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Enea Interim / Quarterly Report 2021
3042_ir_2021-07-16_74f3dc14-e38c-45af-98ad-b4a441e5bf9b.pdf
Interim / Quarterly Report
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ENEA
Interim report January – June 2021
Enea strengthens cybersecurity offering
April – June 2021
- Net sales amounted to SEK 225.8 million (239.0), equivalent to a 5 percent decrease. Net sales increased by 1 percent in fixed currency rates.
- Operating profit amounted to SEK 62.1 million (59.1), corresponding to an operating margin of 27.5 percent (24.7). Operating profit excluding non-recurring items amounted to SEK 62.1 million (60.4), equivalent to an operating margin of 27.5 percent (25.3).
- Net profit after tax amounted to SEK 52.0 million (46.8).
- Earnings per share amounted to SEK 2.41 (2.18).
- The Annual General meeting appointed Jan Frykhammar as a new Board member. The board was given a mandate to issue shares to finance continued growth.
Significant events after period-end
- On July 15th Enea announced the acquisition of AdaptiveMobile Security. The acquired company is market leading in technology for the protection of signaling and messaging in mobile networks. AdaptiveMobile Security is acquired at an enterprise value of EUR 45 million.
January – June 2021
- Net sales amounted to SEK 439.9 million (460.7), equivalent to a 5 percent decrease. Net sales increased by 3 percent in fixed currency rates.
- Operating profit amounted to SEK 106.8 million (81.7), corresponding to an operating margin of 24.3 percent (17.7). Operating profit excluding non-recurring items amounted to SEK 106.8 million (100.9), equivalent to an operating margin of 27.5 percent (21.9).
- Net profit after tax amounted to SEK 95.5 million (63.8).
- Earnings per share amounted to SEK 4.43 (2.98).
| Key figures | Apr-Jun | Jan-Jun | Full year | ||
|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | 2020 | |
| Total revenue, SEK m | 231.1 | 241.2 | 447.9 | 468.0 | 929.1 |
| Net sales, SEK m | 225.8 | 239.0 | 439.9 | 460.7 | 915.1 |
| Net sales growth, % | -5 | -4 | -5 | -6 | -8 |
| Net sales growth currency adjusted, % | 1 | -5 | 3 | -7 | -7 |
| Operating profit excluding non-recurring items, SEK m | 62.1 | 60.4 | 106.8 | 100.9 | 221.5 |
| Operating profit, SEK m | 62.1 | 59.1 | 106.8 | 81.7 | 188.6 |
| Operating margin excluding non-recurring items, % | 27.5 | 25.3 | 24.3 | 21.9 | 24.2 |
| Operating margin, % | 27.5 | 24.7 | 24.3 | 17.7 | 20.6 |
| Net profit after tax, SEK m | 52.0 | 46.8 | 95.5 | 63.8 | 142.3 |
| Earnings per share, SEK | 2.41 | 2.18 | 4.43 | 2.98 | 6.63 |
| Net debt/EBITDA (12 months) | 0.43 | 0.55 | 0.43 | 0.55 | 0.81 |
| Cash flow from operating activities, SEK m | 94.3 | 67.7 | 163.1 | 129.9 | 274.2 |
| Cash, cash equivalents and financial investments, SEK m | 250.5 | 184.5 | 250.5 | 184.5 | 195.1 |
INTERIM REPORT JANUARY – JUNE 2021
CEO's Statement
Enea strengthens cybersecurity offering
Solid quarterly financials
Net sales for the second quarter of 2021 were SEK 225.8 million, which is a 1 percent increase on the corresponding period a year previously, currency adjusted. Operating profit was SEK 62.1 million, equivalent to an operating margin of 27.5 percent. Cash flow before changes in working capital amounted to SEK 88.4 million, consolidating an already stable financial position. The net sales of our largest product group, Network Solutions, increased by 13 percent in fixed exchange rate terms. The Aptilo business unit, acquired in the fourth quarter of 2020, is the source of most of the sales increase. The Operating Systems product group was down by 30 percent, which is as expected and the result of customers increasingly adopting platforms based on open source. In the Software Development Services product group, we're experiencing good demand for our expertise in embedded systems from customers in sectors including medical devices. Overall, net sales in this product group decreased by 21 percent due to continued low demand for consultants from aviation industry customers.
Enea acquires AdaptiveMobile Security
Our acquisition of AdaptiveMobile Security significantly strengthens our offering and customer base in cybersecurity for telecom. AdaptiveMobile Security is a world leader in technology to protect signaling and messaging in mobile networks. The company has over 80 customers worldwide, managing and protecting traffic for an estimated 2 billion-plus subscribers. Sales of advanced software products and associated services enable a high share of repeat revenues and long-term customer relationships. There are several key commonalities between AdaptiveMobile Security and Enea, including 5G and traffic intelligence; shared customer bases offer good potential for extra sales and a broader product portfolio. The acquisition will be integrated as a new business unit, conferring continuity and focus for staff and customers, while we progressively realize synergies in sales, technology, and administration. Financially, AdaptiveMobile Security is forecast to contribute revenues from the third quarter, and increased earnings per share from the fourth quarter 2021.
Continued investments in growth segments
Despite delays on the market over the past year and barriers to new sales, we're continuing to invest in new products and business models. Our traffic intelligence and cybersecurity software has recently gained coveted awards. The revenue model for these businesses is based on our customers' growth, generating potential for the future, but also making modest contributions for
the short term. Our offering in 5G Core, focused on data management, is attracting great interest from customers and collaborative partners. While this market remains in an early phase, we're already seeing how network operators want to use products from software specialists like Enea to create state-of-the-art and flexible 5G systems. As an example, we've contributed to one 5G project for Telenor, whose prototype for 5G recently secured the prestigious Innovation Award at the Global Mobile Awards 2021. Our positioning as a specialist in software built with open interfaces and optimized for the cloud brings real hope that we can grow market shares and revenue as demand increases over the coming years.
Outlook
The market for data management in 5G, virtualization, and advanced cybersecurity is entering an exciting phase, where we can challenge established competitors and win market shares with innovative products and new business models. Our ambition is to increase revenue robustly through organic growth in Network Solutions plus complementary strategic acquisitions that advance our market positioning.
However, due to the continued impact of the corona pandemic, the short and medium-term uncertainties remain substantial. Its consequences have caused delays in customer projects, barriers to new business sales, and other negative effects on our businesses. This also creates risks for earnings through the third and fourth quarters. Despite these uncertainties, our target for 2021 is to create sales growth year over year, and an operating margin of over 20 percent.
Jan Häglund
President and CEO
INTERIM REPORT JANUARY – JUNE 2021
ENEA
Revenue
Enea's revenue in the second quarter amounted to SEK 231.1 million (241.2), consisting of Net Sales of SEK 225.8 million (239.0) and Other operating revenue of SEK 5.3 million (2.2). Other operating revenue includes SEK 4.7 million from forgiveness of a Covid-related loan in US. Net sales decreased by 5 percent, currency adjusted an increase by 1 percent.
Some of the acquisitions Enea has executed in recent years have a higher share of new business, where individual contracts may be large in absolute terms, and with varying levels of recurring revenues. This means variations between individual quarters can occur.
Enea's offering is divided into three product groups: Network Solutions, Operating System Solutions, and Software development services.
Network Solutions
Network Solutions includes products for mobile and fixed telecommunication and enterprise networks. These products are part of solutions for system vendors and are sold directly to network operators. The software enables the analysis, optimization, and monetization of data traffic and services for users and connected devices. The segment includes products for the following applications:
- Policy and access control - authentication of subscribers, and traffic management based on subscription terms, i.e. authorization and access to various types of service.
- Deep packet inspection – identification and classification of data traffic for the optimal use of available resources and enhanced network security.
- Mobile data traffic management – ensuring high and consistent quality of various types of service based on data traffic, with a specific focus on video traffic.
- Management of operators' Wi-Fi services for enterprises and consumers with automatic and secure login based on SIM cards.
- Cloud data management – large-scale processing of subscriber information, such as subscription terms, contract period and service usage.
- Network function virtualization – products that enable new ways to build networks, where applications and software become hardware independent.
Network Solutions' sales amounted to SEK 167.2 million (159.5) and increased by 5 percent in the quarter and by 13 percent currency adjusted. The increase is mainly due to the acquisition of Aptilo, which contributed with SEK 20.3 million. The organic growth was, adjusted for currency, an increase by 0 percent. This product group represented 74 percent (67) of total net sales in the quarter and has growing strategic significance to Enea.
Operating System Solutions
Operating System Solutions ("OS Solutions") includes software for real-time applications and network function virtualization. The former category is operating systems, i.e. software that enables the installation of applications on different computers
Net sales (SEK m)
and platforms. Enea's offering in this segment enables solutions that can be defined as follows:
- Operating systems – products that are used in systems where reliability, performance, and real-time operation are critical, for example mobile network infrastructure. The tools used for developing applications for Enea's operating systems are often part of this business.
Sales in Operating System Solutions amounted to SEK 30.7 million (44.2) and were down by 30 percent in the quarter. The decrease is mainly driven by lower sales from key accounts, where sales decreased by 23 percent and was 82 percent (74) of sales for the product group. The decrease is expected and relates to key customers increasing the share of open source technology in their system solutions. The Operating Systems Solution product group represented 14 percent (18) of net sales in the quarter.
Software development services
Software Development Services (SW Development Services) provides consulting services and expertise for developing integrated systems and other high-end system solutions. Sales in Software development services amounted to SEK 27.8 million (35.3) and decreased by 21 percent in the quarter. The decrease is mainly due to lower revenues from customers negatively affected by the corona pandemic. This product group represented 12 percent (15) of total net sales in the quarter.
Net sales/product group Apr-Jun
INTERIM REPORT JANUARY – JUNE 2021
ENEA
Net sales per region and market segment
Enea reports sales by region: EMEA, the Americas, and Asia. Enea has sales offices in Sweden, Germany, France, Austria, Romania, the US, Singapore, Malaysia, China and Japan.
EMEA
The EMEA region includes sales of both software and services. Sale of software mainly consists of telecom operators as well as key customers Ericsson and Nokia. Sale of software development services is primarily in the markets of cybersecurity, telecom and consumer industry. Sale takes place from offices in Sweden, Germany, France, Austria and Romania.
Net sales in EMEA decreased by 17 percent in the quarter year over year.
Americas
The Americas region includes software and services sales. Software sales are mainly towards customers within the telecom industry, such as AT&T and Cisco, from offices in the US. Service sales are to customers in several sectors, including the medical and aerospace industries.
Net sales increased by 1 percent in the quarter year over year.
Asia
The Asia region includes customers such as Fujitsu, and is mainly managed from offices in China, Japan, Malaysia and Singapore.
Net sales increased by 44 percent year over year in the quarter.
Enea reports sales by market segment: Telecom equipment manufacturers, Telecom operators, Enterprises, and Other.
Net sales by market segment is illustrated to the right. Sales for the Telecom/OEMs segment was 40 percent (36) of total net sales. Sales for the segment Telecom/operators was 30 percent (32) of total net sales.
The Enterprises market segment was 26 percent (31) of total net sales. Other, which includes government and similar, was 4 percent (1) of total net sales.
Net sales per region Apr-Jun
Net sales per region
Net sales/market segment Apr-Jun
INTERIM REPORT JANUARY – JUNE 2021
ENEA
Costs
Cost of goods and services sold
Cost of goods and services sold are costs that relate directly to delivery of the company's production licenses, development licenses including support and maintenance, product-related services, and software development services. These costs also include expenses associated with third-party products, and direct personnel costs related to the delivery of consulting services. Direct costs related to license sales normally represent less than 10 percent of net sales, while costs for product-related and Software Development Services normally account for 60 to 80 percent of revenues. Enea also reports amortization of intellectual property rights, including acquired product rights and customer contracts, as well as capitalized product development expenses, as cost of goods and services sold.
In the second quarter of 2021, Enea's cost of goods and services sold was SEK 72.1 million (73.5), equivalent to a gross margin of 70.4 percent (70.2). The gross margin was negatively affected by an increase in depreciation and amortization, and currency effects on working capital. Depreciation and amortization increased by SEK 6.9 million to SEK 24.2 million (17.2), an effect of acquisitions in recent years. The negative currency effect on working capital decreased by SEK 3.3 million to SEK 1.9 million (5.2). The gross margin was positively affected by the revenue mix, where the share of Software Development Services (with a lower gross margin) was 12 percent (15) of net sales. For the period, cost of goods and services amounted to SEK 143.1 million (152.7), equivalent to a gross margin of 69.3 percent (68.4). Restructuring costs amounted to SEK 0 (6.5) million for the period.
Operating costs
Operating costs are sales and marketing costs as well as product development costs and administration costs. The operating costs amounted to SEK 96.9 million (108.6) in the quarter and SEK 198.0 million (233.6) in the period. Aptilo's operating costs were SEK 9.2 million in the quarter. Costs for share-based incentive programs amounted to SEK 0.9 million (6.3) in the quarter and SEK 7.6 million (8.2) for the period. The decrease in operating costs relates mainly to previous year's restructuring and a currency effect of SEK 7 million. Restructuring costs amounted to SEK 0 million (12.7) in the period.
Sales and marketing costs
Sales and marketing costs include fixed and performance-related salary for the company's sales staff, and costs associated with the company's marketing activities, such as participation at trade fairs, seminars, advertising, and the Internet. Sales and marketing costs were SEK 41.5 million (54.3) in the second quarter, or 18.4 percent (22.7) of net sales in the quarter. For the period, sales and marketing costs were SEK 86.1 million (109.6), or 19.6 percent (23.8) of net sales for the period. The decrease is mainly related to less staff costs following previous year's restructuring programs and lower costs for travel and trade fairs.
Product development costs
Product development costs consist of direct and indirect costs associated with management, development and testing of the company's software products, such as personnel costs and costs for development tools and IT environments. A proportion of the company's costs for new software product development is capitalized in the Balance Sheet and is normally amortized over 36 to 60 months.
Total R&D investments in the second quarter 2021 were SEK 61.7 million (60.0), of which product development costs recognized in the Income Statement were SEK 30.5 million (29.1), corresponding to 13.5 percent (12.2) of net sales in the quarter. SEK 122.8 million (132.9) was invested in the period, of which product development costs recognized in the Income Statement were 60.8 million (73.9), corresponding to 13.8 percent (16) of net sales. SEK 31.2 million (30.9) of product development costs were capitalized in the second quarter and SEK 62.0 million (50.1) were capitalized in the period.
Administration costs
Administration costs comprise costs of management, the Board of Directors and Accounting function, including internal and external legal expenses and audit fees. In the second quarter, administration costs were SEK 24.9 million (25.2), or 11.0 percent (10.5) of net sales for the quarter. Costs for the period were SEK 51.1 million (50.2), or 11.6 percent (10.9) of net sales.
INTERIM REPORT JANUARY - JUNE 2021
ENEA
Results of operations, cash flow, investments, and financial position
Results of operations
The group's operating profit excluding non-recurring items amounted to SEK 62.1 million (60.4) in the second quarter, and was SEK 106.8 million (100.9) for the period, which corresponds to an operating margin excluding non-recurring items of 27.5 percent (25.3) for the quarter and 24.3 percent (21.9) for the period. The group's operating profit was SEK 62.1 million (59.1) in the second quarter with a currency effect of -7 percent (2). The operating profit for the period was SEK 106.8 million (81.7). The operating margin was 27.5 percent (24.7) in the quarter and 24.3 percent (17.7) for the period.
Net financial income/expense was SEK -3.7 million (-4.2) for the quarter and SEK 0.6 million (-3.2) for the period and included interest costs of SEK -2.1 million (-2.3), currency effects on financial items of SEK -1.8 million (-2.1), and interest income of SEK 0.2 million (0.3) for the quarter. Profit after tax amounted to SEK 52.0 million (46.8) for the quarter and SEK 95.5 million (63.8) for the period. Earnings per share were SEK 2.41 (2.18) for the quarter and SEK 4.43 (2.98) for the period.
Cash flow
Cash flow from operating activities was SEK 94.3 million (67.7) for the second quarter and SEK 163.1 million (129.9) for the period. Total cash flow was SEK 16.6 million (24.6) for the second quarter and SEK 52.6 million (39.2) for the period.
Operating profit excluding NRI (SEK m)
Cash flow from operations (SEK m)
Investments
The group's investments amounted to SEK 32.9 million (34.7) in the second quarter and SEK 66.5 million (65.1) for the period. Depreciation and amortization amounted to SEK 26.9 million (19.7) for the second quarter and SEK 52.9 million (38.8) for the period. Enea capitalized SEK 31.2 million (30.9) of product development expenses in the quarter and SEK 62.1 million (59.1) for the period. Amortization of capitalized product development expenses was SEK 16.1 million (10.5) for the second quarter and SEK 31.6 million (20.3) for the period. Depreciation of leased assets was SEK 4.4 million (5.2) in the quarter and SEK 8.9 million (10.3) for the period.
Financial position
Net debt was SEK 142.5 million (164.2) at period end, with cash and cash equivalents of SEK 250.5 million (184.5) and interest-bearing bank and bond liabilities of SEK 393.0 million (348.8). Interest-bearing liabilities were divided between long term of SEK 161.0 million (229.5), and current of SEK 232.0 million (119.3).
The equity ratio was 67.3 percent (68.0), and total assets amounted to SEK 2,421.7 million (2,281.2) at period end. Net debt/EBITDA (12 months) was 0.43 (0.55).
Earnings per share (SEK)
Net debt/EBITDA (ratio)
INTERIM REPORT JANUARY - JUNE 2021
ENEA
Other
Parent company
The parent company's revenue for January to June amounted to SEK 23.5 million (23.9) and loss before appropriations and tax amounted to SEK -20.3 million (-19.1). The parent company's net financial income/expense was SEK -0.2 million (0.2), and cash and cash equivalents were SEK 0 million (0) at period end. The parent company's investments in the quarter were SEK 0.5 million (0.5). The parent company had 16 (16) employees at the end of the period. The parent company does not conduct its own operations and its risks primarily relate to the operations of subsidiaries.
Employees
At the end of the quarter, the group had 638 (637) employees.
Repurchase of treasury shares
Enea repurchased no shares in the second quarter. Enea held 38,688 treasury shares at the end of the period, or 0.2 percent of the total number of shares.
Significant events in the quarter
Enea's Annual General Meeting (AGM) was held on May 6. The AGM resolutions included:
- Anders Lidbeck was re-elected Chairman of the Board
- Jan Frykhammar was elected new Board Director
- Anders Skarin voluntarily left the Board
- The Board of Directors was given a mandate to issue up to 10 percent new shares to finance continued growth
More details on the AGM resolutions are available at the company's website.
Significant events after period-end
On July 15th Enea announced the acquisition of AdaptiveMobile Security including subsidiaries. Closing is expected in July 2021. The acquired company is market leading in technology for the protection of signaling and messaging in mobile networks. AdaptiveMobile Security is acquired at an enterprise value of EUR 45 million on a debt- and cash free basis and the transaction is financed by a new bank loan and cash. The company's net sales 2020 amounted to EUR 15.5 million and it has 135 employees with head quarter in Dublin, Ireland. The transaction costs are estimated to SEK 13 million, of which SEK 4.5 million is Irish stamp duty. AdaptiveMobile Security will be consolidated as part of Enea during the third quarter as a part of product group Network Solutions. The company is expected to deliver a positive contribution to earnings per share from the fourth quarter 2021. Given the short period between acquisition and the publishing of the quarterly report, the acquisition analysis will be reported in the next quarterly report, January to September 2021.
The Annual Report and other documentation are available at Enea's website, www.enea.com
INTERIM REPORT JANUARY - JUNE 2021
ENEA
Other
Financial assets and liabilities
The group applies IFRS 13. This Standard requires disclosures regarding uncertainty in valuations based on the three levels used for financial instruments.
Level 1: Fair value of financial instruments traded on an active market is based on listed market prices on the reporting date. A market is regarded as active if listed prices from a stock exchange, broker, industry group, pricing service or surveillance agency are readily and regularly available and if these prices represent actual and regularly occurring arm's length market transactions. The listed market price used for the group's financial assets is the current purchase price for corporate bonds. These are level 1 instruments.
Level 2: Fair value of financial instruments not traded on an active market (e.g. OTC derivatives are measured with the aid of valuation techniques). The group has currency derivatives, which are used for hedging purposes. Currency hedges are measured at market value by conducting an early allocation of the currency hedge to determine what the forward price would be if the maturity were at the reporting date. As of 30 June 2021, the group's currency hedged amounted to a receivable of SEK 3.3 million, which is the total of level 2.
Level 3: The group does not report any financial instruments at level 3 as of 30 June 2021.
For other financial assets and liabilities, carrying amount is consistent with fair value.
| Allocation by level in fair value measurement, 30 June, SEK million | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Derivative instruments used for hedging purposes: | ||||
| Currency derivatives | - | 3.3 | - | 3.3 |
| Total | - | 3.3 | - | 3.3 |
Accounting policies
This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting, which is consistent with Swedish legislation by applying RFR's (the Swedish Financial Reporting Board) recommendation RFR 1, Supplementary Accounting Rules for Groups, and RFR 2, Accounting for Legal Entities, for the parent company. The same accounting policies, definitions of key figures and computation methods have been applied as in the most recent annual accounts of the group and the parent company, unless otherwise stated below.
INTERIM REPORT JANUARY - JUNE 2021
ENEA
Financing, risks, long-term ambition & outlook
Financing
Enea has a SEK 70 million overdraft facility, of which SEK 45.9 million had been utilized at the end of the quarter. The terms and conditions of the overdraft facility include covenants regarding net debt/EBITDA, all of which were satisfied as of 30 June 2021.
Enea has three bank loans of SEK 80 million (raised January 2019), SEK 250 million (raised October 2019) and SEK 130 million (raised October 2020). The loans are to be repaid after three years. Interest accrues at Stibor 3M (with a floor) plus a market yield. The agreement stipulates covenants regarding the group's net debt/EBITDA and EBITDA/financial expenses. These covenants were satisfied as of 30 June 2021. The remaining liability as of 30 June amounted to SEK 342.3 million.
Material risks and uncertainty factors
Dependency on Key Accounts is decreasing but remains high. These customers represented approximately 20 percent of the group's revenues in the quarter and the trend for these revenues is declining.
Enea is mainly active in cybersecurity and telecommunication, the latter being its largest market. The corona pandemic has a major negative impact on the global economy, which affect some customers' risk appetites and willingness to invest. For Enea, this may mean some projects being delayed, or not being executed. Meanwhile, the underlying drivers of telecommunication, involving a continued focus on virtualization, 5G and increased network capacity, remain. One effect of the corona pandemic has been traffic volumes in networks increasing, as many students and business employees work from home. This effect is likely to be partly transient, even if more widespread usage of digital tools and remote working do become a permanent change.
Enea's people in many countries are affected by being unable to get to their usual workplaces. Essentially, Enea's business can operate from people's homes for a period. Enea has the tools to enable this with state-of-the-art communication solutions. Efficiency remains high but will, to some extent, be affected if restrictions on physical meetings continue. Contact with customers now also mainly takes place via different communication solutions, instead of physical meetings. Since the business has continued without significant interruptions, Enea has not received any major government support.
Because there were no other significant changes to material risks and uncertainties in the quarter, the reader is referred to the review on pages 26-29 of the most recent Annual Report.
Long-term ambition
Our mission is to be a world-leading supplier of software components for telecommunication and cybersecurity. The market for data management in 5G, virtualization and advanced cybersecurity is entering an exciting phase, where we can challenge established competitors and win market shares with innovative products and new business models. Overall, our ambition is to increase revenue robustly through the coming years, with an operating margin exceeding 20 percent, through organic growth in Network solution, plus complementary strategic acquisitions that advance our market position. This ambition means us passing yearly net sales of SEK 1.5 billion by 2023. The operating margin will vary between quarters, tracking growth. Growth and earnings performance will vary during years and between quarters, primarily due to how individual transactions occur, and the progress of royalty streams.
Outlook for 2021
However, due to the continued impact of the corona pandemic, the short and medium-term uncertainties remain substantial. Its consequences have caused delays in customer projects, barriers to new business sales, and other negative effects on our businesses. This also creates risks for earnings through the third and fourth quarters. Despite these uncertainties, our target for 2021 is to create sales growth year over year, and an operating margin of over 20 percent.
Kista, Sweden, 16 July 2021
Enea AB (publ)
Anders Lidbeck
Chairman of the Board
Kjell Duveblad
Board member
Mats Lindoff
Board member
Jan Frykhammar
Board member
Birgitta Stymne Göransson
Board member
Charlotta Sund
Board member
Jenny Andersson
Employee representative
Jan Häglund
President and CEO
This Interim Report was not examined by the company's auditors
INTERIM REPORT JANUARY – JUNE 2021
ENEA 9
Consolidated Statement of Comprehensive Income
| SEK m | Apr-Jun | Jan-Jun | 12 months | Full year | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | Jul-Jun | 2020 | |
| Net sales | 225.8 | 239.0 | 439.9 | 460.7 | 894.2 | 915.1 |
| Other operating revenue | 5.3 | 2.3 | 8.1 | 7.3 | 14.7 | 14.0 |
| Total revenue | 231.1 | 241.2 | 447.9 | 468.0 | 909.0 | 929.1 |
| Cost of goods and service sold | -72.1 | -73.5 | -143.1 | -152.7 | -283.5 | -293.1 |
| Gross profit | 159.0 | 167.7 | 304.8 | 315.3 | 625.5 | 636.0 |
| Sales and marketing costs | -41.5 | -54.3 | -86.1 | -109.6 | -179.0 | -202.5 |
| R&D costs | -30.5 | -29.1 | -60.8 | -73.9 | -127.5 | -140.5 |
| General and administration costs | -24.9 | -25.2 | -51.1 | -50.2 | -105.3 | -104.4 |
| Operating profit 1) 2) 3) 4) | 62.1 | 59.1 | 106.8 | 81.7 | 213.7 | 188.6 |
| Net financial income/expense | -3.7 | -4.2 | 0.6 | -3.2 | -20.7 | -24.5 |
| Profit before tax | 58.4 | 54.9 | 107.4 | 78.5 | 193.1 | 164.2 |
| Tax | -6.5 | -8.1 | -11.9 | -14.7 | -19.0 | -21.9 |
| Net profit for the period | 52.0 | 46.8 | 95.5 | 63.8 | 174.0 | 142.3 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Items that may be reclassified to profit or loss | ||||||
| Change in hedging reserve, after tax | 0.4 | 5.1 | -1.5 | -0.6 | 1.6 | 2.4 |
| Exchange rate differences | -30.8 | -113.7 | 42.1 | -0.7 | -106.6 | -149.4 |
| Items that will not be reclassified to profit or loss | ||||||
| Pension obligations | 0.2 | -0.1 | 0.6 | 0.9 | -1.5 | -1.1 |
| Total comprehensive income for the period, net of tax | 21.8 | -61.9 | 136.7 | 63.3 | 67.5 | -5.9 |
| Profit for the period attributable to equity holders of the parent company | 52.0 | 46.8 | 95.5 | 63.8 | 174.0 | 142.3 |
| Comprehensive income for the period attributable to equity holders of the parent company | 21.8 | -61.9 | 136.7 | 63.3 | 67.5 | -5.9 |
| 1) including depreciation of tangible assets | 2.6 | 2.4 | 5.1 | 4.7 | 11.5 | 11.2 |
| 2) Including amortization of intangible assets | 24.3 | 17.4 | 47.8 | 34.0 | 89.9 | 76.1 |
| 3) Including amortization of right-to-use assets | 4.4 | 5.2 | 8.9 | 10.3 | 18.9 | 20.3 |
| 4) Non-recurring items included in operating profit | ||||||
| Operating profit including non-recurring items | 62.1 | 59.1 | 106.8 | 81.7 | 213.7 | 188.6 |
| Restructuring costs | - | 1.3 | - | 19.2 | 9.4 | 28.7 |
| Transaction costs related to acquisitions | - | - | - | - | 4.3 | 4.3 |
| Operating profit excluding non-recurring items | 62.1 | 60.4 | 106.8 | 100.9 | 227.4 | 221.5 |
Key figures – Income Statement
| SEK m | Apr-Jun | Jan-Jun | 12 months | Full year | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | Jul-Jun | 2020 | |
| Earnings per share (SEK) | 2.41 | 2.18 | 4.43 | 2.98 | 8.09 | 6.63 |
| Earnings per share after full dilution (SEK) | 2.41 | 2.18 | 4.43 | 2.98 | 8.09 | 6.63 |
| Average number of shares before dilution (million) | 21.6 | 21.5 | 21.5 | 21.4 | 21.5 | 21.5 |
| Average number of shares after dilution (million) | 21.6 | 21.5 | 21.5 | 21.4 | 21.5 | 21.5 |
| Net sales growth (%) | -5 | -4 | -5 | -6 | -8 | -8 |
| Gross margin (%) | 70.4 | 70.2 | 69.3 | 68.4 | 69.9 | 69.5 |
| EBITDA (SEK m) | 334.0 | 296.1 | ||||
| Operating costs as % of revenue | ||||||
| - Sales and marketing costs | 18.4 | 22.7 | 19.6 | 23.8 | 20.0 | 22.1 |
| - R&D costs | 13.5 | 12.2 | 13.8 | 16.0 | 14.3 | 15.4 |
| - G&A costs | 11.0 | 10.5 | 11.6 | 10.9 | 11.8 | 11.4 |
| Operating margin excl. non-recurring items (%) | 27.5 | 25.3 | 24.3 | 21.9 | 25.4 | 24.2 |
| Operating margin (%) | 27.5 | 24.7 | 24.3 | 17.7 | 23.9 | 20.6 |
INTERIM REPORT JANUARY – JUNE 2021
ENEA 10
Consolidated Statement of Financial Position
| 30 Jun | 30 Jun | 31 dec | |
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| ASSETS | |||
| Intangible assets | 1,777.6 | 1,695.3 | 1,734.5 |
| - goodwill | 1,257.1 | 1,269.8 | 1,227.7 |
| - capitalized development | 250.5 | 189.7 | 216.0 |
| - product rights | 53.8 | 58.5 | 57.4 |
| - customer contracts | 156.9 | 122.0 | 167.0 |
| - trademarks | 23.9 | 22.8 | 23.5 |
| - right-to-use assets | 34.6 | 31.2 | 42.0 |
| - other intangible assets | 0.8 | 1.2 | 1.0 |
| Inventories, tools and installations | 21.2 | 18.1 | 21.3 |
| Deferred tax assets | 14.3 | 8.5 | 19.4 |
| Other fixed assets | 5.1 | 3.4 | 6.1 |
| Total fixed assets | 1,818.2 | 1,725.3 | 1,781.4 |
| Current receivables | 353.0 | 371.4 | 357.5 |
| Cash and cash equivalents | 250.5 | 184.5 | 195.1 |
| Total current assets | 603.5 | 555.9 | 552.6 |
| Total assets | 2,421.7 | 2,281.2 | 2,334.0 |
| EQUITY and LIABILITIES | |||
| Equity | 1,629.2 | 1,552.2 | 1,487.5 |
| Provisions | 2.1 | 5.2 | 3.1 |
| Long-term liabilities | |||
| Deferred tax liabilities | 98.9 | 84.4 | 96.0 |
| Long-term liabilities, interest-bearing | 161.0 | 229.5 | 291.7 |
| Long-term liabilities, non-interest-bearing | 15.2 | 12.9 | 15.8 |
| Long-term liabilities, leasing | 20.2 | 16.9 | 26.1 |
| Total long-term liabilities | 295.3 | 343.7 | 429.6 |
| Current liabilities | |||
| Current liabilities, interest-bearing | 232.0 | 119.3 | 142.2 |
| Current liabilities, non-interest-bearing | 247.7 | 245.7 | 254.9 |
| Current liabilities, leasing | 15.3 | 15.3 | 16.8 |
| Total current liabilities | 495.0 | 380.2 | 413.9 |
| Total equity and liabilities | 2,421.7 | 2,281.2 | 2,334.0 |
Consolidated Statement of Changes in Equity
| 30 Jun | 30 Jun | 31 dec | |
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| At beginning of period | 1,487.5 | 1,481.3 | 1,481.3 |
| Total comprehensive income for the period | 136.7 | 63.3 | -5.9 |
| Share saving program | 5.1 | 9.4 | 13.8 |
| Repurchasing of own shares | - | -1.7 | -1.7 |
| At end of period | 1,629.2 | 1,552.2 | 1,487.5 |
INTERIM REPORT JANUARY - JUNE 2021
Consolidated Statement of Cash Flow
| Apr-Jun | Jan-Jun | Full year | |||
|---|---|---|---|---|---|
| SEK m | 2021 | 2020 | 2021 | 2020 | 2020 |
| Operating cash flow before changes in working capital | 88.4 | 87.1 | 168.4 | 131.0 | 279.9 |
| Cash flow from changes in working capital | 5.8 | -19.4 | -5.3 | -1.1 | -5.7 |
| Cash flow from operating activities | 94.3 | 67.7 | 163.1 | 129.9 | 274.2 |
| Cash flow from investing activities | -33.1 | -34.9 | -65.4 | -65.1 | -130.9 |
| Cash flow from acquisition of operations, net | - | - | - | - | -90.5 |
| Cash flow from financing activities, raising of loans | 10.5 | 20.2 | 14.4 | 20.2 | 139.4 |
| Cash flow from financing activities, amortization of loans | -50.6 | -21.3 | -50.6 | -33.5 | -108.3 |
| Cash flow from financing activities, amortization of lease liability | -4.5 | -5.3 | -8.9 | -10.5 | -20.5 |
| Cash flow from financing activities, settlement of share savings program | - | -1.7 | - | -1.7 | -1.7 |
| Cash flow for the period | 16.6 | 24.6 | 52.6 | 39.2 | 61.6 |
| Cash and cash equivalents at the beginning of period | 236.9 | 170.3 | 195.0 | 146.1 | 146.1 |
| Exchange rate difference in cash and cash equivalents | -3.1 | -10.4 | 2.8 | -0.8 | -12.7 |
| Cash and cash equivalents at the end of period | 250.5 | 184.5 | 250.5 | 184.5 | 195.0 |
Key figures – Balance Sheet and Cash Flow Statement
| Jan-Jun | 12 months | Full year | ||
|---|---|---|---|---|
| SEK m | 2021 | 2020 | Jul-Jun | 2020 |
| Cash and cash equivalents (SEK m) | 250.5 | 184.5 | 250.5 | 195.1 |
| Equity ratio (%) | 67.3 | 68.0 | 67.3 | 63.7 |
| Equity per share (SEK) | 75.5 | 72.1 | 75.5 | 69.1 |
| Cash flow from operating activities per share (SEK) | 7.6 | 6.1 | 14.3 | 12.8 |
| Net debt (SEK m) | 142.5 | 164.2 | 142.5 | 238.8 |
| Number of employees at end of period | 638 | 637 | 638 | 659 |
| Return on equity (%) | 10.9 | 9.6 | ||
| Return on capital employed (%) | 12.3 | 11.2 | ||
| Return on assets (%) | 10.5 | 9.5 |
Parent Company
Income Statement
| Jan-Jun | Full year | ||
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| Revenue | 23.5 | 23.9 | 43.3 |
| Operating costs | -43.6 | -43.2 | -82.6 |
| Operating profit | -20.1 | -19.3 | -39.3 |
| Financial net | -0.2 | 0.2 | 1.6 |
| Profit/loss after financial net | -20.3 | -19.1 | -37.7 |
| Appropriations | - | - | 37.0 |
| Profit/loss before tax | -20.3 | -19.1 | -0.7 |
| Tax | 4.1 | 4.0 | - |
| Net profit/loss for the period | -16.1 | -15.1 | -0.7 |
Parent Company
Balance Sheet
| 30 Jun | 31 Dec | ||
|---|---|---|---|
| SEK m | 2021 | 2020 | 2020 |
| ASSETS | |||
| Fixed assets | 213.6 | 175.3 | 212.4 |
| Current assets | 1,072.5 | 1,038.4 | 1,116.5 |
| Total assets | 1,286.1 | 1,213.7 | 1,329.0 |
| EQUITY AND LIABILITIES | |||
| Equity | 840.7 | 832.7 | 851.7 |
| Untaxed reserves | 3.7 | 4.1 | 3.7 |
| Long-term liabilities, interest-bearing | 161.0 | 229.5 | 291.7 |
| Current liabilities, interest-bearing | 227.2 | 119.3 | 137.5 |
| Current liabilities, other | 53.5 | 28.1 | 44.3 |
| Total equity and liabilities | 1,286.1 | 1,213.7 | 1,329.0 |
INTERIM REPORT JANUARY – JUNE 2021
ENEA 12
Quarterly data*
| SEK m | 2021 | 2020 | 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
| INCOME STATEMENT | ||||||||||
| Net sales | 225.8 | 214.0 | 248.0 | 206.4 | 239.0 | 221.7 | 258.0 | 246.9 | 249.4 | 240.1 |
| Other operating revenue | 5.3 | 2.8 | 4.4 | 2.3 | 2.3 | 5.0 | 2.8 | 3.2 | 10.8 | 0.7 |
| Cost of goods and services sold | -72.1 | -71.1 | -75.9 | -64.5 | -73.5 | -79.2 | -74.5 | -72.4 | -68.4 | -58.4 |
| Gross profit | 159.0 | 145.7 | 176.4 | 144.3 | 167.7 | 147.6 | 186.4 | 177.8 | 191.8 | 182.5 |
| Sales and marketing costs | -41.5 | -44.6 | -48.0 | -44.9 | -54.3 | -55.2 | -53.8 | -48.8 | -51.1 | -50.6 |
| R&D costs | -30.5 | -30.3 | -38.7 | -27.9 | -29.1 | -44.8 | -44.0 | -40.4 | -44.5 | -38.1 |
| General and administration costs | -24.9 | -26.1 | -25.6 | -28.7 | -25.2 | -25.0 | -31.6 | -25.0 | -24.2 | -31.6 |
| Operating profit | 62.1 | 44.7 | 64.2 | 42.8 | 59.1 | 22.6 | 57.0 | 63.5 | 72.0 | 62.2 |
| Net financial income/expense | -3.7 | 4.3 | -14.9 | -6.3 | -4.2 | 1.0 | -26.0 | -8.2 | -10.1 | -7.4 |
| Profit before tax | 58.4 | 48.9 | 49.2 | 36.5 | 54.9 | 23.5 | 30.9 | 55.3 | 62.0 | 54.8 |
| Tax | -6.5 | -5.4 | -1.8 | -5.4 | -8.1 | -6.5 | -2.8 | -7.7 | -9.6 | -13.4 |
| Net profit for the period | 52.0 | 43.5 | 47.4 | 31.1 | 46.8 | 17.0 | 28.2 | 47.7 | 52.4 | 41.4 |
| Other comprehensive income | -30.2 | 71.3 | -113.4 | -34.2 | -108.7 | 108.2 | -62.5 | 63.4 | 2.1 | 42.8 |
| Total comprehensive income | 21.8 | 114.9 | -66.0 | -3.1 | -61.9 | 125.2 | -34.3 | 111.0 | 54.5 | 84.2 |
| BALANCE SHEET | ||||||||||
| Intangible assets | 1,777.6 | 1,801.9 | 1,734.5 | 1,669.5 | 1,695.3 | 1,784.7 | 1,672.3 | 1,735.1 | 1,678.0 | 1,664.7 |
| Other fixed assets | 35.5 | 39.1 | 40.7 | 30.1 | 26.6 | 27.7 | 27.6 | 28.8 | 29.9 | 33.9 |
| Other financial fixed assets | 5.1 | 5.0 | 6.1 | 4.0 | 3.4 | 3.4 | 3.4 | 3.4 | 3.2 | 2.7 |
| Current receivables | 353.0 | 379.5 | 357.5 | 347.0 | 371.4 | 388.9 | 364.3 | 394.3 | 389.1 | 353.9 |
| Cash and cash equivalents | 250.5 | 236.9 | 195.1 | 180.0 | 184.5 | 170.3 | 146.1 | 395.7 | 150.5 | 142.7 |
| Total assets | 2,421.7 | 2,462.5 | 2,334.0 | 2,230.6 | 2,281.2 | 2,375.1 | 2,213.8 | 2,557.2 | 2,250.7 | 2,197.9 |
| Shareholders' equity | 1,629.2 | 1,606.0 | 1,487.5 | 1,553.1 | 1,552.2 | 1,611.5 | 1,481.3 | 1,507.9 | 1,126.8 | 1,070.9 |
| Long-term liabilities, interest-bearing | 181.2 | 315.5 | 317.7 | 245.7 | 246.4 | 283.6 | 283.6 | 105.9 | 604.4 | 603.8 |
| Long-term liabilities, non-interest-bearing | 116.2 | 116.1 | 115.0 | 105.1 | 102.5 | 103.1 | 99.0 | 93.0 | 90.0 | 87.4 |
| Current liabilities, interest-bearing | 247.3 | 163.0 | 159.0 | 87.2 | 134.5 | 105.1 | 117.0 | 515.5 | 88.3 | 82.3 |
| bearing | 247.7 | 262.0 | 254.9 | 239.5 | 245.7 | 271.7 | 232.9 | 334.9 | 341.3 | 353.4 |
| Total equity and liabilities | 2,421.7 | 2,462.5 | 2,334.0 | 2,230.6 | 2,281.2 | 2,375.1 | 2,213.8 | 2,557.2 | 2,250.7 | 2,197.9 |
| CASH FLOW | ||||||||||
| Cash flow from operating activities | 94.3 | 68.8 | 61.5 | 82.8 | 67.7 | 62.2 | 48.6 | 69.5 | 33.7 | 93.3 |
| Cash flow from investing activities | -33.1 | -32.3 | -31.2 | -34.6 | -34.9 | -30.2 | -22.2 | -21.4 | -24.2 | -23.0 |
| Cash flow from financing activities | 6.0 | -0.5 | 86.7 | -52.3 | -8.1 | -17.4 | -223.4 | 193.4 | -1.4 | -4.4 |
| Cash flow for the period | 67.3 | 36.0 | 116.9 | -4.0 | 24.6 | 14.6 | -197.0 | 241.5 | 8.1 | 65.8 |
| Cash flow from acquisition of operation: | ||||||||||
| Cash flow for the period, from acquisition of operation | ||||||||||
| Total cash flow for the period | 67.3 | 36.0 | 26.5 | -4.0 | 24.6 | 14.6 | -244.2 | 241.5 | 8.1 | 65.8 |
INTERIM REPORT JANUARY - JUNE 2021
Five-year summary*
| SEK m | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| INCOME STATEMENT | |||||
| Net Sales | 915.1 | 994.5 | 824.3 | 584.4 | 498.2 |
| Other operating revenue | 14.0 | 17.5 | 17.7 | 4.0 | 3.1 |
| Operating expenses | -740.5 | -757.3 | -653.1 | -485.6 | -382.5 |
| Operating profit | 188.6 | 254.7 | 188.9 | 102.8 | 118.8 |
| Net financial income/expense | -24.5 | -51.7 | -27.7 | -5.2 | 5.2 |
| Profit before tax | 164.2 | 203.0 | 161.1 | 97.6 | 124.0 |
| Profit for the period | 142.3 | 169.7 | 141.7 | 82.5 | 94.6 |
| Total | 142.3 | 169.7 | 141.7 | 82.5 | 94.6 |
| BALANCE SHEET | |||||
| Intangible assets | 1,734.5 | 1,672.3 | 1,381.4 | 522.2 | 499.2 |
| Other intangible assets | 40.7 | 27.6 | 33.7 | 31.0 | 34.4 |
| Other financial fixed assets | 6.1 | 3.4 | 3.1 | 2.7 | 6.5 |
| Financial assets held for sale, non-current | - | - | - | 62.1 | - |
| Current receivables | 357.5 | 364.3 | 426.8 | 203.6 | 219.4 |
| Financial assets held for sale, current | - | - | - | 40.2 | - |
| Cash and cash equivalents | 195.1 | 146.1 | 74.7 | 312.0 | 223.5 |
| Total assets | 2,334.0 | 2,213.8 | 1,919.7 | 1,173.8 | 983.0 |
| Shareholders' equity | 1,487.5 | 1,481.3 | 985.8 | 754.2 | 422.9 |
| Long-term liabilities, interest-bearing | 291.7 | 263.0 | 539.8 | 82.0 | 116.0 |
| Long-term liabilities, non-interest-bearing | 141.0 | 119.6 | 86.8 | 161.8 | 161.9 |
| Current liabilities, interest-bearing | 142.2 | 99.1 | 94.3 | 34.0 | 34.0 |
| Current liabilities, non-interest-bearing | 271.7 | 250.8 | 212.9 | 141.8 | 248.2 |
| Total equity and liabilities | 2,334.0 | 2,213.8 | 1,919.7 | 1,173.8 | 983.0 |
| CASH FLOW | |||||
| Cash flow from operating activities | 274.2 | 245.2 | 168.6 | 116.6 | 128.1 |
| Cash flow from investing activities | -130.9 | -90.9 | 30.5 | -139.7 | 49.6 |
| Cash flow from investing activities-acquisition of operation | -90.5 | -47.1 | -954.4 | -96.3 | -139.6 |
| Cash flow from financing activities | 8.9 | -35.9 | 514.2 | 206.6 | 56.2 |
| Cash flow for the period | 61.6 | 71.2 | -241.1 | 87.2 | 94.3 |
| KEY FIGURES | |||||
| Net sales growth, % | -8 | 21 | 41 | 17 | 5 |
| Operating margin, % | 20.6 | 25.6 | 22.9 | 17.6 | 23.8 |
| Profit margin, % | 17.9 | 20.4 | 19.5 | 16.7 | 24.9 |
| Return on capital employed, % | 11.2 | 15.6 | 17.0 | 16.3 | 27.8 |
| Return on equity, % | 9.6 | 13.8 | 16.3 | 14.0 | 23.0 |
| Return on total capital, % | 9.5 | 13.3 | 13.8 | 11.1 | 18.1 |
| Interest coverage ration, multiple | 4.1 | 3.8 | 4.1 | 5.4 | 10.2 |
| Equity ratio, % | 63.7 | 66.9 | 51.4 | 64.3 | 43.0 |
| Liquidity, % | 133.5 | 145.9 | 163.2 | 316.1 | 156.9 |
| EBITDA | 296.1 | 340.8 | 229.3 | 126.6 | 134.9 |
| Net debt/EBITDA | 0.81 | 0.63 | 2.44 | -1.58 | -0.55 |
| Average number of employees | 634 | 629 | 563 | 467 | 410 |
| Net sales per employee, SEK m | 1.4 | 1.6 | 1.5 | 1.3 | 1.2 |
| Net asset value per share, SEK | 68.94 | 68.80 | 45.79 | 39.00 | 26.61 |
| Earnings per share, SEK | 6.63 | 8.47 | 7.33 | 4.69 | 5.95 |
| Dividend per share, SEK | - | - | - | - | 2.00 |
- Figures for 2016 have not been restated for IFRS 15.
INTERIM REPORT JANUARY - JUNE 2021
Financial definitions and alternative performance measures
Cash flow from operating activities per share: Cash flow from operating activities in relation to the average number of shares.
Capital employed: Total assets less non-interest-bearing liabilities including deferred tax liabilities. Average capital employed is computed as opening plus closing capital employed divided by two.
Debt service ratio: Cash flow from operating activities - ongoing investment + total financial expenses) in relation to the principal and total financial costs over a reference period of twelve (12) months.
Dividend per share: Dividend for the current financial year divided by the number of shares on the reporting date.
Earnings per share: Profit after tax in relation to the average number of shares.
EBITDA: Earnings before financial items plus depreciation. Equity per share: Equity in relation to the total number of shares outstanding. Equity ratio: Equity including minority interests in relation to total assets.
Equity per share: Equity in relation to the total number of shares outstanding.
Interest coverage ratio: Profit after financial items plus financial costs in relation to financial costs.²
Gross margin: Gross profit less reversed contingent consideration in relation to turnover.
Interest coverage ratio: Profit/loss after financial items plus financial expenses in relation to financial expenses.²
Liquidity: Cash and cash equivalents, including current investments and receivables, in relation to current liabilities.
Net asset value per share: Net asset value, equivalent to equity, in relation to the total number of shares outstanding.
Net debt: Interest-bearing liabilities and unconditional acquisition related liabilities less cash and cash equivalents and financial investments, i.e. negative net cash.
Net sales growth³: Revenue in the period in relation to the previous period’s revenue.
Net sales per employee: Revenue in relation to the average number of employees.
Non-recurring items: Items of a non-repeating nature in normal operating activities. Non-recurring items include restructuring expenses, expenses for legal consulting relating to major disputes and transaction and integration expenses for major acquisitions. Transaction expenses include costs for legal and financial consulting but exclude financing expenses. Reversed contingent consideration are also included in non-recurring items. The purpose of specifying these items is to clarify the progress of underlying operations.
Operating margin: Operating profit in relation to revenue.
Operating profit excl. non-recurring items: Profit from operations before financial items and tax, adjusted for non-recurring items.
Profit margin: Profit/loss after financial items in relation to revenue.
Return on capital employed: Operating profit plus financial income related to average capital employed.
Return on equity: Profit (loss) after tax in relation to average equity.
Return on total capital: Profit after financial items plus financial costs in relation to average total assets.
This Interim Report uses non-IFRS measures that Enea and other parties use to evaluate Enea’s results of operations. These measures provide management and investors with significant information to analyze trends in the company’s business operations. These non-IFRS measures are intended to complement, but not replace, financial measures presented in accordance with IFRS.
| 1. Reconciliation of net sales growth | Apr-Jun | Jan-Jun | Full year | ||
|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | 2020 | |
| Net sales, SEK million | 225,8 | 239,0 | 439,9 | 460,7 | 915,1 |
| Net sales growth, SEK million | -13,1 | -10,5 | -20,8 | -28,8 | -79,4 |
| Net sales growth, % | -5 | -4 | -5 | -6 | -8 |
| Currency effect, unchanged exchange rates compared to previous year, SEK m | -16.5 | 2,9 | -32,7 | 7,8 | -13,6 |
| Currency effect, unchanged exchange rates compared to previous year, % | -7 | 1 | -7 | 1 | -1 |
| Net sales growth, unchanged exchange rates compared to previous year, SEK m | 3.4 | -13,4 | 11,8 | -36,7 | 104,4 |
| Net sales growth, unchanged exchange rates compared to previous year, % | 1 | -5 | 3 | -7 | -7 |
| 2. Reconciliation of financial income/expense | Apr-Jun | Jan-Jun | Full year | ||
| --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | 2021 | 2020 | 2020 | |
| Financial income, SEK million | 7,0 | 5,6 | 19,5 | 15,4 | 28,1 |
| Financial expense, SEK million | -10,7 | -9,7 | -19,0 | -18,6 | -52,5 |
| Reported financial income/expense | -3,7 | -4,2 | 0,6 | -3,2 | -24,5 |
INTERIM REPORT JANUARY – JUNE 2021
ENEA 15
About Enea
Enea is one of the world's leading providers of software for telecommunication and cybersecurity. The company's products are built for cloud platforms and are used in mobile and Wi-Fi networks to enable services for subscribers, enterprise customers, and the Internet of Things. Over three billion people rely on Enea's technology every day when using their mobile phones or connecting to the Internet.
Enea focuses on a number of selected core segments (see illustration below), where it aspires to leadership. The product portfolio includes:
- Cloud data management in 4G/5G networks
- Mobile video traffic management
- Management of services in Wi-Fi networks
- Policy and access control
- Embedded traffic classification
- Virtualization platforms
- Cloud-based services for the Internet of Things
- Real-time operating systems for mobile networks
Enea applies two main sales models, direct sales to end-customers, and indirect sales through partners. Direct sales of turnkey solutions to operators are mainly in the four areas cloud data management, mobile video traffic management, management of services in Wi-Fi networks, and policy and access control.
Indirect sales involve component sales to system vendors or system integrators, who in turn, deliver and implement complete solutions for operators and enterprises. This sales model is mainly in real-time operating systems, embedded traffic intelligence and virtualization platforms.
Data communication solutions have been Enea's core business since the company was founded over 50 years ago. Enea was the first company in the Nordic region to connect to the Internet and received the first email in Sweden. The company also registered Sweden's first Internet domain, and at an early stage, was the hub of all Internet traffic in Sweden.
These and other product-related milestones have secured Enea's market leadership in several strategic segments. The company was one of the pioneers behind the emergence of the Internet and mobile data communication, and continues to drive technological progress by delivering market-leading products and solutions.
Enea also has a global services organization developing software on assignment from customers in different industries with demanding performance and reliability standards. The project engineers in this part of Enea's organization have executed projects for customers providing solutions for medical devices, the aviation industry, and aerospace technology
INTERIM REPORT JANUARY - JUNE 2021
ENEA 16
About Enea
Enea has development centers and sales offices across Europe, North America, and Asia. The company's engineers and project managers have long-term experience of developing software, and take overall responsibility, covering everything from design and
coding to project management, quality-assurance, and training. A total of around 640 people work for the company, and its headquarters is in Stockholm, Sweden.
| Region | Country | City | Product development | Sales support |
|---|---|---|---|---|
| Europe | Austria | Vienna | ● | |
| Croatia | Osijek | ● | ||
| France | Paris | ● | ● | |
| Germany | Berlin | ● | ||
| Romania | Bucharest | ● | ● | |
| Craiova | ● | |||
| Iași | ● | |||
| Sweden | Stockholm | ● | ● | |
| UK | Belfast | ● | ||
| Bristol | ● | |||
| North America | US | Boston | ● | |
| Dallas | ● | |||
| Phoenix | ● | |||
| Redwood City | ● | |||
| North-East Asia | Japan | Tokyo | ● | |
| Kina | Shanghai | ● | ||
| South-East Asia | India | Pune | ● | |
| Malaysia | Kuala Lumpur | ● | ||
| Singapore | Singapore | ● |
INTERIM REPORT JANUARY - JUNE 2021
ENEA
The share
January – June 2021
Share price performance: -9.45%
Share turnover: 866 224
Highest closing price: SEK 255.50
Lowest closing price: SEK 200.0
Closing price. period end: SEK 206.00
Market cap (30 June): SEK 4.453 million
Total no. of shares (30 June): 21 615 231
Share turnover (%): 4.0%
Daily share turnover: 14 200
For queries. please contact:
Jan Häglund, President and CEO
Björn Westberg, CFO
Lotta Trulsson, Executive Assistant
Phone: +46 (0)8 - 507 14000
Enea AB. corp ID no. 556209-7146
Jan Stenbecks Torg 17
P.O. Box 1033
SE-164 21 Kista
Financial Information:
Interim report Jan-Sep 26 October 2021
Annual Statement 2 February 2022
All financial information is published on Enea’s website www.enea.com
Financial reports may also be ordered by e-mail ([email protected]) or post (address to left).
This Report contains forward-looking information that is based on the current expectations of Enea’s management. Although management believes that the expectations reflected in such forward-looking information are reasonable, no assurance can be given that such expectations will prove accurate. Accordingly, actual outcomes may differ materially from those implied in the forward-looking information because of factors including changes to economic, market and competitive conditions, reforms of legislation and other political measures, fluctuations in exchange rates, and other factors. This document is essentially a translation of the Swedish language original. In the event of any discrepancy between this translation and the original, the latter shall take precedence.
Enea AB (publ), Box 1033, S-164 21 Kista, Sweden, www.enea.com, Corp. ID no. 556209-7146