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Formpipe Software

Quarterly Report Aug 19, 2020

3159_ir_2020-08-19_acd3884b-0b2c-459f-85f1-2ac8a58a2368.pdf

Quarterly Report

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Interim Report January – June 2020

PERIOD APRIL 1 – JUNE 30, 2020

  • Net sales of SEK 100.3 m (SEK 101.5 m)
  • Software revenues of SEK 72.5 m (SEK 68.0 m)
  • Recurring revenues of SEK 62.2 m (SEK 56.4 m) which corresponds to 62 % (56 %) of net sales.
  • EBITDA SEK 24.2 m; 24.2 % (SEK 25.0 m; 24.6 %)
  • EBITDA-adj. SEK 14.7 m; 14.6 % (SEK 15.9 m; 15.7 %)
  • EBIT SEK 11.8 m; 11.7 % (SEK 11.5 m; 11.3 %)
  • Net profit SEK 8.9 m; 8.9 % (SEK 8.4 m; 8.3 %)
  • EPS before dilution SEK 0.17 (SEK 0.16)
  • Cash flow from operating activities SEK 36.2 m (SEK 6.7 m)

PERIOD JANUARY 1 – JUNE 30, 2020

  • Net sales of SEK 203.4 m (SEK 198.3 m)
  • Software revenues of SEK 140.8 m (SEK 129.5 m)
  • Recurring revenues of SEK 123.1 m (SEK 112.9 m) which corresponds to 61 % (57 %) of net sales.
  • EBITDA SEK 51.4 m; 25.3 % (SEK 48.0 m; 24.2 %)
  • EBITDA-adj. SEK 32.6 m; 16.0 % (SEK 30.0 m; 15.1 %)
  • EBIT SEK 26.6 m; 13.1 % (SEK 21.0 m; 10.6 %)
  • Net profit SEK 20.2 m; 9.9 % (SEK 14.7 m; 7.4 %)
  • EPS before dilution SEK 0.38 (SEK 0.28)
  • Cash flow from operating activities SEK 62.3 m (SEK 5.8 m)

INCOME STATEMENT - SUMMARY

Jan-Mar Jan-Mar Rolling 12 Full
year
(SEK Million) 2020 2019 2020 2019 months 2019
Net sales 100,3 101,5 203,4 198,3 398,9 393,8
whereof recurring revenue 62,2 56,4 123,1 112,9 239,9 229,7
EBITDA 24,2 25,0 51,4 48,0 104,0 100,7
EBITDA-adj 14,7 15,9 32,6 30,0 67,0 64,4
EBIT 11,8 11,5 26,6 21,0 53,1 47,5

Comments from the Group's CEO

After the second quarter, we can conclude that Formpipe has handled the challenging market conditions in a good way. We deliver an operating profit in line with previous year and make a stable quarter in terms of Saas sales, with an ACV of SEK 2.1 million. Our recurring revenue increased by 10% and now amounts to 62% of our total sales.

I am grateful and proud of how we managed to continue to develop the business during the spring. We quickly changed our business to work efficiently from home, much thanks to well-established routines and processes, but mainly with the help of our committed and responsible employees, who put our customers and Formpipe first and show great commitment to our continued development.

After the end of the quarter, we acquired the English software company EFS Technology Ltd., which has been a partner of Formpipe for many years. The acquisition strengthens our capacity to onboard new partners, provides an expanded product offering and a close partnership with Temenos, a world-leading supplier of software to the banking and finance sector. The acquisition fits very well into the Formpipe business and will contribute to our goal of increasing the growth rate in the future.

Formpipe's business model with a high proportion of recurring revenues and solid finances are, if possible, even greater strengths than normally in these uncertain times. Relatively early during the pandemic, we made the assessment that Formpipe has good prerequisites to cope with the challenging situation in a good way. We focus on taking advantage of the new opportunities that arise to strengthen ourselves for the time after Covid-19. We continue to invest in our products to create an even stronger offer to our customers in the future. We also continue the work of recruiting employees and identifying additional acquisition objects. In summary, we continue to build on Formpipe's already strong position, focusing on initiatives for future growth.

Market

Data and information become more and more important for the financial development: it is the foundation for many new products and services, which leads to productivity and resource efficiency gains in all sectors of the economy. Being able to take advantage of the possibilities of digitalization has become one of the most important issues of our time. The benefits of being able to collect, process and present data are extensive.

Formpipe's products are used to create, store, distribute, automate, relocate, archive and manage information, data and metadata regarding e.g. scanned documents, email, reports, records, business documents or information from other source systems.

The goal is to be able to refine and analyze content from one or more sources, to thereby provide the right insights by the right people receiving relevant information when they need it. It is in the Enterprise Content Management (ECM) market that Formpipe has grown to become a market leader in the public sector and a strong challenger in the private sector where we digitalize and streamline customer communication in sectors such as retail, manufacturing, life science, energy and water as well as legal.

The growth in the market is fueled in large part by the organizational and corporate-wide need to streamline operations and meet legal requirements and regulations. To be able to get the value out of the collective amount of information at companies and organizations, applications and services are needed – in order to securely – collaborate, search, analyse, process and distribute data and content. Growth drivers tend to gain strength as the amount of data and information increases. Intelligent information management is a high priority area.

Gartner's forecast for the global market is an average annual growth of 9.4 per cent in 2018-2023. The Content Services market has a total addressable forecast market in 2021 with system revenues of USD 10.5 billion1.

CLOUD-BASED SOLUTIONS

An important part of the change of the ECM market is also that the development is moving increasingly towards cloud-based solutions, where the customers pay for what is used and where costs for development, operations, maintenance, upgrade and support are included in the running agreement. The transition to SaaS is taking place very quickly now and Gartner estimates that the SaaS revenues will reach up to 40 per cent of the total sales of software in 2022.

This development is well in line with Formpipe's reality where growing numbers of the Company's customers

1 Gartner: Enterprise Application Software, Worldwide, 4Q19 Update

choose to shift to Formpipe's cloud services for the standard products and with the Company's development of service modules that can process information both from Formpipe's existing systems and other systems.

Business Areas

DANISH PUBLIC SECTOR

In the Danish public sector, Formpipe is a market leading vendor of software within Enterprise Content Management (ECM). The digitalization of the Danish public sector creates value, growth and efficiency. The public sector sets ambitious goals for the development towards a more digital public sector in the next few years. Digital solutions and automation create opportunities to meet the growing welfare needs and at the same time increase the service to the citizens.

The employers' organization Dansk Industri believes that a modernization and digitalization of the public sector can free up DKK 20 billion2 by 2025. Money that can then be fed back to the public sector and contribute to increasing the level of service. Formpipe has extensive knowledge of the opportunities and challenges that the Danish public sector will face in the future.

Estimated impact of Covid-19 for the business area Danish Public Sector:

The government in Denmark urges public organizations to act as the stable purchasing power in society and to help private companies to get through the financial turmoil. However, some customers will still be in need of re-planning to postpone projects for practical or technical reasons.

Formpipe's TAP platform is installed on the Board of Agriculture to support the process of EU's joint grants for agriculture. The planned EU CAP-2020 reform has been delayed due to the uncertainty surrounding Brexit and now Covid-19 risks to further delaying it. The continued delay of the CAP-2020 reform thus results in increased uncertainty in this business area.

SWEDISH PUBLIC SECTOR

Around SEK 45 billion is invested in IT in the public sector every year. The Swedish Government's ambition is for government agencies, municipalities and county councils to be the best in the world at using the possibilities of digitalization to create an efficient public sector – a simpler daily life for private individuals and companies, more jobs and greater welfare. Digital solutions and automation create opportunities to meet the growing welfare needs and at the same time increase the service to the citizens. Formpipe has extensive knowledge of the opportunities and challenges that Sweden's municipalities, county councils and agencies will be facing in the future.

2 https://www.danskindustri.dk/politik-og-analyser/dimener/digitalisering/digitalisering-af-den-offentlige-sektor/

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.

Estimated impact of Covid-19 for the business area Swedish Public Sector:

The National Agency for Public Procurement in Sweden is clear in its message to the public sector in Sweden:

  • Continue with purchases as usual.
  • Now is not the time to cancel procurements or postpone purchases.
  • The public sector is needed as a stable and secure customer when there are uncertain times.

In practice, however, some customers are judged to be in need of re-planning to postpone projects for practical or technical reasons. There is also reason to believe that, for these practical reasons, fewer new procurements will be initiated than would otherwise have been expected.

PRIVATE SECTOR

The global ERP software market was estimated at USD 35.81 billion in 2018 and is expected to reach USD 78.40 billion by 20263. As cloud solutions are becoming increasingly accepted due to their scalability, reliability and flexibility, many ERP customers are changing their views on their internal IT architecture. This shift, where customers see the benefits of moving to the cloud, opens up new opportunities for Formpipe. Lasernet is a product that complements ERP systems and enables business documents to be delivered in exactly the format and layout desired. Lasernet continues its strong growth internationally, a positive development that is primarily a result of Formpipe's close collaboration with Microsoft and their offering in the cloud (Azure) regarding Microsoft Dynamics. Lasernet is a natural complement to Dynamics and improves the customer experience through efficient document management. Microsoft supports the marketing of Lasernet, for instance through their global market places Microsoft Azure Marketplace and Microsoft AppSource.

There is potential to expand Formpipe's offering with more products through this channel. This may include, for instance, our product Long-Term Archive, which can make it easier for companies and organizations to execute on their cloud strategy. By providing Long-Term Archive in Azure, customers can move all their business systems to the cloud without the risk of losing valuable information. Both Gartner and Microsoft find this area (often referred to as Cloud Migration or Application Retirement) as a significant growth area.

Estimated impact of Covid-19 for the business area Private Sector:

Within the business area Private Sector, the risk of negative impact of Covid-19 is assessed as greater than for Formpipe's other two business areas. New sales are mainly driven by our partners selling the product Lasernet as part of ERP system implementation projects, such as Microsoft Dynamics etc. At present, the demand is good but there is reason to believe that if the pandemic becomes long-lasting, new ERP investments will come to be pushed for the future. There is also a significant risk that customers within the private sector will end up in financial problems with missing payments as a result and that existing agreements within Support & Maintenance and SaaS will be lost.

When the pandemic is over, the possible deferred ERP investments are estimated to have created a pent-up need with a demand that is higher than normal at that stage.

Financial Information

REVENUE

April-June 2020

Net sales for the period totalled to SEK 100.3 million (101.5 million), which corresponds to a decrease of 1 %. Software revenue increased by 7 % from the previous year and totalled to SEK 72.5 million (68.0 million). Total recurring revenue for the period increased by 10 % from the previous year and totalled to SEK 62.2 million (56.4 million), which is equivalent to 62 % of net sales (56 %). Exchange rate effects have affected net sales positively by SEK 0.9 million in comparison with the previous year.

January – June 2020

Net sales for the period totalled to SEK 203.4 million (198.3 million), which corresponds to an increase of 3 %. Software revenue increased by 9 % from the previous year and totalled to SEK 140.8 million (129.5 million). Total recurring revenue for the period increased by 9 % from the previous year and totalled to SEK 123.1 million (112.9 million), which is equivalent to 61 % of net sales (57 %). Exchange rate effects have affected net sales positively by SEK 1.8 million in comparison with the previous year.

Breakdown of sales revenue, Jan–Mar 2020 9% (8%) 13% (11%) 31% (35%) License SaaS Support and maintenance

Deliveries

48% (46%)

3 https://www.alliedmarketresearch.com/ERP-market

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.

COSTS

April – June 2020

The operating costs for the period totalled to SEK 88.5 million (90.0 million). Personnel costs totalled to SEK 56.3 million (53.9 million). Selling expenses totalled to SEK 10.3 million (12.8 million). Other costs totalled to SEK 19.1 million (18.8 million).

January – June 2020

The operating costs for the period totalled to SEK 176.8 million (177.3 million). Personnel costs totalled to SEK 111.1 million (108.0 million). Selling expenses totalled to SEK 21.5 million (24.7 million). Other costs totalled to SEK 38.2 million (35.6 million).

EARNINGS

April – June 2020

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 24.2 million (25.0 million) with an EBITDA margin of 24.2 % (24.6 %). Operating profit (EBIT) totalled to SEK 11.8 million (11.5 million) with an operating margin of 11.7 % (11.3 %). Net profit totalled to SEK 8.9 million (8.4 million). Exchange rate effects have affected EBITDA positively by SEK 0.2 million in comparison with the previous year.

January – June 2020

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 51.4 million (48.0 million) with an EBITDA margin of 25.3 % (24.2 %). Operating profit (EBIT) totalled to SEK 26.6 million (21.0 million) with an operating margin of 13.1 % (10.6 %). Net profit totalled to SEK 20.2 million (14.7 million). Exchange rate effects have affected EBITDA positively by SEK 0.4 million in comparison with the previous year.

Sales and EBITDA margin, MSEK

FINANCIAL POSITION AND LIQUIDITY

Cash equivalents

Cash and cash equivalents at the end of the period amounted to SEK 68.9 million (16.8 million). The company had interest-bearing debt at the end of the period totalling to SEK 23.8 million (59.8 million), whereof 23.8 million (29.8 million) refers to lease debts according to IFRS 16. The company's total bank overdraft limit amounts to SEK 50.0 million, at the end of the period it was not utilized.

The company's net cash position thereby totalled to SEK 45.0 million (-43.1 million), which corresponds to a net cash position of 68.8 million (-13.3 million) excluding IFRS 16-related debt.

The company's liquidity position at the end of the period is positively affected by the dividend of SEK 32.1 million (31.7 million) being paid out in the third quarter instead of the second quarter as in previous years.

Deferred tax asset

By the end of the period the company's deferred tax assets attributable to accumulated losses amounted to SEK 9.1 million (SEK 10.4 million).

Equity

Equity at the end of the period amounted to SEK 424.5 million (383.1 million), which was equivalent to SEK 7.94 (7.21) per outstanding share at the end of the period. Changes in the value of the Swedish krona compared to other currencies have changed the value of the group's net assets in foreign currencies by SEK 0.9 million (8.2 million) from the end of the year.

During the period the company has issued 290,000 shares due to the warrant program 2017/2020. After the issue of new shares the number of shares amounts to 53,463,907 and the share capital amounts to SEK 5,346,390.70.

Equity ratio

The equity ratio at the end of the period was 63 % (60 %).

CASH FLOW

Cash flow from operating activities

Cash flow from operating activities for the period January - June totalled to SEK 62.3 million (-5.8 million). The cash flow has been affected positively by a decreased working capital tied up compared to previous periods.

Investments and acquisitions

Total investments for the period January - June amounted to SEK 21.7 million (20.0 million).

Investments in intangible assets totalled to SEK 20.5 million (19.0 million) and refer to capitalized product development costs.

Investments in tangible and financial assets totalled to SEK 4.3 million (1.0 million).

Financing

During the period January – June the company amortized SEK 9.3 million (79.1 million). Whereof SEK 3.3 million relates to leasing debts. The existing bank overdraft facility totalling to SEK 50.0 million was not utilized at the end of the period (SEK 30.0 million). Leasing related liabilities amounted to SEK 23.8 million (29.8 million) at the end of the period. The company's interest-bearing debt at the end of the period was thereby SEK 23.8 million (59.8 million).

Significant events during the period January – June 2020

JANUARY-MARCH

New date of the annual general meeting and an updated calendar for financial information

Due to the uncertainty arising from the spread of the Corona virus, Covid-19, the Board of Directors decided to postpone the Annual General Meeting until Tuesday, June 30, 2020 at 10:00 am. By postponing the Annual General Meeting, the Board of Directors will be given the opportunity to continuously analyze and assess the situation, and based on this, evaluate the proposed dividend for 2019.

As a consequence of the postponed Annual General Meeting, the publication of the interim report for January-June will also be postponed until Wednesday, August 19, 2020.

APRIL-JUNE

Annual General Meeting

At the AGM on June 30 decisions were made regarding:

  • Adoption of the income statement and balance sheet for the 2019 financial year.
  • Adoption profit distribution
  • Dividend of SEK 0,60 (0,60) per share.
  • The re-election of Annikki Schaeferdiek, Åsa Landén Ericsson, Peter Lindström, Erik Syrén and Bo Nordlander and the new election of Martin Bjäringer as board member. Bo Nordlander was re-elected as chairman of the board.
  • The re-election of the auditing firm Pricewaterhouse-Coopers 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 for the board to repurchase warrants from the personnel.
  • The AGM approved the issue of share warrants to the personnel.
  • The AGM approved for the proposal regarding guidelines for remuneration to senior executives.

Increased number of shares

During the period the personnel warrant program 2017/2020 was exercised. A total of 290,000 new shares were issued from this program. The number of shares and votes in the Company has therefore increased with 290,000 and the share capital has increased with SEK 29,000. After the issue of new shares, the total number of shares and votes in the Company amounts to 53,463,907 and the share capital to SEK 5,346,390.7.

Significant events after the period's end

After the periods end, dividends were paid amounting to SEK 32.1 million (SEK 31.7 million).

After the period, a new warrant program (2020/2023) was issued to the company's employees of 500,000 warrants, which provided the company with a payment of SEK 0.8 million (SEK 0.6 million).

After the end of the period, Formpipe also acquired 100% of the shares in the company EFS Technology Ltd. The purchase price amounted to GBP 6 million (GBP), which was paid in connection with the takeover and financed through a combination of own cash and loans.

No other significant events have occurred after the end of the period.

Other

EMPLOYEES

The number of employees at the end of the reporting period totalled to 218 persons (224 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. For risks related to Covid-19, see this report under the section Market. During the period there have been no other changes in the risk and uncertainty factors for the group and the parent company.

TRANSACTIONS WITH RELATED PARTIES

No related party transactions 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 1-14 and the interim report on pages 1-7 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 27, 2020 Interim report Jan-Sep
February 16, 2021 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 August 19, 2020 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) 2020 2019 2020 2019
Net Sales 100 296 101 490 203 389 198 313
Sales expenses -10 270 -12 836 -21 480 -24 701
Other costs -19 116 -18 806 -38 153 -35 600
Personnel costs -56 256 -53 900 -111 126 -108 022
Capitalized work for own account 9 593 9 065 18 741 18 020
Operating profit/loss before depreciation/amortization 24 248 25 012 51 370 48 010
and non-comparative items (EBITDA)
Depreciation/amortization -12 479 -13 528 -24 781 -27 030
Operating profit/loss (EBIT) 11 769 11 484 26 590 20 980
Financial income and expenses -247 -491 -443 -1 273
Exchange rate differences 140 -71 203 -571
Tax -2 750 -2 511 -6 153 -4 395
Net profit for the period 8 912 8 411 20 197 14 742
Of which the following relates to:
Parent company shareholders 8 912 8 411 20 197 14 742
Other comprehensive income
Translation differences -17 792 3 191 881 8 248
Other comprehensive income for the period, net after tax -17 792 3 191 881 8 248
Total comprehensive income for the period -8 880 11 602 21 078 22 989
Of which the following relates to:
Parent company shareholders -8 880 11 602 21 078 22 989
EBITDA margin, % 24,2% 24,6% 25,3% 24,2%
EBIT margin, % 11,7% 11,3% 13,1% 10,6%
Profit margin, % 8,9% 8,3% 9,9% 7,4%
Earnings per share attributable to the parent company's shareholders during the
period (SEK per share)
- before dilution 0,17 0,16 0,38 0,28
- after dilution 0,17 0,16 0,38 0,28
Average no. of shares before dilution, in 000 53 271 52 983 53 222 52 935
Average no. of shares after dilution, in 000 53 473 53 334 53 395 53 356

CONSOLIDATED BALANCE SHEET SUMMARY

Jun 31 Dec 31
(SEK 000) 2020 2019 2019
Intangible assets 474 319 475 527 472 389
Tangible assets 30 041 36 996 33 745
Financial assets 4 092 5 537 4 824
Deferred tax asset 9 094 10 377 7 664
Current assets (excl. cash equivalents) 91 144 92 136 122 268
Cash equivalents 68 853 16 754 33 682
TOTAL ASSETS 677 543 637 326 674 573
Equity 424 529 383 142 400 129
Shareholding with no controlling influence - - -
Long-term liabilities 48 113 48 824 43 791
Current liabilities 204 901 205 361 230 654
TOTAL EQUITY AND LIABILITIES 677 543 637 326 674 573
Net interest-bearing debt (-) / cash (+) 45 008 -43 059 690

CHANGES IN CONSOLIDATED EQUITY

Equity attributable to the parent company's shareholders Share-
Other Profit/loss holdings with
Share contributed Other brought no controlling
(SEK 000) capital capital reserves forward Total influence Total
Balance at January 1, 2019 5 288 207 768 18 770 159 196 391 023 - 391 023
Comprehensive income
Net profit for the period - - - 14 742 14 742 - 14 742
Other comprehensive income items - - 8 248 - 8 248 - 8 248
Total comprehensive income - - 8 248 14 742 22 989 - 22 989
Transaction with owners
Acquisition of non-controlling interests - - - - - - -
Dividend - - - -31 732 -31 732 -31 732
Issue for non-cash consideration - - - - - - -
Share issue 29 2 828 - - 2 856 - 2 856
Repurchase of warrants - -2 610 - - -2 610 - -2 610
Employee warrant schemes - 615 - - 615 - 615
Total transaction with owners 29 833 - -31 732 -30 871 - -30 871
Balance at June 30, 2019 5 317 208 600 27 017 142 206 383 142 - 383 142
Balance at January 1, 2020 5 317 208 600 23 712 162 498 400 129 - 400 129
Comprehensive income
Net profit for the period - - - 20 197 20 197 - 20 197
Other comprehensive income items - - 881 - 881 - 881
Total comprehensive income - - 881 20 197 21 078 - 21 078
Transaction with owners
Dividend - - - - - -
Share issue 29 4 553 - - 4 582 - 4 582
Repurchase of warrants - -1 260 - - -1 260 - -1 260
Employee warrant schemes - - - - - - -
Total transaction with owners 29 3 293 - - 3 322 - 3 322
Balance at June 30, 2020 5 346 211 894 24 593 182 695 424 529 - 424 529
CASH FLOW STATEMENT SUMMARY
Apr-Jun Jan-Jun
(SEK 000) 2020 2019 2020 2019
Cash flow from operating activities
before working capital changes 20 352 22 276 42 033 39 927
Cash flow from working capital changes 15 891 -15 607 20 264 -45 750
Cash flow from operating activities 36 243 6 669 62 297 -5 823
Cash flow from investing activities -11 143 -10 079 -21 688 -19 967
Cash flow from financing activities 1 667 -75 941 -5 611 -82 802
Of which dividend paid - -31 732 - -31 732
Cash flow for the period 26 767 -79 351 34 998 -108 592
Change in cash and cash equivalent
Cash and cash equivalent at the beginning of the period 43 500 95 439 33 682 123 782
Translation differences -1 413 666 173 1 564
Cash flow for the period 26 767 -79 351 34 998 -108 592
Cash and cash equivalent at the end of the period 68 854 16 754 68 854 16 754

8 QUARTERS IN SUMMARY

(SEK 000) 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2
License 8 544 10 670 4 972 11 629 4 678 10 157 7 508 10 235
SaaS 8 125 9 031 10 475 10 728 11 532 12 323 12 884 13 373
Support and maintenance 44 626 47 461 46 037 45 671 46 241 46 705 47 952 48 849
Software revenues 61 295 67 161 61 484 68 029 62 450 69 185 68 344 72 457
whereof recurring revenue 52 751 56 491 56 512 56 399 57 773 59 028 60 836 62 222
Deliveries 34 342 42 389 35 339 33 461 29 975 33 874 34 749 27 839
Net sales 95 637 109 550 96 823 101 490 92 425 103 059 103 093 100 296
Sales expenses -13 195 -13 549 -11 864 -12 836 -9 924 -12 918 -11 210 -10 270
Other costs -17 171 -19 966 -16 794 -18 806 -20 143 -17 220 -19 037 -19 116
Personnel costs -48 327 -58 156 -54 121 -53 900 -47 885 -52 979 -54 870 -56 256
Capitalized development costs 8 669 9 419 8 955 9 065 9 811 8 430 9 148 9 593
Total operating expenses -70 024 -82 252 -73 825 -76 478 -68 140 -74 687 -75 970 -76 048
EBITDA 25 613 27 299 22 998 25 012 24 285 28 372 27 122 24 248
% 26,8% 24,9% 23,8% 24,6% 26,3% 27,5% 26,3% 24,2%
Items affecting comparability - - - - - - - -
Depreciation/amortization -11 754 -11 159 -13 502 -13 528 -13 065 -13 059 -12 302 -12 479
EBIT 13 859 16 140 9 496 11 484 11 220 15 314 14 820 11 769
% 14,5% 14,7% 9,8% 11,3% 12,1% 14,9% 14,4% 11,7%

* As of January 1, 2019, the Group applies IFRS 16 according to the modified retroactive transition method, which means that the comparative figures will not be recalculated. The effect of the application of IFRS 16 means that the operating leases previously expensed on a straight-line basis over the income statement under the item "Other expenses" from Q1 2019 are expensed under depreciation and financial items instead.

SEGMENT SUMMARY

From January 1, 2019, the Group's segments are divided according to which customer groups they target. The segments are divided into SE Public, DK Public, Private and Other and reflect the Group's internal reporting and follow-up of Group management.

The SE Public and DK Public segments find their customers in Sweden's and Denmark's public sectors. Segment Private collects the Group's offers that are aimed at customers outside the public sector and are not bound to any particular geographic market. Segment Other includes the Group's older products that are not included in any of the other segments and the Group's overhead costs.

Jan-Jun 20
SE DK
(Tkr) Public Public Private Other Elim. IFRS 16 Koncern
License 2 925 4 724 10 093 - - - 17 742
SaaS 8 876 3 043 14 339 - - - 26 258
Support & Maintenance 40 170 25 521 28 782 2 328 - - 96 801
Delivery 8 167 46 068 8 351 1 - - 62 588
Sales, internal 80 38 47 - -165 - -
Net sales 60 218 79 394 61 612 2 329 -165 - 203 389
Costs, external -37 863 -59 092 -49 924 -9 056 - 3 917 -152 018
Costs, internal 35 -81 -119 - 165 - -
EBITDA 22 390 20 221 11 569 -6 726 - 3 917 51 370
% 37,2% 25,5% 18,8% -288,8% 25,3%
Jan-Jun 19
SE DK
(Tkr) Public Public Private Other Elim. IFRS 16 Koncern
License 5 091 2 304 9 206 - - - 16 601
SaaS 8 195 3 219 9 785 5 - - 21 204
Support & Maintenance 39 341 21 344 28 377 2 646 - - 91 708
Delivery 9 539 47 280 11 981 0 - - 68 800
Sales, internal 153 40 1 525 - -1 718 - -
Net sales 62 319 74 187 60 875 2 651 -1 718 - 198 313
Costs, external -37 575 -60 225 -47 250 -9 196 - 3 943 -150 303
Costs, internal -36 -156 -1 526 - 1 718 - -
EBITDA 24 708 13 806 12 099 -6 545 - 3 943 48 010
% 39,6% 18,6% 19,9% -246,9% 24,2%
NUMBER OF SHARES
2016-01-01 2017-01-01 2018-01-01 2019-01-01 2020-01-01
2016-12-31 2017-12-31 2018-12-31 2019-12-31 2020-06-30
Number of outstanding shares at the beginning of the period 50 143 402 51 273 608 51 873 025 52 887 406 53 173 907
Share issue from warrant programme 1 130 206 599 417 314 576 286 501 290 000
Non-cash issue - - 699 805 - -
Number of outstanding shares at the end of the period 51 273 608 51 873 025 52 887 406 53 173 907 53 463 907

SALES ANALYSIS BY QUARTER

KEY RATIOS FOR THE GROUP

Jan-Jun
2020 2019
Net sales, SEK 000 203 389 198 313
EBITDA, SEK 000 51 370 48 010
EBITDA-adj., SEK 000 32 629 29 990
EBIT, SEK 000 26 590 20 980
Net profit for the period, SEK 000 20 197 14 742
EBITDA margin, % 25,3% 24,2%
EBITDA-adj. margin, % 16,0% 15,1%
EBIT margin, % 13,1% 10,6%
Profit margin, % 9,9% 7,4%
Return on equity, %* 10,2% 10,0%
Return on working capital, %* 13,5% 12,7%
Equity ratio, % 63% 60%
Equity per outstanding share at the end of the period, SEK 7,94 7,21
Earnings per share - before dilution, SEK 0,38 0,28
Earnings per share - after dilution, SEK 0,38 0,28
Share price at the end of the period, SEK 25,20 21,80

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

PARENT COMPANY INCOME STATEMENT SUMMARY
Apr-Jun Jan-Jun
(SEK 000) 2020 2019 2020 2019
Net sales 32 743 34 686 67 059 68 556
Operating expenses
Sales expenses -722 -803 -1 945 -3 484
Other costs -11 613 -12 435 -20 937 -21 258
Personnel costs -19 108 -17 337 -36 729 -36 020
Depreciation/amortization -1 552 -1 499 -3 088 -2 980
Total operating expenses -32 995 -32 074 -62 699 -63 740
Operating profit/loss -253 2 612 4 361 4 816
Other financial items 670 72 549 -1 339
Appropriations - - - -
Tax 2 - 2 -
Net profit for the period 420 2 684 4 912 3 477

PARENT COMPANY BALANCE SHEET SUMMARY

Jun 31 Dec 31
(SEK 000) 2020 2019 2019
Intangible assets 8 537 10 440 12 198
Tangible assets 863 1 115 1 185
Financial assets 278 121 279 570 280 294
Deferred tax asset - - -
Current assets (excl. cash equivalents) 44 128 49 604 94 690
Cash and bank balances 36 906 5 774 64 116
TOTAL ASSETS 368 554 346 503 452 482
Restricted equity 23 037 23 008 22 979
Non-restricted equity 199 282 191 425 218 848
Total equity 222 319 214 433 241 827
Long-term liabilities - - -
Current liabilities 145 255 132 070 210 655
TOTAL EQUITY AND LIABILITIES 367 574 346 503 452 482

PLEDGED ASSETS AND CONTINGENT LIABILITIES

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

Jun 31 Dec 31
(SEK 000) 2020 2019 2019
Pledged assets - - -
Contingent liabilities - - -

DEFINITIONS

Formpipe uses alternative key figures, also called APM (Alternative Performance Measures). Formpipe's APM's are 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

Software 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.

Annual recurring revenue (ARR)

Recurring revenue for the period's last month multiplied by 12, to obtain the recurring revenue for the coming 12 months from contracts with recognized revenue.

ARR IN

Initial value for the period's Annual recurring revenue.

ACV

Annual recurring revenue of the period's won and lost contracts (net).

ARR OUT

Closing value of the period's Annual recurring revenue, provided that all new/lost contracts (ACV) of the period have begun/ceased to be recognized.

Fixed operating expenses

Other costs and personnel costs

Operating expenses

Sales costs, other costs, personnel costs, capitalized development and depreciation.

EBITDA

Earnings before depreciation, amortization, acquisitionrelated costs and other items affecting comparability.

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 affecting comparability 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 affecting comparability 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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