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Net Insight
Quarterly Report • Nov 4, 2020
3180_10-q_2020-11-04_8f99984f-d171-4cd4-89fd-9a394b4e0593.pdf
Quarterly Report
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Net Insight Interim Report January – September 2020
Net Insight AB (publ) corp.id.no. 556533–4397
July – September 2020
- Net sales amounted to SEK 92.5 (109.5) million, a decrease of -15.5% on-year. In comparable currencies net sales decreased by -12.5%.
- Operating earnings amounted to SEK -7.3 (9.5) million, corresponding to an operating margin of -7.9% (8.6%). Excluding foreign exchange rate differences of SEK -0.9 (2.5) million, operating earnings were SEK -6.5 (6.9) million.
- Net income for the period for continuing operations and for the Group, including divested operations, was SEK -5.9 (6.8) million and SEK -5.9 (1.8) million, respectively.
- Earnings per share, basic and diluted, for the Group was SEK -0.02 (0.00).
- Total cash flow for the Group was SEK -21.1 million (17.3).
January – September 2020
- Net sales amounted to SEK 291.5 (343.3) million, a decrease of -15.1% year-on-year. In comparable currencies net sales decreased by -15.5%.
- Operating earnings amounted to SEK -0.6 (20.5) million, corresponding to an operating margin of -0.2% (6.0%). Excluding foreign exchange rate differences of SEK 2.2 (2.2) million, operating earnings were SEK -2.8 (18.3) million.
- Net income for the period for continuing operations was SEK -2.4 (15.9) million. Net Income for the Group, including divested operations, was SEK 244.2 (-4.6) million. This includes capital gains related to discontinued operations of SEK 246.4 (-) million.
- Earnings per share, basic and diluted, for the Group was SEK 0.64 (-0.01).
- Total cash flow for the Group was SEK 214.0 million (-26.9).
FINANCIAL HIGHLIGHTS
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK millions | 2020 | 2019 | Change | 2020 | 2019 | Change | Sep 2020 | 2019 | Change |
| Continuing operations | |||||||||
| Net sales per business area | |||||||||
| Media Networks | 76.8 | 89.8 | -14.5% | 241.1 | 289.8 | -16.8% | 329.1 | 377.8 | -12.9% |
| Resource Optimization | 15.7 | 19.7 | -20.4% | 50.4 | 53.6 | -6.0% | 67.6 | 70.8 | -4.5% |
| Net sales | 92.5 | 109.5 | -15.5% | 291.5 | 343.3 | -15.1% | 396.7 | 448.6 | -11.6% |
| Operating earnings | -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 | |||
| Operating margin | -7.9% | 8.6% | -0.2% | 6.0% | -6.2% | -0.8% | |||
| Net income | -5.9 | 6.8 | -2.4 | 15.9 | -22.9 | -4.6 | |||
| EBITDA | -3.9 | 7.7 | -11.1 | 25.3 | -43.0 | -6.6 | |||
| EBITDA margin | -4.2% | 7.1% | -3.8% | 7.4% | -10.8% | -1.5% | |||
| Total Group, including discontinued operations |
|||||||||
| Net Income | -5.9 | 1.8 | 244.2 | -4.6 | 216.6 | -32.2 | |||
| Total cash flow | -21.1 | 17.3 | 214.0 | -26.9 | 199.7 | -41.2 |
Streaming Solutions was divested in 2020 and is reported separately as discontinuing operations in this report.
Several important product launches
Crister Fritzson, CEO, Net Insight
Significant events:
- Continued negative Covid-19 impact
- Launch of a large number of product functionalities
- Launch of ScheduALL Evolution
CEO´s Statement
Sustained high development pace
Intense quarter with continued uncertainty
During the quarter, we took some important steps towards profitable growth with the establishment of a new management team and development of a new strategy. We are also starting to see the results of our accelerated product development program in the form of several new launches. The Covid-19 pandemic continues to affect our operations. The negative market impact will probably persist over the coming quarters, even if we have seen signs of a gradual recovery in the third quarter.
Market situation and Covid-19
The general market uncertainty continues due to Covid-19. Live events are back, which is positive, while restrictions on audiences and other changes (such as relocating events or compressing playoffs) are negatively affecting the entire live sport ecosystem. This means that our customers remain cautious about making major investment decisions. Practical restrictions on travel and other areas have also had a negative impact. The inflow of potential new business was lower than normal in the second and third quarters. We maintain, given the situation, active cost control aimed at reducing negative financial effects. Despite the continued uncertainty, we have seen some signs of a slow market recovery during the third quarter, although our assessment is that Net Insight will be negatively affected for the remainder of 2020 and into the first half of 2021.
Media Networks
Growth in our core operations, Media Networks, has been unsatisfactory in recent years. There are several reasons for this, but it mainly relates to excessively broad operations (Nimbra, Sye and ScheduALL) given the size of the company. Insufficient commercial acumen and the structure required to drive growth initiatives are other key factors. All this has led to a lack of focus and insufficient investments in core operations, which has meant opportunities have been lost.
To return to high and profitable growth, we are improving our control and follow-up, creating a new and stronger management team that includes the new role of Chief Commercial Officer, and have also produced a clear long-term strategy. We will gradually be shifting the business mix towards an increased proportion of software, recurring revenue streams and sales of solutions rather than individual products.
Our market position, with the ongoing technology shifts (towards IP and cloud-based solutions) and uncertainty caused by the pandemic, is generating major changes for our customers. This creates some challenges, but also considerable potential. Our strategic growth initiatives focus on segments that benefit from the underlying market trends — for example, the shift towards cloud-based transport and remote production. We have a strong position because of the unique Nimbra ecosystem with a large installed base and the potential to combine solutions and technologies. The Nimbra portfolio is based on our own tried-and-tested transport technologies, supports IP and delivers the most open cloud-based software solution in the sector. This allows our customers to upgrade and optimize their existing Nimbra investments as their media transport requirement increases and changes.
Around the end of the quarter, we introduced a large number of new functions on our existing Nimbra and Aperi platforms. The consolidation of software functions on existing hardware continues, which allows our customers to use the same hardware for many different applications. It is also pleasing that the launch of the next generation of our cloud-based solution Nimbra Edge has been well received by the market. We have won a number of deals and the first systems are now operational.
As previously announced, at the beginning of the year Tata Communications decided to base its new media network on our high-capacity platform Nimbra 1060. A large number of products have been delivered and installed in this network during the quarter. Tata's new global 100G media network has been built to handle growing demand for capacity from new formats (e.g. UHD/4K), content such as eSport and remote production.
We have numerous new launches planned over the coming 6-12-month period, which has been made possible by our earlier strategic decision to accelerate product development and increase competitiveness in Media Networks. We are set to maintain the high development pace, focusing on functionality and customer solutions relating to our strategic initiatives, such as the cloud-based solution Nimbra Edge.
Resource Optimization
ScheduALL Evolution, our new cloud-based solution for resource optimization, was launched in the quarter. Evolution allows existing systems to be merged and shifted to a cloud-based environment, which is a highly relevant solution in a media industry characterized by consolidation and cost pressure. We're also continuing the roll-out of our Business
Intelligence services. The business has been negatively affected by Covid-19, and active measures have been taken towards reduction of operating expenses.
We will continuously present information about our operations and growth journey, including through the new communication channel Open Insight that can be found on our website, and through social media channels. Despite continued external challenges, I am looking forward with confidence given the positive market reactions on our new products, e g Nimbra Edge and that we have a focused strategy in place.
Solna, Sweden, November 4, 2020 Crister Fritzson, CEO
EXTRAORDINARY EVENTS
Covid-19 and business impact
The global spread of Covid-19 has had an impact on customers on all our main markets and the uncertainty is continuously high. We see live events coming back again, although in a limited way. Spectator bans, compressed play offs and deferral of events have a negative impact on the whole live sport market. This has in turn had a direct impact on number of potential deals during the second and third quarters. During the quarter we have however seen signs of a slow market recovery. Our travelling continues to be exceedingly limited. For staff in Sweden, the working time reduction through furloughs has decreased slightly during the third quarter.
Two deals from previous periods have been reversed following the postponement of the Olympics until 2021. This has affected operating earnings in the second quarter with SEK -3.5 million. Operating earnings for the third quarter and for the nine-month period have been positively affected with SEK 1.3 million and SEK 3.2 million respectively for Covid-19 related government grants, of which SEK 0.9 and SEK 2.6 respectively is attributable to Sweden. Operating earnings for the third quarter have further been charged with SEK -1.8 million for provisions for expected bad debt because of Covid-19. For the US operations we received a non-interest-bearing loan in just under USD 1 million under the US Covid-19 government grants program. The loan will be forgiven if certain criteria are met. The loan has not affected the income statement for the period. The loan will be forgiven if certain conditions are met. The loan has not affected the income statement for the period.
Our main scenario still assumes a gradual recovery from the third quarter and onwards, but we estimate a negative impact for the remainder of 2020 and the first six months of 2021. At the time of this report, we estimate that Covid-19 does not have or will have any material impact on the company's assets. However, the Covid-19 development is hard to predict, and the company continuously evaluates the situation and need for measures. Net Insights overall strategy for this extraordinary situation is to weather the storm – prioritizing R&D and continue to drive strategic development projects, protect the financial position through active cost control and prepare a rapid activity level increase when we see signs of recovery in the market.
REVENUES
Net sales in the third quarter of 2020 were SEK 92.5 (109.5) million, a decrease of -15.5%. In comparable currencies, sales decreased by -12.5%.
Net sales for the nine-month period were SEK 291.5 (343.3) million, a decrease of -15.1%. In comparable currencies, sales decreased by -15.5%.
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 for Media Networks, our largest Business Area, varies over time depending on where events take place. Revenue per region is therefore less relevant. We report revenue by region separately (see table on page 11) but without comments.
Revenues by Business Area
Net Insight has the following Business Areas: Media Networks and Resource Optimization. See also comments in CEO's statement.
Media Networks
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.
Revenues for the third quarter were SEK 76.8 (89.8) million, a decrease of -14.5%. The decrease is largely attributable to the Covid-19 pandemic's impact on business. Revenue decreased mainly for hardware, and to a limited extent for software and services.
Revenues for the nine-month period were SEK 241.1 (289.8) million, a decrease of -16.8%. Revenues decreased mainly for hardware, but also for software and services.
Resource Optimization
Resources Optimization encompasses ScheduALL, a pure software solution. Revenues are derived from software licenses sales, support and professional services. The business model for ScheduALL Evolution, which was launched during the quarter, will primarily be SaaS, Software as a Service.
Revenues for the third quarter were SEK 15.7 (19.7) million, a decrease of -20.4%. The increase is attributable mainly to software licenses and exchange rate fluctuations.
Revenues for the nine-month period were SEK 50.4 (56.6) million, a decrease of -6.0%, mainly attributable to software licenses.
EARNINGS
Gross profit for the third quarter was SEK 50.7 (71.6) million, a decrease by -29.2%. The decrease is explained by lower revenue both for Media Networks and for Resource Optimization. Gross profit included amortization of capitalized development expenditure of SEK -10.1 (-9.7) million. Gross margin excluding and including amortization of capitalized development expenditure was 65.7% (74.2%) and 54.8% (65.4%) respectively. The decrease is attributed to lower revenue, product mix and impairment of inventory for Media Networks.
Operating expenses in the third quarter of SEK -57.7 (-64.7) million deceased with circa -10.8%, primarily due to temporary Covid-19 related cost reductions. Operating expenses has been positively affected with SEK 0.9 (-) million related to Covid-19 related government grants.
Sales and marketing expenses were SEK -26.0 (-33.1) million, and administration expenses to SEK -15.0 (-16.7). Development expenses were SEK -16.7 (-14.8) million. Total development expenditure, i.e. before capitalization, were SEK -28.9 (-31.4) million. Other operating income and expenses were SEK -0.4 (2.5) million, mainly related to foreign exchange rate differences.
Operating earnings were SEK -7.3 (9.5) million, corresponding to an operating margin of -7.9% (8.6%).
EBITDA was SEK -3.9 (7.7) million, corresponding to an EBITDA margin of -4.2% (7.1%). The decrease is attributable to the lower operating earnings.
In the third quarter, net financial items amounted to SEK -0.3 (-1.1) million.
Profit before tax for the third quarter was SEK -7.6 (8.3) million, and net income was SEK -5.9 (6.8) million, corresponding to a net margin of -6.4% (6.2%). Including Discontinued operations, net income was SEK -5.9 (1.8) million.
Gross earnings for the nine-month period were SEK 178.3 (216.0) million. Operating expenses of SEK -182.2 (-197.7) million decreased following cost reduction initiatives. Operating earnings were SEK -0.6 (20.5). EBITDA was SEK -11.1 (25.3) million. The decrease is attributable to the lower operating earnings and an increase of total development expenditures, i.e. before capitalizations. Net Income for the period for Continuing operations was SEK -2.4 (15.9) million. Net Income for the period including Discontinued operations was SEK 244.2 (-4.6) million. This includes capital gains on disposal of Discontinued operations during the first quarter of SEK 246.4 (-) million.
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| Key Ratios continuing operations |
2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Net sales, SEK millions | 92.5 | 109.5 | 291.5 | 343.3 | 396.7 | 448.6 |
| Net sales YoY, change in % | -15.5% | -4.0% | -15.1% | -0.0% | -11.7% | -0.2% |
| Gross earnings | 50.7 | 71.6 | 178.3 | 216.0 | 244.5 | 282.3 |
| Gross margin | 54.8% | 65.4% | 61.2% | 62.9% | 61.6% | 62.9% |
| Operating earnings | -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 |
| Operating margin | -7.9% | 8.6% | -0.2% | 6.0% | -6.2% | -0.8% |
| EBITDA | -3.9 | 7.7 | -11.1 | 25.3 | -43.0 | -6.6 |
| EBITDA margin | -4.2% | 7.1% | -3.8% | 7.4% | -10.8% | -1.5% |
Earnings trend continuing operations
Earnings per Business Area
Media Networks
Operating earnings for Media Networks for the third quarter decreased and amounted to SEK -3.4 (13.1) million, corresponding to an operating margin of -4.5% (14.6%). The earnings decrease is attributable to Covid-19 impact on revenue, but also to a lower gross margin as a consequence of product mix and impairment of inventory. The Aperi operation, which was acquired during the first quarter, affected Operating earnings with SEK -1.3 (-) million. Total development expenditure increased because of further portfolio investments, including the Aperi acquisition, and amounted to SEK -20.6 (-18.1) million.
Operating earnings for the nine-month period were SEK 1.2 (42.9) million, corresponding to an operating margin of 0.5% (14.8%). The decrease is primarily attributable to Covid-19 impact on revenue. Total development expenditure increased because of further portfolio investments, including the Aperi acquisition, and amounted to SEK -77.6 (-59.8) million.
Resource Optimization
For Resource Optimization, operating earnings for the third quarter amounted to SEK -3.2 (-6.4), a clear improvement versus the corresponding period. This is due to a decrease of operating expenses, primarily due to efficiency measures. Total development expenditure decreased and amounted to SEK -8.3 (-13.3).
Operating earnings for the nine-month period were SEK -4.5 (-25.0). This is due to higher gross earnings as well as to a decrease of operating expenses, primarily due to efficiency measures but also to decreased development expenditure. Total development expenditure and amounted to SEK -28.5 (-34.2).
INVESTMENTS INCLUDING DIVESTED OPERATIONS
Third quarter investments were SEK 12.2 (23.5) million, of which SEK 12.2 (16.5) million related to capitalization of expenditure for development. Depreciation and amortization in the third quarter totaled SEK 15.6 (14.8) million, of which SEK 10.1 (9.7) million related to amortization of capitalized expenditure for development.
Investments for the first nine months were SEK 59.3 (62.0) million, of which SEK 54.0 (41.2) million related to capitalization of expenditure for development. Depreciation and amortization for the first nine months totaled SEK 43.5 (45.9) million, of which SEK 27.3 (30.6) million related to amortization of capitalized expenditure for development.
At the end of the period, net value of capitalized expenditure for development was SEK 208.7 million. Net value of capitalized expenditure for development as of December 31, 2019, was SEK 184.6 million for continuing operations and SEK 264.3 million for the Group, including divested operations.
Investments per Business Area
Investments per Business Area only reflects capitalized expenditure for development.
Media Networks
Capitalized expenditure for development in the third quarter amounted to SEK 9.0 (8.5) million, and amortization to SEK -8.0 (-8.4) million. For the nine-month period, capitalized expenditure for development amounted to SEK 36.4 (23.6) million, and amortization to SEK -22.4 (-26.2) million.
At the end of the period, net value of capitalized expenditure for development was SEK 140.0 million, against SEK 126.0 million as of December 31, 2019.
Resource Optimization
Capitalized expenditure for development in the third quarter amounted to SEK 3.2 (8.1) million, and amortization to SEK -2.1 (-1.2) million. For the nine-month period, capitalized expenditure for development amounted to SEK 17.5 (17.5) million, and amortization to SEK -4.8 (-4.4) million.
At the end of the period, net value of capitalized expenditure for development was SEK 68.6 million, against SEK 58.5 million as of December 31, 2019.
CASH FLOW AND FINANCIAL POSITION INCLUDING DISCONTINUED OPERATIONS
Cash flow from operating activities in the third quarter was SEK -6.7 (42.8) million. Total cash flow was SEK -21.1 (17.3) million.
Cash flow from operating activities for the nine-month period was SEK -23.1 (42.7) million, and total cash flow was 214.0 (-26.9). The divestment of Business Area Streaming Solutions in the first quarter had a cash impact of SEK 302.3 (-) million. Total cash flow for the period includes a US Covid-19 government grant loan in the second quarter of 9.2 MSEK. The grant is a non-interest-bearing loan, which will be forgiven if certain criteria are met. The loan has not affected the income statement for the period and is recorded as an operating liability.
Cash and cash equivalents were SEK 265.3 million at the end of the period, against SEK 52.3 million as of 31 December 2019.
Remaining tax loss carryforwards for group companies amounted to SEK 109.5 million at the end of the period, compared to SEK 102.8 million as of December 31, 2019. Deferred tax assets have been recognized for the tax loss carryforwards. For more information, see the section Tax on page 15.
Equity was SEK 706.4 million at the end of the period, against SEK 463.7 million as of 31 December 2019. The equity/assets ratio was 79.8%, against 67.6% as of 31 December 2019. For information about warrants, share repurchases and share structure, see the section Contributed equity on page 15.
EMPLOYEES
The average number of employees and consultants at Net Insight during the third quarter and the nine-month period was 197 (185) and 198 (190) respectively, of which 126 (111) and 127 (111) respectively in the parent company Net Insight AB (publ).
During the quarter Mårten Blixt assumed the CCO position and is part of the management team. After the reporting period, Joakim Schedvins succeeded Pelle Bourn as CFO.
PARENT COMPANY
Parent company net sales were SEK 79.3 (119.7) million in the third quarter, and net income was SEK -4.2 (2.2) million. In the third quarter, intra-group sales totaled SEK 0.9 (27.1) million, and intra-group purchases SEK 13.2 (38.8) million.
For the nine-month period, parent company net sales were SEK 247.7 (389.2) million, and net income was SEK 193.8 (9.7) million. The financial net includes result from participation in group companies of SEK 196.5 (1.8) million, which for 2020 relates to capital gains from divestment of subsidiary, and for 2019 from dividend from subsidiary. For the nine-month period, intra-group sales totaled SEK 7.1 (90.6) million, and intra-group purchases SEK 37.5 (125.3) million.
Intra-group sales and purchases have decreased due to the intra-group restructuring that was done during the last quarter of 2019, including the parent company acquisition of all immaterial rights related to Nimbra from a subsidiary.
Progress in the parent company in the third quarter and the full year largely shadowed Group progress as indicated above for the business area Media Networks.
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.
See page 4 for Covid-19 and impact on business.
No additional critical risks and uncertainty factors, other than those reviewed in the Annual Report for 2019, arose during the period or are anticipated in 2020.
For a complete review of the company's risk and sensitivity analysis, and its risk management process, see pages 28–30 and 49–50 of the Annual Report for 2019.
SEASONALITY
In the past three calendar years, average seasonality has been fairly modest. Net sales for continuing operations in the first, second, third and fourth quarter has been on average approximately been 25% of annual sales respectively.
CONSOLIDATED INCOME STATEMENT, IN SUMMARY
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Continuing operations | ||||||
| Net sales | 92,505 | 109,508 | 291,457 | 343,333 | 396,674 | 448,550 |
| Cost of sales | -41,779 | -37,909 | -113,200 | -127,303 | -152,148 | -166,251 |
| Gross earnings | 50,726 | 71,599 | 178,257 | 216,030 | 244,526 | 282,299 |
| Sales and marketing expenses | -26,033 | -33,145 | -83,215 | -94,290 | -117,741 | -128,816 |
| Administration expenses | -14,963 | -16,693 | -47,167 | -50,895 | -63,627 | -67,355 |
| Development expenses | -16,674 | -14,838 | -51,857 | -52,532 | -70,101 | -70,776 |
| Other operating income and expenses | -366 | 2,532 | 3,362 | 2,217 | -17,807 | -18,952 |
| Operating earnings | -7,310 | 9,455 | -621 | 20,530 | -24,751 | -3,600 |
| Net financial items | -335 | -1,126 | -2,455 | -663 | -4,801 | -3,009 |
| Profit/loss before tax | -7,645 | 8,329 | -3,076 | 19,867 | -29,552 | -6,609 |
| Tax | 1,709 | -1,528 | 710 | -3,961 | 6,635 | 1,965 |
| Net income continuing operations | -5,936 | 6,801 | -2,366 | 15,906 | -22,916 | -4,644 |
| Discontinued operations, net after tax | - | -5,029 | 246,580 | -20,493 | 239,530 | -27,543 |
| Net Income | -5,936 | 1,772 | 244,214 | -4,587 | 216,614 | -32,187 |
| Net income for the period attributable to the | ||||||
| shareholders of the parent company | -5,936 | 1,772 | 244,214 | -4,587 | 216,614 | -32,187 |
| Earnings per share, based on net income attributable | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
| to the parent company's shareholders during the period |
2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Earnings per share basic and diluted continuing operations (SEK) |
-0.02 | 0.02 | -0.01 | 0.04 | -0.06 | -0.01 |
| Earnings per share basic and diluted including discontinuing operations (SEK) |
-0.02 | 0.00 | 0.64 | -0.01 | 0.57 | -0.08 |
| Average number of oustanding shares in thousands, basic |
382,758 | 382,758 | 382,758 | 382,828 | 382,758 | 382,812 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Net income | -5,936 | 1,772 | 244,214 | -4,587 | 216,614 | -32,187 |
| Other comprehensive income | ||||||
| Items that may be reclassified subsequently to the income statement |
||||||
| Translation differences | -2,422 | 4,376 | -2,558 | 7,074 | -5,728 | 3,904 |
| Total other comprehensive income, after tax | -2,422 | 4,376 | -2,558 | 7,074 | -5,728 | 3,904 |
| Total other comprehensive income for the period | -8,358 | 6,148 | 241,656 | 2,487 | 210,886 | -28,283 |
| Total comprehensive income for the period attributable to the shareholders of the parent company |
||||||
| -8,358 | 6,148 | 241,656 | 2,487 | 210,886 | -28,283 |
CONSOLIDATED BALANCE SHEET, IN SUMMARY
| SEK thousands | Sep 30, 2020 | Jun 30, 2020 | 31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Capitalized expenditure for development | 208,677 | 209,196 | 184,582 |
| Goodwill | 63,421 | 65,791 | 65,582 |
| Other intangible assets | 9,578 | 10,166 | 10,560 |
| Right-of-use assets | 48,026 | 47,377 | 52,394 |
| Equipment | 26,582 | 29,402 | 29,531 |
| Deferred tax asset | 27,798 | 26,184 | 26,997 |
| Deposits | 5,166 | 5,184 | 5,186 |
| Totalt non-current assets | 389,248 | 393,300 | 374,832 |
| Current assets | |||
| Inventories | 58,423 | 62,693 | 44,584 |
| Accounts receivable | 124,225 | 114,767 | 103,771 |
| Other receivables | 47,849 | 56,848 | 17,179 |
| Cash and cash equivalents | 265,309 | 286,677 | 52,280 |
| Assets held for sale | - | - | 93,840 |
| Total current assets | 495,806 | 520,985 | 311,654 |
| TOTAL ASSETS | 885,054 | 914,285 | 686,486 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to parent company's shareholders | |||
| Share capital | 15,597 | 15,597 | 15,597 |
| Other paid-in capita | 1,192,727 | 1,192,727 | 1,192,727 |
| Translation reserve | 6,915 | 9,337 | 9,473 |
| Accumulated deficit | -508,888 | -502,952 | -754,052 |
| Total shareholders' equity | 706,351 | 714,709 | 463,745 |
| Non-current liabilities | |||
| Lease liabilities | 38,029 | 37,332 | 41,517 |
| Other liabilities | 15,858 | 17,501 | 20,649 |
| Total non-current liabilities | 53,887 | 54,833 | 62,166 |
| Current liabilities | |||
| Lease liabilities | 10,270 | 10,031 | 10,586 |
| Accounts payable | 18,990 | 21,682 | 35,821 |
| Other liabilities | 95,556 | 113,030 | 111,173 |
| Liabilities directly associated with assets held for sale | - | - | 2,995 |
| Total current liabilities | 124,816 | 144,743 | 160,575 |
| TOTAL EQUITY AND LIABILITIES | 885,054 | 914,285 | 686,486 |
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, 2019 | 15,597 | 1,192,727 | 5,569 | -720,028 | 493,865 | ||||
| Repurchase of own shares | - | - | - | -1,837 | -1,837 | ||||
| Total comprehensive income | - | - | 3,904 | -32,187 | -28,283 | ||||
| December 31, 2019 | 15,597 | 1,192,727 | 9,473 | -754,052 | 463,745 | ||||
| January 1, 2020 | 15,597 | 1,192,727 | 9,473 | -754,052 | 463,745 | ||||
| Warrants issued | - | - | - | 950 | 950 | ||||
| Total comprehensive income | - | - | -2,558 | 244,214 | 241,656 | ||||
| September 30, 2020 | 15,597 | 1,192,727 | 6,915 | -508,888 | 706,351 |
CONSOLIDATED STATEMENT OF CASH FLOWS INCLUDING DISCONTINUED OPERATIONS
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Ongoing activities | ||||||
| Profit/loss before tax | -7,645 | 1,931 | 243,567 | -6,206 | 208,122 | -41,651 |
| Income tax paid | -47 | -371 | -47 | -371 | -47 | -371 |
| Depreciation, amortization & impairment | 15,656 | 19,717 | 43,494 | 58,632 | 62,710 | 77,848 |
| Other items not affecting liquidity | 8,922 | 2,470 | -235,804 | 3,135 | -223,710 | 15,229 |
| Cash flow from operating activities before changes | ||||||
| in working capital | 16,886 | 23,747 | 51,210 | 55,190 | 47,075 | 51,055 |
| Changes in working capital | ||||||
| Increase-/decrease+ in inventories | -55 | 4,430 | -19,130 | 2,692 | -24,504 | -2,682 |
| Increase-/decrease+ in receivables | -1,181 | 25,781 | -17,040 | -11,805 | -6,807 | -1,572 |
| Increase+/decrease- in liabilities | -22,348 | -11,199 | -38,113 | -3,384 | -20,686 | 14,043 |
| Cash flow from operating activities | -6,698 | 42,759 | -23,073 | 42,693 | -4,922 | 60,844 |
| Investment activities | ||||||
| Investment in intangible assets | -12,328 | -23,249 | -56,375 | -61,017 | -85,517 | -90,159 |
| Investment in tangible assets | 88 | -279 | -2,940 | -1,028 | -3,842 | -1,930 |
| Disposal of subsidiary, net effect on cash | - | - | 302,348 | - | 302,348 | - |
| Increase-/decrease+ in financial assets, net | - | 16 | - | 48 | -2 | 46 |
| Cash flow from investment activities | -12,240 | -23,512 | 243,033 | -61,997 | 212,987 | -92,043 |
| Financing activities | ||||||
| Amortization leasing | -2,172 | -1,954 | -6,953 | -5,797 | -9,310 | -8,154 |
| Warrant premiums paid | - | - | 950 | - | 950 | - |
| Repurchase of own shares | - | - | - | -1,837 | - | -1,837 |
| Cash flow from financing activities | -2,172 | -1,954 | -6,003 | -7,634 | -8,360 | -9,991 |
| Net change in cash and cash equivalents | -21,110 | 17,293 | 213,957 | -26,938 | 199,705 | -41,190 |
| Exchange differences in cash and cash equivalents q g g |
-258 | 668 | -978 | 930 | -1,281 | 627 |
| period | 286,677 | 48,924 | 52,330 | 92,893 | 66,885 | 92,893 |
| Cash and cash equivalents at the end of the period | 265,309 | 66,885 | 265,309 | 66,885 | 265,309 | 52,330 |
SEGMENTS
The company's segments are the business areas Media Networks and Resource Optimization. The business area Streaming Solutions was divested in 2020, hence the business area is reported separately as discontinuing operations and are excluded from the segment reporting.
| Jul-Sep 2020 | Jul-Sep 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK thousands | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total | |||
| Net Sales | 76,802 | 15,703 | - | 92,505 | 89,783 | 19,725 | - | 109,508 | |||
| Gross earnings | 41,478 | 9,224 | 24 | 50,726 | 59,436 | 12,138 | 25 | 71,599 | |||
| Net margin | 54.0% | 58.7% | 54.8% | 66.2% | 61.5% | 65.4% | |||||
| Operating earnings | -3,447 | -3,191 | -672 | -7,310 | 13,120 | -6,361 | 2,696 | 9,455 | |||
| Gross margin | -4.5% | -20.3% | -7.9% | 14.6% | -32.2% | 8.6% | |||||
| Net financial items | -335 | -335 | -1,126 | -1,126 | |||||||
| Profit/loss before tax continuing operations |
-7,645 | 8,329 |
| Jan-Sep 2020 | Jan-Sep 2019 Oct 2019-Sep 2020 |
Jan-Dec 2019 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK thousands | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total | Media Networks | Optimization Resource |
Unallocated items & eliminations |
Total |
| Net Sales | 241,096 | 50,361 | - | 291,457 | 289,776 | 53,557 | - | 343,333 | 329,084 | 67,590 | - | 396,674 | 377,764 | 70,786 | - | 448,550 |
| Gross earnings | 147,000 | 31,190 | 67 | 178,257 | 187,228 | 28,734 | 68 | 216,030 | 202,129 | 42,306 | 91 | 244,526 | 242,357 | 39,850 | 92 | 282,299 |
| Gross margin | 61.0% | 61.9% | 61.2% | 64.6% | 53.7% | 62.9% | 61.4% | 62.6% | 61.6% | 64.2% | 56.3% | 62.9% | ||||
| Operating earnings | 1,202 | -4,531 | 2,709 | -620 | 42,857 | -25,014 | 2,687 | 20,530 | 4,823 | -11,276 | -18,298 | -24,751 | 46,479 | -31,759 | -18,320 | -3,600 |
| Gross margin | 0.5% | -9.0% | -0.2% | 14.8% | -46.7% | 6.0% | 1.5% | -16.7% | -6.2% | 12.3% | -44.9% | -0.8% | ||||
| Net financial items | -2,455 | -2,455 | -663 | -663 | -4,801 | -4,801 | -3,009 | -3,009 | ||||||||
| Profit/loss before tax continuing operations |
-3,075 | 19,867 | -29,552 | -6,609 |
DISAGGREGATION OF REVENUE
| Jul-Sep 2020 | Jul-Sep 2019 Jan-Sep 2020 |
Jan-Sep 2019 | Oct 2019-Sep 2020 | Jan-Dec 2019 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK thousands | Networks Media |
Optimization Resource |
Total | Networks Media |
Optimization Resource |
Total | Networks Media |
Optimization Resource |
Total | Networks Media |
Optimization Resource |
Total | Networks Media |
Optimization Resource |
Total | Networks Media |
Optimization Resource |
Total |
| Net sales by product group |
||||||||||||||||||
| Hardware | 30,549 | - | 30,549 | 40,375 | - | 40,375 | 99,204 | - | 99,204 | 135,114 | - 135,114 | 135,829 | - 135,829 | 171,739 | - 171,739 | |||
| Software licenses | 18,902 | 660 | 19,562 | 19,943 | 2,269 | 22,212 | 57,224 | 2,865 | 60,089 | 64,809 | 4,649 | 69,458 | 79,549 | 4,498 | 84,047 | 87,134 | 6,282 | 93,416 |
| Support and Services | 27,351 | 15,043 | 42,394 | 29,465 | 17,456 | 46,921 | 84,668 | 47,496 132,164 | 89,853 | 48,908 138,761 | 113,706 | 63,092 176,798 | 118,891 | 64,504 183,395 | ||||
| Total | 76,802 15,703 | 92,505 | 89,783 19,725 109,508 | 241,096 | 50,361 291,457 | 289,776 | 53,557 343,333 | 329,084 | 67,590 396,674 | 377,764 | 70,786 448,550 | |||||||
| Net sales by region | ||||||||||||||||||
| WE | 40,553 | 3,394 | 43,947 | 48,484 | 4,530 | 53,014 | 111,238 | 12,665 123,903 | 132,578 | 13,363 145,941 | 146,960 | 17,208 164,168 | 168,300 | 17,906 186,206 | ||||
| AM | 26,861 | 9,897 | 36,758 | 24,553 | 12,281 | 36,834 | 85,827 | 28,547 114,374 | 105,176 | 32,183 137,359 | 118,202 | 38,372 156,574 | 137,551 | 42,008 179,559 | ||||
| RoW | 9,388 | 2,412 | 11,800 | 16,746 | 2,914 | 19,660 | 44,031 | 9,149 | 53,180 | 52,022 | 8,011 | 60,033 | 63,922 | 12,010 | 75,932 | 71,913 | 10,872 | 82,785 |
| Total | 76,802 15,703 | 92,505 | 89,783 19,725 109,508 | 241,096 | 50,361 291,457 | 289,776 | 53,557 343,333 | 329,084 | 67,590 396,674 | 377,764 | 70,786 448,550 | |||||||
| Timing of revenue recognition transfered at a point in |
||||||||||||||||||
| time | 49,454 | 660 | 50,114 | 60,337 | 2,269 | 62,606 | 156,451 | 2,865 159,316 | 199,970 | 4,649 204,619 | 215,403 | 4,498 219,901 | 258,922 | 6,282 265,204 | ||||
| Services transferred over time |
27,348 | 15,043 | 42,391 | 29,446 | 17,456 | 46,902 | 84,645 | 47,496 132,141 | 89,806 | 48,908 138,714 | 113,681 | 63,092 176,773 | 118,842 | 64,504 183,346 | ||||
| Total | 76,802 15,703 | 92,505 | 89,783 19,725 109,508 | 241,096 | 50,361 291,457 | 289,776 | 53,557 343,333 | 329,084 | 67,590 396,674 | 377,764 | 70,786 448,550 |
INCOME FROM DISCONTINUED OPERATIONS
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Revenues | - | 2,799 | -376 | 8,820 | 315 | 9,510 |
| Expenses | - | -9,197 | 668 | -34,893 | -8,991 | -44,552 |
| Capital gain on disposal of discontinued operations | - | - | 246,350 | - | 246,350 | - |
| Profit/loss before tax | - | -6,398 | 246,643 | -26,073 | 237,674 | -35,042 |
| Tax | - | 1,369 | -63 | 5,580 | 1,857 | 7,499 |
| Net income discontinuing operations | - | -5,029 | 246,580 | -20,493 | 239,530 | -27,543 |
ASSETS HELD FOR SALE
| SEK thousands | Jan 2020 | 31 Dec 2019 |
|---|---|---|
| Disposed assets and liabilities | ||
| Capitalized expenditure for development | 79,756 | 79,756 |
| Equipment | 250 | 250 |
| Deferred tax asset | 13,598 | 13,598 |
| Other receivables | 186 | 186 |
| Cash and cash equivalents | 1,533 | 50 |
| Other liabilities | -2,875 | -2,995 |
| Net assets and liabilities | 92,448 | 90,845 |
| Cash consideration | 348,002 | - |
| Less: Escrow | -34,917 | - |
| Less: Cash and cash equivalents in discontinued operations | -1,533 | - |
| Less: Transaction costs | -9,204 | - |
| Effect on group's cash and cash equivalents | 302,348 | - |
CASHFLOW FROM DISCONTIUED OPERATIONS
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Cash flow from discontinued operations, net | ||||||
| Cash flow from operating activities | - | -1,478 | 293 | -13,387 | -3,745 | -17,424 |
| Cash flow from investment activities | - | -6,159 | 302,348 | -19,267 | 295,508 | -26,109 |
| Cash flow from financing activities | - | - | - | - | - | - |
| Cash flow from discontinued operations, net | - | -7,637 | 302,641 | -32,654 | 291,764 | -43,533 |
FINANCIAL ASSETS AND LIABILITIES
| Group's financial instruments by category - Assets | Sep 30, 2020 | 31 Dec 2019 | |||
|---|---|---|---|---|---|
| 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 | 5,639 | 2 | - | |
| Accounts receivable and other receivables, excluding excluding non-financial assets |
166,608 | 110,147 | |||
| Cash and cash equivalents | 265,309 | 52,280 | |||
| Total | 431,917 | 5,639 | 162,427 | - |
| Group's financial instruments by category - Liabilities | Sep 30, 2020 | 31 Dec 2019 | ||||
|---|---|---|---|---|---|---|
| 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 | 8 | 2 | 68 | ||
| Derivative instruments | 2 | - | 2 | - | ||
| Accounts payable and other liabilities, excluding non financial liabilities |
28,114 | 46,689 | ||||
| Lease liabilities | 48,299 | 52,103 | ||||
| Total | 76,413 | 8 | 98,792 | 68 |
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.
PARENT COMPANY INCOME STATEMENT, IN SUMMARY
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK thousands | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Net sales | 79,254 | 119,722 | 247,691 | 389,172 | 345,838 | 487,319 |
| Cost of sales | -36,039 | -51,356 | -94,755 | -171,088 | -131,016 | -207,349 |
| Gross earnings | 43,215 | 68,366 | 152,936 | 218,084 | 214,822 | 279,970 |
| Sales and marketing expenses | -23,320 | -26,370 | -73,932 | -87,014 | -106,504 | -119,586 |
| Administration expenses | -13,600 | -14,565 | -42,187 | -41,462 | -56,216 | -55,491 |
| Development expenses | -12,408 | -26,481 | -41,275 | -83,489 | -61,919 | -104,133 |
| Other income expenses | 760 | 2,404 | 2,296 | 2,510 | -18,620 | -18,406 |
| Operating earnings | -5,353 | 3,355 | -2,162 | 8,630 | -28,437 | -17,646 |
| Net financial items | 9 | -514 | 195,379 | 3,226 | 111,647 | -80,506 |
| Profit/loss before tax | -5,344 | 2,840 | 193,217 | 11,854 | 83,210 | -98,152 |
| Tax | 1,107 | -590 | 561 | -2,147 | 12,821 | 10,113 |
| Net income | -4,237 | 2,249 | 193,778 | 9,706 | 96,031 | -88,039 |
PARENT COMPANY BALANCE SHEET, IN SUMMARY
| SEK thousands | Sep 30, 2020 | Jun 30, 2020 | 31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Capitalized expenditure for development | 140,048 | 141,769 | 126,049 |
| Other intangible assets | 4,661 | 2,125 | 3,234 |
| Equipment | 21,158 | 23,226 | 25,576 |
| Participations in group companies | 246,455 | 246,630 | 243,777 |
| Deferred tax asset | 15,705 | 14,597 | 15,144 |
| Deposits | 4,649 | 4,650 | 4,649 |
| Total non-current assets | 432,676 | 432,997 | 418,429 |
| Current assets | |||
| Inventories | 58,423 | 62,693 | 44,584 |
| Accounts receivable | 115,307 | 108,183 | 98,100 |
| Receivables from group companies | - | - | 20,826 |
| Other receivables | 47,565 | 56,680 | 15,055 |
| Cash and cash equivalents | 240,970 | 260,567 | 40,849 |
| Total current assets | 462,265 | 488,123 | 219,414 |
| TOTAL ASSETS | 894,941 | 921,120 | 637,843 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | 175,734 | 169,435 | 142,075 |
| Non-restricted equity | 540,213 | 550,749 | 379,143 |
| Total equity | 715,947 | 720,184 | 521,218 |
| Non-current liabilities | |||
| Other liabilities | 8,118 | 9,367 | 12,611 |
| Total non-current liabilities | 8,118 | 9,367 | 12,611 |
| Current liabilities | |||
| Accounts payable | 16,892 | 19,547 | 32,381 |
| Liablities to group companies | 104,940 | 108,275 | - |
| Other liabilities | 49,044 | 63,747 | 71,633 |
| Total current liabilities | 170,876 | 191,569 | 104,014 |
| TOTAL EQUITY AND LIABILITIES | 894,941 | 921,120 | 637,843 |
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.
Accounting of government grants
In connection with the Covid-19 outbreak, the reporting of government grants has become relevant, as the Group receives state support from countries around the world linked to the measures introduced due to the outbreak. A government grant is reported in the Group's balance sheet and the Group's report on comprehensive income when there is reasonable assurance that the Group fulfills the conditions associated with the grants and that the grants will be received. Contributions attributable to expenses are reported as other income or reduction of expenses in the Group's report on comprehensive income, depending on the nature of the grant, and are reported during the same period as the costs the contributions are intended to offset. Grants in the form of cost compensation for personnel who do not work, and thus do not create any value for the company, are reported as a reduction of employee expenses. Grants for personnel and other resources that still contribute to creating value for the company are reported as other operating income.
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 2019.
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 2019.
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 0.6 (1,6) million for the period January–September 2020, of which SEK 0.7 (-4.0) million relates to continuing operations. Reported tax corresponds to an effective tax rate of -0.3 (26.1) percent and 23.1 (20.1) percent, respectively. The group recognized a capital gain from discontinued operations of SEK 246.4 million, which is a nontaxable income. This item has had a big impact on the effective tax rate during 2020. The effective tax rate is also affected by the relative effects of foreign tax rates and temporary differences.
Remaining tax loss carryforwards for group companies amounted to SEK 109.5 million at the end of the period, compared to SEK 102.8 million as of December 31, 2019. Deferred tax assets have been recognized for the tax loss carryforwards.
CONTRIBUTED EQUITY
In accordance with the warrant program approved by the 2020 Annual General Meeting, management and key personnel in June acquired a total of 2,160,000 warrants for a market premium of a total of SEK 950,400. The warrants have a vesting period of three years, after which the holder has the right to exercise the warrants for subscription of B shares in the parent company for a period of three months at an exercise price of SEK 2.80. Premiums received for the warrants have been reported against equity. When calculating earnings per share, a dilution effect arises when the average price for the period exceeds the exercise price for the warrants.
A sum corresponding to half of the participants' paid premium for the warrants, net after tax, is paid as a variable remuneration to the participant two equal payments provided that the participant is employed within the Net Insight Group at the time of payment.
No own shares have been repurchased during January-September 2020. 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.
| 30 Sep, 2020 | 31 Dec, 2019 | |||||
|---|---|---|---|---|---|---|
| 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
The Board of Directors appointed the Board member Anders Harrysson, through his company GEB Rand AB, as interim CEO of the parent company Net Insight AB during the transition period between the leaving and the appointed new CEO (November 2019 - April 2020). During January-March 2020, fees from GEB Rand AB of SEK 0.9 (-) million were expensed, after which no more fees has been originated.
CAPITAL REDISTRIBUTION
The Board of Directors have after considerations decided to propose a capital redistribution during 2021, either through repurchase of own shares or a voluntary redemption, or a combination of these methods. The final form and scope will be defined by the financial development, primarily based on how the pandemic situation develops.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
No significant events have occurred after the end of the reporting period.
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 two product areas Media Networks and Resource Optimization, 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
| Year-end report 2020 | February 23, 2021 |
|---|---|
| Interim report January – March | April 20, 2021 |
| Annual General Meeting | May 7, 2021 |
| Interim report January – June | July 16, 2021 |
| Interim report January – September November 9, 2021 |
Solna, Sweden, November 4, 2020
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
REVIEW REPORT
Introduction
We have reviewed the interim report for Net Insight AB (publ) for the period January 1 - September 30, 2020. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, November 4, 2020 Deloitte AB
Therese Kjellberg Authorized Public Accountant
FINANCIAL INFORMATION
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
|---|---|---|---|---|---|---|
| SEK millions (if not defined differently | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Earnings continuing operations | ||||||
| Netsales per business area | ||||||
| Media Networks | 76.8 | 89.8 | 241.1 | 289.8 | 329.1 | 377.8 |
| Resource Optimization | 15.7 | 19.7 | 50.4 | 53.6 | 67.6 | 70.8 |
| Net sales | 92.5 | 109.5 | 291.5 | 343.3 | 396.7 | 448.6 |
| Gross earnings | 50.7 | 71.6 | 178.3 | 216.0 | 244.5 | 282.3 |
| Operating expenses | 57.7 | 64.7 | 182.2 | 197.7 | 251.5 | 266.9 |
| Total development expenditure | 28.9 | 31.4 | 105.8 | 93.7 | 146.1 | 134.0 |
| EBITDA | -3.9 | 7.7 | -11.1 | 25.3 | -43.0 | -6.6 |
| Operating earnings | -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 |
| Profit/loss before tax | -7.6 | 8.3 | -3.1 | 19.9 | -29.6 | -6.6 |
| Net income | -5.9 | 6.8 | -2.4 | 15.9 | -22.9 | -4.6 |
| Balance sheet and cash flow including discontinued operations |
||||||
| Cash and cash equivalents | 265.3 | 66.9 | 265.3 | 66.9 | 265.3 | 52.3 |
| Working capital | 73.9 | 59.8 | 56.0 | 54.5 | 53.5 | 46.8 |
| Total cash flow | -21.1 | 17.3 | 214.0 | -26.9 | 199.7 | -41.2 |
| The share | ||||||
| Dividend per share, SEK Earnings per share basic and diluted continuing |
- | - | - | - | - | - |
| operations, SEK Earnings per share basic and diluted discontinuing |
-0.02 | 0.02 | -0.01 | 0.04 | -0.06 | -0.01 |
| operations, SEK | - | -0.01 | 0.64 | -0.05 | 0.63 | -0.07 |
| Earnings per share basic and diluted total, SEK | -0.02 | 0.00 | 0.64 | -0.01 | 0.57 | -0.08 |
| Cash flow per share, SEK | -0.06 | 0.05 | 0.56 | -0.07 | 0.52 | -0.11 |
| Equity per share basic and diluted, SEK | 1.85 | 1.29 | 1.85 | 1.29 | 1.85 | 1.21 |
| Average number of outstanding shares basic and diluted, thousands |
382,758 | 382,758 | 382,758 | 382,828 | 382,758 | 382,812 |
| Number of outstanding shares at the end of the periodbasic and diluted, thousands |
382,758 | 382,758 | 382,758 | 382,758 | 382,758 | 382,758 |
| Share price at end of period, SEK | 1.89 | 1.37 | 1.89 | 1.37 | 1.89 | 2.30 |
| Employees and consultants continuing operations | ||||||
| Average number of employees and consultants | 197 | 185 | 198 | 190 | 193 | 189 |
| KPI continuing operations | ||||||
| Net sales YoY, change in % | -15.5% | -4.0% | -15.1% | -0.0% | -11.7% | -0.2% |
| Gross margin | 54.8% | 65.4% | 61.2% | 62.9% | 61.6% | 62.9% |
| Total development expenditure/Net sales | 31.2% | 28.6% | 36.3% | 27.3% | 36.8% | 29.9% |
| Operating margin | -7.9% | 8.6% | -0.2% | 6.0% | -6.2% | -0.8% |
| EBITDA margin | -4.2% | 7.1% | -3.8% | 7.4% | -10.8% | -1.5% |
| Net margin | -6.4% | 6.2% | -0.8% | 4.6% | -5.8% | -1.0% |
| KPI Group including discontinued operations | ||||||
| Return on capital employed | -4.4% | -12.2% | -0.1% | -1.1% | -5.0% | -7.4% |
| Equity/asset ratio | 79.8% | 70.4% | 79.8% | 70.4% | 79.8% | 67.6% |
| Return on equity | 35.0% | -10.5% | 35.0% | -10.5% | 35.0% | -6.6% |
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 discontinuing 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 | Jul-Sep | Jan-Sep | Jan-Dec | |||
|---|---|---|---|---|---|---|
| SEK millions (if not defined differently) | 2020 | 2019 | 2020 | 2019 | 2019 | |
| Net sales | 92.5 | 109.5 | 291.5 | 343.3 | 448.6 | |
| Net currency effect of comparable currencies | 3.3 | -5.0 | -1.3 | -19.7 | -24.4 | |
| Net sales in comparable currencies | 95.8 | 104.5 | 290.1 | 323.6 | 424.2 | |
| Change in net sales in comparable currencies | -12.5% | -8.4% | -15.5% | -5.8% | -5.6% | |
| KPI Income Statement | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
| SEK millions (if not defined differently | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Continuing operations | ||||||
| Net sales | 92.5 | 109.5 | 291.5 | 343.3 | 396.7 | 448.6 |
| Net sales YoY, change in % | -15.5% | -4.0% | -15.1% | 0.0% | -11.7% | -0.2% |
| Cost of sales ex. amortization of capitalized | ||||||
| development | -31.7 | -28.3 | -85.9 | -96.7 | -115.9 | -126.6 |
| Gross earnings ex. amortization of capitalized | ||||||
| development | 60.8 | 81.3 | 205.5 | 246.6 | 280.8 | 321.9 |
| Gross margin ex. amortization of capitalized development |
65.7% | 74.2% | 70.5% | 71.8% | 70.8% | 71.8% |
| Cost of sales amortization of capitalized | ||||||
| development | -10.1 | -9.7 | -27.3 | -30.6 | -36.3 | -39.6 |
| Gross earnings | 50.7 | 71.6 | 178.3 | 216.0 | 244.5 | 282.3 |
| Gross margin | 54.8% | 65.4% | 61.2% | 62.9% | 61.6% | 62.9% |
| Sales and marketing expenses | -26.0 | -33.1 | -83.2 | -94.3 | -117.7 | -128.8 |
| Administration expenses | -15.0 | -16.7 | -47.2 | -50.9 | -63.6 | -67.4 |
| Development expenses | -16.7 | -14.8 | -51.9 | -52.5 | -70.1 | -70.8 |
| Operating expenses | -57.7 | -64.7 | -182.2 | -197.7 | -251.5 | -266.9 |
| Operating expenses/net sales | 62.3% | 59.1% | 62.5% | 57.6% | -63.4% | 59.5% |
| Other operating income and expenses | -0.4 | 2.5 | 3.4 | 2.2 | -17.8 | -19.0 |
| Operating earnings | -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 |
| Operating margin | -7.9% | 8.6% | -0.2% | 6.0% | -6.2% | -0.8% |
| Net financial items | -0.3 | -1.1 | -2.5 | -0.7 | -4.8 | -3.0 |
| Profit/loss before tax | -7.6 | 8.3 | -3.1 | 19.9 | -29.6 | -6.6 |
| Tax | 1.7 | -1.5 | 0.7 | -4.0 | 6.6 | 2.0 |
| Net income continuing operations | -5.9 | 6.8 | -2.4 | 15.9 | -22.9 | -4.6 |
| Net margin conutinuing operaitons | -6.4% | 6.2% | -0.8% | 4.6% | -5.8% | -1.0% |
| Discontinued operations, net after tax | - | -5.0 | 246.6 | -20.5 | 239.5 | -27.5 |
| Net Income | -5.9 | 1.8 | 244.2 | -4.6 | 216.6 | -32.2 |
| EBITDA margin continuing operations | Oct 2019- | |||||
| Jul-Sep | Jan-Sep | Jan-Dec | ||||
| SEK millions (if not defined differently) Operating earnings |
2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 | |
| Amortization of capitalized development expenditure | 10.1 | 9.7 | 27.3 | 30.6 | 36.3 | 39.6 |
| Other depreciation, amortization & impairment | 5.5 | 5.1 | 16.2 | 15.3 | 21.5 | 20.6 |
| Capitalization of development expenditure | -12.2 | -16.5 | -54.0 | -41.2 | -76.0 | -63.2 |
| EBITDA | -3.9 | 7.7 | -11.1 | 25.3 | -43.0 | -6.6 |
| Net sales | 92.5 | 109.5 | 291.5 | 343.3 | 396.7 | 448.6 |
| EBITDA margin | -4.2% | 7.1% | -3.8% | 7.4% | -10.8% | -1.5% |
| Development expenditure continuing operations | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
| SEK millions (if not defined differently) | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Development expenses | 16.7 | 14.8 | 51.9 | 52.5 | 70.1 | 70.8 |
| Capitalization of development expenditure | 12.2 | 16.5 | 54.0 | 41.2 | 76.0 | 63.2 |
| Total development expenditure | 28.9 | 31.4 | 105.8 | 93.7 | 146.1 | 134.0 |
| Capitalization rate | 42.2% | 52.7% | 51.0% | 43.9% | 52.0% | 47.2% |
| Net Sales | 92.5 | 109.5 | 291.5 | 343.3 | 396.7 | 448.6 |
| Total development expenditure/net sales | 31.2% | 28.6% | 36.3% | 27.3% | 36.8% | 29.9% |
| 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 (R4Q). |
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 | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
|---|---|---|---|---|---|---|
| SEK millions | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Current assets | 474.5 | 253.4 | 416.9 | 264.3 | 382.5 | 255.0 |
| Cash and cash equivalents | -276.0 | -57.9 | -225.6 | -67.5 | -193.9 | -64.5 |
| No interest-bearing short term liabilities | -124.6 | -135.7 | -135.3 | -142.3 | -135.2 | -143.8 |
| Working capital | 73.9 | 59.8 | 56.0 | 54.5 | 53.5 | 46.8 |
In current assets, assets held for sale of December 31, 2019, are excluded as, as they mainly relate to capitalized development expenses.
| Return on capital employed including discontinued | ||||||
|---|---|---|---|---|---|---|
| operations | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
| SEK millions (if not defined differently) | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Capital employed | ||||||
| Total balance | 899.7 | 705.9 | 855.2 | 697.1 | 824.7 | 695.0 |
| No interest-bearing liabilities | -141.3 | -158.9 | -154.4 | -164.0 | -154.4 | -165.3 |
| Capital employed | 758.4 | 547.0 | 700.8 | 533.1 | 670.3 | 529.7 |
| Operating earings less interest income R4Q | ||||||
| Operating earnings R4Q | -33.4 | -65.9 | -33.4 | -65.9 | -33.4 | -38.6 |
| Interest income R4Q | 0.3 | 0.6 | 0.3 | 0.6 | 0.3 | 0.7 |
| Operating earnings less interest income R4Q | -33.7 | -66.5 | -33.7 | -66.5 | -33.7 | -39.3 |
| Return on capital employed | -4.4% | -12.2% | -4.8% | -12.5% | -5.0% | -7.4% |
| Equity/asset ratio | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
|---|---|---|---|---|---|---|
| SEK millions (if not defined differently) | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Equity | 706.4 | 494.5 | 706.4 | 494.5 | 706.4 | 463.7 |
| Total equity and liabilities | 885.1 | 702.7 | 885.1 | 702.7 | 885.1 | 686.5 |
| Equity/asset ratio | 79.8% | 70.4% | 79.8% | 70.4% | 79.8% | 67.6% |
| Return on equity including discontionued operations | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | ||
| SEK millions (if not defined differently) | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Net income - R4Q | 216.6 | -52.5 | 216.6 | -52.5 | 216.6 | -32.2 |
| Average equity - R4Q | 619.4 | 500.7 | 619.4 | 500.7 | 619.4 | 485.4 |
| Return on equity | 35.0% | -10.5% | 35.0% | -10.5% | 35.0% | -6.6% |
| 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.
| Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|
| Average number of employees and consultants | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Average number of employees | 168 | 179 | 167 | 185 | 172 | 183 |
| Average number of consultants | 29 | 34 | 31 | 32 | 35 | 34 |
| Total average number of employees and consultants | 197 | 213 | 198 | 217 | 207 | 217 |
| Average number of employees and consultants continuing operations |
- | -28 | - | -28 | -14 | -28 |
| Net Average number of employees and consultants continuing operations |
197 | 185 | 198 | 190 | 193 | 189 |
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 | Jul-Sep | Jan-Sep | Oct 2019- | Jan-Dec | |||
|---|---|---|---|---|---|---|---|
| SEK millions | Note | 2020 | 2019 | 2020 | 2019 | Sep 2020 | 2019 |
| Effects of the Net Insight share price development during the period |
|||||||
| Share-based benefits | (a) | 0.1 | 0.0 | 0.1 | 0.1 | -0.1 | 0.0 |
| Synthetic opitons, change in value | (b) | 0.1 | 0.2 | 0.1 | 0.6 | -0.3 | 0.2 |
| Total | 0.2 | 0.2 | 0.1 | 0.7 | -0.3 | 0.3 | |
| Government grants Covid-19 | |||||||
| Reduction of employee expenses | 0.9 | - | 2.6 | - | 2.6 | - | |
| Other operating income | 0.3 | - | 0.7 | - | 0.7 | - | |
| Total | 1.3 | - | 3.2 | - | 3.2 | - | |
| Items affecting comparability | |||||||
| Restructuring | (c) | - | -1.2 | -1.4 | -7.7 | -5.7 | -12.0 |
| Strategic advisory services and preperation for capital injection |
(d) | - | - | - | - | -15.8 | -15.8 |
| Total | - | -1.2 | -1.4 | -7.7 | -21.5 | -27.8 | |
| Operating earnings excluding items affecting comparability continuting operations |
|||||||
| Operating earnings | -7.3 | 9.5 | -0.6 | 20.5 | -24.8 | -3.6 | |
| Items affecting comparability, as per above | - | 1.2 | 1.4 | 7.7 | 21.5 | 27.8 | |
| Items affecting comparability discontinuing operations |
- | - | - | -2.9 | - | -2.9 | |
| Operating earnings excluding items affecting comparability |
-7.3 | 10.7 | 0.7 | 25.3 | -3.2 | 21.3 |
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) During 2015-2019, Net Insight issued 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, 3 years, 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.
Net Insight AB (publ) Telephone: +46 (0)8 685 04 00, [email protected], www.netinsight.net
The information presented in this document may be subject to change without notice. For further information on product status and availability, please contact [email protected] or visit www.netinsight.net ©Copyright 2020. Net Insight AB (publ), Sweden. All rights reserved. Net Insight and Nimbra are trademarks of Net Insight AB, Sweden. All other registered trademarks are the property of their respective owners.
