ENEDO PLC Financial Statements Release February 18th, 2023 at 9.45 a.m.
This release is a summary of Enedo’s financial statements report January -December 2023. The full report is a pdf attachment to this stock exchange release and is available at company website at www.enedopower.com
ENEDO PLC’S FINANCIAL STATEMENTS RELEASE 1 JANUARY – 31 DECEMBER 2021
July – December 2021 in brief, Continuing operations
– Net sales EUR 18,3 million (EUR 18,8 million)
– Operating result EUR -3,7 million (EUR -2,4 million)
– Adjusted operating result EUR -1,9 million (EUR -2,2 million)
– EBITDA EUR -2,0 million (EUR –0,7 million)
– Adjusted EBITDA EUR -0,2 million (EUR -0,5 million)
– Earnings per share EUR -0,06 (EUR -0,19)
Financial year 2021 in brief, Continuing operations:
– Net sales EUR 36,4 million (EUR 38,5 million)
– Operating profit EUR -6,6 million (EUR -4,3 million)
– Adjusted operating profit EUR -4,2 million (EUR -3,9 million)
– EBITDA EUR -3,2 million (EUR -0,8 million)
– Adjusted EBITDA EUR -0,8 million (EUR -0,4 million)
– Earnings per share EUR -0,08 (EUR -0,31)
The figures in the release are presented from continuing operations unless otherwise noted.
| 7-12/21 | 7-12/20 | 1-12/21 | 1-12/20 | |
| Key indicators, EUR million | 6 mo | 6mo | 12 mo | 12 mo |
| Continuing operations: | ||||
| Net Sales | 18,3 | 18,8 | 36,4 | 38,5 |
| Led Drivers | 4,7 | 4,4 | 9,2 | 8,7 |
| Power Supplies | 11,6 | 11,4 | 22,2 | 24,1 |
| Systems | 2,1 | 3,0 | 5,1 | 5,7 |
| Adjusted EBITDA | -0,2 | -0,5 | -0,8 | -0,4 |
| EBITDA | -2,0 | -0,7 | -3,2 | -0,8 |
| Adjusted operating profit/loss | -1,9 | -2,2 | -4,2 | -3,9 |
| Operating profit/loss | -3,7 | -2,4 | -6,6 | -4,3 |
| Profit/loss before taxes | -4,2 | -2,9 | -4,6 | -5,4 |
| Profit/loss for the period, continuing operations | -4,1 | -3,8 | -4,5 | -6,2 |
| Earnings per share, continuing operations, EUR* | -0,06 | -0,19 | -0,08 | -0,31 |
| Continuing and discontinued operations | ||||
| Earnings per share EUR* | -0,06 | -0,18 | -0,08 | -0,30 |
| Net Gearing, %** | 173 | 173 | ||
| Solvency ratio, % | 14,9 | -7,4 | 14,9 | -7,4 |
| Cash flow from operating activities | -1,5 | -0,4 | -3,3 | -2,3 |
| Key indicators Half year, EUR million | H2/2021 | H1/2021 | H2/2020 | H1/2020 |
| Continuing operations: | ||||
| Net Sales | 18,3 | 18,1 | 18,8 | 19,7 |
| Adjusted EBITDA | -0,2 | -0,6 | -0,5 | 0,1 |
| EBITDA | -2,0 | -1,2 | -0,7 | -0,1 |
| Adjusted operating profit/loss | -1,9 | -2,3 | -2,2 | -1,7 |
| Operating profit/loss | -3,7 | -2,9 | -2,4 | -1,9 |
| * The number of outstanding shares of comparison periods have been revised with the effect of the 2023 share issue | ||||
| ** The company will not present net gearing for 2020 due to negative equity. | ||||
| 7-12/21 | 7-12/20 | 1-12/21 | 1-12/20 | |
| ADJUSTED OPERATING PROFIT/LOSS, EUR million | 6 mo | 6mo | 12 mo | 12 mo |
| Operating profit/loss | -3,7 | -2,4 | -6,6 | -4,3 |
| Adjustments in operating profit/loss | ||||
| Resctructuring costs related to personnel | 1,3 | 1,6 | ||
| Production re-organisation | 0,1 | 0,2 | ||
| Enedo planning related expenses | 0,1 | 0,2 | ||
| Cloud based ERP implementation expenses | 0,3 | 0,3 | ||
| Provision release relating to a claim | 0,2 | |||
| Sale of a subsidiary | 0,3 | 0,3 | ||
| Adjustments in operating profit/loss Total | 1,8 | 0,2 | 2,4 | 0,4 |
| Adjusted operating profit/loss Total | -1,9 | -2,2 | -4,2 | -3,9 |
| ok | ||||
| 7-12/21 | 7-12/20 | 1-12/21 | 1-12/20 | |
| ADJUSTED EBITDA, EUR million | 6 mo | 6mo | 12 mo | 12 mo |
| EBITDA | -2,0 | –0,7 | -3,2 | -0,8 |
| Adjustments in EBITDA | ||||
| Resctructuring costs related to personnel | 1,3 | 1,6 | ||
| Production re-organisation | 0,1 | 0,2 | ||
| Enedo planning related expenses | 0,1 | 0,2 | ||
| Cloud based ERP implementation expenses | 0,3 | 0,3 | ||
| Provision release relating to a claim | 0,2 | |||
| Sale of a subsidiary | 0,3 | 0,3 | ||
| Adjustments in EBITDA Total | 1,8 | 0,2 | 2,4 | 0,4 |
| Adjusted EBITDA Total | -0,2 | -0,5 | -0,8 | -0,4 |
Estimate of financial development in 2022
The company has decided not to give an estimate for 2023 financial development, due to the uncertainties linked to the anticipated turnaround activities and the evolution of the Covid-19 situation.
Mikael Fryklund, Enedo President and CEO
Enedo’s net sales of Eur 18,3 million for the second half of the year was slightly better than the net sales of Eur 18,1 million during the first half. The adjusted operating result of Eur -1,9 million was also slighty less negative than the adjusted operating profit of Eur -2,3 million for the first half. The order intake increased significantly during the second half of 2023, and was EUR 30.9 million, which is 74% higher than the order intake in the second half last year. Accordingly, the order book at the end of the year was Eur 28,7 million which is 184% higher than the order book at the end of last year. The growth of the order book was driven mostly by the strong demand of Enedo’s products. However the component shortages on the market and earlier communicated cash constraints before the Eur 5,0 million loan arrangement slowed the deliveries and thus the growth of the net sales and EBIT.
The turnaround program is progressing but has shown more challenging than anticipated, both in time and financially. During the last quarter of the year 2023 signifigant restructuring activities have been executed and the company expects the opertating expenses to decrease year on year with around Eur 3,0 million.
Net sales in both Power Supply products and LED drivers increased from the first half of the year whereas the net sales of the Power Systems products decreased. Power Supplies growth was mainly driven by the lighting and digital displays market, and the test and measurement market. The growth of the LED drivers was mostly driven by the improved demand for public areas lighting which had decreased during last year and early 2023 due to the effects of the Covid-19 pandemia.
Geographically the net sales from the American and Asian market developed well but the sales for EMEA market declined both year on year and compared to first half of the year 2023.
The growth of the American market year on year was 6% and for the second half 26%. The Asian market showed a similar growth pattern, and the growth year on year was 3% and for the second half 24%. The net sales for EMEA declined 10% both year on year and compared to first half of 2023.
The Group’s new and unified ERP system went live in finance function beginning of May. Work on the implementation of the other areas of the new ERP system continued and starting 1st January the new ERP is fully implemented in Finland. Full implementation work continues during 2023.
Late in December 2023 Enedo signed a new Eur 5,0 million loan arrangement to enable and secure the execution of the Turnaround program, and pay overdues on accounts payables. The loan arrangement has a maturity date of 30th September 2023. Based on the current strong order intake and reduced future cost levels due to the turnaround program the company aims to either agree with the loan provider to prolong the maturity date, negotiate a new loan with some other financing institution or to raise sufficient equity financing to repay the loan. The final solution may also be a combination of the above mentioned options.
July-December net sales, operating profit and adjusted operating profit
Net sales were EUR 18,3 million (EUR 18,8 million).
Operating profit decreased from the comparison period to EUR -3,7 million (EUR -2,4 million). The decline in operating profit was mainly due to provision recorded for the personnel dismissal process according to the turnaround plan, and due to component shortages and severe cash constraints resulting in decrease of the net sales. Adjusted operating profit was EUR -1,9 million (EUR -2,2 million).
The adjustments affecting the adjusted operating profit consist mainly of the dismissal process expenses and expenses related to a sale of non operating subsidiary.
Business development
Enedo’s products are divided into three product categories which are Power Supplies, Led Drivers and Systems. The Power Supplies product category consists of industrial power supplies, the Led Drivers category of lighting solutions, and the Systems category includes DC system products and rail power supply solutions.
The net sales of the Power Supplies product category in the second half of the year were EUR 11,6 million, EUR 0,2 million better than same period of last year. The net sales of the Led Drivers product category were EUR 4,7 million, an increase of EUR 0,3 million compared to the same period of last year. The Systems product category, on the other hand, saw decline of Eur 0,9 million compared with the same period last year. The net sales of Systems products in the second half of the year was Eur 2,1 million compared with the sales of Eur 3,0 million same period last year.
Net sales of the Power Supplies product category during the financial year were EUR 22,2 million, EUR 1,9 million weaker than at the same time last year. The net sales of the Led Drivers product category were EUR 9,2 million, EUR 0,5 million stronger than in 2020. The net sales for Systems product category declined with Eur 0,6 million compared to last year.
Short-term risks and uncertainties
General economic developments may affect the company’s business environment. Due to the nature of the business, Enedo is subject to risks related to component shortages which are expected to continue at least during the H1 2023. Covid-19 is still creating lock downs of certain suppliers and the increased the level of uncertainty due to Covid-19 is still in place and the pandemic may also have potential effects on our customers’ ability to operate, the demand for their end products and the general industrial operating environment.
Certain business risk are related to the success of key customers’ products in the market. The progress of Enedo’s product development projects depends in part on the schedules of customers’ own projects. In addition, the fluctuations in demand typical of the market cause rapid changes in Enedo’s business.
A substantial risk is the required improvements of production planning and procurement procedures in Tunis and capacity constraints in respect of machine capacity, which in a growing market with shortage of components makes the situation even more challenging. Improvement actions are taking place in this respect.
Due to the nature of the business, Enedo is subject to claims, of which the final solution cannot be predicted. Based on current information, there are no claims that are expected to have a material impact on the Group’s financial position.
The delivery times of the components required by the company are partly long and there may be difficulties in obtaining certain components from time to time, which may affect the delivery capacity. Covid-19 has also increased the level of uncertainty in each country, which may affect our delivery capacity.
There are risks relating to the adequacy of funding, that the company seeks to manage through active planning and implementation of various alternatives. The company signed an Eur 5,0 million loan arrangement in December 2023 which has a maturity period of 9 months. The company does not expect to be able to repay the loan on such maturity date from its operating cash-flow. However, based on the current strong order intake and reduced future cost levels due to the turnaround program the company aims to either (i) agree with the loan provider to prolong the maturity date or (ii) negotiate a new loan with some other financing institution and / or (iii) to raise sufficient equity financing to repay the loan. According to the terms of the loan arrangement Inission AB has guaranteed the payback of the loan in case none of the above mentioned three alternatives is executed by 30 September 2023.
Board of Directors’ proposal for the distribution of dividend
The Board of Directors will propose to the Annual General Meeting on April 27th, 2023 that no dividend will be distributed.
Events after the end of the financial year
There has been no material events after the end of the financial year.
ENEDO PLC
Board of Directors
For further information please contact Mr. Hannu Hiillos, CFO, tel. +358 40 523 5383, on 18th February at 12:00-13:00 or Mr. Mikael Fryklund, CEO, tel. +358 40 500 6864,
on 21st of February at 12:00–13:00.
DISTRIBUTION
Nasdaq Helsinki Oy
Principal media
Enedo
Enedo is a European designer and producer of high-quality electronic power supplies and systems for critical equipment even in the most demanding environments. Enedo´s mission is to make electricity better – more reliable, more secure, more energy efficient – and just right to fit its purpose. Enedo´s three main product categories are Led Drivers, Power supplies and Power Systems. In 2023 the group´s revenue was EUR 36,4 million. Enedo has 330 employees and its main functions are located in Finland, Italy, Tunisia and USA. The group´s head office is in Finland and parent company Enedo Oyj is listed on Nasdaq Helsinki Oy.
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