Cavotec : 2Q23 Report

Q2 2023 | Interim report January-June 2023

Q2 2023 | Interim report January-June 2023

Strong increase in revenues and growing profitability

APRIL-JUNE 2023

• Revenues increased 44.4% to EUR 45.7 million (31.7)
• EBIT amounted to EUR 1.2 million (-0.9), corresponding to an EBIT-margin of 2.6% (-3.0%)
• Net result for the period was EUR -0.9 million (0.9)
• Operating cash flow amounted to EUR -4.6 million (2.2)
• Earnings per share basic and diluted amounted to EUR -0.009 (0.017)

JANUARY-JUNE 2023

• Order backlog decreased -8.2% to EUR 140.3 million (152.8)
• Revenues increased 44.3% to EUR 85.3 million (59.1)
• EBIT amounted to EUR 1.5 million (-2.4), corresponding to an EBIT-margin of 1.7% (-4.1%)
• Net result for the period was EUR -2.3 million (1.3)
• Operating cash flow amounted to EUR -7.5 million (2.1)
• Earnings per share basic and diluted amounted to EUR -0.022 (0.014)

Unless otherwise stated, figures in brackets refer to the same period in the preceding year.

Key events during the quarter

• Cavotec made a strategic decision to expand its operations in India to drive growth and support global sourcing.
• Cavotec won a major turnkey order for on-shore power worth approximately EUR 5 million.
• Joakim Wahlquist officially started as CFO as of 1 May 2023.
• Jörgen Ohlsson has been appointed Senior Vice President Global Operation and will be a member of the Cavotec Management Team starting from August 2023.
• At the end of the quarter Cavotec agreed with the lenders to a covenant waiver for the remainder of 2023.

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Q2 2023 | Interim report January-June 2023

FINANCIAL SUMMARY

EUR 000's		Q223	Q222	Delta	1H23	1H22	Delta	Dec 2022
Order backlog	140, 257	152,794	-8.2%	140,257	152,794	-8.2%	147,207
Revenues	45,734	31,671	44.4%	85,261	59,078	44.3%	147,849
EBITDA	2,656	580	357.9%	4,648	724	542.0%	1,631
EBITDA margin, %	5.8%	1.8%	4.0 pp	5.5%	1.2%	4.3 pp	1.1%
EBIT	1,171	(942)	224.3%	1,477	(2,415)	161.2%	(4,506)
EBIT margin, %	2.6%	-3.0%	5.6 pp	1.7%	-4.1%	5.8 pp	-3.0%
Net profit/(loss) for the period	(932)	1,627	-157.3%	(2,276)	1,350	-268.7%	(3,170)
Operating Cash Flow	(4,572)	2,168	-310.9%	(7,494)	2,067	-462.6%	(5,485)
Full time equivalent employees	625	616	9	625	616	9	640
The KPIs below includes discontinued operations *
Net profit/(loss) for the period	(932)	900	-203.6%	(2,276)	(3,307)	-31.2%	(14,692)
Basic and diluted earnings per share, EUR	(0.009)	0.009	-200.0%	(0.022)	(0.035)	-37.1%	(0.156)
Operating Cash Flow	(4,572)	(137)	3237.2%	(7,494)	(6,080)	23.3%	(20,993)
Net debt	(23,314)	(25,274)	-7.8%	(23,314)	(25,274)	-7.8%	(30,328)
Equity/assets ratio	34.7%	31.5%	3.2 pp	34.7%	31.5%	3.2 pp	26.2%
Leverage ratio	3.73x	6.46x	-2.7x	3.73x	6.46x	-2.7x	12.5x

* The income statement has been amended for the year 2022 to reflect discontinued operations in line with IFRS 5.

Please refer to page 11 and 12 for further segmental details

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Q2 2023 | Interim report January-June 2023

Comment from the CEO

Strong revenue and continued positive EBIT development

In the second quarter we reported revenues of EUR 45.7 million, an increase of 16% compared to the first quarter, and an increase of 44% compared to the same period last year. Revenues in Ports & Maritime increased by 65.3%, to EUR

28.8 million and revenues in Industry increased by 18.9%, to EUR 17.0 million compared to the same period last year.

Due to a combination of an uptick in deliveries and delays in order intake, our order backlog decreased to EUR 140.3 million, an -8% reduction compared to the same period last year. The slightly lower order intake is explained by delayed orders in our Ports & Maritime and Industry businesses with customers carefully evaluating the macroeconomic environment. During this and recent quarters, we have improved our delivery performance and lead-times. Our total installed base continues to grow and this provides considerable opportunities for our Services business which performed strongly in the second quarter.

Due to increased volume and improved profitability of new orders, we continued to build on the positive EBIT performance in the first quarter. EBIT in the second quarter amounted to EUR 1.2 million, corresponding to an EBIT improvement of EUR 0.9 million versus the first quarter of 2023 and EUR 2.1 million compared to the same period last year. We remain fully focused on deriving more profitability from our existing order book, while at the same time taking actions to win new orders with improved margins. We are starting to see the benefits and effects of the changes we have introduced, but there is still much we want to do. Further improvements to our profitability will come after we have delivered the portion of our Ports & Maritime orderbook which was booked before the global supply chain disruptions and emergence of inflationary pressure. It will still take some time for those orders to fully unwind due to long delivery schedules. However, we are actively identifying ways to offset higher costs with the introduction of cost optimization programs. Finally, similar to many companies, we were forced to increase our prices to counter the impact of higher costs. Our pricing now better reflects the value we deliver to our customers. These effects combined are set to contribute to a steady improvement in profitability throughout the year.

On the back of the above and encouraging EBIT improvement and revenue growth, we agreed at the end of the quarter with our lenders to a covenant waiver for the remainder of 2023.

We have recently developed a strategy focused on production and sourcing to ensure that Cavotec also in the future is well equipped to continue delivering high-quality products at competitive prices going forward.

On June 23rd Jörgen Ohlsson was appointed Senior Vice President Global Operations effective August 21st, 2023. With his strong track-record of driving transformation projects and implementing processes aimed at optimizing site production and global sourcing costs reduction programs, Jörgen is an ideal addition to the team. I have asked Jörgen to focus initially on setting up a global sourcing function with commodity managers to build an efficient and scalable supply chain organization across all Cavotec sites. I believe this will play a key role in building "One Cavotec" from an operations and procurement standpoint.

Furthermore, I am delighted to share the exciting news that Cavotec has decided to expand its operations into India by opening a new scalable facility, marking a pivotal step towards our vision of growth and customer-centricity.

The expansion, which will not involve major investment, is required to fuel our growth, and will focus on serving our customers primarily located in India and Southeast Asia. By capitalizing on India's robust manufacturing capabilities and cost-effective resources, we expect to support all our operations globally with new and competitive suppliers from the region as well as enabling us to increase our overall capacity.

I have now completed my first year as Cavotec CEO, during these 12 months I have spent considerable time meeting our valued customers and partners and visiting our offices and operations around the world. My most important observation from this time is that demand for our solutions is strong. I am confident that we are well positioned to capture the technological shift to sustainable electrical solutions. I am also proud of the passion I have seen in our people, and of the work that has been put in to get Cavotec back on a profitable track. Most of all, I am excited at the prospect of what we are yet to achieve, and I am certain that Cavotec will continue to grow, and to grow profitably.

Stockholm, July 28, 2023

David Pagels

Chief Executive Officer

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Q2 2023 | Interim report January-June 2023

ORDER BACKLOG AND REVENUE

EUR 000s		Q223			Q222			1H23			1H22
	Ports &	Industry	Total	Ports &	Industry	Total	Ports &	Industry	Total	Ports &	Industry	Total
	Maritime			Maritime			Maritime			Maritime
Revenue from sales of	28,764	16,970	45,734	17,398	14,273	31,671	52,400	32,861	85,261	29,748	29,330	59,078
goods and services
Increase/(decrease)	11,366	2,697	14,063	(4,394)	(1,480)	(5,874)	22,652	3,531	26,183	(243)	(4,184)	(3,941)
Percentage change	65.3%	18.9%	44.4%	33.8%	11.5%	22.8%	76.1%	12.0%	44.3%	-0.81%	16.6%	7.2%
Of which
- Volumes and prices	66.3%	19.9%	45.4%	34.8%	12.5%	20.0%	77.8%	14.6%	46.4%	-4.3%	14.8%	4.5%
- Currency effects	-1.0%	-1.0%	-1.0%	-1.0%	-1.0%	2.8%	-1.7%	-2.6%	-2.1%	3.5%	1.8%	2.7%

DIVISIONS

Revenue

EUR 000s	Q223	Q222	Change %	1H23	1H22	Change %	LTM Rolling	FY22	Change %
Ports & Maritime	28,764	17,398	65.3%	52,400	29,748	76.1%	110,911	88,259	25.7%
Industry	16,970	14,273	18.9%	32,861	29,330	12.0%	63,121	59,590	5.9%
Total	45,734	31,671	44.4%	85,261	59,078	44.3%	174,032	147,849	17.7%
Order Backlog
EUR 000s	1H23	1H22	Change %	Q123	Change %	FY22	Change %
Ports & Maritime	108,755	121,963	-10.8%	120,357	-9.6%	116,916	-7.0%
Industry	31,502	30,831	2.2%	29,264	7.6%	30,291	4.0%
Total	140,257	152,794	-8.2%	149,621	-6.3%	147,207	-4.7%

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