Quarterly Report • Apr 28, 2022
Quarterly Report
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Financial report and status
| Revenue | 300.7 | 249.3 | 981.3 |
|---|---|---|---|
| EBITDA | 11.5 | 13.6 | 53.6 |
| EBITDA margin | 3.8% | 5.5% | 5.5% |
| Operating profit (EBIT) | 4.8 | 7.5 | 27.5 |
| Ordinary profit before tax (EBT) | 3.5 | 8.6 | 25.9 |
| Cash flow from operational activities | 11.9 | 21.6 | 225.5 |
| Cash flow from operational activities ex discontinued operations | 11.9 | 19.3 | 55.7 |
| Disposable funds | 295.3 | 149.4 | 274.2 |
| Q1 2022 | Q1 2021 Year 2021 | ||
|---|---|---|---|
| Revenue | 300.7 | 249.3 | 981.3 |
| EBITDA | 11.5 | 13.6 | 53.6 |
| EBITDA margin | 3.8% | 5.5% | 5.5% |
| Operating profit (EBIT) | 4.8 | 7.5 | 27.5 |
| Ordinary profit before tax (EBT) | 3.5 | 8.6 | 25.9 |
| Cash flow from operational activities | 11.9 | 21.6 | 225.5 |
| Cash flow from operational activities ex discontinued operations | 11.9 | 19.3 | 55.7 |
| Disposable funds | 295.3 | 149.4 | 274.2 |
| Earnings per share from continued operations (NOK) | 0.07 | 0.19 | 0.51 |
| Earnings per share from continued operations, adjusted | 0.11 | 0.23 | 0.67 |
| Earnings per share included discontinued operations (NOK) | 0.07 | 0.23 | 4.32 |
In the first quarter of 2022 we tipped the 300 MNOK turnover mark and achieved our best quarter ever as a Retail Technology focused company, growing a remarkable 21% vs. same quarter last year. The achievement is even more impressive considering negative currency effects, where an adjustment for currency would have resulted in a 24% growth. Furthermore, as component shortages continue to have an effect, we could have seen an additional approximate 15 MNOK revenue, or an additional 6% growth from revenues pushed out to later quarters. The first quarter was positively impacted by in-store efficiency solutions, with continued large-scale rollouts of Electronic Shelf Labels (ESLs) from Pricer and our own proprietary Cash Management solutions.
Our EBITDA in the first quarter was 11.5 MNOK (3.8%), down from 13.6 MNOK (5.5%) the same quarter last year, impacted by considerable, continued investments in sales, marketing and product development within E-commerce and key in-store productivity solutions as well as costs associated with the acquisition of ALS. In total, we estimate these higher costs to be in the order of magnitude of 7 MNOK. High sales of ESLs with lower margins than proprietary solutions also contribute to the margin decline.
The first quarter results tell a story about a resilient business that is growing very strongly in its traditional in-store productivity solutions, led by our operations in Norway and a rejuvenated Spain. It also tells a story of a company with a large upside potential within E-commerce logistics. Not only is there a top line potential, but also a significant bottom line potential as margins reaped by StrongPoint are typically higher in this area, as many of the solutions have significant scale advantages. Although this quarter's strong revenue growth of in-store solutions contributed to a relative decline of revenue of E-commerce to only 6%, the relatively low contribution from E-commerce does not reflect the activity and interest level in this space. I expect the contribution from our E-commerce solutions area to be a lot stronger going forward, with pilots and customer interest continuing to be very high.
The Russian attack on Ukraine cannot be left unspoken. StrongPoint strongly condemns the Russian Authorities' unlawful and horrendous acts of violence against Ukraine and its people. Following the divestment of our Cash Security business at the end of 2020, StrongPoint does not have any business activities in Russia. Our Baltic operations have had a handful of Ukrainian software contractors supporting our business, and all of these employees including their families have been offered permanent positions in the Baltics. In addition, company-wide donation campaigns, with StrongPoint matching personal donations, have contributed to financial assurance of the above-mentioned contractors and families as well as recognized aid organizations operating in Ukraine and the neighboring countries.
In the quarter we welcomed two new members to StrongPoint's Executive Management Team (EMT), Chris Mackie and Magnus Rosèn. Chris is now leading our E-commerce sales efforts and brings a wealth of experience in the area. Magnus now leads our Swedish operations as well as our E-commerce product development. With extensive past experience from ICA e-commerce it is difficult to envisage anyone with a better fit to take the helm following Göran Thörn's well deserved retirement.
In February, we announced the intention to acquire Air Link Group. Our team and advisors have, and are continuing to, conduct the necessary due diligence of the company. In due time, I believe that getting ALS as a part of the StrongPoint family will be a great success and a highly value creating acquisition.
Having commented on our Spanish operations throughout last year as we have undergone a significant turnaround of our operations in the country, I am pleased to announce a topline growth rate of more than 50% with a close-to break-even result in the first quarter of 2022.Whereas much work remains to build the organization and business we want in Spain, this certainly is a big step in the right direction.
The future remains bright and promising, and I am confident about our success in the future. We continue to see that our solutions are attracting attention from grocery retailers in our target markets attracted by our world-class proprietary and partner solutions. We continue to ramp our team and required resources to execute on our aligned and communicated strategy. As more and more grocery retailers discover our solutions, I believe we can be optimistic in achieving our 2025 strategic ambitions.
Stay safe and strong!
CEO's perspective
The demand for grocery retail technology and StrongPoint's solutions continues to be strong. The first quarter of 2022 shows that in-store productivity solutions are in high demand and that only challenging component access holds back even larger growth. Behind the scenes, our e-commerce offering is being continuously improved with hardware and software improvements as well as significant ramp-up investments in sales and marketing resources. Further in the quarter, we have engaged intensively with
Air Link Group (ALS) in a due diligence phase, as part of the announced intention to acquire the company, paving the way for a StrongPoint presence in to the UK and Ireland. StrongPoint is delivering its best quarter ever as a Retail Technology focused company. StrongPoint's 'double' opportunity' – capitalizing on the opportunity arising from the increased demand for e-groceries and in-store efficiency – continues to be more relevant than ever. I remain, along with my management team, committed and confident in achieving our 2.5 BNOK 2025 ambitions.
The total revenue increased by 20.6% compared with same quarter last year, and the best quarter ever for the continued operations (Retail Technology). Norway and Spain increased their revenue by 63% and 52%, respectively, compared to the same quarter last year. Although overall revenue growth was solid, it was still negatively influenced by unfavorable foreign currency exchange rate development and the ongoing shortage of components for payment solutions. The EBITDA declined with 2.1 MNOK, and the EBITDA margin declined to 3.8% (5.5%) following the ongoing investments in e-commerce R&D, sales and marketing and also accrued cost for the ongoing due diligence of Air Link Group Ltd. Ongoing investments consists of planned activities supporting the ambitions in the 2025 strategy. Along with the accrued acquisition expenses, the total cost increase amounts to 7 MNOK compared to same quarter last year. The EBITDA was also negatively affected by the component shortages and foreign currency. Number of employees increased by 28 compared to Q1 last year, with a majority hired within e-commerce. StrongPoint introduces two new reporting segments: Nordics and Rest of Europe including R&D. The Nordics represents the operating units in Norway and Sweden, while Rest of Europe including R&D represents all other
geographic operating units including partners. Group R&D activities are presented as part of the "Rest of Europe" reporting segment.
StrongPoint is a retail technology company that provides solutions to make shops smarter, shopping experiences better and online grocery shopping more efficient.
Operating revenue per quarter (MNOK)
EBITDA per quarter (MNOK)
100
120
| Revenue | Q1 | Year | |
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Nordics | 214.5 | 172.3 | 695.5 |
| Rest of Europe incl. R&D | 86.2 | 80.0 | 293.1 |
| ASA/Elim | - | -3.2 | -7.2 |
| Total | 300.7 | 249.3 | 981.3 |
| EBITDA | Q1 | Year | |
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Nordics | 17.6 | 18.1 | 77.0 |
| Rest of Europe incl. R&D | 5.0 | 5.7 | 14.6 |
| ASA/Elim | -11.1 | -10.2 | -38.0 |
| Total | 11.5 | 13.6 | 53.6 |
| Number of employees | 418 | 390 | 400 |
25 350 StrongPoint signed a new agreement with the retail chain Palink (part of REWE Group) to supply and install self-checkout solutions for around 2 MEUR. Palink, that is managing "IKI" brand stores in Lithuania, has actively expanded its self-checkout network already for several years. The estimated value of the agreement is around EUR 2 million, excluding the revenue of installation and future technical support.
5 10 15 20 100 200 250 300 StrongPoint was chosen by SPAR International as a Preferred Supplier for e-commerce order picking, click and collect e-commerce and in-store cash management solutions. SPAR International is one of the most recognized grocery retail brands with over 13,500 stores in 48 countries across four continents. The framework agreement gives the SPAR Partners in the SPAR network easier access to certain StrongPoint solutions via their internal intranet.
The largest grocery retailer in Denmark, Salling Group, ordered additional grocery lockers as well as adding modules to their current locker installations from StrongPoint for their Føtex chain. Following the success of the first roll-out, Salling Group decided to install StrongPoint grocery lockers at eight new locations and add additional capacity to their existing units as they continue to expand their e-grocery pickup offer.
60 80 100 120 On February 14, a non-binding term sheet to acquire 100% of the shares in Air Link Group Limited (Air Link) was signed. Air Link is a retail solutions company that provides construction services, grocery lockers, self-checkouts, vending systems and queue management systems to grocery retailers. The ongoing Due Diligence and negotiation of the share purchase agreement are progressing with an aim to conclude within short.
The Spanish operations managed to achieve almost break-even results in Q1 2022, despite delays from component situation and a long-lasting strike in the Spanish transport sector. The market has started to pick up after a long period with restrictions following the pandemic. The local management is working consistently to both recruit new employees within sales and marketing and to increase sales to the grocery retail market.
During the quarter, two new members were appointed to the Executive Management Team: Chris Mackie as SVP E-commerce and Magnus Rosén as SVP and MD Sweden.
StrongPoint has a strategic ambition to achieve NOK 2.5 billion in revenues and EBITDA margins of 13-15% by 2025.
StrongPoint's world class retail technology solutions for increasing in-store efficiency and e-commerce technology for online order picking and last mile solutions have a double opportunity to meet two key global trends affecting grocery retailers. Firstly, the pressure on brick and mortar retailers' margins means that grocery retailers need to find ways to increase in-store productivity to boost profitability. Secondly, the pressure to develop an online presence, grow their market share and reduce costs means they need highly efficient order fulfilment solutions and provide multiple last-mile delivery and pick-up options. These two key industry trends have only been accelerated by the global demand for online groceries during the global Covid-19 pandemic.
To respond to the changes in the industry following the events of 2020, StrongPoint has updated its strategy to achieve its 2025 ambitions.
Order Picking solution * AutoStore Micro-Fulfillment centers
Click & Collect Lockers * Drive-thru * Pick-up in-store * Home delivery with route optimization
Pricer Electronic Shelf Labels ShopFlow Logistics * Digi Scales and Wrapping Systems Reflexis Task and Labour Management
CashGuard Cash Management *
Self-Checkout * Self-Scanning Vensafe Sales Automation *
POS Systems Commerce Management System
* Proprietary technologies
BNOK 2.5 in 2025 EBITDA 13-15%
The revenue in Norway increased by 63.2% compared to the same quarter last year. Installation of Pricer ESL to large retail chains and CashGuard rollout to NorgesGruppen were the main contributors to the growth, contributing to an 88.7% growth in product sales. Approximately 70% of the announced ESL contracts for NorgesGruppen and COOP have been installed. The global constraints on components affected the sale of Cash Management solutions in Q1 by 3.5 MNOK. The business expects additional delay in the installation of CashGuards as the shortage of component situation continues.
The revenue in Sweden declined by 7.9% compared to the same period last year, adjusted for currency the revenue increased by 0.8%. Sale and installation of Pricer ESL grew by almost 30% in the quarter. The e-commerce sale declined by 64% in the quarter compared to last year, driven by very high installations of Click & Collect lockers in Q1 last year. Sweden has the highest installed base of lockers with 225 lockers in operation.
The new reporting segment Nordics currently consist of the operating business units in Norway and Sweden. The revenue and EBITDA figures are consistent with the internal reporting structure to the Board of Directors and executive management.
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 97.5 | 51.7 | 247.6 |
| Service | 30.3 | 26.6 | 114.1 |
| Revenue | 127.8 | 78.3 | 361.6 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 53.4 | 58.7 | 195.0 |
| Service | 33.3 | 35.4 | 138.9 |
| Revenue | 86.7 | 94.1 | 333.9 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| - Norway | 127.8 | 78.3 | 361.6 |
| - Sweden | 86.7 | 94.1 | 333.9 |
| Total Revenue | 214.5 | 172.3 | 695.5 |
| EBITDA | 17.6 | 18.1 | 77.0 |
| - In % | 8.2% | 10.5% | 11.1% |
| EBT | 14.9 | 15.3 | 66.0 |
| - In % | 7.0% | 8.9% | 9.5% |
The reporting segment increased by 25.7% compared to the same quarter last year, with a significant growth in Norway and a decline in Sweden. The growth came in majority from increased sale of Electronic Shelf Labels and Cash Management solutions in Norway, while the reduced sale of e-commerce (mainly Click & Collect lockers) contributed to the decline in Sweden. The EBITDA and EBT was on the same level as Q1 last year.
The business in the Baltics declined by 23.2% in the quarter compared to the same quarter last year. The service revenue grew by 65.6% as there have been several software development projects this quarter. Last year's product revenue was high due to a large rollout SCO project. The reporting segment announced a new order of self-checkouts to IKI of 2 MEUR in revenue not including installation and service, installation of this order will start in Q2. In the quarter, the main activities have been within development, installation and support on POS and ERP software projects.
The Spanish revenue grew by 52.2% from the same quarter last year and continues the positive trend from Q4 last year. The main customer market continues to be the horeca segment which is picking up from the pandemic but not fully recovered yet. The revenue was also negatively affected by the shortage of components (combo cards) and a truck transport strike in March. More than 20% of the cash management installations done in Q1 2022 was on a rental contract. The local organization has focused on cost control and managed to achieve almost break-even EBITDA in the period. There are recruitment, sales and marketing activities ongoing to improve StrongPoint's market position.
Bullion IT ordered 250 CashGuard units in September last year to be delivered during first half of 2022, and only 1/5 of that was delivered on this order this period due to the ongoing shortage of components. The shortage of components is expected to continue, hence pushing the delivery of this order out in quarters beyond Q2.
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 20.6 | 43.3 | 109.4 |
| Service | 23.7 | 14.3 | 80.7 |
| Revenue | 44.3 | 57.6 | 190.1 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 18.2 | 11.0 | 53.7 |
| Service | 4.4 | 3.9 | 13.8 |
| Revenue | 22.7 | 14.9 | 67.5 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 18.7 | 7.5 | 32.5 |
| Service | 0.5 | 0.0 | 3.0 |
| Revenue | 19.2 | 7.5 | 35.4 |
The new reporting segment Rest of Europe consists of the operating business units in the Baltics and Spain, in addition to partner sales in the rest of Europe and Africa. The ongoing R&D costs for own products have been allocated to this area as the outcome for the activities is to enable international sales outside the Nordics (top of the "T" in the strategy plan). The revenue and EBITDA figures are consistent with the internal reporting structure to the Board of Directors and executive management.
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| - Baltic | 44.3 | 57.6 | 190.1 |
| - Spain | 22.7 | 14.9 | 67.5 |
| - Rest of Europe | 19.2 | 7.5 | 35.4 |
| Total Revenue | 86.2 | 80.0 | 293.1 |
| EBITDA | 5.0 | 5.7 | 14.6 |
| - In % | 5.8% | 7.1% | 5.0% |
| EBT | 1.5 | 1.9 | -1.9 |
| - In % | 1.8% | 2.4% | -0.7% |
A substantial part of the growth in Q1 2022 comes from installation of Pricer Electronic Shelf Labels in the Nordics. The product sale for in-store productivity grew by 56% compared with the same quarter last year, where of Norway contributes most to the growth but also Sweden had a good quarter compared to Q1 2021. The announced large orders in Norway have reached an installation rate of approx. 70%.
Despite the ongoing challenges in the global supply of combo cards, the Payment Solutions segment grew by 62.7% in the period. StrongPoint use the financial capacity to pre-produce the cash management systems as far as possible to reduce time to delivery when the suppliers manage to purchase the items with low availability. The Norwegian and South African cash management business more than doubled in the quarter, while the Spanish operation grew by approx. 50% compared to last year. The component situation affected the revenue by around 15 MNOK on orders not delivered. The quarter-to-quarter delay will maintain as long as the component situation exists in the market.
Check Out Efficiency decreased by 37.3% compared to the same quarter last year, as especially the Baltic business had a large roll-out of self-checkout during first quarter 2021. The increased service revenue reflects that the number of active units have increased.
Other retail technology, mainly software projects in the Baltics, increased by 33.2% in the period. The revenue consists of both software, services, and hardware deliveries, both from recurring operation and development projects, for the large grocery retailers in Lithuania.
Relative share of revenue per segment (%)
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 105.8 | 67.9 | 283.9 |
| Service | 22.4 | 18.9 | 82.0 |
| Revenue | 128.3 | 86.8 | 365.9 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 51.1 | 21.1 | 102.3 |
| Service | 30.3 | 29.0 | 122.2 |
| Revenue | 81.4 | 50.0 | 224.5 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 8.9 | 20.4 | 64.9 |
| Service | 10.6 | 10.7 | 43.2 |
| Revenue | 19.5 | 31.1 | 108.1 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 24.1 | 45.3 | 116.1 |
| Service | 8.9 | 7.2 | 34.2 |
| Revenue | 33.0 | 52.4 | 150.3 |
| Q1 | Year | ||
|---|---|---|---|
| MNOK | 2022 | 2021 | 2021 |
| Product Sales | 19.3 | 16.2 | 62.2 |
| Service | 19.2 | 12.7 | 50.9 |
| Revenue | 38.5 | 28.9 | 113.1 |
The e-commerce logistics segment declined by 37.3% compared to the same quarter last year. Rolling 12 months recuring revenue was maintained at the same lavel as last quarter, so the decline comes from reduced installation of Click & Collect lockers.
During the corona pandemic, StrongPoint's products have ensured that retailers have been able to quickly handle an extreme increase in e-commerce volumes with efficiency, profitability and customer satisfaction. During Q1, there was a temporary reduction in the growth rates of e-commerce driven by the post pandemic reopening of the society. This has aslo led to fewer installations of Click & Collect lockers in the quarter. E-commerce is assumed to continue to grow with double-digit numbers in the coming years and thus customers' demands for efficient solutions that create customer value and long-term profitability will increase.
The development of the new generation G3 platform continues at an unabated pace with, for example, integration with Autostore's micro fulfillment centers (MFC), expanded Click & Collect opportunities, better transparency in the order flow for the consumer and further improved efficiency in the store pick. During Q1 2022 a functionality was launched, that makes it possible for customers to handle orders with extremely short delivery times (Q-commerce). The influx of new customers on the G3 platform is going according to plan, and during Q1 2022 several new Swedish and international customers was enrolled.
I have over 20 years experience working for global software companies including extensive experience working with leading grocery retailers. In fact I started my career working for the grocery retailer ASDA in the UK as a department store manager.
I next worked for a WMS vendor for 15 years. My first project was the implementation of their system for Ocado who started their commercial Grocery delivery service in 2002 using the software to pick, pack and despatch their orders.
During those 15 years my teams and I implemented numerous warehouse management and workforce management systems for Grocers and ecommerce retailers. I saw first-hand the impact a well-designed picking and packing dialogue can have on productivity and profitability.
I was amazed by the potential impact of StrongPoint's technologies in markets where we haven't been before – or are still scaling up. It's the attention to details and all the countless micro-adjustments that the team has made over the years where the magic lies. I want to help bring to market an amazing solution suite and have real impact on grocey retailers' bottom line.
Firstly, there is a shift towards smaller assortments and less variety. When lockdowns first hit, the simple challenge of feeding people required retailers to
focus on the essentials. The shift to online has taught consumers to make better lists, and online shopping's algorithms and instant carts again narrow what we buy.
Secondly, there is a focus on speed and safety redefining how convenience is understood. The pandemic has changed our perception of safety and it has accelerated the rollout of self-service checkouts, digital payments, and payment apps. Overall, there is an accelerated shift towards a cash-free economy.
Thirdly we are seeing an evolution of store models. The adoption of e-commerce in groceries is impacting store size, store layouts and leading to the repurposing of less profitable stores into dark stores.
Chris Mackie
I have spent my entire career withing with business and technology development in retail and then mainly for the grocery industry. From the time I started at Statoil in the 1990s via the grocery retailer ICA Sweden where I worked in both the IT and development of their e-commerce offer for many years.
I have known StrongPoint for a long time as they are one of the leading players in Sweden in retail technology and solutions for e-commerce. The choice to start at StrongPoint felt obvious, they are going forward and investing and have a clear strategy for growth in their sector. This is the start of an exciting new journey!
How do you see you can leverage your e-grocery experience?
Physical and digital commerce is developing at an ever-faster pace. The change is made possible by new technology and it is
driven by new customer expectations and behaviors. Not least in the e-commerce of groceries where the change was accelerated during the pandemic and completely new customer groups started shopping online. With my experience in retail, and then especially the grocery trade, I have good insights into the consumer's needs and driving forces and a deep understanding of the reality of stores and retailers.
Magnus Rosén
The Board and group CEO have today considered and approved StrongPoint's financial statements for the first quarter 2022, including comparative consolidated figures for the first quarter 2021. This report has been prepared in accordance with IAS 34 on interim financial reporting as determined by the European Union, and with supplementary requirements pursuant to the Norwegian Securities Trading Act. The Board and CEO hereby declare, to the best of their knowledge, that the financial statements for the first quarter 2022 have been prepared in accordance with prevailing accounting principles and that the information in the financial statements gives a true and fair view of the assets, liabilities, financial position and profit of the group taken as a whole at 31 March 2022 and 31 March 2021. To the best of their knowledge, the report gives a true and fair overview of important events during the accounting period and the impact of these events on the financial statements.
Morthen Johannessen Chairman
Klaus de Vibe Director
Camilla AC Tepfers Director
Rælingen 27 April 2022
Peter Wirén Director
Ingeborg Molden Hegstad Director
Jacob Tveraabak CEO
Accounting year
General meeting
Dividend per share
28.04.2022 Proposed 0.80 28.04.2021 0.70 22.10.2020 0.60 26.04.2019 0.55 24.04.2018 0.50 20.04.2017 0.50 05.01.2017 Extraordinary 1.00 28.04.2016 0.45 30.04.2015 0.35 25.04.2014 0.30 26.04.2013 0.25 08.05.2012 0.25
After the sale of both Cash Security (2020) and Labels (2021) reporting segments the Group has a net positive cash position. Cash flow from operational activities in the first quarter was 11.9 MNOK (21.6).
Disposable funds were 295.3 MNOK (149.4) per March 31, 2022, of which 100 MNOK was available credit facility. The net interest-bearing debt decreased by 25.3 MNOK compared to the end of the last quarter and ended with a positive net cash position of 141.5 MNOK.
The Group's holding of own shares at the end of the first quarter amounted to 637,451, which represents 1.4 per cent of the outstanding shares.
The Group has shareholder programs for the board of directors, the Group executive management and the employees. 57,266 shares have been distributed so far in 2022 (166,157 in the year 2021).
StrongPoint has a long-term incentive program for management and key employees. More information on the program can be found in note 7.
The Board will propose a dividend of NOK 0.80 per share at the Annual General Meeting April 28, 2022.
| KNOK | Q1 2022 Q1 2021 | Chg. % YTD 2022 YTD 2021 | Chg. % Year 2021 | ||||
|---|---|---|---|---|---|---|---|
| Operating revenue | 300 679 | 249 255 | 20.6% | 300 679 | 249 255 | 20.6% | 981 339 |
| Cost of goods sold | 184 688 | 144 975 | 27.4% | 184 688 | 144 975 | 27.4% | 560 104 |
| Payroll | 68 129 | 65 729 | 3.7% | 68 129 | 65 729 | 3.7% | 255 147 |
| Share based compensation | 1 439 | 1 305 | 10.2% | 1 439 | 1 305 | 10.2% | 6 178 |
| Other operating expenses | 34 919 | 23 639 | 47.7% | 34 919 | 23 639 | 47.7% | 106 285 |
| Total operating expenses | 289 174 | 235 649 | 22.7% | 289 174 | 235 649 | 22.7% | 927 714 |
| EBITDA | 11 505 | 13 606 | -15.4% | 11 505 | 13 606 | -15.4% | 53 625 |
| Depreciation tangible assets | 5 000 | 4 242 | 17.9% | 5 000 | 4 242 | 17.9% | 18 718 |
| Depreciation intangible assets | 1 751 | 1 906 | -8.2% | 1 751 | 1 906 | -8.2% | 7 403 |
| EBIT | 4 754 | 7 458 | -36.3% | 4 754 | 7 458 | -36.3% | 27 504 |
| Interest expenses | 80 | 514 | -84.4% | 80 | 514 | -84.4% | 1 596 |
| Other financial expenses/currency differences | 1 234 | -1 552 | 179.5% | 1 234 | -1 552 | 179.5% | 184 |
| Profit from AC, Service companies | 74 | 78 | -5.3% | 74 | 78 | -5.3% | 175 |
| EBT | 3 514 | 8 575 | -59.0% | 3 514 | 8 575 | -59.0% | 25 899 |
| Taxes | 343 | 268 | 27.8% | 343 | 268 | 27.8% | 3 542 |
| Profit from continued operations | 3 171 | 8 307 | -61.8% | 3 171 | 8 307 | -61.8% | 22 357 |
| Profit after tax from discontinued operations | - | 1 775 | - | 1 775 | 168 418 | ||
| Profit/loss after tax | 3 171 | 10 081 | -68.5% | 3 171 | 10 081 | -68.5% | 190 775 |
| Earnings per share | |||||||
| Number of shares outstanding | 44 376 040 44 376 040 | 44 376 040 44 376 040 | 44 376 040 | ||||
| Av. number of shares - own shares | 43 723 395 44 307 119 | 43 723 395 44 307 119 | 44 190 919 | ||||
| Av. number of shares diluted- own shares | 45 623 395 45 457 119 | 45 623 395 45 457 119 | 46 265 919 | ||||
| EPS from continued operations | 0.07 | 0.19 | 0.07 | 0.19 | 0.51 | ||
| EPS included discontinued operations | 0.07 | 0.23 | 0.07 | 0.23 | 4.32 | ||
| Diluted EPS from continued operations | 0.07 | 0.18 | 0.07 | 0.18 | 0.48 | ||
| Diluted EPS incl. discontinued operations | 0.07 | 0.22 | 0.07 | 0.22 | 4.12 | ||
| EBITDA per share from continued operations | 0.26 | 0.31 | 0.26 | 0.31 | 1.21 | ||
| EBITDA per share incl. discontinued operations | 0.26 | 0.44 | 0.26 | 0.44 | 1.56 | ||
| Diluted EBITDA per share from continued operations |
0.25 | 0.30 | 0.25 | 0.30 | 1.16 | ||
| Diluted EBITDA per share incl. discontinued operations |
0.25 | 0.43 | 0.25 | 0.43 | 1.49 | ||
| Total earnings | |||||||
| Profit/loss after tax | 3 171 | 10 081 | -68.5% | 3 171 | 10 081 | -68.5% | 190 775 |
| Exchange differences on foreign operations | -9 117 | -22 682 | 59.8% | -9 117 | -22 682 | 59.8% | -19 400 |
| Total earnings | -5 947 | -12 600 | 52.8% | -5 947 | -12 600 | 52.8% | 171 375 |
| KNOK | 31.03.2022 | 31.03.2021 | 31.12.2021 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 27 542 | 37 376 | 30 371 |
| Goodwill | 120 347 | 142 288 | 124 641 |
| Tangible assets | 19 786 | 26 094 | 19 031 |
| Right-of-use assets | 38 216 | 52 956 | 43 241 |
| Long term investments | 4 916 | 5 779 | 4 775 |
| Other long term receivables | 856 | 22 372 | 15 622 |
| Deferred tax | 16 844 | 11 339 | 17 240 |
| Non-current assets | 228 508 | 298 205 | 254 921 |
| Inventories | 177 159 | 138 838 | 211 256 |
| Accounts receivables | 213 025 | 196 324 | 175 627 |
| Prepaid expenses | 24 472 | 20 950 | 16 646 |
| Other receivables | 6 511 | 10 078 | 13 885 |
| Bank deposits | 195 282 | 49 432 | 174 198 |
| Current assets | 616 449 | 415 622 | 591 612 |
| TOTAL ASSETS | 844 957 | 713 827 | 846 533 |
| EQUITY AND LIABILITIES | |||
| Share capital | 27 513 | 27 513 | 27 513 |
| Holding of own shares | -395 | -52 | -364 |
| Other equity | 465 082 | 328 521 | 471 041 |
| Total equity | 492 200 | 355 983 | 498 190 |
| Long term interest bearing liabilities | 10 923 | 11 247 | 11 236 |
| Long term lease liabilities | 29 736 | 30 063 | 25 972 |
| Deferred tax liabilities | 8 786 | 7 843 | 8 720 |
| Total long term liabilities | 49 445 | 49 153 | 45 928 |
| Short term interest bearing liabilities | 4 630 | 6 661 | 4 768 |
| Short term lease liabilities | 8 530 | 24 747 | 16 086 |
| Accounts payable | 102 564 | 62 423 | 101 969 |
| Taxes payable | 7 069 | 15 112 | 11 717 |
| Other short term liabilities | 180 518 | 199 749 | 167 874 |
| Total short term liabilities | 303 312 | 308 692 | 302 415 |
| TOTAL EQUITY AND LIABILITIES | 844 957 | 713 827 | 846 533 |
| KNOK | Share capital |
Treasury shares |
Other paid in equity |
Translation variances |
Share Option Program |
Other equity |
Total equity |
|---|---|---|---|---|---|---|---|
| Equity 31.12.2020 | 27 513 | -52 | 351 262 | 66 252 | 440 | -79 355 366 059 | |
| Purchase/sale of own shares | -313 | -13 322 -13 635 | |||||
| Dividend 2020 | -31 050 -31 050 | ||||||
| Share Option Program | 5 441 | 5 441 | |||||
| Profit this year after tax | 190 775 190 775 | ||||||
| Other comprehensive income and expenses |
-19 400 | -19 400 | |||||
| Reclassification discontinued operations |
-11 028 | 11 028 | - | ||||
| Equity 31.12.2021 | 27 513 | -364 | 351 262 | 35 824 | 5 881 | 78 076 498 190 | |
| Purchase/sale of own shares | -1 186 | -1 186 | |||||
| Dividend 2020 | - | - | |||||
| Share Option Program | 1 143 | 1 143 | |||||
| Profit this year after tax | 3 171 | 3 171 | |||||
| Other comprehensive income and expenses |
-9 117 | -9 117 | |||||
| Equity 31.03.2022 | 27 513 | -364 | 351 262 | 26 706 | 7 024 | 80 061 492 200 |
| KNOK | Q1 2022 | Q1 2021 | YTD 2022 | YTD 2021 | Year 2021 |
|---|---|---|---|---|---|
| Ordinary profit before tax continued operations | 3 514 | 8 575 | 3 514 | 8 575 | 25 899 |
| Ordinary profit before tax discontinued operations | - | 2 246 | - | 2 246 | 169 755 |
| Net interest | 80 | 662 | 80 | 662 | 1 935 |
| Tax paid | -4 389 | -1 089 | -4 389 | -1 089 | -17 856 |
| Share of profit, associated companies | -74 | -78 | -74 | -78 | -175 |
| Ordinary depreciation | 6 751 | 9 650 | 6 751 | 9 650 | 33 431 |
| Profit / loss on sale of fixed assets | - | -743 | - | -743 | -793 |
| Change in inventories | 29 392 | -1 460 | 29 392 | -1 460 | -74 046 |
| Change in receivables | -40 851 | 14 065 | -40 851 | 14 065 | 34 601 |
| Change in accounts payable | 2 961 | -16 924 | 2 961 | -16 924 | 22 673 |
| Change in other accrued items | 14 466 | 6 671 | 14 466 | 6 671 | 30 057 |
| Cash flow from operational activities | 11 851 | 21 575 | 11 851 | 21 575 | 225 483 |
| Payments for fixed assets | -1 944 | -2 467 | -1 944 | -2 467 | -8 794 |
| Investments in other companies | -67 | -4 001 | -67 | -4 001 | -3 001 |
| Payment from sale of fixed assets | - | 739 | - | 739 | 738 |
| Net effect acquisitions previous years | - | - | - | - | -4 200 |
| Net effect divestment | 19 641 | - | 19 641 | - | 199 888 |
| Dividends received from associated companies | - | - | - | - | 100 |
| Interest income | 324 | 36 | 324 | 36 | 300 |
| Cash flow from investment activities | 17 954 | -5 693 | 17 954 | -5 693 | 185 033 |
| Purchase/sale of own shares | -1 186 | 1 864 | -1 186 | 1 864 | -13 635 |
| Change in long-term debt | -3 985 | -33 913 | -3 985 | -33 913 | -55 598 |
| Change in overdraft | -2 389 | -7 989 | -2 389 | -7 989 | -208 080 |
| Interest expenses | -404 | -698 | -404 | -698 | -2 235 |
| Dividend paid | - | - | - | - | -31 050 |
| Cash flow from financing activities | -7 965 | -40 735 | -7 965 | -40 735 | -310 598 |
| Net change in liquid assets | 21 840 | -24 853 | 21 840 | -24 853 | 99 917 |
| Cash and cash equivalents at the start of the period | 174 198 | 75 007 | 174 198 | 75 007 | 75 007 |
| Effect of foreign exchange rate fluctuations on foreign currency deposits |
-757 | -722 | -757 | -722 | -727 |
| Cash and cash equivalents at the end of the period | 195 282 | 49 432 | 195 282 | 49 432 | 174 198 |
| Cash and cash equivalents at the end of the period discontinued operations |
- | 52 689 | - | 52 689 | - |
| Cash and cash equivalents at the end of the period continued operations |
195 282 | -3 258 | 195 282 | -3 258 | 174 198 |
| KNOK | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 YTD 2022 YTD 2021 | ||
|---|---|---|---|---|---|---|---|
| Income statement | |||||||
| Operating revenue continued operations | 300 679 | 284 181 | 196 363 | 251 539 | 249 255 | 300 679 | 249 255 |
| EBITDA continued operations | 11 505 | 20 062 | 7 953 | 12 003 | 13 606 | 11 505 | 13 606 |
| EBITA continued operations | 6 505 | 14 499 | 3 316 | 7 728 | 9 364 | 6 505 | 9 364 |
| Operating profit EBIT continued operations | 4 754 | 12 782 | 1 409 | 5 856 | 7 458 | 4 754 | 7 458 |
| Ordinary profit before tax (EBT) continued operations |
3 514 | 10 889 | -452 | 6 887 | 8 575 | 3 514 | 8 575 |
| Profit/loss after tax continued operations | 3 171 | 9 513 | -345 | 4 895 | 8 307 | 3 171 | 8 307 |
| EBITDA-margin | 3.8% | 7.1% | 4.1% | 4.8% | 5.5% | 3.8% | 5.5% |
| EBT-margin | 1.2% | 3.8% | -0.2% | 2.7% | 3.4% | 1.2% | 3.4% |
| Balance sheet | |||||||
| Non-current assets | 228 508 | 254 921 | 240 026 | 243 316 | 298 205 | 228 508 | 298 205 |
| Current assets | 616 449 | 591 612 | 583 570 | 506 258 | 415 622 | 616 449 | 415 622 |
| Total assets | 844 957 | 846 533 | 823 596 | 749 573 | 713 827 | 844 957 | 713 827 |
| Total equity | 492 200 | 498 190 | 503 772 | 336 192 | 355 983 | 492 200 | 355 983 |
| Total long term liabilities | 49 445 | 45 928 | 42 804 | 38 313 | 49 153 | 49 445 | 49 153 |
| Total short term liabilities | 303 312 | 302 415 | 277 020 | 375 068 | 308 692 | 303 312 | 308 692 |
| Working capital | 287 620 | 284 913 | 261 191 | 244 143 | 272 739 | 287 620 | 272 739 |
| Equity ratio | 58.3% | 58.9% | 61.2% | 44.9% | 49.9% | 58.3% | 49.9% |
| Liquidity ratio | 203.2% | 195.6% | 210.7% | 135.0% | 134.6% | 203.2% | 134.6% |
| Net interest bearing debt | -141 462 -116 136 -136 145 | 49 346 | 23 285 | -141 462 | 23 285 | ||
| Net leverage multiples | -2.75 | -2.17 | -2.55 | 0.74 | 0.15 | -2.75 | 0.15 |
| Cash Flow | |||||||
| Cash flow from operational activities | 11 851 | 6 975 | 180 605 | 16 327 | 21 575 | 11 851 | 21 575 |
| Net change in liquid assets | 21 840 | -11 695 | 162 580 | -26 115 | -24 853 | 21 840 | -24 853 |
| Share information | |||||||
| Number of shares | 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040 | ||||||
| Weighted average shares outstanding | 43 723 395 44 016 397 44 172 852 44 270 702 44 307 119 43 723 395 44 307 119 | ||||||
| EBT per shares continued operations | 0.08 | 0.25 | -0.01 | 0.16 | 0.19 | 0.08 | 0.19 |
| Earnings per share continued operations | 0.07 | 0.22 | -0.01 | 0.11 | 0.19 | 0.07 | 0.19 |
| Earnings per share, adjusted * | 0.11 | 0.26 | 0.04 | 0.15 | 0.23 | 0.11 | 0.23 |
| Equity per share | 11.26 | 11.32 | 11.40 | 7.59 | 8.03 | 11.26 | 8.03 |
| Dividend per share | 0.70 | ||||||
| Employees | |||||||
| Number of employees (end of period) | 418 | 400 | 402 | 399 | 390 | 418 | 390 |
| Average number of employees | 409 | 401 | 401 | 397 | 389 | 409 | 389 |
| IFRS 16 effects continued operations | |||||||
| Reduced OPEX | 4 107 | 4 003 | 3 658 | 3 254 | 3 344 | 4 107 | 3 344 |
| Increased depreciation | 3 915 | 3 679 | 3 518 | 3 095 | 3 183 | 3 915 | 3 183 |
| Increased interest expenses | 192 | 325 | 140 | 158 | 161 | 192 | 161 |
| EBT | - | - | - | - | - | - | - |
| Cash flow from operational activities | 4 107 | 4 003 | 3 658 | 3 254 | 3 344 | 4 107 | 3 344 |
| Cash flow from financing activities | -4 107 | -4 003 | -3 658 | -3 254 | -3 344 | -4 107 | -3 344 |
The condensed and consolidated quarterly financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The quarterly financial statements do not contain all the information required in an annual financial statement and should be read in connection with the Group financial statements for 2021.
The accounting principles for the report are described in note 2 in the annual financial statements for 2021. The Group financial statements for 2021 were prepared in accordance with the IFRS principles and interpretations thereof, as defined by the EU, as well as other disclosure requirements pursuant to the Norwegian Accounting Act and the Oslo Stock Exchange regulations and rules applicable as at 31.12.2021. The quarterly report and the interim financial statements have not been revised by auditor.
*) Service and licenses
| Q1 2022 | Q1 2021 | Year 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| MNOK | Revenue | EBITDA | EBT Revenue | EBITDA | EBT Revenue | EBITDA | EBT | ||
| Nordics | 214.5 | 17.6 | 14.9 | 172.3 | 18.1 | 15.3 | 695.5 | 77.0 | 66.0 |
| Rest of Europe | 86.2 | 5.0 | 1.5 | 80.0 | 5.7 | 1.9 | 293.1 | 14.6 | -1.9 |
| ASA/Elim | - | -11.1 | -12.9 | -3.2 | -10.2 | -8.6 | -7.2 | -38.0 | -38.2 |
| Total | 300.7 | 11.5 | 3.5 | 249.3 | 13.6 | 8.6 | 981.3 | 53.6 | 25.9 |
| Q1 2022 | Q1 2021 | Year 2021 | ||||
|---|---|---|---|---|---|---|
| MNOK | New sales | Service * | New sales | Service * | New sales | Service * |
| Nordics | 151.0 | 63.5 | 110.2 | 62.1 | 442.7 | 252.9 |
| Rest of Europe | 57.4 | 28.8 | 61.8 | 18.1 | 195.6 | 97.5 |
| Elim / ASA | - | - | -3.2 | - | -7.2 | - |
| Total | 208.3 | 92.3 | 169.0 | 80.2 | 631.0 | 350.3 |
No significant transactions between the Group and related parties had taken place as at 31 March 2022.
| KNOK | Q1 2021 | Year 2021 |
|---|---|---|
| Operating revenue | 46 836 | 110 144 |
| Cost of goods sold | 21 933 | 53 177 |
| Payroll | 14 466 | 31 766 |
| Other operating expenses | 4 540 | 9 690 |
| Total operating expenses | 40 938 | 94 633 |
| EBITDA | 5 898 | 15 512 |
| Depreciation tangible assets | 3 391 | 7 090 |
| Depreciation intangible assets | 111 | 221 |
| EBIT | 2 395 | 8 201 |
| Interest expenses | 148 | 339 |
| Other financial expenses/currency differences | 1 | 1 495 |
| Profit on sale of discontinued operations | - | 163 389 |
| EBT | 2 246 | 169 755 |
| Taxes | 472 | 1 337 |
| Profit from discontinued operations | 1 775 | 168 418 |
StrongPoint Labels reporting segment was announced divested in June 2021. The Swedish part of the transaction was closed July 1, and the Norwegian part was closed September 1. Following IFRS, the financial figures for the reporting segments are reported as "Profit from discontinued operations" below tax in the financial statement and removed from the comparison figures in other tables.
| No. | Name | No. of shares | % |
|---|---|---|---|
| 1 | STRØMSTANGEN AS | 3 933 092 | 8.86 |
| 2 | SOLE ACTIVE AS | 2 221 717 | 5.01 |
| 3 | HSBC BANK PLC | 1 976 000 | 4.45 |
| 4 | V. EIENDOM HOLDING AS | 1 835 009 | 4.14 |
| 5 | PERSHING LLC | 1 645 684 | 3.71 |
| 6 | PICTET & CIE (EUROPE) S.A. | 1 641 821 | 3.70 |
| 7 | NORDNET BANK AB | 1 386 548 | 3.12 |
| 8 | AVANZA BANK AB | 1 252 247 | 2.82 |
| 9 | ZETTERBERG, GEORG (incl. fully owned companies) | 1 225 000 | 2.76 |
| 10 | RING, JAN | 1 021 803 | 2.30 |
| 11 | VERDIPAPIRFONDET DNB SMB | 908 674 | 2.05 |
| 12 | EVENSEN, TOR COLKA | 810 000 | 1.83 |
| 13 | WAALER AS | 780 000 | 1.76 |
| 14 | HAUSTA INVESTOR AS | 700 000 | 1.58 |
| 15 | VERDADERO AS | 679 742 | 1.53 |
| 16 | STRONGPOINT ASA | 637 451 | 1.44 |
| 17 | MP PENSJON PK | 561 402 | 1.27 |
| 18 | JOHANSEN, STEIN | 550 000 | 1.24 |
| 19 | MORGAN STANLEY & CO. INTERNATIONAL | 433 447 | 0.98 |
| 20 | NORDA ASA | 430 360 | 0.97 |
| Sum 20 largest shareholders | 24 629 997 | 55.50 | |
| Sum 2 562 other shareholders | 19 746 043 | 44.50 | |
| Sum all 2 582 shareholders | 44 376 040 | 100.00 |
| Total costs and Social Security Provisions | 2020 | 2021 | Q1 2022 | Total |
|---|---|---|---|---|
| Total IFRS cost | 440 | 5 441 | 1 143 | 7 024 |
| Total Social security provisions | 36 | 737 | 296 | 1 069 |
| Granted instruments | ||||
| Activity | Number of instruments |
Weighted Average Strike Price |
||
| Outstanding OB (01.01.2022) | 2 075 000 | 24.14 | ||
| Granted | 0 | |||
| Exercised | - 50 000 | |||
| Terminated | - 125 000 | |||
| Outstanding CB (31.03.2022) | 1 900 000 | 24.40 | ||
| Vested CB | - 212 500 | 17.31 |
The fair value of share options granted is estimated at the date of grant using the Black-Scholes-Merton Option Pricing Model. The model uses the following parameters; the exercise price, the life of the option, the current price of the underlying shares, the expected volatility of the share price, the dividends expected on the shares, and the risk-free interest rate for the life of the option.
The vesting of the options is dependent on the participant still being employed at Strongpoint at the time of the vesting.
All StrongPoint ASA options are intended to be settled in equity, but in the event that the Company is not capable of delivering Shares following an exercise of Options, the Company shall fulfil its obligations under this Agreement through a cash-out.
The options will vest over three years, with ¼ vesting after one year, ¼ after two years, and the remaining 2/4 after three years. The split in vesting underpins the retention ambition of the program. Any non-exercised options expire five years after grant.
| Working capital | Inventories + accounts receivables – accounts payable |
|---|---|
| Equity per share | Book value equity / number of shares |
| Operating revenue | Sales revenue and profit from AC, Service companies |
| EBITDA | Operating profit + depreciation fixed assets and intangible assets |
| EBITA | Operating profit + amortization of intangible assets |
| EBIT | Operating profit |
| EBITDA-margin | EBITDA / operating revenue |
| EBT | Profit before tax |
| EBT-margin | EBT / operating revenue |
| Equity ratio | Book value equity / total assets |
| Liquidity ratio | Current assets / short term debt |
| Earnings per share | Profit after tax / number of shares |
| Diluted | Number of shares minus own shares plus shares granted in share option program |
| Earnings per share adjusted | Profit after tax + amortization of intangible assets / number of shares |
| Net leverage multiple | Net Debt / 12 months rolling operating revenue |
| Net change in liquid assets | The total changes in cash flow from operational activities, investment activities and financing activities |
| Discontinued operations | Divested Cash Security reporting segment December 2020. Divested Labels reporting segment Q3 2021. |
Net change in liquid assets The total changes in cash flow from operational activities, investment activities
Divested Labels reporting segment Q3 2021.
StrongPoint ASA | Slynga 10, 2005 Rælingen | strongpoint.com
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