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ROBIT PLC INTERIM REPORT 1 JANUARY–31 MARCH 2021: NET SALES AND PROFITABILITY IMPROVED

Robit Oyj
·36-min read

ROBIT PLC STOCK EXCHANGE RELEASE 22 APRIL 2021 AT 11.00 A.M.

ROBIT PLC INTERIM REPORT 1 JANUARY–31 MARCH 2021: NET SALES AND PROFITABILITY IMPROVED

Q1 refers to the period from 1 January to 31 March 2021.
Figures from the corresponding time period in 2020 are given in parentheses.
All the figures presented are in euros.
Percentages are calculated from thousands of euros.

1 January–31 March 2021 in brief

  • Net sales EUR 23.0 million (21.5), change 7.1%

  • EBITDA EUR 1.6 million (0.4)

  • EBITA EUR 0.3 million (-0.9)

  • EBIT percentage 0.5% of net sales (-5.3)

  • Review period net income EUR 0.4 million (-2.0)

  • Operating cash flow EUR -1.7 million (-1.2)

  • Equity ratio at the end of the review period 45.2% (46.9)

Key financials

Q1 2021

Q1 2020

Change %

2020

Net sales, EUR 1 000

23 023

21 490

7,1 %

91 631

EBITDA*, EUR 1 000

1 578

354

345,7 %

5 116

EBITDA, per cent of sales

6,9 %

1,6 %

5,6 %

EBITA, EUR 1 000

337

-941

135,8 %

-48

EBITA, per cent of sales

1,5 %

-4,4 %

-0,1 %

EBIT, EUR 1 000

121

-1 145

110,5 %

-868

EBIT, per cent of sales

0,5 %

-5,3 %

-0,9 %

Result of the period, EUR 1 000

415

-2 010

120,7 %

-2 894

Result of the period, per cent of sales

1,8 %

-9,4 %

-3,2 %

Earnings per share (EPS), EUR 1 000

0,02

-0,10

-0,14

Return on equity (ROE), per cent

0,0 %

-4,1 %

-5,9 %

Return on capital employed (ROCE), per cent

0,0 %

-4,0 %

-6,0 %

*No items affecting comparability in Q1/2021 or Q1/2020.

ROBIT’S OUTLOOK FOR 2021

Robit expects the market situation to develop positively and believes COVID-19 restrictions to have a limited impact on the demand of Robit’s products in 2021. Demand is supported by the positive development in the price of raw materials and customers’ good work situation in the construction market areas that are relevant to Robit.

The mining industry’s demand is expected to remain very stable in 2021, which is typical of the consumables business related to the production process of the segment. The positive development of metal prices and bright outlook are reflected in the research drilling activities that are developing well. Prospection drilling is a cyclical part of the industry, reflecting the mining industry’s willingness to invest in future capacity increases.

The construction industry is always locally cyclical, and the market situation can change rapidly. In Robit’s key markets, customer prospects are good, and projects related to infrastructure construction that are ongoing or to be launched in 2021 support the prospects for the beginning of the year.

GUIDANCE FOR 2021

Robit expects the market situation to develop positively and believes COVID-19 restrictions to have a limited impact on the demand of Robit’s products in 2021. Robit estimates that net sales for 2021 will grow and comparable EBITDA profitability in euros will improve compared with 2020.

CEO TOMMI LEHTONEN:

The beginning of the year continued the good development that we saw throughout last year. We reached the highest net sales month in Robit’s history in March. In the mining sector in particular, business development was good, but on the other hand, we did not have large project deliveries during the quarter. Profitability developed well and the result did not include significant non-operational items. All in all, the beginning of the year was a new step towards a stronger Robit.

Net sales were EUR 23.0 million and at constant exchange rates EUR 23.4 million. There was an increase of 7.1% compared to the corresponding period and an increase of 8.7% at constant exchange rates. EBITDA represents a significant improvement of EUR 1.2 million compared to the corresponding period. Profitability was at a satisfactory level. Orders received decreased by 7.1% on the corresponding period being MEUR 23.2 (24.9). On the background was a timing issue related to a single significant order in the first quarter of 2020.

Growth projects proceeded as planned. Both the Top Hammer and Down the Hole business grew in the first quarter. The development of the East region continued to be excellent, mainly as a result of the good development of the mining segment. Development in the EMEA region was strongest in the Nordic countries, where the construction sector had a good market situation. The situation in the Americas region was divided. We have already seen good developments in North America, but the South American market has not yet fully recovered from the effects of the COVID-19 pandemic. The beginning of the year was challenging in this area, but already in March, we saw developments in the right direction. In the Australian market, we saw a slight growth and made progress in the region, especially in acquiring new customers.

Distribution development projects progressed well. In the quarter, we signed a contract with a new Portuguese distributor. Top Hammer business growth was supported by focusing on improvement of availability both by investments and growing inventories.

Worldwide, we launched a new Rbit Top Hammer button bit series. The launch was a success, and the feedback is very positive. The Rbit series simplifies Robit’s drill bit offering. It brings product cost savings and helps to manage availability and stock.

The profitability improvement projects progressed systematically throughout the quarter, focusing on material costs and pricing. The results of this work will be implemented mainly during this year. Fixed costs remained well under control. Travel and representation expenses remained well below the normal levels. Market prices for raw materials have risen rapidly and we have responded to these developments with a number of measures to ensure progress towards our profitability targets.
We continued the development of availability planning processes supported by digitalisation. Among others analytical tools for sales forecast process and stock level planning were created to support the availability planning processes. We updated and deployed distribution development and management processes during the quarter.

We implemented a new Robit Talent programme, where we hire a few young top experts to the company each year. We are also adding personnel to production operations in Finland and South Korea. The management training programme Robit Growth Booster was completed in March. A total of 29 people from 8 countries participated in the management training programme. We will continue the systematic development of competence as a strategic priority.

NET SALES

Net sales by product area

EUR thousand

Q1 2021

Q1 2020

Change %

2020

Top Hammer

12 451

11 475

8,5 %

46 348

Down the Hole

10 571

10 016

5,5 %

45 283

Total

23 023

21 490

7,1 %

91 631

The Group’s net sales for the review period totalled EUR 23.0 million (21.5). There was an increase of 7.1% from the corresponding period. In constant currencies, the change was 8.7%.

The Top Hammer business grew by 8.5%, the net sales for the review period being EUR 12.5 million (11.5). The growth of the Top Hammer business was partly limited in the early part of the year by the challenges of the Asian logistics market, which slowed down the company’s deliveries from the South Korean factory, and by increased production capacity to meet the increased demand. The company’s delivery capacity strengthened towards the end of the quarter, although the shortage of capacity in the freight market continues to slow down deliveries.

The Down the Hole business grew by 5.5%, the net sales for the review period being EUR 10.6 million (10.0). Business growth was strong in the EMEA region, especially in the Nordic countries, and North America.

Net sales by market area

EUR thousand

Q1 2021

Q1 2020

Change %

2020

EMEA

10 766

9 731

10,6 %

40 028

Americas

3 708

3 909

-5,1 %

14 008

Asia

2 373

3 213

-26,1 %

11 397

Australasia

3 202

3 001

6,7 %

13 654

East

2 972

1 637

81,6 %

12 544

Total

23 023

21 490

7,1 %

91 631

The company’s strong growth in the East region continued in the first quarter of the year. The net sales in the area grew by 81.6% to EUR 3.0 million (1.6). Good growth also continued in the EMEA region, where net sales grew by 10.6%. Development in the EMEA region was strongest in the Nordic countries, where the construction sector has a good market situation. Sales in Australasia increased by 6.7% during the corresponding period due to new customers. In the Americas region, net sales decreased by 5.1%. Net sales developed positively in North America, but the South American market has not yet fully recovered from the effects of the COVID-19 pandemic. In Asia region, the beginning of the year was challenging and the net sales decreased by 26.1%. Asian activity developed in the right direction towards the end of the quarter.

PROFITABILITY

Key figures

Q1 2021

Q1 2020

Change %

2020

EBITDA*, EUR 1 000

1 578

354

345,7 %

5 116

EBITDA, per cent of sales

6,9 %

1,6 %

5,6 %

EBITA, EUR 1 000

121

-1 145

110,5 %

-868

EBITA, per cent of sales

0,5 %

-5,3 %

-0,9 %

Result of the period, EUR 1 000

415

-2 010

120,7 %

-2 894

Result of the period, per cent of sales

1,8 %

-9,4 %

-3,2 %

The company’s profitability improved distinctly in the review period. The review period EBITDA was EUR 1.6 million (0.4) EBITDA’s share of net sales was at a satisfactory level of 6.9% (1.6). The company’s EBIT was EUR 0.1 million (-1.1). EBIT was 0.5% (-5.3) of the review period net sales.

Improved operating profit was supported by increased net sales, management of fixed costs and lower other operating expenses. The company will continue systematic work to improve profitability through material cost saving projects and more accurate pricing. The impact of these projects will be realised mainly during this year.

Financial income and expenses totalled EUR 0.2 million (-0.9), of which EUR -0.3 million (-0.3) was interest expenses and EUR 0.5 million (-0.6) exchange rate changes. The result of the review period improved, being EUR 0.4 million (-2.0).

CASH FLOW AND INVESTMENTS

Consolidated cash flow statement

EUR thousand

Q1 2021

Q1 2020

2020

Cash flow from operating activities

Cash flows before changes in working capital

1 675

1 477

7 160

Cash flows from operating activities before financial items and taxes

-1 161

-897

5 555

Net cash inflow (outflow) from operating activities

-1 714

-1 181

4 263

Net cash inflow (outflow) from investing activities

-795

-321

-1 173

Net cash inflow (outflow) from financing activities

374

-1 257

-3 626

Net increase (+)/decrease (-) in cash and cash equivalents

-2 135

-2 759

-536

Cash and cash equivalents at the beginning of the financial year

14 339

15 248

15 248

Exchange gains/losses on cash and cash equivalents

148

-363

-370

Cash and cash equivalents at end of the year

12 352

12 123

14 339

The Group’s cash flow before changes in working capital improved during the review period to EUR 1.7 million (1.5). The net cash flow for operating activities was EUR -1.7 million (-1.2). Changes in working capital had an impact of EUR -2.6 million (-2.3). The positive change in working capital was caused by the EUR 1.2 million increase in account payables. Growth of sales and other receivables had a negative impact of EUR 1.7 million on cash flow and inventories by EUR 2.4 million. Strong invoicing at the end of the quarter increased the amount of sales receivables. The increase in inventories was due to the company’s preparation for stronger demand and the measures related to improving the company’s delivery capacity and product availability.

The net cash flow for investment activities was EUR -0.8 million (-0.3). Gross investments in production during the review period totalled EUR -0.8 million (-0.1). The investments accounted for 3.5% of net sales (0.2). The investments were mainly directed at the company’s factories in South Korea and Lempäälä, Finland. The investments are aimed at responding to the growth of the Top Hammer business.

The net cash flow for financing was EUR 0.4 million (-1.3). Net changes in loans totalled EUR 0.9 million (-0.8). The net change in loans was due to the financing of investments. The repayment of lease liabilities reported in net cash flow from financing activities under IFRS 16 totalled EUR -0.5 million (-0.5).

Depreciations and write-downs totaled EUR 1.5 million (1.5), EUR 0.2 million of which were related to depreciations of acquired companies’ custom and brand value.

FINANCIAL POSITION

31.3.2021

31.3.2020

31.12.2020

Cash and cash equivalents, EUR thousand

12 352

12 123

14 339

Interest-bearing liabilities, EUR thousand

36 331

37 686

35 567

of which current interest-bearing liabilities

10 986

14 925

11 154

Interest-bearing net debt, EUR thousand

23 979

25 563

21 228

Unused credit limit, EUR thousand

364

14

261

Gearing ratio, %

49,3 %

53,6 %

45,2 %

Equity ratio, %

45,2 %

46,9 %

45,5 %

The Group had interest-bearing debt amounting to EUR 36.3 million (37.7), of which EUR 6.4 million (6.0) was interest-bearing debt under IFRS 16. The Group’s liquid assets totalled EUR 12.4 million (12.1). Interest-bearing net debt was EUR 24.0 million (25.6), and interest-bearing net bank debt without IFRS 16 debt impact was EUR 17.6 million (19.6).

The Group’s equity at the end of the review period was EUR 48.6 million (47.7). The Group’s equity ratio was 45.2% (46.9) and its net gearing was 49.3% (53.6).

PERSONNEL AND MANAGEMENT

The number of personnel increased by 12 from the end of the corresponding period, and at the end of the review period it was 264 (252). At the end of the review period, 75% of the company’s personnel were located outside Finland.

The company Management Team at the end of the review period was comprised of Tommi Lehtonen (CEO), Jaana Rinne (HR Director) and Arto Halonen (CFO).

FINANCIAL TARGETS

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

Long-term target

2019

2020

Q1 2021

Net sales growth

15 % p.a.

4,6 %

6,0 %

7,1 %

Comparable EBITDA, per cent of sales

13 %

3,1 %

5,6 %

6,9 %

RESOLUTIONS OF THE ANNUAL GENERAL MEETING 2021

Robit Plc’s Annual General Meeting on 25 March 2021 adopted the financial statements for 1 January–31 December 2020 and resolved that no dividend would be paid based on the adopted balance sheet for the financial year 2020.

The General Meeting resolved to discharge the members of the Board of Directors and the Managing Directors from liability for the financial year ending 31 December 2020.

The General Meeting decided to approve the Remuneration Report for Governing Bodies. The decision was advisory.

The General Meeting resolved that the Board of Directors consists of six (6) members. Kim Gran, Mammu Kaario, Mikko Kuitunen, Anne Leskelä, Kalle Reponen and Harri Sjöholm were re-elected as members of the Board of Directors.

The annual remuneration for the Chairman of the Board of Directors is EUR 45,000, of which 40% is paid in shares and the remaining 60% is an advance tax withheld and paid to the Finnish Tax Administration by the company. There is also a meeting fee of EUR 500 per meeting. The fee is compensation per meeting attended. Other costs such as travel and lodging expenses will also be compensated.

The annual remuneration for the Board members is EUR 30,000, of which 40% is paid as shares and the remaining 60% is an advance tax withheld and paid to the Finnish Tax Administration by the company. There is also a meeting fee of EUR 500 per meeting. The fee is compensation per meeting attended. Other costs such as travel and lodging expenses will also be compensated.

Members of the Working Committee, Personnel Committee and Audit Committee are paid a financial compensation of EUR 500 per meeting attended. Other costs such as travel and lodging expenses will also be compensated.
The annual remuneration of the Chairman of the Board and Board members for the entire term of office will be paid in December 2021. The part of the remuneration paid in shares may be paid by issuing new shares in the company or by acquiring shares by the authorisation given to the Board of Directors by the General Meeting. The receiver of the remuneration pays the transfer tax.

Ernst & Young Oy, an audit firm, was re-elected as the company’s auditor for a term that will continue until the end of the next Annual General Meeting. Ernst & Young Oy has notified the company that Authorised Public Accountant Toni Halonen will serve as the company’s principal responsible auditor.

The General Meeting resolved to pay the auditor’s remuneration in accordance with an invoice approved by the company.

The General Meeting resolved to authorise the Board of Directors to resolve on the acquisition of a maximum of 2,108,390 shares of the company and/or accepting the same number of the company’s shares as a pledge, in one or several tranches by using funds in the unrestricted shareholders’ equity. The maximum total of shares that will be acquired and/or accepted as a pledge corresponds to 10% all shares in the company as of the date of the notice to the General Meeting. However, the company cannot, together with its subsidiary companies, own or accept as a pledge altogether more than 10% of its own shares at any point in time. The company’s shares may be purchased under this authorisation solely by using unrestricted shareholders’ equity.

The shares will be acquired otherwise than in proportion to the share ownership of the shareholders via public trading arranged by Nasdaq Helsinki Ltd at the market price on the date on which the acquisition is made or otherwise at a price formed on the market. The authorisation will be used e.g. for the purposes of implementing the company’s share-based incentive schemes or for other purposes as decided by the Board of Directors.

It was resolved that the authorisation revokes the authorisation granted by the General Meeting on 22 April 2020 to decide on the acquisition of treasury shares.

The authorisation is valid until the closing of the next Annual General Meeting, however, no longer than until 30 June 2022.

The Annual General Meeting resolved to authorise the Board of Directors to resolve on a share issue and on the issuance of special rights entitling to shares as referred to in Chapter 10 Section 1 of the Finnish Limited Liability Companies Act, in one or more tranches, either against or without consideration.

The number of shares to be issued, including shares to be issued on the basis of special rights, may not exceed 2,108,390, which amounts to 10% of all shares in the company as of the date of the notice to the Annual General Meeting. The Board of Directors may decide to either issue new shares or to transfer any treasury shares held by the company.

The authorisation entitles the Board of Directors to decide on all terms that apply to the share issue and to the issuance of special rights entitling to shares, including the right to derogate from the shareholders’ pre-emptive right. The authorisation will be used e.g. for the purposes of strengthening the company’s balance sheet and improving its financial status, implementing the company’s share-based incentive systems or for other purposes as decided by the Board of Directors.

The authorisation is valid until the closing of the next Annual General Meeting, however, no longer than until 30 June 2022. The authorisation will revoke all previously granted, unused authorisations to decide on a share issue and the issuance of options or other special rights entitling to shares.

SHARES AND SHARE TURNOVER

On 31 March 2021, the company had 21,179,900 shares and 4,181 shareholders. Trading volume in January-March was 2,538,843 shares (1,879,776).

The company holds 120,964 treasury shares (0.57% of total shares). On 31 March 2021, the market value of the company’s shares was EUR 107.6 million. The closing price of the share was EUR 5.08. The highest price in the review period was EUR 5.60 and the lowest price EUR 3.75.

RISKS AND BUSINESS UNCERTAINTIES

Robit closely monitors the impact of COVID-19 on demand in the sector. In general, customer activities have returned to normal levels. The number of COVID-19 cases is increasing again, and the restrictions placed on the business operations of customers, and thereby on Robit’s demand, remain possible. At this stage, the impact seems limited. COVID-19 continues to restrict travel and thus the implementation of some testing and sales growth projects. The company has returned from managing the effects of the acute crisis to the comprehensive development of the company towards the company’s strategic goals.

Robit will continue actions to protect the health of its personnel and to ensure the continuity of the company’s operations. At the time of reporting, all of the company’s factories operated at planned capacity. No disruptions in the supply chain have been identified that cannot be managed, for example, with current inventory levels and supplier cooperation.

In the longer term, the effects of COVID-19 on Robit’s operations will depend on the extent of any restrictive measures and how long the restrictive measures continue. As Robit operates in the drilling consumables business, the effects are milder than in the investment goods business. In addition, many of Robit’s customers operate in sectors that are highly significant for the economy of the country in question, and therefore such business may be assumed to suffer less from the economic impact of the COVID-19 pandemic.

Other uncertainty factors include exchange rate development, the functioning and commissioning of new information systems, integration of corporate acquisitions, risks related to security of supply and logistics, and IPR risks. Transfer of raw material cost increase to customer prices as full may cause 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 DURING THE REVIEW PERIOD

On 14 January 2021, Robit announced having received, on 14 January 2021 from Fondita Fund Management Company Ltd, a notification under Chapter 9, Section 5 of the Finnish Securities Markets Act. According to the information received by the company, the total number of Robit shares owned by Fondita Nordic Micro Cap Investment Fund decreased below five (5) per cent of the total shares of Robit Plc on 13 January 2021.

On 18 January 2021, the company announced the proposals of Robit Plc’s Shareholders’ Nomination Committee regarding the board members and board fees for the Annual General Meeting of 2021. The Nomination Committee’s proposals were included in the notice of the General Meeting. Timo Sallinen (Senior Vice-President, Investments, Varma Mutual Pension Insurance Company) acted as the Chairman of the Shareholder Nomination Committee, with Harri Sjöholm (Chairman of the Board of Five Alliance Oy), Tuomas Virtala (CEO of OP Asset Management Ltd) and Jukka Vähäpesola (CEO of Elo Mutual Pension Insurance Company) as the other members.

Robit published its financial statements release from 1 January to 31 December 2020 on 18 February 2021.

On 18 February 2021, the company sent notice of the Annual General Meeting on 25 March 2021 to Robit Plc’s shareholders.

On 26 February 2021, Robit announced that the company’s Annual Report, Corporate Governance Statement and Remuneration Report for 2020 had been published on the company’s website. The company also published the annual report as an xHTML file for the first time, complying with the European Single Electronic Format (ESEF) reporting requirements.

The Annual General Meeting of the company was held on 25 March 2021. Robit announced the decisions of the Annual General Meeting in a separate stock exchange release on 25 March 2021.

On 25 March 2021, Robit published the decisions of the constituent meeting of the company’s Board of Directors. In its constituent meeting, the Board of Directors elected by Robit Plc’s Annual General Meeting on 25 March 2021 elected from among its members a Chairman of the Board, Harri Sjöholm and a Vice Chairman of the Board, Mammu Kaario, as well as members to serve on Robit Plc’s Remuneration Committee, Working Committee and Audit Committee.

EVENTS AFTER THE REVIEW PERIOD

No events after the review period.

Lempäälä, 22 April 2021

ROBIT PLC
Board of Directors

For more information, contact:

Tommi Lehtonen, CEO
+358 40 724 9143
tommi.lehtonen@robitgroup.com

Arto Halonen, CFO
+358 40 028 0717
arto.halonen@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 9 countries as well as an active sales network in more than 100 countries. Robit’s manufacturing units are located in Finland, South Korea, Australia 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 figures expressed or assumed in statements about future prospects.

CONDENSED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR thousand

1.1.-31.3.2021

1.1.-31.3.2020

1.1.-31.12.2020

Net sales

23 023

21 490

91 631

Other operating income

480

1 004

2 524

Materials and services*

-14 872

-12 984

-58 773

Employee benefit expense

-3 953

-3 901

-15 747

Depreciation, amortisation and impairment

-1 457

-1 499

-5 984

Other operating expenses*

-3 101

-5 256

-14 520

EBIT (Operating profit/loss)

121

-1 146

-868

Finance income and costs

Interest income and finance income

585

94

286

Interest cost and finance cost*

-388

-999

-2 936

Finance income and costs net

197

-905

-2 650

Profit/loss before tax

318

-2 051

-3 518

Taxes

Income tax

-31

-8

-380

Change in deferred taxes

67

48

1 004

Income taxes

98

41

624

Result for the period

415

-2 010

-2 894

Attributable to:

Parent company shareholders

361

-2 010

-2 894

Non-controlling interest***

55

0

0

415

-2 010

-2 894

Other comprehensive income

Items that may be reclassified to profit or loss in subsequent periods:

Translation differences

976

-1 045

-1 088

Other comprehensive income, net of tax

976

-1 045

-1 088

Total comprehensive income

1 337

-3 054

-3 981

Attributable to:

Parent company shareholders

1 392

-3 054

-3 981

Non-controlling interest***

-55

0

0

Consolidated comprehensive income

1 337

-3 054

-3 981

Earnings per share

Basic earnings per share

0,02

-0,10

-0,14

*In the summarised 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 BALANCE SHEET

EUR thousand

31.3.2021

31.3.2020

31.12.2020

ASSETS

Non-current assets

Goodwill

5 412

5 206

5 134

Other intangible assets

3 564

4 715

3 809

Property, plant and equipment

25 021

26 378

24 641

Loan receivables

320

274

386

Other receivables

3

3

3

Deferred tax assets

1 698

987

1 528

Total non-current assets

36 017

37 562

35 500

Current assets

Inventories

38 115

31 578

34 857

Account and other receivables

21 059

20 569

18 621

Loan receivables

129

134

125

Income tax receivable

84

61

81

Cash and cash equivalents

12 352

12 123

14 339

Total current assets

71 740

64 465

68 023

Total assets

107 757

102 027

103 523

EQUITY AND LIABILITIES

Equity

Share capital

705

705

705

Share premium

202

202

202

Reserve for invested unrestricted equity

82 570

82 268

82 570

Translation differences

-1 822

-2 755

-2 798

Retained earnings

-33 701

-30 686

-30 796

Profit/loss for the year

361

-2 010

-2 894

Equity attributable to parent company shareholders, total

48 315

47 725

46 989

Non-controlling interest*

306

Equity total

48 621

47 725

46 989

Liabilities

Non-current liabilities

Borrowings

20 229

18 278

19 247

Lease liabilities

5 116

4 483

5 166

Deferred tax liabilities

847

1 130

798

Employee benefit obligations

658

514

628

Total non-current liabilities

26 850

24 404

25 838

Current liabilities

Borrowings

9 699

13 394

9 941

Lease liabilities

1 288

1 531

1 213

Advances received

210

318

130

Income tax liabilities

87

29

283

Account payables and other liabilities

20 913

14 575

19 029

Other provisions

91

52

100

Total current liabilities

32 287

29 899

30 696

Total liabilities

59 136

54 303

56 534

Total equity and liabilities

107 757

102 027

103 523

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

CASH FLOW STATEMENT

EUR thousand

1–3/2021

1–3/2020

2020

Cash flows from operating activities

Profit before tax

318

-2 051

-3 518

Adjustments:

Depreciation, amortisation and impairment

1 457

1 499

5 984

Finance income and costs

-198

905

2 650

Share-based payments to employees

-11

58

182

Loss (+)/Gain (-) on sale of property, plant and equipment

-1

-2

158

Other non-cash transactions*

109

1 067

1 704

Cash flows before changes in working capital

1 675

1 477

7 160

Change in working capital

Increase (-) in account and other receivables

-1 663

-2 215

1

Increase (-)/decrease (+) in inventories

-2 392

-929

-5 000

Increase (+) in account and other payables

1 219

770

3 395

Cash flows from operating activities before financial items and taxes

-1 161

-897

5 555

Interest and other finance expenses paid

-320

-76

-1 083

Interest and other finance income received

0

10

28

Income taxes paid

-233

-217

-238

Net cash inflow (outflow) from operating activities

-1 714

-1 181

4 263

Cash flows from investing activities

Purchases of property, plant and equipment

-792

-89

-1 204

Purchases of intangible assets

-18

-2

-77

Proceeds from the sale of property, plant and equipment

5

3

103

Proceeds from loan receivables

9

-233

6

Net cash inflow (outflow) from investing activities

-795

-321

-1 173

Cash flows from financing activities

Equity issue

0

0

79

Changes in non-current loans

940

-819

-1 751

Change in bank overdrafts

-103

67

-179

Payment of leasing liabilities*

-463

-505

-1 774

Net cash inflow (outflow) from financing activities

374

-1 257

-3 626

Net increase (+)/decrease (-) in cash and cash equivalents

-2 135

-2 759

-536

Cash and cash equivalents at the beginning of the financial year

14 339

15 428

15 248

Exchange gains/losses on cash and cash equivalents

148

-363

-370

Cash and cash equivalents at end of the year

12 352

12 123

14 339

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR thousand

Share capital

Share premium

Reserve for invested un-restricted equity

Cumulative translation difference

Retained earnings

Equity attributable to parent company share-holders, total

Non-controlling interest

Equity total

Equity on 1 January 2020

705

202

82 268

-1 710

-30 744

50 721

Profit for the period

-2 010

-2 010

Other comprehensive income

Translation differences

-1 045

-1 045

Profit for the period

-1 045

-2 010

-3 054

Share-based payments to employees

58

58

Total transactions with shareholders, recognised directly in equity

0

0

0

0

58

58

Equity on 31/03/2020

705

202

82 268

-2 755

-32 696

47 725

EUR thousand

Share capital

Share premium

Reserve for invested unrestricted equity

Cumulative translation difference

Retained earnings

Equity attributable to parent company shareholders, total

Non-controlling interest

Equity total

Equity on 1 January 2021

705

202

82 570

-2 798

-33 690

46 989

Profit for the period

361

361

55

415

Other comprehensive income

Translation differences

976

976

Profit for the period

976

361

361

55

1 391

Share-based payments to employees

-11

-11

Changes in non-controlling interest

251

251

Total transactions with shareholders, recognised directly in equity

-11

251

240

Equity on 31/03/2021

705

202

82 570

-1 822

-33 340

361

306

48 621

NOTES
Contents

  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. Impairment testing

  7. Given guarantees

  8. Business acquisitions

  9. Derivatives

1. SCOPE AND PRINCIPLES OF THE INTERIM REPORT

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

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

Key figures

Q1 2021

Q1 2020

2020

Net sales, EUR thousand

23 023

21 490

91 631

EBIT, EUR thousand

121

-1 145

-868

EBIT, per cent of sales

0,5 %

-5,3 %

-0,9 %

Earnings per share (EPS), EUR

0,02

-0,10

-0,14

Return on equity (ROE) %

0,0 %

-4,1 %

-5,9 %

Return on capital employed (ROCE) %

0,0 %

-4,0 %

-6,0 %

Equity ratio %

45,2 %

46,9 %

45,5 %

Gearing ratio %

49,3 %

53,6 %

45,2 %

Gross investments, EUR thousand

809

91

1 281

Gross investments, EUR thousand

3,5 %

0,4 %

1,4 %

Number of shares (outstanding)

21 058 936

21 083 900

21 058 936

Treasury shares (owned by the Group)

120 964

148 793

120 964

Percentage of total shares

0,57 %

0,71 %

0,57 %

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, so Robit’s alternative figures may not be directly comparable to those presented by other companies, even if they carry the same headings.

EUR thousand

1.1.-31.3.2021

1.1.-31.3.2020

1.1.-31.12.2020

EBIT

121

-1 145

-868

Depreciation, amortisation and impairment

1 457

1 499

5 984

EBITDA

1 578

354

5 116

EBIT

121

-1 145

-868

Amortisation of acquisitions

216

204

820

EBITA

337

-941

-48

2.3 CALCULATION OF KEY FIGURES

EBITDA:

=

Operating profit (EBIT) + depreciation, amortisation and impairment

EBITA

=

Operating profit + amortisation and impairment of customer relationships and brand

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), per cent

=

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

x100

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, per cent

=

Net interest-bearing financial liabilities

x 100

Equity


4. 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

1.1.-31.3.2021

1.1.-31.3.2020

Change %

1.1.-31.12.2020

Top Hammer

12 451

11 475

8,5 %

46 348

Down the Hole

10 571

10 016

5,5 %

45 283

Total

23 023

21 490

7,1 %

91 631

Net sales by market area

EUR thousand

1.1.-31.3.2021

1.1.-31.3.2020

Change %

1.1.-31.12.2020

EMEA

10 766

9 731

10,6 %

40 028

Americas

3 708

3 909

-5,1 %

14 008

Asia

2 373

3 213

-26,1 %

11 397

Australasia

3 202

3 001

6,7 %

13 654

East

2 972

1 637

81,6 %

12 544

Total

23 023

21 490

7,1 %

91 631

5. FINANCING ARRANGEMENTS

In the financial year 2021, the covenant is the net debt/EBITDA ratio according to the financing agreement regarding the situation on 30 June 2021 and 31 December 2021, which must not exceed 2.5as well as the equity ratio, which must be at least 32.5%.

The company’s available cash was EUR 12.4 million on 31 March 2021 and thus it is able to take care of its debt servicing and liquidity.

INTEREST BEARING LOANS

EUR thousand

31.3.2021

31.3.2020

31.12.2020

Non-current borrowings

Loans from credit institutions

20 080

17 452

19 060

Other loans

12

584

41

Lease liabilities

5 253

4 725

5 312

Total non-current borrowings

25 345

22 761

24 413

Current borrowings

Loans from credit institutions

5 835

9 074

5 850

Other loans

0

76

86

Bank overdrafts

3 636

3 986

3 739

Lease liabilities

1 515

1 789

1 479

Total current borrowings

10 986

14 925

11 154

Total borrowings

36 331

37 686

35 567

6. CHANGES TO PROPERTY, PLANT AND EQUIPMENT

EUR thousand

31.3.2021

31.3.2020

31.12.2020

Cost at the beginning of period

47 323

45 952

45 952

Other changes*

-1 376

Additions

926

1332

4 230

Disposals

-16

-1

-496

Exchange differences

890

-1 802

-1 007

Cost at the end of period

49 124

45 502

47 323

Accumulated depreciation and impairment at the beginning of period

-22 682

-18 844

-19 193

Other changes*

349

Depreciation

-1 073

-1 114

-4 385

Disposals

62

0

235

Exchange differences

-410

834

311

Accumulated depreciation and impairment at the end of period

-24 103

-19 124

-22 682

Net book amount at the beginning of period

24 642

26 759

26 759

Net book amount at the end of period

25 021

26 378

24 642

*Other changes include corrections to IFRS 16 calculations for 2019.

7. 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 two cash-generating units (Top Hammer and Down the Hole). In the 31 March 2021 situation, the company has reviewed the assumptions used in goodwill testing, such as forecasts for the current and future years and changes in interest rates. In addition, the company has assessed the changes caused by the COVID-19 pandemic in the company’s operating environment and their impact on the company’s long-term profitability and cash flows. The effects depend on how long the restrictions remain in force and how they affect the profitability in countries and industries important to Robit. Based on the review there were no indications of internal or external factors identified affecting possible impairment and therefore it was concluded that no additional impairment testing was needed. The factors affecting goodwill items will be reviewed during the second quarter.

8. GIVEN GUARANTEES

EUR thousand

31.3.2021

31.3.2020

31.12.2020

Guarantees and mortgages given on own behalf

47 828

46 025

45 119

Other guarantee liabilities

1 121

261

94

Total

48 948

46 286

45 213

9. ACQUISITIONS

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

10. DERIVATIVES

The company hedges the most significant net currency positions that can be predicted in time and volume. During the reporting period, hedging had no significant impact on the result and there were no open derivatives at the end of the reporting period.

Attachment