COVID-19 IN CHINA POSTPONES RTX Q2 REVENUE – OUTLOOK MAINTAINED - Seite 3

HIGHLIGHTS H1 (FIRST SIX MONTHS) 2019/20 FOR THE RTX GROUP

• Net revenue decreased by 5.2% to DKK 241.0 million in H1 2019/20 (H1 2018/19: DKK 254.4 million) mainly due to revenue being postponed from Q2 to Q3 2019/20 due to delayed start of RTX suppliers in China after the Chinese New Year due to COVID-19 countermeasures in China.
  • Business Communications: Revenue decreased by 0.8% to DKK 167.7 million positively impacted by solid underlying growth of approx. 13% compared to last year especially from the large framework agreements, however negatively impacted by postponements of deliveries from Q2 to Q3 2019/20 due to COVID-19 impact on the supply chain in China.
  • Design Services: Revenue decreased by 14.0% to DKK 73.3 million. While recurring revenues from product sales and royalties increased in line with the strategy to increase resource scalability within Design Service, revenues from engineering services (hourly-based engineering) decreased compared to last year as the development activities in the division focus increasingly on generating recurring revenues instead of executing pure engineering projects.

FX corrected revenue development in H1 2019/20 amounted to a decrease of 7.6% as revenue compared to last year was positively impacted by the USD exchange rate development to a minor degree.

• Operating performance was impacted by the lower revenue level. Thus, EBITDA decreased by 2.8% to DKK 32.7 million (H1 2018/19: DKK 33.7 million) while EBIT decreased by 19.7% to DKK 22.0 million in H1 2019/20 (H1 2018/19: DKK 27.4 million). In addition to the revenue development, EBITDA and EBIT are impacted by increased capacity costs related to ramp-up of activities and investments in capacity related to the major framework agreements announced over the latest year. Also, EBITDA and EBIT are impacted by implementation of IFRS 16 regarding capitalization of leasing costs, which increases EBITDA (and to a minor degree EBIT).
   
• Cash flows from operating activities (CFFO) amounted to DKK 30.1 million in H1 2019/20 compared to DKK 28.0 million in H1 2018/19.
  
  

OUTLOOK FOR 2019/20

• As detailed above, the impact on RTX from the COVID-19 situation is mixed. With current knowledge and visibility RTX maintains the expectations for revenue between DKK 620-650 million, EBITDA between DKK 105-120 million and EBIT between DKK 75-90 million for the financial year 2019/20. However, given the unprecedented nature of the COVID-19 situation an uncertainty as to a potential future impact from COVID-19 on RTX’s financial year 2019/20 must be acknowledged. As stated in the annual report for 2018/19, it is expected that the revenue and earnings distribution over 2019/20 will be relatively backloaded towards the end of the year.