TRADING
REPORT
Q3 - 2022/23
COMPANY ANNOUNCEMENT NO. 10 - 2022/23
TRADING REPORT FOR Q3 OF 2022/23 FOR THE PERIOD 1 MAY 2022 TO 31 JANUARY 2023
To NASDAQ OMX Copenhagen
The Board of Directors of Harboes Bryggeri A/S has today considered and approved the following trading report for the third quarter of 2022/23.
Skælskør, 9 March 2023
Bernhard Griese
Chairperson
CEO SØREN MALLING STATES:
"Development in the third quarter show that our implementation of price increases to offset the very high cost of manufacturing and distributing our products has started to show positive results. We're continuing the close dialogue with customers on security of supply and compensation for the continued high costs. We're also seeing positive development in both Denmark and Germany, with an increased volume of business with our customers contributing to revenue growth. We're still facing challenges in Export markets and expect growth here to remain under pressure as long as the existing challenges of high distribution prices persist. We're working on several cases to strengthen the organisation so we can equip the business for future organic growth.
The launch of the new design for our Harboe products in Denmark has been well received by both customers and consumers. At the same time, we see a positive consumer trend with increased activity in the budget segment, where we compete.
The overall results for the first nine months of the year are not satisfactory, but the positive development in the third quarter show that we are on the right track in line with our strategy. We're therefore continuing our efforts with planned strategic initiatives to ensure a future platform for value-creating growth. We maintain our expectations for the full year of an EBITDA in the range of DKK 63m to DKK 103m and a profit/(loss) before tax in the range of DKK -30m to DKK 10m, and with the expectation that the results will be around the middle of the ranges."
FOR FURTHER INFORMATION
CFO Simon Andersson
Telephone: +45 58 16 88 88
Harboes Bryggeri A/S - CRN: 43 91 05 15 - Telephone: +45 58 16 88 88 - www.harboe.com | SIDE 2 |
TRADING REPORT - Q1 TO Q3 OF 2022/23
REVENUE GROWTH DRIVEN BY MAIN MARKETS
- Net revenue increased by 17% to DKK 1,221m
- EBITDA decreased from DKK 71m to DKK 51m
- Loss before tax from continuing activities* was DKK -18m, compared to DKK -6m in the first nine months of 2021/22
Revenue growth was driven in particular by Beverages in Germany, where net revenue increased by 35%, while Export activities remain under pressure and decreased by 2%. Overall, revenue in Beverages increased by 16%, while revenue in Ingredients increased by 22%.
However, the increase in revenue was not enough to cover the still very high costs, so earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first nine months of 2022/23 amounted to DKK 51m, compared to DKK 71m for the same period last year.
Depreciation, amortisation and write-downs for the period amounted to DKK 65m, which is lower than in the first nine months last year (DKK 73m), resulting in a loss before tax from continuing activities of DKK -13m, compared to DKK -5m last year.
* Discontinued activities related to Viru Ölu in Estonia
BUSINESS DEVELOPMENT
The development in revenue was driven by increasing sales and implemented price increases. In addition, expanded customer agreements contributed to increased activity, particularly in Germany, while increased business volume from the activities in Denmark contributed to the increase in revenue.
At EBITDA level, the results were significantly impacted by high costs, driven by the continued high price of raw materials, packaging, distribution and energy. Furthermore, earnings were affected negatively by falling export revenue.
Harboe is cooperating with customers to ensure continued supply, and regularly negotiates compensation for the increased costs in the sales prices.
As a result of the continued uncertainty surrounding energy supply, Harboe implemented the necessary measures to be able to continue production without gas during the period. These measures have also entailed additional costs.
NET REVENUE | SEGMENT REVENUE, DKKm | SEGMENT EBITDA, DKKm | |||||||||||||
Export | Denmark | 68 | |||||||||||||
DKK 314m | 1.111 | 1.221 | 51 | ||||||||||||
DKK 399m | +18% | ||||||||||||||
26% | |||||||||||||||
+0% | |||||||||||||||
32% | DKK 1.221m | 9 | |||||||||||||
+17% | 110 | 0 | |||||||||||||
-26 | |||||||||||||||
42% | Germany | ||||||||||||||
DKK 508m | Beverages Ingredients Not allocated Total | Beverages Ingredients Not allocated Total | |||||||||||||
+33% | |||||||||||||||
Harboes Bryggeri A/S - CRN: 43 91 05 15 - Telephone: 58 16 88 88 - www.harboe.com | SIDE 3 |
TRADING REPORT - Q3 OF 2022/23
REVENUE GROWTH AND IMPROVED EARNINGS
- Net revenue increased by 32% to DKK 396m
- EBITDA increased from DKK 3m in Q3 2021/22 to DKK 24m
- Profit before tax from continuing activities was DKK 1m, compared to a loss of DKK -23m in Q3 2021/22
Revenue growth in Q3 was also driven by all markets, with net revenue in Germany increasing by 45%, while in Denmark net revenue increased by 26% and Export activities increased by 23%.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) in Q3 2022/23 was DKK 24m, compared to DKK 3m for the same period last year. The result was positively affected by revenue growth, but earnings remain under pressure from high costs.
Profit before tax from continuing activities amounts to DKK 1m for the period, compared to a loss of DKK -18mlast year.
BUSINESS DEVELOPMENT
The continued revenue growth in Germany and Denmark was driven by realised sales price increases and increased business volumes in both markets.
In the quarter, revenue from Export markets increased by 23% compared with the same period last year, but this should be seen in the context of a very weak quarter in 2021/2022. Activities remain under pressure, mainly due to very high transport prices, and the implemented price increases continue to have a negative impact on demand.
In the third quarter, the focus was also on continuously cost savings initiatives in order to counter the cost increases, and we are in close dialogue with customers to ensure continued delivery and compensation for the increased costs.
NET REVENUE
Export | ||
DKK 124m | ||
+23% | Denmark | |
31% | 27% | DKK 105m |
+26% | ||
Net revenue Q3 | ||
DKK 396m | ||
+32% |
42%
Germany
DKK 167m
+45%
NET REVENUE DKKm | EBITDA, DKKm | PROFIT/(LOSS) BEFORE TAX, DKKm | |||||||||||||||||||||||||
+32% | 28 | +70 0 % | 1 | ||||||||||||||||||||||||
421 | 404 | ||||||||||||||||||||||||||
374 | 396 | ||||||||||||||||||||||||||
24 | |||||||||||||||||||||||||||
-1 | |||||||||||||||||||||||||||
299 | 19 | -4 | |||||||||||||||||||||||||
8 | -15 | ||||||||||||||||||||||||||
3 | -23 | ||||||||||||||||||||||||||
21/22 Q3 | 21/22 Q4 | 22/23 Q1 | 22/23 Q2 | 22/23, Q3 | 21/22 Q3 | 21/22 Q4 | 22/23 Q1 | 22/23 Q2 | 22/23, Q3 | 21/22 Q3 | 21/22 Q4 | 22/23 Q1 | 22/23 Q2 | 22/23, Q3 | |||||||||||||
Harboes Bryggeri A/S - CRN: 43 91 05 15 - Telephone: 58 16 88 88 - www.harboe.com | SIDE 4 |
SELECTED FINANCIAL HIGHLIGHTS AND KEY FIGURES
Q3 | Q1 - Q3 | Full year | |||
DKK'000 | 2022/23 | 2021/22 | 2022/23 | 2021/22 | 2021/22 |
Earnings (continuing activity) | |||||
Net revenue | 396,039 | 298,954 | 1,221,445 | 1,045,618 | 1,419,353 |
EBITDA | 24,064 | 2,967 | 51,246 | 71,337 | 99,016 |
Earnings before interest and tax (EBIT) | 2,686 | (21,878) | (13,299) | (1,313) | (796) |
Profit/(loss) before tax from continuing activities | 561 | (23,061) | (18,350) | (5,891) | (6,957) |
Profit/(loss) after tax from continuing activities | 1,141 | (17,704) | (13,232) | (5,378) | (4,227) |
Balance | |||||
Non-current assets | 633,791 | 667,222 | 633,791 | 667,222 | 653,619 |
Current assets | 462,035 | 407,350 | 462,035 | 407,350 | 489,403 |
Equity | 667,619 | 675,177 | 667,619 | 675,177 | 680,903 |
Non-current liabilities | 152,621 | 170,620 | 152,621 | 170,620 | 167,172 |
Current liabilities | 275,586 | 228,775 | 275,586 | 228,775 | 294,947 |
Balance sheet total | 1,095,826 | 1,074,572 | 1,095,826 | 1,074,572 | 1,143,022 |
Net interest-bearing debt | 145,575 | 130,523 | 145,575 | 130,523 | 82,930 |
Working capital | 313,937 | 300,871 | 313,937 | 300,871 | 278,212 |
Investments | |||||
Investment in intangible assets | 0 | 52 | 0 | 1,156 | 1,219 |
Investment in tangible assets | 20,789 | 12,288 | 47,967 | 34,609 | 49,452 |
Depreciation, amortisation and write-downs | 21,378 | 24,845 | 64,545 | 72,650 | 99,812 |
Cash flows | |||||
Cash flows from operations | 38,189 | 36,543 | (18,430) | 38,214 | 100,134 |
Cash flows from investments | (19,815) | (12,406) | (44,284) | (32,797) | (47,119) |
Cash flows from financing | (4,096) | (5,994) | (10,588) | (19,031) | (23,384) |
Change in cash and cash equivalents (free cash flow) | 14,278 | 18,143 | (73,302) | (13,614) | 29,631 |
Key figures | |||||
EBITDA margin | 6.1% | 1.0% | 4.2% | 6.8% | 7.0% |
Operating margin | 0.7% | -7.3% | -1.1% | -0.1% | -0.1% |
Solvency ratio | 60.9% | 62.8% | 60.9% | 62.8% | 59.6% |
Return on invested capital (ROIC) (prev. 12m) | -0.8% | 0.5% | -0.8% | 0.5% | -0.3% |
Net interest-bearing debt, average/EBITDA (prev. 12m) | 1.7 | 1.2 | 1.7 | 1.2 | 1.1 |
Number of full-time employees | 523 | 496 | 519 | 498 | 504 |
kg CO2/hL | 4.0 | 2,9 | 3.2 | 2.7 | 2.7 |
REVENUE GROWTH AND CONTINUED FOCUS ON MEASURES TO IMPROVE PROFIT
Harboe's Q3 revenue increased by 32% to DKK 396m compared with the same period last year, driven by the developments in all markets and in both Beverages and Ingredients.
The Group's EBITDA in the third quarter was positively affected by the implemented price increases. We remain in close negotiation with suppliers about prices and security of supply. Internally, work is ongoing to ensure supply chain efficiency, and we continue to cooperate and negotiate with customers about the security of supply and compensation for high costs.
The EBITDA margin was 6% in the third quarter, compared to 1% for the same period last year.
Investments of DKK 21m were made in Q3, including finalising investment in production facility for alcohol-free beer in order to meet an increasing demand in this category.
The group's net interest-bearing debt amounted to DKK 146m as of 31 January 2023, slightly higher than for the same period last year.
Cash flow from operations were DKK 38m, compared to DKK 37m for the same period last year. This development was influenced among other by the improved earnings and working capital. Free cash flow was affected by several investments but remains positive at DKK 14m.
The improved earnings in the third quarter are a positive contribution to a continued good financial basis that supports the implementation of the Group's strategy.
Harboes Bryggeri A/S - CRN: 43 91 05 15 - Telephone: 58 16 88 88 - www.harboe.com | SIDE 5 |
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Harboes Bryggeri A/S published this content on 16 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2023 11:44:08 UTC.