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StrongPoint

Quarterly Report Oct 19, 2018

3767_rns_2018-10-19_b1c73d1a-b868-4882-882f-28880ec4e247.pdf

Quarterly Report

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Q3 and YTD 2018 Financial report and status

StrongPoint | Q3 and YTD 2018

Highlights third quarter

• Solid financial results

  • Operating revenues: MNOK 233.3 (204.8)
  • EBITDA: MNOK 15.2 (14.1)
  • • Cash flow from operational activities: MNOK 1.2 (- 2.2)

• Important new customer contracts

  • • Electronic Shelf Labels (ESL) to up to 350 Joker-stores
  • • Framework agreement of MNOK 50 on electronic shelf labels (ESL) to a speciality retail chain
  • • Exclusive contract for 960 CIT cases for Sberbank

• Reinforcement of the organization

  • • Dedicated E-commerce unit, led by Göran Thörn in Cub
  • • Dedicated SVP Global Partner, Roine Gabrielsson, from January 2019
  • • Technology with new SVP, Julius Stulpinas, from January 2019, and establishment of a cross-functional product development team

• Cost optimization and focus in the future

  • • Cost savings estimated to MNOK 30 per year from January 2019
  • • Organic growth of own e-commerce solutions, sales of cash management solutions through "RoadRunners", and sales of own solutions through external partners
  • • Growth through M&A and partnership

Key figures

MNOK Q3 Q3 YTD YTD Year
2018 2017 2018 2017 2017
Revenue 233,3 204,8 759,8 692,3 951,5
EBITDA 15,2 14,1 45,0 31,6 52,4
EBITDA margin 6,5 % 6,9 % 5,9 % 4,6 % 5,5 %
Operating profit (EBIT) 6,6 6,2 17,5 7,8 19,9
Ordinary profit before tax (EBT) 4,3 4,5 20,1 3,4 14,2
Cash flow from operational activities 1,2 -2,2 0,9 6,1 26,8
Disposable funds 49,5 37,8 49,5 37,8 54,3
Earnings per share (NOK) 0,07 0,05 0,35 0,04 0,23

StrongPoint Group

StrongPoint develops and markets technology that streamlines and simplifies store operations, as well as delivering leading e-commerce solutions. The company focuses on Retail Technology, CIT (Cash Security) and Labels.

Solid financial results

StrongPoint's 3rd quarter operating revenues increased by 14 % compared to last year and amounted to MNOK 233.3 (204.8). Turnover of own technology has increased by 30 %, for the same period. Operating revenues year to date have increased by 10 % compared to last year to a total of MNOK 759.8 (692.3).

Aftermarket revenues consists of installation revenues and monthly services and license fees, which increases in line with the installed base. In the third quarter, these revenues represented 31 % of the total revenue. The company experienced an increase in aftermarket revenues in 2015, 2016 and parts of 2017, due to major upgrade projects in Norway and Sweden. In 2018, aftermarket revenues increased due to the acquisition of Cub.

EBITDA was MNOK 15.2 (14.1) in the third quarter. Several product development projects were completed or were in the final phase, which resulted in somewhat lower development costs in the quarter. Year to date, EBITDA was MNOK 45.0 (31.6). The result included a positive net effect from non-recurring items of MNOK 4.1.

Earnings before tax (EBT) for the Group showed a profit of MNOK 4.3 (4.5) in the third quarter. Year to date, EBT is MNOK 20.1 (3.4).

StrongPoint Cub AB, which was acquired in December 2017, has had a very positive year so far. The company experiences a growing interest for its e-commerce solution (E-Commerce Logistics Suite) from grocery chains in and outside Sweden. It is also a positive sales trend for ShopFlow Logistics, a mobile store logistics system developed by Cub. The turnover in Cub consists of a combination of consultancy revenue related to implementation and operation, annual license income and software. Year to date, the company had a turnover of MNOK 34.6 with an EBITDA of MNOK 5.3, where annual license revenues are expected to increase year over year.

Important new customer contracts

StrongPoint has entered into several important agreements during the third quarter as a supplier of Pricer's electronic shelf labels, including up to 350 Joker stores in NorgesGruppen, as well as a speciality retail

StrongPoint Group

Operating revenue per quarter (MNOK)

Operating revenue trailing 12 months (MNOK)

chain in Norway.

In the third quarter, StrongPoint received an exclusive contract for 960 CIT cases for Sberbank, Russia's largest bank.

E-commerce is an important focus area for StrongPoint and consists of solutions from both Cub (E-Commerce Logistics Suite) and Click & Collect. During the third quarter, one of Denmark's largest grocery chains chose E-Commerce Logistics Suite as an important component of its e-commerce solution. StrongPoint has received several pilot orders for Click & Collect pickup stations in the European market.

In the third quarter, StrongPoint also entered into an agreement to deliver 85 self-checkout solutions (hardware and software) to a major grocery chain in StrongPoints home market (Norway, Sweden, the Baltics).

EMEA is becoming an increasingly important market for our own technology. In the quarter, more than nine out of ten Cash Management solutions sold, were delivered to countries outside Norway and Sweden. The Cash Management solutions sold in EMEA are typically to smaller chains and independent stores.

Reinforcement of the organization

StrongPoints E-commerce business have been gathered in a common business area led by Göran Thörn in Cub. This will provide comprehensive solutions and increased expertise within E-commerce. For the first time,

StrongPoint has established a dedicated team, led by SVP Global Partner, Roine Gabrielsson, responsible for increasing sales and distribution of own solutions through partners. The position will take effect from January 2019.

StrongPoint also reorganizes its product development efforts by promoting Julius Stulpinas to SVP Technology. Until 1 January 2019, Julius will continue as SVP for the Baltics. In addition, the company now is establishing a cross-functional group to ensure faster and more accurate product modifications and product launches.

Cost optimization and focus in the future

StrongPoint has had a thorough review of its cost base and expect cost savings in the range of MNOK 30 per year, due to reduction of consultants and employees in product development, e-commerce synergies, and general reduction of administrative costs. Parts of this savings will be invested in selected focus areas. Full effect of cost optimization is expected from January 2019.

StrongPoint will focus on selling its e-commerce solutions outside Sweden, strengthening its own distribution network and sales resources in selected European markets, as well as focusing on selling its own solutions through partners by establishing the SVP Global Partner position. In addition, StrongPoint will actively search for acquisition targets and strategic agreements to grow top and bottom lines beyond what organic growth is performing on its own.

StrongPoint Group

Aftermarket revenue trailing 12 months (MNOK) 350

Operating revneue per business area in the third quarter

Operating revenue

Revenue Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Own Tech 125,9 97,1 392,0 324,8 449,1
3rd Party 71,0 68,3 246,0 245,9 338,6
Labels 37,7 43,5 126,2 132,2 176,4
Elim / ASA -1,2 -4,1 -4,5 -10,6 -12,6
Total 233,3 204,8 759,8 692,3 951,5

EBITDA

EBITDA Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Own Tech 5,8 4,1 17,4 11,4 20,4
3rd Party 7,6 4,8 27,6 16,4 27,0
Labels 6,5 8,6 17,5 16,1 24,9
Elim / ASA -4,7 -3,3 -17,5 -12,3 -19,9
Total 15,2 14,1 45,0 31,6 52,4

5

Q3

10

15

2016 2017 2018

2016 2017 2018

EBITDA trailing 12 months (MNOK)

Business areas

Own Technologies

Proprietary technology solutions that improves store efficiency, e-commerce and simplifies the shopping experience, and IBNS (Intelligent Banknote Neutralization System) technology, which secures ATM and CIT.

Retail Technology IBNS Technology

E-Commerce Logistics Suite

E-Commerce Logistics Suite handles and optimizes the entire work flow of web orders - from planning, picking to delivery of goods. The solution is easy to integrate with existing systems.

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Click & Collect

Click & Collect makes it possible to shop online and pick up groceries without having to deal with the shop opening hours.

ShopFlow Logistics

ShopFlow linked to mobile devices simplifies your in-store routines while also making them more efficient. Minimize the time put into stocktaking, take control of shipping, prices, orders and loss of goods.

CIT-cases CIT-cases based on IBNS (Intelligent Banknote Neutralisation System) technology which ensures

cash during transportation.

Select & Collect

Select & Collect stores and ensures high-value products in store. Our customers reduce waste and inventory management becomes even more efficient.

Self-checkout

Self-checkout is especially suitable for retailers with a high number of transactions and having customers with medium-sized shopping carts. Our customers improve customer experience and reduce queues in the cashier area.

Cash Management

Closed cash handling automates, seals and secures the cash at the cash point and in the back office. Our customers reduce costs and achieves increased flexibility, security and customer service.

3rd Party Technologies

Innovative retail solutions from leading third-party technology providers, consisting of among others ESL, POS, ERP, consulting services, scales and wrapping machines.

Labels

Leading expertise in the design and manufacturing of adhesive labels.

Own Technologies

Proprietary technology solutions that improves store efficiency, e-commerce and simplifies the shopping experience, and IBNS (Intelligent Banknote Neutralization System) technology, which secures ATM and CIT.

Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Product Sales 73,1 51,0 224,6 177,5 249,8
Service 52,7 46,0 167,4 147,3 199,2
Revenue 125,9 97,1 392,0 324,8 449,1
EBITDA 5,8 4,1 17,4 11,4 20,4
EBITDA-margin 4,6 % 4,2 % 4,4 % 3,5 % 4,5 %
EBT 1,5 0,8 5,3 2,4 7,5

Own Technologies

Operating revenue trailing 12 months (MNOK)

EBITDA trailing 12 months (MNOK)

Norway

Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Product sales 9,5 3,6 20,1 31,8 45,5
Service 18,8 18,0 54,8 60,9 79,4
Revenue 28,3 21,6 74,9 92,7 124,9

In the third quarter, Norway's first automated pickup station (Click & Collect) was installed at MENY Strømmen Storsenter.

Plantasjen has chosen Cash Management solutions from StrongPoint. Deliveries started in the third quarter.

The upgrade and replacement project of existing Cash Management solutions, to handle new banknotes in Norway, was completed in the second quarter 2017. There is now a large installed base of modern cash handling solutions in Norwegian stores. This has resulted in a decline in revenue from new systems in 2018.

In the first half, a replacement campaign for Select & Collect (Vensafe) was initiated for the big grocery chains, resulting in 45 solutions sold.

Sweden

Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Product sales 26,9 9,4 53,8 37,5 55,7
Service 25,9 17,7 79,9 53,9 73,8
Revenue 52,8 27,2 133,7 91,3 129,5

StrongPoint Cub is experiencing an increasing demand for its e-commerce software solution, as well as ShopFlow Logistics (a mobile retail logistics system) from both existing and new customers.

Coop has started picking in stores. Previously, e-commerce orders were picked in their darkstores. The decision of starting to pick in stores has led to an increase in the use of StrongPoint's E-Commerce Logistics Suite.

Based on their good experiences with Click & Collect, a Swedish retail chain ordered another 17 pickup stations. The company already has 44 Click & Collect pickup stations.

Baltic/Russia

Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Product sales 0,0 0,0 0,0 7,1 22,0
Service 3,2 1,0 6,9 3,6 6,1
Revenue 3,3 1,0 7,0 10,6 28,2

During the third quarter, StrongPoint has installed 6 Click & Collect pickup stations at Coop Estonia, as well as pickup stations in Lithuania. This customer also has a pilot installation with StrongPoint Cub's E-Commerce Logistics Suite.

Installations of Click & Collect pickup stations in Russia takes longer time than expected. The reason for this is that the customer, Utkonos, still evaluates the installed pickup stations, as well as challenges related to access to appropriate locations and permissions from public authorities.

StrongPoint has been chosen as an exclusive supplier of 960 CIT cases to Russia's largest bank, Sberbank. The agreement was signed by the parties in the third quarter and will be completed during the year.

EMEA/APAC

Q3
YTD
MNOK 2018 2017 2018 2017 2017
Product sales 36,7 38,0 150,6 101,2 126,6
Service 4,7 9,3 25,8 28,9 39,9
Revenue 41,5 47,3 176,4 130,1 166,5

One of Denmark's largest retail chains has chosen StrongPoint's E-Commerce Logistics Suite. The first installations are already in place, with additional installations in 2019

StrongPoint's e-commerce solutions are being presented to the largest chains in Europe, and the company has great expectations for these solutions. In the second quarter, a Click & Collect pilot was installed at COOP in Italy. This pilot will be evaluated by the end of 2018. StrongPoint has received orders for two pilots on Click & Collect in Spain.

The development in the prioritized markets outside Norway, Sweden and the Baltics are very positive. EMEA accounted for more than 9 out of 10 Cash Management solutions delivered in the third quarter.

In 2016, StrongPoint and Alimerka entered into a "cash management as a service" agreement. A total of 725 solutions was installed, which are 225 solutions more than originally planned. The roll out has been a success. After renting the solutions for two years, Alimerka chose to buy the remaining contract period. In the second quarter, MNOK 36.0 was booked as revenue from the sale of the rental agreement. Service Level Agreement (SLA) and software licenses will continue to run throughout the life of the contract.

There is high activity in the Spanish market, and StrongPoint is working to recruit more agents (RoadRunners). These are small selected sales and service companies, which focus on selling Cash Management solutions. This is a well-proven concept, which StrongPoint has developed the last years, and which the company wishes to build on in Spain and in other selected markets.

Based on the success of "cash management as a service" to Alimerka, StrongPoint wants to offer similar solutions to other Spanish customers.

StrongPoint has strengthened its sales team in Germany with a new senior Sales Manager, and are looking for a replacement for the Country Manager. For the second consecutive year, the company has near doubled its revenue from Cash Management solutions in the country. Volumes are still low compared to France and Spain, but the development is very positive

Aramark in Spain has, after running pilots from several suppliers, chosen StrongPoint Cash Management as its main cash management solution for selected Spanish Aramark restaurants.

Early in September 2018, StrongPoint APAC received an order for Cash Management solutions from an airport rail company in Malaysia. The solutions will be installed during the fourth quarter.

Roine Gabrielsson is going to be SVP Global Partners, January 1, 2019 and will be located in Kista. Due to this, StrongPoint is working with a further operational plan for APAC.

3rd Party Technologies

Innovative retail solutions from leading third-party technology providers, consisting of among others ESL, POS, ERP, consulting services, scales and wrapping machines.

Q3 YTD Year
MNOK 2018 2017 2018 2017 2017
Product Sales 50,9 47,3 180,7 173,9 243,1
Service 20,1 21,0 65,3 72,0 95,5
Revenue 71,0 68,3 246,0 245,9 338,6
EBITDA 7,6 4,8 27,6 16,4 27,0
EBITDA-margin 10,7 % 7,0 % 11,2 % 6,7 % 8,0 %
EBT 5,9 3,4 21,6 11,9 19,6

The interest in electronic shelf labels is increasing, and an increasing number of our customers see the benefits of the technology. In the third quarter,

NorgesGruppen in Norway chose StrongPoint as a supplier of Pricer electronic shelf labels for up to 350 Joker stores. The agreement has a value of approximately MNOK 60. Deliveries are expected to start this year and will be completed in 2019.

In the third quarter, a speciality retail chain in Norway entered into a framework agreement on electronic shelf labels with an estimated value of MNOK 50.

In the second quarter, Coop Norge prolonged the agreement with StrongPoint, and the company was awarded the contract of electronic shelf labels for an additional 70 Coop Extra stores. The agreement has an estimated value of MNOK 35.

In the second quarter, StrongPoint signed an agreement with a specialty retail chain in the Baltics for deliveries of ERP and POS solutions. The agreement includes software licenses and implementation of Microsoft Dynamics NAV and LS Nav for more than 700 points of sales, as well as 24/7 service level agreement. The project will last over the next three years.

3rd Party Technologies

Operating revenue trailing 12 months (MNOK)

EBITDA trailing 12 months

Labels

Leading expertise in the design and manufacturing of adhesive labels.

Q3 YTD
MNOK 2018 2017 2018 2017 2017
Revenue 37,7 43,5 126,2 132,2 176,4
EBITDA 6,5 8,6 17,5 16,1 24,9
EBITDA-margin 17,2 % 19,8 % 13,8 % 12,2 % 14,1 %
EBT 3,1 4,7 7,1 4,7 9,8
EBT-margin 8,3 % 10,8 % 5,6 % 3,5 % 5,6 %

Production of labels is capital intensive and requires significant investments in new technology which is depreciated. This means that EBT is an important measurement parameter. EBT decreased in the quarter to MNOK 3.1 (4.7). Continuous focus on efficient operations and investments in modern and flexible machines in both Norway and Sweden has given results on EBT year to date. In addition, we now see the effect of the investments to co-locate production into one modern and efficient production unit in Sweden, which was carried out in 2016/2017.

The business area is well adapted to today's market situation with efficient work processes, modern technology and new efficient premises.

Labels

Operating revenue trailing 12 months (MNOK)

EBITDA trailing 12 months (MNOK)

Reinforcement of the organization

As an integrated technology company, StrongPoint is dependent on having the best people to deliver results over time. StrongPoint strengthens its management and organization through a variety of actions.

StrongPoint has established an E-commerce unit, led by Göran Thörn from Cub. As of September, both Cub's solutions (E-Commerce Logistics Suite and ShopFlow Logistics) and Click & Collect are part of the E-commerce's unit. The change will provide comprehensive solutions, as well as increased expertise in this business area. Future e-commerce solutions will also be added under the E-commerce unit.

To increase sales and distribution of own solutions through partners, StrongPoint will establish a SVP Global Partner from January 2019. The unit will be led by Roine Gabrielsson, who has a long experience in the company. Sales through partners are currently too low and unstable considering the potential of own products. The establishment of a separate Global Partner unit is expected to significantly increase partner sales.

StrongPoint reorganizes its product development efforts by promoting Julius Stulpinas to SVP Technology. Until 1 January 2019, Julius will continue as SVP for the Baltics. Today's SVP Technology, Evaldas Budvilaitis,

will continue to lead Technology until January 1, 2019. In addition, the company will establish a crossfunctional team ("Retail Technology Product Board") to ensure faster and more accurate product changes and launches. This cross-functional group will be led by SVP Supply Chain, Lars-Åke Köpper.

The group's marketing unit, headed by VP Marketing, Rūta Kairienė, will report directly to the CEO in the future. This is to focus on external marketing of products, solutions and activities in StrongPoint.

Cash Security and Labels are set up as own business areas. From 1 January 2018, a work began to integrate Cash Security in Retail Technology. To ensure focus on each business area, it was announced in the third quarter to reverse this integration work and keep Cash Security as its own business area.

In order to ensure the best recruitment, motivation and development of managers and employees, in the third quarter, it was also decided to start recruiting SVP People & Organizational Development.

Executive Management Team

* As of January 1, 2019

** Part of Extended Executive Management Team (EMT). Sven Calissendorf in Sweden, and Rimantas Mažulis in the Baltics

Retail Technology

Cost optimization and focus in the future

StrongPoint optimizes its cost base and invests in growth areas in the future.

Cost optimization

StrongPoint has had a thorough review of its cost base and expect savings in the range of MNOK 30 per year due to the reduction of consultants and employees in product development, e-commerce synergies, and general reduction of administrative costs. The cost optimization is not expected to have negative effect on the company's operations. The savings will partly be used to invest in future growth areas. Full effect of cost optimization is expected from January 2019.

Focus in the future

StrongPoint has expectations of selling Cub's e-commerce solution outside Sweden. The sales in Denmark must be called a breakthrough in this way. In addition, it is expected that the value of Cub's e-commerce solution will increase even further as integration of Pricer's electronic shelf labels is in place to streamline pickup. The solution ("pick by light") is now being tested in some of Sweden's largest retail stores. Early test results show a productivity improvement of 15-30 % with "pick by light".

The process of strengthening our own distribution network and sales resources in selected European markets is ongoing. The concept "RoadRunners" - small selected sales and service companies, focusing on

selling cash handling solutions - shows early success in Spain. StrongPoint currently has a approximately 40 agents with approximately 200 sales people spread across Spain as "RoadRunners". In the future, the agents will also explore the possibilities for additional sales through "cash management as a service" to Spanish customers. These agents account for an increasing proportion of the company's Cash Management sales

From 2019, StrongPoint also expects increased sales of all its own solutions by further focusing on sales through partners and the creation of the SVP Global Partner position.

StrongPoint will in the future actively search for acquisition targets and strategic agreements to grow top and bottom line beyond what organic growth is performing on its own.

The company can acquire technology or products that match existing product portfolio, and can effectively be sold in geographies where StrongPoint is present, or seeks companies that will increase presence in selected geographies, which will increase the power to sell existing products and solutions even more effectively. The CEO, together with the CFO and the operational SVPs, will manage this important source of growth.

Cash flow and equity

Cash flow from operational activities in the third quarter was MNOK 1.2 (- 2.2). Year to date cash flow from operational activities was MNOK 0.9 (6.1). Disposable funds were MNOK 49.5 per September 30, 2018. The net interest-bearing debt increased by MNOK 0.8 compared with the end of the last quarter and totalled MNOK 71.8. A dividend of NOK 0.50 per share was paid in May 2018. The Groups holding of own shares amounted to 104,544, which represents 0.2 per cent of the outstanding shares. The Group has a shareholder program for the Group executive management and the employees in Norway and Sweden. Through these programs, employees subscribed for a total of 67,494 shares in 2017 and 109,299 shares so far in 2018.

Accoun
ting year
General
assembley
Dividend
per share
2017 24.04.2018 0,50
2016 20.04.2017 0,50
2016 05.01.2017 Extraordinary 1,00
2015 28.04.2016 0,45
2014 30.04.2015 0,35
2013 25.04.2014 0,30
2012 26.04.2013 0,25
2011 08.05.2012 0,25

Statement from the Board

The board and group CEO have today considered and approved StrongPoint's financial statements for the third quarter and year to date 2018, including comparative consolidated figures for the third quarter and year to date 2017. 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 third quarter and year to date 2018 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 30 September 2018 and 30 September 2017. 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.

The Board of Directors of StrongPoint ASA

Täby 18, October 2018

Morthen Johannessen Chairman

Klaus de Vibe Director

Camilla AC Tepfers Director

Inger Johanne Solhaug Director

Peter Wirén Director

Jacob Tveraabak CEO

Consolidated income statement

KNOK Q3
2018
Q3
2017
Chg.
%
YTD
2018
YTD
2017
Chg.
%
Year
2017
Operating revenue 233 214 204 717 13,9 % 759 533 692 315 9,7 % 951 388
Profit from AC, Service companies 90 50 238 30 90
Cost of goods sold 120 212 98 427 22,1 % 372 509 344 552 8,1 % 472 003
Payroll 68 104 64 037 6,4 % 244 587 223 952 9,2 % 298 916
Other operating expenses 29 821 28 162 5,9 % 97 702 92 256 5,9 % 128 112
Total operating expenses 218 137 190 626 14,4 % 714 797 660 761 8,2 % 899 032
EBITDA 15 167 14 142 7,3 % 44 974 31 584 42,4 % 52 446
Depreciation tangible assets 4 155 4 562 -8,9 % 12 687 13 221 -4,0 % 18 405
Depreciation intangible assets 4 371 3 390 28,9 % 14 743 10 538 39,9 % 14 137
EBIT 6 640 6 189 7,3 % 17 544 7 825 124,2 % 19 905
Interest expenses 766 751 1,9 % 2 049 2 303 -11,1 % 2 209
Other financial expenses 1 590 919 72,9 % -4 649 2 086 -322,9 % 3 465
EBT 4 285 4 519 -5,2 % 20 144 3 436 486,3 % 14 231
Taxes 1 000 2 177 -54,1 % 4 455 1 703 161,6 % 4 197
Profit/loss after tax 3 285 2 342 40,3 % 15 689 1 733 805,2 % 10 034
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 44 271 496 44 271 496 44 271 496 44 271 496 44 271 496
Earnings per share
0,07 0,05 0,35 0,04 0,23
Diluted earnings per share 0,07 0,05 0,35 0,04 0,23
EBITDA per share 0,34 0,32 1,02 0,71 1,18
Diluted EBITDA per share 0,34 0,32 1,02 0,71 1,18
Total earnings Q3 2018 Q3 2017 Chg. % YTD 2018 YTD 2017 Chg. % Year 2017
Profit/loss after tax 3 285 2 342 40,3 % 15 689 1 733 805,2 % 10 034
Exchange differences on foreign
operations
2 314 -4 605 150,3 % -26 144 8 791 -397,4 % 16 405
Total earnings 5 599 -2 263 -347,4 % -10 455 10 524 -199,3 % 26 439

Consolidated balance sheet

KNOK 30.09.2018 30.09.2017 30.06.2018 31.12.2017
ASSETS
Intangible assets 61 630 47 050 65 481 81 796
Goodwill 134 884 116 088 127 605 139 213
Tangible assets 60 017 82 298 62 969 81 341
Long term investments 1 717 1 412 1 628 1 110
Deferred tax 16 241 29 763 17 208 20 930
Non-current assets 274 489 276 611 274 892 324 391
Goods 141 677 113 648 136 608 131 455
Accounts receivable 174 434 162 355 167 416 160 027
Prepaid expenses 13 362 11 149 18 572 14 061
Other receivables 15 533 23 111 11 764 24 172
Bank deposits 20 381 24 329 24 255 41 503
Current assets 365 386 334 592 358 617 371 218
TOTAL ASSETS 639 875 611 203 633 508 695 609
EQUITY AND LIABILITIES
Share capital 27 513 27 513 27 513 27 513
Holding of own shares -65 -65 -65 -65
Other equity 220 974 237 650 215 375 253 564
Total equity 248 422 265 098 242 823 281 013
Long term interest bearing liabilities 38 855 26 958 43 648 24 623
Other long term liabilities 19 596 3 668 23 575 27 422
Total long term liabilities 58 451 30 626 67 223 52 046
Short term interest bearing liabilities 53 345 66 236 51 658 68 229
Accounts payable 76 154 81 972 67 245 93 070
Taxes payable 493 - 970 1 852
Other short term liabilities 203 010 167 271 203 590 199 399
Total short term liabilities 333 002 315 479 323 462 362 551
TOTAL EQUITY AND LIABILITIES 639 875 611 203 633 508 695 609

Overview of changes in the equity

KNOK Share capital Treasury
shares
Other paid-in
equity
Translation
variances
Other equity Total equity
Equity 31.12.2016 27 513 -65 351 262 35 912 -93 640 320 981
Dividend 2016 - - - - -66 407 -66 407
Profit this year after tax - - - - 10 034 10 034
Other comprehensive income and
expenses
- - - 16 405 - 16 405
Equity 31.12.2017 27 513 -65 351 262 52 316 -150 013 281 013
Dividend 2017 - - - - -22 136 -22 136
Profit this year after tax - - - - 15 689 15 689
Other comprehensive income and
expenses
- - - -26 144 - -26 144
Equity 30.09.2018 27 513 -65 351 262 26 172 -156 459 248 422

Statement of cash flow

KNOK Q3
2018
Q3
2017
YTD
2018
YTD
2017
Year
2017
Ordinary profit before tax 4 285 4 519 20 144 3 436 14 231
Net interest 766 751 2 049 2 303 2 209
Tax paid -472 - -472 - 3 596
Share of profit, associated companies -90 -50 -238 -30 -90
Ordinary depreciation 8 526 7 952 27 430 23 759 32 541
Profit / loss on sale of fixed assets -198 -42 -593 -517 -390
Change in inventories -4 622 -12 957 -17 530 -10 039 -24 508
Change in receivables -6 574 -10 988 -22 048 2 021 17 861
Change in accounts payable 8 548 12 328 -12 527 -22 537 -22 553
Change in other accrued items -8 991 -3 715 4 638 7 706 3 863
Cash flow from operational activities 1 177 -2 202 853 6 102 26 760
Payments for fixed assets -1 327 -5 099 -6 942 -13 220 -15 446
Payment from sale of fixed assets 459 8 36 134 2 392 2 772
Profit on sale to Alimerka - - -21 299 - -
Net effect acquisitions - - - - -462
Interest income -17 -54 152 -16 2 131
Cash flow from investment activities -884 -5 144 8 044 -10 844 -11 004
Change in long-term debt -5 048 -2 445 11 368 -17 732 -22 060
Change in overdraft 1 619 5 018 -14 807 47 646 49 559
Interest expenses -749 -698 -2 200 -2 288 -4 340
Dividend paid - - -22 136 -66 407 -66 407
Cash flow from financing activities -4 178 1 875 -27 776 -38 781 -43 249
Net change in liquid assets -3 885 -5 471 -18 879 -43 522 -27 493
Cash and cash equivalents at the start of the period 24 255 30 232 41 503 67 090 67 090
Effect of foreign exchange rate fluctuations on foreign currency
deposits
11 -432 -2 243 761 1 905
Cash and cash equivalents at the end of the period 20 381 24 329 20 381 24 329 41 502

Key figures

KNOK Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
YTD
2018
YTD
2017
Income statement
Operating revenue 233 304 276 401 250 066 259 133 204 767 759 771 692 345
EBITDA 15 167 18 326 11 481 20 862 14 142 44 974 31 584
Operating revenue EBIT 6 640 8 965 1 938 12 080 6 189 17 544 7 825
Ordinary profit before tax (EBT) 4 285 9 425 6 434 10 795 4 519 20 144 3 436
EBITDA-margin 6,5 % 6,6 % 4,6 % 8,1 % 6,9 % 5,9 % 4,6 %
EBT-margin 1,8 % 3,4 % 2,6 % 4,2 % 2,2 % 2,7 % 0,5 %
Balance sheet
Non-current assets 274 489 274 892 301 064 324 391 276 611 274 489 276 611
Current assets 365 386 358 617 354 503 371 218 334 592 365 386 334 592
Total assets 639 875 633 508 655 567 695 609 611 203 639 875 611 203
Equity 248 422 242 823 266 767 281 013 265 098 248 422 265 098
Long-term debt 58 451 67 223 68 815 52 046 30 626 58 451 30 626
Short-term debt 333 002 323 462 319 985 362 551 315 479 333 002 315 479
Working capital 239 957 236 780 225 311 198 413 194 031 239 957 194 031
Equity ratio 38,8 % 38,3 % 40,7 % 40,4 % 43,4 % 38,8 % 43,4 %
Liquidity ratio 109,7 % 110,9 % 110,8 % 102,4 % 106,1 % 109,7 % 106,1 %
Net interest bearing debt 71 819 71 050 62 298 51 350 68 865 71 819 68 865
Cash Flow
Cash flow from operatinal activities 1 177 5 985 -6 309 20 658 -2 202 853 6 102
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 44 271 496 44 271 496 44 271 496 44 271 496 44 271 496 44 271 496 44 271 496
EBT per shares 0,10 0,21 0,15 0,24 0,10 0,46 0,08
Earnings per share 0,07 0,16 0,12 0,19 0,05 0,35 0,04
Equity per share 5,6 5,5 6,0 6,3 6,0 5,6 6,0
Dividend per share - 0,50 - - - 0,50 1,50
Employees
Number of employees (end of period) 570 564 567 580 573 570 573
Average numbers of employees 567 566 574 577 573 569 573

Note 1 Confirmation of reporting framework

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 2017.

Note 2 Key accounting principles

The accounting principles for the report are described in the annual financial statements for 2017. The Group financial statements for 2017 were prepared in accordance with the IFRS principals 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 31.12.2017. The quarterly report and the interim financial statements have not been revised by auditor. StrongPoint has conducted an assessment of IFRS 15, and its implementation will not have any significant impact on the Group. See the Annual report 2017, note 2 for further information.

Note 3 Segmentinformation

Business areas

Q3 2018 Q3 2017
YTD 2018
YTD 2017 Year 2017
MNOK Re
venue
EBITDA EBT Re
venue
EBITDA EBT Re
venue
EBITDA EBT Re
venue
EBITDA EBT Re
venue
EBITDA EBT
Own Tech 125,9 5,8 1,5 97,1 4,1 0,8 392,0 17,4 5,3 324,8 11,4 2,4 449,1 20,4 7,5
3rd Party 71,0 7,6 5,9 68,3 4,8 3,4 246,0 27,6 21,6 245,9 16,4 11,9 338,6 27,0 19,6
Labels 37,7 6,5 3,1 43,5 8,6 4,7 126,2 17,5 7,1 132,2 16,1 4,7 176,4 24,9 9,8
Elim / ASA -1,2 -4,7 -6,2 -4,1 -3,3 -4,4 -4,5 -17,5 -13,8 -10,6 -12,3 -15,5 -12,6 -19,9 -22,7
Total 233,3 15,2 4,3 204,8 14,1 4,5 759,8 45,0 20,1 692,3 31,6 3,4 951,5 52,4 14,2

Operating revenue by geographical market

Q3 2018 Q3 2017 YTD 2018 YTD 2017 Year 2017
MNOK Norway Sweden Other Norway Sweden Other Norway Sweden Other Norway Sweden Other Norway Sweden Other
Own Tech 28,3 52,8 44,7 21,6 27,2 48,3 74,9 133,7 183,4 92,7 91,3 140,7 124,9 129,5 194,7
3rd Party 15,3 30,6 25,0 25,7 32,4 10,2 81,0 92,6 72,4 96,4 98,4 51,0 105,5 133,7 99,4
Labels 15,0 22,8 0,0 15,1 26,9 1,4 48,7 77,5 0,0 43,7 85,3 3,2 60,8 115,7 0,0
Elim / ASA 0,0 -1,2 0,0 0,0 -4,0 -0,1 0,0 -4,2 -0,3 0,0 -9,4 -1,1 -0,0 -11,2 -1,4
Total 58,6 105,0 69,7 62,5 82,5 59,8 204,6 299,6 255,5 232,8 265,6 193,9 291,1 367,6 292,7

Operating revenue by product and service

Q3 2018 Q3 2017 YTD 2018 YTD 2017 Year 2017
MNOK New
sales
Service New
sales
Service New
sales
Service New
sales
Service New
sales
Service
Own Tech 73,1 52,7 51,0 46,0 224,6 167,4 177,5 147,3 249,8 199,2
3rd Party 50,9 20,1 47,3 21,0 180,7 65,3 173,9 72,0 243,1 95,5
Labels 37,7 0,0 43,5 0,0 126,2 0,0 132,2 0,0 176,4 0,0
Elim / ASA -1,2 0,0 -4,1 0,0 -4,5 0,0 -10,6 0,0 -12,6 0,0
Total 160,5 72,8 137,8 67,0 527,1 232,7 473,1 219,2 656,8 294,7

Note 4 Related parties

No significant transactions between the Group and related parties had taken place as at 30 September 2018.

Note 5 Topp 20 shareholders as at 30 September 2018

No. Name No. of shares
1 STRØMSTANGEN AS 3 933 092 8,9 %
2 HOLMEN SPESIALFOND 2 400 000 5,4 %
3 AVANZA BANK AB 2 037 825 4,6 %
4 HSBC TTEE MARLB EUROPEAN TRUST 1 976 000 4,5 %
5 PROBITAS HOLDING AS 1 788 276 4,0 %
6 ZETTERBERG, GEORG (incl. fully owned companies) 1 623 000 3,7 %
7 NORDNET LIVSFORSIKRING AS 1 603 686 3,6 %
8 NORDNET BANK AB 1 563 897 3,5 %
9 V. EIENDOM HOLDING AS 1 442 610 3,3 %
10 WAALER, JØRGEN (incl. fully owned companies) 1 030 000 2,3 %
11 VERDADERO AS 988 308 2,2 %
12 GLAAMENE INDUSTRIER AS 873 549 2,0 %
13 RING, JAN 869 372 2,0 %
14 MP PENSJON PK 777 402 1,8 %
15 GRESSLIEN, ODD ROAR 660 000 1,5 %
16 SKANDINAVISKA ENSKILDA BANKEN AB 533 363 1,2 %
17 JOHANSEN, STEIN 450 000 1,0 %
18 NHO - P665AK 405 342 0,9 %
19 JACOBSEN, SVEIN (incl. fully owned companies) 400 000 0,9 %
20 SVENSKA HANDELSBANKEN AB 391 040 0,9 %
Sum 20 largest shareholders 25 746 762 58,0 %
Sum 1 798 other shareholders 18 629 278 42,0 %
Sum all 1 818 shareholders 44 376 040 100,0 %

Definitions

EBT Profit before tax EBT-margin EBT / operating revenue EBIT Operating profit EBITDA-margin EBITDA / operating revenue Equity ratio Book value equity / total assets Liquidity ratio Current assets / short term debt

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 Operating revenue per employee Operating revenue / average number of employees Operating cost per employee Operating cost / average number of employees EBITDA Operating profit + depreciation fixed assets and tangible assets Weighted average basic shares Issued shares adjusted for own shares on average for the year Earnings per share Paid dividend per share throughout the year

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StrongPoint ASA Slynga 10, 2005 Rælingen strongpoint.com

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