Nilfisk Holding A/S (NF1.F) Earnings Call Transcript & Summary

Welcome to the Nilfisk A/S Trading Update for Q2 2021 and 2021 Full Year Outlook Adjustment. [Operator Instructions] Today, I am pleased to present Antonio Tapia, Head of IR. Please begin.

Good morning and welcome to Nilfisk Q2 2021 Trading Update Conference Call. To present Nilfisk's announcement today, we have our CFO, Reinhard Mayer. Before we begin, I would like to remind you that this presentation, including remarks from management, may contain forward-looking statement that, for a number of reasons, should not be relied upon as predictions of actual results. I therefore encourage you to read the content of this slide in connection with the presentation. And now looking at Slide 4. The agenda of today's presentation is as follows. We will start by going through the details of the trading update for the quarter, and this will be followed by the adjusted outlook for the financial year 2021. As always, you are invited to ask question during the Q&A session at the end of the presentation. And with this, I will hand over to you, Reinhard.

Thank you, Antonio. Good morning, everyone, and thank you for taking part in this call. It is a pleasure for me to talk to you as CFO of Nilfisk for the first time, and I hope you are well and safe. Let's go to Slide 5 for the trading update. Based on preliminary unaudited figures for the second quarter of 2021, we are reporting a revenue of EUR 257.8 million, corresponding to an organic growth for the total business of 38.5% and an EBITDA before special items of EUR 41.9 million, corresponding to an EBITDA margin before special items of 16.3%. This has certainly been a very good quarter for us. The strong performance is driven by outstanding commercial execution and continuing positive and earlier-than-expected development in demand recovery in the professional branded business. I would also like to highlight the solid performance in Europe and Americas with a sustained strong order intake across geographies and healthy growth profile in the different customer segments we serve. And with this, let's move on to the outlook for the full year 2021. As we have discussed before, we see continuing positive trading conditions and strong execution in our key markets, which is underpinned by the overall economic recovery and the increased demand of cleaning solutions. With this, the visibility on business activity for the second half of the year has improved. And therefore, we adjust our full year outlook for organic growth upwards to 12% to 16% from the previous range of 8% to 12%, as announced on May 6, 2021. At the same time, we do recognize the ongoing impact related to supply chain constraints that affects almost all industry across the globe with substantially higher material and freight costs. We also see a reduced reliability of delivery times for certain source components or parts. As a result, we maintain our outlook for EBITDA margin before special items in the range of 13% to 15%. And with this, we conclude our presentation, and we are now ready to take your questions.

[Operator Instructions] We currently have no questions registered via the audio lines. I will hand back to the speakers for any further remarks.

Well, if there are no questions, I would say -- I mean...

We have one.

We have one?

We now have our first question registered if you are ready for it. Our first question comes from the line of Claus Almer from Nordea.

Yes. I have one question -- or actually 2 questions regarding the cost headwind. So maybe you could put some more color to what are you seeing from freight costs and also a shortage of input costs -- input materials. Is that already happening in Q3? Is it more a Q4 thing? And what is in more real terms?

Yes. Thank you, Claus, for your question. I mean, first of all, we would not give a detailed answer on the freight impact. We would spare that a little bit more out for our Q2 release, September 1. But we do see, so to say, these uncertainties of delivery times in certain source components. It is, so to say, taking a certain effect to some order fulfillment, which are, to an extent, realized already in Q2, but with an increasing effect we at least foresee for Q3. Nevertheless, as we cannot predict that, we cannot give a clear guidance update, but hence, we maintain our current guidance as is.

Sure. Okay. But -- so what I'm trying to figure out is you have had a very strong first half at least compared to 2020, but the implicit guidance for second half is not in the same strong momentum. So have you seen a sharp decline in momentum already in Q3? Or is it more about a lack of visibility for the rest of the year?

More about lack of visibility for the rest of the year, how the aforementioned effects might have an impact on our supply ability.

Our next question comes from the line of Mads Quistgaard from Carnegie Investment Bank.

Two questions from my side. The first one is if you could put some more color on the growth performances across the segments. And the second question is in terms of this organic growth performance in the quarter, is it only driven by volume? Or have you done anything in terms of your pricing policy in the quarter?

Thank you, Mads, for your question. Basically, one can say we have been growing across all regions in a very strong stage. I mean you will hear more about this in our Q2 release. Hence, we will not be able to give you now today an update. This will come at September 1. And the other question which you highlight, it's basically, the effects is at the moment -- can you repeat that again maybe, the second part of the question? I'm not quite sure what I...

Yes, yes, sure. So my question was relating to the organic performance here. Is it driven by your volume? Or is it driven by -- have you changed any prices or something?

Well, at the moment, it's fully driven by volume. No price changes in an exceptional, let's say, extent, which has been imposed. But this is, so to say, a topic for the second half of the year.

[Operator Instructions] And we currently have no further questions registered. I will hand back to the speakers for any further remarks.

So I would say thank you for listening into the call. If there are no further questions, I wish you all a good summer. And hope to see you September 1 when we release the second quarter results and then add more detail at that point in time. Good afternoon.

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.