Brødrene A & O Johansen A/S : 2021-04-29 - No. 6 - Q1 2021

Interim Financial Report

for the Period

1 January - 31 March 2021

Brødrene A & O Johansen A/S

Rørvang 3 * DK-2620 Albertslund * Denmark

Tel: [phone] * Fax: [phone] * www.ao.dk

CVR (Central Business Register) No.: 58 21 06 17

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Interim financial report for Q1 2021

Contents

Highlights for the first quarter of 2021.........................................................................	page 3
Financial and operating data for the AO Group ..........................................................	page 5
Management's review ................................................................................................	page 6-8
Company announcements in 2021 .............................................................................	page 9
Management's statement ..........................................................................................	page 10
Income statement and statement of comprehensive income .....................................	page 11
Balance sheet ............................................................................................................	page 12-13
Cash flow statement...................................................................................................	page 14
Statement of changes in equity ..................................................................................	page 15
Notes..........................................................................................................................	page 16-17

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Brødrene A & O Johansen A/S

Interim financial report for Q1 2021

Today the Board of Directors has approved the Group's interim financial report for the period 1 January - 31 March 2021.

Highlights for the first quarter of 2021

• Consolidated revenue for the first quarter of 2021 was DKK 1,230.5 million, which is DKK 260.2 million, or 26.8%, more than for the first quarter of 2020. The first three months of 2021 had one less working day than the previous year.
• Compared with the first quarter of 2020, the gross profit margin for the first quarter of 2021 decreased by 0.5 percentage point mainly due to higher distribution costs driven by a higher B2C share.
• Operating profit (EBIT) for the first quarter of 2021 was DKK 82.1 million, corresponding to a profit margin of 6.7%, against DKK 51.8 million and 5.3% for the first quarter of 2020. The increased profit margin is achieved through revenue growth.
• Profit before tax (EBT) for the first quarter of 2021 was DKK 81.6 million, which is DKK 32.0 million more than for the first quarter of last year due to revenue growth.
• As at 31 March 2021, the Group's total assets amounted to DKK 2,589.7 million, which is DKK 305.4 million more than at the same time in 2020. The increase is primarily attributable to trade receivables and a rise in cash and short-term deposits.
• As at 31 March 2021, the Group's equity totalled DKK 1,051.9 million, which is DKK 162.6 million more than at the same time in 2020. The solvency ratio was 40.6% against 38.9% at 31 March 2020.
• Cash flow from operating activities for the first quarter of 2021 was DKK 105.9 million, which is DKK 74.7 million more than for the same period last year, primarily due to higher earnings and an improved development of working capital. Investments for the first quarter of 2021 totalled DKK 37.9 million, compared with DKK 10.9 million for the first quarter of 2020. The increase is driven by investment in an expansion of the central warehouse.
• As at 31 March 2021, the net interest-bearing debt totalled DKK 235.2 million against DKK 520.3 million at the same time in 2020. The net interest-bearing debt was 0.7 compared with the Last Twelve Months EBITDA.

Other highlights for the first three months of 2021:

• The Annual General Meeting approved the recommended consolidated and parent company financial statements as well as the allocation of profits, including a dividend payment of DKK 15 per preference share of DKK 10. All shareholder-elected Board members were re-elected. Afterwards the Board of Directors constituted itself with Henning Dyremose as Chairman and Michael Kjær as Deputy Chairman. The Board of Directors was authorised to acquire own preference shares equivalent to a total of 10% of the Company's share capital.
• As described in the 2020 annual report under 'Outlook', the increase in sales was extraordinarily high in the first quarter of 2021. The high level of activity in the building industry was combined with increased digital commerce due to the lockdown of physical DIY stores in part of the quarter. A more moderate growth is expected for the rest of 2021.
• On 29 April 2021, Brødrene A & O Johansen A/S entered into an agreement to acquire the business of Complet VVS A/S (CompletVVS.dk), CVR number (Danish company registration number) 78864028), which is a web shop selling plumbing, heating, and sanitary ware products. The acquisition of Complet VVS A/S is effective as of 1 May 2021. The business's annual revenue is approximately DKK 50 million. The parties have agreed not to disclose the purchase price.

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Brødrene A & O Johansen A/S

Interim financial report for Q1 2021

Expectations for the year

As revenue and earnings for the first quarter and April were higher than anticipated, the Group increases its pre-tax profit expectations for the year from DKK 240-260 million, as announced in the annual report for 2020, to DKK 260- 280 million. The acquisition of Complet VVS A/S is expected to have a limited impact on the Group's net profit for the year. In 2020, Brødrene A & O Johansen A/S realised a profit before tax of DKK 220.8 million.

The expansion of the Albertslund central warehouse decided upon in 2020 is in progress. The expansion is expected to be completed in the first half of 2022, and it is estimated to amount to approximately DKK 200 million, of which approximately DKK 150 million is expected to be recognised in 2021

	Albertslund, 29 April 2021
Niels A. Johansen	Per Toelstang
CEO	CFO

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Financial and operating data for the AO Group

(DKKm)
Key figures	Q1	Q1	Full Year
2021	2020	2020
Consolidated revenue	1,230.5	970.3	4,098.3
Gross margin	274.1	221.4	914.4
Earnings before interest, taxes, depreciation
and amortisation (EBITDA)	107.9	78.9	328.2
Profit or loss before financial income and expenses
(EBIT)	82.1	51.8	223.8
Financial income and expenses, net	(0.6)	(2.2)	(3.0)
Profit or loss before tax (EBT)	81.6	49.6	220.8
Tax on profit or loss for the period	(17.0)	(10.8)	(47.9)
Net profit or loss for the period	64.6	38.8	172.9
Non-current assets	1,352.4	1,337.8	1,320.0
Current assets	1,237.3	946.5	1,063.2
Total assets	2,589.7	2,284.3	2,383.2
Share capital	28.0	28.0	28.0
Equity	1,051.9	889.3	1,030.2
Non-current liabilities	337.6	339.2	330.6
Current liabilities	1,200.2	1,055.9	1,022.4
Cash flow from operating activities	105.9	31.2	375.4
Cash flow from investing activities	(37.9)	(10.9)	(66.3)
Of which investments in property, plant and
equipment, net	(31.9)	(2.6)	(37.3)
Cash flow from financing activities	(38.0)	(87.4)	(256.2)
Cash flow for the period	30.0	(67,1)	52.8
Financial ratios*
Gross profit margin	22.3%	22.8%	22.3%
Profit margin	6.7%	5.3%	5.5%
Return on capital employed**	3.3%	2.3%	9.5%
Return on equity**	6.2%	4.4%	18.2%
Solvency ratio	40.6%	38.9%	43.2%
Book value	376	318	368
Share price at the end of the period	744	293	604
Earnings per share (EPS Basic), DKK***	24	14	64
Diluted earnings per share (EPS-D), DKK***	24	14	64
Average number of employees****	773	732	741

• Other financial ratios have been calculated in accordance with CFA Society Denmark's 'Recommendations and Financial Ratios'.
• Not translated into full-year figures.
• Basic EPS and diluted EPS have been calculated in accordance with IAS 33.
• The number of employees includes external temporary workers.

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