AI assistant
Addnode Group Interim / Quarterly Report 2017
3001_10-k_2020-08-18_6a0bf1c8-6d5a-4d9e-9e0e-12a01061a56e.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
ADDNODE GROUP
THIS IS A TRANSLATION OF THE SWEDISH ORIGINAL OF ADDNODE GROUP'S YEAR-END REPORT FOR 2017
Year-End Report
1 January–30 December 2017
FOURTH QUARTER SUMMARY, OCTOBER–DECEMBER 2017
- Net sales increased to SEK 777.1 m (658.7), representing growth of 18 per cent.
- EBITA increased to SEK 101.1 m (63.4), corresponding to an EBITA margin of 13.0 per cent (9.6).
- Operating profit increased to SEK 75.8 m (47.6), corresponding to an operating margin of 9.8 per cent (7.2).
- Profit after tax increased to SEK 53.8 m (36.8).
- Earnings per share increased to SEK 1.77 (1.21).
- Cash flow from operating activities was SEK 65.4 m (72.9).
SUMMARY OF SIGNIFICANT EVENTS DURING THE FOURTH QUARTER, OCTOBER–DECEMBER 2017
- Acquisition of software company Apricon.
- Acquisition of CAD and PDM company MCAD.
- Acquisition of software company inPORT.
SUMMARY OF TWELVE-MONTH PERIOD, JANUARY–DECEMBER 2017
- Net sales increased to SEK 2,519.8 m (2,195.0), representing growth of 15 per cent.
- EBITA increased to SEK 211.8 m (170.6), corresponding to an EBITA margin of 8.4 per cent (7.8).
- Operating profit increased to SEK 129.9 m (113.7), corresponding to an operating margin of 5.2 per cent (5.2).
- Profit after tax increased to SEK 89.6 m (82.3).
- Earnings per share increased to SEK 2.94 (2.71).
- Cash flow from operating activities was SEK 147.1 m (157.7).
SUMMARY OF SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
- The Board of Directors proposes an unchanged dividend of SEK 2.25 (2.25) per share.
- City of Stockholm chooses Addnode Group’s work place and facility management solution.
50%
SHARE OF RECURRING REVENUE IN Q4 2017
+18%
GROWTH Q4 2017 COMPARED WITH Q4 2016
SEK 2,520 m
NET SALES JANUARY - DECEMBER 2017
For more information, please contact:
Johan Andersson, President and CEO
[email protected]
+46 (0) 704 20 58 31
Helena Nathhorst, CFO
[email protected]
+46 (0)70 607 63 23
Contact Address
Addnode Group AB (publ.)
Hudiksvallsgatan 4B
SE-113 30 STOCKHOLM
Corporate Identity
556291-3185
Telephone Number
+46 8 630 70 70
Website
www.addnodegroup.com
This information is inside information that Addnode Group AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out to the left, at 8.30 a.m. CET on 7 February 2018.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
Growth and highly increased profits in Q4
STRONG CONCLUSION TO THE YEAR
The fourth quarter was very strong for Addnode Group. Our net sales grew by 18 per cent, to SEK 777 m. Organic growth was 3 per cent. EBITA of SEK 101 m is the best we have ever achieved in a single quarter, and earnings per share grew 46 per cent compared with the same quarter a year ago.
ALL BUSINESS AREAS GROWING, WITH INCREASED PROFIT
All of the business areas posted favourable growth in net sales for the fourth quarter and a strong improvement in the EBITA margin compared with the same period a year ago.
Growth in net sales for the Design Management business area was 14 per cent, and the EBITA margin improved to 11.1 per cent. Favourable demand primarily from the construction and property sectors, but also from manufacturing industries, generated organic growth of 5 per cent and improved earnings. The acquisition of Service Works Group (SWG) has strengthened the offering and is making a positive contribution to the business area's performance.
Net sales growth for the Product Lifecycle Management business area was 28 per cent, and the EBITA margin increased to 13.6 per cent. Good sales of software both to existing and new customers, and positive performance following the acquisition of Intrinsys, contributed to the strong earnings for the quarter.
The Process Management business area's growth in net sales was 11 per cent, and the EBITA margin increased to 18.2 per cent. Organic growth was 3 per cent during the quarter, driven mainly by favourable demand for case management systems and e-archive services from government authorities and municipalities. Successful initiatives in own product development, complementary acquisitions and a strong service offering contributed to sales growth and the improved margin.
INTENSIVE YEAR OF ACQUISITIONS
During the 2017 financial year we announced ten acquisitions with combined annual sales of approximately SEK 450 m. Through these acquisitions we have expanded to new geographies and broadened our portfolio with products and services that can even better meet our customers' needs. We are engaged in continuous dialogues regarding both complementary acquisitions as well as with larger companies that could expand the Group.
GLOBAL TRENDS YIELDING GROWTH
The drivers of our business can be found in the major trends and challenges that we see in the world around us. These involve everything from urbanisation and the emergence of smart cities to digitalisation and automation of processes in industry and public administration. Demographic changes, with ageing populations and rising demands for sustainable development, are also salient societal trends in which we can offer solutions to our customers.
With software and services that meet our customers' needs, we have delivered growth to our shareholders year after year. We are well-positioned to continue growing and further improve our margins going forward.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
SIGNIFICANT EVENTS DURING THE FOURTH QUARTER OF 2017
Acquisition of Apricon – SaaS project tool
Apricon develops an SaaS tool for project collaboration and document management that is used by leading construction and property companies. The company had sales of approximately SEK 10 m in 2016, and has nine employees. Possession was transferred on 2 October 2017, and the company is part of Addnode Group’s Design Management business area.
Acquisition of CAD and PDM company MCAD
MCAD provides CAD and PDM solutions to medium-sized and larger companies in the manufacturing and process industries. The offering includes both services and products. The company posted sales of SEK 31 m for its 2016/2017 financial year. Possession was transferred on 2 January 2018, and the company is part of Addnode Group’s Product Design Management business area starting in January 2018.
Acquisition of software company inPORT
inPORT develops logistics solutions for harbours, terminals and shipping companies. The company is the Nordic region’s leading supplier in its market segment and had sales of SEK 25 m during the last 12-month period. Possession was transferred on 2 January 2018, and the company is part of Addnode Group’s Process Management business area starting in January 2018.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
Board of Directors proposes unchanged dividend of SEK 2.25 per share
The Board of Directors proposes an unchanged dividend of SEK 2.25 per share (2.25). The Board is of the opinion that, after payment of the proposed dividend, the company will have sufficient funds to meet its financial targets.
City of Stockholm chooses Addnode Group’s workplace and facility management solution
The City of Stockholm, one of Sweden’s largest property owners, has chosen Symetri, a subsidiary of Addnode Group, as a partner for new IT support for its property office. Based on Symetri’s concept, Symetri Efficient Facility IWMS, which combines traditional facility management systems with workplace services, graphical visualisation of building models and document management, the City of Stockholm will obtain good support for business processes in a uniform solution. The contract has a term of six years for an initial value of SEK 17.5 m, with an option for a nine-year extension.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
CONSOLIDATED NET SALES AND EARNINGS
Fourth quarter, October-December 2017
Net sales amounted to SEK 777.1 m (658.7), an increase of 18 per cent. Organic growth increased by 3 per cent. Software revenue (licences) totalled SEK 134 m (92), recurring revenue increased to SEK 389 m (328), service revenue increased to SEK 234 m (209), and other revenue totalled SEK 20 m (30). The increase in sales of licences is mainly attributable higher sales of third-party licences in the Product Lifecycle Management business area, and the increase in recurring revenue is explained mainly by the shift from a licence-based to a subscription-based business model in the Design Management business area. Recurring revenue increased also in other business areas and is attributable to completed acquisitions. EBITA was SEK 101.1 m (63.4), corresponding to an EBITA margin of 13.0 per cent (9.6).
The Design Management business area had growth of 14 per cent, of which 5 per cent organic growth, and higher earnings compared with the same quarter a year ago. The higher earnings are attributable to favourable organic growth and to acquisitions carried out during the year. The Product Lifecycle Management business area posted growth of 28 per cent, of which 1 per cent organic growth. The improved earnings compared with the same period a year ago can be credited to good software sales and to acquisitions carried out during the year. The Process Management business area had growth of 11 per cent over the corresponding quarter a year ago, of which 3 per cent organic growth. The increases in net sales and earnings are attributable to higher sales of services and maintenance contracts, and to acquisitions carried out during the year.
Cash flow from operating activities was SEK 65.4 m (72.9). Net financial items amounted to SEK -4.1 m (-0.4). The increase in financial expenses is attributable to higher debt. Reported tax on profit for the period was SEK -17.9 m (-10.4), and profit after tax was SEK 53.8 m (36.8). Earnings per share increased to SEK 1.77 (1.21).
Twelve-month period, January-December 2017
Net sales increased by 15 per cent to SEK 2,519.8 m (2,195.0). Organic growth was 5 per cent compared with the corresponding period a year ago. Software revenue (licences) increased to SEK 316 m (311), recurring revenue increased to SEK 1,341 m (1,108), service revenue increased to SEK 803 m (708), and other revenue totalled SEK 60 m (67). EBITA increased to SEK 211.8 m (170.6), corresponding to an EBITA margin of 8.4 per cent (7.8). EBITA for the 12-month period was charged with SEK 6.6 m (0.1) in acquisition costs. Net financial items amounted to SEK -11.0 m (-4.9). Reported tax on profit for the period was SEK -29.3 m (-26.5), and profit after tax was SEK 89.6 m (82.3). Earnings per share were SEK 2.94 (2.71).
Net sales, quarterly trend, SEK M
EBITA, quarterly trend SEK M 1)
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
DESIGN MANAGEMENT
IT solutions for design and construction
PRODUCT LIFECYCLE MANAGEMENT
IT solutions for product data information
PROCESS MANAGEMENT
IT solutions for document and case management
Quarterly development
Net sales increased to SEK 277.3 m (243.1) during the fourth quarter, representing growth of 14 per cent. The organic growth was 5 per cent. EBITA was SEK 30.8 m (18.2), for an EBITA margin of 11.1 per cent (7.5). Our SaaS solution for information and processes in construction projects continues to attract a growing number of users. Demand for Autodesk products remained strong from the construction and property sectors in Sweden, and was favourable from manufacturing industries. The company SWG that was acquired during the third quarter contributed in line with expectations, as did the acquisition of Apricon during the fourth quarter.
New business
The business area secured agreements with customers such as ASM Technologies, Elomatic, James Howden & Company, Norconsult, Point Resources, SCA, the City of Stockholm, Unite Integrated Solutions and Volvo Information Technologies.
Quarterly development
Net sales increased to SEK 303.5 m (237.1) during the fourth quarter, representing growth of 28 per cent. The organic growth was 1 per cent. EBITA was SEK 41.4 m (24.9), for an EBITA margin of 13.6 per cent (10.5). Demand in the UK, the Nordic countries and Germany was favourable for our broad PLM offering of software and services. We landed several new customers, and a revenue mix with strong software sales had a positive impact on earnings. The acquisitions of Intrinsys and Infostrait continued to develop in line with expectations, and previously communicated cost-cutting measures in Germany were implemented.
New business
The business area secured agreements with customers such as AB/E Aerospace, Draxlmaier, Emerald Automotive, Fulda, M-Tec, Seco Tools, Vanderlande and Walraven.
Quarterly development
Net sales increased to SEK 200.8 m (180.6) during the fourth quarter, representing growth of 11 per cent. The organic growth was 3 per cent. EBITA increased to SEK 36.6 m (27.4), for an EBITA margin of 18.2 per cent (15.2). The general business climate for the business area remains favourable. The case management and system development offerings performed strongly, and the utilisation rate for the business area's consultants was good. Completed acquisitions contributed to the earnings performance.
New business
The business area secured agreements with customers such as Fastighetsdata WMS, Gävleborg County Council, Hogia, Ludvika Municipality, the Swedish Environmental Protection Agency, Nyköping Municipality, Perstorp Municipality and Östersund Municipality.
Net sales by business area, share during the quarter, % 1)
1) Before elimination of invoicing between the business areas and central costs.
EBITA by business area, share during the quarter, % 1)
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
DEVELOPMENT OF BUSINESS AREAS
| Net sales, SEK M | 2016 Q1 | 2016 Q2 | 2016 Q3 | 2016 Q4 | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | Full Year 2017 | Full Year 2016 |
|---|---|---|---|---|---|---|---|---|---|---|
| Design Management | 225.8 | 204.0 | 156.0 | 243.1 | 247.1 | 208.6 | 172.9 | 277.3 | 905.9 | 828.9 |
| Product Lifecycle Management | 176.4 | 179.4 | 186.1 | 237.1 | 197.8 | 205.3 | 213.2 | 303.5 | 919.8 | 779.0 |
| Process Management | 140.4 | 146.8 | 127.0 | 180.6 | 178.0 | 175.3 | 150.0 | 200.8 | 704.1 | 594.8 |
| Elim/central | -1.8 | -1.8 | -2.0 | -2.1 | -2.2 | -1.7 | -1.6 | -4.5 | -10.0 | -7.7 |
| Addnode Group | 540.8 | 528.4 | 467.1 | 658.7 | 620.7 | 587.5 | 534.5 | 777.1 | 2,519.8 | 2,195.0 |
| EBITA, SEK M | 2016 Q1 | 2016 Q2 | 2016 Q3 | 2016 Q4 | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | Full Year 2017 | Full Year 2016 |
| Design Management | 14.8 | 15.0 | 9.1 | 18.2 | 20.3 | 12.8 | 12.3 | 30.8 | 76.2 | 57.1 |
| Product Lifecycle Management | 8.8 | 11.1 | 17.3 | 24.9 | 12.0 | 10.5 | 7.9 | 41.4 | 71.8 | 62.1 |
| Process Management | 14.0 | 17.7 | 19.2 | 27.4 | 29.5 | 18.0 | 16.9 | 36.6 | 101.0 | 78.3 |
| Elim/central | -7.0 | -6.8 | 6.0 | -7.1 | -8.2 | -8.5 | -12.8 | -7.7 | -37.2 | -26.9 |
| Addnode Group | 30.6 | 37.0 | 39.6 | 63.4 | 53.6 | 32.8 | 24.3 | 101.1 | 211.8 | 170.6 |
| EBITA margin, % | 2016 Q1 | 2016 Q2 | 2016 Q3 | 2016 Q4 | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | Full Year 2017 | Full Year 2016 |
| Design Management | 6.6% | 7.4% | 5.8% | 7.5% | 8.2% | 6.1% | 7.1% | 11.1% | 8.4% | 6.9% |
| Product Lifecycle Management | 5.0% | 6.2% | 9.3% | 10.5% | 6.1% | 5.1% | 3.7% | 13.6% | 7.8% | 8.0% |
| Process Management | 10.0% | 12.1% | 15.1% | 15.2% | 16.6% | 10.3% | 11.3% | 18.2% | 14.3% | 13.2% |
| Addnode Group | 5.7% | 7.0% | 8.5% | 9.6% | 8.6% | 5.6% | 4.5% | 13.0% | 8.4% | 7.8% |
| Average number of employees | 2016 Q1 | 2016 Q2 | 2016 Q3 | 2016 Q4 | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | Full Year 2017 | Full Year 2016 |
| Design Management | 314 | 320 | 320 | 322 | 309 | 317 | 367 | 391 | 345 | 319 |
| Product Lifecycle Management | 406 | 420 | 443 | 443 | 460 | 498 | 526 | 544 | 508 | 428 |
| Process Management | 390 | 396 | 393 | 424 | 445 | 443 | 458 | 477 | 457 | 405 |
| Central | 7 | 7 | 8 | 9 | 8 | 8 | 7 | 8 | 7 | 8 |
| Addnode Group | 1,117 | 1,143 | 1,164 | 1,198 | 1,222 | 1,266 | 1,358 | 1,420 | 1,317 | 1,160 |
Seasonal variations
The fourth quarter has historically the highest net sales and EBITA.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
7
CONSOLIDATED BALANCE SHEET AND CASH FLOW
Liquidity, cash flow and financial position
The Group’s cash and cash equivalents on 31 December 2017 amounted to SEK 173.2 m (111.5). Cash flow from operating activities was SEK 147.1 m (157.7) in 2017. Cash flow was affected by a temporary increase in working capital. Cash flow from investing activities in 2017 includes payment of SEK 52.9 m in contracted and previously expensed earn-out payments for company acquisitions carried out in previous years. It also includes payments of SEK 45.7 m (42.7) for proprietary software.
Share dividends of SEK 68.5 m were paid out during the second quarter of 2017. New bank borrowing of SEK 422.9 m was taken out in 2017 within the framework of existing credit facilities, plus an additional SEK 42.5 m in January 2018. The Group’s interest-bearing liabilities amounted to SEK 620.8 m on 31 December 2017 (177.3), and the net sum of interest-bearing assets and liabilities was SEK -447.6 m (-65.8). The equity/assets ratio was 37 per cent (49) on 31 December 2017. The Parent Company has an existing bank overdraft facility of SEK 100 m. In addition, on 30 June 2017 the Parent Company increased its acquisition credit facility by SEK 350 m from SEK 400 m previously, to SEK 750 m in total, to finance acquisitions, of which SEK 626 m has been utilised as per the date of publication of this year-end report.
Investments
Investments in intangible non-current assets and in property, plant and equipment amounted to SEK 65.0 m (67.9), of which SEK 45.7 m (42.7) pertains to proprietary software and SEK 16.2 m (16.6) to equipment.
Goodwill and other intangible assets
The Group’s carrying amount of goodwill on 31 December 2017 was SEK 1,357.7 m (972.0). Other intangible assets amounted to SEK 296.7 m (193.9) and pertain mainly to customer contracts and software.
Deferred tax assets
Total reported deferred tax assets amounted to SEK 13.0 m on 31 December 2017, of which SEK 9.5 m pertains to tax loss carryforwards. The Group’s accumulated tax loss carryforwards amounted to approximately SEK 80 m on 31 December 2017. Deferred tax assets attributable to tax loss carryforwards are reported as assets to the extent it is likely that the loss carryforwards can be used to offset surpluses against future taxation.
Shareholders’ equity and number of shares
Shareholders’ equity on 31 December 2017 amounted to SEK 982.5 m (964.7), corresponding to SEK 32.29 (31.70) per share outstanding. Changes in the number of shares outstanding and in shareholders’ equity are shown on page 12. During the second quarter, SEK 68.5 m was paid out in share dividends. No share-savings, option or convertible programmes were outstanding as per 31 December 2017.
Provisions
Provisions, which are included in non-current and current liabilities on the consolidated balance sheet, amounted to SEK 109.8 m on 31 December 2017, of which SEK 93.8 m pertains to estimated contingent earn-out payments for completed company acquisitions. A total of SEK 42.6 m was paid out during the year in previously expensed contingent earn-out payments.
EMPLOYEES
The average number of employees in the Group in 2017 was 1,317 (1,160). The number of employees at year-end was 1,511 (1,277).
DISCLOSURES OF SUBSIDIARY ACQUISITIONS
On 22 September 2017 an agreement was signed to acquire all of the shares in the Swedish software company Adtollo, with possession transferring on 2 October 2017. Adtollo delivers systems for the plans and designs of communities and cities based on its proprietary Topocad and Chaos Desktop products. The company delivers its CAD system Topocad to more than ten Swedish municipalities and several of the Nordic region’s leading construction companies. Adtollo had sales of SEK 24 m in 2016 and is part of Addnode Group’s Process Management business area from the date of possession. The acquisition complements and strengthens the Group’s offering of solutions for plans and designs of communities and cities.
According to the preliminary purchase price allocation analysis, goodwill and other acquisition-related intangible assets arising through the acquisition are estimated to be approximately SEK 28 m, which entails a deferred tax liability of approximately SEK 2 m. Other acquired assets and liabilities pertain mainly to trade receivables and deferred income. Depending on the actual outcome for the acquired company’s operating profit for the period 2017–2018, a contingent, cash earn-out payment ranging from zero up to a maximum undiscounted amount of SEK 10 m may be payable, of which SEK 5 m is reported as a provision on the consolidated balance sheet as per 31 December 2017.
On 2 October 2017 an agreement was signed to acquire all of the shares in the Swedish software company Apricon, with possession transferring the same day. Apricon are developing a cloud-based tool for project collaboration and document management that is used by leading construction and property companies. The company had sales of approximately SEK 10 m in 2016, and has nine employees. Apricon is part of Addnode Group’s Design Management business area from the date of possession. The acquisition represents a continued strengthening of Addnode Group’s offering to construction and property companies. According to the preliminary purchase price allocation analysis, goodwill and other acquisition-related intangible assets arising through the acquisition are estimated to be approximately SEK 11 m. Other acquired assets and liabilities pertain mainly to trade receivables, cash and cash equivalents, and deferred income.
In earlier quarters in 2017 Addnode Group acquired the companies Kompanion, Infostrait, Canella, Forsler & Stjerna, Service Works Group and Intrinsys, which are described in previous interim reports and in the table on page 16.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
8
With respect to these acquisitions, restatements of contingent earn-out payments and corresponding decreases in goodwill were made by approximately SEK 30 m during the fourth quarter. During 2017 the acquisitions contributed approximately SEK 184 m to consolidated net sales and SEK 20 m to consolidated profit after tax. If the acquisitions had been carried out as per 1 January 2017, consolidated net sales in 2017 would have amounted to approximately SEK 2,720 m, and profit after tax would have amounted to approximately SEK 112 m. Costs for carrying out the acquisitions, totalling SEK 6.6 m, are included in the Group's other external costs.
At the end of November 2017 an agreement was signed to acquire all of the shares in MCAD Sverige AB, with possession transferring on 2 January 2018. MCAD provides CAD and PDM solutions to medium-sized and larger companies in the manufacturing and process industries. The acquisition strengthens the Group's offering in these areas. The company has annual net sales of approximately SEK 30 m and is consolidated in the Design Management business area starting in 2018.
In December 2017 an agreement was signed to acquire all of the shares in inPORT, Intelligent Port Systems AB, with possession transferring on 2 January 2018. The company develops logistics solutions for harbours, terminals and shipping companies, and is the Nordic region's leading supplier in its market segment. Annual net sales amount to approximately SEK 25 m, and the company is consolidated from 2018 in the Process Management business area.
DISCLOSURES OF FINANCIAL INSTRUMENTS
The Group's risk exposure in financial instruments is relatively limited. No financial assets or liabilities are carried at a value that significantly deviates from their fair value. More detailed information is provided in Note 19 of the 2016 Annual Report. During 2017 no significant changes took place in holdings or in the valuation of financial instruments attributable to Level 3 of the fair value hierarchy under IFRS 13, nor were transfers made between the levels in the valuation hierarchy. As per 31 December 2017 the Group had no outstanding currency forward contracts.
RELATED PARTY TRANSACTIONS
The Chairman of the Board, Staffan Hanstorp, invoiced the Parent Company for fees for consulting services in the amount of SEK 1.7 m related to the Group's acquisition opportunities, financing matters, strategic partnerships and overarching strategic matters during the period May–December 2017.
PARENT COMPANY
Net sales amounted to SEK 10.4 m (9.1), which pertain mainly to invoicing to subsidiaries for performed services. Profit after financial items totalled SEK 106.1 m (71.3), including SEK 40.1 m (47.0) in dividends from subsidiaries, Group contributions of SEK 119.8 m (68.2) from subsidiaries, and write-downs of shares in subsidiaries by SEK 19.0 m (18.0). Cash and cash equivalents amounted to SEK 0.0 m on 31 December 2017 (96.6), and utilized overdraft facilities amounted to SEK 41.6 m (0.0). Investments in shares in subsidiaries amounted to SEK 630.5 m, and transfers of shares in subsidiaries to other Group companies totalled SEK 9.0 m. Repayment of capital from subsidiaries was made in the amount of SEK 19.1 m. No significant investments were made in intangible non-current assets or in property, plant and equipment. During the second quarter, SEK 68.5 m was paid out in share dividends. In 2017, payments of SEK 52.9 m were made for contracted and previously expensed earn-out payments for company acquisitions carried out in previous years. Provisions for estimated, contingent earn-out payments have increased by SEK 90.4 m in connection with company acquisitions carried out in 2017. New bank borrowing of SEK 422.9 m was taken out in 2017 within the framework of existing credit facilities, plus an additional SEK 42.5 m in January 2018. The Parent Company has an existing bank overdraft facility of SEK 100 m. In addition, on 30 June 2017 the Parent Company increased its acquisition credit facility by SEK 350 m from SEK 400 m previously, to SEK 750 m in total, to finance acquisitions, of which SEK 626 m has been utilised as per the date of publication of this year-end report.
ACCOUNTING POLICIES
This year-end report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU and the Swedish Annual Accounts Act. The Parent Company's accounts have been prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities. The new standards, amendments and interpretations of existing standards that took effect in 2017 have not had any impact on the Group's financial position or financial statements. The accounting policies and calculation methods are unchanged compared with the description provided in the 2016 Annual Report.
IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments will be applied starting in 2018. Addnode Group has concluded that IFRS 15 will not entail any material impact on the Group's earnings or financial position. The Group will apply this standard retrospectively. For IFRS 9, the Group has concluded that the new standard will not have any material impact on the Group's classification and valuation of financial instruments or on the Group's hedge accounting. The new model for calculating the credit loss reserve is based on expected credit losses instead of confirmed losses, which entails earlier recognition of credit losses, but the effect is expected to be negligible since the Group has historically had insignificant credit losses. IFRS 16 Leases will be applied as from 2019. Application of this standard will have effects on the Group's financial reporting, and the Group is currently evaluating the effects of implementation of the standard.
SIGNIFICANT RISKS AND UNCERTAINTIES
Addnode Group's significant risks and uncertainties are described in the 2016 Annual Report on pages 26-27 and in the section "Risks and uncertainties" on page 37, as well as in notes 37 and 38 on pages 69-71. No significant changes have subsequently taken place.
FUTURE OUTLOOK
The Board has not changed its assessment of the future outlook compared with the previous quarter. In the interim report for the period January–September 2017 the Board communicated the following outlook: In the long-term, the areas in which Addnode Group is active are deemed to have strong underlying potential. Addnode Group's growth strategy is to grow organically and through acquisitions of new businesses in the aim of adding new, complementary offerings and additional expertise. The policy of not issuing a forecast stands firm.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
CERTIFICATION
The Board of Directors and President certify that the year-end report gives a fair overview of the company's and Group's operations, position and earnings, and describes significant risks and uncertainties facing the company and the companies included in the Group.
Stockholm, 7 February 2018
The Board of Directors
This year-end report has not been reviewed by the company's auditors.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
10
LARGEST SHAREHOLDERS 2017-12-31
| Shareholder | % of capital | % of votes |
|---|---|---|
| Aretro Capital Group AB^{1} | 7.5 | 20.1 |
| Vidinova AB^{2} | 4.8 | 12.0 |
| Odin fonder | 9.5 | 7.4 |
| Lannebo Fonder | 8.2 | 6.3 |
| Swedbank Robur fonder | 7.9 | 6.1 |
| Försäkringsaktiebolaget Avanza pension | 6.4 | 4.9 |
| Fjärde AP-fonden | 4.9 | 3.8 |
| Handelsbanken Fonder AB | 4.7 | 3.6 |
| Didner & Gerge Fonder | 3.9 | 3.0 |
| Grenspecialisten Förvaltning AB | 3.0 | 2.3 |
| Other shareholders | 39.2 | 30.5 |
| Total | 100.0 | 100.0 |
1) Aretro Capital Group AB is jointly owned by Staffan Hanstorp, Addnode Group’s Chairman of the Board, and Jonas Gejer, the Business Area Manager of Product Lifecycle Management.
2) Board member Dick Hasselström is the principal owner of Vidinova AB
QUICK FACTS
Addnode Group acquires, operates and develops entrepreneur-driven companies that supply software and services to markets in which we have or can achieve a leading position. We are one of Europe's leading suppliers of software and services for design, construction and product data information, and a leading supplier of document and case management systems to public sector clients in Sweden and Norway. In 2017 we reported growth rate of 15 per cent and net sales of SEK 2,520 m.
TWO CORE BUSINESSES
IT solutions for design, construction and product data information. IT solutions for document and case management.
ENTREPRENEURSHIP
We are distinguished by a spirit of entrepreneurship, with short decision-making paths, and business-critical decisions are made as close as possible to the customer and end user.
ACQUISITION
We have completed more than 50 acquisitions since 2003 and are constantly seeking companies that can strengthen or complement any of our core businesses.
RECURRING REVENUE
A large portion of our revenue is recurring in the form of support and maintenance agreements, subscription and rental contracts, and SaaS solutions.
FINANCIAL CALENDAR 2018
26 APRIL 2018
AGM
Interim report for the first quarter of 2018
25 OKTOBER 2018
Interim report for the nine-month period
20 JULI 2018
Interim report for the first six months of 2018
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
11
CONSOLIDATED INCOME STATEMENT
| (SEK M) | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Net sales | 777.1 | 658.7 | 2,519.8 | 2,195.0 |
| Operating expenses: | ||||
| Purchases of goods and services | -300.6 | -277.2 | -968.3 | -863.3 |
| Other external costs | -88.3 | -68.9 | -312.0 | -258.0 |
| Personnel costs | -296.2 | -256.2 | -1,057.6 | -931.0 |
| Capitalized work performed by the company for its own use | 13.1 | 11.1 | 45.7 | 42.7 |
| Depreciation/amortization and impairment of | ||||
| - tangible fixed assets | -4.0 | -4.1 | -15.8 | -14.8 |
| - intangible fixed assets | -25.3 | -15.8 | -81.9 | -56.9 |
| Total operating expenses | -701.3 | -611.1 | -2,389.9 | -2,081.3 |
| Operating profit | 75.8 | 47.6 | 129.9 | 113.7 |
| Financial income | 0.4 | 0.9 | 1.5 | 2.1 |
| Financial expenses | -4.5 | -1.3 | -12.5 | -7.0 |
| Profit before taxes | 71.7 | 47.2 | 118.9 | 108.8 |
| Current tax | -15.6 | -9.1 | -30.6 | -21.1 |
| Deferred tax | -2.3 | -1.3 | 1.3 | -5.4 |
| NET PROFIT FOR THE PERIOD | 53.8 | 36.8 | 89.6 | 82.3 |
| Attributable to: | ||||
| Owners of the Parent Company | 53.8 | 36.8 | 89.6 | 82.3 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 |
| Earnings per share before and after dilution, SEK | 1.77 | 1.21 | 2.94 | 2.71 |
| Average number of shares outstanding: | ||||
| Before and after dilution, millions | 30.4 | 30.4 | 30.4 | 30.4 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| (SEK M) | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Net profit for the period | 53.8 | 36.8 | 89.6 | 82.3 |
| Other comprehensive income, items that will not be reclassified to the consolidated income statement: | ||||
| Actuarial gains and losses on pension obligations | 0.0 | -0.2 | 0.0 | -0.2 |
| Other comprehensive income, items that may be reclassified to the consolidated income statement: | ||||
| Exchange rate difference upon translation of foreign operations | 14.3 | -4.7 | 12.8 | 36.6 |
| Hedge of net investments in foreign operations | -9.5 | 0.4 | -16.1 | -2.1 |
| Total other comprehensive income after tax for the period | 4.8 | -4.5 | -3.3 | 34.3 |
| COMPREHENSIVE INCOME FOR THE PERIOD | 58.6 | 32.3 | 86.3 | 116.6 |
| Attributable to: | ||||
| Owners of the Parent Company | 58.6 | 32.3 | 86.3 | 116.6 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 |
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
12
CONSOLIDATED BALANCE SHEET
| (SEK M) | Dec 31, 2017 | Dec 31, 2016 |
|---|---|---|
| Goodwill | 1,357.7 | 972.0 |
| Other intangible fixed assets | 296.7 | 193.9 |
| Tangible fixed assets | 39.8 | 36.8 |
| Financial fixed assets | 28.0 | 23.8 |
| Inventories | 1.1 | 1.3 |
| Current receivables | 728.9 | 646.2 |
| Cash and cash equivalents | 173.2 | 111.5 |
| TOTAL ASSETS | 2,625.4 | 1,985.5 |
| Shareholders' equity | 982.5 | 964.7 |
| Non-current liabilities | 192.3 | 67.5 |
| Current liabilities | 1,450.6 | 953.3 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 2,625.4 | 1,985.5 |
| Interest-bearing receivables amount to | 0.0 | 0.0 |
| Interest-bearing liabilities amount to | 620.8 | 177.3 |
| Pledged assets | 6.2 | 11.8 |
| Contingent liabilities | 0.9 | 0.6 |
SHAREHOLDERS' EQUITY AND NUMBER OF SHARES
| Specification of changes in shareholders' equity | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Shareholders' equity | ||||
| Shareholders' equity, opening balance | 923.9 | 932.4 | 964.7 | 916.6 |
| Dividend | -68.5 | -68.5 | ||
| Comprehensive income for the period | 58.6 | 32.3 | 86.3 | 116.6 |
| Shareholders' equity, closing balance | 982.5 | 964.7 | 982.5 | 964.7 |
| Shareholders' equity attributable to: | ||||
| Owners of the Parent Company | 982.5 | 964.7 | 982.5 | 964.7 |
| Non-controlling interests (minority interests) | 0.0 | 0.0 | 0.0 | 0.0 |
| Specification of number of shares outstanding, millions | ||||
| Number of shares outstanding, opening balance | 30.4 | 30.4 | 30.4 | 30.4 |
| Number of shares outstanding, closing balance | 30.4 | 30.4 | 30.4 | 30.4 |
The number of registered shares was 30,427,256 on both December 31, 2016 and December 31, 2017. Addnode Group had no holdings of own shares on December 31, 2016 or December 31, 2017. The number of outstanding shares was 30,427,256 on both December 31, 2016 and December 31, 2017.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
13
CONSOLIDATED CASH FLOW STATEMENT
| (SEK M) | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Operating activities | ||||
| Operating profit | 75.8 | 47.6 | 129.9 | 113.7 |
| Adjustment for non-cash items | 35.4 | 23.0 | 104.2 | 76.5 |
| Total | 111.2 | 70.6 | 234.1 | 190.2 |
| Net financial items | -2.8 | -0.5 | -9.9 | -2.3 |
| Tax paid, etc. | -8.3 | 7.5 | -28.9 | -16.4 |
| Cash flow from operating activities before changes in working capital | 100.1 | 77.6 | 195.3 | 171.5 |
| Total change in working capital | -34.7 | -4.7 | -48.2 | -13.8 |
| Cash flow from operating activities | 65.4 | 72.9 | 147.1 | 157.7 |
| Cash flow from investing activities^{1)} | -93.5 | -21.8 | -438.9 | -135.7 |
| Cash flow from financing activities^{2)} | 26.2 | -0.1 | 351.7 | -18.8 |
| Change in cash and cash equivalents | -1.9 | 51.0 | 59.9 | 3.2 |
| Cash and cash equivalents, opening balance | 171.7 | 61.6 | 111.5 | 102.9 |
| Exchange rate difference in cash and cash equivalents | 3.4 | -1.2 | 1.8 | 5.4 |
| Cash and cash equivalents, closing balance | 173.2 | 111.4 | 173.2 | 111.5 |
1) Specification of investing activities:
| Purchases and sales of intangible and tangible fixed assets | -19.6 | -19.1 | -61.9 | -66.4 |
|---|---|---|---|---|
| Acquisition of financial fixed assets | -1.9 | -1.9 | ||
| Acquisition of subsidiaries and operations | -77.5 | -2.7 | -550.5 | -86.1 |
| Cash and cash equivalents in acquired companies | 3.6 | 0.0 | 175.4 | 18.6 |
| Repayment of receivables | 0.1 | |||
| Total | -93.5 | -21.8 | -438.9 | -135.7 |
2) Specification of financing activities:
| Paid dividend | -68.5 | -68.5 | ||
|---|---|---|---|---|
| Borrowings | 26.8 | 422.9 | 67.5 | |
| Repayment of loans | -0.6 | -0.1 | -2.7 | -17.8 |
| Total | 26.2 | -0.1 | 351.7 | -18.8 |
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
14
KEY FIGURES
| Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 | |
|---|---|---|---|---|
| Net sales, SEK M | 777.1 | 658.7 | 2,519.8 | 2,195.0 |
| Average number of employees | 1,420 | 1,198 | 1,317 | 1,160 |
| Net sales per employee, SEK 000s | 547 | 550 | 1,913 | 1,892 |
| Change in net sales, % | 18 | 7 | 15 | 15 |
| EBITA margin, % | 13.0 | 9.6 | 8.4 | 7.8 |
| Operating margin, % | 9.8 | 7.2 | 5.2 | 5.2 |
| Profit margin, % | 9.2 | 7.2 | 4.7 | 5.0 |
| Equity/assets ratio, % | 37 | 49 | 37 | 49 |
| Acid-test ratio, % | 62 | 79 | 62 | 79 |
| Shareholders' equity, SEK M | 982.5 | 964.7 | 982.5 | 964.7 |
| Return on shareholders' equity,% * | 5.6 | 3.9 | 9.4 | 8.9 |
| Return on capital employed, % * | 4.9 | 4.3 | 10.0 | 10.7 |
| Net debt, SEK M | 447.6 | 65.8 | 447.6 | 65.8 |
| Investments in equipment, SEK M | 6.9 | 6.1 | 16.2 | 16.6 |
- Key figures for the various interim periods have not been adjusted to return on an annual basis.
SHARE DATA
| Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 | |
|---|---|---|---|---|
| Average number of shares outstanding, millions | 30.4 | 30.4 | 30.4 | 30.4 |
| Total number of shares outstanding, millions | 30.4 | 30.4 | 30.4 | 30.4 |
| Total number of registered shares, millions | 30.4 | 30.4 | 30.4 | 30.4 |
| Earnings per share, SEK | 1.77 | 1.21 | 2.94 | 2.71 |
| Cash flow per share, SEK | 2.15 | 2.40 | 4.83 | 5.18 |
| Shareholders' equity per share, SEK | 32.29 | 31.70 | 32.29 | 31.70 |
| Dividend per share, SEK | - | - | 2.25^{1)} | 2.25 |
| Share price at end of period, SEK | 75.75 | 56.50 | 75.75 | 56.50 |
| P/E ratio | - | - | 26 | 21 |
| Share price/shareholders' equity | 2.34 | 1.78 | 2.34 | 1.78 |
1) According to proposal from the board
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
15
OPERATING SEGMENTS
The figures below refer to each full-year.
| (SEK M) | DESIGN MGT | PLM MGT | PROCESS MGT | CENTRAL | ELIMINATION | ADDNODE GROUP | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |
| REVENUE | ||||||||||||
| External sales | 902.8 | 826.2 | 917.4 | 778.6 | 699.0 | 589.7 | 0.6 | 0.5 | 2,519.8 | 2,195.0 | ||
| Transactions between segments | 3.1 | 2.7 | 2.4 | 0.4 | 5.1 | 5.1 | 12.1 | 12.1 | -22.7 | -20.3 | 0.0 | 0.0 |
| Total revenue | 905.9 | 828.9 | 919.8 | 779.0 | 704.1 | 594.8 | 12.7 | 12.6 | -22.7 | -20.3 | 2,519.8 | 2,195.0 |
| EBITA | 76.2 | 57.1 | 71.8 | 62.1 | 101.0 | 78.3 | -37.2 | -26.9 | 211.8 | 170.6 | ||
| EBITA margin | 8.4% | 6.9% | 7.8% | 8.0% | 14.3% | 13.2% | 8.4% | 7.8% | ||||
| Operating profit | 45.0 | 32.8 | 53.9 | 50.5 | 68.3 | 57.3 | -37.4 | -26.9 | 129.8 | 113.7 | ||
| Operating margin | 5.0% | 4.0% | 5.9% | 6.5% | 9.7% | 9.6% | 5.2% | 5.2% | ||||
| Average number of employees | 345 | 319 | 508 | 428 | 457 | 405 | 7 | 8 | 1,317 | 1,160 |
Addnode Group's operations are organized and managed based on the business areas Design Management, Product Lifecycle Management (PLM) and Process Management, which are the Group's operating segments. There have been no changes in the segment division or calculation of segment results since the most recently published Annual Report. Segments are reported according to the same accounting principles as the Group. The difference between the sum of the segments' operating income and consolidated income before tax is attributable to financial income of SEK 1.5 M (2.1) and financial expenses of SEK -12.5 M (-7.0). Acquisition of subsidiaries have increased the total assets of Design Management and Product Lifecycle Management each with approximately SEK 300 M compared to the information in the most recent annual report. There have been no other significant changes in the segments' assets compared to the information in the most recent annual report.
QUARTERLY FINANCIAL OVERVIEW
| (SEK M) | 2017 | 2016 | 2015 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | Q4 | Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | |
| Net sales | 2,519.8 | 777.1 | 534.5 | 587.5 | 620.7 | 2,195.0 | 658.7 | 467.1 | 528.4 | 540.8 | 1,900.8 | 614.4 | 467.3 | 387.3 | 431.8 |
| EBITA | 211.8 | 101.1 | 24.3 | 32.8 | 53.6 | 170.6 | 63.4 | 39.6 | 37.0 | 30.6 | 168.0 | 69.5 | 42.2 | 22.6 | 33.7 |
| Operating profit | 129.9 | 75.8 | 2.7 | 14.6 | 36.8 | 113.7 | 47.6 | 24.6 | 23.3 | 18.2 | 126.0 | 58.0 | 30.8 | 12.8 | 24.4 |
| Profit before taxes | 118.9 | 71.7 | 0.8 | 10.8 | 35.6 | 108.8 | 47.2 | 23.2 | 21.6 | 16.8 | 124.6 | 57.2 | 29.6 | 12.2 | 25.6 |
| Profit after taxes | 89.6 | 53.8 | 0.6 | 8.1 | 27.1 | 82.3 | 36.8 | 17.2 | 15.6 | 12.7 | 95.5 | 45.5 | 21.7 | 8.7 | 19.6 |
| EBITA margin | 8.4% | 13.0% | 4.5% | 5.6% | 8.6% | 7.8% | 9.6% | 8.5% | 7.0% | 5.7% | 8.8% | 11.3% | 9.0% | 5.8% | 7.8% |
| Operating margin | 5.2% | 9.6% | 0.5% | 2.5% | 5.9% | 5.2% | 7.2% | 5.3% | 4.4% | 3.4% | 6.6% | 9.4% | 6.6% | 3.3% | 5.7% |
| Cash flow from operating activities | 147.1 | 65.4 | -78.7 | -19.1 | 179.5 | 157.7 | 72.9 | -37.2 | -28.2 | 150.2 | 143.8 | 98.0 | -18.0 | 23.3 | 40.5 |
| Average number of employees | 1,317 | 1,420 | 1,358 | 1,266 | 1,222 | 1,160 | 1,198 | 1,164 | 1,143 | 1,117 | 1,005 | 1,132 | 1,109 | 884 | 886 |
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
16
ACQUISITION OF SUBSIDIARIES 2017
Information about identified net assets, goodwill, purchase prices and the impact of the acquisitions on the Group's cash and cash equivalents is provided in the following tables:
| (SEK M) | SERVICE WORKS GROUP | INTRINSYS | OTHER ACQUISITIONS | TOTAL |
|---|---|---|---|---|
| Customer agreements and computer software | 52 | 36 | 43 | 131 |
| Other intangible fixed assets | 1 | 1 | ||
| Tangible fixed assets | 1 | 1 | 2 | 4 |
| Receivables | 27 | 50 | 22 | 99 |
| Cash and cash equivalents | 51 | 95 | 29 | 175 |
| Long-term liabilities | -1 | -1 | ||
| Current liabilities | -36 | -84 | -36 | -156 |
| Deferred tax, net | -4 | -7 | -7 | -18 |
| Identified net assets | 92 | 91 | 52 | 235 |
| Goodwill | 128 | 154 | 94 | 376 |
| Total purchase prices | 220 | 245 | 146 | 611 |
| Long-term and current liabilities to sellers | -18 | -18 | ||
| Provisions for conditional purchase prices | -43 | -43 | -5 | -91 |
| Purchase prices paid earlier years | -5 | -5 | ||
| Purchase prices paid in cash for acquisitions 2017 | 177 | 202 | 118 | 497 |
| Purchase prices paid in cash for acquisitions 2017 | -177 | -202 | -118 | -497 |
| Paid purchase prices for acquisitions earlier years | -53 | -53 | ||
| Cash and cash equivalents in acquired subsidiaries | 51 | 95 | 29 | 175 |
| Impact on the group's cash and cash equivalents | -126 | -107 | -142 | -375 |
The acquired companies are knowledge-based companies and goodwill therefore pertains to the built-up competence of the personnel and the employees total knowledge of the respective computer software and IT-systems, and to a certain extent also to synergy effects.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
17
PARENT COMPANY INCOME STATEMENT
| (SEK M) | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Net sales | 4.8 | 4.2 | 10.4 | 9.1 |
| Operating expenses | -10.2 | -8.8 | -37.5 | -31.8 |
| Operating result | -5.4 | -4.6 | -27.1 | -22.7 |
| Financial income | 101.6 | 51.3 | 143.3 | 99.8 |
| Financial expenses | -4.5 | -1.0 | -10.1 | -5.8 |
| Profit after financial items | 91.7 | 45.7 | 106.1 | 71.3 |
| Transfer to tax allocation reserve | -21.2 | -9.5 | -21.2 | -9.5 |
| Profit before taxes | 70.5 | 36.2 | 84.9 | 61.8 |
| Tax | -13.9 | -7.1 | -13.9 | -7.1 |
| NET PROFIT FOR THE PERIOD | 56.6 | 29.1 | 71.0 | 54.7 |
PARENT COMPANY BALANCE SHEET
| (SEK M) | Dec 31, 2017 | Dec 31, 2016 |
|---|---|---|
| Intangible fixed assets | 0.8 | 0.9 |
| Financial fixed assets | 1,772.0 | 1,188.9 |
| Current receivables | 128.0 | 109.9 |
| Cash and cash equivalents | 0.0 | 96.6 |
| TOTAL ASSETS | 1,900.8 | 1,396.3 |
| Shareholders' equity | 853.8 | 851.3 |
| Untaxed reserves | 30.7 | 9.5 |
| Provisions | 90.7 | 41.4 |
| Non-current liabilities | 11.0 | 4.0 |
| Current liabilities | 914.6 | 490.1 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,900.8 | 1,396.3 |
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
18
USE AND RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
Guidelines for information about Alternative Performance Measures (APM) for companies with securities listed on a regulated market within EU have been issued by the European Securities and Markets Authority (ESMA) and shall be applied for alternative performance measures in published compulsory information. Alternative performance measures refer to financial measures regarding historical or future development of result, financial position, financial result or cash-flow which are not defined or stated in applicable rules for financial reporting. In the year-end report, some performance measures are used, which are not defined in IFRS, with the purpose to give investors, analysts and other interested parties clear-out and relevant information about the company's operations and development. The use of these performance measures and reconciliation to the financial statements is presented below. Definitions are stated on page 19.
EBITA
EBITA is a measure which the group consider as relevant for investors, analysts and other interested parties in order to understand the development of the result before investments in intangible fixed assets. The measure is an expression for operating profit before amortization and impairment of intangible fixed assets.
Net debt
The group consider the key-ratio as useful for the users of the financial statements as a complement in order to evaluate the possibilities for dividend, to execute strategical investments and to evaluate the group's possibilities to comply with financial commitments. The key-ratio is an expression for the level of financial borrowing in absolute amount with deduction of cash and cash equivalents
Reconciliation of EBITA
| (SEK M) | Oct - Dec 2017 | Oct - Dec 2016 | Full-year 2017 | Full-year 2016 |
|---|---|---|---|---|
| Operating profit | 75.8 | 47.6 | 129.9 | 113.7 |
| Amortization and impairment of intangible fixed assets | 25.3 | 15.8 | 81.9 | 56.9 |
| EBITA | 101.1 | 63.4 | 211.8 | 170.6 |
Reconciliation of net debt
| (SEK M) | Dec 31, 2017 | Dec 31, 2016 |
|---|---|---|
| Non-current liabilities | 192.3 | 67.5 |
| Current liabilities | 1,450.6 | 953.3 |
| Non interest-bearing non-current and current liabilities | -1,022.1 | -843.5 |
| Total interest-bearing liabilities | 620.8 | 177.3 |
| Cash and cash equivalents | -173.2 | -111.5 |
| Other interest-bearing receivables | 0.0 | 0.0 |
| Net debt(+)/receivables(-) | 447.6 | 65.8 |
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
19
DEFINITIONS
Average number of employees
Average number of full-time employees during the period.
Shareholder's equity
Reported shareholders' equity plus untaxed reserves less deferred tax at the current tax rate.
Capital employed
Total assets less noninterest-bearing liabilities and noninterest-bearing provisions including deferred tax liabilities.
Net sales per employee
Net sales divided by the average number of employees (fulltime equivalents).
EBITA
Earnings before amortisation and impairment of intangible non-current assets.
EBITA margin
EBITA as a percentage of net sales.
Operating margin
Operating profit as a percentage of net sales.
Profit margin
Profit before tax as a percentage of net sales.
Return on shareholder's equity
Net profit for the period attributable to owners of the Parent Company as a percentage of average shareholders' equity attributable to owners of the Parent Company.
Return on capital employed
Profit before tax plus financial expenses as a percentage of the average capital employed.
Equity/assets ratio
Shareholders' equity (including shareholders' equity attributable to non-controlling interests) as a percentage of total assets.
Acid test ratio
Current assets excluding inventories as a percentage of current liabilities.
Net debt
Interest-bearing liabilities less cash and cash equivalents and other interest-bearing receivables. According to this definition, a negative level of net debt means that cash and cash equivalents and other interest-bearing financial assets exceed interest-bearing liabilities.
Earnings per share
Net profit for the period attributable to owners of the Parent Company divided by the average number of shares outstanding.
Shareholder's equity per share
Shareholders' equity attributable to owners of the Parent Company divided by the total number of shares outstanding.
P/E multiple
Share price in relation to earnings per share.
Share price/shareholder's equity
Share price in relation to shareholders' equity per share.
Cash flow per share
Cash flow from operating activities divided by the average number of shares outstanding.
LTM (Last Twelve Month)
Outcome for the last twelve-month period.
Recurring revenue
Revenue of an annually recurring character, such as revenue from support and maintenance contracts and revenue from subscription agreements, rental contracts and SaaS solutions.
Organic growth
Change in net sales excluding acquired entities during the last twelve-month period.
ADDNODE GROUP YEAR-END REPORT 1 JANUARY-30 DECEMBER 2017
20
ADTOLLO ARKIVA CANELLA
ADDNODE GROUP ADDNODE GROUP ADDNODE GROUP
DECERNO ESSVISION EVITBE
ADDNODE GROUP ADDNODE GROUP ADDNODE GROUP
FORSLER STJERNA IDA INFRONT
ADDNODE GROUP ADDNODE GROUP
INTRINSYS KOMPANION MITTBYGGE
ADDNODE GROUP ADDNODE GROUP ADDNODE GROUP
MOGUL SOKIGO STAMFORD
ADDNODE GROUP ADDNODE GROUP
SYMETRI SYMETRI COLLABORATION
ADDNODE GROUP ADDNODE GROUP
TECHNIA TRANSCAT VOICE PROVIDER
ADDNODE GROUP ADDNODE GROUP
ADDNODE GROUP