Increased revenues and focus on costs
Summary of interim period, January - June 2020
- Net sales SEK 630 million (570)
- EBITA was SEK 161 million (125), with an EBITA margin of 26% (22)
- Operating profit was SEK 97 million (73), with an operating margin of 15% (13)
- Profit after net financial items SEK 89 million (68)
- Earnings per share before dilution SEK 2.19 (1.56)
- Cash flow from operating activities SEK 302 million (185)
Summary of interim period, April - June 2020
- Net sales SEK 321 million (291)
- EBITA was SEK 96 million (67), with an EBITA margin of 30% (23)
- Operating profit was SEK 64 million (37), with an operating margin of 20% (13)
- Profit after net financial items SEK 61 million (34)
- Earnings per share before dilution SEK 1.52 (0.76)
- Cash flow from operating activities SEK 69 million (3)
- Acquisition of LJ System AB and Appva AB
Operations remained almost completely intact during the second quarter. However, there are some significant differences in how work is carried out: no travel, work at home has totally dominated and many employees have developed red ears from all the hours spent wearing headphones during countless video meetings with customers and colleagues.
We have held about 40 video meetings for Group management during the quarter to monitor the situation, coordinate internal information, plan for difficult events and, as far as possible, to support the managers of the Group. We have been spared from severe cases of COVID-19 and sick leave has been low.
Because of the pandemic, we have concentrated on liquidity, further increased our focus on restraint with costs and postponed planned recruitments into the future. Some internal events were also canceled – for obvious reasons. Cash flow has also been unusually strong, in part because of the steps and measures we have taken within the business, and in part because we have taken advantage of the option to temporarily defer certain tax payments during the coronavirus outbreak.
Earnings for the quarter are strong. The lack of travel expenses and general tax relief measures have contributed equally to produce a positive impact on earnings of about SEK 9 million – cost reductions that are likely to be temporary. We have at the same time had about SEK 1 million in direct costs, but have not been hit by customer losses of more than a few hundred thousand Swedish kronor. Our systems are critical for our customers and we have customers who are essential and crucial participants in society. This provides us with a robust operation that enables long-term planning that can still be adapted to short-term changes or stresses.
We have been able to complete two acquisitions during the quarter, almost completely without any physical meetings. Activities in the transaction market fell at first, but increased once again as summer approached.
Our financial position is solid and we are well prepared for future acquisitions and for continued acquisition-based growth. Supported by our acquisition of well-established companies and a high and increasing percentage of recurring revenues, Vitec will stay its course – to be a vertical software company with excellent risk diversification, as well as sustainable and profitable growth.
Lars Stenlund, CEO
For more information, please contact:
Patrik Fransson, Investor Relations, Vitec Software Group AB (publ), firstname.lastname@example.org, mob. +46 76 942 85 97
This information is such information that Vitec Software Group AB (publ) is required to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. (CET) on Friday, July 10, 2020.
Vitec is market leader for Vertical Market Software in the Nordic region. We develop and deliver standard niche software. Vitec grows through acquisitions of well-managed and well-established software companies. The Group's overall processes together with the employees' in-depth knowledge of the customer's local market enables continuous improvement and innovation. Our 830 employees are based in Denmark, Finland, Norway and Sweden. Vitec is listed on Nasdaq Stockholm and had net sales of SEK 1,156 million in 2019. Find more at www.vitecsoftware.com.