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Formpipe Software

Quarterly Report Jul 14, 2017

3159_10-q_2017-07-14_198e0c5c-7449-4822-96a0-200b817ba05f.pdf

Quarterly Report

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Interim report January – June 2017

PERIOD APRIL 1 – JUNE 30, 2017

  • Net sales SEK 97.1 m (SEK 101.5 m)
  • System revenue SEK 62.4 m (SEK 61.3 m)
  • Recurring revenue in percentage of net sales 48 % (43 %)
  • EBITDA SEK 19.0 m; 19.6 % (SEK 21.5 m; 21.2%)
  • EBITDA-adj. SEK 9.1 m; 9.4% (SEK 12.6 m; 12.4 %)
  • EBIT SEK 7.5 m; 7.7 % (SEK 4.8 m; 4.7 %)
  • Net profit SEK 5.1 m; 5.3 % (SEK 4.3 m; 4.2 %)
  • EPS before dilution SEK 0.10 (SEK 0.08)
  • Cash flow from operating activities SEK 3.7 m (SEK 3.0 m)

PERIOD JANUARY 1 – JUNE 30, 2017

  • Net sales SEK 191.8 m (SEK 188.8 m)
  • System revenue SEK 123.8 m (SEK 119.5 m)
  • Recurring revenue in percentage of net sales 49 % (47 %)
  • EBITDA SEK 37.8 m; 19.7 % (SEK 37.9 m; 20.1 %)
  • EBITDA-adj. SEK 18.3 m; 9.5 % (SEK 18.5 m; 9.8 %)
  • EBIT SEK 11.9 m; 6.2 % (SEK 7.6 m; 4.0 %)
  • Net profit SEK 7.9 m; 4.1 % (SEK 5.7 m; 3.0 %)
  • EPS before dilution SEK 0.15 (SEK 0.10)
  • Cash flow from operating activities SEK 17.4 m (SEK 16.4 m)

INCOME STATEMENT - SUMMARY

Apr-Jun Jan-Jun Rolling 12 Full year
(SEK Million) 2017 2016 2017 2016 months 2016
Net sales 97,1 101,5 191,8 188,8 381,7 378,7
whereof recurring revenue 46,7 43,3 94,2 88,1 184,9 178,8
EBITDA 19,0 21,5 37,8 37,9 87,9 88,0
EBITDA-adj 9,1 12,6 18,3 18,5 50,6 50,8
EBIT 7,5 4,8 11,9 7,6 33,9 29,7

Comments from the Groups CEO

The second quarter comes in at about the same level as the first quarter, which is better than it looks like accounting wise. The trend that more orders are being carried out as cloud services (SaaS) continues and strengthens. This is noticeable throughout the product portfolio. Over time this will be positive and show a margin improvement for us, but at present time it entails challenges on the revenue side since the revenue is accrued over the contract length instead of an initial license revenue.

This quarter's revenues are lower than last year's quarter when the consulting revenues were particularly high. The, for us very important recurring revenues, keeps increasing.

As for our Lasernet product the trend towards cloud services is extra clear. New sales in this area during the year have increased with 7 % compared to previous year and 25 % of these orders have been sold as a cloud service. This revenue therefore accrued over the contract period and the accounted revenue for the quarter is 14 % lower than previous year.

Even in Life Science we have won new business as a cloud service during the quarter. By comparison with last year's second quarter we had cloud service agreements generating an annual income of SEK 0.5 million which at the end of this year's second quarter has increased to SEK 2.0 million on an annual basis.

During the quarter we have successfully deployed the three pilot projects for Stockholm city into production. The next phase is a broad introduction where Stockholm's 50 committees, administrations and companies are divided into clusters. Cluster 1 is being implemented during the autumn and will be launched in January 2018. Both Formpipe and the customer are very pleased with the project and further areas where Formpipe can assist the city of Stockholm in its digitalization has already been identified.

The municipality market in Denmark continues to be challenging even if we can see some bright spots. Gladly we have won two cloud service orders from Danish municipalities for a total value of SEK 8 million which will be accrued over the four year contracts.

The major sale success we have had for e-archives the last year has led to some capacity problems in our delivery department. We have addressed this with increased resources to ensure that all customers can go into production and we can generate revenues from these deliveries. Short-term this will affect our margins negative, but in the long-term this is a promising area where we are well positioned in the market.

As a summary, the business is doing well and we are going into the right direction. The trend that more and more orders are done as a cloud service is positive for us long-term and will contribute to better margins. At the moment the shift has had a negative impact on our earnings. However, we estimate that through good cost control we will be able to combine margin improvements with strong growth in recurring revenues.

Significant events during the period April – June 2017

ORDER FROM HILLERØDS MUNICIPALITY

Formpipe signed an agreement with Hillerøds municipality regarding the ECM-product Acadre as a cloud service. The total order value amounts to SEK 4.4 million over a four year period.

ANNUAL GENERAL MEETING

At the AGM on April 25 decisions were made regarding:

  • Adoption of the income statement and balance sheet for the 2016 financial year.
  • Adoption profit distribution
  • The re-election of Martin Henricson, Peter Lindström and Bo Nordlander as board members and the election of Annikki Schaeferdiek and Åsa Landén Ericsson as new board members. Bo Nordlander was re-elected as chairman of the board.
  • The re-election of the auditing firm PricewaterhouseCoopers AB as the auditors of the Company with Aleksander Lyckow as the principal auditor.
  • Principles for the Nomination Committee.
  • The AGM approved the Board's proposal to authorise the Board to issue new shares or convertibles.
  • The AGM approved for the Board to acquire and transfer the company's own shares.
  • The AGM approved the issue of share warrants to the personnel.

The AGM approved for the proposal regarding guidelines for remuneration to senior executives.

ISSUE OF WARRANT INCENTIVE PROGRAM

It was decided at the AGM held on 25 April to issue 500 000 warrants offered to all employees within the Formpipe Software group, where one option gives the right to subscribe for one new share. The programme was fully subscribed.

INCREASED NUMBER OF SHARES

During the period the personnel warrant program 2014/2017 was exercised. A total of 599,417 new shares were issued from this program. The number of shares and votes in the Company has therefore increased with 599,417 and the share capital has increased with SEK 59,941.7. After the issue of new shares, the total number of shares and votes in the Company amounts to 51,873,025 and the share capital to SEK 5,187,302.5.

Significant events after the period April – June 2017

ORDER FROM FURESØ MUNICIPALITY

Formpipe signed an agreement with Furesø municipality regarding the ECM-product Acadre as a cloud service. The total order value amounts to SEK 3.6 million over a four year period.

Market

Enterprise content management (ECM) is used to create, store, distribute, discover, archive and manage digital content (such as scanned documents, email, reports, medical images and office documents), and ultimately analyze usage to enable organizations to deliver relevant content to users where and when they need it. It is in the ECM market that Formpipe has emerged as the market leader in the public sector, as a challenger in e.g. life sciences and legal as well as cross-industry for parts of the product range.

Growth in the ECM market is fueled in large part by the organizational and corporate wide need to streamline operations and meet legal requirements and regulations. Making business value from the information requires applications and services to search, analyze, process and distribute data and content. Growth drivers continually gain strength as the sheer amount of data and information increases and ECM remains a highly prioritized investment area. Gartner's forecast on ECM software revenue is a Compound Annual Growth Rate of 10.6%, 2015-2020. The ECM market is large and fragmented, with a total addressable market (systems revenue) of 7 billion dollars in 2017 (Source: Gartner,

Enterprise Software Markets, Worldwide, 2013-2020, 4Q16 update).

A CHANGING MARKET

The ECM market is changing from the centralized, backend, command and control of unstructured content to integrated, purpose-built, cloud based solutions that prioritizes content usability, processing and analyzing content from one or several sources, to get business insights and business value. Control, file synchronization and sharing will be a standard capability of ECM offerings.

This change is well in line with the Formpipe's strategy, as more and more of the company's customers choose to switch to cloud solutions for the standard products, as well as with the company development of applications and modules with the ability to process information from both Formpipe's existing systems or from other systems.

The development for ECM software is towards cloud based solutions and Gartner predicts that at least 50% of the leading ECM software providers will have rearchitected their offerings to cloud based platform by the end of 2018. But even if the trend is towards the cloud, the license revenues from on-premise will play an important role for years to come.

Software Revenue – On Premises Vs SaaS, 2014-2020 (Source: Gartner (January 2017)

FORMPIPES OFFERINGS IN ECM:

CA S E A N D DO C U M E N T MA N A G E M E N T

Case and Document Management is about managing documents and information in cooperation, over functional boundaries, with version management, management of rights, traceability and automation of the work flows. This provides lower costs, minimized risk exposure and structured information. In the area of Case and Document Management, Formpipe addresses the public sector in Sweden and Denmark, as well as the industries of Life Science and Legal.

GR A N T S MA N A G E M E N T

Grants Management automates the whole life cycle for applications and grants for both grant funding bodies and recipients, from requests for proposals by the program to measurement and reporting of the outcome of the effort. Formpipes Grants Management products are currently sold to the public sector and it is the leading system with national authorities.

C U S T O M E R C O M M U N I C A T I O N S MA N A G E M E N T

With CCM products, content is produced, individualized, formatted and distributed from different systems and data sources to the format that best suits the company in its communication with customers or other business partners. Formpipe's CCM product Lasernet is mainly tied to sales of ERP systems

ST R U C T U R E D DA T A AR C H I V I N G

Structured data archiving is the ability to index and move important operating data from active business systems, or systems being discontinued. It provides control and makes the data available in its context, reduces storage costs and the amount of data in the daily production environment. Formpipe's product Long-Term Archive is currently sold to the public sector in Sweden where there is a high level of activity.

The Future

Formpipe is well-positioned to be able to develop and strengthen its leading position as ECM provider while retaining good profitability levels. The company sees good opportunities to continue to utilize its experience from its successes in order to target new markets and customer segments. A solid product development and product strategy creates good conditions to be able to efficiently develop market-leading offerings and meet up with sector-specific requirements also in the future.

The board believes that Formpipe, which is one of the largest European-based ECM suppliers, is wellpositioned with a stabile customer base, a high share of recurring revenue and a focus on customer segments with a high need for ECM solutions.

Financial Information

REVENUE

April – June 2017

Net sales for the period totalled to SEK 97.1 million (101.5 million), which corresponds to a decrease of 4 %. System revenue increased by 2 % from the previous year and totalled to SEK 62.4 million (61.3 million). Total recurring revenue for the period increased by 8 % from the previous year and totalled to SEK 46.7 million (43.3 million), which is equivalent to 48 % of net sales (43 %). Exchange rate effects have affected net sales positively by SEK 1.4 million in comparison with the previous year.

January – June 2017

Net sales for the period totalled to SEK 191.8 million (188.8 million), which corresponds to an increase of 2 %.

System revenue increased by 4 % from the previous year and totalled to SEK 123.8 million (119.5 million). Total recurring revenue for the period increased by 7 % from the previous year and totalled to SEK 94.2 million (88.1 million), which is equivalent to 49 % of net sales (47 %). Exchange rate effects have affected net sales positively by SEK 3.0 million in comparison with the previous year.

COSTS

April – June 2017

The operating costs for the period decreased by 3 % and totalled to SEK 90.9 million (93.6 million). Personnel costs decreased by 4 % and totalled to SEK 54.1 million (56.3 million). Selling expenses totalled to SEK 15.1 million (13.9 million). Other costs totalled to SEK 18.7 million (18.7 million). During the period a write-down of the liability for additional purchase price from the acquisition of GxP Ltd. has been made by 0.5 million GBP (SEK 5.6 million). Related goodwill from the acquisition has also been written down by 0.4 million GBP (SEK 4.3 million) giving a positive net effect of non-recurring items amounting to SEK 1.3 million.

January – June 2017

The operating costs for the period increased by 2 % and totalled to SEK 181.2 million (178.1 million). Personnel costs increased by 1 % and totalled to SEK 108.6 million (107.4 million). Selling expenses totalled to SEK 28.7 million (26.8 million). Other costs totalled to SEK 36.2 million (36.1 million). During the period a write-down of the liability for additional purchase price from the acquisition of GxP Ltd. has been made by 0.5 million GBP (SEK 5.6 million). Related goodwill from the acquisition has also been written down by 0.4 million GBP (SEK 4.3 million) giving a positive net effect of non-recurring items amounting to SEK 1.3 million.

Recurring revenues in relation to fixed operating costs, MSEK

EARNINGS

April – June 2017

Operating profit before depreciation and amortization and one-off costs (EBITDA) totalled to SEK 19.0 million (21.5 million) with an EBITDA margin of 19.6 % (21.2 %). Operating profit (EBIT) totalled to SEK 7.5 million (4.8 million) with an operating margin of 7.7 % (4.7 %). Net profit totalled to SEK 5.1 million (4.3 million). Exchange rate effects have affected EBITDA positively by SEK 0.3 million in comparison with the previous year.

January – June 2017

Operating profit before depreciation and amortization and one-off costs (EBITDA) totalled to SEK 37.8 million (37.9 million) with an EBITDA margin of 19.7 % (20.1 %). Operating profit (EBIT) totalled to SEK 11.9 million (7.6 million) with an operating margin of 6.2 % (4.0 %). Net profit totalled to SEK 7.9 million (5.7 million). Exchange rate effects have affected EBITDA positively by SEK 0.6 million in comparison with the previous year.

FINANCIAL POSITION AND LIQUIDITY

Cash equivalents

Cash and cash equivalents at the end of the period amounted to SEK 35.1 million (30.4 million). The company had interest-bearing debt at the end of the period totalling to SEK 99. million (113.1 million). The company's net interest-bearing debt thereby totalled to SEK 64.3 million (82.7 million).

The company has bank overdraft facilities for a total of SEK 10.0 million and for DKK 17.0 million, which were not utilized at the end of the period (- million).

Deferred tax asset

By the end of the period the company's deferred tax assets attributable to accumulated losses amounted to SEK 18.4 million (SEK 23.5 million).

Equity

Equity at the end of the period amounted to SEK 341.9 million (330.1 million), which was equivalent to SEK 6.59 (6.44) per outstanding share at the end of the period. The weakening of the Swedish krona have increased the value of the group's net assets in foreign currencies by SEK 2.1 million (7.5 million) from the end of the year.

Equity ratio

The equity ratio at the end of the period was 56 % (53 %).

CASH FLOW

Cash flow from operating activities

Cash flow from operating activities for the period January - June totalled to SEK 17.4 million (16.4 million).

Investments and acquisitions

Total investments for the period January - June amounted to SEK 20.0 million (19.7 million.

Investments in intangible assets totalled to SEK 19.5 million (19.4 million) and refer to capitalized product development costs.

Investments in tangible assets totalled to SEK 0.5 million (0.3 million).

F I N A N C I N G

During the period January – June the company has amortized SEK 8.8 million (7.8 million) and the interestbearing debt amounted to SEK 99.4 million (113.1 million) at the end of the period.

As an outcome from the exercise of the personnel warrant program 2014/2017, 599,417 new shares was issued and payments amounting to SEK 3.8 million (7.5 million) has been added to the Company. At the same time the Company repurchased 392,583 warrants to a value of SEK 3.3 million (0.5 million).

During the period a new warrant program (2017/2020) has been issued to the company's personnel amounting to 500 000 warrants, which has provided the company with payments of SEK 0.4 million (0.3 million).

During the period dividends amounting to SEK 15.4 million (6.6 million) has been paid out to shareholders.

Other

EMPLOYEES

The number of employees at the end of the reporting period totalled to 236 persons (236 persons).

RISKS AND UNCERTAINTY FACTORS

The significant risk and uncertainty factors for the group and the parent company, which include business and financial risks, are described in the annual report for the last financial year. During the period there have been no changes in the risk and uncertainty factors for the group and the parent company.

TRANSACTIONS WITH RELATED PARTIES

No transactions with related parties have occurred during the period

ACCOUNTING POLICIES

The group's financial reports are prepared in accordance with International Financial Reporting Standards (IFRS) in the way in which they have been adopted by the European Union, the Swedish Annual Accounts Act, RFR 1 Additional Accounting Regulations for Groups issued by the Swedish Financial Reporting Board and in accordance with the regulations that the Stockholm Stock Exchange stipulates for companies listed on Nasdaq Stockholm. Preparing financial reports in accordance with IFRS requires that the company management makes accounting evaluations and estimates and makes assumptions that affect the application of the accounting policies and the reported values of assets, liabilities,

income and costs. The actual result can differ from these estimates and evaluations. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The interim report covers pages 1-12 and the interim report on pages 1-5 is thus an integral part of this financial report. The most important accounting policies according to IFRS, which constitute the accounting standard for the preparation of this interim report, are stated in the company's most recently published annual report

The financial reports of the parent company have been pre-pared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities issued by the Swedish Financial Reporting Board. The same accounting policies and methods of calculation have been applied in the interim report and in the most recent annual report.

ABOUT FORMPIPE

Formpipe Software AB (publ) is a software company in the field of ECM (Enterprise Content Management). We develop and deliver ECM products for structuring information in larger companies, the public sector and organizations. Our software helps organizations to capture and place information in context. Reduced costs, minimized risk exposure and structured information are the benefits from using our ECM products.

Formpipe was founded in 2004 and has offices in Sweden, Denmark, United Kingdom, the Netherlands, Germany and USA. The Formpipe share is listed on Nasdaq Stockholm.

CALENDAR FOR FINANCIAL INFORMATION

October 26, 2017 Interim report Jan-Sep February 14, 2018 Interim report Jan-Dec

This interim report has not been subject to review by the company's auditors.

FINANCIAL INFORMATION

Can be ordered from the below contact details. All financial information is published on www.formpipe.com immediately after being made public.

CONTACT INFORMATION

Christian Sundin, Managing Director Telephone: +46 70 567 73 85, +46 8 555 290 84 E-mail: [email protected]

Stockholm April 24, 2017 Formpipe Software AB The Board of Directors and the Managing Director

Formpipe Software AB (publ) Swedish company reg. no.: 556668-6605 Sveavägen 168 | Box 231 31 | 104 35 Stockholm T: +46 8 555 290 60 | F: +46 8 555 290 99 [email protected] | www.formpipe.se

CONSOLIDATED INCOME STATEMENT SUMMARY

Apr-Jun Jan-Jun
(SEK 000) 2017 2016 2017 2016
Net Sales 97 059 101 531 191 781 188 806
Sales expenses -15 107 -13 939 -28 732 -26 826
Other costs -18 700 -18 724 -36 202 -36 123
Personnel costs -54 130 -56 277 -108 596 -107 376
Capitalized work for own account 9 892 8 887 19 524 19 411
Operating profit/loss before depreciation/amortization 19 013 21 478 37 776 37 893
and non-comparative items (EBITDA)
Depreciation/amortization -12 820 -13 559 -27 176 -27 143
Operating profit/loss (EBIT) 7 453 4 801 11 859 7 632
Financial income and expenses -1 088 -1 149 -2 170 -2 406
Exchange rate differences -488 93 -652 164
Tax -771 -1 890 -1 122 -2 095
Net profit for the period from remaining business 5 106 1 856 7 915 3 295
Realization gains from discontinued business - 2 434 - 2 434
Net profit for the period 5 106 4 290 7 915 5 729
Of which the following relates to:
Parent company shareholders 5 212 4 248 7 903 5 130
Shareholding with no controlling influence -106 41 12 599
Other comprehensive income
Translation differences 3 179 7 079 2 139 7 512
Other comprehensive income for the period, net after tax 3 179 7 079 2 139 7 512
Total comprehensive income for the period 8 286 11 368 10 054 13 241
Of which the following relates to:
Parent company shareholders 8 391 11 327 10 042 12 642
Shareholding with no controlling influence -106 41 12 599
EBITDA margin, % 19,6% 21,2% 19,7% 20,1%
EBIT margin, % 7,7% 4,7% 6,2% 4,0%
Profit margin, % 5,3% 4,2% 4,1% 3,0%
Earnings per share attributable to the parent company's shareholders
during the period (SEK per share) 0,00 kr 0,00 kr 0,00 kr 0,00 kr
- before dilution 0,10 0,08 0,15 0,10
- after dilution 0,10 0,08 0,15 0,10
Average no. of shares before dilution, in 000
Average no. of shares after dilution, in 000
51 473
52 154
50 520
50 932
51 374
52 043
50 332
50 841

CONSOLIDATED BALANCE SHEET SUMMARY

Jun 30 Dec 31
(SEK 000) 2017 2016 2016
Intangible assets 462 488 474 810 470 396
Tangible assets 3 418 4 350 4 075
Financial assets 1 749 1 481 1 682
Deferred tax asset 18 411 23 495 17 332
Current assets (excl. cash equivalents) 93 162 86 624 94 870
Cash equivalents 35 109 30 379 60 890
TOTAL ASSETS 614 338 621 139 649 244
Equity 341 869 330 073 346 249
Shareholding with no controlling influence 2 717 2 397 2 706
- - -
Long-term liabilities 105 876 126 581 115 953
Current liabilities 163 876 162 087 184 337
TOTAL EQUITY AND LIABILITIES 614 338 621 139 649 244
Net interest-bearing debt (-) / cash (+) -64 264 -82 725 -45 626

CHANGES IN CONSOLIDATED EQUITY

Equity attributable to the parent company's shareholders Share
Other Profit/loss holdings with
Share contributed Translation brought no controlling
(SEK 000) capital capital reserves forward Total influence Total
Balance at January 1, 2016 5 014 186 709 4 454 118 930 315 108 3 378 318 486
Comprehensive income
Net profit for the period - - - 5 130 5 130 599 5 729
Other comprehensive income items - - 7 512 - 7 512 - 7 512
Total comprehensive income - - 7 512 5 130 12 642 599 13 241
- - - - - - -
Transaction with owners - - - - - - -
Dividend - - - -5 014 -5 014 -1 579 -6 594
Share issue 113 7 425 - - 7 538 - 7 538
Repurchase of warrants - -466 - - -466 - -466
Employee warrant schemes - 265 - - 265 - 265
Total transaction with owners 113 7 224 - -5 014 2 323 -1 579 744
Balance at June 30, 2016 5 127 193 933 11 966 119 046 330 073 2 397 332 471
Balance at January 1, 2017 5 127 193 933 11 395 135 793 346 249 2 706 348 954
Comprehensive income
Net profit for the period - - - 7 903 7 903 12 7 915
Other comprehensive income items - - 2 139 - 2 139 - 2 139
Total comprehensive income - - 2 139 7 903 10 042 12 10 053
- - - - - - -
Transaction with owners - - - - - - -
Dividend - - - -15 382 -15 382 - -15 382
Share issue 60 3 782 - - 3 842 - 3 842
Repurchase of warrants - -3 282 - - -3 282 - -3 282
Employee warrant schemes - 400 - - 400 - 400
Total transaction with owners 60 900 - -15 382 -14 422 - -14 422
Balance at June 30, 2017 5 187 194 833 13 534 128 314 341 869 2 717 344 586

CASH FLOW STATEMENT SUMMARY*

Apr-Jun Jan-Jun
(SEK 000) 2017 2016 2017 2016
Cash flow from operating activities
before working capital changes 16 812 14 290 16 812 14 290
Cash flow from working capital changes -3 076 -894 -3 076 -894
Cash flow from operating activities 13 736 13 396 13 736 13 396
Cash flow from investing activities -9 919 -10 618 -9 919 -10 618
Cash flow from financing activities -4 243 -3 915 -4 243 -3 915
Cash flow for the period -426 -1 137 -426 -1 137
Change in cash and cash equivalent
Cash and cash equivalent at the beginning of the period 60 889 37 670 60 890 37 670
Translation differences -25 125 -25 125
Cash flow for the period -426 -1 137 -426 -1 137
Cash and cash equivalent at the end of the period 60 438 36 658 60 438 36 658

* Cash flow from internal development work (SEK 1,7 m for the year and 0,5 m for the quarter) previously included in the cash flow from operating activities has been re-classified to investment acitivies in last year's comparable period (in accordance with IAS 7).

8 QUARTERS IN SUMMARY*

(SEK 000) 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2
Support and maintenance 39 254 40 893 42 150 40 842 42 478 42 309 43 572 42 406
Licenses 17 025 22 708 15 999 20 459 13 730 30 667 17 778 20 033
System revenue 56 279 63 602 58 149 61 301 56 208 72 976 61 350 62 439
whereof recurring revenue 42 076 43 603 44 806 43 308 45 338 45 318 47 521 46 706
Deliveries 27 235 29 522 29 126 40 230 27 013 33 720 33 372 34 620
Net sales 83 514 93 123 87 275 101 531 83 221 106 696 94 722 97 059
Sales expenses -12 381 -14 033 -12 886 -13 939 -11 327 -14 287 -13 625 -15 107
Other costs -18 912 -17 757 -17 399 -18 724 -16 844 -18 621 -17 502 -18 700
Personnel costs -46 077 -51 607 -51 099 -56 277 -44 260 -52 220 -54 465 -54 130
Capitalized development costs 11 448 11 957 10 524 8 887 9 074 8 718 9 632 9 892
Total operating expenses -65 922 -71 440 -70 861 -80 053 -63 356 -76 410 -75 960 -78 046
EBITDA 17 592 21 683 16 415 21 478 19 865 30 286 18 763 19 013
% 21,1% 23,3% 18,8% 21,2% 23,9% 28,4% 19,8% 19,6%
1 590 -3 905 -2 434
Items affecting comparability -1 947 - - -3 118 - - 0 1 260
Depreciation/amortization -13 030 -13 308 -13 584 -13 559 -13 658 -14 460 -14 356 -12 820
EBIT 2 614 8 375 2 831 4 801 6 207 15 827 4 406 7 453
% 3,1% 9,0% 3,2% 4,7% 7,5% 14,8% 4,7% 7,7%
Discontinued business:
Net sales 4 627 2 165 - - - - -
EBITDA 1 683 -43 - - - - -

* Adjusted to reflect the remaining business after disposal of customer specific consulting services in Denmark in 2015 Q4.

SEGMENT SUMMARY

The Group's segments are divided according to which country they have their headquarters in and for which products that is accounted for. The segments are divided into Sweden, Denmark and Life Science. Segment Sweden comprises the Swedish companies and their products, segment Denmark consists of the Danish companies and their subsidiaries that accounts for products belonging to the Danish entities. Segment Life Science consists of the Group's total records related to life sciences customers for its products specifically designed for life science companies. Items related to life sciences are thus reported separately under its own segment and are not included in the other segments' reported amounts.

Jan-jun 2017
Life
(SEK 000) Sweden Denmark Science Eliminations Group
Sales, external 84 050 102 616 5 115 - 191 781
Sales, internal 2 658 120 470 -3 248 -
Total sales 86 708 102 736 5 585 -3 248 191 781
Costs, external -59 444 -88 223 -6 338 - -154 005
Costs, internal -2 350 -430 -468 3 248 -
EBITDA 24 914 14 083 -1 221 - 37 776
% 28,7% 13,7% -21,9% 0,0% 19,7%
Jan-jun 2016
Life
Sweden Denmark Science Eliminations Group
77 658 106 541 4 606 - 188 806
2 913 99 791 -3 803 -
80 571 106 640 5 397 -3 803 188 806
-55 199 -87 006 -8 707 - -150 912
-2 649 -351 -803 3 803 -
22 723 19 283 -4 113 - 37 893
28,2% 18,1% -76,2% 0,0% 20,1%

GROUP-WIDE INFORMATION

Revenues from all products and services are identified as follows:

Life
2017 Sweden Denmark Science Group
License 21 108 15 453 1 252 37 813
Support & Maintenance 44 567 39 904 1 506 85 977
Delivery 18 375 47 259 2 357 67 991
Net sales 84 050 102 616 5 115 191 781
Life
2016 Sweden Denmark Science Group
License 16 091 18 932 1 346 36 369
Support & Maintenance 41 589 39 966 1 136 82 691
Delivery 19 979 47 643 2 124 69 746

SALES ANALYSIS BY QUARTER

NUMBER OF SHARES

2013-01-01 2014-01-01 2015-01-01 2016-01-01 2017-01-01
2013-12-31 2014-12-31 2015-12-31 2016-12-31 2017-06-30
Number of outstanding shares at the beginning
of the period
48 934 588 48 934 588 50 143 402 50 143 402 51 273 608
Share issue from warrant programme - - - 1 130 206 599 417
Non-cash issue - 1 208 814 - - -
Number of outstanding shares at the end of
the period
48 934 588 50 143 402 50 143 402 51 273 608 51 873 025

KEY RATIOS FOR THE GROUP

Jan-Jun
2017 2016
Net sales, SEK 000 191 781 188 806
EBITDA, SEK 000 37 776 37 893
EBITDA-adj., SEK 000 18 252 18 481
EBIT, SEK 000 11 859 7 632
Net profit for the period, SEK 000 7 915 5 729
EBITDA margin, % 19,7% 20,1%
EBITDA-adj. margin, % 9,5% 9,8%
EBIT margin, % 6,2% 4,0%
Profit margin, % 4,1% 3,0%
Return on equity, %* 7,2% 4,6%
Return on working capital, %* 8,4% 4,6%
Equity ratio, % 56% 53%
Equity per outstanding share at the end of the period, SEK 6,59 6,44
Earnings per share - before dilution, SEK 0,15 0,10
Earnings per share - after dilution, SEK 0,15 0,10
Share price at the end of the period, SEK 14,85 8,40

* Ratios including P&L measures are based on the most recent 12-month period

This is a translation of the original Swedish version. In the event of any discrepancies between the two versions, the original Swedish version shall take precedence.

PARENT COMPANY INCOME STATEMENT SUMMARY*

Apr-Jun Jan-Jun
(SEK 000) 2017 2016 2017 2016
Net sales 40 607 26 869 75 128 31 728
Operating expenses
Sales expenses -6 344 -3 705 -11 045 -4 855
Other costs -7 904 -16 530 -14 682 -19 148
Personnel costs -16 520 -13 138 -33 158 -22 193
Depreciation/amortization -1 557 -1 555 -3 117 -3 113
Total operating expenses -32 325 -34 927 -62 003 -49 309
Operating profit/loss 8 282 -8 058 13 126 -17 581
Other financial items 704 518 1 022 1 132
Net profit for the period 8 986 -4 619 14 148 -13 529

* During the third quarter of 2016 the wholly owned Swedish subsidiaries were merged with the parent company.

PARENT COMPANY BALANCE SHEET SUMMARY

Jun 30 Dec 31
(SEK 000) 2017 2016 2016
Intangible assets 17 040 22 691 19 856
Tangible assets 1 087 964 1 164
Financial assets 341 689 422 714 353 463
Deferred tax asset - 3 635 -
Current assets (excl. cash equivalents) 68 930 44 468 65 302
Cash and bank balances 25 212 30 046 45 369
TOTAL ASSETS 453 958 524 517 485 154
Restricted equity 22 878 22 818 22 818
Non-restricted equity 209 731 212 328 210 064
Total equity 232 609 235 146 232 882
Long-term liabilities 102 111 121 434 94 552
Current liabilities 119 239 167 937 157 720
TOTAL EQUITY AND LIABILITIES 453 958 524 517 485 154

PLEDGED ASSETS AND CONTINGENT LIABILITIES

Pledged assets refers to shares in subsidiaries as security for loans. The pledged assets in the Group is the same as disclosed for the Parent Company.

Jun 30 Dec 31
(SEK 000) 2017 2016 2016
Pledged assets 303 865 363 040 300 321
Contingent liabilities - - -

DEFINITIONS

Formpipe uses alternative key figures, also called APM (Alternative Performance Measures). From July 3rd 2016 new guidelines were implemented by the European Union regarding alternative APM's, which Formpipe uses in published reports. Formpipe's APM's is calculated from the financial reports, which are prepared in accordance with applicable rules for financial reporting, where prepared figures is altered by adding or subtracting amounts from the presented numbers. Below the alternative performance measures, that Formpipe uses in published reports, are defined and described

System revenue

The total of license revenue and revenue from support and maintenance contracts.

Recurring revenue

Revenue of an annually recurring nature such as support and maintenance revenue and revenue from SAAS services regarding license agreements.

Fixed operating expenses

Other costs and personnel costs

EBITDA

Earnings before depreciation, amortization, acquisitionrelated costs and other items of a one-off nature.

EBITDA-adj.

EBITDA exclusive capitalized work for own account

Items affecting comparability

The item must be of a material nature to be reported separately and considered undesirable from the regular core operations and complicate the comparison. For example, acquisition-related items, restructuring-related items and write-downs

EBIT

Operating profit/loss

Operating margin before depreciation and amortization (EBITDA margin)

Earnings before depreciation, amortization, acquisitionrelated costs and other items of a one-off nature as a percentage of net sales.

Operating margin before depreciation and amortization (EBITDA-adj margin)

Earnings before capitalized work for own account, depreciation, amortization, acquisition-related costs and other items of a one-off nature as a percentage of net sales.

Operating margin (EBIT margin)

Operating profit/loss as a percentage of net sales.

Profit margin

Net profit/loss after tax as a percentage of sales at the end of the period.

Earnings per share - before dilution

Net profit/loss after tax divided by the average number of shares during the period.

Earnings per share - after dilution

Net proft/loss after tax adjusted for dilution effects divided by the average number of shares after dilution during the period.

Equity per share

Equity at the end of the period divided by the number of shares at the end of the period.

Return on equity

Profit/loss after tax as a percentage of average equity

Return on working capital

Operating profit/loss as a percentage of average working capital (balance sheet total less non-interest bearing liabilities and cash and bank balances).

Free cash flow

Cash flow from operating activities minus cash flow from investing activities excluding acquisitions.

Net interest-bearing debt

Interest bearing debts minus cash and cash equivalents

Equity ratio

Equity as a percentage of the balance sheet total.

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