Year-end report 2020 with interim report Q4
October - December 2020
Net sales increased by 26% Y-O-Y adjusted for exchange rate fluctuations. Consolidated net sales ended at 46,693 (SEK 000s). EBITDA totaled 4,750 (SEK 000s),10% margin. Operating profit, EBIT, was 3,337 (SEK 000s). Profit after tax was 625 (SEK 000s). Earnings per share was SEK 0.01.
January - December 2020
Net sales increased by 28% Y-O-Y adjusted for exchange rate fluctuations. Consolidated net sales ended at 169,226 (SEK 000s). EBITDA totaled 14,909 (SEK 000s), 9% margin. Operating profit, EBIT, was 6,949 (SEK 000s). Profit after tax was -920 (SEK 000s). Earnings per share was SEK -0.015.
CEO’S COMMENTS
Profitable growth in the pandemic year 2020
I am proud of the 24SevenOffice team for its performance in 2020. We had our long term plan entering into 2020, but with the Covid-19 pandemic hitting the world hard early in the year our short term plans were quickly adjusted and aligned to the new world scenario. This led to a shift where we were seeking to faster reach profitability than we originally had planned for and have more focus on the profitability of the business, rather than the top priority of growth.
The shift to focus on profitability in 2020 has resulted in a major improvement of 32 MSEK for the full year, from a negative EBITDA of -16 MSEK in 2019 to a positive EBITDA of 16 MSEK. For the fourth quarter the improvement was 9 MSEK, from a negative EBITDA of -4 MSEK to a positive EBITDA of 5 MSEK. For the full year 2020 the EBITDA margin was 9% and 10% for the fourth quarter.
Even with the focus on profitability we managed to grow the business with 28% for the full year 2020 and 26% in the fourth quarter adjusted for the extraordinary currency fluctuations between Norwegian and Swedish kroner which has shown significant variances due to the market situation. Adjusted for currency the year ended with revenues of 184 million and an EBITDA of 16 million, and for the fourth quarter the revenue was 51 million with an EBITDA of 5 million. The focus on profitability will affect the future organic long term growth, but at the same time free resources to do M&A.
To be able to adjust the profitability of the company in such a short time shows the uniqueness of the 24SevenOffice culture and values, and the power of the business model.
Profitable growth with Rule of 40
During the pandemic we decided to follow the Rule of 40 principle to ensure profitable growth going forward. Our aim is to grow organic, up-sale and M&A based as much as possible with profitability and that the combined growth margin and EBITDA margin should be minimum 40. It is, however, important to emphasize that our main goal is long term growth, but with an underlying profitability.
Investments in product development
During 2020 we have continued to invest in the 24SevenOffice product platform and launched several new modules and features like new dashboard, menu and navigation which facilitates efficient upsales of new modules to our customer base. The investments we have made into AI resulted in two large enterprise accounting firm contracts announced at the end of the year following HSB which went live in the fourth quarter. These investments into product development are confirming our leading position within automation of business processes and will continue to ensure24SevenOffice leading position on the market for the future.
Huge opportunities with Fintech
24SevenOffice has been one of the pioneers in integrating the accounting and ERP system with the banks allowing customers to pay their invoices and receive payments directly from the accounting system. We were also the first to launch financial services where companies can sell their invoice and get paid immediately and launched small business loans during the Corona crisis.
In December 24SevenOffice approved an agreement where Optin Bank ASA will be changed to 24SevenBank ASA. This is a change made as a result of the agreement whereby 24SevenOffice will be able to realize its planned fintech/ banking products and services.
Traditional banks have substantial revenue from payment transactions alone. With the PSD2 regulative and new technology the banking industry is open for disruption. We are working closely with the technical and commercial team in the bank to launch new, automated and embedded banking services in 24SevenOffice providing customers relevant banking products seamlessly integrated into our services, more efficiently, cheaper and faster, with expected launch within the first half of 2021.
Adding acquisitions to the growth strategy
Going forward we believe there will be good opportunities to expand our growth strategy with acquisitions. Through acquisition we can access technology and new modules such as the acquisition of Busy, a leading time tracking solution, which has grown more than 400% since the acquisition and becoming a part of 24SevenOffice. We can also access new verticals and increase customers by acquiring customer bases.
In January 2021 we announced the acquisition of Exicom Software in Sweden and we have acquired the US operation and the rights to the European markets.
To be able to pursue an acquisition strategy internationally we have raised capital and secured funding and credit lines and I am glad we have solid and supporting institutional investors throughout Europe and the US. Totally we have raised approx 660 MSEK since January 2020 until today. This, together with positive EBITDA, puts us in a strong financial position going forward.
Empowering businesses for the future
I look forward to 2021 and believe the foundation to keep building amazing software that automates business processes and empowers businesses for the future are in place.
Ståle Risa
CEO
This disclosure contains information that 24SevenOffice Scandinavia AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 24-02-2021 07:15 CET.
For further information please contact:
Ståle Risa, CEO
Tel: +46 70-023 63 03, str@24sevenoffice.com
24SevenOffice in brief
24SevenOffice's vision is to empower businesses for the future, through delivering world class cloud based business systems to small and medium-sized companies. The system is currently used by 59,900 companies in the Nordic region, with PwC, among others, as accounting partner. The business system is module-based, where the modules are provided independently or packaged as complete solutions. For more information see www.24sevenoffice.com