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Karnov Group Interim / Quarterly Report 2021
3068_10-q_2021-05-05_9a7995cc-6691-40ab-8215-9a952890f2ed.pdf
Interim / Quarterly Report
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Interim report
January–March 2021
Q1
Good start to the year
Financial highlights first quarter
- Net sales increased to SEK 234 m (212), organic growth was 5%.
- EBITA amounted to SEK 95 m (88) with EBITA margin of 40.7% (41.6%).
- Adjusted EBITA amounted to SEK 95 m (88) with adjusted EBITA margin of 40.7% (41.6%).
- Net result amounted to SEK 40 m (29).
- Earnings per share after dilution amounted to SEK 0.40 (0.30).
- Adjusted operating cash flow amounted to SEK 104 m (170).
Business highlights first quarter
- Karnov Group closes the acquisition of DIBkunnskap AS and the company is consolidated in the Group’s financials from 5 January 2021.
- Karnov Group acquires the Danish legal tech start-up Onlaw ApS. The acquisition is part of Karnov Group’s strategy of establishing a broad technology platform that creates increased relevance and efficiency for professionals working with legal information.
- Pontus Bodelsson will assume his position as new President and CEO of Karnov Group on 8 May 2021.
Key financial ratios for the Group*
| TSEK | Q1 | Δ% | Jan-Dec | |
|---|---|---|---|---|
| 2021 | 2020 | 2020 | ||
| Net sales | 233,519 | 211,961 | 10.2% | 771,416 |
| Organic growth, % | 5.0% | 2.3% | 2.1% | |
| EBITA | 94,996 | 88,218 | 7.7% | 275,955 |
| EBITA margin, % | 40.7% | 41.6% | 35.8% | |
| Adjusted EBITA | 94,996 | 88,218 | 7.7% | 288,158 |
| Adjusted EBITA margin, % | 40.7% | 41.6% | 37.4% | |
| Net result | 39,719 | 29,084 | 36.6% | 100,004 |
| Adjusted cash flow from operating activities | 104,288 | 170,348 | -38.8% | 413,762 |
- For more information see Financial definitions and Note 7 for calculations of Alternative Performance Measures.
KARNOV
GROUP
KARNOV GROUP
Interim report, January – March 2021
Our organic growth in the first quarter was 5.0 percent, mainly due to increased online sales compared to last year. Acquired growth from DIBkunnskap AS and LEXNordics AB contributed with an additional 8.0 percent.
We have launched our new updated platform in Denmark and the platform will continuously be enhanced while onboarding our users over the coming months.
Flemming Breinholt
President and CEO
Comments by the CEO
We have had a positive start to 2021, with continued growth and solid margins. Our new family member DIBkunnskap has performed well and is consolidated in the Group's financials for the quarter. We have also launched our new updated platform in Denmark.
Solid financial results
Our organic growth in the first quarter was 5.0 percent, mainly due to increased online sales compared to last year. Acquired growth from DIBkunnskap AS and LEXNordics AB contributed with an additional 8.0 percent. DIBkunnskap AS' financials are consolidated in the new segment Sweden/Norway. Offline sales were on similar levels to last year, which is a strong result above normal market trend.
The first quarter typically has the highest margin in a fiscal year. This year, our adjusted EBITA margin was 40.7 percent. The result was due to a combination of higher net sales, primarily of online products, along with efficiency gains in our strive for operational excellence. DIBkunnskap AS has diluted the adjusted EBITA margin on group level with approximately 1 percentage point as earlier announced.
As normal for the first quarter, we have had a strong cash flow generation. We have strengthened our processes and we therefore have a seasonality effect as the great majority of subscriptions were renewed and paid in Q4 2020. Following the acquisition of DIBkunnskap AS, our leverage has increased to 2.8 times, but still below our financial target.
New improved platform in Denmark and more products to come
We have launched our new updated platform in Denmark and the platform will continuously be enhanced while onboarding our users over the coming months. We are pleased with the feedback we have received, showing that the updated platform is an appreciated initiative. We also plan to launch additional new products in Denmark in 2021, including an offering for municipalities, similar to our offering in Sweden.
In Sweden, we have started the year on a strong note with considerable growth driven by upselling to existing customers and sales to new customers, especially within the areas of public sector, municipalities and EHS.
In Norway we have experienced a good performance from our newly acquired business DIBkunnskap AS.
Update on the Covid-19 pandemic
We are pleased to see that vaccinations against the Covid-19 virus are progressing globally, and we look forward to meeting all employees, authors, experts and customers in person again soon. We continue to follow the regulations and recommendations from the authorities.
In the first quarter, our non-subscription part of the offline business, mainly books, public trades and sales of legal training courses, have been on a similar level to last year. Our customers have also adapted well to the Covid-19 restrictions. We are starting to see the demand normalising for our offline products, being in line with the overall market trend of online sales growing and offline sales declining. We are content with this, as the rest of the year will be compared to quarters fully impacted by the Covid-19 pandemic.
Karnov Group in brief
Karnov Group is a leading provider of mission critical information in the areas of legal, tax and accounting, and environmental, health and safety in Denmark, Sweden and Norway. Under a strong portfolio of brands including Karnov, Norstedts Juridik, Notisum, Legal Cross Border, Forlaget Andersen, LEXNordics and DIBkunnskap, Karnov Group delivers knowledge and insights, to more than 80,000 users – every day.
PARTNER IN INFORMATION
> Karnov Group was founded in Copenhagen in 1924 on one person’s belief that access to the law is the foundation of every great society and our legacy dates back to 1867.
> Over time, the Company has evolved from a traditional publishing company to a digital value creator.
> Karnov Group’s mission is to be an indispensable partner for all legal, tax and accounting professionals and enable its users to make better decisions, faster by delivering the highest quality of content within a state-of-the-art user experience to support their workflow efficiency.
> Karnov Group’s products are largely digital, including subscription-based online solutions for law firms, tax and accounting firms, corporates and the public sector including courts, universities, public authorities and municipalities.
> Karnov Group also publishes and sells printed books and journals and hosts legal training courses.
> Karnov Group continuously adds more value through development of new verticals and investments in adjacent companies with technologies helping professionals in taking better decisions, faster.
Karnov Group’s medium-term financial targets
GROWTH
Net sales organic annual growth of 3-5% in the medium term, supplemented by selective acquisitions.
PROFITABILITY
Increased Adjusted EBITA margin in the medium term.
CAPITAL STRUCTURE
Ratio of Net debt to Adjusted EBITDA of no more than 3.0. This level may temporarily be exceeded, for example as a result of acquisitions.
DIVIDEND POLICY
The objective is to distribute 30–50% of the purchase price allocation (PPA) adjusted net profit, taking investment opportunities and financial position into consideration.
KARNOV GROUP
Interim report, January – March 2021
Group financial performance
Net sales by country per first quarter,%
10%
Net sales growth
Net sales per quarter, SEKm
Adjusted EBITA, SEKm and margin, % per quarter
First quarter
| Q1 | Jan-Dec | |||
|---|---|---|---|---|
| TSEK | 2021 | 2020 | Δ% | 2020 |
| Net sales | 233,519 | 211,961 | 10.2% | 771,416 |
| Organic growth, % | 5.0% | 2.3% | 2.1% | |
| EBITA | 94,996 | 88,218 | 7.7% | 275,955 |
| EBITA margin, % | 40.7% | 41.6% | 35.8% | |
| Adjusted EBITA | 94,996 | 88,218 | 7.7% | 288,158 |
| Adjusted EBITA margin, % | 40.7% | 41.6% | 37.4% |
Net sales and growth
For the three-month period, January-March 2021, net sales increased to SEK 234 m (212) compared with the corresponding quarter last year including SEK 17 m from acquired business. Organic growth on a constant currency basis was 5.0 percent, currency effects had a negative impact on net sales of -2.8 percent and acquired growth accounted for 8.0 percent. The driver for the growth was increased online sales, both due to upselling to existing customers and sales of new products to existing and new customers. Offline sales were on similar levels to last year, which is better than the normal market decline we have seen for the last year.
Operating income
EBITA for the quarter amounted to SEK 95 m (88) and EBITA margin amounted to 40.7 percent (41.6). The acquisition of DIBkunnskap AS has diluted the adjusted EBITA margin on group level by approximately 1 percentage point. The high margin was due to a combination of higher net sales, primarily of online products, along with efficiency gains in our strive for operational excellence.
Operating profit (EBIT) was SEK 57 m (51) for the quarter.
KARNOV GROUP
Interim report, January – March 2021
Net sales split per first quarter, %
41%
Adjusted EBITA margin
98%
Cash conversion
Net financial items
Net financial items for the quarter amounted to SEK -11 m (-16). Currency effect for the quarter was SEK -6 m (11), relating to long-term loans in DKK.
Profit before and after tax, Earnings per share
Profit before tax increased by SEK 10 m to SEK 46 m (36).
Profit after tax increased to SEK 40 m (29). Taxes amounted to SEK 7 m (6).
Earnings per share after dilution was SEK 0.40 (0.30).
Cash flow and investments
Cash flow from operating activities for the quarter decreased by SEK 68 m to SEK 98 m (166). The decrease reflects a SEK 88 m negative effect from working capital, which mainly relates to timing of invoicing effecting receivables and prepaid income.
Total investments for the quarter amounted to SEK 288 m (31), whereof SEK 263 m is related to the acquisition of DIBkunnskap AS.
Total financing for the quarter amounted to SEK 4 m (305) related to changes in lease liabilities. The comparable period last year includes a SEK 309 m draw down on short term borrowings to increase our cash position.
The cash flow generation was positive in the first quarter, despite a decrease of SEK 66 m to SEK 104 m (170) on adjusted cash flow from operating activities in the quarter compared to last year. The invoicing season is normally Q4 and Q1. We have strengthened our processes and we therefore have a seasonality effect as the great majority of subscriptions were renewed and paid in Q4 2020. Combining Q4 2020 and Q1 2021 cash flows, we have a higher cash conversion rate, and we are proud to have improved it from the previous invoicing season. As the level of receivables were normalised by end of the quarter the timing effect is expected to not continue.
The cash conversion rate was 98 percent (173).
| Cash conversion | Q1 | Jan-Dec | |
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Adjusted EBITDA | 106,631 | 98,285 | 333,634 |
| Adjusted cash flow from operating activities | 104,288 | 170,348 | 413,762 |
| Cash conversion, % | 97.8% | 173.3% | 124.0% |
KARNOV GROUP
Interim report, January – March 2021
2.8
Leverage
Financial position
Net debt was SEK 958 m (755) at the end of the period. The increase in net debt is mainly driven by payment for the acquisition of DIBkunnskap AS.
The leverage at the end of the period was 2.8 (2.3) times and the equity ratio was 42.2 (42.8) percent with an equity of SEK 1,638 m (1,619).
| Net Debt | Q1 | Jan-Dec | |
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Total borrowings | 1,318,632 | 1,249,155 | 1,196,087 |
| Cash and cash equivalents | 360,797 | 493,933 | 552,921 |
| Net debt | 957,835 | 755,222 | 643,166 |
| Leverage ratio | 2.8 | 2.3 | 1.9 |
| Equity | 1,637,652 | 1,618,794 | 1,550,840 |
| Equity/asset ratio, % | 42.2% | 42.8% | 42.0% |
Cash and cash equivalents at the end of the period amounted to SEK 361 m (494) and the Group had unutilized credit lines of SEK 237 m (200).
KARNOV GROUP
Interim report, January – March 2021
Significant events
First quarter
- On 5 January 2021 Karnov Group closed the acquisition of market leading Norwegian knowledge workflow-tool supplier DIBkunnskap AS. The acquisition further strengthens Karnov Group’s position as a leading supplier of legal knowledge management solutions in Scandinavia.
- Karnov Group acquires the Danish legal tech start-up Onlaw ApS. The acquisition is part of Karnov Group’s strategy of establishing a broad technology platform that creates increased relevance and efficiency for professionals working with legal information.
- The Board of Directors of Karnov Group AB (publ) appoints Pontus Bodelsson as the new President and CEO of Karnov Group. The decision follows Flemming Breinholt’s desire to resign from his position. Flemming Breinholt will resign and Pontus Bodelsson will assume his position on 8 May 2021.
Events after the end of the period
- No events have occurred after the reporting date of importance to the financial statements.
KARNOV GROUP
Interim report, January – March 2021
The Danish segment offers a wide range of online and offline solutions for legal, tax and accounting professionals, assisting them in their research and providing qualitative advisory services. The segment includes Karnov Group Denmark, Forlaget Andersen and Legal Cross Border.
Net sales per quarter, SEKm
Adjusted EBITA, SEKm and margin,% per quarter
Segment performance
Denmark
| TSEK | Q1 | Jan-Dec | ||
|---|---|---|---|---|
| 2021 | 2020 | Δ% | 2020 | |
| Net sales | 111,051 | 112,928 | -1.7% | 419,207 |
| Organic growth, % | 3.1% | 1.5% | 0.5% | |
| EBITA | 47,292 | 48,012 | -1.5% | 165,782 |
| EBITA margin, % | 42.6% | 42.5% | 39.5% | |
| Adjusted EBITA | 47,292 | 48,012 | -1.5% | 167,491 |
| Adjusted EBITA margin, % | 42.6% | 42.5% | 40.0% |
Net sales and growth
Organic growth for the quarter 3.1 percent (1.5). However, net sales for the quarter decreased by 1.7 percent to SEK 111 m (113) due to currency effects having a negative impact of -4.8 percent. The organic growth is mainly driven by online sales due to upselling to existing customers and sales of new products. Offline sales were on similar levels to last year which is above market trend.
Our new products launched in 2020 have been well received by our customers and we will continue being active in the Danish market. We plan to launch new products in 2021, including an offering for municipalities, similar to our offering in Sweden.
The updated platform is now launched in Denmark, with a steady progress as regards to onboarding users and adding features. We experience a high customer satisfaction. All new users are onboarded to the updated platform.
Operating income
EBITA and adjusted EBITA amounted to SEK 47 m (48) and EBITA margin to 42.6 percent (42.5).
Operating profit (EBIT) for the quarter was flat at SEK 32 m (32) compared to same period last year.
KARNOV GROUP
Interim report, January – March 2021
The Sweden/Norway segment is specialised in online and offline legal solutions; the environmental, health and safety compliance; legal classroom training and e-courses. The segment provides online tools for the broad legal services market, including contract templates. The segment includes Norstedts Juridik, Notisum, LEXNordics and DIBkunnskap.
Net sales per quarter, SEKm
Adjusted EBITA, SEKm and margin, % per quarter
Segment performance (cont.)
Sweden/Norway
| TSEK | Q1 | Jan-Dec | ||
|---|---|---|---|---|
| 2021 | 2020 | Δ% | 2020 | |
| Net sales | 122,468 | 99,033 | 23.7% | 352,209 |
| Organic growth, % | 7.2% | 3.2% | 4.2% | |
| EBITA | 47,702 | 40,206 | 18.6% | 110,173 |
| EBITA margin, % | 39.0% | 40.6% | 31.3% | |
| Adjusted EBITA | 47,702 | 40,206 | 18.6% | 120,667 |
| Adjusted EBITA margin, % | 39.0% | 40.6% | 34.3% |
Net sales and growth
Net sales for the quarter increased by 23.7 percent to SEK 122 m (99) including SEK 17 m from acquired business. Organic growth was 7.2 percent (3.2) driven by online sales, upselling to existing customers and sales of new products to both existing and new customers. Currency effects had a negative impact of -0.6 percent.
Our newly acquired business DIBkunnskap AS has performed well in the quarter. Further, we have seen good development in municipalities, public sector and in our EHS vertical. Offline sales were on similar levels to last year, above market trends.
Acquired growth accounts for 17.1 percent (0.0) in the quarter.
Operating income
EBITA and adjusted EBITA was SEK 48 m (40) driven by the increase in net sales. Adjusted EBITA margin was 39.0 percent (40.6). DIBkunnskap AS has diluted the margin in the Sweden/Norway segment with approximately 2 percentage points.
Operating profit (EBIT) was SEK 25 m (20). Depreciations and amortisations increased by SEK 3 m compared to the corresponding quarter 2020.
KARNOV GROUP
Interim report, January – March 2021
Other information
Risks and uncertainties
Through its operations Karnov Group is exposed to different risks, which can give rise to fluctuations in earnings and cash flow. Material risks and uncertainties include sector and market-related risks, business-related risks and financial risks.
The current Covid-19 pandemic continues to affect all global markets and the Group is following the situation on continuously basis. The Group operates in the legal and tax professional market in Denmark and Sweden. These markets encompass, among other things, online information database services, printed information sources, legal practice management software and legal training courses. The products and services are generally offered to law firms, tax and accounting firms, corporates in a wide range of industries and the public sector, including courts, libraries, universities and other public authorities and municipalities.
The nature of the market and the products offered in combination with the Group's business model with approximately 85-90% subscription-based revenue, the Group assess that the virus will have no impact on online revenue on a short-term basis.
Karnov's significant risks and risk management are described on page 52-53 of the 2020 Annual report, available at the Company's website www.karnovgroup.com.
Seasonal variations
Typically, a significant proportion of Karnov Group's online contracts is renewed and invoiced during the fourth quarter, impacting cash flow during the fourth and first quarters. Online net sales are accrued according to the terms of the agreement and therefore are not exposed to any seasonality. Offline net sales are exposed to seasonality where the first quarter is significantly stronger, driven by a higher share of book sales early in the year.
Employees
Average number of Full-Time Employees (FTEs) in the first quarter amounted to 284 (240). The increase is mainly due to the acquisition of DIBkunnskap AS. On average during the first quarter, 50% (49%) of the workforce were males and 50% (51%) females.
Shares, share capital and shareholders
Karnov Group's share was listed on Nasdaq Stockholm on 11 April 2019, Mid Cap segment, under the ticker KAR. On 5 January 2021 the Company closed the transaction of DIBkunnskap AS and issued 178,675 ordinary shares of series A as part of the payment.
On 31 March 2021, the total number of shares and votes in Karnov Group AB (publ) amounts to 98,274,589 shares and 97,891,776.7 votes. Each share has a quotient value of approximately SEK 0.015385. The total number of shares consists of 97,849,242 ordinary shares, which carry one vote per share, and 425,347 shares of series C, which carry one-tenth of a vote per share. A detailed description of changes in the share capital is available on the Company's website, www.karnovgroup.com/en/share-capital-development/.
On 31 March 2021, the Company had 1,366 known shareholders. The five largest shareholders in Karnov Group AB (publ) were Kayne Anderson Rudnick, Invesco, M&G Investment Management, Janus Henderson Investors and Lazard Asset Management.
Incentive programs
Karnov Group has implemented two long-term incentive programs in the form of share savings programs. The purpose of the programs is to encourage a broad ownership amongst the Company's employees, retain competent employees, facilitate recruitment, increase the alignment of interest between the employees and the Company's shareholders and increase motivation to reach or exceed the Company's financial targets. 153 employees in Karnov have chosen to invest in Karnov and participate in the share savings programs.
The employees participating in the programs have allocated acquired or already held ordinary shares to the program (so-called savings shares). The maximum investment permitted in savings shares depends on the category of the participant. The participants have allocated a total of 137,465 savings shares to the program. Full allotment would mean that the total number of shares under the program will amount to no more than 425,347 ordinary shares, corresponding to approximately 0.4 per cent of the total number of shares outstanding in the Company. For more information see www.karnovgroup.com/en/incentive-program/
KARNOV GROUP
Interim report, January – March 2021
KARNOV GROUP
Interim report, January – March 2021
Related-party transactions
Karnov Group did not undertake any significant transactions with related parties in the first quarter 2021 except from compensation and benefits to the Board members and managing director received as a result of their membership of the Board, employment with Karnov Group or shareholdings in Karnov Group AB.
Parent Company
Net sales for the quarter amounted to SEK 0 m (0). Operating profit for the quarter amounted to SEK -6 m (-7).
Outlook
Karnov Group does not provide financial forecasts.
Review
This interim report has not been subject to a review by the Company's auditors.
Disclosure
This interim report contains inside information that Karnov Group AB (publ) is required to make public pursuant to the EU Market Abuse Regulation (MAR). The information was submitted for publication by the contact person below on 5 May 2021 at 8.00 am CEST.
Karnov Group AB (publ)
Stockholm, 5 May 2021
Flemming Breinholt
President and CEO
For further information, please contact:
Flemming Breinholt, President and CEO
+45 3374 1202
[email protected]
Dora Brink Clausen, CFO
+45 3374 1248
[email protected]
Erik Berggren, Investor Relations Specialist
+45 5219 6552
[email protected]
Q1 presentation webcast
Karnov Group will present the first quarter for analysts and investors via a webcast teleconference on 5 May at 10.00 am CEST. To participate, use the following link: https://tv.streamfabriken.com/karnov-group-q1-2021 or dial-in numbers: SE: +46 8 505 583 74 DK: +45 7 815 0109 NO: +47 2 350 0236 UK: +44 333 300 92 64 US: +1 833 526 8382 The presentation will also be available on www.financialhearings.com
Financial calendar 2021
Annual General Meeting 5 May, 2021
Half-year report January-June 2021
26 August, 2021
Interim report January-September 2021
4 November, 2021
Consolidated statement of comprehensive income
| Q1 | Jan-Dec | |||
|---|---|---|---|---|
| TSEK | Note | 2021 | 2020 | 2020 |
| Net sales | 5 | 233,519 | 211,961 | 771,416 |
| Total revenue | 233,519 | 211,961 | 771,416 | |
| Goods for resale | -38,151 | -37,348 | -131,754 | |
| Employee benefit expenses | -68,705 | -53,593 | -234,667 | |
| Depreciations and amortisations | -49,569 | -47,025 | -190,389 | |
| Other operating expenses | -20,032 | -22,734 | -83,564 | |
| Operating profit | 57,062 | 51,261 | 131,042 | |
| Financial income | 85 | 56 | 14,503 | |
| Financial expenses | -10,879 | -15,769 | -24,970 | |
| Net financial items | -10,794 | -15,713 | -10,467 | |
| Profit before income tax | 46,268 | 35,548 | 120,575 | |
| Income tax expense | -6,549 | -6,464 | -20,571 | |
| Net result | 39,719 | 29,084 | 100,004 | |
| Other comprehensive income: | ||||
| Items that may be reclassified to profit or loss: | ||||
| Exchange differences on translation of foreign operations | 32,342 | 61,675 | -43,354 | |
| Total comprehensive income for the period | 72,061 | 90,759 | 56,650 | |
| Profit for the period is attributable to: | ||||
| Owners of Karnov Group AB | 39,754 | 29,133 | 99,903 | |
| Non-controlling interests | -35 | -49 | 101 | |
| Net result | 39,719 | 29,084 | 100,004 | |
| Total comprehensive income for the period is attributable to: | ||||
| Owners of Karnov Group AB | 75,997 | 90,808 | 56,549 | |
| Non-controlling interests | -32 | -49 | 101 | |
| Total comprehensive income | 75,965 | 90,759 | 56,650 | |
| Earnings per share, basic, SEK | 4 | 0.41 | 0.30 | 1.02 |
| Earnings per share, after dilution, SEK | 4 | 0.40 | 0.30 | 1.02 |
For further information and details on earnings per share please refer to note 4.
KARNOV GROUP
Interim report, January – March 2021
Consolidated balance sheet
| TSEK | Note | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|---|
| ASSETS: | ||||
| Goodwill | 1,868,702 | 1,727,739 | 1,623,978 | |
| Other intangible assets | 1,299,753 | 1,278,859 | 1,149,935 | |
| Right-of-use assets | 106,215 | 111,296 | 95,545 | |
| Property, plant and equipment (PPE) | 6,774 | 5,188 | 6,280 | |
| Investments in associated companies | 70,678 | 63,821 | 70,347 | |
| Loans to associated companies | 10,952 | 3,172 | 3,036 | |
| Deposits | 2,632 | 2,900 | 2,528 | |
| Total non-current assets | 3,365,706 | 3,192,975 | 2,951,649 | |
| Inventories | 12,775 | 15,083 | 10,011 | |
| Trade receivables | 3 | 62,308 | 58,046 | 148,214 |
| Prepaid expenses | 7,358 | 10,902 | 7,556 | |
| Other receivables | 1,572 | 14,411 | 986 | |
| Tax receivable | 67,518 | - | 17,446 | |
| Cash and cash equivalents | 3 | 360,797 | 493,933 | 552,921 |
| Total current assets | 512,328 | 592,375 | 737,134 | |
| TOTAL ASSETS | 3,878,034 | 3,785,350 | 3,688,783 | |
| EQUITY AND LIABILITIES: | ||||
| Share capital | 1,512 | 1,503 | 1,509 | |
| Share premium | 2,072,096 | 2,062,361 | 2,062,361 | |
| Treasury shares | -6 | - | -6 | |
| Reserves | -327,432 | -258,645 | -363,675 | |
| Retained earnings including net profit for the year | -115,722 | -186,651 | -156,585 | |
| Total equity attributable to the parent company's shareholders | 1,630,448 | 1,618,568 | 1,543,604 | |
| Non-controlling interest | 7,204 | 226 | 7,236 | |
| Total equity | 1,637,652 | 1,618,794 | 1,550,840 | |
| Non-current liabilities | ||||
| Borrowing from credit institutions | 3 | 1,207,985 | 865,425 | 1,196,087 |
| Lease liabilities | 97,865 | 101,723 | 86,539 | |
| Deferred tax liability | 174,030 | 170,299 | 153,239 | |
| Provisions | 5,613 | 5,847 | 5,454 | |
| Other non-current liabilities | 38,519 | 38,907 | 38,612 | |
| Total non-current liabilities | 1,524,012 | 1,182,201 | 1,479,931 | |
| Current liabilities | ||||
| Borrowing from credit institutions | 3 | - | 383,730 | - |
| Trade payables | 3 | 7,053 | 11,465 | 12,395 |
| Current tax liabilities | 61,045 | 25,917 | 10,595 | |
| Accrued expenses | 130,355 | 132,029 | 136,585 | |
| Prepaid income | 443,825 | 394,999 | 428,436 | |
| Lease liabilities | 12,782 | 12,125 | 12,842 | |
| Other current liabilities | 3 | 61,310 | 24,090 | 57,159 |
| Total current liabilities | 716,370 | 984,355 | 658,012 | |
| TOTAL EQUITY AND LIABILITIES | 3,878,034 | 3,785,350 | 3,688,783 |
KARNOV GROUP
Interim report, January – March 2021
Consolidated statement of changes in equity
Equity attributable to the parent company's shareholders
| TSEK | Share capital | Share premium | Treasury shares | Reserves | Retained earnings | Equity attributable to the parent company's shareholders | Non-controlling interest | Total equity |
|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2020 | 1,503 | 2,062,361 | - | -320,320 | -217,050 | 1,526,494 | 275 | 1,526,769 |
| Adjustment to prior years | - | - | - | - | 0 | 0 | 0 | - |
| Restated balance at January 1, 2020 | 1,503 | 2,062,361 | - | -320,320 | -217,050 | 1,526,494 | 275 | 1,526,769 |
| Net result | - | - | - | - | 29,133 | 29,133 | -49 | 29,084 |
| Other comprehensive income for the period | - | - | - | 61,675 | - | 61,675 | - | 61,675 |
| Total comprehensive income/loss | - | - | - | 61,675 | 29,133 | 90,808 | -49 | 90,759 |
| Transaction with shareholders in their capacity as owners: | ||||||||
| Purchase of shares from non-controlling interest | - | - | - | - | - | - | -19,118 | -19,117 |
| Sharebased payment | - | - | - | - | 1,266 | 1,266 | - | 1,266 |
| Total transaction with shareholders | - | - | - | - | 1,266 | 1,266 | -19,118 | -17,851 |
| Closing balance at March 31, 2020 | 1,503 | 2,062,361 | - | -258,645 | -186,650 | 1,618,569 | -18,892 | 1,599,677 |
Equity attributable to the parent company's shareholders
| TSEK | Share capital | Share premium | Treasury shares | Reserves | Retained earnings | Equity attributable to the parent company's shareholders | Non-controlling interest | Total equity |
|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2021 | 1,509 | 2,062,361 | -6 | -363,675 | -156,585 | 1,543,604 | 7,236 | 1,550,840 |
| Net result | - | - | - | - | 39,754 | 39,754 | -35 | 39,719 |
| Other comprehensive income for the period | - | - | - | 36,243 | - | 36,243 | 3 | 36,246 |
| Total comprehensive income/loss | - | - | - | 36,243 | 39,754 | 75,997 | -32 | 75,965 |
| Transaction with shareholders in their capacity as owners: | ||||||||
| Sharebased payment | - | - | - | - | 1,109 | 1,109 | - | 1,109 |
| Dividend paid | - | - | - | - | - | - | - | - |
| Total transaction with shareholders | 3 | 9,735 | - | - | 1,109 | 10,847 | - | 10,847 |
| Closing balance at March 31, 2021 | 1,512 | 2,072,096 | -6 | -327,432 | -115,722 | 1,630,448 | 7,204 | 1,637,652 |
KARNOV GROUP
Interim report, January – March 2021
Consolidated statement of cash flows
| Q1 | Jan-Dec | ||
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Operating profit | 57,062 | 51,266 | 131,042 |
| Adjustments: | |||
| Non-cash items | 50,727 | 36,464 | 199,968 |
| Effect of changes in working capital: | |||
| Increase/decrease in inventories | -2,765 | -1,985 | 3,086 |
| Increase/decrease in receivables | 96,312 | 148,920 | 75,694 |
| Increase/decrease in trade payables and other payables | -64,816 | -47,219 | 19,217 |
| Increase/decrease in prepaid income | -20,537 | -4,587 | 28,850 |
| Interest paid | -3,500 | -4,907 | -19,156 |
| Income tax paid | -14,703 | -11,671 | -59,710 |
| Net effect of changes in working capital | -10,009 | 78,551 | 47,982 |
| Cash flow from operating activities | 97,780 | 166,281 | 378,992 |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Acquisition of participations in associated companies | - | -3,743 | -25,466 |
| Acquisition of subsidiaries | -262,800 | -14,094 | -4,245 |
| Loan to associated companies | -7,917 | -235 | - |
| Acquisition of intangible assets | -17,199 | -13,109 | -79,690 |
| Acquisition of PPE | - | - | -2,947 |
| Cash flow from investing activities | -287,916 | -31,181 | -112,348 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Increase/decrease in borrowings | - | 308,730 | 294,297 |
| Increase/decrease in lease liabilities | -3,563 | -4,154 | -14,891 |
| Dividend paid | - | - | -43,952 |
| Cash flow from financing activities | -3,563 | 304,577 | 235,454 |
| Cash flow for the period | -193,699 | 439,677 | 502,098 |
| Cash and cash equivalents at the beginning of the period | 552,922 | 52,008 | 52,008 |
| Exchange-rate differences in cash and cash equivalents | 1,574 | 2,248 | -1,184 |
| Cash and cash equivalents at the end of the period | 360,797 | 493,933 | 552,922 |
KARNOV GROUP
Interim report, January – March 2021
Parent company income statement
| Q1 | Jan-Dec | |||
|---|---|---|---|---|
| TSEK | Note | 2021 | 2020 | 2020 |
| Employee benefit expenses | -3,757 | -2,149 | -8,817 | |
| Other operating expenses | -1,987 | -4,409 | -20,810 | |
| Operating profit | -5,744 | -6,558 | -29,627 | |
| Financial income | 3,825 | 5,905 | 18,874 | |
| Financial expenses | -29 | -9 | -355 | |
| Net financial items | 3,796 | 5,896 | 18,519 | |
| Profit before income tax | -1,948 | -662 | -11,108 | |
| Income tax expense | - | - | - | |
| Net result | -1,948 | -662 | -11,108 | |
| Total comprehensive income | -1,948 | -662 | -11,108 |
KARNOV GROUP
Interim report, January – March 2021
Parent company balance sheet
| TSEK | Note | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|---|
| ASSETS: | ||||
| Investments in group enterprises | 1,149,925 | 1,143,458 | 1,149,925 | |
| Receivables from group enterprises | 781,355 | 792,757 | 747,792 | |
| Total non-current assets | 1,931,280 | 1,936,215 | 1,897,718 | |
| Receivables from group enterprises | - | - | 206 | |
| Other receivables | 1,423 | 9,119 | 450 | |
| Current tax receivable | - | 41,634 | - | |
| Cash and cash equivalents | 12,953 | 4,537 | 41,033 | |
| Total current assets | 14,376 | 55,290 | 42,247 | |
| TOTAL ASSETS | 1,945,656 | 1,991,505 | 1,939,964 | |
| TSEK | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 | |
| EQUITY AND LIABILITIES: | ||||
| Restricted equity | ||||
| Share capital | 1,512 | 1,503 | 1,509 | |
| Treasury shares | -6 | - | -6 | |
| Non-restricted equity | ||||
| Share premium | 2,072,096 | 2,062,361 | 2,062,363 | |
| Retained earnings including net profit for the year | -130,187 | -74,416 | -128,356 | |
| Total equity | 1,943,415 | 1,989,448 | 1,935,510 | |
| Trade payables | 37 | 94 | 407 | |
| Trade payables from group companies | - | 13 | - | |
| Accrued expenses | 2,139 | 1,883 | 3,989 | |
| Other current liabilities | 65 | 67 | 59 | |
| Total current liabilities | 2,241 | 2,057 | 4,454 | |
| TOTAL EQUITY AND LIABILITIES | 1,945,656 | 1,991,505 | 1,939,964 |
KARNOV GROUP
Interim report, January – March 2021
Notes
Note 1. Accounting policies
The consolidated interim financial statements for Karnov Group AB have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, RFR 1 Supplementary Accounting Regulations for Groups and the Swedish Annual Accounts Act.
The accounting policies used for this interim report 2021 are the same as the accounting policies used for the annual report 2020 to which we refer for a full description.
The interim financial statements for the parent company have been prepared in accordance with RFR 2, Accounting for Legal Entities, and the Swedish Annual Accounts Act.
Note 2. Critical estimates and judgements
Preparation of financial statements requires the company management to make assessments and estimations along with assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The actual outcome may differ from these estimates. The critical assessments and sources of uncertainty in the estimates are the same as in the most recent annual report. See the Annual report 2020 Note 4, page 72, for further details regarding critical estimates and judgements.
Note 3. Fair value of financial instruments
| TSEK | Carrying amount | Fair value | ||||
|---|---|---|---|---|---|---|
| 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 | |
| FINANCIAL ASSETS | ||||||
| Financial assets at amortised cost | ||||||
| Trade receivables | 62,308 | 58,046 | 148,214 | 62,308 | 58,046 | 148,214 |
| Cash and cash equivalents | 360,797 | 493,933 | 552,921 | 360,797 | 493,933 | 552,921 |
| Total financial assets | 423,105 | 551,979 | 701,135 | 423,105 | 551,979 | 701,135 |
| FINANCIAL LIABILITIES | ||||||
| Financial liabilities at fair value through profit or loss (FVPL) | ||||||
| Contingent considerations | 43,431 | 14,439 | 9,537 | 43,431 | 14,439 | 9,537 |
| Liabilities at amortised cost | ||||||
| Trade payables | 7,053 | 11,465 | 12,395 | 7,053 | 11,465 | 12,395 |
| Non-current borrowing from credit institutions | 1,207,985 | 865,425 | 1,196,087 | 1,207,985 | 865,425 | 1,196,087 |
| Current borrowings from credit institutions | - | 383,730 | - | - | 383,730 | - |
| Total financial liabilities | 1,258,469 | 1,275,059 | 1,218,019 | 1,258,469 | 1,275,059 | 1,218,019 |
Trade receivables
Due to the short-term nature of trade receivables, their carrying amount is considered to be the same as their fair value.
Cash and cash equivalents
Cash and cash equivalents are unsecured with a short credit period and are therefore considered to have a fair value equal to the carrying amount. These are classified at level 2 in the fair value hierarchy.
KARNOV GROUP
Interim report, January – March 2021
Contingent consideration
The carrying amounts of contingent considerations are considered to be the same as the fair value. The fair value of the contingent considerations was estimated by calculating the present value of the future expected cash flows. The estimates are based on a discount rate at 7 percent. These are classified at level 3 in the fair value hierarchy.
Trade payables
Trade payables are unsecured and are usually paid within 30 days of recognition. Due to the short-term nature of trade payables, their carrying amounts are considered to be the same as their fair value.
Non-current borrowing from credit institutions
The carrying amount of non-current borrowings is considered to be the same as their fair values, since interest payable on those borrowings is close to current market rates. These are classified at level 2 in the fair value hierarchy.
Current borrowings from credit institutions
The fair value of current borrowings is considered to be the same as the carrying amount since the interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature. They are classified at level 2 in the fair value hierarchy.
Deferred payments
Deferred payments are related to contractual undertakings to pay the full sum in future periods, and therefore the carrying amount is the same as the fair value. These are classified at level 2 in the fair value hierarchy.
Note 4. Earnings per share
| Q1 | Jan-Dec | ||
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Earnings attributable to shareholders | 39,754 | 29,133 | 99,903 |
| Weighted average number of ordinary shares | 97,793,030 | 97,670,567 | 97,670,567 |
| Diluted | 98,218,377 | 97,997,733 | 98,095,914 |
| Earnings per share, basic, SEK | 0.41 | 0.30 | 1.02 |
| Earnings per share, after dilution, SEK | 0.40 | 0.30 | 1.02 |
KARNOV GROUP
Interim report, January – March 2021
19
Note 5. Segment reporting and disaggregated revenue
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The CEO has been identified as the chief operating decision maker and assesses the financial performance and position of the Group and makes strategic decisions. Within Karnov Group, operating segments are defined by geography and are monitored down to
EBIT level. Below EBIT level and on balance sheet and cash flow statements the assessment of financial performance and position is conducted entirely on Group level. Karnov's business operations are media independent and the Company monitors the overall net sales distribution trend between online and offline products at Group level.
| TSEK | Denmark | Sweden/Norway | Total | |||
|---|---|---|---|---|---|---|
| Q1 | Q1 | Q1 | ||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Online | 175,837 | 152,530 | ||||
| Offline | 57,682 | 59,431 | ||||
| Total net sales | 111,051 | 112,928 | 122,468 | 99,033 | 233,519 | 211,961 |
| EBITDA | 49,425 | 49,917 | 57,205 | 48,368 | 106,631 | 98,285 |
| EBITA | 47,292 | 48,012 | 47,702 | 40,206 | 94,996 | 88,218 |
| EBIT | 31,875 | 31,754 | 25,186 | 19,506 | 57,062 | 51,261 |
| Net financial items | -10,794 | -15,713 | ||||
| Profit before tax | 46,268 | 35,548 | ||||
| Income tax expenses | -6,549 | -6,464 | ||||
| Net result | 39,719 | 29,084 |
Note 6. Business combinations and similar transactions
DIBkunnskap AS
On 5 January 2021, Karnov Group entered into an agreement to acquire 100 percent of the shares issued in DIBkunnskap AS at TSEK 338,610. DIBkunnskap is a market leader amongst accounting- and auditing firms as well as large enterprises and provides knowledge and workflow solutions on the Norwegian market, with a strong focus on creating efficiencies in the workflows of professionals. The transaction is entirely in line with Karnov Groups strategy to carry out selective and value accretive acquisitions. The acquisition allows Karnov Group to continue growth in a new vertical in Norway. The financial effects of this transaction have not been recognized as of December 31, 2020. Revenue, income as well as assets and liabilities belonging to the acquired company are consolidated from 5 January 2021. The purchase price allocation is illustrated on the following table.
The goodwill arising from the acquisition is attributable to DIBkunnskap AS's strong position and profitability on the market. The goodwill arising is not expected to be tax deductible in the event of future impairments.
| Purchase price, TSEK | 05 Jan 2021 |
|---|---|
| Cash on closing | 294.953 |
| Loan note | 9.636 |
| Earn-out | 34.021 |
| Total purchase price | 338.610 |
| Reported amounts, TSEK | |
| --- | --- |
| Cash | 27.837 |
| PPE | 264 |
| Intangible assets: Customer relations | 33.413 |
| Intangible assets: Technology | 112.703 |
| Intangible assets: Other | 8.130 |
| Trade receivables and other receivables | 11.391 |
| Trade payables and other liabilities | -53.652 |
| Deferred tax | -26.309 |
| Total identified assets | 113.776 |
| Goodwill | 224.834 |
| Total | 338.610 |
Financing
The acquisition was paid with cash SEK 295 m. Further Karnov Group issued a loan note with a value of SEK 10 m which in January 2021 was converted to issue of 178,675 new ordinary shares of series A in Karnov Group AB (publ). In addition, part of
KARNOV GROUP
Interim report, January – March 2021
the purchase price is settled as an earn-out agreement which, if the agreed performance criterions are met, will be paid in 2022 and 2023 respectively.
Note 7. Alternative performance measures
Karnov's financial statements include alternative performance measures, which complement the measures that are defined or specified in applicable rules for financial reporting. Alternative performance measures are presented since, in their context, they provide clearer or more in-depth information than the measures defined in applicable rules for financial reporting. The alternative
performance measures are derived from the Group's consolidated financial reporting and are not measured in accordance with IFRS.
Karnov's definition of these measures, which are not described under IFRS, is provided in the section Financial definitions. Reconciliation of the alternative performance measures is presented below.
| Total net sales | Q1 | Jan-Dec | |
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Organic business | 222,575 | 209,652 | 773,317 |
| Acquired business | 16,931 | - | 1,531 |
| Currency | -5,987 | 2,309 | -3,432 |
| Total net sales | 233,519 | 211,961 | 771,416 |
| Total net sales split, % | Q1 | Jan-Dec | |
| TSEK | 2021 | 2020 | 2020 |
| Organic growth, % | 5.0% | 2.3% | 2.1% |
| Acquired growth, % | 8.0% | - | 0.2% |
| Currency effect, % | -2.8% | 1.1% | -0.5% |
| Total growth, % | 10.2% | 3.4% | 1.8% |
| Items affecting comparability | Q1 | Jan-Dec | |
| TSEK | 2021 | 2020 | 2020 |
| Acquisition costs | - | - | -4,165 |
| Restructuring costs | - | - | -8,038 |
| Total | - | - | -12,203 |
KARNOV GROUP
Interim report, January – March 2021
| Group | Q1 | Jan-Dec | |
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Net sales | 233,519 | 211,961 | 771,416 |
| EBITDA | 106,631 | 98,285 | 321,431 |
| EBITDA margin, % | 45.7% | 46.4% | 41.7% |
| Items affecting comparability | - | - | 12,203 |
| Adjusted EBITDA | 106,631 | 98,285 | 333,634 |
| Adjusted EBITDA margin, % | 45.7% | 46.4% | 43.2% |
| Depreciations and amortisations | -11,635 | -10,067 | -45,476 |
| EBITA | 94,996 | 88,218 | 275,955 |
| EBITA margin, % | 40.7% | 41.6% | 35.8% |
| Adjusted EBITA | 94,996 | 88,218 | 288,158 |
| Adjusted EBITA margin, % | 40.7% | 41.6% | 37.4% |
| Amortisation (acquisitions) | -37,934 | -36,957 | -144,913 |
| EBIT | 57,062 | 51,261 | 131,042 |
| Denmark | Q1 | Jan-Dec | |
| TSEK | 2021 | 2020 | 2020 |
| Net sales | 111,051 | 112,928 | 419,207 |
| EBITDA | 49,425 | 49,917 | 176,029 |
| EBITDA margin, % | 44.5% | 44.2% | 42.0% |
| Items affecting comparability | - | - | 1,709 |
| Adjusted EBITDA | 49,425 | 49,917 | 177,738 |
| Adjusted EBITDA margin, % | 44.5% | 44.2% | 42.4% |
| Depreciations and amortisations | -2,133 | -1,905 | -10,247 |
| EBITA | 47,292 | 48,012 | 165,782 |
| EBITA margin, % | 42.6% | 42.6% | 39.5% |
| Adjusted EBITA | 47,292 | 48,012 | 167,491 |
| Adjusted EBITA margin, % | 42.6% | 42.5% | 40.0% |
| Amortisation (acquisitions) | -15,417 | -16,257 | -61,255 |
| EBIT | 31,875 | 31,754 | 104,527 |
KARNOV GROUP
Interim report, January – March 2021
Sweden/Norway
| TSEK | 2021 | 2020 | 2020 |
|---|---|---|---|
| Net sales | 122,468 | 99,033 | 352,209 |
| EBITDA | 57,205 | 48,368 | 145,401 |
| EBITDA margin, % | 46.7% | 48.8% | 41.3% |
| Items affecting comparability | - | - | 10,494 |
| Adjusted EBITDA | 57,206 | 48,368 | 155,895 |
| Adjusted EBITDA margin, % | 46.7% | 48.8% | 44.3% |
| Depreciations and amortisations | -9,504 | -8,162 | -35,228 |
| EBITA | 47,702 | 40,206 | 110,173 |
| EBITA margin, % | 39.0% | 40.6% | 31.3% |
| Adjusted EBITA | 47,702 | 40,206 | 120,667 |
| Adjusted EBITA margin, % | 39.0% | 40.6% | 34.3% |
| Amortisation (acquisitions) | -22,515 | -20,700 | -83,659 |
| EBIT | 25,186 | 19,506 | 26,515 |
Return on capital
| TSEK | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|
| EBIT | 57,062 | 51,261 | 131,042 |
| Total assets | 3,878,034 | 3,785,350 | 3,688,783 |
| Return on capital, % | 1.5% | 1.4% | 3.6% |
Net working capital
| TSEK | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|
| Current assets | 512,328 | 592,375 | 737,134 |
| Current liabilities | 716,370 | 984,355 | 658,012 |
| Net working capital | -204,042 | -391,980 | 79,122 |
Cash conversion
| Q1 | Jan-Dec | ||
|---|---|---|---|
| TSEK | 2021 | 2020 | 2020 |
| Adjusted EBITDA | 106,631 | 98,285 | 333,634 |
| Cash flow from operating activities | 97,780 | 166,281 | 378,992 |
| Interest paid | 3,500 | 4,907 | 19,156 |
| Income tax paid | 14,703 | 11,671 | 59,710 |
| Items affecting comparability | - | - | 12,203 |
| Capex related to new product development | -11,696 | -12,511 | -56,298 |
| Adjusted cash flow from operating activities | 104,287 | 170,348 | 413,762 |
| Cash conversion, % | 97.8% | 173.3% | 124.0% |
KARNOV GROUP
Interim report, January – March 2021
Net debt
| TSEK | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|
| Non-current borrowing from credit institutions | 1,207,985 | 865,425 | 1,196,087 |
| Leasing liabilities, long term | 97,865 | 101,723 | 86,539 |
| Current borrowing from credit institutions | - | 383,730 | - |
| Leasing liabilities, short term | 12,782 | 12,125 | 12,842 |
| Cash and cash equivalents | 360,797 | 493,933 | 552,921 |
| Net debt | 957,836 | 755,222 | 643,166 |
Leverage ratio
| TSEK | 31 Mar 2021 | 31 Mar 2020 | 31 Dec 2020 |
|---|---|---|---|
| Adjusted EBITDA LTM | 341,981 | 324,997 | 333,634 |
| Net debt | 957,836 | 755,222 | 643,166 |
| Leverage ratio | 2.8 | 2.3 | 1.9 |
KARNOV GROUP
Interim report, January – March 2021
24
Quarterly overview
| TSEK | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 |
|---|---|---|---|---|---|
| Income statement | |||||
| Net sales | 233,519 | 188,742 | 192,755 | 177,958 | 211,961 |
| EBITDA | 106,631 | 60,820 | 88,375 | 73,952 | 98,285 |
| EBITDA margin, % | 45.7% | 32.2% | 45.8% | 41.6% | 46.4% |
| EBITA | 94,996 | 47,581 | 76,899 | 63,259 | 88,218 |
| EBITA margin, % | 40.7% | 25.2% | 39.9% | 35.5% | 41.6% |
| Adjusted EBITA | 94,996 | 59,784 | 76,899 | 63,259 | 88,218 |
| Adjusted EBITA margin, % | 40.7% | 31.7% | 39.9% | 35.5% | 41.6% |
| EBIT | 57,062 | 12,377 | 40,377 | 27,029 | 51,261 |
| EBIT, margin % | 24.4% | 6.6% | 20.9% | 15.2% | 24.2% |
| Net financial items | -10,794 | 5,883 | -6,287 | 5,650 | -15,713 |
| Net result | 39,719 | 16,110 | 27,953 | 26,858 | 29,084 |
| Balance sheet | |||||
| Non-current assets | 3,365,706 | 2,951,649 | 3,059,839 | 3,071,186 | 3,192,975 |
| Current assets | 512,328 | 737,134 | 586,406 | 534,659 | 592,375 |
| Cash and cash equivalents | 360,797 | 552,921 | 420,946 | 443,183 | 493,933 |
| Equity | 1,637,652 | 1,550,840 | 1,584,940 | 1,541,508 | 1,618,794 |
| Non-current liabilities | 1,524,012 | 1,479,931 | 1,148,061 | 1,151,415 | 1,182,201 |
| Current liabilities | 716,370 | 658,012 | 913,244 | 912,922 | 984,355 |
| Total assets | 3,878,034 | 3,688,783 | 3,646,245 | 3,605,845 | 3,785,350 |
| Cash flow | |||||
| Cash flow from operating activities | 97,780 | 162,721 | -570 | 47,354 | 166,281 |
| Cash flow from Investing activities | -287,916 | -23,056 | -18,404 | -39,902 | -31,181 |
| Cash flow from financing activities | -3,563 | -3,324 | -3,494 | -56,182 | 304,577 |
| Cash flow for the period | -193,699 | 136,341 | -22,468 | -48,730 | 439,677 |
| Key ratios | |||||
| Net working capital | -204,042 | 79,122 | -326,838 | -378,263 | -391,980 |
| Return on capital, % | 1.5% | 0.3% | 1.1% | 0.7% | 1.4% |
| Equity/asset ratio, % | 42.2% | 42.0% | 43.5% | 42.8% | 42.8% |
| Cash conversion, % | 97.8% | 262.7% | -0.7% | 66.2% | 173.3% |
| Net debt | 957,835 | 643,166 | 801,624 | 774,861 | 755,222 |
| Share data: | |||||
| Weighted average number of ordinary shares | 97,793,030 | 97,670,567 | 97,670,567 | 97,670,567 | 97,670,567 |
| Earnings per share, basic, SEK | 0.41 | 0.17 | 0.28 | 0.27 | 0.30 |
| Earnings per share, after dilution, SEK | 0.40 | 0.16 | 0.28 | 0.27 | 0.30 |
KARNOV GROUP
Interim report, January – March 2021
Financial definitions and alternative performance measures
This interim report contains references to a number of performance measures. Some of these measures are defined in IFRS standards, while others are alternative measures, which are not reported in accordance with applicable financial reporting frameworks or other legislation. These measures are used by Karnov to help both investors and management to analyse the Group's operations. The measures used in this interim report are described below, together with definitions and the reason for their use.
| Key ratio | Definition | Reason for use |
|---|---|---|
| Acquired growth | Change in net sales during the current period attributable to acquired units, excluding currency effects, in relation to net sales for the corresponding period of the preceding year. Net sales of acquired units are defined as acquired growth during a period of 12 months commencing the respective acquisition date. | The measure is used as a complement to organic growth and provides an improved understanding for Karnov's growth. |
| Adjusted EBITA | EBITA adjusted for the impact of items affecting comparability. | The measure shows the profitability from the business, adjusted for the impact of items affecting comparability and amortisation of capital expenditures related to acquisitions. |
| Adjusted EBITA margin | Adjusted EBITA as a percentage of net sales. | The measure shows the underlying profitability generated from the current operations over time, adjusted for items affecting comparability. |
| Adjusted EBITDA | EBITDA excluding items affecting comparability. | The measure is used since it facilitates the understanding of the operating profit, excluding items affecting comparability, financing, depreciation and amortisation. |
| Adjusted EBITDA margin | Adjusted EBITDA as a percentage of net sales. | The measure shows operational profitability over time, excluding items affecting comparability, financing, depreciation and amortisation. |
| Adjusted cash flow from operating activities | Adjusted EBITDA plus changes in net working capital less capital expenditure related to new product development and enhancement of existing products and business systems. | The measure is used to calculate one component in the cash conversion. |
| Average number of full-time employees (FTEs) | Average number of full-time employees during the reporting period. | Non-financial key ratio. |
| Cash conversion (%) | Adjusted cash flow from operating activities as a percentage of Adjusted EBITDA. | The measure is used since it shows how efficiently adjusted cash flow from operating activities is translated into a concrete contribution to Karnov's financing. |
| Earnings per share | Earnings per share for the period in SEK attributable to the parent company's shareholders, in relation to weighted average number of outstanding shares before and after dilution. | IFRS key ratio. |
| EBITA | Earnings before financial items and taxes, excluding acquisition related purchase price allocation (PPA) amortisation. | The measure shows the profitability from the business, adjusted for acquisition related purchase price allocation (PPA) amortisation. |
| EBITA margin | EBITA as a percentage of net sales. | The measure shows the profitability over time for the underlying business (i.e., excluding PPA amortisation) in relation to net sales. |
| EBITDA | Earnings before depreciation and amortisation, financial items, and taxes. | The measure shows the operating profitability before depreciation and amortisation. |
KARNOV GROUP
Interim report, January – March 2021
| Key ratio | Definition | Reason for use |
|---|---|---|
| EBITDA margin | EBITDA as a percentage of net sales. | The measure shows operational profitability over time, regardless of financing, depreciation and amortisation. |
| Equity/asset ratio (%) | Equity divided by total assets. | The measure can be used to assess Karnov’s financial stability. |
| Items affecting comparability | Items affecting comparability includes items of a significant character that distort comparisons over time. | The measure is used for understanding the financial performance over time. |
| Leverage ratio (Net debt/adjusted EBITDA LTM) | Net debt on the balance sheet date divided by adjusted EBITDA for the last twelve months (LTM). | Relevant to analyse to ensure that Karnov has an appropriate financing structure and is able to fulfil its financial obligations under its loan agreement. |
| Net debt | Total net borrowings including capitalised bank costs less cash and cash equivalents. | The measure is used since it allows for an assessment of whether Karnov has an appropriate financing structure and is able to fulfil its commitments under its financing agreements. |
| Net sales (online) | Net sales from online products. | The measure is used since it facilitates the understanding of total net sales and the breakdown of net sales. |
| Net sales (offline) | Net sales from printed products and training. | The measure is used since it facilitates the understanding of total net sales and the breakdown of net sales. |
| Net working capital (NWC) | Current assets less current liabilities. | The measure shows the tie-up of short-term capital in the operations and facilitates the understanding of changes in the cash flow from operating activities |
| Operating profit (EBIT) | Profit for the period before financial items and taxes. | The measure is used since it enables comparisons of the profitability regardless of the capital structure or tax situation. |
| Organic growth | Change in net sales during the current period, excluding acquisitions and currency effects, in relation to net sales for the corresponding period of the preceding year. Acquisitions are included in organic net sales after a period of 12 months. | The measure is used since it shows Karnov’s ability to generate growth through increases of, among other things, volume and price in its existing business. |
| PPA adjusted net profit | Net profit adjusted for items affecting comparability and amortisations of acquired businesses. | The measure is used to show Karnov’s financial performance without the influence of items affecting comparability and amortisations of acquired businesses. |
| Return on capital | Operating profit (EBIT) for the period divided by total assets. | The measure shows the operating return on capital that owners and lenders have invested. |
Currency rates
| | Closing rate
31 Mar 2021 | Average rate
Jan-Mar 2021 | Closing rate
31 Mar 2020 | Average rate
Jan-Mar 2020 | Closing rate
31 Dec 2020 | Average rate
Jan-Dec 2020 |
| --- | --- | --- | --- | --- | --- | --- |
| 1 DKK is equivalent to SEK | 1.3765 | 1.3600 | 1.4840 | 1.4268 | 1.3492 | 1.4070 |
KARNOV GROUP
Interim report, January – March 2021
Karnov Group today
80,000+
Users
1,500+
Specialists
280+
Employees
Karnov Group (publ) is a leading provider of information solutions for professionals in the areas of legal, tax and accounting, and environmental, health and safety in Denmark and Sweden. Karnov was founded on one man's belief that access to the law is the foundation of every great society and our legacy dates back to 1867. Over time, the Karnov Group has evolved from a traditional publishing company to a digital information provider.
Our mission is to be an indispensable partner for all legal, tax and accounting professionals and enable our users to make better decisions, faster by delivering the highest quality of content within a state-of-the-art user experience to support their workflow efficiency.
Our solutions are largely digital, and we offer subscription-based online solutions for law firms, tax and accounting firms, corporates and the public sector including courts, universities, public authorities and municipalities. Karnov also publishes and sells books and journals and hosts legal training courses.
With strong brands such as Karnov, Norstedts Juridik, Notisum, Legal Cross Border, Forlaget Andersen, LEXNordics and DIBkunnskap, Karnov Group delivers knowledge and insights to more than 80,000 users.
Karnov's is organised into two geographical financial reporting segments and the product offering, subject to a few variations, is similar in all countries.
Denmark: Legal, tax and accounting online and offline products and solutions
Sweden: Legal online and offline products, compliance solutions and legal training
Norway: Tax and accounting online workflow tools – legal online product to be launched
With offices in Copenhagen, Stockholm, Oslo and Malmo, Karnov Group employs around 280 people.
The Karnov share is listed on Nasdaq Stockholm, Mid Cap segment, under the ticker "KAR".
Better decisions, faster.
Find what you need, trust what you find and do it quickly.
Karnov Group AB (publ) Corp. Id. 559016-9016 Registered office: Stockholms län
Head office: Warfvinges väg 39, 112 51 Stockholm, Sweden
Tel: +46 8 587 670 00 www.karnovgroup.com
KARNOV
GROUP