INTERIM REPORT, FOURTH QUARTER OF 2016

Fourth quarter (October – December 2016)

  • The operating result for the period improved to SEK -21.0 million (-32.8), an improvement of 36%
  • Loss after tax for the period improved with SEK 10.6 million, to SEK -23.0 million (-33.6), an improvement of 32%
  • Earnings per share SEK -0.39 (-0.80), an improvement of 51%
  • Cash flow before changes in working capital improved with SEK 19.3 million to -9.1 (-28.4), an improvement of 68% 
  • Net sales for the period SEK 68,5 million (78.9), a decrease of 13% compared to same period last year

January – December 2016

  • Operating result for the year was improved with 28% and amounted SEK -83.5 million (-116.6)
  • Result after tax for the period SEK -86.9 million (-119.3), an improvement of 27%
  • Earnings per share SEK -1.66 (-2.84)
  • Cash flow before changes in working capital increased with SEK 31.9 million to -67.5 (-99.4), an improvement of 32% 
  • Net sales decreased with 2% compared to 2015 and amounted to SEK 274.5 million (280.0)
     
Overview Oct-Dec Oct-Dec Full-Year Full-Year
SEK thousand 2016 2015 2016 2015
Net sales 68 453 78 873 274 549 279 997
Operating result -21 048 -32 789 -83 460 -116 637
Financial net and taxes -1 967 -830 -3 467 -2 671
Loss for the period -23 015 -33 619 -86 927 -119 308
Balance sheet total 251 284 205 332 251 284 205 332
Earnings per share, basic and diluted* -0.39 -0.8 -1.66 -2.84
Operating margin neg neg neg neg
Equity ratio 54% 50% 54% 50%
Capitalized development costs 15 763 5 161 35 009 18 244
Depreciation -6 170 -4 712 -19 402 -20 780

 
Significant events during the period October – December 2016

  • Vera&John is the first iGaming operator to offer Seqr as a payment tool to their customers. Initially customers can top up their accounts by using Seqr on their mobile. Moreover, new customers can register a gaming account at Vera&John in a very simple and fast way via the Seqr app.
  • Seqr launched a peer-to-peer money transfer solution that enables users to instantly transfer money to each other regardless of where they are in the world. The service is now being rolled out for SEQR users in 14 countries.
  • Seamless has obtained a Notice of Allowance (patent application no. 14/347,742) from the United States Patent and Trademark Office (USPTO) for its Seqr mobile payment solution. This implies that USPTO intends to announce the approval of the patent within three months following the payment of all fees.
  • Seqr was elected as the payment solution on the international fair Web Summit, a fair which gathers 15 000 companies and 7 000 CEO’s. The fair was held in Lisbon on November 7 – 10, and approximately 50 000 participants will pay with Seqr.
  • Seqr launches Contactless Payments and Gocardless Service in the UK. Seqr customers in the UK are now able to quickly and easily link their bank account to the Seqr app and make payments directly from their bank account.

Significant events after the close of the reporting period

  • Seamless arranged a fixed income debt financing amounting to app. 30 MSEK in January 2017

   
CEO´s COMMENT


Dear Shareholders,

We can now look back on a very active and successful year for Seamless. Our P/L improved with 27% and our EBITDA improved with 33%, from -95.8 MSEK to -64 MSEK. This positive trend is continuing.

Sales for the group were slightly down with a 2% decrease. This decrease stems in full from our business area E-products where we actively purged non profitable sales. This strategy was right as the net result for this subsidiary increased with 54% during the period.

Our business area Seamless Distribution Systems (SDS) increased sales with 6% to 96.0 MSEK and net earnings increased with 22% to 33.1 MSEK. The favorable development of the company continues with new additions to our product portfolio in addition to a strong order pipeline in our traditional product mix.

Our business area Seqr increased sales during 2016 with 28% to 9.4 MSEK and the net result improved with 35% to a loss of 78 MSEK. Transactions through the system increased with 75%. We see a continued accelerated growth going forward due to some very important developments during 2016. The most important of the new features is that Seqr users now can pay with Seqr all over the world where NFC enabled (contactless) card terminals exist. The development of this new technology meant that our acceptance network went from a few ten thousand stores to approximately 35 million Point-Of-Sales (POS) overnight. This development also removed Seqr’s largest bottleneck which has been our limited acceptance network, and it also means that Seqr doesn’t have to continue to negotiate bilateral agreements with merchants in order to grow the acceptance network. If you as a merchant accept MasterCard, you accept Seqr.

In another very important development we added real time transfers between users regardless of currency, global location, or nationality. This is a unique service to users that is not matched by any other industry participant.

In 2016 Seqr acquired the Norwegian company MeaWallet. MEA is a software company that has developed turn-key solutions for card issuers that wants to issue virtual cards through the mobile, just as Seqr has done.

This is a strategically important technology because we believe that in the future every existing, and new, card issuer in the world will embrace virtual card issuance through various electronic devices. Currently there are only a limited number of companies that can offer this technology which gives a MEA a favorable competitive environment.

Seqr is looking forward to a very interesting 2017 where general tech and market conditions will be favorable for Seqr. Seqr is now a truly global service which can be used in shops everywhere. It is therefore our expectation that we will see accelerating growth in both transactions and revenue in 2017.

Best Regards,

Peter Fredell 

    
This is the type of information that Seamless Distribution 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 9, 2017 at 08:50 a.m. (CET).

    
CONTACT DETAILS

For further information, please contact:
Peter Fredell, CEO
Peter.fredell@seamless.se
+46 8 564 878 00

     
ABOUT SEAMLESS

Seamless is one of the world’s largest suppliers of payment systems for mobile phones. Founded in 2001 and active in 39 countries, Seamless handles more than 5.3 billion transactions annually through 675 000 active sales outlets. Seamless has three main business areas including the SDS/transaction switch, the technology provider for the distribution of e-products and the mobile payment platform SEQR. Seamless shares are traded on NASDAQ OMX Stockholm www.seamless.se

The Seamless Interim Report 2016 for the period October– December 2016 has been approved for publication by the Board of Directors, by its decision on February 8, 2017. This financial report has not been subjected to a review by the Company’s auditors.

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