Quarterly Report • May 13, 2022
Quarterly Report
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Revenue growth at 28.1% (24.8%) with a group revenue at NOK 710 million (554). Organic growth at 6.5% (5.5%) and acquired growth at 22.8% (20.1%). Currency effects affected growth with minus 1.2% (minus 0.7%).
EBITDA* at NOK 87 million (NOK 66 million) with a margin at 12.3% (11.9%).
Adjusted Free Cash Flow at NOK 58 million (24). However, last year figures would have been at NOK 44 million versus 24 if adjusted for Covid-19 related payments (VAT, tax and other).
Activity in the F&A Division (Finance & Accounting) is almost back to the pre-Covid level, however affected by a higher than normal level of employee sick leave due to Covid-19. Increased sick leave in combination with internal consolidation effects (merger processes) are the main factors behind a reduced organic revenue growth in the F&A division.
The IT division continues to experience solid demand for both services and solutions being the main contributor to organic growth in the quarter. Still revenue growth has been affected by postponed IT deliveries (global supply chain challenges). It seems as if the supply challenges could continue for some time which could impact growth rates somewhat going forward.
With 42.5% (47%) the Tech division continues to deliver strong revenue growth. The growth is a result of gradual implementation of ECIT owned software as well as increased external demand for of the different software solutions offered by the division.
ECIT invests to develop the three Tech solution business lines; Accounting, Payroll and Office support, which gradually will serve a bigger part of both internal and external markets.
At group level the combined recurring- and repeatable revenue represent 73% (69%). The increase is coming from a gradual change towards fixed price contracts as well as from acquisitions.
The financial results were not impacted by the tragic war in Ukraine. Offices and employees geographically close to the conflict are closely monitored in case of escalation of the current situation.
Considering a revenue growth at 28% and the effects from consolidation processes within both the F&A- and IT division, mainly coming from the four large mergers completed late 2021 / Q1 2022, management is pleased that the EBITDAmargin has improved compared to last year.
ECIT had a net interest-bearing debt of NOK 184 million (79). The financial gearing ratio (NIBD/EBITDA) was 0.5x at 31 March 2022, compared to 0.3x Q1 2021 year which is well below the ratio limit of 2.5x NIBD/EBITDA.
EBITDA* (NOKm)
*) Before special items
**) Cash flow from operating activities less IFRS16 leases and before investment in new subsidiaries, investments in R&D and special items
During first quarter ECIT acquired two companies: XACCT Accounting AS (XACCT) and CataCloud AS representing an acquired annualized revenue of NOK 50 million.
XACCT is a Norwegian F&A company with a 2021 revenue of approx. NOK 50 million and plus 40 employees. The company strengthens ECIT's position in the medium to larger customer segment. The combination of XACCT and Norian (acquired by in 2021) will potentially form one of the largest X-ledger partners in Norway.
CataCloud is a Norwegian software company offering a modern ERP system to customers within the SME segment. Adding an ERP system to the Tech product portfolio is a big step towards the ambition to offer a full range of software products to the SME segments of F&A businesses.
The process of consolidating the more than 20 companies being part of the four large mergers is going as planned. Such mergers are important in all our divisions since the large units being formed will benefit from scale (i.e. cost synergies) and strengthening ECIT's position towards larger customers.
By the end of Q1 2022 the ownership share was at 67.9% compared to a 68.2% at the end 2021,
The average ownership share is measured through a 50 / 50 weighted average of revenue and EBITDA in the local subsidiaries, hence affected by fluctuations in local revenue and EBITDA as well affected by acquisitions. The process of increasing the average ownership share in subsidiaries through purchase of minority shares (partly exercising the options to acquire minority shares) is ongoing.
When ECIT became listed the 20th May 2021 a lock-up period for all existing shareholders were established.
A 6-month lock-up period for non-employed shareholders expired at 20th November 2021 whereas shareholders employed in ECIT had a 1-year lock-up period. The latter lockup, comprehending approx. 225 million shares, will expire at 20th May 2022.
Still approx. 10 million shares will be comprehended by different lock-up agreements after 20th May 2022.
The Board of Directors were changed in April 2022 as three new board members were appointed at the Annual General Meeting.
Thomas Plenborg was appointed new Chairman of the Board. Mr. Plenborg has extensive experience from serving as Chairman in multinational companies, including DSV, listed on the Danish stock exchange and one of the world's leading freight forwarders.
Linda Forberg (former entrepreneur now operational responsible for the F&A sub-division in Norway) and Espen Karlsen, board member of the capital fund Varner Kapital, with experience from various board positions, were both appointed.
The new Board of directors will hold the competence and experience necessary to continue to build profitable growth in ECIT.
Dividend for 2021 amounts to NOK 0.04 per share, and was paid out to the shareholders in April 2022.
Recurring and repeat revenue in percent of total revenue.
Yearly revenue in acquired companies prior to the acquisition.
| Q1 | Q1 | Q1 | Q1 | ||
|---|---|---|---|---|---|
| (NOKm) | 2022 | 2021 | (NOKm) | 2022 | 2021 |
| Condensed Income Statement | Key figures | ||||
| Revenue | 710 | 554 | Total revenue growth, % | 28.1% | 24.8% |
| EBITDA* | 87 | 66 | Total organic revenue growth, % | 6.5% | 5.5% |
| EBIT* | 42 | 32 | Total M&A revenue growth, % | 22.8% | 20.1% |
| Special items, net | -4 | 0 | EBITDA margin*, % | 12.3% | 11.9% |
| Financial items, net | 3 | -3 | Effective tax rate, % | 22.7% | 25.0% |
| Profit for the quarter | 32 | 22 | Avg. majority share***, % | 67.9% | 57.4% |
| Adjusted profit for the quarter | 25 | 22 | Solvency ratio, % | 48.8% | 52.6% |
| Attributeable to ECIT AS' shareholders | 15 | 12 | CAPEX in % of revenue | 0.6% | 1.1% |
| Attributeable to minorities | 10 | 10 | R&D in % of revenue**** | 1.3% | 0.7% |
| Recurring & repeat revenue share | 73% | 69% | |||
| Financial position | Proforma revenue* | 720 | 557 | ||
| Total assets | 2,747 | 2,028 | Proforma EBITDA, last 12 months* | 360 | 276 |
| ECIT shareholdes' share of equity | 1,199 | 796 | |||
| Non-controlling interest | 207 | 166 | Stock-related key figures | ||
| Net working capital | -63 | -66 | EPS, NOK | 0.04 | 0.03 |
| Net interest-bearing debt (NIBD) | 184 | 79 | Diluted EPS, NOK | 0.04 | 0.03 |
| Net debt to EBITDA* (Gearing ratio) | 0.5x | 0.3x | Adjusted diluted EPS, NOK | 0.03 | 0.03 |
| Total number of shares issued ('000) | 448,330 | 392,195 | |||
| Cash Flow | Total number of treasury shares ('000) | 1,137 | 7,899 | ||
| Operating activities | 80 | 49 | |||
| Adjusted free cash flow** | 58 | 24 | ESG data | ||
| Investing activities | -105 | -41 | Employees (FTE) | 2,236 | 1,567 |
| Financing activities | 56 | -33 | Gender diversity (female/male) | 59%/41% | 56%/44% |
| Cash flow for the quarter | 31 | -25 | Gender diversity, managerial (female/male) | 45%/55% | 43%/57% |
| Employee engagement score (EES) | 83 | 80 |
*) Before special items
**) Cash flow from operating activities less IFRS16 leases and before investment in new subsidiaries, investments in R&D and special items
***) Average majority share is calculated as a simple average of the majority share of revenue and EBITDA on behalf of the ownership as of 31 March 2022
****) Measured excluding additions through business combination
*****) Proforma figures are including companies which are part of ECIT at the time of measurement
EBITDA* & Margin
For the first three months of 2022, revenue was NOK 710 million, compared to NOK 554 million in Q1 2021, representing an increase of 28.1% in total growth of which 6.5% was organic growth (5.5%).
The M&A growth is representing 22.8% (20.1%) and is mainly coming from last year acquisitions including Norian (acquired in April 2021).
The impact from the development in foreign exchange rates was minus 1.2% for Q1 2022 (minus 0.7%).
Norway is the largest market ECIT operates in and represents approx. 66% in 2022 (66%) of the total revenue in Q1 2022. The second largest market is Sweden representing approx. 16% in 2022 (18%).
Revenue per division compared to Q1 2021 is specified below. All operational divisions delivered positive revenue growth.
| Revenue (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| F&A division | 390 | 299 |
| IT division | 316 | 266 |
| Tech division | 32 | 22 |
| Group & eliminations | -28 | -33 |
| Total | 710 | 554 |
For the Group, EBITDA before special items came out at NOK 87 million in Q1 2022 compared to NOK 66 million in Q1 2021 representing an increase of 33.1%.
EBITDA before special items per division compared to same period last year is specified below.
| EBITDA* (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| F&A division IT division Tech division Group & eliminations |
61 33 -2 -5 |
52 21 -2 -5 |
| Total | 87 | 66 |
Special items consist of costs which by nature are not related to the Group's ordinary.
Special items incurred in the first three months of the year consist mainly of transaction costs related to acquisitions. Special items equal a cost of NOK 4 million compared to NOK 0 last year.
The amortization and depreciations for Q1 2022 amounts to NOK 45 million compared to NOK 34 million for the same period last year. The increase in amortizations and depreciations are coming from acquisitions hence an increase in amortizations on customer contracts.
The financial items totalled a net income of NOK 3 million for Q1 2022 compared to a net financial expense of NOK 3 million for the same period last year.
Q1 2022 financial income comes from a profit of NOK 10 million related to the sale of the associated company; Cloud Connection AS. Interest expenses have increased due to increased borrowings compared to Q1 2021. Exchange rate expenses has increased due to exchange rate fluctuations.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Financial income: Interest income |
2 | 0 |
| Exchange rate income | 1 | 1 |
| Profit on disposal of | ||
| associated company | 10 | 0 |
| Income from associated | ||
| companies | 1 | 0 |
| Other financial income | 0 | 0 |
| Total financial income | 14 | 1 |
| Financial expenses: | ||
| Interest expenses | -6 | -3 |
| Exchange rate expenses | -4 | -1 |
| Other financial expenses | -1 | 0 |
| Total financial expenses | -11 | -4 |
| Financial items, net | 3 | -3 |
Effective tax rate for the first quarter of 2022 is 22.7% (2021: 25.0%).
Profit for Q1 2022 was NOK 32 million, up from NOK 22 million for Q1 2021.
Profit for the quarter is impacted by two one-off items including special item costs and the profit from the sale of the associated company Cloud Connection. No oneoff items were included in Q1 2021.
An adjusted profit for the quarter has been made to illustrate the impact of the one-off items.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Profit for the period | 32 | 22 |
| Special items Disposal associated |
4 | 0 |
| company, profit | -10 | 0 |
| Adjusted profit for the period | 25 | 22 |
| Attributeable to: | ||
| Shareholders in ECIT AS | 15 | 12 |
| Non-controlling interests | 10 | 10 |
| Shareholders in ECIT AS | 57.6% | 56.1% |
| Non-controlling interests | 42.4% | 43.9% |
Profit for the period attributable to the Shareholders of ECIT are similar impacted by the one-off items. Adjusted for one-off items the shareholders share of profit for the quarter is NOK 15 million compared to NOK 12 million same period last year.
Shareholders in ECIT AS holds 57.6% (56.1%). Compared to our average ownership measured at revenue and EBITDA of 67.9% on 31 March 2022, the majority ownership measured at profit of the quarter is at 57.6%.
The explanation behind the difference is due to the high share of amortizations/depreciations and financial expenses coming from companies with high ownership percentage. Among those is the parent company of ECIT.
The main explanation to the increase of shares at 31 March 2022 to last year is the capital increase made as part of the IPO in May 2021, hence the impact on earnings per share.
A separate specification has been added to the overview to illustrate the impact of the previous mentioned one-off items and the effect to the earnings per share.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Profit of the period | 32 | 22 |
| Shareholders in ECIT AS | 18 | 12 |
| Non-controlling interests | 14 | 10 |
| Adjusted profit of the period* | 25 | 22 |
| Shareholders in ECIT AS | 15 | 12 |
| Non-controlling interests | 10 | 10 |
| ('000 shares) | ||
| Average number of shares | 446,893 | 390,209 |
| Average number of treasury | ||
| shares | -1,158 | -7,935 |
| Diluted average number of | ||
| shares in cirkulation | 445,735 | 382,774 |
| (NOK 1) | ||
| EPS | 0.04 | 0.03 |
| Diluted EPS | 0.04 | 0.03 |
| Adjusted EPS | 0.03 | 0.03 |
| Adjusted diluted EPS | 0.03 | 0.03 |
*) Earnings per share adjusted for special items and one-off gain on disposal of an associated company in 2022
Cash flow & Net working capital
Cash flow from operating activities in Q1 2022 came out at NOK 80 million compared to NOK 49 million for Q1 2021. The development in the cash flow from operating activities is explained by increased EBITDA and positive change in net working capital mainly due to holiday provision build up.
Net working capital last year was affected by payments of prolonged Covid-19 credits NOK 20 million. Almost all prolonged payments of VAT, tax and other duties have been paid throughout 2021.
Last year's cash flow from operations would have been at NOK 69 million if adjusted for the Covid-19 impact.
| (NOKm) | Q1 2022 |
Q1 |
|---|---|---|
| Cash flow from operations | 80 | 49 |
| Cash flow from investing | -105 | -41 |
| Cash flow from financing | 56 | -33 |
| Cash flow for the period | 31 | -25 |
Cash flow from investing activities was a cash outflow of NOK 105 million in the first quarter compared to NOK 41 million in Q1 2021. The development is mainly explained by acquisitions, whereas a net cash investment of NOK 107 million is the most significant item in Q1 2022.
Cash flow from financing activities ended at NOK 56 million (positive) compared to a minus NOK 33 million last year, caused by increased borrowings through the credit facility of NOK 85 million to finance acquisitions.
Exercised option agreements related to the increase in ownership amounts to cash outflow of NOK 9 million. Exercised option agreements were paid partly with cash and partly with shares.
Adjusted free cash flow (cash flow from operations less investments in tangible assets & IFRS 16 leases and before special items) is NOK 58 million compared to NOK 24 million last year.
When adjusting for the 2021 Covid-19 impact, the adjusted cash flow last year would have been at NOK 44 million.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Cash flow from operations | 80 | 49 |
| Special items Net investments in tangible |
4 | 0 |
| assets, total | -4 | -6 |
| Repayment of lease liabilities | -22 | -19 |
| Adjusted free cash flow | 58 | 24 |
| Covid-19 impact Adj. free cash flow before |
1 | 20 |
| Covid-19 impact | 59 | 44 |
Changes in net working capital for Q1 2022 ended at NOK 27 million compared to NOK 8 million for Q1 2021.
As mentioned, Covid-19 explains a large part of the development in net working capital compared to last year.
Last year change in accounts receivable and payable can be explained by high IT hardware sales in December 2020 which subsequently were collected/paid during Q1 2021.
The net working capital can fluctuate due to acquisitions. For companies acquired in Q1 2022 the total effect on net working capital amounts to NOK 2 million (minus NOK 1 million, Q1 2021).
When a company is acquired by ECIT, part of the integration is to improve their net working capital.
| justed cash flow last year would have been at NOK 44 million. |
Change in NWC (NOKm) | Q1 2022 |
Q1 2021 |
|||
|---|---|---|---|---|---|---|
| Q1 | Q1 | Accounts receivables | 2 | 25 | ||
| (NOKm) | 2022 | 2021 | Accounts payable | 2 | -15 | |
| Delayed payments. Covid-19 | -1 | -20 | ||||
| Cash flow from operations | 80 | 49 | Other change in NWC | 24 | 18 | |
| Total change in NWC | 27 | 8 | ||||
| Q1 | Special items | 4 | 0 | |||
| 2021 | Net investments in tangible | Delayed payments. Covid-19 | 1 | 20 | ||
| assets, total | -4 | -6 | Adjusted change in NWC | 28 | 28 | |
| Repayment of lease liabilities | -22 | -19 | ||||
| Adjusted free cash flow | 58 | 24 | DSO | 44.6 | 42.5 |
On 31 March, ECIT AS shareholders' share of equity is NOK 1,199 million (2021: NOK 796 million). The development is primarily due to the capital increase made in connection with the IPO last year.
On 31 March 2022, the ECIT's portfolio of treasury shares are 1,136,816 shares (7,898,756 shares on 31 March 2021).
The decrease in treasury shares are subject to part-payments of new subsidiaries and exercising of options towards existing subsidiaries.
The solvency ratio including non-controlling interest is 48.8% at 31 March 2022 against 52.5% for the same period last year.
Consolidated net interest-bearing debt amounts to NOK 184 million on 31 March 2022 (NOK 79 million).
The financial gearing ratio (NIBD/EBITDA) is 0.5x per 31 March 2022 compared to 0.3x per 31 March 2021 which is below the financial gearing ratio limit of 2.5x NIBD/EBITDA.
The leverage ratio has increased mainly due to financing large acquisitions within the last 12 months.
Leasing liabilities (IFRS16 lease accounting) has a material impact to the financial liabilities of ECIT.
The increase compared to last year is mainly explained by the acquisitions made in the last 12 months and their share of leasing. Lease liabilities consist mainly of office rentals.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Borrowings | 320 | 167 |
| Lease liabilities | 217 | 184 |
| Total interest bearing liabilities | 537 | 351 |
| Interest bearing receivables | 61 | 57 |
| Cash and cash equivalents | 292 | 215 |
| Total interest bearing assets | 352 | 272 |
| Net debt / Net cash (-) | 184 | 79 |
| EBITDA*, LTM | 360 | 276 |
| Debt leverage | 0.5x | 0.3x |
ECIT has an option to acquire the minority shares in the partly owned subsidiaries within an agreed period. The option allows ECIT to acquire the remaining minority shares at a price model based on last year's EBITDA multiplied with a fixed factor.
The minority option obligation per 31 March 2022 is estimated to NOK 469 million compared to NOK 458 million as per 31 December 2021.
The obligation has increased which is mainly explained by the option calculated model which is based on last year EBITDA performance. Since many of the companies have improved their earnings compared to last year option debt has consequently increased.
The option obligation is not part of the NIBD statement.
The utilization of the credit facility is specified below.
As of March 2022, NOK 287 million of the credit facility has been utilized, and total available amount is NOK 463 million.
The leasing facility has been utilized by NOK 12 million and total available amount is NOK 38 million.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Revolving facility gross | 750 | 475 |
| Revolving facility utilized | -287 | -103 |
| Net revolving facility available | 463 | 372 |
| Leasing facility gross | 50 | 21 |
| Leasing facility utilized | -12 | -10 |
| Net leasing facility available | 38 | 11 |
The F&A business delivered a revenue growth of 30.0% (20.0%). Growth is mainly coming from acquisitions and will vary depending on when companies are acquired during the year.
EBITDA margin ended at 15.7% (17.0%) which is in line with management expectations since margin development will fluctuate affected by acquisitions.
Although the general activity levels within the F&A business is almost back to pre-Covid levels, increased sick leave (Covid-19) among employees have had impact on the financial performance in Q1 2022.
Q1 2022 revenue growth is also impacted from consolidation efforts by integrating acquired companies and consolidate the F&A division through mergers.
In Q1 2022 the M&A growth rate can mainly be explained by large acquisitions completed last year (Norian).
In Q1 2022, Norwegian based XACCT Accounting was acquired which will strengthen ECIT's position to serve medium to larger customers with a highly qualified offering. The combination of XACCT and Norian will potentially form one of the largest X-ledger partners in Norway.
The revenue growth of 30.0% (20.0%) is mainly coming from M&A activity.
Increased sick leave in combination with internal consolidation effects (merger processes) are the main factors behind a reduced organic revenue growth in the F&A division.
The EBITDA margin development compared to last year is mainly explained by acquisitions.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Revenue | 390 | 300 |
| COGS Gross Profit |
-34 356 |
-21 278 |
| Personnel expenses | -237 | -191 |
| Other operating costs | -58 | -36 |
| EBITDA* | 61 | 51 |
| Total revenue growth EBITDA-%* |
30.0% 15.7% |
20.0% 17.0% |
EBITDA & EBITDA margin (%)*
Despite the continuing global supply-chain challenges for certain product groups, the activity level in the IT division remained high in the first quarter of the year with increased demand for our services both from existing customers as well as new customers.
All main markets including Norway and Denmark experienced revenue growth.
Continued focus on optimization and consolidation of the IT businesses are the main explanation behind the EBITDA margin increase compared to last year. Our Swedish activities are a result of this process since they have moved from negative EBITDA to positive EBITDA in 2022.
Within the last 6 months, 13 companies in total have been merged into 3 large companies representing a total revenue of approx. NOK 700 million and more than 200 FTEs. The process of consolidating the companies into 3 units is progressing as planned.
The overall demand for skilled employees in the IT industry is high. Measures are taken to keep our personnel satisfied in order to attract new talents but equally important to keep the existing talents within the division.
The IT division is facing continuing global supply-chain challenges, which mainly explains the lower revenue growth of 19.0% compared to 34.3% last year.
Despite the challenges, the margin improved from 7.9% last year to 10.5% in Q1 2022.
Total revenue
Total revenue growth (%)
EBITDA & EBITDA margin (%)**
*) Personnel expenses include cost to external consultants
**) Before special items
In the first quarter of 2022, the Tech division came out with a revenue growth at 42.5% (46.7%).
Total number of customers within the Tech division continues to increase with a total year-on-year growth of 35.4%, which is to some extent explained by the higher demand due to broader offering.
The acquisition of CataCloud AS and the addition of an ERP system to the Tech product portfolio is a big step towards our ambition to offer close to a full range of products for the SME segment of Finance & Accounting businesses.
Further developing our Accounting, Payroll and Office support products are enabling ECIT to gradually serve a bigger part of both internal and external markets.
The Tech division is further developing towards acting as one division, meaning integrating our products and services together and thereby being able to solve a continuously larger part of the issues for our customers.
Further investments in the development of our applications are made to deliver a quality-based product portfolio. Investments are subsequently made to integrate the newly acquired applications with the existing product portfolio to improve the range offered to our customers.
The Tech division is continuing with further
Further investments are made in developing the product portfolio including the acquisition of the ERP-system CataCloud.
Revenue 32 22 COGS -9 -4 Gross Profit 23 18 Personnel expenses -17 -15 Other operating costs -8 -5 EBITDA* -2 -2
Capitalized R&D -10 -4
Total revenue growth 42.5% 46.7% EBITDA-%* -7.1% -10.7%
Q1 Q1 2022 2021
growth in revenue at 42.5% (46.7%)
*) Before special items
(NOKm)
The total share capital on 31 March 2022 consists of 448,330,101 shares of nominal NOK 1 each. There are three share classes whereas the B-shares are subject to trade on the Euronext Growth stock exchange.
On 31 March 2022 1,136,816 shares were held as treasury shares, corresponding to 0.3% of the share capital.
A total of 42,026 treasury shares were sold during the quarter.
ECIT has the philosophy that local ownership will create a stronger group, which reflects the many minority owners in the Group. Another and equally important philosophy is that if the local management, as well as employees also own part of the Group, this will create an even better unity across the Group.
The philosophy is visible in the composition of shareholders in the Group. More than 60% of the shares are owned by employees and management, with the top management representing 18% and employees and partners within the group representing more than 42% of the shares.
When ECIT became listed 20 May 2021 a lock-up period for certain shareholders was established.
A 6-month lock-up period for selected shareholders expired 20 November 2021 whereas certain shareholders employed in the Group had a 1-year lock-up period which will expire 20 May 2022.
Our shareholders are mainly located in the Nordic countries in Europe with two-thirds of our shareholders being in Norway.
CEO Peter Lauring holds however 49.9% of the voting shares of the Group.
Dividend for 2021 amounts to NOK 0.04 per share, and was paid out to the shareholders during April 2022.
INTERIM REPORT Q1 2022
| (NOKm) | Note | Q1 2022 |
Q1 2021 |
|---|---|---|---|
| Revenue | 2.1 | 710 | 554 |
| COGS | -148 | -131 | |
| Gross Profit | 561 | 424 | |
| Personnel expenses | -421 | -326 | |
| Other operating costs | -53 | -31 | |
| EBITDA* | 87 | 66 | |
| Amortizations and depreciations | -45 | -34 | |
| EBIT* | 42 | 32 | |
| Special items, net | 2.2 | -4 | 0 |
| Financial items, net | 3 | -3 | |
| Profit before tax | 41 | 28 | |
| Tax on profit for the period | 2.3 | -9 | -7 |
| Profit for the year | 32 | 22 | |
| Attributeable to: | |||
| Shareholders in ECIT AS | 18 | 12 | |
| Non-controlling interests | 14 | 10 |
| (NOKm) | Note | Q1 2022 |
Q1 2021 |
|---|---|---|---|
| Profit for the year | 32 | 22 | |
| Items that may be reclassified to the income statement: |
|||
| Foreign exchange adjustments of subsidiaries |
-15 | -28 | |
| Other comprehensive income | -15 | -28 | |
| Total comprehensive income | 17 | -6 | |
| Attributable to: | |||
| Shareholders in ECIT AS | 7 | -11 | |
| Non-controlling interests | 10 | 4 | |
| (NOKm) | Note | Q1 2022 |
Q1 2021 |
| Earnings per share | |||
| Earnings per share (NOK) | 3.2 | 0.04 | 0.03 |
| Diluted earnings per share (NOK) | 3.2 | 0.04 | 0.03 |
| Adjusted earnings per share** | |||
|---|---|---|---|
| Adjusted earnings per share (NOK) | 3.2 | 0.03 | 0.03 |
| Adjsuted diluted earnings per share (NOK) | 3.2 | 0.03 | 0.03 |
| (NOKm) | Note | Q1 2022 |
Q1 2021 |
(NOKm) Note |
Q1 2022 |
Q1 2021 |
|---|---|---|---|---|---|---|
| Profit before tax | 41 | 28 | Repayment of lease liabilities | -22 | ||
| Amortizations & Depreciations | 45 | 34 | Loans and credit facilities | 96 | ||
| Financial items | -3 | 3 | Financial items, net | -7 | ||
| Operating profit before amortizations, | Capital increase | 0 | ||||
| depreciations and financial items | Sale and purchase of treasury shares | 0 | ||||
| (EBITDA) | 84 | 66 | Transactions with minorities | -2 | ||
| Dividends distributed | -9 | |||||
| Corporation tax, paid | -31 | -25 | Cash flow from financing activities | 56 | ||
| Change in net working capital (NWC) | 27 | 8 | ||||
| Cash flow from operating activities (A) | 80 | 49 | Cash flow for the period | 31 | ||
| Investments in tangible assets | -4 | -6 | Cash and cash equivalents 1 January | 265 | ||
| Investments in Research & Development | -9 | -4 | Cash flow for the period | 31 | ||
| Investments in subsidairies | 4.1 | -107 | -29 | Currency translation adjustments | -4 | |
| Investments in other activities | 0 | 0 | Cash and cash equivalents end of period | 292 | 215 | |
| Gain on other activities | 15 | -4 | ||||
| Change in other financial assets | 0 | 3 | ||||
| Cash flow from investing activities (B) | -105 | -41 | ||||
| Cash flow from operating and investing activities (A+B) |
-25 | 8 |
| (NOKm) Note |
Q1 2022 |
Q1 |
|---|---|---|
| Repayment of lease liabilities | -22 | -19 |
| Loans and credit facilities | 96 | -3 |
| Financial items, net | -7 | 3 |
| Capital increase | 0 | 0 |
| Sale and purchase of treasury shares | 0 | 3 |
| Transactions with minorities | -2 | -12 |
| Dividends distributed | -9 | -5 |
| Cash flow from financing activities | 56 | -33 |
| Cash flow for the period | 31 | -25 |
| Cash and cash equivalents 1 January | 265 | 246 |
| Cash flow for the period | 31 | -25 |
| Currency translation adjustments | -4 | -7 |
| Cash and cash equivalents end of period | 292 | 215 |
| (NOKm) | Note | 31 MAR 2022 |
31 MAR | 31 DEC 2021 |
|---|---|---|---|---|
| Goodwill | 1,066 | 721 | 955 | |
| Customer contracts | 340 | 269 | 335 | |
| Research & development | 117 | 80 | 113 | |
| Deferred tax assets | 28 | 15 | 31 | |
| Total intangible assets | 1,552 | 1,085 | 1,434 | |
| Land, buildings and equipment | 46 | 67 | 50 | |
| Right-of-use assets | 207 | 178 | 226 | |
| Total tangible assets | 253 | 245 | 276 | |
| Other financial assets | 123 | 77 | 112 | |
| Total non-current assets | 1,928 | 1,407 | 1,822 | |
| Inventories | 14 | 11 | 12 | |
| Trade receivables | 329 | 243 | 325 | |
| Other receivables | 185 | 152 | 153 | |
| Cash and cash equivalents | 3.3 | 292 | 215 | 265 |
| Total current assets | 819 | 621 | 754 | |
| Total assets | 2,747 | 2,028 | 2,576 |
| 31 MAR 2021 |
31 DEC 2021 |
(NOKm) | Note | 31 MAR 2022 |
31 MAR 2021 |
31 DEC 2021 |
|---|---|---|---|---|---|---|
| Share capital | 3.1 | 448 | 392 | 445 | ||
| Treasury shares | -1 | -8 | -1 | |||
| Reserves and retained earnings | 752 | 412 | 754 | |||
| ECIT AS shareholders share of equity | 1,199 | 796 | 1,198 | |||
| Non-controlling interest | 207 | 166 | 165 | |||
| Total equity | 1,407 | 962 | 1,363 | |||
| Lease liabilities | 3.3 | 146 | 126 | 160 | ||
| Borrowings | 3.3 | 304 | 156 | 181 | ||
| Provisions | 38 | 37 | 26 | |||
| Other non-current liabilites | 8 | 0 | 7 | |||
| Deferred tax liabilities | 76 | 59 | 78 | |||
| Total non-current liabilities | 572 | 377 | 451 | |||
| Lease liabilities | 3.3 | 71 | 58 | 76 | ||
| Borrowings | 3.3 | 15 | 11 | 36 | ||
| Provisions | 2 | 0 | 5 | |||
| Tax payables | 42 | 21 | 59 | |||
| Trade payables | 113 | 84 | 111 | |||
| Other current liabilites | 524 | 524 | 475 | |||
| Total current liabilities | 768 | 689 | 762 | |||
| Total equity and liabilities | 2,747 | 2,028 | 2,576 |
| Share | Not reg. Capital |
Share | Treasury | Retained | Non controlling |
|||
|---|---|---|---|---|---|---|---|---|
| (NOKm) | Capital | increase* | premium | shares | earnings | Total | interests | Total equity |
| Equity at 1 January | 445 | 12 | 722 | -1 | 20 | 1,198 | 165 | 1,363 |
| Profit for the year | 0 | 0 | 0 | 0 | 18 | 18 | 14 | 32 |
| Net exchange differences recognized in OCI | 0 | 0 | 0 | 0 | -11 | -11 | -4 | -15 |
| Other comprehensive income | 0 | 0 | 0 | 0 | -11 | -11 | -4 | -15 |
| Total comprehensive income | 0 | 0 | 0 | 0 | 7 | 7 | 10 | 17 |
| Transactions with shareholders: | ||||||||
| Capital increase registreded | 3 | -23 | 20 | 0 | 0 | 0 | 0 | 0 |
| Capital increase approved not registrered | 0 | 32 | 0 | 0 | 0 | 32 | 0 | 32 |
| Dividends distributed | 0 | 0 | 0 | 0 | 0 | 0 | -1 | -1 |
| Sale and purchase of treasury shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Addition of non-controlling interests, customer contracts | 0 | 0 | 0 | 0 | 0 | 0 | 3 | 3 |
| Addition of non-controlling interests, goodwill | 0 | 0 | 0 | 0 | 0 | 0 | 19 | 19 |
| Addition of non-controlling interests, net assets | 0 | 0 | 0 | 0 | 0 | 0 | 3 | 3 |
| Transactions of shares with non-controlling interests | 0 | 0 | 0 | 0 | -36 | -36 | 9 | -27 |
| Other adjustments | 0 | 0 | 0 | 0 | -2 | -2 | -1 | -3 |
| Total transactions with shareholders | 3 | 9 | 20 | 0 | -38 | -6 | 33 | 27 |
| Equity at 31 March | 448 | 21 | 742 | -1 | -11 | 1,199 | 207 | 1,407 |
| Capital 388 |
increase* | premium | shares | earnings | Total | interests | Total equity |
|---|---|---|---|---|---|---|---|
| 371 | -8 | 55 | 811 | 161 | 972 | ||
| 0 | 0 | 0 | 0 | 12 | 12 | 10 | 22 |
| 0 0 |
0 0 |
0 0 |
0 0 |
-23 -23 |
-23 -23 |
-5 -5 |
-28 -28 |
| 0 | 0 | 0 | 0 | -11 | -11 | 4 | -6 |
| 4 0 0 0 0 0 0 0 |
-4 1 0 0 0 0 0 0 |
0 0 0 0 0 0 0 0 |
0 0 0 0 0 0 0 0 |
0 0 0 2 0 0 -9 1 |
0 1 0 3 0 0 -9 1 |
0 0 0 0 2 0 -1 0 |
0 1 0 3 2 0 -10 1 -3 |
| 962 | |||||||
| 4 392 |
4 -3 1 |
0 371 |
0 -8 |
-5 39 |
-4 796 |
1 166 |
ECIT (the Group) consists of ECIT AS (the Company) and its subsidiaries. The head office is located in Oslo, Norway.
ECIT's condensed consolidated interim financial statements for the first quarter of 2022 were authorized for issue by the board of directors on 12 May 2022.
experience and other factors that management assesses to be reliable, but that, by nature, are associated with uncertainty and unpredictability and may therefore prove incomplete or incorrect.
As a result of the uncertainties inherent in connection to the above, periodic adjustments may occur.
The condensed consolidated interim financial statements for the three months ended 31 March 2022 have been prepared in accordance with IAS 34 Interim Financial Reporting with requirements according to Norwegian GAAP "Forenklet IFRS". The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2021.
In preparing the condensed consolidated interim Financial statements, management makes various accounting estimates and judgements that form the basis of presentation, recognition and measurement of the Group's assets, liabilities, income and expenses. The estimates and judgements made are based on historical Reference is made to ECIT Group's 2021 Annual Report for a description of accounting policies.
The condensed consolidated interim financial statements are unaudited.
Operating segments are defined by the operational and management structure of ECIT, which is derived from the type of services we deliver. Our operating segments is reflecting our division and Group reporting used for management decision-making.
Our business operations are carried out by three divisions, forming our segment reporting.
The Finance & Accounting division improves customers' efficiency through delivering vital administrative services in a more effective and productive way.
ECIT offers IT services based on business understanding, and our more than 400 IT-experts are ready to help our customers operate and optimize their IT setup.
The Tech division develop software applications primarily used within Finance & Accounting.
Our business segments are measured and reported down to EBITDA before special items. Segment results are accounted for in the same way as in the consolidated financial statements.
Segment income/expenses comprise the items directly attributable to the individual segment as well as the items that may be allocated to the individual segment on a reliable basis.
Income and expenses relating to Group functions, investing activities, etc. are managed at Group level. These items are not included in the statement of segment information but are presented under 'Group & Elim.'.
| Q1 2022 | Q1 2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| F&A | IT | Tech | Group | F&A | IT | Tech | Group | |||
| (NOKm) | Division | Divsion | Division | & Elim. | Total | Division | Divsion | Division | & Elim. | Total |
| Revenue | 390 | 316 | 32 | -28 | 710 | 300 | 266 | 22 | -34 | 554 |
| COGS | -34 | -111 | -9 | 6 | -148 | -21 | -109 | -4 | 3 | -131 |
| Gross Profit | 356 | 206 | 23 | -24 | 561 | 278 | 157 | 18 | -29 | 424 |
| Personell expenses | -237 | -151 | -17 | -16 | -421 | -191 | -117 | -15 | -3 | -326 |
| Other operating costs | -58 | -22 | -8 | 35 | -53 | -36 | -18 | -5 | 28 | -31 |
| EBITDA* | 61 | 33 | -2 | -5 | 87 | 51 | 21 | -2 | -4 | 66 |
| Total revenue growth | 30.0% | 19.0% | 42.5% | 17.6% | 28.1% | 20.0% | 34.3% | 46.7% | -78.9% | 24.8% |
| EBITDA-% | 15.7% | 10.5% | -7.1% | 17.9% | 12.3% | 17.0% | 7.9% | -10.7% | 11.8% | 11.9% |
ECIT operates throughout the northern part of Europe and has activities in 10 countries. Our geographical information is presented as:
Other includes United Kingdom, Germany, Finland, Poland, Lithuania, Serbia, and Romania.
Income/expenses are allocated to the geographical areas according to the country in which the individual entity is based.
| Revenue (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Norway | 469 | 367 |
| Sweden | 114 | 98 |
| Denmark | 97 | 85 |
| Other | 30 | 5 |
| Total | 710 | 554 |
| EBITDA* (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Norway | 50 | 37 |
| Sweden | 21 | 16 |
| Denmark | 14 | 12 |
| Other | 2 | 1 |
| Total | 87 | 66 |
Intercompany transactions are made on an arm's length basis and excluded in tables below.
Special items are used in connection with the presentation of profit or loss for the year to distinguish consolidated operating profit from exceptional items, which by their nature are not related to the Group's ordinary operations.
Special items comprise:
In the classification of special items, judgement is applied in ensuring that only exceptional items not associated with the ordinary operations of the Group are included.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Transactions costs | 3 | 0 |
| Restructuring costs | 1 | 0 |
| Total | 4 | 0 |
Tax for the year comprises current and deferred tax on profit or loss for the year, interest expenses related to pending tax disputes and adjustments to previous years, including adjustments due to tax rulings.
Tax for the year is recognised in the income statement, unless the tax expense relates directly to items included in other comprehensive income or equity.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Profit before tax | 41 | 28 |
| Calculated tax on profit for the period |
9.1 | 6.2 |
| Tax effect of: | ||
| Adjustment of calculated tax in foreign group enterprises relative to 22.0% |
-0.1 | -0.2 |
| Non-deductible expenses/non-taxable |
||
| income | 0.8 | 0.4 |
| Non-deductible losses/non taxable gain on shares |
-2.2 | 0.0 |
| Tempoary differences, net | 1.4 | 0.2 |
| Other tax adjustments | 0.4 | 0.4 |
| Tax of the period | 9.4 | 7.0 |
| Effective tax rate | 22.7% | 25.0% |
ECIT AS is owned through a multiple share class structure where Peter Lauring, the CEO and Founder, is the largest owner holding 9.5% of the economic interest and 49.9% of the voting rights through CGL Holding AS and CGL Holding II AS.
Management and employees hold approx. 60.8% of the shares in ECIT AS.
| Total | Ownership | Voting | |||
|---|---|---|---|---|---|
| A-shares | B-shares | C-shares | shares | in % | share |
| 49.9%** | |||||
| 3.0% | |||||
| 3.0% | |||||
| 2.0% | |||||
| 198 | 15,525 | 15,723 | 3.5% | 1.9% | |
| 125 | 14,840 | 14,965 | 3.3% | 1.8% | |
| 14,942 | 14,942 | 3.3% | 1.8% | ||
| 10,622 | 10,622 | 2.4% | 1.3% | ||
| 9,993 | 9,993 | 2.2% | 1.2% | ||
| 9,829 | 9,829 | 2.2% | 1.2% | ||
| 8,500 | 8,500 | 1.9% | 1.0% | ||
| 7,109 | 7,109 | 1.6% | 0.9% | ||
| 6,566 | 6,566 | 1.5% | 0.8% | ||
| 5,217 | 5,217 | 1.2% | 0.6% | ||
| 4,714 | 4,714 | 1.1% | 0.6% | ||
| 4,503 | 4,503 | 1.0% | 0.5% | ||
| 4,261 | 4,261 | 1.0% | 0.5% | ||
| 3,625 | 3,625 | 0.8% | 0.4% | ||
| 3,578 | 3,578 | 0.8% | 0.4% | ||
| 3,553 | 3,553 | 0.8% | 0.4% | ||
| 41,336 | 164,236 | 30,365 | 235,937 | 52.6% | 73.5% |
| 177,817 | 34,576 | 212,393 | 47.4% | 26.5% | |
| 41,336 | 342,053 | 64,941 | 448,330 | 100.0% | 100.0% |
| 41,336 | 1,212 25,000 24,423 16,267 |
42,548 25,000 24,423 16,267 |
9.5% 5.6% 5.4% 3.6% |
*) Consists of all shares held by Peter Lauring, companies he has the majority of shares in and his relatives.
**) Adjusted for Peter Lauring's maximum voting right of 49.9% according to ECIT's articles of association regardless of ownership.
***) Consists of all shares held by Klaus Jensen, companies he has the majority of shares in and his relatives.
****) Nominee account including more than one shareholder. Due to non-disclosure regulations in Switzerland the shares cannot be specified.
Earnings per share (EPS) is calculated according to IAS 33.
Earnings per share is impacted by two one-off items including special item cost and the profit from the sale of the associated company Cloud Connection. No oneoff items were included in Q1 2021.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Profit of the period | 32 | 22 |
| Shareholders in ECIT AS | 18 | 12 |
| Non-controlling interests | 14 | 10 |
| Adjusted profit of the period* | 25 | 22 |
| Shareholders in ECIT AS | 15 | 12 |
| Non-controlling interests | 10 | 10 |
| ('000 shares) | ||
| Average number of shares Average number of treasury |
446,893 | 390,209 |
| shares | -1,158 | -7,935 |
| Diluted average number of | ||
| shares in cirkulation | 445,735 | 382,774 |
| (NOK 1) | ||
| EPS | 0.04 | 0.03 |
| Diluted EPS | 0.04 | 0.03 |
| Adjusted EPS | 0.03 | 0.03 |
| Adjusted diluted EPS | 0.03 | 0.03 |
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce costs of capital.
Executive Management and the Board of Directors Monitor the share- and capital structure to ensure that the Group's capital resources support the strategic goals.
The debt leverage is monitored closely by the management in connection with the facility agreement with Nordea.
| (NOKm) | Q1 2022 |
Q1 2021 |
|---|---|---|
| Borrowings | 320 | 167 |
| Lease liabilities | 217 | 184 |
| Total interest bearing liabilities | 537 | 351 |
| Interest bearing receivables | 61 | 57 |
| Cash and cash equivalents | 292 | 215 |
| Total interest bearing assets | 352 | 272 |
| Net debt / Net cash (-) | 184 | 79 |
| EBITDA**, LTM | 360 | 276 |
| Debt leverage | 0.5x | 0.3x |
*) Profit for the period adjusted for special items and one-off gain on divestment of an associated company in 2022
**) Proforma EBITDA before special items
During the first quarter of 2022 ECIT has made two acquisitions, one in the F&A division and one in the Tech division.
The two acquisitions made by the Group contributed with NOK 5.0 million to the Group's YTD revenue and NOK 0.6 million to the Group's EBITDA corresponding an EBITDA -margin of 11.0%.
Total transaction costs related to the acquisitions amount to NOK 3 million. Transaction costs are accounted for in the income statement as special items.
The acquisitions have been paid partly with cash and partly with shares, through treasury shares or a capital increase.
Adjusted for the fair value of acquired cash, cash equivalents and paid out earn out for prior acquisitions of NOK 2 million, the net cash flow for new subsidiaries amounted to NOK 107 million (outflow) during the first quarter of 2022.
Paid earn out obligations are subject to prior acquisitions, the earn out obligation for the newly subsidiaries are not due within the next 12 months.
| Q1 | Q1 | |||
|---|---|---|---|---|
| (NOKm) | 2022 | 2021 | ||
| Cash payment | -108 | -12 | ||
| Sales of subsidiaries | 0 | 0 | ||
| Paid earn out obligation | -2 | -20 | ||
| Majority share of cash*** | 3 | 2 | ||
| Net investment in subsidairies | -107 | -29 | ||
| New subsidiaries: | ||||
| Share payment | 0 | -1 | ||
| Cash payment | -108 | -12 | ||
| Earn out obligation | -16 | 0 | ||
| Investment in new subsidiaries | -123 | -13 | ||
| PAT Q1 2022** |
FTE | |||
| Revenue | Revenue | PAT | ||
|---|---|---|---|---|
| Acquired companies (NOKm) | 2021* | Q1 2022** | FTE | |
| XACCT Accounting AS, Norway, F&A | 49.8 | 15.6 | 1.3 | 37 |
| Catacloud AS, Norway, Tech | 0.3 | 0.1 | -0.1 | 2 |
| Total | 50.1 | 15.7 | 1.2 | 39 |
*) Proforma figures equal to figures presented in local annual report
**) Proforma figures calculated from 1 January to the end of the period
***) Majority share of cash equals the share of cash at the acquisition date owned by the Group
Fair value of acquired net assets and recognised goodwill
Provisional fair values of acquired assets and liabilities at the acquisition date are given in the table to the right.
The intangible assets mainly consist of Goodwill and is primarily related to synergy effects from integration with ECIT's existing business. Goodwill is non-deductible for tax purposes.
Integration of the acquired companies is still ongoing, and consequently net assets, including goodwill and other intangible assets, may be adjusted, and off-balance sheet items may be recognized for up to 12 months after the acquisition date in accordance with IFRS 3.
In the first quarter of both 2022 and 2021 no acquisitions where of a size where it could be defined as significant.
| (NOKm) | Total 2022 |
Total 2021 |
|---|---|---|
| Research & Development | 0.4 | 0.0 |
| Property, plant and equipment | 0.2 | 0.3 |
| Right-of-use assets | 4.0 | 1.0 |
| Deferred tax | 0.1 | 0.0 |
| Trade receivables | 5.7 | 1.3 |
| Other receivables | 21.7 | 0.4 |
| Cash and cash equivalents | 3.3 | 3.0 |
| Total Assets | 31.4 | 4.9 |
| Lease liabilities | 4.0 | 1.0 |
| Provisions | 0.0 | 0.7 |
| Long-term debt | 1.5 | 0.0 |
| Trade payables | 0.8 | 0.6 |
| Other payables | 20.4 | 3.0 |
| Total Liabilities | 22.7 | 5.3 |
| Non-controlling interest' share of acquired net assets | 3.0 | 0.3 |
| Acquired net assets | 5.7 | 0.0 |
| Cash payments | 107.5 | 11.8 |
| Share payments | 0.0 | 1.2 |
| Earn Out obligation | 15.8 | 0.0 |
| Goodwill and intangible assets arising from the acquisition | 117.6 | 12.9 |
Selected financial ratios and key figures are provided by the management in the report to allow the reader to gain better understanding of the Group's underlying performance. The alternative performances measures provided may be defined or calculated differently than for other companies.
Net investments in subsidiaries = The comparative figures have been amended to reflect that acquisition and sale of subsidiaries must be reported based on net cash payment. Net cash payment corresponds to the cash payment for the shares, less cash holdings in the subsidiaries at the time of acquisition or sale. The effect of the new subsidiary's balance sheet is therefore eliminated.
Net working capital = Receivables and other current operating assets less trade payables and other current operating liabilities. Tax payable and earn out obligation are not included. Net working capital are not be compared to the change in net working capital in the cash flow statement since the entry values of acquired companies are eliminated in the cash flow statement.
Net-interest-bearing-debt = consist of interest bearingbearing assets less interest-bearing debt. Interest bearing debt consist mainly of bank loan (credit facility) and lease liabilities, whereas interest bearing assets mainly consist of cash and outstanding loans to minority shareholders.
Organic revenue growth = Growth in companies where ECIT Group legally had control in both the actual period and the comparison period. The organic growth is calculated on a monthly basis.
Acquisitions impact = The impact on the total growth which relies on new acquisitions during the period.
Currency translation = The impact on the total growth due to change in exchange rate changes.
Total revenue growth = Organic growth, acquisitions impact and currency translation in total.
Adjusted Free Cash Flow = Cash flow from operating activities less repayment of lease liabilities and before special items and net investments in tangible assets. Adjusted free cash flow as presented is a key performance measurement for the management of ECIT Group.
Proforma revenue = Proforma revenue equals revenue in the Group as all companies acquired within the year had been owned as of 1 January.
| Gross profit x 100 | |||
|---|---|---|---|
| Gross margin | = Net revenue |
||
| EBITDA margin | EBITDA, before special items x 100 = |
||
| Net revenue | |||
| Equity end of reporting period x 100 |
|||
| Solvency ratio = |
Total assets end of reporting period |
||
| Cash investment in | |||
| Capital expenditure in % of revenue |
tangible assets x 100 = Net revenue |
||
| Net interest-bearing debt | |||
| Leverage ratio | = Proforma EBITDA, before special items, last twelve months |
||
Recurring revenue = Recurring revenue is where the revenue is predictable, stable and likely to continue in the future. In general, it involves less risk but maximum revenue predictability.
Repeatable revenue = Repeated revenue is defined as revenue that is somewhat predictable (but can vary) and likely to continue due to the long customer relationships
Annualized recurring revenue (ARR) = Annual recurring revenue (ARR) refers to revenue, normalized on an annual basis, that is expected to be received from customers for providing them with products or services. Essentially, annual recurring revenue is a metric of predictable and recurring revenue generated by customers within the next twelve months.
EBITDA = Operating profit before amortizations, depreciations and financial items.
Special items = Exceptional items of income or expense which by nature are not related to the Group's ordinary operation or investments in future activities. See note 2.7 for additional details on items included
PAT = Profit after tax or net income.
Adjusted free cash flow = Cash flow from operating activities less IFRS16 leases and before investment in new subsidiaries, investments in R&D and special items.
DSO = Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. DSO is determined in number of days. DSO is calculated based on proforma revenue last twelve months.
Number of customers = customers who have generated revenue for the group within the last twelve months.
FTE = Calculated full-time employees.
Leverage ratio = operating profit before amortizations and depreciations (EBITDA) are calculated on proforma figures in order to match the full impact from new acquisitions on net interest bearing debt.
Majority share of revenue and operating profit before amortizations and depreciations and special items (EBITDA) = Shareholders of ECIT AS' share of revenue and operating profit before amortizations and depreciations (EBITDA) and special items. The share is calculated on legal figures for the last twelve months (LTM) and with the ownership as of 31 December 2021.
Adjusted profit for the year = Adjusted profit for the year equals profit for the year before special items, IPO costs and gain on portfolio investments. Adjusted profit for the year is used by the management to measure the performance of the Group excluding one-off items.
Adjusted diluted earnings per share = Adjusted diluted earnings per share equals diluted earnings per share calculated at adjusted profit for the year. Adjusted diluted earnings per share is used by the management to measure the performance of the Group excluding oneoff items.
Gender diversity = Gender diversity is measured between male, female and non-binary. Non-binary is not showed in the overview since the share of non-binary people with the Group is less than 1%.
Gender diversity, managerial = Managerial level is defined by people within ECIT Group with responsible of employees or with tasks considered as management level.
Financial ratios and key figures provided are important for ECIT and to stakeholders as is illustrates the underlying performance of ECIT.
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