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Cavotec SA - Interim report January - March 2022
Order backlog increased 25.9% to EUR 124.5 million
On February 22, 2022, Cavotec signed an agreement to divest 100% of our Airports business to US based investment company Fernweh Group. The transaction is expected to close in the summer of 2022. As a result of the sale, Airports is reported as a discontinued entity
JANUARY–MARCH 2022 NEW CAVOTEC
Order backlog increased 25.9% compared to Q421 to EUR 124.5 million
Revenues decreased 6.6% to EUR 27.4 million (29.3)
EBIT amounted to EUR -1.5 million (1.1), corresponding to a margin of -5.4% (3.8%).
JANUARY–MARCH 2022 TOTAL (INCL. DISCONTINUED)
Net result for the group was EUR -4.2 million (1.5), of which EUR -3.9 million attributable to the discontinued operations
Key events during the quarter
Due to the lockdown of Shanghai to contain surging COVID-19 cases in the latter part of March, Cavotec’s production facility was not able to deliver EUR 2.8M revenue, that will now be postponed to Q222.
On 8 March Cavotec announced shore power orders valued at EUR 8.5M for new-build container ships in China.
On 31 March Cavotec announced landmark shore power connection orders from two major customers in Asia, worth EUR 2.2M
Key events after the quarter
In the month of April 2022 Cavotec signed an amendment to its bank agreement to ensure full compliance with bank covenants.
At the date of this report Cavotec Shanghai’s production facility remains closed due to lockdown; production activity is expected to start again by mid May.
On April 25 Cavotec announced an order in the first quarter for a battery charging system for industrial use worth over EUR 3M. This is an important breakthrough in the market for electrification of heavy-duty industrial vehicles, a market that is set for considerable growth in the years ahead.
On April 26 Cavotec appointed David Pagels to take over as CEO during the month of May from Mikael Norin who, as previously announced, has decided to leave Cavotec.
Comment from the CEO
Cleantech focus yields large increase in orders
We have made considerable investments in technology, engineering, and business development in the last year since announcing our strategy to focus on cleantech solutions for marine and industrial applications. Building on our 40-year experience of electrification of port and mining equipment we now have a first mover advantage in this fast-growing market for decarbonization around the world. A market that is estimated to be worth several billion euros in the coming years.
I’m very pleased to report that those investment are now beginning to pay off. We have started 2022 with a record high level of new orders. In the first quarter, our order backlog (excluding Airports, which is under divestment) grew a further 26% compared to three months earlier. Comparing to this point last year the backlog has almost doubled and now sits at EUR 124.5 million, a record level.
The backlog was strengthened in most markets, but particularly in the Far East, with several multi-million orders to equip new-build container ships with shore power systems. In a major development, we announced this week that we have received an order in the first quarter for a battery charging system for industrial use. This is an important breakthrough in the market for electrification of heavy-duty industrial vehicles, a market that is set for considerable growth in the years ahead. Building on our experience with fast, high-power charging for marine applications, and working closely with the customer, we will develop a solution to serve as a proof-of-concept for high-voltage charging of electrically powered heavy-duty trucks at a mining application in Australia. Delivery is scheduled for the beginning of 2023.
While order intake was strong, revenues on the other hand was impacted by the Covid closure of our facility in Shanghai and supply chain shortages delaying deliveries. Revenues in the quarter decreased 6.6% to EUR 27.4 million (29.3). The effect from the lockdown of Shanghai amounted to EUR 2.8 million in delayed revenue. We see signs that the situation will normalize but if the lock-down isn’t eased soon it will impact also the second quarter.
During the quarter we continued to make investments to meet future demand. This, together with the build-up of stock, due to delayed deliveries, had a EUR 1.5 million negative impact on EBIT.
The separation process of the Airports business following the divestment to US based investment company Fernweh Group that we announced on February 22 is progressing according to plan with closing expected in the summer of 2022. Because of the divestment, we initiated a discussion with our banks after the FY-year report was published. I’m happy to say that we have full support from our lenders for our strategy and that we are completely in agreement and able to meet all conditions in the updated bank agreement.
The continually strengthening orderbook in the last nine months and the many many new customers showing growing interest in our cleantech solutions is proof that our strategy is beginning to yield results, despite the headwinds caused by the pandemic and the macro-uncertainty from the horrendous invasion of Ukraine by Russia.
This is my 20th quarterly report and my last as CEO of Cavotec as I prepare to hand over to David Pagels. I wish David and everyone of the talented people in Cavotec the best of luck for the future. As a shareholder, I will be following the progress of the company closely and I remain convinced that with the steps we have taken in the last few years and with the cleantech strategy in place the best is yet to come.
Lugano, 29 April 2022
Mikael Norin
Chief Executive Officer
ENDS
Quarterly Reports on www.cavotec.com
The full report for the period January-March 2022 and previous quarterly and full year reports are available at:
http://ir.cavotec.com/financial-reports
Analysts & Media
Johan Hähnel – Investor Relations Manager
Mobile: +46 70 605 63 34 – Email: investor@cavotec.com
This is information that Cavotec SA is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CEST on 29 April 2022
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