INTERIM REPORT, FOURTH QUARTER OF 2017
October– December 2017
The numbers refer to the remaining operations
- Q4 marked the final period of major restructuring, “cleaning up”, and legacy issue resolution, initiated in July 2017.
- Net sales for the period SEK 29 million (34)
- Operating result for the period after nonrecurring items attributable to restructuring SEK -15 million
- Operating loss for the period SEK -13,7 million (-4,1)
- Loss after tax for the period SEK -27 million (-6)
- Earnings per share SEK -0,46 (-0.10)
- Cash flow before changes in working capital for the period SEK -46,1 million (-9,1)
Full year 2017 – Highlights
The numbers refer to the remaining operations
- Net sales for the period SEK 127 million (141)
- Operating result for the period after nonrecurring items attributable to restructuring SEK -51 million
- Operating loss for the period SEK -72,2 million (-31)
- Loss after tax for the period SEK -118 million (-35)
- Earnings per share SEK -2,01 (-0,67)
- Cash flow before changes in working capital for the period SEK -137 million (-67,4)
- The Board of Directors proposes that the Annual General Meeting not pay any dividend for the financial year 2017
|All numbers and key figures are the remaining operation|
|Net sales||29 161||34 064||127 157||141 533|
|Operating result without non-recurring items attributable to restructuring||-15 270||-8 137||-51 257||-35 391|
|Operating result||-13 676||-4 137||-72 231||-31 391|
|Financial net and taxes||-13 520||-1 965||-46 085||-3 396|
|Result from divested operations and operations under sale||-29 453||-16 915||50 590||-52 141|
|Loss for the period||-27 359||-6 102||-118 316||-34 787|
|Balance sheet total||163 189||251 284||163 189||251 284|
|Earnings per share, basic and diluted*||-0,46||-0,10||-2,01||-0,67|
|Capitalized development costs||2 671||-||4 593||-|
|Depreciation/Write down||124||-680||-14 037||-2 644|
|Non-reccuring items||1 594||4 000||-20 974||4 000|
The fourth quarter of 2017 saw the completion of key strategic objectives, as well as critical financing and product success factors. The transformation of the company into a pure B2B enterprise was achieved via the agreement to sell SEQR. Additionally, with the support of our largest shareholders, Invuo was able to raise sufficient financing via the December rights issue, for us to meet key operational objectives, as well as discharge ongoing legacy costs. During the fourth quarter, eProducts continued its progress to moving toward breakeven. Critically, MeaWallet developed strong momentum going into year-end, and signed a number of breakthrough orders, positioning the company strongly for a significant increase in signed orders in 2018.
Invuo ended 2017 as a much smaller enterprise than at the beginning of the year. The key focus going forward is 'profitable traction'. For MeaWallet, the mobile payments market developed slowly in Europe until 2017, and Europe now has to catch up with ‘developing’ nations like Kenya, China and India. Whilst some value chains are well established, European financial enterprises are now making strategic choices as to how to meet the threat of disintermediation by companies like Apple. MeaWallet achieved 15% market share in 2017 in Europe, and we aim to at least maintain that in 2018 in a rapidly growing market. eProducts has some excellent products and markets, but in the core Swedish market, all suppliers have suffered multi-year losses due to unsustainable competitive behaviors. eProducts is on a clear path to sustainable profitability, and a focus on profitable growth opportunities, whilst aggressively withdrawing from loss-making activities and clients. Our vendors in Sweden are also enforcing behavior change in the market, and we believe a superior standing with our suppliers will give us opportunities going forward.
Our keys goals for 2018 are to sign profitable orders in both divisions, and solidify the company’s financial position via internal efforts.
Significant events during the quarter
- MeaWallet signs new agreement with Norwegian bank for delivery of the Mea Token Platform service. For MeaWallet as a Norwegian company, an agreement with a domestic bank is an enormously important validation of the company's offer and an important reference because MeaWallet builds a strong pipeline of international customers.
- Objective of patent infringement is written off. The reason behind the dismissal of the case is that the parties have reached a financial settlement in favour of Invuo.
- At the Extraordinary General Meeting on November 24, decisions were made on the following:
- Tomas Jalling was appointed new Chairman of the Board.
- change of company name to Invuo Technologies AB and thus amendment of the Articles of Association new issue of shares with preferential rights for existing shareholders.
- Invuo appoints John Longhurst as CEO.
- MeaWallet A/S has signed an agreement with First Investment Bank AD in Bulgaria to deliver the Mea Token platform for implementation of the second technology level gene. The contract's order value corresponds to 300,000 Euro over a five-year period.
- MeaWallet A/S has signed an agreement with Spanish credit institution Oney España for delivery of MeaWallet's proprietary technology for contactless card payments. The contract's order value is within the normal range of MeaWallet deliveries to single card networks, ie. between 200,000 and 350,000 Euro over a three-year period.
- The completed rights issue shows that the total number of shares will increase by 23,319,650 shares. Thus, the rights issue has been subscribed to 39.70 percent. Through the rights issue, Invuo will be supplied approximately SEK 42 million before deduction of issue costs. The rights issue has increased the number of shares and votes in Invuo to 82 084 955.
- Seamless Distribution AB has On 20 December changed its trade name to Invuo Technologies AB by registration of new articles of association.
- At the end of the year, the subsidiary SEQR was sold to Glase FinTech AB "Glase", which acquired all shares in SEQR Group AB (and all its subsidiaries) for a cash consideration of SEK 8 million. The sale of SEQR confirms the new strategic focus that was decided at the Extraordinary General Meeting in November 2017 and means that Invuo focuses entirely on B2B. By selling SEQR, instead of decommissioning the business area, Invuo expects a cost savings of approximately MSEK 20 and the heavy monthly net cash burn will be stopped.
- MeaWallet A/S has signed an agreement with Swedbank Support OÜ for delivery of MeaWallet's non-contact card payment technology in the Latvian, Lithuanian and Estonian markets. The contract's order value is between 500,000 and 600,000 Euro over a three-year period.
- Invuo supplied SDS an unconditional shareholder contribution of SEK 15M through write-down of existing loans from SEK 50m to SEK 35m. The interest rate on the loan is increased from 8 percent to 10 percent per annum.
Significant events after the end of the reporting period
- As a result of the completion of the divestment of SEQR, on January 10, the new operational management was announced, which will be responsible for implementing Invuo's B2B strategy. The new management, under John Longhurst, CEO, consists of Martin Schedin and Lars Sandtorv (Head of MeaWallet), and Jonas Lundgren (Head of eProducts).
- MeaWallet A/S, has signed an agreement with a major bank in the Nordic region for delivery of MeaWallet’s technology for converged wallet, i.e. mobile contactless payments to that specific Nordic country. The contract value is approximately €700,000.
This is the type of information that Invuo Technologies AB (publ) is required to disclose pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on February 15, 2018 at 08:50 a.m. (CET).
For further information, please contact:
Martin Schedin, CFO/IR
email@example.com +46 8 564 878 00
Invuo has two main business areas: Mobile payment solutions provided under the trademarks of MeaWallet™ and distribution of eProducts. www.Invuo.com
Invuo’s interim report for the period October – December 2017 has been approved for publication by the Board of Directors, by its decision on February 14, 2018. This financial report has not been subjected to a review by the Company’s auditors.