04/28/2021 | Press release | Archived content
Wellington Drive Technologies (Wellington) is today announcing its unaudited trading results for the three months ending 31 March 2021 (Q1 2021) and updating its guidance for Q2 2021 and for the full year.
Q1 EBIT of NZ$0.5m was in line with previous guidance and confirms the company's return to profitability after the difficult, COVID-affected trading in 2020. Over the last quarter, Wellington has experienced strong forward orders for both its Wellington Connect™ IoT products and its ECR® 2 motor range.
Wellington Chairman and acting CEO Gottfried Pausch commented:
"Wellington has had a great quarter with strong trading, a big increase in our forward order position and a successful reception for the first two of the four new products we are launching this year. We are now expecting record US$ revenue for the year. Even more significantly, our core growth products - our Connect IoT solution and our ECR 2 motor series - are expected to grow in US$ revenue terms by 15-20% over our previous record performance in 2019 -prior to the COVID impacted downturn in 2020. Wellington is not just recovering - we believe we are back onto a solid medium-term growth path, driven by market share gains from our core growth products."
"2021 is expected to be a pivotal year for Wellington's medium-term strategy to lift growth and improve profitability. The successful launch of our 4 new products will allow us to take our Connect IoT solution into new, higher-value market segments as well as positioning us for growth with existing IoT customers via retrofit and upgrade sales cycles. While our forecast includes some small contributions from these products in 2021 - they will mainly be part of our 2022 and beyond performance."
"2021 will also see Wellington appoint a new CEO whose main task will be to build on the platform established by Greg Allen and guide the Company through its next phase of growth. Over the last few months Wellington's board has conducted a detailed search process for a successor for Greg and we have been very impressed with the quality of candidates we have interviewed. We are now closing in on a final decision and expect to be able to make an announcement in early May."
Details of the Q1 performance are shown in the table below. The result is consistent with previous guidance and is a continuation of the improvement in trading results since late 2020.
Financial Metrics
Other achievements
2021 updated guidance
Customer demand continues to be strong and Wellington's current US dollar revenue forecast for 2021 is in the range US$41m to US$46m compared to previous guidance of US$40m - US$43m. The top end of that range would be approximately 90% ahead of 2020 and 10% above 2019 - and would be a new US dollar revenue record for Wellington. This forecast would see Connect IoT and ECR 2 motor revenue 20% above the level achieved in 2019, with this offset by a decline in revenue from our legacy motor series.
Q2 2021 revenue is forecast to be approximately US$12-14m compared to US$2.9m in Q2 2020 which was a quarter that was significantly impacted by Covid19.
With 2021 US dollar revenue in this range, the Company is targeting EBITDA earnings in the range of $2.5m to $3m which would deliver a pre-tax profit of around breakeven. This EBITDA guidance range is unchanged as the Company is seeing cost and supply chain pressures. Forecasts have been prepared at a 0.70 US$/NZ$ exchange rate and are sensitive to the US$/NZ$ exchange rate (i.e. each 1c movement has an estimated $0.2m impact on EBITDA). The current global component and commodity shortage situation could impact the Company's ongoing ability to deliver its revenue forecast. The Company is working closely with its supply base to mitigate this risk, with actions that include lengthening its supply forecast window and seeking alternate sources for some commodities.
EBITDA1 (i.e. Earnings before interest, taxation, depreciation, amortisation and impairment) is a non- GAAP earnings figure that equity analysts tend to focus on for comparable company performance analysis. Wellington considers that it is a useful financial indicator because it avoids the distortions caused by differences in amortisation and impairment policies.
Contact:
Gottfried Pausch
Chief Executive Officer
Phone +64 21 258-4054
Howard Milliner
Chief Financial Officer
+64 27 587-0455
WT 9535