Quarterly report July 1 - September 30, 2014

Third Quarter 2014 — Summary

The third quarter continued to be eventful and can best be summarized in the following points:

  • The acquisition of Ingram Micro's business for prepaid mobile services in Sweden and Denmark, with consequent integrations to major retailers in these countries. It also opens up Denmark as a new market. Both for prepaid services as well as for SEQR
  • Continued interest in SEQR, both amongst retailers as well as consumers, resulting in a turnover increase of over 20% compared to the previous quarter
  • High tempo in the continued international expansion of SEQR during the quarter, where agreements have been signed with, amongst others, Colruyt Group in Belgium and Clas Ohlson in Sweden, something that even further confirms SEQR's market-leading position
  • More countries gets added - Portugal will be the biggest launch to date, with over 500 stores under contract at the date of launch.
Net sales amounted to SEK 42,662 thousand (56,095)
Operating Profit amounted to SEK -40,738 thousand (-23,016)
The Operating Margin remained negative Neg (Neg)
Financial results after tax amounted to   SEK -40,794 thousand (-19,539)
Earnings per share before and after dilution SEK -0.97 (-0.59)

A few words from the CEO 

A new quarter has concluded, and we are delighted to note that this has been yet another successful one for Seamless and our mobile payment service, SEQR. The increase in revenues for SEQR that we saw in the third quarter has continued, and during the period July to September, has increased by over 20%. The increase is based on a continued positive trend when in terms of the usage and transactions made with the SEQR app, but it is also gratifying that other revenue streams such as advertising income and fees for promotions and digital coupons from merchants and producers have now begun to be activated and have contributed to the growth in revenue. This illustrates a breadth of SEQR's business model which will be important in future work with the payment service. 

At the end of September, the acquisition of Ingram Micro's distribution of prepaid mobile services was also completed. For us at Seamless, this not only means that our revenues are estimated to double, but what is even more important is that the opportunities are opened up in yet another new market, in this case Denmark, and that an integration with major retail companies in both Sweden and Denmark, which we previously had on our client list, is underway. Our hope and expectation is that this will also be of benefit for SEQR as the integration will make it easier to launch SEQR in the future in more retail chains.

In September, it also became clear that Portugal will be the next market where SEQR is rolled out. In terms of the number of merchants who are participating from the very beginning, this is our largest launch to date. Over 500 outlets, including McDonald's, are ready for the roll out later this fall. Portugal thus becomes the third country where consumers will be able to connect SEQR directly to their bank account. This has been made possible by the implementation of SEPA, and we also see that this contributes very positively in terms of the pace of our European expansion.

Since SEQR has been launched, our working relationship with large retail companies has been one of the most important success factors. We are therefore very pleased to have established a relationship with the Colruyt Group which has a major presence in Belgium, with sales of over EUR 8.7 billion and over 500 stores in all major cities and towns, as well as a major online shopping presence, as a cooperative partner. For us, it shows that the proven value that SEQR has to offer both merchants and consumers is an important factor in linking up with strategic and major partners. What is particularly pleasing is that the Colruyt Group has highlighted our speed and ability to smoothly adapt SEQR as a strong argument in choosing us. Our open platform and independence create opportunities both for us and for our partners.

Even in our home market, Sweden, it has been intense quarter. Among new partnerships, for example, include Europe's largest provider of student IDs/discount cards, Mecenat. Over half a million students in the country's universities and other institutions of higher education can now move their Mecenat card into SEQR and receive student-targeted offers directly via the app.

We are also proud that one of Sweden's classic and strongest brands, the retail giant Clas Ohlson, has chosen SEQR. They work strategically to digitize the shopping experience and regard the partnership with SEQR and Seamless as a key part of that effort.

Also in our business environment, the focus is on mobile payments, especially due to Apple's introduction of Apple Pay. We at Seamless welcome this development and regard it as a positive sign that major players are involved in the industry, something which will result in that more and more consumers are becoming aware of what mobile payment services can mean for them. In our contacts with both merchants and consumers, we have identified some prerequisites necessary to eventually become a successful participant. There must be an incentive for both merchants and consumers; the system must operate independent of the platform; and the users must receive added value for paying by cellphone/smartphone. SEQR's service makes all this possible while it provides us with a sense of security and a head start, as more and more players enter into the market.

SEQR is the only mobile payment service that offers a comprehensive solution, and provides clear benefits for both consumers and merchants. There is a great advantage in that the service works with any operating system and smartphone, and that it is compatible with both QR codes and NFC. All the time, additional new retail outlets are added where SEQR can be used, and day by day we draw customers away from our potential competitors. We have rolled out a recognized solution that customers know works well, and we are attracting the largest chains in the markets where we are established. It helps us in our continued efforts forward. 

Peter Fredell

The Group


Seamless' revenues decreased during the third quarter by 24 percent, to SEK 42,662 thousand (56,095). The sales are distributed between the various business segments, with 16 (19) percent from the Transaction Switch business segment, with 79 percent (76) from the Distribution business segment, and 5 (5) percent from the SEQR business segment. 

Financial Results

•           The consolidated operating loss amounted to SEK -40,738 thousand (-23,016) in the third quarter.

•           Net losses from financial items for the third quarter amounted to SEK -27 thousand (gain of 210).

•           Earnings per share amounted to SEK -0.97 (-0.59) for the quarter.


We had a total of 160 (137) employees at conclusion of the quarter. In addition to this, Seamless has retained approximately 35 consultants — primarily in India, Ghana and Pakistan.

During the quarter, it was decided that the Swedish part of the Seamless Development Department will be phased out. The development henceforth will be conducted primarily from Poland, where at the present time Seamless has 29 people on site. 

The Company regularly reviews its business activities and operations with a focus on increasing productivity per paid hour. The planned closure of the Swedish development activities is therefore a natural step to take, as the cost per developed functionality is significantly lower in Poland than in Sweden, while the core of SEQR is fully developed and will not require as much development hours in the future.  In total, this concerns about twenty people and gross savings is estimated, from 2015 onwards, to be about SEK 28 million annually. The bulk of the expenses in Sweden are thereby moved from software development to marketing and sales.


During the quarter, investments have been made in the total amount of SEK 10,998 thousand (3,754). Product development costs have been capitalized in the amount of SEK 5,587 thousand (3,426), while depreciation taken amounted to SEK -5,014 thousand (-2,572). 

Cash Flow and Financial Position

For the third quarter, the cash flow from operating activities amounted to SEK -35,627 thousand (-22,022). Bank deposits and cash on hand at the end of the quarter amounted to SEK 175,050 thousand (14,213). 

The Group has interest-bearing liabilities in the form of leases for hardware amounting to SEK -2,396 thousand (-3,494), divided into long-term debt of SEK -979 thousand (-1,883) and short-term debt of SEK -1,417 thousand (-1,611). The Company has no interest-bearing liabilities to banks or other credit institutions. 

Other than the above, the Group has no borrowings. Seamless continues to maintain a strong financial position with an equity ratio of 85 percent (63).

It is the Board's and management's view that the financial position and liquidity are sufficient to fund operations for the next twelve months.

Parent company

The parent company's net sales for the quarter amounted to SEK 5,393 (-15) thousand and net financial results amounted to a profit of SEK 275 thousand (loss of -5,497). Net financial gains/losses in the parent company was SEK 103 thousand (0) and bank deposits/cash on hand amounted to SEK 150,482 thousand (6,062) at the end of the quarter. The parent company had 5 (4) employees at end of the quarter. 

For more information:
Daniel Hilmgård, CFO +46 8 564 878 00, daniel.hilmgard@seamless.se
Peter Fredell, CEO Seamless, +46 8 564 878 00, peter.fredell@seamless.se

This information is such that Seamless Distribution AB (publ) must publish in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on November 11th, 2014 at 7:50 a.m.

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.