ADVA posts strongest Q1 results in company's history
ADVA (News - Alert) (ISIN: DE0005103006), a leading provider of open networking solutions for the delivery of cloud and mobile services, reported record financial results for Q1 2021 ended on March 31, 2021. The results have been prepared in accordance with International Financial Reporting Standards (IFRS).
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Q1 2021 financial summary1
1 Potential difference due to rounding
Q1 2021 IFRS financial results
Pro forma gross profit in Q1 2021 increased by 1.3%, reaching EUR 55.3 million (38.3% of revenues) compared to EUR 54.6 million (38.9% of revenues) in Q4 2020 and increased significantly by 30.9% compared to EUR 42.3 million reported in the year-ago quarter. Orders for network synchronization technology again developed positively in Q1. In addition, the customer mix contributed positively to the margin increase in the past quarter.
Pro forma operating income for Q1 2021 was EUR 12.9 million (8.9% of revenues) and decreased by 10.3% compared to EUR 14.3 million (10.2% of revenues) reported in Q4 2020. Compared to the year-ago quarter, pro forma operating income improved significantly by 869.6% from a loss of EUR 1.7 million (-1.3% of revenues). Hence the pro forma operating margin was at the top end of the guidance corridor of 7% to 9%. In addition to the higher gross profit, this substantial margin improvement is mainly due to improved operational expenditures.
Operating income for Q1 2021 of EUR 11.6 million decreased by 11.6% from EUR 13.1 million reported for Q4 2020 and significantly increased by 386.6% from a loss of EUR 4.0 million in the same year-ago quarter.
Net income reached EUR 11.2 million in Q1 2021, down by 15.3% from EUR 13.2 million in Q4 2020, and significantly up by 255.2% from a loss of EUR 7.2 million in Q1 2020.
The company's cash and cash equivalents totaled EUR 79.1 million, representing an increase of EUR 14.2 million compared to EUR 64.9 million at the end of Q4 2020. Year-over-year cash and cash equivalents substantially increased by EUR 26.3 million from EUR 52.7 million at the end of Q1 2020. The higher cash balance is mainly the result of the improved profitability and lower capital expenditures, particularly compared to the prior-year quarter.
Consequently, net debt in Q1 2021 strongly decreased by EUR 14.9 million to EUR 10.6 million from EUR 25.5 million at the end of Q4 2020 and improved significantly by EUR 57.1 million compared to Q1 2020 (EUR 67.7 million).
Net working capital at quarter-end was EUR 125.8 million and decreased by EUR 4.1 million compared to EUR 129.9 million at the end of Q4 2020.
"Our transformation strategy combined with strict cost control showed the expected effects and have opened the door to sustainably higher margin potential. Net income of EUR 11.2 million is already over 50% of the result generated in 2020. With that, we have made an excellent start to the new financial year," said Uli Dopfer, CFO, ADVA. "We were able to further increase cash and reduce net debt to EUR 10.6 million. This further underlines our strong financial position."
Financial outlook 2021
The company will publish its financial results for Q2 2021 on July 22, 2021.
Conference call details
A corresponding presentation is available on ADVA's website:
The complete quarterly statement 3M (News - Alert) 2021 (January - March) is available as a PDF:
A replay of the call will be available here:
Use of pro forma financial information
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