Quarterly Report • Nov 1, 2022
Quarterly Report
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November 1st 2022
| Operational development10 |
|---|
| Market survey10 |
| Shift to recurring revenue models 11 |
| Organization 11 |
| Financial Review15 |
| Cash flow 16 |
| Financial position16 |
| Share information 16 |
| Risk factors 17 |
| Outlook 17 |
| Financial calendar17 |
| Condensed Consolidated Financial Statements 18 |
| Consolidated Statement of Comprehensive Income 18 |
| Consolidated Statement of Financial Position19 |
| Consolidated Statement of Changes in Equity21 |
| Consolidated Cash Flow Statement22 |
| Explanatory Notes to the Consolidated Financial Statements 23 |
| Alternative Performance Measures (APMs) 24 |
SmartCraft's mission is to streamline operations and free up time for construction companies, so they can generate additional revenue instead of spending evenings and weekends with planning, purchasing, invoicing and documentation. This is especially true for small and medium enterprises, but our specialized software is also used by large installation companies, as many of the processes in the fi eld and in the offi ce are the same. In the future, well-functioning and effi cient processes will be necessary for craftsmen and contractors to keep up with competition. Offi cial requirements and regulations, for example with regards to health and safety as well as quality control, become increasingly comprehensive and end-customers require more documentation of the work being done. Nevertheless, the construction industry is today one of the least digitized, however we are more convinced than ever that this will change rapidly in the years to come. Those who remain passive and stick with their analogue processes will be left behind.
We off er best-of-breed software. This means that our solutions are tailormade for each of the niches we focus on. The best solution for a plumber is not necessarily ideal for a carpenter – and electricians have their specifi c requirements. Since we were founded in 1987, we have followed this philosophy, which means that we over time have built deep insight and competency regarding the business models and workfl ows of our customers. At the same time, we increasingly collaborate across the group and solutions when it comes to customer insight, product and technology, development and sales. Our goal is always to provide the most effi cient and productive solutions for our customers. We emphasize innovation and in 2021 8% of our revenue was invested in product and technology development.
The craftsman's offi ce is in the car or outside on a construction site. Our solutions are seamlessly available on smartphones and tablets for fi eld workers and on rich web clients at the desktop for people in the offi ce. Hence, SmartCraft users can use digital tools throughout the day in every step of the process. All the way from producing a quotation, project planning, and work-order to project documentation, salaries and invoicing.
In our existing markets there are about 260 000 companies in the construction industry. Most of these are SME companies where our solutions are a great fi t. Calculations show that the potential market size was above NOK 10 billion in the Nordics alone in 2021. This market is expected to grow annually by double digits in the period 2020-2025 and we are deeply committed to remaining a leading player and a driving force in the industry going forward.
It is essential for us to ensure that the purchase decision for new customers is easy. Our solutions are cloud based and easy to implement. Looking at the cost per month for a new SmartCraft customer, the take-rate is very low compared to the total cost base. For a customer, the return on investment is immense.
There are four main drivers for digitalization in the construction industry.
| Lack of skilled workers • Need for skilled construction workers globally • Aging workforce and lack of recruitment |
|---|
| Long tail of service needs in private and public sector • Increasing aging buildings in need of renovation • Services include renovation, upgrades and maintenance of existing buildings |
| Increasing demand for detailed digital documentation • Regulatory offi ces • Consumers |
| Digitally maturing users and software • Apps and SaaS solutions drive adoption • Younger more digital workforce |
The story of SmartCraft has for many years been the story of profi table growth. We love our cloud-based Software-as-a-Service model for many reasons. One being the fact that the cost of adding one additional customer or user is minimal. This, combined with an effi cient sales and marketing organization and a gross margin above 90%, gives us a strong business model. We are increasing our revenue by 15-20% and expect to do so for years to come, and we have been able to combine this with an adjusted EBITDA margin around 40%. We are continuously investing in product development to secure future growth, but in the profi table growth mindset we are focusing on maintaining a high margin before any capitalization is made.
Another thing we love with our business model is the long revenue visibility and hence low risk related to our cash fl ows. Once onboard, our customers stay with us for many years and we see a low annual churn, which was 5% in Q3 2022.
Looking ahead, we continue to follow our strategy of profi table organic growth and M&A driven consolidation. We have a strong fi nancial foundation following the successful listing on Oslo Børs in 2021, providing a solid balance sheet and a broad, international investor base. Hence, our growth strategy is fully funded. Additionally, with an average cash conversion of 110% we are constantly increasing our M&A capabilities.
Our primary focus going forward is organic growth in the Nordics through upselling to existing customers, by winning new customers and by cross selling on our customer bases. Secondly, we are pursuing M&A opportunities both in existing and new geographies and are in dialogue with several companies. At the same time, we are patient. Capital discipline has high priority and we will only pursue the right acquisition target at the right price.
Q1 is seasonally strong as the majority of 12-months subscriptions are invoiced in January.
Amounts in NOK (thousands)
SmartCraft is the leading provider of business-critical SaaS solutions for the Nordic construction industry and I am pleased to report continued strong growth and profi tability momentum in the third quarter. We continued to build a solid base of customers and solutions, leading to 19 percent growth in recurring revenue and improved EBITDA margin and cash fl ow. We also successfully executed on our acquisition strategy, adding another strategic and accretive acquisition to our portfolio in the beginning of October.
SmartCraft operates in a large and underpenetrated market. The majority of the small and medium-sized enterprises (SMEs) in this industry have yet to digitalize their mission critical processes, the processes that really provide value or cost to their businesses. Our solutions target SMEs in the construction industry and our mission is to digitalize their manual processes.
The market for our solutions remains strong, despite a gloomy macro picture and rising concerns around slowdown in the construction industry. Our customers report continued high activity, but with lower future visibility and somewhat increased uncertainty.
SmartCraft is well positioned for growth and resilience even in a slower market environment:
We have a long history of profi table growth, and we are committed to our medium-term targets to grow margins. In Q3 2022 our adjusted EBITDA margin grew by 2 percentage points to 39 percent compared to Q3 last year. The positive margin development also proves that we manage to improve the profi tability of the companies we have acquired.
SmartCraft is uniquely positioned with strong organic growth and a very healthy margin. We have no fi nancial debt and a negative net working capital of 34 percent. Hence we are self-funded with an average cash conversion of 110 percent. With our strong cash situation, we are in an excellent position to invest in organic growth and acquisitions.
We believe in a strong market and with our best-of-breed SaaS solutions and a highly skilled team we stay very optimistic about the future market opportunities. We are confi dent about achieving our medium-term targets of annual organic revenue growth of 15-20 percent and growing EBITDA margins due to the scalability of the business.
Gustav Line CEO
| Sept 30th, 2022 ARR |
NOK 303.6 million 17% growth YoY |
Increased adjusted EBITDA |
|---|---|---|
| 16% | 5% Reduced churn at |
margin to 39% |
| organic ARR growth YoY1 | Maintaining high organic growth1 |
Development ARR per quarter (end of period, MNOK)
| Amounts in NOK (millions) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Annual Recurring Revenue | 303.6 | 259.9 | 303.6 | 259.9 | 266.8 |
| Revenue | 82.4 | 72.2 | 243.1 | 195.3 | 270.8 |
| Adjusted EBITDA | 32.0 | 26.5 | 94.5 | 80.8 | 108.7 |
| Adjusted EBITDA-margin | 38.8% | 36.7% | 38.9% | 41.4% | 40.1% |
| Adjusted EBITDA - capex margin | 33.1% | 32.0% | 32.4% | 35.3% | 32.0% |
| Churn rate (R12m) | 5.2% | 6.2% | 5.2% | 6.2% | 6.3% |
1. Organic growth is defi ned as growth in existing solutions adjusted for currency eff ects.
Annual Recurring Revenue (ARR) was NOK 303.6 million at the end of Q3 2022, a growth of 17 percent compared to Q3 2021. The growth was driven by an increased number of customers and the acquisition of Kvalitetskontroll in July 2021 and Elverdi in June 2022. ARR growth was 17 percent in Q3 2022 compared to Q3 2021. The organic ARR growth was 16 percent. New sales in the third quarter is normally seasonally lower than in the rest of the year, aff ected negatively by the summer holiday months in the Nordics in July and August.
Organic revenue growth was 16 percent. The growth was driven by continued good sales performance for the SmartCraft's SaaS solutions earlier in the year and in the third quarter. Sales- and marketing investments earlier in 2022, combined with marketing and sales activities during Q3 has resulted in a good sales pipeline towards the end of 2022. Prospect customers well appreciate that SmartCraft's solutions has the potential to increase productivity and profi tability for customers. At the same, the somewhat uncertain market outlook leads craftsmen to focus more on utilizing the currently strong market demand, leaving less time for development of their internal processes and conversations with SmartCraft's sales team short-term. For SmartCraft, this leads to a somewhat more timeconsuming sales process than normal.
We continue our initiatives to make sure our customers utilize our solutions to its potential, so they get good value of their investments. We use digital tools to track usage automatically and provide automatic online help in the solutions. Together with a range of other initiatives, this results in a customer revenue churn of only 5 percent in the third quarter 2022, compared to 6 percent in Q3 2021.
SmartCraft reported an adjusted EBITDA margin of 39 percent in Q3, an improvement from 37 percent in Q3 2021. The SaaS based operating model of SmartCraft leads to strong scalability, and at the same time, margins in acquired companies with lower margins have been improved.
In the third quarter we released the "SmartCraft Digimeter 2022 report". The report is based on the fi ndings from a survey of Swedish construction companies https:// smartcraft.com/digimeter/. The report is the fi rst in a planned series of surveys and is a good proof point for the need for mission critical digital tools for the industry, and that the penetration is still relatively low.
During the third quarter we have continued to optimize our organization for scale and to serve our customers in the best ways. We have a strong focus on lowering the investment bar for potential customers and make sure they have predictable low costs. Today our customers pay an average of NOK 7 pr user pr day, and there is an upside potential to increase this low price in the future.
In Q3 2022 we continue to focus on shifting customer non-recurring revenue to recurring revenue contracts to provide more predictability and stability for our customers and SmartCraft. We reduced non-recurring revenue by 35 percent in Q3 2022 compared to Q3 2021 and as a result recurring revenue in Q3 2022 reached a record of 97 percent of total revenue.
"In Q3 2022 we continued shifting non-recurring revenue to contractual recurring revenue to provide more predictability and stability for our customers and SmartCraft. As a result, recurring revenue in Q3 2022 accounts for 97 percent of total revenue"
After nine acquisitions the last years we have started to align and synergize parts of our organization and the way we do business. In the beginning of October, we launched the amended leadership team with a good balance of diff erent experiences and gender.
By organizing business by country, we will better execute in alignment towards the same partners, customer domains and customers. Today we have several solutions addressing for example electrician companies. To a certain extent these solutions compete for customer attention and against each other. By aligning our marketing, sales and development initiatives where it makes sense, we believe we can scale better.
With rising energy prices and need for energy effi ciency, we see a clear potential for our solutions aimed at electrician companies. We already have a large share of our customers from the electro domain and with the acquisition of Elverdi in June and Inprog in the beginning of October we have 5 best of breed solutions addressing these customers. Aligning our resources will allow for more cross selling and eventually increase our share of wallet
from these customers. Going forward we will further investigate how to realize synergies in sales and development.
With a mission of digitalizing the construction industry, we focus signifi cant parts of our product and tech development on features for quick onboarding and maximizing usage of our solutions. We see this as an important factor to speed up the digitalization.
A second focus area is to improve collaboration across our R&D teams. We have a set of best-of-breed products that are highly appreciated by our users and developed by talented people in our R&D and product departments. However, today we tend to occasionally build similar features for the same user groups and therefore not utilize our R&D teams in an optimal way.
We have been working on smarter ways to utilize our engineers and our R&D capacity to increase productivity since Q4 2021. Utilizing our capability-based platform SmartCraft Core is an important step in this direction, as resources and functionality can be shared across development teams and solutions in the SmartCraft Group. SmartCraft Core is already in use by our Cordel solution, and more than 2500 daily users are now onboard this platform.
With our latest acquisitions of Inprog in October and Elverdi in June, we now have 5 solutions addressing electrician companies. Since these solutions cover diff erent parts of an electrician's workday, SmartCraft is now organizing them according to a domain that focuses on connecting the dots where it makes sense. This way our solutions fulfi l and enrichen each other. By taking a more holistic approach where our solutions provide an eco-system for electricians, we can better support our customers throughout their diff erent processes in their workday.
With a domain approach our ambition is to enrichen our existing solutions for electricians with functionality from SmartCraft Core. This will increase our ability to capture scale in the context of product and technology development. We expect to see the results gradually over the upcoming years.
SmartCraft is present in three geographical markets, and the revenue distribution is shown below. The acquisition of Elverdi in June 2022 contributed to the growth in Norway.
| Amounts in NOK (millions) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Norway | 34.7 | 30.3 | 101.3 | 77.0 | 108.4 |
| Sweden | 35.6 | 32.0 | 105.2 | 92.6 | 126.8 |
| Finland | 12.1 | 9.9 | 36.6 | 25.7 | 35.6 |
| Total revenues | 82.4 | 72.2 | 243.1 | 195.3 | 270.8 |
SmartCraft recognizes Specialized contractors and General contractors as the operating units that form natural reporting segments.
Newly acquired Elverdi is included in the Specialized contractors segment.
Apart from Elverdi the Specialized contractors segment consists of our most established brands with a long history, a strong market position in their areas and high EBITDA margins. These solutions still have a share of customers with the solutions deployed on-premise. We are continuously moving these customers to a SaaS environment, which over time will enable higher revenue growth.
| Amounts in NOK (millions) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Specialized contractors | 34.6 | 30.4 | 101.8 | 91.9 | 123.4 |
| General contractors | 47.8 | 41.8 | 141.2 | 103.4 | 147.4 |
| Total revenue in segments | 82.4 | 72.2 | 243.1 | 195.3 | 270.8 |
| Organic growth in current solutions YoY | |||||
| Specialized contractors | 11.8% | 7.8% | 9.0% | 10.2% | 9.3% |
| General contractors | 19.0% | 18.6% | 21.7% | 22.3% | 21.3% |
| Distribution of adjusted EBITDA per segment* | |||||
| Amounts in NOK (millions) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
| Specialized contractors | 16.9 | 14.7 | 50.3 | 49.9 | 64.7 |
| General contractors | 19.3 | 15.3 | 56.3 | 36.7 | 53.1 |
| Total adjusted EBITDA in segments | 36.1 | 30.0 | 106.7 | 86.6 | 117.9 |
| *Excluding SmartCraft ASA | |||||
| Adjusted EBITDA margin | |||||
| Specialized contractors | 48.7% | 48.4% | 49.5% | 54.3% | 52.5 % |
| General contractors | 40.3% | 36.6% | 39.9% | 35.5% | 36.0 % |
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Revenue from customers | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 |
| Total operating revenue | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 |
| Purchase of goods and services | 6 348 | 5 657 | 19 884 | 16 405 | 22 866 |
| Payroll and related expences | 33 430 | 30 431 | 96 483 | 76 934 | 104 986 |
| Other operating expenses | 11 107 | 13 259 | 34 148 | 48 582 | 62 598 |
| Total operating expenses | 50 885 | 49 347 | 150 515 | 141 921 | 190 450 |
| EBITDA | 31 556 | 22 813 | 92 536 | 53 362 | 80 312 |
| Adjustments of special items | 447 | 3 673 | 1 939 | 27 428 | 28 359 |
| Adjusted EBITDA | 32 003 | 26 486 | 94 475 | 80 790 | 108 671 |
| Depreciation and amortization | 6 910 | 5 486 | 20 325 | 15 647 | 22 726 |
| Operating profi t (loss) before fi nancial items and tax | 24 646 | 17 327 | 72 211 | 37 715 | 57 586 |
| EBITDA-margin | 38.3% | 31.6% | 38.1% | 27.3% | 29.7% |
| Adjusted EBITDA-margin | 38.8% | 36.7% | 38.9% | 41.4% | 40.1% |
SmartCraft's consolidated revenues in Q3 2022 grew by 14.2% to NOK 82.4 million, up from NOK 72.2 million in Q3 2021. The revenue growth was driven by the acquisition of Elverdi (June 2022) and continued high organic growth from the Group's SaaS solutions but off set by changes in currency rates.
Quarterly revenue recognition does not correlate with invoicing and customer payment plans. SmartCraft off ers payment plans between 1 and 12 months, and on average a customer pays 8 months in advance. This entails there is no seasonality in fi xed price revenue from existing customers. Still, Q3 is seasonally slow regarding new sales as July and August are mainly vacation periods. As a result, quarter-over-quarter growth is at a lower level.
The Group has continued its strategy to service all customers SaaS solutions on common SaaS environments. The Group's strategy includes both migrating its remaining on-premise customers to a SaaS environment, and transitioning non-recurring revenue into a SaaS service. As an eff ect, non-recurring revenue continues to decrease as the migration progresses. By reducing the threshold to become a customer we increase our opportunity to grow ARR.
| Organic growth in current solutions YoY | Q3'22 | Q3'21 | FY'21 |
|---|---|---|---|
| Fixed price subscriptions | 18.6% | 16.0% | 18.9% |
| Transaction priced add-on subscriptions | 19.3% | 21.1% | 27.5% |
| Total recurring revenue | 18.7% | 16.5% | 19.7% |
| Non-recurring revenue | (34.9%) | (19.4%) | (27.8%) |
| Total revenue | 15.9% | 14.4% | 15.8% |
The Q3 2022 adjusted EBITDA margin is aff ected negatively with 0.3%-points due to lower margins in the acquired company Elverdi. The recent acquisitions aff ect the YTD 2022 adjusted EBITDA margin negatively with 1.1%-points. SmartCraft is well on track to increase the margin in the recently acquired companies. Our approach to increasing the margin is not by cost-cutting, but fi rst and foremost helping the companies to better scale and grow, creating a long-term business advantage. These adjustments may vary in time and are not regarded an onboarding item but as a continuous enhancement of business management.
The reported EBITDA in Q3 2022 was NOK 31.6 million. Adjusted EBITDA was NOK 32.0 million. The adjusted EBITDA margin for Q3 2022 was 38.8%, compared to 36.7% in Q3 2021. Note that the principles for holiday pay accruals are changed in 2022. If the same principles are applied for 2021 the Q3 2021 adjusted EBITDA is 34.9%.
SmartCraft plans for the continuous improvement of existing solutions, and the development of new solutions and add-ons. For the development of new solutions and add-ons, SmartCraft recognized NOK 4.7 million in capitalization of development costs in Q3 2022, which constitutes 5.7% of revenue. Although Q3 was expected to be lower due to vacation, capitalized amount was further reduced as we are selective in recruitments and open positions are not fi lled posthaste.
Depreciations and amortizations were NOK 6.9 million in Q3 2022 compared to NOK 5.5 million in Q3 2021. The increase is a result of the Group's continuous R&D activity and acquisitions.
Cash fl ow from operating activities was NOK 14.9 million in Q3 2022 compared to NOK 10.4 million in Q3 2021. The increase in operating activities is primarily due to operational growth.
Cash fl ow from investing activities was NOK -5.3 million in Q3 2022, driven by capitalized R&D.
Net cash fl ow from fi nancing activities was NOK 2.7 million in Q3 2022. The cash provided relates to the capital increase in the long-term incentive program (LTIP). Details on the LTIP are included in the remuneration guidelines.
SmartCraft has a solid balance sheet. The Group is in a net cash position and has a negative net working capital of NOK 109.0 million, is self-funded and well capitalized to deliver on the stated growth ambitions and M&A strategy.
Total assets amounted to NOK 964.2 million (NOK 886.2 million at the end of 2021), of which cash and cash equivalents amounted to NOK 202.9 million (NOK 156.3 million at the end of 2021). Non-current assets amounted to NOK 725.5 million (NOK 700.3 million at the end of 2021) which primarily consist of goodwill and intangible assets from the Group's R&D and acquisitions.
Total liabilities amounted to NOK 192.3 million (NOK 184.6 million at the end of 2021). The increase is related to the increase in deferred revenue and taxes payable.
At the end of Q3 2022 SmartCraft ASA had 171.5 million shares at par value of NOK 0.01. There have been no changes in shares or share capital in 2022 in SmartCraft ASA.
Risk factors are described in the information document prepared in connection with the listing on Oslo Børs, published June 24th, 2021 and in the annual accounts for 2021, published April 26th, 2022.
We have a very positive future outlook as the market opportunities are great. We experience a continued and strong demand for our solutions. As a specialized SaaS player within construction we have identifi ed a market opportunity of above NOK 10 billion in the Nordics alone, and this market is growing by double digits annually.
Our main focus is organic growth in the Nordics through upsell to existing customers, by winning new customers and by cross selling on our customer bases. Additionally, we are pursuing M&A opportunities both in existing and new geographies and are in dialogue with several companies. At the same time, we are patient - capital discipline is priority number one, and we will only pursue the right acquisition target at the right price.
Our medium-term targets stay fi rm. SmartCraft targets 15-20% organic growth in the medium-term, and any acquisitions will come on top of that. We expect adjusted EBITDA margin in the medium-term to increase due to scalability of the business. Impact from acquired companies last 12 months and additional costs as a listed company are short-term considerations to the adjusted EBITDA margin.
We have a highly motivated and aligned organization that is well positioned with our solutions to help customers to increase their productivity and profi tability. We strongly believe that construction companies that prioritize to digitalize and modernize their business processes will be the winners in this industry in the future.
As a result of increasing interest rates and high infl ation, the uncertainty in the macro picture has increased in SmartCraft's markets. Our customers report continued high activity, but with lower future visibility due to the increased uncertainty. Historically, SmartCraft's target segments have been relatively resilient against economic slowdown as they are less dependent on large construction projects that tend to be postponed during periods of slowdown. SmartCraft has a relatively high exposure to the electro segment. This segment tends to be more resilient than the rest of the market and as the electricity prices are at record high levels there is an increasing demand for services to be more energy effi cient. All in all, this leads to a maintained positive view on the future outlook for SmartCraft.
• Dates for fi nancial reporting in 2023 will be available at the end of 2022.
• SmartCraft arranges roadshow and attends several conferences during H2 2022. See smartcraft.com/investor-relations for complete list.
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Revenue from customers | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 |
| Total operating revenue | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 |
| Purchase of goods and services | 6 348 | 5 657 | 19 884 | 16 405 | 22 866 |
| Payroll and related expences | 33 430 | 30 431 | 96 483 | 76 934 | 104 986 |
| Other operating expenses | 11 107 | 13 259 | 34 148 | 48 582 | 62 598 |
| Depreciation and amortization | 6 910 | 5 486 | 20 325 | 15 647 | 22 726 |
| Total operating expenses | 57 794 | 54 832 | 170 840 | 157 568 | 213 176 |
| Operating profi t (loss) before fi nancial items and tax | 24 646 | 17 327 | 72 211 | 37 715 | 57 586 |
| Financial income | 8 094 | 1 034 | 13 076 | 4 009 | 5 615 |
| Financial expenses | (6 988) | (538) | (11 167) | (10 403) | (14 334) |
| Financial income (expense), net | 1 106 | 496 | 1 909 | (6 395) | (8 720) |
| Profi t (loss) before tax | 25 751 | 17 824 | 74 120 | 31 320 | 48 867 |
| Tax expense | 5 099 | 2 730 | 14 416 | 6 597 | 12 171 |
| Profi t (loss) | 20 652 | 15 094 | 59 703 | 24 724 | 36 696 |
| Other comprehensive income | |||||
| Items that will be reclassifi ed to profi t or loss: | |||||
| Currency translation diff erences, net of tax | 5 143 | (1 529) | 5 659 | (5 084) | (17 843) |
| Total | 5 143 | (1 529) | 5 659 | (5 084) | (17 843) |
| Total comprehensive income | 25 795 | 13 564 | 65 363 | 19 639 | 18 853 |
| ASSETS | |||
|---|---|---|---|
| Amounts in NOK (thousands) | Sept 30th 2022 | Sept 30th 2021 | Dec 31th 2021 |
| Deferred tax assets | - | - | - |
| Goodwill | 506 643 | 515 642 | 491 223 |
| Intangible assets | 200 428 | 152 499 | 187 378 |
| Right to use assets | 14 344 | 17 720 | 17 009 |
| Tangible Assets | 4 062 | 5 855 | 4 732 |
| TOTAL NON-CURRENT ASSETS | 725 477 | 691 715 | 700 341 |
| Inventory | 71 | 82 | 73 |
| Other current assets | 7 834 | 4 559 | 4 987 |
| Accounts Receivable | 27 920 | 24 957 | 24 583 |
| Cash and cash equivalents | 202 881 | 145 251 | 156 277 |
| TOTAL CURRENT ASSETS | 238 706 | 174 849 | 185 919 |
| TOTAL ASSETS | 964 183 | 866 564 | 886 261 |
| Amounts in NOK (thousands) | Sept 30th 2022 | Sept 30th 2021 | Dec 31th 2021 |
|---|---|---|---|
| Share capital | 1 715 | 1 715 | 1 715 |
| Share premium | 605 893 | 605 893 | 605 893 |
| Retained earnings | 159 770 | 88 095 | 100 067 |
| Other components of equity | (332) | 6 768 | (5 990) |
| Non-controlling interests | 4 881 | - | - |
| TOTAL EQUITY | 771 928 | 702 471 | 701 685 |
| Non-current fi nancial liabilities | - | 1 208 | 1 158 |
| Non-current lease liabilities | 7 027 | 10 617 | 9 913 |
| Deferred tax liabilities | 32 685 | 26 179 | 34 637 |
| Total non-current liabilities | 39 712 | 38 005 | 45 708 |
| Deferred revenue | 74 295 | 63 490 | 59 593 |
| Current portion of lease liabilities | 7 767 | 6 969 | 6 952 |
| Accounts payable | 7 877 | 7 450 | 6 501 |
| Taxes payable | 20 810 | 11 882 | 14 216 |
| Other current liabilities | 41 794 | 36 295 | 51 607 |
| Total current liabilities | 152 543 | 126 088 | 138 869 |
| TOTAL LIABILITIES | 192 255 | 164 093 | 184 576 |
| TOTAL EQUITY AND LIABILITIES | 964 183 | 866 564 | 886 261 |
| Other | Non | |||||
|---|---|---|---|---|---|---|
| Share | components | Retained | controlling | |||
| Amounts in NOK (thousands) | Share capital | premium | of equity | earnings | interest | Total equity |
| Total equity 31.12.2020 | 4 497 | 244 193 | 11 853 | 63 371 | - | 323 914 |
| Profi t / (-) loss for the period | - | - | - | 36 696 | - | 36 696 |
| Other comprehensive income | - | - | (17 843) | - | - | (17 843) |
| Capital decrease 21.06.2021 | (3 109) | (205 864) | - | - | - | (208 973) |
| Capital increase 22.06.2021 | 284 | 489 219 | - | - | - | 489 503 |
| Capital increase 05.07.2021 | 38 | 67 732 | - | - | - | 67 770 |
| Capital increase 09.07.2021 | 5 | 10 613 | - | - | - | 10 618 |
| Total equity 31.12.2021 | 1 715 | 605 893 | (5 990) | 100 067 | - | 701 685 |
| Profi t / (-) loss for the period | - | - | - | 59 703 | - | 38 359 |
| Other comprehensive income | - | - | 5 659 | - | - | 1 407 |
| Capital increase 13.07.2022 | - | - | - | - | 4 881 | 4 881 |
| Total equity 30.09.2022 | 1 715 | 605 893 | (332) | 159 770 | 4 881 | 771 928 |
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 |
|---|---|---|---|---|---|
| Operating activities Profi t before tax |
25 751 | 17 824 | 74 120 | 31 320 | 48 867 |
| Paid taxes | (2 771) | (2 841) | (10 268) | (4 536) | (5 811) |
| Depreciation | 3 400 | 2 791 | 10 032 | 7 562 | 10 085 |
| Amortisation of intangible assets | 3 510 | 2 695 | 10 293 | 8 085 | 12 641 |
| Accrued interest expense | - | 1 | - | (789) | - |
| Items classifi ed as investing or fi nancing activities | 175 | 5 491 | 1 071 | 19 562 | 38 759 |
| Net cash provided from operating activities before net | |||||
| working capital changes | 30 066 | 25 960 | 85 249 | 61 204 | 104 540 |
| Working capital adjustments: | |||||
| Changes in accounts receivable | (7 277) | (317) | (2 973) | (6 046) | (5 837) |
| Changes in deferred revenue | (7 976) | (8 781) | 13 960 | 10 470 | 6 572 |
| Changes in accounts payable | 2 728 | (1 326) | 1 252 | 877* | (67) |
| Changes in all other working capital items | (2 618) | (5 168) | (10 559) | 1 280 | 1 316 |
| Net cash provided from operating activities | 14 923 | 10 368 | 86 928 | 67 785 | 106 524 |
| Investing activities | |||||
| Investments in tangible and intangible assets | (536) | (80) | (1 363) | (142) | (397) |
| Payments for acqusitions | - | (44 524) | (19 308) | (72 215) | (71 734) |
| Acquisition transaction costs | - | (1 710) | (438) | (5 052) | (5 775) |
| Payments for software development costs | (4 697) | (3 375) | (15 832) | (11 920) | (21 737) |
| Foreign currency eff ect | (48) | - | (180) | - | 178 |
| Net cash used in investing activities | (5 281) | (49 688) | (37 122) | (89 329) | (99 465) |
| Financing activities | |||||
| Cash proceeds from capital increases | 4 881 | 67 770 | 4 881 | 567 770 | 551 287 |
| Cash proceeds from loan facilities | - | - | - | - | - |
| Downpayment on loan facilities | - | (93) | (2 014) | (234 547) | (235 434) |
| Interest payments | (172) | (17) | (634) | (4 794) | (4 794) |
| Repayments of capital decreases | - | - | - | (208 973) | (208 973) |
| Repayments of lease liabilities | (1 944) | (1 801) | (5 656) | (4 684) | (6 783) |
| Other fi nancial items | (30) | (18 460) | (136) | (21 529)* | (21 407) |
| Net cash provided by (used in) fi nancing activities | 2 735 | 47 399 | (3 559) | 93 244 | 73 896 |
| Net increase (decrease) in cash and cash equivalents | 12 377 | 8 078 | 46 248 | 71 700 | 80 956 |
| Cash and cash equivalents at the beginning of period** | 189 349 | 138 441 | 156 277 | 77 868 | 79 902 |
| Foreign currency eff ects on cash and cash equivalents | 1 156 | (1 268) | 357 | (4 317) | (4 581) |
| Cash and cash equivalents at end of period** | 202 881 | 145 251 | 202 881 | 145 251 | 156 277 |
* In the Q2 2021 report, IPO expenses were included in account payable and net working capital. In the Q3 2021 report the cost items were reclassifi ed as fi nancing items.
** Cash and cash equivalent include restricted funds
The interim report for the SmartCraft Group for 3rd quarter 2022 has been prepared in accordance with IAS 34 Interim Financial Reporting. The same accounting policies and methods for computation have been applied as in the latest annual statement, except for the accrual of holiday pay. Where holiday pay earlier was expensed at the time the obligation arised, holiday pay are now expensed at the time holiday leave is carried out.
The eff ect of the change in accrual is a shift of expenses between the quarters, while the total annual expense remains the same.
For further information on accounting policies see the Annual Report 2021.
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | Revenue recognition |
|---|---|---|---|---|---|
| Fixed price subscriptions | 73 262 | 63 055 | 212 407 | 167 249 | Over time |
| Transaction priced subscriptions (add-on features) | 6 790 | 5 940 | 20 998 | 17 730 | Point in time |
| Total recurring revenue | 80 053 | 68 995 | 233 406 | 184 979 | |
| Non-recurring revenue | 2 388 | 3 165 | 9 646 | 10 304 | Point in time |
| Total revenue | 82 440 | 72 160 | 243 051 | 195 283 |
| Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 | ||
|---|---|---|---|---|---|---|
| Profi t for the period due to holders of shares |
TNOK | 20 652 | 15 094 | 59 703 | 24 724 | 36 696 |
| Profi t allocated to redeemed preferance shares |
TNOK | - | - | - | 7 282 | 7 282 |
| Profi t allocated to common shares | TNOK | 20 652 | 15 094 | 59 703 | 17 441 | 29 413 |
| Average numbers of common shares | 171 522 305 | 171 310 500 | 171 522 305 | 150 501 050 | 155 857 151 | |
| Earning per share | NOK | 0.12 | 0.09 | 0.35 | 0.12 | 0.19 |
The following terms are used by the Group in defi nitions of APMs:
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 | |
|---|---|---|---|---|---|---|
| Revenue from customers | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 | |
| Total operating revenue | 82 440 | 72 160 | 243 051 | 195 283 | 270 762 | |
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 | |
| EBITDA | 31 556 | 22 813 | 92 536 | 53 362 | 80 312 | |
| Adjustments of special items | 447 | 3 673 | 1 939 | 27 428 | 28 359 | |
| Adjusted EBITDA | 32 003 | 26 486 | 94 475 | 80 790 | 108 671 | |
| EBITDA-margin | 38.3% | 31.6% | 38.1% | 27.3% | 29.7% | |
| Adjusted EBITDA-margin | 38.8% | 36.7% | 38.9% | 41.4% | 40.1% | |
| Amounts in NOK (thousands) | Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 | |
| Adjusted EBITDA | 32 003 | 26 486 | 94 475 | 80 790 | 108 671 | |
| Capitalized development expenses | 4 697 | 3 375 | 15 832 | 11 920 | 21 737 | |
| Adjusted EBITDA - CAPEX margin | 33.1% | 32.0% | 32.4% | 35.3% | 32.0% | |
| Q3'22 | Q3'21 | YTD'22 | YTD'21 | FY'21 | ||
| Annual Recurring Revenue (ARR) (EoP) | TNOK | 303 586 | 259 925 | 303 586 | 259 925 | 266 843 |
| Recurring revenue | 97.1% | 96.1% | 96.0% | 94.5% | 94.9% | |
| Average Revenue per Customer (ARPC) | NOK | 27 640 | 27 903 | 27 239 | 27 102 | 26 994 |
| Churn rate (R12m) (EoP) | 5.2% | 6.2% | 5.2% | 6.2% | 6.3% |
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