Year-end report January-December 2020
Long-term profitable growth - before, during and after the pandemic
Fourth quarter
- Net sales amounted to MSEK 93.1 (81.8), rendering a net sales growth of 14% (19%). Organic net sales growth was 13% (14%)
- Recurring revenue amounted to MSEK 50.5 (44.3)
- The quarter was impacted by one-off items affecting comparison, relating to writing-down a share option liability for part of the remaining shares in Lime Intenz AB, amounting to MSEK 1.4 (0.0)
- Adjusted EBITA amounted to MSEK 29.3 (19.9) which corresponds to an adjusted EBITA margin of 31% (24%)
- Net income amounted to MSEK 20.1 (12.1)
- Earnings per share, before dilution, amounted to SEK 1.52 (0.91) and diluted to SEK 1.52 (0.91)
2020 in brief
- Net sales amounted to MSEK 338.7 (289.7), rendering a net sales growth of 17% (19%). Organic net sales growth was 14% (16%)
- Recurring revenue amounted to MSEK 194.4 (167.2)
- 2020 was impacted by one-off items affecting comparison, amounting to MSEK 1.4 (-0.9). This relates to writing-down a share option liability for part of the remaining shares in Lime Intenz AB. Comparison attributable to acquisitions and the listing of the company’s shares on Nasdaq Stockholm
- Adjusted EBITA amounted to MSEK 99.3 (66.8) which corresponds to an adjusted EBITA margin of 29% (23%)
- Net income amounted to MSEK 62.7 (39.0)
- Earnings per share, before dilution, amounted to SEK 4.72 (2.94) and diluted to SEK 4.72 (2.94)
- Acquired an additional 35% of the shares in janjoo AB
- The Board proposes the general meeting a dividend of SEK 2.50 (1.50)
CEO’s comments
We, at Lime, continuously attempt to seize the opportunities that arises in the pandemic. During the fourth quarter, we have invested in sales and marketing, recruited an additional 25 employees, and we have worked hard on product development. This underpins a continued bright future, which is why we are increasing our financial goals. Furthermore, with the improved profitability in mind, the board of directors propose to increase the dividend to our shareholders.
The trend of a gradually improving business climate, which we witnessed already in the third quarter, continued during the fourth quarter. The fourth quarter showed growth in order intake compared to the same period last year. Despite this, we are somewhat disappointed with the sales to new customers. We believe the lower volumes are a result of paused and prolonged decision-making processes within the customers’ organisations, which in turn is a result of the pandemic.
Growth in the fourth quarter was 14% compared to the same period last year and an improvement to the third quarter. As seen in previous quarters, Denmark, Norway, Finland and the Netherlands are more impacted by the lockdowns than Sweden is. Growth in the segment Rest of Europe was 8%, compared to 15% in Sweden.
Full year growth for 2020 was 17% compared with 2019. Based on an analysis made by the research company IDC, the Nordic CRM market was expected to achieve zero growth 2020, implying that Lime grew faster than the market and thus continues to gain market shares.
We have seen a continuation of the profitability improvements that began in the fourth quarter 2019. 2020 Q4 adjusted EBITA margin was 31%, which corresponds to 54% growth compared with the same quarter last year. Adjusted EBITA margin for 2020 was 29%, again a strong improvement compared to 23% in 2019.
The company’s cash flow continues to improve. Better profitability, strong cash flow and repayment of loans mean our net liability is dropping. Having a strong balance sheet brings many opportunities going forward, allowing us to continue to invest in growth and acquisitions in 2021. The Board of Directors proposes to the Annual General Meeting a dividend for 2020 of SEK 2.50 (an increase from SEK 1.50 last year) per share.
During 2020, a total of about 75 new staff members were recruited of which 25 commenced the trainee program at Lime in January 2021. Due to the pandemic, we have had to hold training digitally to the most recently employed staff members. We, like many other companies, has during the pandemic been forced to think outside the box, and have learned to engage, activate and build relations from a distance. None the less, I am convinced that team building and embracing the corporate culture are better achieved when people actually meet and I look forward to get everyone together as soon as the situation allows.
In recent months, we have had discussions with a number of potential acquisitions. We have had to discontinue a few acquisition processes when it became clear that the companies’ products did not met our requirements, however, our search continues.
Following a review of the company’s financial goals, it has been resolved by Lime's board of directors to adjust the targets. The previous sales growth target of 15% organic growth has been replaced by an 18% total sales growth target. Organic growth continues to be the most critical growth driver for Lime, but our strategy also includes acquisition-driven growth. A total growth target will better reflect this strategy.
The profitability target has been adjusted from “higher than 23% EBITA margin” to “higher than 25% EBITA margin”. As a result of an increased proportion of recurring revenue per employee, we have seen profitability improvements over the last five quarters. We believe strong profitability is a trend that will continue moving forward. By the same token, we want to utilise the profits for growth investments, which is why we do not expect to continue to deliver the high margins seen in 2020.
The capital structure target of 2.5 times net debt to EBITDA, and the dividend policy to distribute 50% or more of the net income remain.
We expect the market to gradually improve in the first half of 2021. It is, however, difficult to assess the developments considering the uncertainties caused by the pandemic. Our medium to long term view remains; i.e., there will be an increase in digitalisation as a result of the behavioural changes caused by the pandemic, for example, less travelling and more working from home. Companies need CRM systems for better structure, collaboration and follow-up of employee activities.
In summary, I am very pleased with the strategy we adopted during the pandemic. We have continued to invest during these uncertain times, we have recruited new employees, we have established our business in new markets, and we have launched more products than ever before, all of which I’m certain will pay off in the long run. Having made these investments, we are looking forward to what 2021 has to bring.
Erik Syrén, CEO of Lime Technologies
Read the entire report in the attached PDF.
Invitation to webcast for the presentation of Lime Technologies’ Year-end report for January-December 2020
On Tuesday, February 16, at 09:30 CEST, are analysts, investors, media and other interested parties invited to attend a webcast where Lime’s CEO, Erik Syrén, and CFO, Magnus Hansson, will comment on the published report and answer questions. The presentation will be held in English.
The presentation material will be available on Lime’s website.
The link to the webcast can be found here.
For more information, contact:
Lime Technologies AB (publ)
Erik Syrén, CEO / +46 707-38 50 72 / erik.syren@lime.tech
Magnus Hansson, CFO / +46 708-55 55 40 / magnus.hansson@lime.tech
This information constituted inside information prior to publication. This is information that Lime Technologies 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 February 16, 2021.
About Lime
Lime helps businesses all over the Nordics to become better at customer care. The company develops and sells digital products for ”Customer Relationship Management”, development and management of customer relationships. Lime was founded in 1990 and has 280 employees. The company has offices in Lund, Stockholm, Gothenburg, Gävle, Oslo, Copenhagen, Utrecht and Helsinki. Their customers include everything from sole traders to large organisations.
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