ADVA announces preliminary results for fiscal year 2022
Feb 21, 2023
- Annual revenues up by 18% to €712.1m
- Annual pro forma EBIT down by 7.8% to €50.4m (7.1% of revenues)
ADVA, a leading provider of open networking solutions for the delivery of cloud and mobile services, reported preliminary, unaudited financial results for Q4 2022 and full year 2022 ended on December 31, 2022. The results have been prepared in accordance with International Financial Reporting Standards (IFRS). The final audited annual financial statements, consolidated financial statements and annual report 2022 will be published on March 09, 2023.
Q4 2022 IFRS financial results
Revenues in Q4 2022 reached EUR 195.7 million, up by 9.0% from EUR 179.6 million in Q3 2022, also up by 24.1% compared to EUR 157.7 million in Q4 2021. This was due, in particular, to very high demand from telecommunications service providers.
Pro forma gross profit in Q4 2022 increased by 17.4%, reaching EUR 71.4 million (36.5% of revenues) compared to EUR 60.9 million (33.9% of revenues) in Q3 2022 and increased by 27.4% compared to EUR 56.1 million (35.6% of revenues) reported in Q4 2021. The margin increase was due to a reduction in freight costs and expedited fees associated with the semiconductor crisis.
Pro forma EBIT for Q4 2022 was EUR 24.4 million (12.5% of revenues) and increased by 108.0% compared to EUR 11.7 million (6.5% of revenues) reported in Q3 2022. Compared to Q4 2021, pro forma EBIT improved by 69.9% from EUR 14.4 million (9.1% of revenues).
Operating income for Q4 2022 of EUR 14.8 million increased from an operating loss of EUR 7.3 million reported for Q3 2022 and increased by 32.3% from EUR 11.2 million in Q4 2021. The year-ago quarter was impacted by higher purchasing costs, and the previous quarter was impacted by both higher purchasing costs and expenses related to the business combination with Adtran.
Net income reached EUR 3.8 million in Q4 2022 and increased by 329.2% from EUR 0.9 million in Q3 2022 but decreased by 78.4% from EUR 17.5 million in Q4 2021.
The company’s cash and cash equivalents totaled EUR 58.4 million, compared to EUR 61.4 million at the end of Q3 2022 or EUR 109.0 million at the end of Q4 2021. Net debt at the end of Q4 2022 stood at EUR 19.2 million compared to EUR 17.4 million at the end of Q3 2022 or a net cash position of EUR 36.2 million at the end of Q4 2021. The comparatively high level of net debt is attributable to higher debt-financed inventories.
Full year 2022 IFRS financial results
For the full year 2022, revenues increased by 18.0%, from EUR 603.3 million in 2021 to EUR 712.1 million. Revenues were within the guidance corridor of between EUR 680 million and 730 million. Despite the continuing challenges posed by global supply bottlenecks and material shortages in the semiconductor industry, ADVA substantially increased its revenues. Demand notably increased in the telecommunications service provider segment.
Pro forma gross profit increased 8.7% from EUR 220.8 million (36.6%) in 2021 to EUR 240.0 million (33.7%) in 2022. Full year gross margins were impacted by increased freight costs and expedited fees associated with the semiconductor crisis.
Pro forma EBIT for 2022 decreased by 7.8%, from 54.6 million or 9.1% of revenues in 2021 to EUR 50.4 million or 7.1% of revenues. Pro forma EBIT was within the guidance corridor of between 5.0% and 9.0%.
Operating income decreased by 60.0%, from EUR 45.3 million in 2021 to EUR 18.1 million in 2022. The results for 2022 were impacted by higher costs resulting from the supply chain crisis and expenses related to the business combination with Adtran.
Consequently, net income decreased from EUR 59.2 million in 2021 by 69.4% to EUR 18.1 million in 2022.
Basic earnings per share in 2022 amounted to EUR 0.35 compared to EUR 1.17 in 2021. Diluted earnings per share in 2022 also amounted to EUR 0.35 compared to diluted earnings per share of EUR 1.15 in 2021.
“We’re proud to report a highly successful fiscal year, where we achieved the highest revenues in our company’s history. Despite ongoing challenges caused by the semiconductor crisis, bottlenecks in the supply chains, inflation and fears of recession, we were able to stay on course, comprehensively serving and supporting our customers with innovative communications technology, software and services,” said Christoph Glingener, CEO of ADVA. “Looking forward, we are optimistic about future growth prospects. We have a strong pipeline of new products and services and are well-positioned to benefit from the major trends in our industry. Our capabilities in software and services are strengthening, delivering increasing value to our customers and partners. Together with Adtran, we will continue to focus on cost management and operational efficiency while investing in key areas to enter new growth markets.“
“Today, we report financial results of a strong 2022 with revenue growth of 18% year-over-year. Considering the various macroeconomic challenges and ongoing constraints in global supply chains, we’re very pleased with our profitability, which came in as expected,” commented Uli Dopfer, CFO of ADVA. "We’re optimistic that global supply chains will ease during this year and that cash generation will improve. We also expect to benefit from our business combination with Adtran and see first revenue synergies in 2023. We remain committed to increasing software and service revenues, which will drive continued margins improvement.”
The company will publish its financial results for Q1 2023 on 9 May 2023.
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