SP Group Half-Year Report 2023

Interim report – First half year of 2023

Summary: SP Group generated revenue of DKK 1,370.1 million in the H1 2023 reporting period, a decline of 2.2% from DKK 1,400.5 million in H1 2022. EBITDA was down by 7.8% to DKK 230.3 million from DKK 249.6 million last year, and profit before tax fell by 29.7% to DKK 107.9 million. FY 2023 guidance revised: SP Group expects FY 2023 revenue to grow by 0-10% (previously 5-15%) at an EBITDA margin of 16-19% (unchanged) and an EBT margin of 7-10% (previously 9-12%).

The Board of Directors of SP Group A/S has today considered and approved the interim report for the six months ended 30 June 2023. Highlights of the interim report:

• The H1 2023 revenue was down by DKK 30.4 million to DKK 1,370.1 million, or by 2.2%, relative to the year- earlier period. Company acquisitions added DKK 34.2 million to consolidated revenue. Q2 sales fell by 2.6% year on year.
• EBITDA for H1 2023 was DKK 230.3 million, as against DKK 249.6 million in H1 2022. Company acquisitions added DKK 7.4 million to EBITDA. EBITDA declined by DKK 17.4 million in Q2 2023, for a 14.5% year-on-year decrease.
• Depreciation, amortisation and impairment losses amounted to DKK 100.7 million, an increase of DKK 12.9 million relative to the same period last year. Amortisation and depreciation in acquired companies accounted for DKK 3.3 million of the increase.
• Profit before net financials (EBIT) came to DKK 129.5 million in H1 2023, for a 19.9% decline from DKK 161.8 million in H1 2022. EBIT for the second quarter was DKK 51.4 million, for a 31.6% decline from DKK 75.1 million in Q2 2022.
• Net financials were an expense of DKK 21.6 million, a DKK 13.3 million increase relative to H1 2022 that was due to higher interest rates and the servicing of a larger debt.
• Profit before tax was DKK 107.9 million in H1 2023, a 29.7% decline from DKK 153.5 million in H1 2022. The Q2 2023 EBT was DKK 39.5 million against DKK 70.5 million in Q2 2022.
• Earnings per share (diluted) were DKK 6.92 in H1 2023, a 30.2% drop from DKK 9.92 in H1 2022.
• Sales of our own brands were down by 18.9% in H1 2023 to DKK 317.1 million. SP Group’s own brands accounted for 23.1% of H1 2023 revenue.
• Sales to the cleantech, automotive and other demanding industries increased during the reporting period, whereas sales to healthcare (ergonomics) and food-related industries declined.
• There was a cash inflow from operating activities of DKK 186.8 million in H1 2023, against DKK 136.6 million in H1 2022.
• Net interest-bearing debt (NIBD) amounted to DKK 1,012.5 million at 30 June 2023, against DKK 910.3 million at 30 June 2022. At 31 December 2022, NIBD amounted to DKK 1,034.5 million. NIBD was 2.2 times LTM EBITDA. NIBD fell by DKK 22.0 million in H1 2023.
• SP Group now expects FY 2023 revenue to grow by 0-10% at an EBITDA margin of 16-19% and an EBT margin of 7-10%. However, due to the high rate of inflation, higher interest rates, the energy crisis and the war in Ukraine, our levels of activity and cash flows over the coming months are subject to considerable uncertainty.