Interim Report January-June 2013

Strategic acquisition

• Sales for the second quarter decreased with 5 percent to SEK 190.9 (202.0) million
• License revenue for the second quarter decreased with 11 percent to SEK 54.6 (61.1) million
• Operating profit EBITDA for the second quarter was SEK 4.8 (17.2) million
• Earnings per share after tax for the second quarter were SEK 0.03 (0.49)
• Sales for January-June decreased with 2 percent to SEK 353.5 (358.9) million
• License revenue for January-June decreased with 1 percent to SEK 96.6 (97.6) million
• Operating profit EBITDA for January-June was SEK -12.8 (5.5) million
• Earnings per share after tax for January-June were SEK -0.35 (0.23)
• Cash-flow from operating activities for January-June was SEK 61.7 (41.1) million
• ReadSoft acquired Expert Systems Development Svenska AB during the second quarter

CEO comment:

Strategic acquisition and measures for long-term growth

“We have had a weaker sales development during the second quarter than expected. Our total sales decreased with 1 percent in constant currencies for the second quarter, and increased with 3 percent for the first six months. Our license sales, adjusted for currency effects, decreased by 7 percent in the second quarter, but increased by 3 percent for the first six months. Our cash-flow from operating activities was very strong during the quarter. 

During the quarter, we completed a strategic acquisition of Expert Systems Development Svenska AB (Expert Systems), a supplier of SaaS solutions (Software as a Service) for electronic business. Expert Systems has one of the leading cloud-based networks for exchanging e-invoices and other electronic documents in Sweden. 

Our result is not acceptable and there are several key reasons. One main reason is that some major deals were postponed. We have also had a somewhat weak development on the consultancy side. We have improved the number of billable hours significantly compared to the first quarter, but we are being paid less for our consulting hours. The reason is mainly intensification of competition depressing the hourly rate, but we have also had negative currency effects. The result for the first half-year was also affected by non-recurring restructuring costs, and non-recurring costs for the acquisition of Expert Systems. But the decreased result also depends on a calculated change we are making to increase the proportion of recurring revenues. Some of our new and larger completed license deals are subscription deals, which don’t generate any significant revenue in the second quarter, but are strategically important for the future. The recurring revenues continue to grow on a rolling 12 month basis.

In view of our results, we will execute a program to lower costs in some areas while creating opportunities for investments in areas where we see a clear growth potential. Thirty positions, about 5 percent of our employees, will be eliminated from the company, particularly in some of our subsidiaries that haven’t met our expectations for a long time, and positions will also be eliminated at the corporate level. We expect to be finished with these actions in the third quarter. These savings will be partially reused for recruitments and investments in areas where we see good potential for development. We will, among other things, focus on our recently acquired e-invoicing portal, from the Expert Systems acquisition, which we will roll-out to our international organization and start selling to our global customer base. The technology from Expert Systems, together with our legacy products and solutions, will be a strong offer to our customers. We will also make an increased investment in the North American market where we see a continued great potential for development and growth.

Our global Oracle organization continues to grow and shows significantly better numbers compared to the corresponding quarter last year. ReadSoft Online also had a good development. In particular, markets such as the UK, Benelux and Asia have shown the way with good growth and profitability during the quarter. Inside of Q2 we introduced XBOUND to the North American market and saw a quick result, closing a major deal with DISC Corporation, a leading provider of document management in the healthcare sector, with estimated revenues of around 1 million U.S. dollars per year. On the product side we have conducted a number of exciting launches, including the launch of INVOICES 5-7, and introduction of the latest version of PROCESS DIRECTOR at a major industry trade show in the US. Furthermore we enhanced ReadSoft Online with new workflow functionality, strong e-invoice support, and online storage of invoices on the cloud, and XBOUND was updated with support for Windows 8 and Windows RT.

The actions we are taking will save costs while also freeing up resources to redeploy our investments towards clear growth areas where we want to strengthen our position. These actions will not change ReadSoft’s focus to work for growth and to prioritize improving our profit margin. ReadSoft remains well equipped for the future and we are optimistic about our potential for continued good development.” 


Per Åkerberg
President and CEO


Read the entire report in the attached PDF.


Invitation to telephone conference / audiocast for the presentation of ReadSoft's Interim Report for January-June 2013 

On Thursday, July 18, 2013, at 9:00 CET, are analysts, investors, media and other interested parties invited to attend a telephone conference where ReadSoft’s President and CEO Per Åkerberg will comment on the published report and answer questions. The presentation will be held in English. 


Link to webcast:         click here 
Day and time:             Thursday, July 18, 2013 at 09.00 CET
Phone number:          +46 8 519 993 68 or +44 207 660 2081


You can also access the presentation via our website www.readsoft.se or www.readsoft.com.


This is information of the type that ReadSoft AB (publ) is obligated to disclose in accordance with the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on July 18, 2013 at 08:00 CET.

For additional information please contact:

Per Åkerberg, President and CEO
Phone+46 42 490 21 00 
Johan Holmqvist, Vice President Corporate Communications
Phone: +46 42-490 21 98 or +46 708-37 66 77
Jan Bertilsson, CFO
Phone: +46 42-490 21 43 or +46 708-37 66 16

e-mail: firstname.lastname@readsoft.com

About ReadSoft
ReadSoft is a leading global provider of software solutions for document process automation in the cloud or on premise. ReadSoft is by far the world’s number one choice for invoice processing automation, especially into business systems from SAP and Oracle. ReadSoft’s software enables companies to automate document processes such as accounts payable processing, and mailroom automation. Since the start in 1991, ReadSoft has grown to a worldwide group with operations in 17 countries on six continents and a network of local and global partners. The head office is located in Helsingborg, Sweden, and the ReadSoft share is traded on the NASDAQ OMX Stockholm's Small Cap list. For more information about ReadSoft, please visit www.readsoft.com

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