1 st quarter 2019
CEO Jacob Tveraabak | CFO Hilde Horn Gilen
April 26, 2018
Agenda
- Intro
- Highlights Q1 2019
- Key figures
- Q&A
Mission
"Driving retailers productivity by providing innovative integrated technology solutions"
Strong market fundamentals for retail technology
Double opportunity for StrongPoint
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- E-commerce: most of our clients want to grow within e-commerce
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- In-store: all of our clients need to improve store operations productivity
Retail Technology is a vital part of the solution for retail companies to grow in e-commerce and to improve in-store productivity
Our Product and Solution offering
Key focus areas
- 1. Maintain and grow relevance with retailers in current key Markets (Norway, Sweden, Baltics)
- 2. Significantly grow presence with retailers in Spain to mirror Home Market penetration
- 3. Grow e-commerce into a substantial portion of StrongPoint's business
… and be the best owner and employer for all businesses under the StrongPoint-umbrella
Highlights Q1 2019
Highlights Q1 2019
Very strong first quarter figures
2
Several customer break-throughs and deliveries
Important milestones for go-to-market model
Very strong 1st quarter figures: 15% revenue growth vs. last year(s)
Revenue MNOK
Very strong 1st quarter figures: growth in all Business Areas
Revenue MNOK
Very strong 1st quarter figures: highest ever EBITDA in Q1
EBITDA MNOK
* Includes positive effect of IFRS 16 of MNOK 5.7
Very strong 1st quarter figures: EBITDA-growth in all Business Areas 1
EBITDA MNOK
* Includes positive effect of IFRS 16 of MNOK 3.5 for Retail Technology, MNOK 0.9 for Cash Security, and MNOK 1.3 for Labels
Several customer break-throughs and deliveries 2
- Contract for Electronic Shelf Labels (ESL) to Rimi Baltic won
- Large increase in revenue for Vensafe in Norway and Sweden
- First ever deal for ESL in a pharmacy: Gintarinė Vaistinė, the 2nd largest pharmacy chain in the Baltic
- Delivery of Self Checkout equipment to a grocery chain in the Baltic
- Production of RFID-enabled tags from Labels to Retail customers
3 Important milestones for go-to-market model
- Partner agreement with Harting Systems for sale and development of self-checkout solutions in Germany
- Exclusive distribution agreement with Radiant Globaltech regarding sale of StrongPoint's solutions in APAC
- Expansion of our RoadRunner concept to Germany
Direction and initiatives forward
- Focus! On Retail Technology; and continued utilization of Partners where that makes sense (adding to the cooperation with Harting Systems, and Radiant Globaltech)
- Transferring Retail Technology offices in Belgium and France into our Partner organization
- Replacing own Retail personnel in Russia to service partner
- Cancelled distribution agreement with CashDefend in the US; exploring other partners
- Maintain and grow relevance with retailers in key markets (Norway, Sweden, Baltics): Exploring new, relevant products/offerings
- Significantly grow presence with retailers in Spain:
- Intensified recruitment, primarily in Sales
- Moved our Madrid office to a new, more appropriate location. Established a StrongPoint office in Catalonia (Barcelona)
- Significantly improving the value proposition for our RoadRunners: adding Unico and Compact to our Cash Management portfolio
- Grow e-commerce into a substantial portion of StrongPoint's business:
- Investments in E-commerce Logistics Suite ("E20") to improve scalability of solution sales
- Recruiting more Sales personnel
Financial Information
IFRS 16 – increase the EBITDA
• Figures
- 2018 Profit & Loss figures are not updated to comparison.
- 2019 Opening Balance is updated with equal Right to Use Asset and Lease Liability values of 70.6 MNOK.
- Equity Ratio is reduced from 40.5 % at 31.12.18 to 36.5 % at 01.01.19.
- 2019 Profit & Loss: Operational lease cost will be replaced by depreciation and interest expenses. Net Profit is not influenced by the change.
- 2019 Cash Flow: Increase Cash Flow from Operations and reduce Cash Flow from Financial activities.
- Major asset groups
- Rent and cars, with majority on rent agreements.
- No optional rental periods are included in the balance sheet, unless it is a high probability that the optional rental contract will be utilised.
- Machinery in Cash Security and Labels was previously recognised as financial lease and IFRS 16 has no impact.
CashFlow effects in Q1 2019
• Working Capital developement mainly related to seasonal changes in receivables and prepaid expenses
Solid cash flow generation last 12 months
Free Cash Flow* Last 12 months, MNOK
• First quarter 2018 had negative cash flow from operational activities
• Sale of the Cash Management as-a-service to Alimerka (MNOK 14.4) in Q2 18
*Cash flow from operations minus Capex
Net leverage of 0.66x R12 EBITDA
71.1 Q4-18 51.4 Q4-17 62.3 Q1-18 Q2-18 71.8 Q3-18 54.6 55.1 Q1-19 120.3 Q1-19** Net Interest Bearing Debt Net Leverage multiples* 0.98 1.17 1.10 1.09 0.81 0.66 1.44
* Net Interest Bearing Debt / Rolling 12 EBITDA ** Including IFRS 16 balance effect
Investor Relations
Main communication channels
- Reports, webcasts, etc. under "Investor" tab
- News articles under "News" tab
- Newsletters and Social Media
Financial calendar 2019
IR-contact: CFO Hilde Horn Gilen
Jacob Tveraabak CEO
Hilde Horn Gilen CFO
Thank you!