Vitec Year End Report 2014

Summary for January-December 2014

• Net sales SEK 492,0 M (371,6)
• Profit before tax SEK 64,5 M (38,1)
• Operating margin 14 % (11)
• Earnings per share before dilution SEK 8,76 (5,78)
• Cash flow from operations SEK 129,3 M (42,9)
• The Board proposes a dividend of  3,35 SEK/share (2,75)

Summary for October-December 2014

• Net sales SEK 141,5 M (92,8)
• Profit before tax SEK 23,3 M (9,4)
• Operating margin 16 % (10)
• Earnings per share before dilution SEK 3,23 (1,36)
• Cash flow from operations SEK 38,2 M (10,0)

CEO´S COMMENTS

Vitec continues to grow and with a strong increase in sales, improved operating margins and increased earnings per share, 2014 became Vitec strongest year so far. The Board of Directors proposes an increased dividend which means that the dividend has been increased for 12 years in a row.

Vitec's growth is driven by acquisitions. Since 1998, we have made over 20 acquisitions of profitable, well-functioning, vertically oriented software companies with a significant proportion of recurring revenue. This has meant that since 2000 we has increased sales by 20 percent on average per year and that earnings has grown by over 30 percent on average over the same period. We intend to continue to grow through acquisitions and we are focusing on the Nordic region. Today we have a prospect list of about 100 interesting software companies, whose combined turnover is exceeding 4 billion SEK. There is an ongoing active dialogue with a dozen of these, and we see good prospects for further acquisitions.

By that we during several years purposefully and rigorously applied our business model with the pursuit of a high proportion of recurring revenues, we note that 2014 has returned excellent results. We have an improved operating margin as well as increased internal efficiency, while we can offer improved and modernized offers to our customers. In 2014, we invested about 120 man-years in our product portfolio and a further SEK 150 million in new acquisitions to ensure our existing business while creating growth.

With a clear shift from traditional license sales to a more modern subscription model (SaaS) we increase the proportion of recurring revenue and operating margin simultaneously. This, together with the employees' great capacity to innovate and integrate acquisitions, provides good conditions for long-term development of our business.

With successive acquisitions of well established companies and increasing proportion of recurring revenue in the back Vitec continue on our chosen path, to act in several independent and specialized niches to achieve sustained profitable growth.
 

Lars Stenlund, CEO

Disclaimer:
Vitec Software Group AB (publ.) is to make the above information public pursuant to the Swedish Securities Market Act or the Swedish Financial Instruments Trading Act. The information will be made public at 08:30 CET on Wednesday, February 18, 2015.
 

Vitec Software Group (publ) is a software company that offers industry specific business applications on the Nordic market. The Company, with operations in Sweden, Norway, Finland and Denmark is growing in the mature part of the software industry by consolidating vertical software segments. Clients include facility management companies, construction and real estate companies, banks and insurance companies, utilities and energy traders, healthcare companies, car spare part dealers and newspaper companies. Vitec is listed on Nasdaq OMX Stockholm. Group turnover has an annual capacity of 575 million SEK and has approximately 400 employees. Vitec is listed on Nasdaq OMX Stockholm.

www.vitecsoftware.com   Address: Box 7965, S-907 19 Umeå, Sweden. Phone +46 90 15 49 00