Brødrene A & O Johansen A/S : AO - H1 2022

Interim Financial Report

for the Period

1 January - 30 June 2022

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

Company Announcement No. 11/2022

1/17

Brødrene A & O Johansen A/S

Interim financial report for H1 2022

Contents

Highlights for the second quarter and first half of 2022...............................................	page 3
Financial and operating data for the AO Group ..........................................................	page 5
Management's review ................................................................................................	page 6-9
Management's statement ..........................................................................................	page 10
Income statement and statement of comprehensive income .....................................	page 11
Balance sheet as at 30 June 2022 .............................................................................	page 12-13
Cash flow statement...................................................................................................	page 14
Statement of changes in equity ..................................................................................	page 15
Notes..........................................................................................................................	page 16-17

Company Announcement No. 11/2022

2/17

Brødrene A & O Johansen A/S

Interim financial report for H1 2022

The Board of Directors has approved the Group's interim financial report for the period 1 January - 30 June 2022.

Highlights for the second quarter and first half of 2022

• Consolidated revenue for the second quarter of 2022 was DKK 1,318.8 million, which is DKK 130.0 million, or 10.9%, more than for the second quarter of 2021. The second quarter of 2022 had one more working day than the corresponding quarter a year ago. Consolidated revenue for the first half of 2022 was DKK 2,570.1 million, which is DKK 150.7 million, or 6.2%, more than for the same period last year. The first half of 2022 had the same number of working days as the year-earlier period.
• Operating profit (EBIT) for the second quarter of 2022 was DKK 92.3 million, corresponding to a profit margin of 7.0%, against DKK 76.5 million and 6.4% for the second quarter of 2021. Operating profit (EBIT) for the first half of 2022 was DKK 177.3 million, corresponding to a profit margin of 6.9%, against DKK 158.6 million and 6.6% for the first half of 2021
• Profit before tax for the second quarter of 2021 was DKK 90.9 million, which is DKK 11.8 million more than in the second quarter of last year. Profit before tax for the first half of 2022 amounted to DKK 176.8 million, which is DKK
• 1. million more than last year. In the second quarter of 2022 the profit margin, measured as profit before tax, was 6.9% against 6.7% in the second quarter of 2021. The earnings growth is a result of an increase in sales, while the increased profit margin is achieved through an increase in the gross profit margin. In the first half of 2022, the gross profit margin increased by 0.9 percentage point compared with the same period last year.
• As at 30 June 2022, the Group's total assets amounted to DKK 3,199.2 million, which is DKK 605.7 million more than at 30 June 2021. The increase is mainly attributable to a rise in receivables and inventories due the growth in sales and a higher level of non-current assets driven by investment in the central warehouse of the future. The acquisition of EA Værktøj impacted the balance sheet total by DKK 179.8 million.
• As at 30 June 2022, the Group's equity of DKK 1,255.4 million, equalling a solvency ratio of 39.2%, was DKK
• 1. million higher than for the same period last year. The consolidation of EA Værktøj briefly reduced the solvency ratio by 2.4 percentage points.
• Cash flow from operating activities was DKK 73.8 million for the second quarter of 2022 and DKK -36.4 million for the first half of 2022, which is DKK 47.0 million more and DKK 169.2 million less than for the same periods last year. The development is driven by an improvement in the cash flows from operations before change in working capital, countered by more funds being tied up in working capital as at 30 June 2022. Investments for the second quarter of 2022 totalled DKK 187.1 million and DKK 247.6 million for the first half of 2022, compared with DKK
• 1. million and DKK 117.2 million in 2021. Investments in the second quarter were mainly attributable to the acquisition of EA Værktøj.

Other highlights for the second quarter and first half of 2022:

• The Brødrene A & O Johansen Group delivered record results in both the second quarter and first half of 2022 with the highest revenue ever, primarily driven by growth in the B2B segment. The acquisition of EA Værktøj was included in the second quarter of 2022 with revenue of DKK 69.5 million and EBT of DKK 3.6 million.
• To ensure security of supply for AO's customers, additional purchases of selected products have been made in 2022. As at 30 June 2022, inventories amount to a total of DKK 796.7 million, which is DKK 272.9 million more than as at 30 June 2021. Of this increase, DKK 66.1 million is attributable to the acquisition of EA Værktøj. The increased funds tied up in assets will be reduced to normal, when it is deemed appropriate in relation to the supply situation.
• On 1 April 2002, Brødrene A & O Johansen A/S completed the acquisition of EA Værktøj Engros A/S. The integration of EA Værktøj has begun and is expected to be completed both organisationally and systemically in the fourth quarter of 2022.
• AO won the Gold Award as well as the awards for the best B2B company of the year and the best omnichannel company of the year at the Danish E-Commerce Awards 2022. The awards are the result of many years of dedicated work to digitise AO and AO's sales channels.

Company Announcement No. 11/2022

3/17

Brødrene A & O Johansen A/S

Interim financial report for H1 2022

Expectations for the year

The second quarter of 2022 was characterised by continued growth in the B2B segment. The organic growth was 9.2%, while the acquisition of EA Værktøj means that the reported growth in the B2B segment is 16.0% compared with the same period last year.

In the second quarter of 2022 the sales index of the B2C segment rose to -16.6% when compared with the second quarter of 2021. It was -32.7% in the first quarter of 20221 when compared with the first quarter of 2021.

The AO Group's sales developed as forecasted in the latest company announcement regarding net profit expectations for the year.

A number of indicators, e.g., increased level of interest rates, rising product prices, a high rate of inflation and lower consumer confidence, lead to increased uncertainty regarding future demand levels

Despite the increased uncertainty, the previously announced expectations for this year's earnings are maintained.

Revenue

Revenue for 2022 is still expected to be in the region of DKK 5,200-5,300 million. Revenue for 2021 was DKK 4,800.5 million.

EBITDA

EBITDA for 2022 is still expected to be in the range of DKK 455-485 million, corresponding to an EBITDA margin of 8.6%-9.3%. EBITDA for 2021 was DKK 417.2 million.

EBT

Profit before tax (EBT) is still expected to be in the region of DKK 345-375 million, corresponding to a profit margin of 6.5%-7.2%. Profit before tax for 2021 was DKK 326.1 million.

These expectations are based on an assumption of revenue growth of 10-14% for the rest of 2022, including the acquisition of EA Værktøj.

The expected synergies from the acquisition of EA Værktøj are expected to occur from 2023, and therefore they are not included in expectations for 2022

The expansion of the Albertslund central warehouse is expected to be completed in the third quarter of 2022. Efficiency improvements in logistics are expected to take effect from the end of 2022.

	Albertslund, 17 August 2022
Niels A. Johansen	Per Toelstang
CEO	CFO

Company Announcement No. 11/2022

4/17

Brødrene A & O Johansen A/S

Interim financial report for H1 2022

Financial and operating data for the AO Group

(DKKm)

Key figures

H1	H1	Q2	Q2	Full Year
2022	2021	2022	2021	2021

Consolidated revenue	2,570.1	2,419.4	1,318.8	1,188.8	4,800.5
Gross margin	618.6	561.8	323.6	273.8	1,119.3
Earnings before interest, taxes, depreciation
and amortisation (EBITDA)	230.3	208.6	119.4	100.7	417.2
Profit or loss before financial income and expenses (EBIT)	177.3	158.6	92.3	76.5	316.7
Financial income and expenses, net	(0.4)	2.1	(1.4)	2.7	9.4
Profit or loss before tax (EBT)	176.7	160.7	90.9	79.2	326.1
Tax on profit or loss for the period	(38.7)	(34.1)	(19.9)	(17.2)	(72.3)
Net profit or loss for the period	138.1	126.6	71.1	62.0	253.8
Non-current assets	1,713.9	1,417.0	1,713.9	1,417.0	1,472.7
Current assets	1,485.3	1,176.5	1,485.3	1,176.5	1,235.9
Total assets	3,199.2	2,593.5	3,199.2	2,593.5	2,708.5
Share capital	28.0	28.0	28.0	28.0	28.0
Equity	1,255.4	1,114.5	1,255.4	1,114.5	1,239.9
Non-current liabilities	367.2	308.1	367.2	308.1	295.9
Current liabilities	1,576.5	1,171.0	1,576.5	1,171.0	1,172.7
Cash flow from operating activities	(36.4)	132.8	73.8	26.9	308.1
Cash flow from investing activities	(247.6)	(117.2)	(187.1)	(79.4)	(212.7)
Of which investments in property, plant and
equipment, net	(106.0)	(76.6)	(52.7)	(44.7)	(170.5)
Cash flow from financing activities	147.8	(82.0)	113.4	(44.0)	(91.6)
Cash flow for the period	(136.2)	(66.4)	0.1	(96.5)	3.7
Financial ratios*
Gross profit margin	24.1%	23.2%	24.5%	23.0%	23.3%
EBITDA margin	9.0%	8.6%	9.1%	8.5%	8.7%
Profit margin	6.9%	6.6%	7.0%	6.4%	6.6%
Return on capital employed**	6.0%	6.4%	3.0%	3.0%	9.5%
Return on equity**	11.1%	11.8%	5.8%	5.7%	18.2%
Net gearing	1.6	0.7	1.6	0.7	0.5
Solvency ratio	39.2%	43.0%	39.2%	43.0%	45.8%
Book value	44.8	39.8	44.8	39.8	44.3
Share price at the end of the period	72.1	94.2	72.1	94.2	136.0
Earnings per share (EPS Basic), DKK***	5.1	4.7	2.6	2.3	9.3
Diluted earnings per share (EPS-D), DKK****	5.1	4.7	2.6	2.3	9.3
Average number of employees****	795	695	853	695	705
Average number of employees, incl. external temporary
workers	864	774	920	776	784

• Other financial ratios have been calculated in accordance with CFA Society Denmark's 'Recommendations and Financial Ratios'.
• Not translated into full-year figures.
• Comparative figures related to shares are adjusted to reflect share split in 2022.
• Basic EPS and diluted EPS have been calculated in accordance with IAS 33.

.

Company Announcement No. 11/2022

5/17