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Net Insight
Quarterly Report • Apr 20, 2021
3180_10-q_2021-04-20_993e568d-a9a4-4908-a215-0e7dc9254691.pdf
Quarterly Report
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Net Insight Interim Report January – March 2021
Net Insight AB (publ) corp.id.no. 556533–4397
January – March 2021
- Net sales amounted to SEK 77.9 (76.0) million, an increase of 2.6% year on-year. In comparable currencies net sales increased by 11.6%.
- Operating earnings amounted to SEK 3.1 (4.8) million, corresponding to an operating margin of 4.0% (6.3%). Excluding foreign exchange rate differences of SEK 7.6 (9.2) million, operating earnings were SEK -4.4 (-4.4) million.
- Net income for the period for the Group, including divested operations, was SEK -33.0 (248.4) million. This includes capital loss on disposal of discontinued operations of SEK -35.9 million (246.4). The effect on earnings from the disposal of discontinued operations deviates from the estimate communicated in connection with the announcement of the transaction. For more information, see section "Divested operations" in "Extraordinary events".
- Earnings per share, basic and diluted, for the Group was SEK -0.09 (0.65).
- Total cash flow for the Group was SEK 14.1 million (245.4). Excluding the cash impact of the divestment of subsidiary, cash flow was SEK -1.0 million (-57.0).
New IP deals won during the quarter
Crister Fritzson, CEO, Net Insight
Significant events:
- Divestment of ScheduALL
- Promising results in innovation study of Net Insight's time synchronization technology in mobile networks
- Important deals with Red Bee Media and NEP Connect
FINANCIAL HIGHLIGHTS
| Jan-Mar | Apr 2020- | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK millions | 2021 | 2020 | Change | Mar 2021 | 2020 | Change |
| Continuing operations | ||||||
| Net sales | 77.9 | 76.0 | 2.6% | 333.7 | 331.7 | 0.6% |
| Operating earnings | 3.1 | 4.8 | -34.2% | -17.2 | -15.6 | |
| Operating margin | 4.0% | 6.3% | -5.2% | -4.7% | ||
| Net income | 3.9 | 1.3 | 207.0% | -12.1 | -14.8 | |
| EBITDA | 2.6 | 1.1 | 131.5% | -17.8 | -19.3 | |
| EBITDA margin | 3.3% | 1.5% | -5.3% | -5.8% | ||
| Total Group, including discontinued operations | ||||||
| Net Income | -33.0 | 248.4 | -44.0 | 237.4 | ||
| Total cash flow | 14.1 | 245.4 | -94.3% | 1.3 | 232.6 | -99.4% |
Business area Resource Optimization was divested in 2021 and Business area Streaming Solutions was divested in 2020. The divested business areas are reported separately as discontinued operations in this report.
CEO´s Statement
Accelerated product development results in new deals
Growth on a continued cautious market
Net Insight posted continued growth in the first quarter 2021 and revenue up by 2.6% despite negative exchange rate effects. Adjusted for exchange rate effects, year-on-year growth was 11.6%. The divestment of ScheduALL, which was announced in the quarter, is an important step towards focusing the operations and achieving profitable growth. It is also encouraging that our sharper focus and accelerated R&D investments are yielding results and that we won important deals in the quarter.
Financial targets
Following last year's strategic operational focus and initiatives aimed at the core operations Media Networks, we are now ready to communicate external financial targets of an average annual organic growth of at least 10% and an average annual EBIT margin (operating margin) of at least 10% until 2025.
Market position and Covid-19
The pandemic is not over yet and the market is continuing to adjust to the new reality. The transition towards remote production continues, as well as demand for live events with higher transmission quality from traditional TV broadcasters and various streaming services. Although market activity is increasing, the market remains hesitant and a high proportion of business in the quarter is related to minor upgrades and network extensions. Due to the increased market activity, we ended all short-term staff furloughs on April 1.
There is currently a global shortage of electronic components due to the Covid-19 pandemic. To what degree this will affect us, and whether it could disrupt production and delivery remains uncertain, but we are working to secure component deliveries.
The first quarter is normally characterized by preparations ahead of major trade shows. All Net Insight's operations are now carried out digitally and more than a year has passed since we last met in person with our customers, partners and colleagues. Although personal meetings are invaluable, the digital transition shows that we have the capacity to adjust and realign operations, which will be critical for continuing to build a successful change organization.
Media Networks
Over the past year, we have invested in Media Networks and accelerated product development. Our product investments are now focused on IP media, based on the ST 2110 standard, and IP video functionality, that supports our customers' transition to IP and cloud-based production and distribution.
In the quarter, we were pleased to announce the implementation of our 100GE IP media solution for delivery of an uncompressed IP playout to Red Bee Media, for reliable, flexible and future-proof services for their customers. The solution includes Media Pro App, our new software offering IP video functionality in our Nimbra products, such as ST 2110 adaptation and IP video security. We also signed a deal in the quarter with NEP Connect relating to remote production for cricket for a UK broadcaster, where our solution supports the transition to IP and virtualized workflows. Swisscom Broadcast also chose us for a media network that covers all arenas for the top two soccer leagues in Switzerland.
During this period when sporting events are taking place without audiences on-site, TV broadcasts have become even more important which has led to extensive changes that have accelerated the shift to remote production. For example, we signed a deal with Swiss broadcaster SRF, who had planned to have 80 persons on-site during the Alpine World Championships in Cortina, but were forced to change their plans due to the Covid-19 pandemic. They chose our cloudbased Nimbra Edge solution for remote production as a replacement, which ensured quality transmission from Cortina and to quickly scale-up production.
Time synchronization
We recently completed a study as part of an innovation project alongside Vinnova and KTH Royal Institute of Technology relating to time synchronization for real-time critical networks. The study showed that our time synchronization technology could be attractive to mobile operators and that it satisfies the technical requirements for cost-efficient inclusion in existing synchronization solutions in 5G networks and other critical networks. This also demonstrates our leading-edge technology and highly skilled developers. We are now developing the solution further and have started discussions with customers and partners, and initiated the first customer tests.
Resource Optimization
In line with our strategy of focusing operations and optimize resources in Media Networks, we took an important step in February when we signed an agreement to sell ScheduALL to Xytech Systems,
thereby divesting the Resource Optimization business area. We will continue to develop various partnerships looking ahead, and have established a close collaboration with Xytech relating to continued joint solutions.
The work associated with developing and improving customer relationships, together with our tech development initiatives, are now starting to pay off in the form of deals, while we are also gearing up for innovation and development on further markets.
I am very satisfied that we have now externally communicated our financial targets for the first time and look forward to continuing to work alongside all my colleagues to reach these goals on our future growth journey.
Solna, Sweden, April 20, 2021 Crister Fritzson, CEO
EXTRAORDINARY EVENTS
Divested operations
The business area Streaming Solutions (the Sye consumer streaming business) was divested on March 31, 2021, and is reported as discontinued operations in this report. The transaction means that 100% of the shares in the wholly owned subsidiary VizuALL Inc was sold on a cash and debt basis, including a normalized working capital for a total of USD 6 million, of which USD 3 million in cash in connection with the transfer of ownership and the remainder as a promissory note payable over a 12 -18 months term. The transaction had a negative effect on earnings for the Group of SEK -35.9 million and a negative effect on earnings for the Parent Company of SEK -70.1 million. The divestment had a positive cash impact (net after deduction of the withheld part of the consideration and transaction cost) of SEK 15.1 million.
Due to inaccuracies in the calculation of the expected earnings effect for the Group, which was communicated in connection with the announcement of the transaction on February 24, 2021, the actual effect on earnings (SEK -35.9 million) deviates sharply from the previously estimated positive profit effect of SEK 35-45 million. However, the difference between the previously communicated and the actual earnings effect at Group level does not imply any change in terms of either liquidity, distributable funds, tax situation or the future earning capacity for continuing operations.
Revenues for Resource Optimization in the first quarter 2021 were SEK 15.1 (18.0) million, a decrease of -16%. Operating earnings were SEK -1.2 (0.8) million. Excluding foreign exchange rate differences of SEK -0.1 (1.1) million, operating earnings were SEK -1.1 (-0.3) million. Uncertainty linked to Covid-19 has continued to characterize customers' willingness to invest and thus revenues during the first quarter.
Comments in this report have reference to continuing operations, business area Media Networks, unless otherwise specified. For more information on discontinued operations, including the in 2020 divested business Streaming Solutions, see tables on page 11.
REVENUES
Net sales amounted to SEK 77.9 (76.0) million, an increase of 2.6% year on-year. In comparable currencies net sales increased by 11.6%. Despite continued general uncertainty, a number of important deals were made in the quarter, which contributed to slightly increased sales compared with the corresponding period last year.
Net Insight's solutions are sold all over the world and we have customers in around 70 countries. Many customers are global, with central purchasing functions for subsidiaries. Revenue per region varies over time depending on where events take place.
Media Networks encompasses the Nimbra portfolio. A Nimbra solution normally consists of software as well as hardware and support. Customers with existing software licenses sometimes purchases only hardware, which means the mix between software and hardware revenues may vary over time. Revenues are mainly driven by events and specific larger deals can have a significant impact on quarterly revenue. There is no clear seasonality, why revenue on a rolling 12-month basis is a better indicator than a single quarter.
Net sales continuing operations
EARNINGS
Gross profit for the first quarter was SEK 45.1 (47.0) million, a decrease by -4.0%. The decrease is explained by higher amortization of capitalized development expenditure due to new launches in late 2020 and early 2021. Gross profit included amortization of capitalized development expenditure of SEK -9.9 (-7.3) million. Gross margin excluding and including amortization of capitalized development expenditure was 70.5% (71.4%) and 57.9% (61.8%) respectively.
Operating expenses in the first quarter of SEK -49.8 (-51.7) million were SEK 1.9 million lower compared to the corresponding period of the previous year due to cost saving programs and temporary Covid-19 related cost reductions.
Sales and marketing expenses were SEK -23.0 (-23.1) million, and administration expenses to SEK -13.1 (-14.0). Development expenses were SEK -13.7 (-14.7) million. The decrease was due to a higher capitalization rate. Total development expenditure, i.e. before capitalization, decreased to SEK -28.1 (-29.4) million. Other operating income and expenses were SEK 7.9 (9.5) million, mostly related to foreign exchange rate gains.
Operating earnings were SEK 3.1 (4.8) million, corresponding to an operating margin of 4.0% (6.3%). Excluding foreign exchange rate differences of SEK 7.6 (9.2) million, operating earnings were unchanged at SEK -4.4 (-4.4).
EBITDA was SEK 2.6 (1.1) million, corresponding to an EBITDA margin of 3.3% (1.5%). Net financial items amounted to SEK 1.5 (-2.6) million.
Profit before tax for the first quarter was SEK 4.7 (2.2) million, and net income was SEK 3.9 (1.3) million, corresponding to a net margin of 5.0% (1.7%). Including Discontinued operations, net income was SEK -33.0 (248.4) million, including capital loss on disposal of discontinued operations of SEK -35.9 (246.4) million.
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| Key Ratios continuing operations | 2021 | 2020 | Mar 2021 | 2020 |
| Net sales, SEK millions | 77.9 | 76.0 | 333.7 | 331.7 |
| Net sales YoY, change in % | 2.6% | -18.8% | -7.3% | -12.2% |
| Gross earnings | 45.1 | 47.0 | 200.0 | 201.9 |
| Gross margin | 57.9% | 61.8% | 59.9% | 60.9% |
| Operating earnings | 3.1 | 4.8 | -17.2 | -15.6 |
| Operating margin | 4.0% | 6.3% | -5.2% | -4.7% |
| EBITDA | 2.6 | 1.1 | -17.8 | -19.3 |
| EBITDA margin | 3.3% | 1.5% | -5.3% | -5.8% |
Earnings trend continuing operations
Earnings trend excl. Items affeceting comparability continuing operations
INVESTMENTS INCLUDING DIVESTED OPERATIONS
First quarter investments were SEK 18.1 (24.4) million, of which SEK 17.6 (21.3) million related to capitalization of expenditure for development. Last year also includes SEK 2.9 million of fixed assets acquired from Aperi.
Depreciation and amortization in the first quarter totaled SEK 16.2 (13.9) million, of which SEK 11.2 (8.4) million related to amortization of capitalized expenditure for development.
At the end of the period, net value of capitalized expenditure for development was SEK 149.3 million. Net value of capitalized expenditure for development was SEK 208.9 million as of December 31, 2020.
For continuing operations (Media Networks) capitalized expenditure for development in the first quarter amounted to SEK 14.4 (14.6) million, and amortization to SEK -9.9 (-7.3) million.
At the end of the period, net value of capitalized expenditure for development was SEK 149.3 million, against SEK 144.8 million as of December 31, 2020.
CASH FLOW AND FINANCIAL POSITION INCLUDING DISCONTINUED OPERATIONS
Cash flow from operating activities in the first quarter was SEK 19.3 (-30.2) million. The divestment of Business Area Resource Optimization (last year Business Area Streaming Solutions) had a cash impact of SEK 15.1 (302.3) million. Total cash flow for the period was Total cash flow was SEK 14.9 (245.4) million. Excluding the divestment impact, cash flow was SEK -1.0 (-57.0) million. Last year, cash flow was affected negatively with SEK -12.7 million by the acquisition of the Aperi product portfolio.
Cash and cash equivalents were SEK 298.3 million at the end of the period, against SEK 283.2 million as of 31 December 2020.
Remaining tax loss carry-forwards for group companies amounted to SEK 98.1 million at the end of the period, compared to SEK 102.2 million for continuing business as of December 31, 2020. For more information, see the section Tax on page 13.
Equity was SEK 659.7 million at the end of the period, against SEK 692.6 million as of 31 December 2020. The equity/assets ratio was 82.4%, against 80.3% as of 31 December 2020. For more information about share repurchases and share structure, see the section Contributed equity on page 13.
EMPLOYEES
The average number of employees and consultants at Net Insight during the first quarter was 153 (148) of which 124 (128) in the parent company Net Insight AB (publ).
Katarina Dufvenmark, vice president People, and Marcus Sandberg, vice president Corporate Development, left the company during the quarter and in connection with this, a reorganization took place, meaning that the HR department is part of the CFO's area of responsibility and Corporate Development is part of the CCO's area of responsibility. Ken Graham, vice president Resource Optimization, left the management team in connection with the divestment of the business area in the first quarter of 2021.
PARENT COMPANY
Parent company net sales were SEK 77.9 (80.2) million in the first quarter, and net income was SEK -67.2 (200.0) million. The financial net includes result from participation in group companies of SEK -70.1 (193.8) million, which relates to capital loss/gains from divestment of subsidiary. In the first quarter, intra-group sales totaled SEK 0.0 (4.7) million, and intragroup purchases SEK -11.7 (-13.1) million.
Progress in the parent company in the first quarter and the full year largely shadowed Group progress as indicated above for the business area Media Networks (except for the effect of the sale of businesses/subsidiaries).
RISK AND SENSITIVITY ANALYSIS
Net Insight's operations and results of operations are affected by a number of external and internal factors. The company conducts a continuous process to identify all risks present, and to assess how each risk should be managed.
Primarily, the risks the company is exposed to are market-related risks (including competition, technological progress and political risks), operational risks (including product liability, intellectual property, disputes, customer dependency and contract risks) as well as financial risks.
No additional critical risks and uncertainty factors, other than those reviewed in the Annual Report for 2020, arose during the period or are anticipated in 2021.
For a complete review of the company's risk and sensitivity analysis, and its risk management process, see pages 26-28 and 45-46 of the Annual Report for 2020.
SEASONALITY
In the past three calendar years, average seasonality has been fairly modest. Net sales per quarter were approximately 25% of annual sales.
CONSOLIDATED INCOME STATEMENT, IN SUMMARY
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Continuing operations | ||||
| Net sales | 77,938 | 75,971 | 333,711 | 331,744 |
| Cost of sales | -32,840 | -28,998 | -133,673 | -129,831 |
| Gross earnings | 45,098 | 46,973 | 200,038 | 201,913 |
| Sales and marketing expenses | -23,014 | -23,054 | -92,538 | -92,578 |
| Administration expenses | -13,093 | -13,953 | -53,728 | -54,588 |
| Development expenses | -13,716 | -14,734 | -54,321 | -55,339 |
| Other operating income and expenses | 7,850 | 9,520 | -16,671 | -15,001 |
| Operating earnings | 3,125 | 4,752 | -17,220 | -15,594 |
| Net financial items | 1,536 | -2,583 | -505 | -4,624 |
| Profit/loss before tax | 4,661 | 2,169 | -17,725 | -20,218 |
| Tax | -748 | -894 | 5,604 | 5,458 |
| Net income continuing operations | 3,913 | 1,275 | -12,121 | -14,760 |
| Discontinued operations, net after tax | -36,926 | 247,094 | -31,877 | 252,143 |
| Net Income | -33,013 | 248,368 | -43,998 | 237,383 |
| Net income for the period attributable to the shareholders of the parent company | -33,013 | 248,368 | -43,998 | 237,383 |
| Earnings per share, based on net income attributable to the | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| parent company's shareholders during the period | 2021 | 2020 | Mar 2021 | 2020 |
| Earnings per share basic and diluted continuing operations (SEK) | 0.01 | 0.00 | -0.03 | -0.04 |
| Earnings per share basic and diluted including discontinuing operations (SEK) | -0.09 | 0.65 | -0.11 | 0.62 |
| Average number of oustanding shares in thousands, basic | 382,758 | 382,758 | 382,758 | 382,758 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Net income | -33,013 | 248,368 | -43,998 | 237,383 |
| Other comprehensive income | ||||
| Items that may be reclassified subsequently to the income statement | ||||
| Translation differences | 80 | 5,443 | -15,103 | -9,740 |
| Total other comprehensive income, after tax | 80 | 5,443 | -15,103 | -9,740 |
| Total other comprehensive income for the period | -32,933 | 253,811 | -59,101 | 227,643 |
| Total comprehensive income for the period attributable to the shareholders of the parent company |
-32,933 | 253,811 | -59,101 | 227,643 |
CONSOLIDATED BALANCE SHEET, IN SUMMARY
| SEK thousands | 31 Mar 2021 | 31 Dec 2020 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Capitalized expenditure for development | 149,318 | 208,938 |
| Goodwill | 38,752 | 58,166 |
| Other intangible assets | 3,381 | 7,830 |
| Right-of-use assets | 39,436 | 45,231 |
| Equipment | 21,675 | 24,989 |
| Deferred tax asset | 20,956 | 27,428 |
| Deposits | 5,022 | 5,400 |
| Totalt non-current assets | 278,540 | 377,982 |
| Current assets | ||
| Inventories | 56,911 | 52,470 |
| Accounts receivable | 84,256 | 98,116 |
| Other receivables | 82,826 | 50,620 |
| Cash and cash equivalents | 298,305 | 283,184 |
| Total current assets | 522,298 | 484,390 |
| TOTAL ASSETS | 800,838 | 862,372 |
| EQUITY AND LIABILITIES | ||
| Equity attributable to parent company's shareholders | ||
| Share capital | 15,597 | 15,597 |
| Other paid-in capital | 1,192,727 | 1,192,727 |
| Translation reserve | -187 | -267 |
| Accumulated deficit | -548,454 | -515,441 |
| Total shareholders' equity | 659,683 | 692,616 |
| Non-current liabilities | ||
| Lease liabilities | 30,794 | 35,498 |
| Other liabilities | 11,284 | 18,230 |
| Total non-current liabilities | 42,078 | 53,728 |
| Current liabilities | ||
| Lease liabilities | 9,107 | 10,231 |
| Accounts payable | 14,621 | 17,093 |
| Other liabilities | 75,349 | 88,704 |
| Total current liabilities | 99,077 | 116,028 |
| TOTAL EQUITY AND LIABILITIES | 800,838 | 862,372 |
The balance sheet as of December 31, 2020, includes assets and liabilities related to the in 2021 divested business. See table on page 11 for divested assets and liabilities on March 31, 2021.
CHANGES IN CONSOLIDATED EQUITY, IN SUMMARY
| Attributable to parent company's shareholders | |||||
|---|---|---|---|---|---|
| SEK thousands | Share capital |
Other paid-in capital |
Translation reserve |
Accumulated deficit |
Total shareholders' equity |
| January 1, 2020 | 15,597 | 1,192,727 | 9,473 | -754,052 | 463,745 |
| Warrants issued | - | - | - | 1,228 | 1,228 |
| Total comprehensive income | - | - | -9,740 | 237,383 | 227,643 |
| December 31, 2020 | 15,597 | 1,192,727 | -267 | -515,441 | 692,616 |
| January 1, 2021 | 15,597 | 1,192,727 | -267 | -515,441 | 692,616 |
| Total comprehensive income | - | - | 80 | -33,013 | -32,933 |
| March 31, 2021 | 15,597 | 1,192,727 | -187 | -548,454 | 659,683 |
CONSOLIDATED STATEMENT OF CASH FLOWS INCLUDING DISCONTINUED OPERATIONS
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Ongoing activities | ||||
| Profit/loss before tax | -32,333 | 249,426 | -44,862 | 236,897 |
| Income tax paid | - | - | -313 | -313 |
| Depreciation & amortization | 16,168 | 13,909 | 62,146 | 59,887 |
| Other items not affecting liquidity | 27,596 | -251,909 | 49,612 | -229,893 |
| Cash flow from operating activities before changes in working capital | 11,431 | 11,426 | 66,583 | 66,578 |
| Changes in working capital | ||||
| Increase-/decrease+ in inventories | -4,645 | -14,954 | -3,360 | -13,669 |
| Increase-/decrease+ in receivables | -3,491 | -25,548 | 29,071 | 7,014 |
| Increase+/decrease- in liabilities | 15,974 | -1,147 | -26,935 | -44,056 |
| Cash flow from operating activities | 19,269 | -30,223 | 65,359 | 15,867 |
| Investment activities | ||||
| Investment in intangible assets | -17,563 | -21,346 | -70,563 | -74,346 |
| Investment in tangible assets | -552 | -3,026 | -588 | -3,062 |
| Disposal of subsidiary, net effect on cash | 15,129 | 302,348 | 15,129 | 302,348 |
| Increase-/decrease+ in financial assets, net | - | - | -278 | -278 |
| Cash flow from investment activities | -2,986 | 277,976 | -56,300 | 224,662 |
| Financing activities | ||||
| Amortization leasing | -2,190 | -2,381 | -8,943 | -9,134 |
| Cash flow from financing activities | -2,190 | -2,381 | -7,715 | -7,906 |
| Net change in cash and cash equivalents | 14,093 | 245,372 | 1,344 | 232,623 |
| Exchange differences in cash and cash equivalents | 1,028 | 476 | -1,217 | -1,769 |
| Cash and cash equivalents at the beginning of the period | 283,184 | 52,330 | 298,178 | 52,330 |
| Cash and cash equivalents at the end of the period | 298,305 | 298,178 | 298,305 | 283,184 |
DISAGGREGATION OF REVENUE
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Net sales by product group | ||||
| Hardware | 34,855 | 32,379 | 139,587 | 137,111 |
| Software licenses | 15,314 | 15,585 | 80,655 | 80,926 |
| Support and Services | 27,769 | 28,007 | 113,469 | 113,707 |
| Total | 77,938 | 75,971 | 333,711 | 331,744 |
| Net sales by region | ||||
| WE | 40,640 | 39,098 | 159,170 | 157,628 |
| AM | 25,248 | 24,221 | 118,233 | 117,206 |
| RoW | 12,050 | 12,652 | 56,308 | 56,910 |
| Total | 77,938 | 75,971 | 333,711 | 331,744 |
| Timing of revenue recognition | ||||
| Products and services transfered at a point in time | 50,201 | 47,976 | 220,289 | 218,064 |
| Services transferred over time | 27,737 | 27,995 | 113,422 | 113,680 |
| Total | 77,938 | 75,971 | 333,711 | 331,744 |
FINANCIAL ASSETS AND LIABILITIES
| Group's financial instruments by category - Assets | Mar 31, 2021 | 31 Dec 2020 | ||
|---|---|---|---|---|
| SEK thousands | Value Measured at tier amortized cost |
Measured at fair value through profit or loss |
Value Measured at tier amortized cost |
Measured at fair value through profit or loss |
| Assets in Balance Sheet | ||||
| Derivative instruments | 2 | - | 2 | - |
| Accounts receivable and other receivables, excluding excluding non-financial assets |
168,094 | 130,667 | ||
| Cash and cash equivalents | 298,305 | 283,134 | ||
| Total | 466,399 | - | 413,801 | - |
| Group's financial instruments by category - Liabilities | Mar 31, 2021 | 31 Dec 2020 | |||||
|---|---|---|---|---|---|---|---|
| SEK thousands | Value tier |
Measured at amortized cost |
Measured at fair value through profit or loss |
Value tier |
Measured at amortized cost |
Measured at fair value through profit or loss |
|
| Liabilities in Balance Sheet | |||||||
| Synthetic options | 2 | - | 2 | - | |||
| Derivative instruments | 2 | 27 | 2 | - | |||
| Accounts payable and other liabilities, excluding non financial liabilities |
18,696 | 22,763 | |||||
| Lease liabilities | 39,900 | 45,729 | |||||
| Total | 58,597 | 27 | 68,492 | - |
Financial instruments in tier 2
The fair value of derivative instruments is measured using exchange rates of currency forwards on the reporting date. The closing balance for synthetic options represents the total assessed value of a number of outstanding options, which has been measured on the basis of accepted market principles and are based on Net Insight's share price.
INCOME FROM DISCONTINUED OPERATIONS
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Revenues | 15,101 | 17,649 | 64,281 | 66,829 |
| Expenses | -16,176 | -16,741 | -55,499 | -56,064 |
| Capital gain on disposal of discontinued operations | -35,919 | 246,350 | -35,919 | 246,350 |
| Profit/loss before tax | -36,994 | 247,258 | -27,137 | 257,115 |
| Tax | 68 | -164 | -4,740 | -4,972 |
| Net income discontinuing operations | -36,926 | 247,094 | -31,877 | 252,143 |
ASSETS HELD FOR SALE
| SEK thousands | Mar 2021 | Jan 2020 |
|---|---|---|
| Disposed assets and liabilities | ||
| Capitalized expenditure for development | 70,198 | 79,756 |
| Goodwill | 22,932 | - |
| Other intangible assets | 3,642 | - |
| Right-of-use assets | 3,617 | - |
| Equipment | 2,688 | 250 |
| Deferred tax asset | 6,261 | 13,598 |
| Deposits | 407 | - |
| Accounts receivable | 7,916 | - |
| Other receivables | 1,859 | 186 |
| Cash and cash equivalents | 2,274 | 1,533 |
| Lease liabilities, non-current | -2,593 | - |
| Other liabilities, non-current | -5,862 | - |
| Lease liabilities | -1,291 | - |
| Accounts payable | -1,702 | - |
| Other liabilities | -32,596 | -2,875 |
| Net assets and liabilities | 77,750 | 92,448 |
| Cash consideration | 49,538 | 348,002 |
| Less: Escrow | -24,428 | -34,917 |
| Less: Cash and cash equivalents in discontinued operations | -2,274 | -1,533 |
| Less: Transaction costs | -7,707 | -9,204 |
| Effect on group's cash and cash equivalents | 15,129 | 302,348 |
CASHFLOW FROM DISCONTIUED OPERATIONS
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Cash flow from discontinued operations, net | ||||
| Cash flow from operating activities | 819 | 3,288 | 19,749 | 22,218 |
| Cash flow from investment activities | 11,960 | 295,667 | -2,769 | 280,938 |
| Cash flow from financing activities | - | - | - | - |
| Cash flow from discontinued operations, net | 12,779 | 298,955 | 16,980 | 303,156 |
PARENT COMPANY INCOME STATEMENT, IN SUMMARY
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK thousands | 2021 | 2020 | Mar 2021 | 2020 |
| Net sales | 77,879 | 80,195 | 338,347 | 340,663 |
| Cost of sales | -31,768 | -29,124 | -134,092 | -131,448 |
| Gross earnings | 46,111 | 51,071 | 204,255 | 209,215 |
| Sales and marketing expenses | -28,411 | -24,846 | -113,400 | -109,835 |
| Administration expenses | -13,278 | -13,916 | -55,133 | -55,771 |
| Development expenses | -10,413 | -15,073 | -51,442 | -56,102 |
| Other income expenses | 7,767 | 9,520 | -16,943 | -15,190 |
| Operating earnings | 1,776 | 6,756 | -32,663 | -27,683 |
| Net financial items | -68,274 | 194,262 | -66,335 | 196,201 |
| Profit/loss before tax | -66,498 | 201,018 | -98,998 | 168,518 |
| Tax | -708 | -1,001 | 6,067 | 5,774 |
| Net income | -67,206 | 200,017 | -92,931 | 174,292 |
PARENT COMPANY BALANCE SHEET, IN SUMMARY
| SEK thousands | 31 Mar 2021 | 31 Dec 2020 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Capitalized expenditure for development | 149,318 | 144,776 |
| Other intangible assets | 3,381 | 3,981 |
| Equipment | 19,745 | 20,407 |
| Participations in group companies | 174,895 | 246,400 |
| Deferred tax asset | 20,210 | 20,919 |
| Deposits | 4,927 | 4,927 |
| Total non-current assets | 372,476 | 441,410 |
| Current assets | ||
| Inventories | 56,911 | 52,470 |
| Accounts receivable | 84,721 | 90,453 |
| Receivables from group companies | - | - |
| Other receivables | 84,278 | 50,520 |
| Cash and cash equivalents | 273,958 | 263,558 |
| Total current assets | 499,868 | 457,001 |
| TOTAL ASSETS | 872,344 | 898,411 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Restricted equity | 248,106 | 200,181 |
| Non-restricted equity | 381,426 | 496,557 |
| Total equity | 629,532 | 696,738 |
| Non-current liabilities | ||
| Other liabilities | 11,519 | 11,357 |
| Total non-current liabilities | 11,519 | 11,357 |
| Current liabilities | ||
| Accounts payable | 14,621 | 15,557 |
| Liablities to group companies | 150,318 | 120,390 |
| Other liabilities | 66,354 | 54,369 |
| Total current liabilities | 231,293 | 190,316 |
| TOTAL EQUITY AND LIABILITIES | 872,344 | 898,411 |
ACCOUNTING POLICIES
This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable regulations of the Swedish Annual Accounts Act. The Interim Report of the parent company complies with chapter 9 of the Swedish Annual Accounts Act, Interim Financial Reporting, and RFR 2 Accounting for Legal Entities.
Disclosures in accordance with IAS 34 are presented in the interim financial statements and the associated notes as well as elsewhere in the interim financial report.
There are no new or amended International Financial Reporting Standards (IFRS) that have had a material impact on the Company's financial reporting.
Business area Resource Optimization (ScheduALL) was divested on March 31, 2021, and business area Streaming Solutions (Sye) was divested on January 3, 2020. Hence, Net Insight has now only one business area and segment. The divested business areas are presented in the report as discontinued operations. As a result of the divestment, certain costs for central functions has been reallocated between the various business areas. Most of these costs are fixed and do not accompany the divested operations.
Except for stated above, the same accounting principles and basis of calculation as those used in the latest Annual Report have been applied to the group and parent company. For a description of these accounting principles, please refer to the Annual Report for 2020.
The preparation of the Interim Report requires management to make judgements, estimates and assumptions that affect the company's earnings and position and information presented generally. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. For a description of these estimates and assumptions, please refer to the Annual Report for 2020.
Figures in brackets in this report refer to comparison with the corresponding period or date in the previous year, if not stated otherwise. Divergences due to rounding may occur in this report.
TAX
The group reported tax of total SEK -0.7 (1.1) million for the period January–March 2021, of which SEK -0.7 (-0.9) million relates to continuing operations. Reported tax corresponds to an effective tax rate of 2.1 (-0.4) percent and 16.0 (-41.2) percent, respectively. The group recognized a capital loss/gain from discontinued operations of SEK -35.9 (246.4) million, which is a non taxable income. The effective tax rate is also affected by the relative effects of foreign tax rates and temporary differences.
Remaining tax loss carry-forwards for group companies amounted to SEK 98.1 million at the end of the period, compared to SEK 102.2 million for continuing business as of December 31, 2020.
CONTRIBUTED EQUITY
No own shares have been repurchased during January-March 2021.
At the end of the reporting period, the parent company had a total of 7,175,000 of its own class B shares, at an average cost of SEK 4.44 per share and with a par value of SEK 0.04 per share. The shares are held as own shares. The parent company has the right to reissue these shares at a later date.
All shares issued by the parent company were fully paid.
| 31 Mar, 2021 | 31 Dec, 2020 | ||||||
|---|---|---|---|---|---|---|---|
| The division of shares | A-shares | B-shares | Total | A-shares | B-shares | Total | |
| Outstanding shares | 1,000,000 | 381,758,009 | 382,758,009 | 1,000,000 | 381,758,009 | 382,758,009 | |
| Repurchased own shares | - | 7,175,000 | 7,175,000 | - | 7,175,000 | 7,175,000 | |
| Issued shares | 1,000,000 | 388,933,009 | 389,933,009 | 1,000,000 | 388,933,009 | 389,933,009 |
TRANSACTIONS WITH RELATED PARTIES
No transactions with related parties during the period.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
No significant events have occurred after the end of the reporting period.
AUDITORS' REVIEW
This Report has not been reviewed by the company's auditors.
THIS IS NET INSIGHT
Business concept and model
Net Insight is defining new ways to deliver media. Net Insight is driving the transformation of video networks with open IP, virtualized and cloud solutions that enable our customers to simply and costeffectively create live experiences. With the product area Media Networks, Net Insight is opening up new routes for customers to produce and deliver content to viewers anywhere. Revenues are generated through sales of hardware and software solutions and services.
Strategy
Net Insight wants to set the benchmark for media transport and help broadcasters, production companies, service providers and enterprises to transform their media businesses – enabling them to benefit from new software defined, virtual and distributed media workflows, without discarding their existing hardware investments. Net Insight wants to empower customers to work smarter through remote/distributed production and flexible networks.
Net Insight is technology agnostic and has built the market's most open and cloud-ready video centric media delivery platform, allowing customers to deliver content on any network, their way.
The main strategic objective is to accelerate growth, in both existing and closely related market and customer segments. This will be achieved through a combination of leveraging our unique portfolio and our industry expertise, strengthened solutions competitiveness, and improved internal execution.
Value creators
The solutions are deployed by the world's leading media brands to keep their mission-critical media networks running smoothly. New technology is enabling these players to adopt new, more cost efficient and flexible ways to produce and deliver content. Net Insight can play an important role to support our customers making this gradual transition.
Net Insight benefits from underlying market trends like the general increase in video traffic, live streaming and file-based transfers. Other trends supporting the company's growth prospects include the broader coverage of live events, move towards remote production and increased use of Internet and cloud for media production and transport.
REPORTING DATES
Annual General Meeting May 7, 2021 Interim report January – June July 16, 2021 Interim report January – September November 9, 2021
Solna, Sweden, April 20, 2021
Crister Fritzson CEO
This interim report has been prepared in Swedish and translated into English. In the event of any discrepancies between the Swedish interim report and the English translation the former shall have precedence.
For more information, please contact:
Crister Fritzson, CEO, Net Insight AB (publ) Phone: +46 (0)8-685 04 00 Email: [email protected]
Joakim Schedvins, CFO, Net Insight AB (publ) Phone: +46 (0)8-685 04 00 Email: [email protected]
Net Insight AB (publ), corp.id.no. 556533-4397 Box 1200, 171 23 Solna, Sweden Phone. +46 (0)8 – 685 04 00 www.netinsight.net
This information is information that Net Insight AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8:45 am CEST on April 20, 2021.
FINANCIAL INFORMATION
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| SEK millions (if not defined differently | 2021 | 2020 | Mar 2021 | 2020 |
| Earnings continuing operations | ||||
| Net sales | 77.9 | 76.0 | 333.7 | 331.7 |
| Gross earnings | 45.1 | 47.0 | 200.0 | 201.9 |
| Operating expenses | 49.8 | 51.7 | 200.6 | 202.5 |
| Total development expenditure | 28.1 | 29.4 | 104.6 | 105.9 |
| EBITDA | 2.6 | 1.1 | -17.8 | -19.3 |
| Operating earnings | 3.1 | 4.8 | -17.2 | -15.6 |
| Profit/loss before tax | 4.7 | 2.2 | -17.7 | -20.2 |
| Net income | 3.9 | 1.3 | -12.1 | -14.8 |
| Balance sheet and cash flow including discontinued operations | ||||
| Cash and cash equivalents | 298.3 | 298.2 | 298.3 | 283.2 |
| Working capital | 71.2 | 38.0 | 53.5 | 57.8 |
| Total cash flow | 14.1 | 245.4 | 1.3 | 232.6 |
| The share | ||||
| Dividend per share, SEK | - | - | - | - |
| Earnings per share basic and diluted continuing operations, SEK | 0.01 | 0.00 | -0.03 | -0.04 |
| Earnings per share basic and diluted discontinuing operations, SEK | -0.10 | 0.65 | -0.08 | 0.66 |
| Earnings per share basic and diluted total, SEK | -0.09 | 0.65 | -0.11 | 0.62 |
| Cash flow per share, SEK | 0.04 | 0.64 | 0.00 | 0.61 |
| Equity per share basic and diluted, SEK | 1.72 | 1.87 | 1.72 | 1.81 |
| Average number of outstanding shares basic and diluted, thousands | 382,758 | 382,758 | 382,758 | 382,758 |
| Number of outstanding shares at the end of the periodbasic and diluted, thousands | 382,758 | 382,758 | 382,758 | 382,758 |
| Share price at end of period, SEK | 2.61 | 1.75 | 2.61 | 1.58 |
| Employees and consultants continuing operations | ||||
| Average number of employees and consultants | 153 | 148 | 169 | 152 |
| KPI continuing operations | ||||
| Net sales YoY, change in % | 2.6% | -18.8% | -7.3% | -12.2% |
| Gross margin | 57.9% | 61.8% | 59.9% | 60.9% |
| Total development expenditure/Net sales | 36.1% | 38.6% | 31.3% | 31.9% |
| Operating margin | 4.0% | 6.3% | -5.2% | -4.7% |
| EBITDA margin | 3.3% | 1.5% | -5.3% | -5.8% |
| Net margin | 5.0% | 1.7% | -3.6% | -4.4% |
| KPI Group including discontinued operations | ||||
| Return on capital employed | -1.2% | -3.3% | -1.1% | -0.6% |
| Equity/asset ratio | 82.4% | 76.7% | 82.4% | 80.3% |
| Return on equity | -6.3% | 42.4% | -6.3% | 36.0% |
ALTERNATIVE PERFORMANCE MEASURES AND OTHER DEFINITIONS
Non-IFRS financial measures are presented to enhance an investors and management possibility to evaluate the ongoing operating results, to aid in forecasting future periods and to facilitate meaningful comparison of result between periods. The APMs in this report may differ from similar-titled measures used by other companies. APMs regarding to the income statement are calculated on continuing operations unless otherwise stated. APMs regarding the balance sheet are calculated on the whole group including discontinued operations, unless otherwise stated.
| Performance measures | Various types of performance measures and margin measures as a percentage of sales. | |||
|---|---|---|---|---|
| Non-IFRS performance measures |
Description | Reason for use of the measure | ||
| Gross margin | Gross earnings as a percentage of net sales. | The gross margin is of major importance, showing | ||
| Gross margin excl. amortization of capitalized development |
Gross earnings excl. amortization of capitalized development as a percentage of net sales. |
the margin for covering the operating expenses. | ||
| Operating expenses | Sales and marketing expenses, administration expenses and development expenses. |
|||
| Operating expenses/net sales | Operating expenses as a percentage of net sales. | Used in charts to illustrate trend. | ||
| Operating earnings | Calculated as operating earnings before financial items and tax. |
Operating earnings provides an overall picture of earnings generated in the operating activities. |
||
| Operating margin | Operating earnings as a percentage of net sales. | The operating margin is a key measure together with sales growth and capital employed for monitoring value creation. |
||
| Net sales YoY, change in % | The relation between net sales for the period and the corresponding sales for the comparative period in previous year. |
The sales growth is a key measure together with operating margin and capital employed for monitoring value creation. |
||
| Change in Net sales in comparable currencies |
The relation between the net sales for the period, recalculated using the foreign currency rates from the comparative period, and the corresponding sales for the comparative period in previous year. Only sales from business combinations that has been part of the Group for the whole comparative period are recalculated. |
This measure is of major importance for management in its monitoring of underlying sales growth driven by changes in volume, price and product mix for comparable currency rates between different periods. |
||
| Net margin | Net Income as a percentage of net sales. | The net margin shows the remaining share of net sales after all the company's costs have been deducted. |
||
| Total development (R&D) expenditure |
Development expenses and capitalized expenditures for development. |
The measure is a good complement to development expenses, as it shows the company's |
||
| Capitalization rate | Capitalized development expenditures as a percentage of total development expenditures. |
total expenditure in development. The development expenditures effect on income, financial position, and presentation in the |
||
| Total development (R&D) expenditure/net sales |
Total development expenditure as percentage of net sales. |
statement of cashflow is affected by the periods level of capitalized development expenditures. |
||
| EBITDA | Operating earnings before depreciation and amortization and capitalization of development expenditure. |
The measures are good complements to operating earnings and margin as it, simplified, shows the earnings-generated cash flow in the operation and |
||
| EBITDA margin | EBITDA as a percentage of net sales. | it shows operating earnings without influence of variations in the level of capitalized development expenditures in the company's development projects. |
||
| Region | Region. • Western Europe (WE). • Americas (AM), North and South America. • Rest of World (RoW), countries outside of Western Europe and Americas. |
Calculation of performance measures not included in IFRS framework
| Change in net sales in comparable currencies | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | 2020 |
| Net sales | 77.9 | 76.0 | 331.7 |
| Net currency effect of comparable currencies | 6.8 | -2.6 | 5.7 |
| Net sales in comparable currencies | 84.8 | 73.4 | 337.4 |
| Change in net sales in comparable currencies | 11.6% | -21.6% | -10.7% |
| KPI Income Statement | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently | 2020 | Mar 2021 | 2020 | |
| Continuing operations | ||||
| Net sales | 77.9 | 76.0 | 333.7 | 331.7 |
| Net sales YoY, change in % | 2.6% | -18.8% | -7.3% | -12.2% |
| Cost of sales ex. amortization of capitalized development | -23.0 | -21.7 | -99.7 | -98.4 |
| Gross earnings ex. amortization of capitalized development | 54.9 | 54.3 | 234.0 | 233.3 |
| Gross margin ex. amortization of capitalized development | 70.5% | 71.4% | 70.1% | 70.3% |
| Cost of sales amortization of capitalized development | -9.9 | -7.3 | -34.0 | -31.4 |
| Gross earnings | 45.1 | 47.0 | 200.0 | 201.9 |
| Gross margin | 57.9% | 61.8% | 59.9% | 60.9% |
| Sales and marketing expenses | -23.0 | -23.1 | -92.5 | -92.6 |
| Administration expenses | -13.1 | -14.0 | -53.7 | -54.6 |
| Development expenses | -13.7 | -14.7 | -54.3 | -55.3 |
| Operating expenses | -49.8 | -51.7 | -200.6 | -202.5 |
| Operating expenses/net sales | 63.9% | 68.1% | -60.1% | 61.0% |
| Other operating income and expenses | 7.9 | 9.5 | -16.7 | -15.0 |
| Operating earnings | 3.1 | 4.8 | -17.2 | -15.6 |
| Operating margin | 4.0% | 6.3% | -5.2% | -4.7% |
| Net financial items | 1.5 | -2.6 | -0.5 | -4.6 |
| Profit/loss before tax | 4.7 | 2.2 | -17.7 | -20.2 |
| Tax | -0.7 | -0.9 | 5.6 | 5.5 |
| Net income continuing operations | 3.9 | 1.3 | -12.1 | -14.8 |
| Net margin conutinuing operaitons | 5.0% | 1.7% | -3.6% | -4.4% |
| Discontinued operations, net after tax | -36.9 | 247.1 | -31.9 | 252.1 |
| Net Income | -33.0 | 248.4 | -44.0 | 237.4 |
| EBITDA margin continuing operations | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | Mar 2021 | 2020 |
| Operating earnings | 3.1 | 4.8 | -17.2 | -15.6 |
| Amortization of capitalized development expenditure | 9.9 | 7.3 | 34.0 | 31.4 |
| Other depreciation, amortization & impairment | 4.0 | 3.7 | 15.7 | 15.4 |
| Capitalization of development expenditure | -14.4 | -14.6 | -50.3 | -50.5 |
| EBITDA | 2.6 | 1.1 | -17.8 | -19.3 |
| Net sales | 77.9 | 76.0 | 333.7 | 331.7 |
| EBITDA margin | 3.3% | 1.5% | -5.3% | -5.8% |
| Development expenditure continuing operations | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | Mar 2021 | 2020 |
| Development expenses | 13.7 | 14.7 | 54.3 | 55.3 |
| Capitalization of development expenditure | 14.4 | 14.6 | 50.3 | 50.5 |
| Total development expenditure | 28.1 | 29.4 | 104.6 | 105.9 |
| Capitalization rate | 51.2% | 49.8% | 48.1% | 47.7% |
| Net Sales | 77.9 | 76.0 | 333.7 | 331.7 |
| Total development expenditure/net sales | 36.1% | 38.6% | 31.3% | 31.9% |
| Capital and return measures | Shows how capital is utilized and the company's financial strength. Return is a financial term that describes how much the value of an asset changes from an earlier point in time. |
||
|---|---|---|---|
| Non-IFRS performance measure |
Description | Reason for use of the measure | |
| Working capital | Current assets less cash and cash equivalents, accounts payable and other interest-free current liabilities. The Company has no interest-bearing liabilities, excluding lease liabilities. Changes in working capital in the cash flow statement also includes adjustments for items not affecting liquidity and changes in non-cur- rent operating assets and liabilities. |
This measure shows how much working capital that is tied up in the operations and can be put in relation to sales to under-stand how effectively tied up working capital is used. |
|
| Capital employed | The Company capital employed is calculated as an average of total assets, less total liabilities, excluding interest-bearing liabilities. The Company has no interest-bearing liabilities, excluding lease liabilities. |
Return on capital employed is the central ratio for measuring the return on the capital tied up in operations. |
|
| Return on capital employed | Operating earnings plus interest income, in relation to average capital employed, rolling four quarters. |
||
| Equity/asset ratio | Shareholders' equity divided by the balance sheet total. |
A traditional measure for showing financial risk, expressing the ratio of the assets that is financed by the owners. |
|
| Return on equity | Net income as a percentage of average share holders' equity, rolling four quarters. . |
Return on equity shows the total return on shareholders' capital and reflects the effect of the company's profitability as well as the financial leverage. The measure is primarily used to analyze shareholder profitability over time. |
|
| Investments | Investments in intangible and tangible assets. | ||
| Total cash flow | Change in cash and cash equivalents during the period, excluding exchange differences in cash and cash equivalents. |
| Working capital | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions | 2021 | 2020 | Mar 2021 | 2020 |
| Current assets | 459.8 | 359.3 | 382.5 | 424.3 |
| Cash and cash equivalents | -290.7 | -175.3 | -193.9 | -237.1 |
| No interest-bearing short term liabilities | -97.9 | -146.0 | -135.2 | -129.4 |
| Working capital | 71.2 | 38.0 | 53.5 | 57.8 |
In current assets, assets held for sale are excluded, as they mainly relate to capitalized development expenses.
| Return on capital employed including discontinued operations | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | Mar 2021 | 2020 |
| Capital employed | ||||
| Total balance | 831.5 | 810.8 | 879.5 | 856.6 |
| No interest-bearing liabilities | -112.6 | -167.5 | -130.6 | -148.3 |
| Capital employed | 718.9 | 643.3 | 748.9 | 708.3 |
| Operating earings less interest income R4Q | ||||
| Operating earnings R4Q | -8.2 | -20.8 | -8.2 | -4.3 |
| Interest income R4Q | 0.3 | 0.6 | 0.3 | 0.2 |
| Operating earnings less interest income R4Q | -8.5 | -21.4 | -8.5 | -4.5 |
| Return on capital employed | -1.2% | -3.3% | -1.1% | -0.6% |
| Equity/asset ratio | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | Mar 2021 | 2020 |
| Equity | 659.7 | 717.6 | 659.7 | 692.6 |
| Total equity and liabilities | 800.8 | 935.1 | 800.8 | 862.4 |
| Equity/asset ratio | 82.4% | 76.7% | 82.4% | 80.3% |
| Return on equity including discontionued operations | Jan-Mar | Apr 2020- | Jan-Dec | |
|---|---|---|---|---|
| SEK millions (if not defined differently) | 2021 | 2020 | Mar 2021 | 2020 |
| Net income - R4Q | -44.0 | 224.7 | -44.0 | 237.4 |
| Average equity - R4Q | 698.2 | 530.1 | 698.2 | 659.0 |
| Return on equity | -6.3% | 42.4% | -6.3% | 36.0% |
| Shareholders' information | Measures related to the share. | |
|---|---|---|
| Non-IFRS performance measure |
Description | Reason for use of the measure |
| Dividend per share | Dividend divided by the average number of outstanding shares during the period. |
Measures showing the return of the business to the owners, per share. |
| Earnings per share (EPS) | Net income divided by the average number of outstanding shares during the period. |
|
| Cash flow per share | Total cash flow, divided by average number of outstanding shares during the period. |
|
| Equity per share | Shareholders' equity divided by number of out standing shares at the end of the period. |
|
| Average number of outstanding shares |
Total number of shares in the Parent company, less the number of group companies' holdings of shares in the Parent company (own/treasury shares). |
|
| Employees | Measures related to employees. | |
| Non-IFRS performance measure |
Description | Reason for use of the measure |
| Average number of employees and consultants/co-workers |
The average number of employees and consultants for non-temporary positions (longer than nine months) and who do not replace absent employees, in FTE (Full-time equivalent). |
To supplement the number of employees with consultants gives a better measure of the Company's cost. |
| Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|
| Average number of employees and consultants | 2021 | 2020 | Mar 2021 | 2020 |
| Average number of employees | 169 | 166 | 172 | 168 |
| Average number of consultants | 28 | 32 | 35 | 30 |
| Total average number of employees and consultants | 197 | 198 | 207 | 198 |
| Average number of employees and consultants discontinued operations | -44 | -50 | -38 | -46 |
| Net Average number of employees and consultants continuing operations | 153 | 148 | 169 | 152 |
MATERIAL PROFIT AND LOSS ITEMS
The group has identified a number of items which are material due to the significance of their nature and/or amount. These are listed separately here to provide a better understanding of the financial performance of the group:
| Material profit and loss items | Jan-Mar | Apr 2020- | Jan-Dec | ||
|---|---|---|---|---|---|
| SEK millions | Note | 2021 | 2020 | Mar 2021 | 2020 |
| Effects of the Net Insight share price development during the period | |||||
| Share-based benefits | (a) | -0.2 | 0.1 | -0.3 | -0.0 |
| Synthetic opitons, change in value | (b) | - | 0.1 | 0.0 | 0.1 |
| Total | -0.2 | 0.1 | -0.3 | 0.0 | |
| Exchange rate differences | |||||
| Part of Other operating income & expenses | 7.5 | 9.2 | -17.7 | -16.0 | |
| Part of Net Financial Items | 1.8 | -2.1 | 0.3 | -3.5 | |
| Total Exchange rate differences | 9.3 | 7.1 | -17.3 | -19.5 | |
| Government grants Covid-19 | |||||
| Reduction of employee expenses | - | - | 3.4 | 3.4 | |
| Other operating income | 0.1 | - | 0.8 | 0.7 | |
| Total | 0.1 | - | 4.2 | 4.1 | |
| Items affecting comparability | |||||
| Restructuring | (c) | - | - | -0.9 | -0.9 |
| Government grants Covid-19, other operating income | (d) | 0.1 | - | 0.7 | 0.7 |
| Total | 0.1 | - | -0.2 | -0.3 | |
| Operating earnings excluding items affecting comparability continuting operations |
|||||
| Operating earnings | 3.1 | 4.8 | -17.2 | -15.6 | |
| Items affecting comparability, as per above | -0.1 | - | 0.2 | 0.3 | |
| Operating earnings excluding items affecting comparability | 3.0 | 4.8 | -17.0 | -15.3 |
All items in the table above effects operating earnings, except for (b) that effects net financial items.
(a) Share-based benefits are value changes in amounts held in escrow for participation in the synthetic share program.
(b) Net Insight has synthetic option programs. The synthetic options are revaluated on a current basis to fair value by applying an options valuation model. The changes in value during the term of the options are presented as a financial item. To financially hedge future cash flow effects of the company's commitments in the synthetic option programs, if the share price would exceed the strike price, the parent company has repurchased its own shares. The repurchased of own shares is deducted from equity, retained earnings, and are not revaluated to fair value on a current basis.
(c) Severance pay in due to structural changes.
(d) Costs for strategic advisory services and preparation for capital injection, which were interrupted as a result of the divestment of the Sye business.
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