GROSS PROFIT GROWTH OF 24.5 PERCENT AND SUBSTANTIALLY IMPROVED EBIT

This is a translation of the Swedish interim report. If there should be any discrepancies, the Swedish language version governs.

THIRD QUARTER, JULY – SEPTEMBER 2018 

• Net sales increased by 22.8% to MSEK 56.0 (45.6)
• Gross profit increased by 24.5% to MSEK 41.2 (33.1)
• EBIT was MSEK -3.4 (-8.6)
• Earnings after tax was MSEK -3.6 (-8.3)
• Earnings per share was, basic SEK -0.51 (-1.16), diluted SEK -0.50 (-1.14)

NINE MONTHS, JANUARY – SEPTEMBER 2018 

• Net sales increased by 17.7% to MSEK 178.5 (151.7)
• Gross profit increased by 20.3% to MSEK 132.7 (110.3)
• EBIT was MSEK -9.6 (-20.7)
• Earnings after tax was MSEK -11.0 (-21.3)
• Earnings per share was, basic SEK -1.54 (-2.98), diluted SEK -1.51 (-2.93)

IMPORTANT EVENTS 

DURING THE PERIOD

• San Diego based video-game developer Psyonix selects Nepa as its provider of ongoing Brand and Advertisement measurement.
• Nepa expands into global sports and signs U.S. based industry veteran Steve Livingstone to lead change.
• Nepa’s new product CX Tracker attracts several new clients, including European specialty retailer Plantagen.

AFTER THE PERIOD ENDED

• Dressmann, Nordic menswear fashion chain, chooses Nepa’s CX Tracker for Customer Experience measurement.

A WORD FROM OUR CEO 

I am very proud of Nepa’s third quarter results – we have posted continued strong growth while executing on our strategy of scalability, profitability and expansion. In the third quarter, gross profit grew by 24.5 percent. This takes our 2018 YTD gross profit growth to 20.3 percent - a substantial increase from 14.3 percent in the same period in the previous year (Q1-Q3 2017). EBIT was MSEK -3.4 in the third quarter, an improvement by MSEK 5.2 compared to the same quarter in 2017.

Our larger markets can be divided into three segments:

1.    Home market: Sweden – Continued profitable growth
Sweden’s success has been fuelled by our Customer Experience product suite, we have won multiple new clients such as Plantagen and Dressmann. Since the launch of CX Tracker in March the Swedish market continues to demonstrate high demand for this product.  We are expecting rapid growth that will further strengthen our net margins.

2.    Established markets: Finland and UK – fast, profitable growth
In the UK, the third quarter was especially strong posting 2018 YTD gross profit growth of 172 percent compared to the same period last year. This is a milestone for Nepa that proves our international competitiveness.  Since late 2016 the UK management team and consumer packaged goods focus has accelerated growth and the UK business has become profitable. In the third quarter, Liz Earle, a global skincare manufacturer become a Nepa client.

3.    Investment market: USA - rapid growth market entry, investment phase
In the third quarter we launched Nepa’s Customer Experience offer tailored towards sports companies. It has been very well received and created a strong pipeline in the USA and globally. Expansion of existing client relationships has contributed to rapid growth in the US business.

Nepa’s long term focus on increasing product scalability has resulted in positive effects on profitability. The relationship between personnel costs and growth during the past 15 months illustrates this. Gross profit increased by 24.5 percent in the third quarter while personnel costs grew by 6.6 percent, so our net margin continues to grow.

Fredrik Östgren
CEO

Fredrik Östgren
CEO
Maria Skolgata 83 118 53
Stockholm, Sweden
+46 733 345 069 fredrik.ostgren@nepa.com

P-O Westerlund
Deputy CEO, CFO
Maria Skolgata 83 118 53
Stockholm, Sweden+46 706 404 824 p-o.westerlund@nepa.com

This is a translation of the Swedish interim report. If there should be any discrepancies, the Swedish language version governs. The Swedish version is information that Nepa AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on November 23, 2018.

Headquartered in Stockholm and with local presence in Helsinki, Oslo, Copenhagen, London, Mumbai, New York, Miami and Denver, we help some of the world's most reputable brands in more than 50 countries to optimize customer experience investments and get more effect out of their marketing and sales. Nepa has been awarded DI Gasell's award for organic fast-growing companies in 6 of 7 years since 2011. The company is publicly traded at the Nasdaq First North Stockholm stock exchange since 2016. Erik Penser Bank is Nepa’s Certified Adviser.

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