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Interim report for January-September 2020

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Improved underlying margin despite challenging market conditions

Third quarter 2020 (third quarter 2019)

  • Total revenue amounted to SEK 38.5 million (40,4), a decrease of 4,8 percent compared to the corresponding period last year.
  • EBITDA amounted to SEK 0.6 million (2,2)
  • The EBITDA margin amounted to 1.6 percent (5.4)
  • Operating profit (EBIT) amounted to SEK –2.2 million (–0.8)
  • The EBIT margin amounted to –5.8 percent (–2.0)
  • Result before tax amounted to SEK –2.4 million (–1.3)
  • Cash flow amounted to SEK –4.6 million (3.2)
  • Average number of employees amounted to 122 (127)
  • Earnings per share amounted to –0.27 SEK (–0.16)
  • Non-recurring cost of SEK 2.3 million due to the closing of the German business.

First nine months, January-September 2020 (January-September 2019)

  • Total revenue amounted to SEK 139.0 million (137.9), a growth of 0.8 percent compared to the corresponding period last year.
  • EBITDA amounted to SEK 4.0 million (7.1)
  • The EBITDA margin amounted to 2.9 percent (5.1)
  • Operating profit (EBIT) amounted to SEK –4.5 million (–0.1)
  • The EBIT margin amounted to –3.3 percent (–0.1)
  • Result before tax amounted to SEK –5.2 million (–1.2)
  • Cash flow amounted to SEK –3.0 million (–2.5)
  • Average number of employees amounted to 1293 (123)
  • Earnings per share amounted to –0.62 SEK (–0.23)
  • Non-recurring cost of SEK 2.3 million due to the closing of the German business.

Significant events in the third quarter 2020

  • In the first half of September, Transcendent Group announced that for the third year in a row, the company had been ranked as one of Europe's best workplaces according to the Great Place to Work’s annual top list.
  • In September, Transcendent Group announced that Charlotte Elsnitz has been appointed new CFO. Charlotte will assume her role on December 10, 2020.
  • In the end of September, Transcendent Group announced that the company will close its German business due to low demand and limited possibilities to achieve profitability given current market conditions.

Significant events after the end of the third quarter 2020

  • No significant events have occurred since the end of the quarter.

Comments from CEO Martin Malm:

"Transcendent Group’s revenue in the third quarter decreased by approximately 5 percent; however, for the first nine months of 2020 we exhibit a growth of 1 percent. At the time, excluding non-recurring items, we manage to improve our margins despite the challenging market conditions caused by the Covid-19 pandemic. The measures that we introduced in the first quarter continue to contribute to a reduced cost base for the remainder of the year.

The established markets show a slight decrease compared to last year due to Covid-19 but given our strong position we see good opportunities for growth when the market conditions improve. Among our new markets the Netherlands stands out from the crowd, and if the business continues to grow at the same pace as now it might become our next established market. Each market is unique but based on the success in the Netherlands, we will apply some learnings on the rest of the new markets. By closing Germany, which has clearly underperformed compared to the other businesses, we also achieve an improved risk balance between the new markets and better opportunities to create sustainable growth.

In 2020, our focus has been to ensure profitability and liquidity, and we have made some tough decisions along the way. Our long-term strategy remains more or less unchanged – but based on the effects from the pandemic we will put larger emphasis on sustainable growth. We will ensure that each newly established market has the conditions required to reach critical mass in terms of staff and the right service offering, while sharing best practice between the different markets."

Link to full interim report
The full interim report is available in Swedish on https://transcendentgroup.com/investor-relations/.

For further information, please contact:
Martin Malm, CEO Transcendent Group
Martin.Malm@transcendentgroup.com
+46 73 335 94 26

This is information that Transcendent Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was sent for publication, through the agency of the contact person set out above, on 19 November at 08:00 (CET).

About Transcendent Group

At Transcendent Group you will meet experienced consultants in Governance, Risk and Compliance. Transcendent Group’s services provide security and opportunities for government agencies, businesses and other organizations in a variety of industries. The company was established in Stockholm in 2001 and has from the start built a differentiated offering based on a value-driven culture with experienced experts. Transcendent Group has been ranked as one of Europe’s, Sweden’s and Norway’s best workplaces in 2020 and has been a Great Place to Work since 2012. Transcendent Group has approximately 120 employees in 8 markets across Europe. Transcendent Group is listed on Nasdaq First North Premier Growth Market. The company’s Certified Adviser is Avanza Bank, +46(0)8-409 421 20, corp@avanza.se. For more information, visit www.transcendentgroup.com.

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