Quarterly Report April - June 2013

Stockholm, 2013-08-20 07:50 CEST (GLOBE NEWSWIRE) --  

Second Quarter 2013 — Summary

Lower revenues in this quarter from our Transaction Switch and Distribution business, resulted in a 26% decrease in overall revenues. Revenues from the Transaction Switch segments are lumpy and traditionally vary from quarter to quarter. The decrease in sales for Distribution was largely due to a decline in the market generally for the Distribution business area in Latvia. However, income from Distribution will in Q3 increase given that Seamless, as of July 1, is active in the distribution of electronic prepaid cards in the Swedish market. Deals already signed will mean an increase in sales by approximately SEK 100 million annually. Seamless does not have as a policy to give guidelines about quarterly figures, but given the impact of the new deals signed in the Swedish market for Distribution, Seamless estimates that the net sales will increase with around 100% in Q3 compared to Q2, to around SEK 50 million.

     Sales for our SEQR mobile payments solution increased by 58% compared with the previous quarter. In less than one year, our SEQR mobile payments service has come available to consumers all across Sweden. SEQR has also become technology independent where consumers can now choose to pay either with QR code or NFC. During the quarter, agreements were signed with a number of international companies, and consumers across Europe will have the opportunity to pay with SEQR during the second half of 2013.

  • Net Sales decreased by 26% to 26 424 t (35 658) 
  • Operating profit amounted to -20 906 t (-2 729)
  • Operating margin remained negative Neg (Neg)
  • Profit after tax -17 480 t (-2 167)
  • Earnings per share, basic and diluted -0,53 SEK (-0,09)

CEO's Comments 

Seamless continued to grow strongly in the second quarter. In less than one year since its launch, our mobile payment service, SEQR, has become Europe's most widely accepted solution for mobile payments, based on strong interest from merchants in Sweden.  Currently, about 3,500 stores in Sweden have signed an agreement to accept payments from consumers using our SEQR service. As evidence of our compelling offering, SEQR sales rose by 58% over the previous quarter. We have just commenced the roll out of SEQR in Romania, where we have seen a strong start.

We continue to demonstrate the scalability of our SEQR offering — with no investment in setup and very low ongoing costs for merchants.  Put simply, all it takes is a sticker on a checkout register, after which merchants can accept payments via consumers' mobiles.  It took, for example, only 13 days to install SEQR in all Axfood's approximately 450 Swedish stores (Hemköp, Willys, Tempo and PrisXtra). With the same speed, this quarter we also started the rollout of our SEQR payments solution for McDonald's, Burger King, Västtrafik, Ur & Penn and Euronics, to name a few.

I regularly get asked: "If it's so easy and convenient to make payments with SEQR, and merchants pay only half the fees of other payment cards, and there is virtually no need for investment from the merchant — why are not more of the major chains adopting SEQR?"

My answer to this question is: "Look at our rate of expansion, which is, perhaps, the world's fastest. At the same time, we need to keep in mind that large retail companies have decision processes that require time. We are seldom rejected by any chain.  Those we have met are evaluating SEQR, but we cannot yet disclose their names.  Remember, SEQR was only recently (November 2012 — less than one year ago) rolled out in a production environment."

In the Swedish market, we have achieved a market penetration with stores that make it economically attractive to start communicating directly with consumers. In addition to SEQR being a simple, convenient, fast and safe payment alternative, our focus is to also ensure the solution is financially attractive for the consumer. The SEQR application will continuously provide consumers new offerings, and our goal is for the average consumer to save at least 1,500 crowns per annum using SEQR, without incurring any upfront costs.

During the quarter, we started our international expansion in earnest.  I believe this is where there is especially large potential. Seamless is already an international company - we have over ten years experience in international business with our solution for refills of prepaid cards for mobile phones. 

Interest in SEQR among international companies is proving greater than I expected. During the quarter, we established ourselves in Romania, Malaysia, Kuwait, Norway and Finland. Major participants in these markets approached us as they realized the profit potential from using SEQR.  Our international expansion is progressing according to our geographic strategy and, at the same time, our scalable products give us the opportunity to add more countries as requests are received.

During the quarter, we started to build an international organization to drive our geographic expansion. In contrast to Sweden, banks in other countries are a driving force for our business, as SEQR reduces the very costly handling of cash.  In many parts of the world, the proportion of cash used for payments is between 75 and 50 percent (compared with Sweden, where cash is below 25 percent). In these economies, the incentive to move directly to mobile payments — avoiding high card credit payment charges, is even greater than in Sweden.

I agree with many observers who believe that the Seamless SEQR is the best technology in the world for mobile payments. In addition, our proven and stable transaction switch - which handles more than 3 billion transactions annually — is the technology at the core of SEQR. It is not difficult to see why the interest in our solution is so great.

The strength of our SEQR solution is confirmed by the fact that we have signed agreements with international giants like Microsoft and Celcom, who want to incorporate our technology into their own solutions.

During this reporting period, even distribution of prepaid phone time - so called, ‘top-ups' - grew rapidly. Turnover year on year for this segment of our business roughly doubled. We signed important contracts with customers such as Axfood. Distribution is a strategically important area for Seamless because we can offer merchants an attractive turnkey solution where the same checkout integration can accept SEQR payments and also sell various electronic products such as prepaid phone top-ups.

During the remainder of 2013, we will continue to focus on the opportunities we have for rapid expansion. We are building a very good base for future revenue. Seamless, with SEQR, has a unique opportunity that we plan to maximize.

The Group


Seamless sales decreased by 26 percent in the second quarter to SEK 26 424 (35 658) t. Revenues by business area were: Transactions switch with 34 (40) percent, Distribution with 58 (60) percent, and SEQR with 8 (0) percent. Previously the business area SEQR was included in business area Transaction Switch, but as of January 1, 2013 SEQR is recognized as a separate business. 


•           Group operating profits amounted to SEK -20 906 (-2 729) t.

•           Net financial items amounted to SEK 16 (-65) t.

•           Earnings per share amounted to SEK -0,53 (-0,09) SEK for the quarter.


The number of employees was 120 (45) at the end of the period. In addition, Seamless has approximately 35 consultants primarily in India, Ghana, and Pakistan. The headcount is unchanged from the previous quarter.


During the quarter, investments were made at a value of SEK 11 245 (3 285) t. Product development costs have been capitalized at a value of SEK 6 530 (3 209) t, while depreciation was SEK -2 135 (-487) t.

Cash Flow and Financial Position

Cash flow from operating activities amounted to SEK -26 633 (-8 528) t for the second quarter. Cash and cash equivalents amounted to SEK 44 092 (10 737) t. Given the nature of Seamless' business and it's expansion plans internationally, the company has been approached by several interesting potential strategic partners consisting of international retailers and large corporations, as well as institutional investors — with both groups interested in investing in Seamless. Something, which would assist in further increasing the market presence of SEQR. These two groups will help in leveraging Seamless' technological advantage — either due to them having a strong market presence in key markets or by possessing large contact networks — and both groups should satisfy such criteria both in respect to their contribution to industrial aspects of SEQR as well as through financial investments in Seamless as a company.

The Group has interest-bearing liabilities in the form of equipment leasing amounting to SEK -2 868 (-478) t, divided accordingly into non-current liabilities of SEK -1 582 (-289) t and current liabilities of SEK -1 286 (-189) t. The Company has no interest-bearing liabilities to banks or other financial institutions.

In addition, the company has an outstanding liability to the sellers of Lettel, and amortization of hardware for internal use as well as hardware resold to customers. Otherwise, the Group has no borrowings. 

About Seamless

Seamless is one of the world's leading providers of mobile phone payment systems and handles more than 3.1 billion transactions each year via 525,000 active sales outlets. Combined with more than eleven years' experience and a presence in about 30 countries, this gives Seamless a strong position in the mobile phone payment market. It is the company's unique transaction platform that makes SEQR possible. Seamless is traded on Nasdaq OMX Stockholm, under the SEAM ticker.

About Us

Founded in 2001 (and previously named Seamless Distribution), Invuo Technologies is a mobile payments technology company, which provides innovative B2B mobile payment services and electronic top-up systems for the financial industry, mobile operators and retailers. Our goal is to maximise value for shareholders while making positive contributions to the technology sphere.