (-)/decrease (+) in inventories 2,615 844 2,943 -1,345 -606
Increase (+) in account and other payables -3,912 -3,664 -1,619 -5,747 -5,107
Cash flows from operating activities before financial items and taxes -465 3,197 2,791 5,267 7,277
           
Interest and other finance expenses paid -197 -121 -1,166 -722 -1,250
Interest and other finance income received 19 4 48 4 20
Income taxes paid -52 -146 -340 -569 -490
Net cash inflow (outflow) from operating activities -695 2,934 1,332 3,981 5,556
           
Cash flows from investing activities          
Purchases of property, plant and equipment -36 -183 -450 -1,009 -1,194
Purchases of intangible assets -5 -42 -59 -80 -131
Proceeds from the sale of property, plant and equipment -3 48 229 81 150
Proceeds from loan receivables 22 -1 -130 27 119
Net cash inflow (outflow) from investing activities -23 -177 -410 -982 -1,057
           
Cash flows from financing activities          
Dividend payment -393 0 -393 0 -30
Changes in non-current loans -45 134 1,785 -1,416 -3,187
Change in bank overdrafts 112 -2,409 -1,669 -3,068 -1,480
Payment of leasing liabilities -253 -423 -811 -1,325 -1,723
Net cash inflow (outflow) from financing activities -587 -2,698 -1,098 -5,809 -6,421
           
Net increase (+)/decrease (-) in cash and cash equivalents -1,305 59 -175 -2,810 -1,921
Cash and cash equivalents at the beginning of the financial year 8,616 7,079 7,688 9,525 9,525
Exchange gains/losses on cash and cash equivalents 42 -122 -159 300 84
Cash and cash equivalents at end of the year 7,353 7,016 7,353 7,016 7,688
                   
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
A = Share capital                  
B = Share premium                  
C = Reserve for invested unrestricted equity                  
D = Cumulative translation difference                  
E = Fair value reserve                  
F = Retained earnings                  
G = Equity attributable to parent company shareholders                  
H = Non-controlling interests                  
I = Capital and reserves in total                  
EUR thousand A B C D E F G H I
Equity as at 1 January 2022 705 202 82,570 -1,793 45 -32,846 48,883 281 49,114
Profit for the period           2,788 2,788 264 3,051
Other comprehensive income                  
Cash flow hedges         587   587   587
Translation differences       767     767 -4 763
Total comprehensive changes       767 587 2,788 4,142 260 4,402
Share-based payments to employees           52 52   52
Total transactions with owners, recognised directly in equity           52 52   52
Equity as at 30 September 2022 705 202 82,570 -1,026 632 -30,006 53,077 541 53,618
                   
EUR thousand A B C D E F G H I
Equity as at 1 January 2023 705 202 82,570 -1744 678 -31,928 50,483 339 50,822
Profit for the period           -2,823 -2,823 135 -2,688
Other comprehensive income                  
Cash flow hedges         75   75   75
Translation differences       -999     -1,207 -45 -1,045
Total comprehensive changes       -999 75 -2,823 -3,748 90 -3,658
Share-based payments to employees           -20 -20   -20
Acquisition of treasury shares           -9 -9   -9
Distribution of dividends     -393       -393   -393
Total transactions with owners, recognised directly in equity           -29 -422   -422
Equity as at 30 September 2023 705 202 82,178 -2,744 753 -34,780 46,313 429 46,743

NOTESContents

  1. Scope and principles of the interim report
  2. Key figures and calculation
  3. Breakdown of net sales
  4. Financing arrangements
  5. Changes to property, plant and equipment
  6. Given guarantees
  7. Business acquisitions
  8. Goodwill impairment testing
  9. Derivatives

1. SCOPE AND PRINCIPLES OF THE INTERIM REPORT

This interim report has been prepared in accordance with the IAS 34 standard for interim financial reporting and using the same principles as for the annual financial statements. The interim report has not been audited.

Robit is reporting 2023 net sales for three business units: Top Hammer, Down the Hole and Geotechnical. Previously, the company reported the Geotechnical unit as part of the Down the Hole unit. The Geotechnical unit focuses on drill piling, which is a support method used in different kinds of construction projects. Down the Hole focuses on DTH drilling equipment used in mines, quarries and well drilling. Top Hammer focuses on top hammer drilling equipment used in mines, quarries, construction projects and tunnelling.

All figures in the summarised financial statement have been rounded to the nearest figure and, therefore, the sum of the reported figures may not exactly match those presented.2.1 KEY FIGURES

Consolidated key figures Q3 2023 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 2022
Net sales, EUR 1,000 23,706 28,424 70,016 85,751 111,962
EBIT, EUR 1000 265 1,984 -1,076 4,111 3,071
EBIT, per cent of sales 1.1% 7.0% -1.5% 4.8% 2.7%
Earnings per share (EPS), EUR -0.02 0.08 -0.13 0.13 0.04
Return on equity (ROE), %     -7.7% 1.8% 1.6%
Return on capital employed (ROCE), %     -2.2% 2.5% 3.5%
Equity ratio, %     46.3% 48.1% 46.5%
Net gearing, %     58.9% 54.6% 56.4%
Gross investments, EUR 1,000 41 188 509 1,089 1,326
Gross investments, % of net sales 0.2% 0.7% 0.7% 1.3% 1.2%
Number of shares (outstanding shares)     21,153,331 21,091,436 21,127,592
Treasury shares (owned by the Group)     26,569 88,464 52,308
Percentage of votes/shares     0.13% 0.42% 0.24%

2.2 CONSOLIDATING ALTERNATIVE KEY FIGURES

Robit presents alternative key figures to supplement the key figures given in the Group’s income statements, balance sheets and cash flow statements that have been drawn up according to IFRS standards. Robit considers that the alternative figures give significant extra insight into the result of Robit’s operations, its financial position and cash flows. These figures are often used by analysts, investors and other parties.

Alternative key figures should not be studied apart from the key figures according to IFRS or instead of them. Not all companies calculate their alternative key figures in the same way and, therefore, Robit’s alternative figures may not be directly comparable to those presented by other companies, even if they carry the same headings.

Adjusted EBITDA and EBITA          
EUR thousand  7–9/2023  7–9/2022  1–9/2023  1–9/2022 2022
EBIT (Operating profit) 265 1,984 -1,076 4,111 2,080
Depreciation, amortization and impairment 1,105 1,504 3,838 4,361 5,514
EBITDA 1,370 3,488 2,763 8,472 7,595
Items affecting comparability          
Reorganising expenses 150 0 280 0 0
Adjusted EBITDA 1,520 3,488 3,042 8,472 7,595
           
EBIT (Operating profit) 265 1,984 -1,076 4,111 2,080
Amortisation of acquisitions 32 227 453 671 859
EBITA 296 2,211 -623 4,781 2,940
           
EBIT (Operating profit) 265 1,984 -1,076 4,111 2,080
Items affecting comparability          
Reorganising expenses 150 0 280 0 0
Adjusted EBIT (Operating profit) 415 1,984 -796 4,111 2,080
Items affecting comparability          
Amortization of acquisitions 32 0 453 0 859
Adjusted EBITA 446 2,211 -343 4,781 2,940
                   

2.3 CALCULATION OF KEY FIGURES

EBITDA:
EBIT + Depreciation, amortization and impairment
 
EBITA
EBIT + Amortisation of customer relationships
 
Net working capital
Inventory + Accounts receivables and other receivables – Accounts payables and other liabilities
 
Earnings per share (EPS), EUR  
Profit (loss) for the financial year  
Amount of shares adjusted with the share issue (average during the financial year)  
 
Return on equity (ROE), %
Profit (loss) for the financial year x 100
Equity (average during the financial year)
 
Return on capital employed (ROCE), %
Profit before appropriations and taxes + Interest expenses and other financing expenses x 100
Equity (average during the financial year) + Interest-bearing financial liabilities (long-term and short-term loans from financial institutions, average during the financial year)
 
Net interest-bearing financial liabilities
Long-term and short-term loans from financial institutions – Cash and cash equivalents – Short-term financial securities  
 
Equity ratio, %
Equity x 100
Balance sheet total – Advances received
 
Gearing, %
Net interest-bearing financial liabilities x 100
Equity

3. BREAKDOWN OF NET SALES

Entries are recorded according to IFRS 15 in the same way for each business unit and market area.

NET SALES               
Net sales by product area
EUR thousand  7–9/2023  7–9/2022 Change %  1–9/2023  1–9/2022 Change % 2022
Top Hammer 13,829 16,492 -16.2% 40,862 50,086 -18.4% 66,834
Down the Hole 5,635 6,218 -9.4% 15,998 19,488 -17.9% 22,141
Geotechnical 4,243 5,713 -25.7% 13,156 16,177 -18.7% 22,987
Total 23,706 28,424 -16.6% 70,016 85,751 -18.4% 111,962
               
Net sales by market area            
EUR thousand  7–9/2023  7–9/2022 Change %  1–9/2023  1–9/2022 Change % 2022
EMEA 12,539 12,199 2.8% 36,459 36,105 1.0% 48,651
Americas 4,859 6,933 -29.9% 15,407 20,192 -23.7% 26,349
Asia 2,228 2,836 -21.5% 6,657 8,919 -25.4% 11,686
Australasia 3,920 3,671 6.8% 10,804 10,665 1.3% 13,892
East 160 2,785 -94.2% 688 9,870 -93.0% 11,384
Total 23,706 28,424 -16.6% 70,016 85,751 -18.4% 111,962

4. FINANCING ARRANGEMENTS

The company’s cash and cash equivalents were EUR 7.4 million on 30 September 2023. The company has sufficient liquidity to take care of its debt management and liquidity.

The parent company’s covenants are based on the company’s net debt/EBITDA ratio and the company’s equity ratio. The covenants are tested on a quarterly basis. The ratio of net debt to EBITDA on 30 September 2023 was 8.8.

The covenant of Robit Plc’s financing agreement, net interest-bearing debt/EBITDA, did not meet the terms of the financing agreement on 30 June 2023. The company obtained the consent of its main financier to the breach of the covenant on 26 September 2023. 

BORROWINGS/LOANS/INTEREST-BEARING LOANS       
EUR thousand 30 Sep 2023 30 Sep 2022 31 Dec 2022
Non-current borrowings      
Loans from credit institutions 25,360 25,259 22,073
Other loans 12 11 11
Lease liabilities 4,429 5,616 5,338
Total non-current borrowings 29,801 30,886 27,423
       
Current borrowings      
Loans from credit institutions 3,568 3,563 5,462
Other loans 0 0 10
Bank overdrafts 112 193 1,782
Lease liabilities 1,422 1,724 1,669
Total current borrowings 5,102 5,480 8,922
       
Total borrowings 34,903 36,366 36,345
5. CHANGES TO PROPERTY, PLANT AND EQUIPMENT 
EUR thousand 30 Sep 2023 30 Sep 2022 31 Dec 2022
Cost at the beginning of period 55,562 53,794 53,794
Additions 600 961 2,251
Disposals -537 -43 -195
Reclassification 0 0 0
Exchange differences -1,268 124 -288
Cost at the end of period 54,357 54,836 55,562
       
Accumulated depreciation and impairment at the beginning of period -30,634 -26,398 -26,398
Depreciation -3,054 -2,176 -4,477
Disposals 375 34 131
Reclassification 0 -44 0
Exchange differences 567 -116 110
Accumulated depreciation and impairment at the end of period  -32,746 -28,700 -30,634
Net book amount at the beginning of period 24,928 27,396 27,396
Net book amount at the end of period 21,611 26,135 24,928
       
6. GIVEN GUARANTEES       
EUR thousand 30 Sep 2023 30 Sep 2022 31 Dec 2022
Guarantees and mortgages given on own behalf 48,166 47,839 48,425
Other guarantee liabilities 49 48 49
Total 48,214 47,888 48,474

7. BUSINESS ACQUISITIONS

There were no changes in the Group structure during the review period.

8. GOODWILL IMPAIRMENT TESTING

The amount of goodwill is reviewed at least annually in accordance with the IFRS provisions. The values of the goodwill testing variables are also revised if there have been material changes in business, competition, the market or other assumptions of goodwill testing. The company has three cash flow-generating units (Top Hammer, Down the Hole and Geotechnical). The company weakened its guidance on 27 June 2023, as a result of which the company has performed goodwill testing in the 31 August situation. Based on the impairment testing, there is no need for write-downs, but the sensitivity for impairment is highest in the Geotechnical business unit. The factors affecting goodwill items will be reviewed during the fourth quarter.

9. DERIVATIVES

The company hedges the most significant net currency positions that can be predicted in time and volume and interest rate risk.

There were no open currency derivatives at the end of the review period.

On 8 June 2021, the company concluded a financing agreement of EUR 30 million and, in connection with this, an interest rate swap of EUR 10 million with an interest rate cap in order to hedge part of its exposure to fluctuating interest rates. The interest rate swap took effect on 30 June 2023 and it will end on 30 June 2026. The company applies hedge accounting in accordance with IFRS 9. This effectively leads to the recording of interest expenses on a hedged floating rate loan at a fixed rate.

The company’s main interest rate risk arises from long-term loans with floating interest rates that expose the Group’s cash flow to interest rate risk. The Group’s policy is to use, if necessary, a floating to fixed interest rate swap.

Interest derivatives      
EUR thousand 30 September 2023 30 September 2022 31 December 2022
Interest rate swaps      
Nominal value 10,000 10,000 10,000
Fair value 941 790 848

Attachment

  • Robit Plc - Interim Report 1.1.-30.9.2023
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