Annual Report • Apr 20, 2023
Annual Report
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ANNUAL REPORT 2022
Smartoptics provides innovative optical networking solutions for a new era of open networking. We focus on solving network challenges and increasing the competitiveness of our customers. Our customer base includes cable and telecom operators, cloud providers, Internet exchanges, governments and thousands of enterprises.
At Smartoptics, we leverage modern software design principles and expand network horizons by taking an open approach in everything we do. This empowers our customers to break free from unwanted vendor lock-in, remain flexible and minimize costs.
Our solutions based on open networking standards and protocols are used in metro and regional network applications as well as in metro access networks. The products we deliver are based on in-house developed hardware and software and enhanced by associated services.
Smartoptics is a Scandinavian company founded in 2006. We partner with leading technology and network solution providers and hold numerous certifications and approvals from major switching and storage solution providers such as Brocade, Cisco and Dell. We have a global reach through our salesforce and more than 100 business partners including distributors, OEMs and VARs.
As a challenger, we take pride in our open approach, smart design principles and ambitious customer service.
| Amounts in USD thousands | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | 57 366 | 45 902 | 25.0 % |
| Gross profit | 25 352 | 19 591 | 29.4 % |
| Gross margin | 44.2 % | 42.7 % | 1.5 p.p |
| Operating cost | -14 520 | -13 362 | 8.7 % |
| EBITDA | 10 832 | 6 230 | 74.0 % |
| EBITDA margin | 18.9 % | 13.6 % | 5.3 p.p |
| Operating profit | 9 300 | 4 594 | 102.5 % |
| Operating margin | 16.2 % | 10.0 % | 6.2 p.p |
| Profit & loss for the year | 6 789 | 3 532 | 92.2 % |
| Basic earnings per share | 0.071 | 0.038 | |
| FTEs | 83 | 75 |
Dear Shareholders,
It is my pleasure to present to you the annual report of Smartoptics Group AS for the year 2022. The year can be summarized as a continuation of delivering on our strategy of providing open optical networking solutions to our customers, that ultimately will result in affordable bandwidth to more people and organizations.
We have maintained our growth trajectory and expand our market share in key geographies. Our products and solutions have been well-received by customers, who appreciate our novel approach to networking, the simplicity of using the products and the attractive cost of transporting bandwidth that the products result in.
The financial development of the company has been very positive. We grew the revenue substantially and improved the operating margin. 2022 is our fifth consecutive year with solid revenue growth. Cash flow has been impacted by an increase in inventory, as we have actively mitigated the component shortage that was very acute at the beginning of 2022, but very much less so at the end. The financial impact of a challenging global economic climate was small during 2022.
In 2022, Smartoptics continued to invest in its people, processes, and technology to strengthen our position as a challenger in the industry. The company's strategic objective of becoming a recognized leader in Open optical Networking solutions is well underway, with the endorsement of our strategy from customers and partners being strong. We have received orders from larger customers than ever before and established new partnerships with important stakeholders in our industry.
Smartoptics has been focusing on its Open Line System product offering, which allows our customers to lower cost and break unwanted vendor lock-in. Network capacity is upgraded to cope with the ever-growing demand for bandwidth, and the need for higher speed interfaces in networks puts Open Line Systems in focus even more. This leads to new network deployment concept becoming the new standard our target market Metropolitan Area Networks.
Magnus Grenfeldt, CEO Smartoptics Group AS
Smartoptics' approach and position in the market are unique, with a focus on innovation near the edge of the networks and the thousands of medium to small customers in our target geographies. Few of the largest competitors have the same focus. The company's strategy is to fill this gap, while larger system houses generally focus on the most complex areas of the networks and the largest customers.
Smartoptics is also committed to pursuing sustainable and responsible business practices, with a focus on environmental, social, and governance (ESG) issues. The company is aware of its responsibilities towards its stakeholders and is committed to making a positive impact in the communities it operates in.
During the past year, Smartoptics has continuously worked on establishing and strengthening partnerships that will enable the company to reach more customers in the coming years. These partnerships primarily focus on expanding our addressable market and geography, while also complementing our existing product offering and making us more relevant to larger accounts.
While our indirect business has seen growth, our direct business has been growing at a faster pace. This can be attributed to our success in the Communications Service Provider space, where many customers tend to prefer a direct vendor relationship.
The Solutions, Software, and Services business areas of Smartoptics has experienced a remarkable 37% growth compared to the previous year and now represents 69% of our revenue. This area of our business is the most profitable and will continue to serve as the growth engine for the company in the future.
Through developing innovative solutions, software, and services, we broaden our addressable customer base year by year. The introduction of new products targeting more complex network topologies and higher capacity, has been driving the growth as expected. More than 30% of our revenue in the second half of 2022 is related to these products. The speed at which our new products get implemented in live network deployments is remarkable compared to industry standard.
Entering 2023 with an expanded product offering puts us in a very promising place in the market. In addition, our So-Smart software suite has been developed to support network deployments in a great way, allowing our customers to even further explore the CAPEX and OPEX savings that our products can offer.
With this expanded product offering, Smartoptics will be relevant for more and larger customers and more network applications within our existing customer base. The basis for growth is far stronger now compared to the beginning of 2022.
The semiconductor shortage, which was a threat to our ability to deliver our products to our customers during 2021, is much less of a problem when I am writing this. We feel that we have a good control of the situation. In addition to general improvements in this market, Smartoptics took several actions to secure components throughout 2021 and early parts of 2022, and despite the challenges and complexity, we managed to deliver revenue growth and improved profitability.
Looking ahead, we are excited about the opportunities that lie ahead for us. The networking industry is continuously in transformation, and we are well-positioned to leverage our strengths and capture emerging growth opportunities. The world will see higher capacity, more data-centers, enhanced 5G cellular coverage, more fiber put into the ground – resulting in more people being connected and having the ability to take part of all digital opportunities. Our position in the market is continuously improving and our target to grow to USD 100 million in revenue by 2025/2026 remains firm.
Americas EMEA APAC
Solutions Devices Software & Services
Smartoptics core markets are Americas, EMEA and parts of APAC.
During 2022 Smartoptics has continued to grow in EMEA and Americas.
Americas is predominantly USA. The growth in Americas is largely driven by continued success in USA with winning new customers, expanding business with existing larger customers, as well as new sales partnerships. Smartoptics is also making some inroads into Latin America (under Americas) and won a handful of customers.
EMEA is mainly driven by Nordics, UK & Ireland. In EMEA the success has been driven by several wins with mediumsized and smaller network and telecom operators, cloud providers as well as continued strong base business with Enterprises.
During 2022 Americas was the largest market for Smartoptics. Americas grew by 38% between 2021 and 2022. EMEA grew by 19% between 2021 and 2022.
Smartoptics has three main categories of products: Solutions, Optical Devices, Software & Services
Solutions are products for various optical metro networks. Solutions consists of hardware such the DCP-R family, DCP-F family, DCP-M family, Transponders and Muxponders, as well as transceivers included in a complete customer project. Solutions grew 33% between 2021 and 2022. The overall success stems from successful product launches, especially the 404 muxponder and the ROADM system DCP-R.
Software and Services are closely related to Solutions, as customers buy a complete solution including a Software and Services package. There is a recurring element in Software and Services through customers having quarterly or yearly Software and Services subscriptions and renewals. Software and Services is shown after reductinon of deferred revenue. Software and Services grew by 76% between 2021 and 2022, driven by product launches in solutions and investing in both service and software offerings.
Optical devices are transceivers and accessories that are sold independent of systems. Devices grew by 5% between 2021 and 2022.
Smartoptics customers are divided into three market segments: Communication Service Providers (CSP), Internet Content Providers (ICP) and Enterprises
CSPs ranges from incumbents providing a broad service offering to both businesses and consumers. This segment also includes wholesale operators with enterprise and bulk transport service focus. In addition, the segment includes Cable MSO (Multi System Operator) and Broadband providing wired consumer access via for example fiber.Smartoptics has been targeting growth with CSPs with the DCP-M, DCP-F and DCP-R product families. The between growth between 2021 and 2022 was 51%, demonstrating success with this strategy.
ICPs are Internet content, public cloud computing, or neutral co-location providers. This segment had a growth of 16% between 2021 and 2022.
Enterprises includes medium & large enterprises that purchase equipment directly from manufacturer or reseller to support connectivity for non-telecom core businesses; Equipment resold by other service providers for managed services are not included. Typical customers are within-Banking, Government, Utilities and Education. The Enterprise segment grew by 7% between 2021 and 2022 and has provided a good base to build upon. Smartoptics has traditionally been focused on Enterprise, while new products focus on the other two segments.
Revenue split is an estimate, by categorizing customers. A new categorization has been made for 2022, covering all shown years.
Smartoptics has a direct sales force throughout Europe and in the USA. Together with a large network of sales partners in the form of value added resellers, distributors and OEMs Smartoptics is covering many markets and has a cost efficient market access.
The network of sales partners is a valuable asset for Smartoptics. The network has been developed over some 15 years and is continuously improved and new partners are added every year.
The direct business is primarily related to the CSP segment, where procurement of Smartoptics products are handled directly by the customers. As the business with CSP segment has grown the share of direct business has also grown.
The Value Added Resellers are datacom, telecom and ITsystem integrators of various sizes. In close cooperation with Smartoptics and the end customer, these companies designs solutions, which sometimes includes several products and several vendors, while at other times just Smartoptics products.
Distributors are similar to Value Added Resellers, but are usually larger and have a broader offering to a larger customer base. They are also less involved in the design of the solutions for the end customer.
OEMs (distributor / partner) are companies that markets and sells the products from Smartoptics under their own name or where the Smartoptics products are a part of an OEM-branded solution.
Revenue split is an estimate, by categorizing customers. A new categorization has been made for 2022, covering all shown years.
(USD million)
The global optical equipment market is currently valued at approximately USD 15 billion.
Smartoptics specializes in developing products for metro applications, which involve networks within cities or between nearby cities. These products are designed using open and disaggregated principles, meaning they can interoperate with a variety of other vendors' products and function well in a mixed vendor ecosystem. Disaggregation also allows for multiple vendors to deliver different aspects of the network solution, resulting in higher performance at a lower cost point, as well as the ability to continuously upgrade step by step.
In recent years, there has been a shift in the market towards integrating WDM optics directly into routers, also known as IP-over-DWDM. This technology concept has become a more viable option with recent advancements in transceiver form factors, cost levels, and performance.
The global metro WDM market, which includes IP-over-DWDM solutions, is currently worth approximately USD 7.5 billion, and the IP-over-DWDM segment is expected to grow rapidly in the coming years due to its cost efficiency. This is expected to result in an overall flat development of the market, while the IP-over-DWDM share increases quickly.
Overall, Smartoptics is well-positioned to capitalize on this growing trend towards IP-over-DWDM solutions, as our products are designed to be interoperable and cost-effective, making them an attractive option for customers looking to upgrade their metro networks.
These insights are based on research from Cignal.AI and Smartoptics analysis, with the forecast from Cignal.AI being dated March 2023.
Smartoptics' products and solutions are used by a wide variety of customers in different market segments. Key customers include Communication Service Providers (CSPs), Content Providers and Internet Exchanges (IXPs) as well as large enterprises and governmental agencies.
Communication Service Providers (CSPs) form Smartoptics' largest addressable market segment and use Smartoptics products to build cost efficient optical networks interconnecting major points of presence and providing network access for their users. The hierarchical structure of the CSPs' networks offers multiple opportunities for the deployment of Smartoptics ROADM, transponder and muxponder products: At the regional level, which interconnects cities, the 100G and 400G DWDM systems with DCP-R ROADMs from Smartoptics are in strong demand when building ring and mesh
shaped networks. Within cities, i.e., at the metro level, additional rings at 100G with upgrade options to 400G and built with ROADMs from Smartoptics are used to meet the ever-growing demand for further distribution of the CSP's bandwidth. And to reach the thousands of CSP users, access and edge networks using Smartoptics 10G and 100G systems with transponders/muxponders are deployed.
The CSPs have a recurring demand for more bandwidth between their sites, in addition to significant expansion needs when building backhaul networks for e.g., 5G and broadband access. Their technical requirements focus on capacity, reliability, and manageability combined with a demand for low cost and simple deployment. By the addition of several new products such as ROADMs based on the Dynamic Connectivity Platform (DCP), the scope of the Smartoptics offering to the CSPs has been dramatically enhanced in 2022.
The ever-growing demand for bandwidth also drives Internet Content Providers (ICPs) and Internet Exchanges (IXPs) to request bandwidth at a very attractive cost per bit, when interconnecting their sites. A preferred way of achieving this is to deploy IP over DWDM solutions, removing transponders and decreasing the overall cost of the transport layer. Smartoptics innovative and fully open DCP platform is therefore designed to simplify all types of IP over DWDM deployments by reducing cost and automating network configuration. An IP over DWDM architecture further has the advantage of leveraging technology advances more rapidly than traditional systems, thereby facilitating a continuous update of the DWDM connections to higher speeds.
In the same way, Enterprises and Government agencies use Smartoptics' products to boost the bandwidth transported over optical fibers when interconnecting data centers. Using the technology offered by Smartoptics they can transport up to 16 Tbit/s over one fiber pair, and mix and match Ethernet traffic with e.g., storage specific protocols like Fibre Channel. The unprecedented software automation offered by the DCP platform allows the customers to use this advanced technology with very limited in-house competence in how networks are installed, commissioned and operated.
OVERVIEW PORTFOLIO
Until recently, all optical transport networks were built using dedicated, monolithic, optical transport systems originating from the telco world. However, an open architectural approach is now increasingly applied to optical networking, using IP over DWDM, i.e., pluggable optics in standard IP routers and switches, and open line systems including everything needed for the DWDM channels to be carried over longer distances (amplifiers, dispersion compensation, ROADMs etc.). A new breed of disaggregated network solutions has emerged, relying upon standardized hardware with embedded WDM capabilities and with the option of being steered from the same software defined networking (SDN) controllers as other parts of the network.
IP over DWDM solutions are of interest both to enterprises for e.g., data center interconnect (DCI) and to Communication Service Providers (CSPs) for metro edge and metro/ regional networks. The building practices, use of pluggable optics, SDN etc. originating from the enterprise data centers have laid the foundation for a new generation of optical networks, reaping the rewards of breakthroughs in DWDM and transceiver technology.
Illustrations of function of an Open Line System
Smartoptics product portfolio comprises complete Optical Systems and Optical Devices.
To meet the diverse requirements of IP over DWDM with active and open line systems, Smartoptics has introduced the Dynamic Connectivity Platform (DCP) as a multipurpose base, supporting the optical networking needs of both operators and enterprises. The DCP platform uses an open architecture supporting pluggable transceivers, open line systems, and SDN control, resulting in a superior price/performance when compared to legacy solutions.
The DCP platform can be used in all types of IP over DWDM optical networks, may they be simple point-to-point links or advanced, ROADM-based, ring and mesh networks. To fit the varying needs of IP over DWDM, the DCP platform comes in several flavors: The DCP-M, the DCP-R, and the DCP-F open line system families, and the DCP-2-based transponders and muxponders.
The DCP platform leverages two building practices to provide flexibility for both small and large configurations and to cater for use in special situations. Management of all DCP platform products is either fully automatic or controlled by use of either a command line interface or the REST/ NetConf protocols, interfacing with standard SDN architectures as defined by the Open ROADM MSA.
An open line system may be anything from a set of passive optical filters and a fiber to a complex, meshed ROADM network with multiple active elements. To meet the diverse requirements of active open line systems, Smartoptics has introduced three families of DCP products:
For zero touch provisioning of point-to-point links with multiple traffic formats at speeds up to 400G, focusing on the lowest cost per transported bit. The DCP-M products have a fixed form factor chassis, and each model is designed for a particular use case.
For any type of ring and mesh shaped ROADM network with multiple traffic formats at speeds up to 400G, focusing on service reliability and wavelength manageability. The DCP-R products also have a fixed form factor chassis, and each model is designed for a particular application.
For configuration of all types of open line systems with a set of versatile, active, optical units that can be used on their own or extend the functionality of the DCP-M and DCP-R families as well as being used in active/passive optical ring applications. The DCP-F units have a uniquely high level of flexibility based on a building box concept with flexible optical modules that fit into a DCP-2 chassis.
The DCP-M/DCP-R chassis (top) and the DCP-2 chassis with a DCP-F-A22 amplifier and a DCP-F-R22 micro ROADM (bottom)
To facilitate the migration from 10G and 100G optical links to 400G and higher speeds, Smartoptics has introduced a separate family of DCP-2 based transponders and muxponders. Using a transponder, a short range electrical or optical signal from a switch or router can be converted to a long range WDM signal for transport over an open line system. The transponder/muxponder also has functions for optional encryption of the optical signal and for optical channel quality monitoring.
The DCP-108, DCP-1203, and the DCP-1610 transponders are typically used to adapt switches and routers that do not accept pluggable CWDM/DWDM transceivers to use an open WDM line system. These products also often act as a demarcation device between a service provider's network and his subscribers.
The DCP-404 muxponder is primarily used to multiplex several lower bit rate data streams onto a higher speed optical channel at e.g., 400G.
SoSmart is a modular software suite for SDN-based management of Smartoptics' products in an open, multi-layer and multi-vendor optical networking environment. The management suite has a new and modern software architecture with open APIs that enable a high level of management flexibility, modularity, multiple integration possibilities and openness. The Smartoptics SoSmart Software Suite for open network management includes the following building blocks:
SoSmart Manager – The management application for optical network provisioning, also including fault, configuration, administration, performance, and security (FCAPS) functions, and operated via an advanced graphical user interface (GUI).
SoSmart Controller – An open source SDN controller based on TransportPCE.
SoSmart Planner – An optical planning and simulation tool with the same GUI as the SoSmart Manager and using the open-source module GNPy for path simulations.
The SoSmart Software Suite interworks seamlessly with the DCP network elements, each of them having data models based on Yang and supporting the Open ROADM APIs, which are made accessible via the NetConf protocol. This open approach has two important advantages: The DCP network elements may be directly controlled by other SDN controllers supporting the Open ROADM API and
NetConf, and the SoSmart Software Suite can be extended to also control other optical network elements with relevant open APIs.
Smartoptics offers a comprehensive portfolio of optical devices, consisting of optical transceivers supporting data rates up to 400G. The portfolio focuses on delivering thoroughly tested, high end transceivers used in e.g., routers, switches, and radio base stations. In addition to the transceivers Smartoptics offers a complete portfolio of passive WDM filters and cables, where applications span from data center interconnect to pure access network deployments for operators.
Through the optical devices portfolio Smartoptics enable enterprises and service providers to leverage advances in pluggable optics in innovative ways, such as deploying IP over DWDM networks, lowering the cost, and creating better scalability for network owners.
SMART CARE
ranty.
The Complete Care service is our most comprehensive service bundle and contains TAC 24/7/365, software subscriptions and APR+EWS.
Smartoptics' advance product replacement (APR) service is an optional service that can be purchased for any Smartoptics product. If a product is found to be in need of replacement a replacement product with the same or similar functionality will be shipped by the next business day.
The Smart Care offers a bundle of support services including 24/7/365 support and an extended product war-
We offer a complimentary optical network design service. This includes a bill of materials (BOM) to match the future-proof fiber and network requirements of every individual network task as well as recommendations for spare parts.
STAGING AND INSTALLATION SUPPORT
Our pre-staging service encompasses building up and testing the network in our lab. This ensures the network is fully operational prior to shipping and saves valuable time during the installation period.
Smartoptics provides a wide range of support services to its customers. From network design by inhouse engineers, via staging and installation support to after sales support, Smartoptics ensures that the customer gets the most out of his network. The support offering includes several pre-defined service bundles, where the customer can choose a complete set including technical support 24/7, software update subscriptions, advance product replacement, and extended warranty. Alternatively, the customer may pick and choose the individual support services of his interest.
TECHNICAL SUPPORT Our aim is to meet your network expectations by designing a network to be as high-performance and cost-efficient
as possible.
Smartoptics' extended warranty service (EWS) allows you to extend the term of your product warranty beyond the standard term.
Smartoptics offers training programs for everything from xWDM basics to our product portfolio and how to design and implement an optimized network to meet your current and ongoing capacity requirements.
THOMAS RAMM CHAIRMAN OF THE BOARD BORN 1964
BOARD MEMBER SINCE 2013
Chairman of the Board of Ignis AS, Chairman of the Board of Etain AS, Chairman of the Board of Apini AS, Chairman of the board Electronic coast, Owner of Coretech AS, Notion Holding AS
Bachelor of Information Technology from EDB høyskolen in Oslo, Norway
HOLDINGS IN SMARTOPTICS GROUP 31 783 599 shares, as of December 31, 2022
SARA HEINER ASPLUND BOARD MEMBER
BOARD MEMBER SINCE 2022
OTHER CURRENT ASSIGNMENTS CFO Svea Solar
MSc. in Industrial Engineering and Management from the Royal Institute of Technology
15 850 429 shares, as of December 31, 2022 EINAR CASPERSEN BOARD MEMBER
BORN 1968
BOARD MEMBER SINCE 2022
OTHER CURRENT ASSIGNMENTS Lawyer Advokatfirmaet Schjødt
EDUCATION Cand Jur, Law from University of Oslo
HOLDINGS IN SMARTOPTICS GROUP
BOARD MEMBER
BORN 1963
BOARD MEMBER SINCE 2019
OTHER CURRENT ASSIGNMENTS CEO of Outpost24 AB
EDUCATION MSc. in Systems Engineering from the Royal Institute of Technology
HOLDINGS IN SMARTOPTICS GROUP 463 078 shares, as of December 31, 2022 KARL THEDÉEN
MAGNUS GRENFELDT CHIEF EXECUTIVE OFFICER
Has held several management, sales and business development positions at Transmode, Infinera, ADVA Optical Networking, Sycamore Networks and Ericsson.
MSc. Materials Physics from Uppsala University
2016
1 857 489 shares and 867 031 warrants, as of December 31, 2022
MIKAEL HAAG CHIEF FINANCIAL OFFICER
1975
Prior to joining Smartoptics he has held senior finance positions at Tele2, Ericsson, Arthur D Little as well as Danske Bank.
MSc. Finance & Accounting from Stockholm School of Economics as well as a MSc. Industrial Engineering and management degree from the Royal Institute of Technology
HOLDINGS IN SMARTOPTICS GROUP 248 747 shares and 325 136 warrants, as of December 31, 2022
1969
Has held various positions at Transmode and Infinera including a 4-year assignment in the USA where he worked as the director of sales engineering. Prior to this Kent held several positions at Ericsson.
BSc. In Engineering from the Royal Institute of Technology
2018
HOLDINGS IN SMARTOPTICS GROUP 280 762 shares and 325 136 warrants, as of December 31, 2022
CARINA OSMUND CHIEF OPERATING OFFICER
Has held several management positions within operations and global supply chain at EG Electronics, Climeon, Profoto, General Electric and Trimble.
MBA from Blekinge Institute of Technology as well as a MSc. Industrial Engineering and management degree from the Royal Institute of Technology
HOLDINGS IN SMARTOPTICS GROUP 15 100 shares, as of December 31, 2022
1976
Per has held several sales and management positions at Tilgin, Transmode and Infinera.
MSc. In Engineering from the Royal Institute of Technology
280 075 shares and 216 758 warrants, as of December 31, 2022
Smartoptics Group AS is the holding company of the Smartoptics group of companies. The group consists of Smartoptics Group AS and three subsidiaries (Smartoptics AS, Smartoptics Sverige AB and Smartoptics US Corp).
Smartoptics is a Scandinavian company that provides innovative optical networking solutions and devices for the new era of open networking.
We focus on solving network challenges and increasing the customers efficiency by having an open network approach. This allows customers to break unwanted vendor lock ins, remain flexible and reduce costs. Smartoptics products are based on in-house developed hardware and software, enhanced through associated services.
The customer base includes thousands of enterprises, governments, cloud providers, Internet exchanges as well as cable and telecom operators.
Smartoptics partner with leading technology and network solution providers and uphold numerous certifications and approvals from major switching and storage solution providers such as Brocade, Cisco, and Dell. Smartoptics has a global reach through our own sales force and more than 100 business partners including distributors, OEMs and VARs.
The Smartoptics group has three main product categories.
Solutions comprises software and hardware systems which enable transport of data over optical fibers in networks and between data centers. Smartoptics' product offering is designed to target the metro and regional market. Target customers may be enterprises, Internet content providers or communication service providers.
Devices consists of passive optical multiplexers, transceivers (optical interfaces for routers, switches and base-stations for example) and various accessories. Optical transceivers are complete pluggable optical interfaces for any host system, ranging from simple fiber to the home termination points to high end routers, switches and base stations. Smartoptics offers a complete portfolio that can be used in a wide range of host systems. Smartoptics offers optical transceivers capable of transmitting and receiving from 100 Mbit/s to 400 Gbit/s.
Software and services consists of technical support, advanced product replacement, extended warranty and software upgrades. Software and services is usually sold together with the other type of products.
The employees of the group are located in Norway, Sweden, United Kingdom, Germany, Poland and the United States. Smartoptics Group AS operates from Brynsalléen 2, 0667 Oslo.
The Smartoptics group's revenues amounted to USD 57.4 million in 2022, an increase of 25.0% from 2021. The revenue growth was all organic. The revenue growth is driven by success within Solutions and Software and services business.
Gross profit was USD 25.4 million, resulting in a gross margin of 44.2%. The gross margin improved by 1.5%-points compared to 2021. The improvement is a result of business mix shift toward higher share of Solutions and Software and services.
Operating costs amounted USD 14.5 million. The operating costs have increased as a result of a growing organization. Smartoptics group had 95 employees at year end 2022. About 82% of the operating costs are related to employees and consultants.
Operating profit was 9.3 million and opearting margin 16.2%, an increase of 5.3%-points copared to 2021. The increase in profitability is driven by revenue growth and a business mix shift which is increasing gross margin, while at the same time growing the operating costs slightly slower. Currency changes, with USD strenghten vs SEK and NOK have reduced the increase in operating costs.
Depreciation and Amortization was USD 1.5 million. Amortization is related to capitalization of personell costs within key projects in research and development. The capitali-
zed amount for the year is USD 0.5 million. Depreciation is primarily related to production equipment and lab instruments used for development and office equipment.
Net financial items were USD -0.4 million, of which interest payments accounted for USD -0.2 million and net translation differences USD -0.2 million.
Profit/(loss) for the year was USD 6.8 million.
The parent company operates as a holding company, and all operational activities are conducted in the subsidiaries. The net income for the parent company was NOK 62.7 million.
Total non-current assets amounted to USD 6.4 million at the end for 2022. This mainly consists of Right-of-use assets (USD 2,4 millon), capitalized research and development costs (USD 0.9 million) as well as deferred tax asset (USD 1.3 million).
Total current assets amounted to USD 37.9 million at the end of 2022. Current assets consist predominantly of inventory, trade receivables and cash. Cash position was USD 5.7 million at year end.
The group had a total equity of USD 27.6 million, corresponding to an equity ratio of 62.2% at the end of the year.
Total liabilities amounted to USD 16.8 million at the end of the year. Current liabilities was USD 11.6 million and non-current liabilities was USD 5.2 million. The group had USD 1.5 million in interest bearing debt. Current liabilities consist of mainly trade payables (USD 5.8 million) and deferred revenue (USD 1.8 million). Trade payables has increased with increasing revenue. Deferred revenue relates to pre-paid service business, where revenue recognition is made as the performance obligation of the service is fulfilled and the deferred revenue is transformed to revenue.
Operating cash flow was positive USD 0.1 million. This was driven by overall profitable business, while increasing working capital contributed negatively. Working capital is defined as trade receivables plus inventory, less trade receivables and deferred revenue. Working capital grew by 31.6 % as an effect of the overall revenue growth for the group as well as supply chain disturbances related to the global semi-conductor shortage.
Smartoptics operates in a competitive environment. Product performance, network design philosophy, solution design capabilities, compliance with industry standards, price levels and ability to deliver on time are some of the aspects that determine success going forward. Competition may intensify in some areas, impacting Smartoptics competitive position and attractiveness to customers.
The war in Ukraine has had limited commercial implications. Smartoptics has no direct business in Ukraine no employees, customers, or suppliers. About 1% of the group's revenue came from Russia. All future shipments to Russia have been put on hold.
Smartoptics rely on a global supply chain with suppliers located in Europe, North America and in Asia. Rising tension between major powers in the world could negatively impact these global supply chains.
Covid has had impact on Smartoptics business during the past couple of years.
In the beginning of the pandemic Smartoptics device orders saw a dramatic boost, while solution orders dropped. As the months passed the solution orders recovered to a more normal level. However, as some of the business was pushed to later in the year, the normal seasonality of the business was a bit altered. The normal seasonality was restored during 2022.
Customer credit risk is continuously monitored. All customers are subject to a credit evaluation, or the use of pre-payment. The group has historically had very low levels of bad debt, going forward minimal impact from credit risks are expected.
The group's financial position is strong with USD 5.7 million in cash at the end of the year. In addition, the group has an undrawn bank credit facility of USD 2.6 million.
Long-term borrowings amounted to USD 1.5 million per year end 2022. There are two loans with Innovasjon Norge. These are denominated in NOK. These loans will be fully amortized in 2026. The group has no other interest-bearing debts.
A majority of Smartoptics customers are located in Europe and in USA and Canada. Nearly all commercial contracts are in USD, both with customers and suppliers. This creates a situation with very limited exchange rate risk. Operating costs, which predominantly related to salaries, are in local currencies, i.e. SEK, NOK, USD, EUR and GBP. Currency fluctuations will have an impact on profitability, through increasing or decreasing operating costs.
In the wake of the lockdowns throughout Asia and in particular China, a shortage of key components arose. Throughout 2022 we have experiences longer than normal lead times on several components.
During 2022 Smartoptics proactively purchased the necessary components required for customer deliveries, including purchases on the spot market, as supplier lead times increased dramatically. This practice came with an extra cost, estimated to USD 1.5 million. Towards the end of 2022 the situation had normalized.
The employees of Smartoptics are one of the most vital assets. Competence, experience and relations may be hard to replace. As Smartoptics has grown in size the group is becoming an even more attractive employer, with stronger ability to attract talent in many markets. The personnel turn-over has been on low levels, during the past years.
At the end of the financial year, the group employed 81 full-time employees and the parent company has 2 employees. Of the 83 full-time employees in the group 18 were women and 65 were men. For the parent company both employees are men. The board of directors consists of four persons, whereof one female. There were no injuries or accidents during the financial year. Sick leave has been low and there have been no long-term sick leavers. The working environment in the group is considered good, and ongoing measures for improvement are implemented.
From July 1st, 2022, the Norwegian Transparency Act came into effect, which mandates the Smartoptics Group to perform due diligence assessments based on OECD guidelines. The Group is obligated to release an annual report complying with the Transparency Act on smartoptics.com, no later than June 30th, 2023
The Group's sustainability report will also be published on www.smartoptics.com no later than June 30th, 2023.
At Smartoptics, we are committed to maintaining a workplace that is free from discrimination of any kind. We ensure that all aspects of recruitment, compensation, skills development, promotion, and retirement are based solely on merit and are not influenced by gender or sexual orientation, race, color, age, pregnancy, marital status, religion, political opinion, nationality, ethnic origin, disease, or disability. Additionally, we have a robust grievance mechanism in place that enables employees to submit complaints without fear of retaliation. We take these matters very seriously and work diligently to create a work environment that is fair, respectful, and supportive for all employees.
Smartoptics is fully committed to upholding the United Nations Convention of Human Rights. We believe that all employees should have a clear understanding of their employment conditions. We are dedicated to ensuring that our employees receive fair and reasonable pay and benefits that meet or exceed applicable laws and industry standards.
We strictly adhere to applicable laws regarding working hours and provide vacation time in accordance with the respective local vacation acts. At Smartoptics, we have a zero-tolerance policy towards forced labor and child labor. We respect the right of every co-worker to freedom of association and collective bargaining, and we do not tolerate any form of punishment or harassment for exercising these rights.
We place the highest priority on the health and safety of our employees. We conduct regular Health, Safety and Environment (HSE) rounds with a dedicated safety representative to ensure that our workplace environment is healthy and safe. Our HSE audits cover a wide range of areas, including emergency plans, control of fire equipment, physical and psychosomatic work environment, and more. Any findings from our HSE audits are acted upon promptly to ensure that necessary steps are taken to create a safe and healthy work environment.
We are fully committed to maintaining high standards of health and safety in compliance with relevant local legislation and guidelines in all areas in which we operate. Any health and safety incidents are recorded and thoroughly investigated to prevent recurrence in the future.
We are committed to creating a work environment that values and respects every employee. We believe that every employee should be always treated with respect and dignity. Discrimination of any kind based on partiality or prejudice is strictly prohibited in our workplace. This includes discrimination based on race, color, gender, sexual orientation, gender identity, marital status, pregnancy, parental status, religion, political opinion, nationality, ethnic background, social origin, social status, indigenous status,
disability, age, union membership or employee representation, and any other characteristic protected by local law, as applicable.
We recognize the importance of responsible waste management and are committed to reducing our environmental footprint. We believe that it is essential to minimize the impact of our operations on the environment and contribute to sustainable practices wherever possible.
We are committed to further reducing our environmental impact by exploring additional sustainable practices and working with suppliers and partners who share our commitment to sustainability. Through our efforts, we hope to inspire others to adopt sustainable practices and contribute to a more environmentally responsible future.
Smartoptics is committed to ensuring that our products are environmentally responsible and comply with all relevant regulations and standards. We are proud to say that our products are RoHS/REACH compliant and, where applicable, are certified by organizations such as CE, UL/ ETL, TÜV Rheinland, and NEBS level 3. We work with a recycling and disposal company to ensure that all waste generated by our products complies with the WEEE regulation from the European Commission.
We recognize that our operations have an impact on the environment, and we are committed to minimizing our carbon footprint. To achieve this, we regularly measure our greenhouse gas emissions in accordance with the GHG protocol, and use this information to identify areas where we can reduce our impact.
One key area where we are focusing our efforts is on transportation. We are actively seeking out suppliers who can offer us solutions that reduce our carbon footprint, and we encourage all employees to choose environmentally friendly options when it comes to travel.
Any potential future risk related to potential adverse change in climate is hard to quantify for Smartoptics.
Smartoptics is committed to conducting its business in an ethical and legal manner, and we expect the same from our business partners. Therefore, we have developed a Business Partner Code of Conduct to ensure that our business partners comply with our values and standards. We share this code with all our business partners and expect them to adhere to it in all their dealings with us.
The Code of Conduct includes principles such as respect
for human rights, labor rights, and environmental protection. We expect our business partners to comply with all applicable laws and regulations, including those related to labor, health and safety, and the environment. We also require that our business partners treat their employees with dignity and respect, and do not engage in any form of forced labor or child labor.
In addition, we expect our business partners to conduct themselves with honesty, integrity, and transparency, and to avoid conflicts of interest. We encourage our business partners to communicate openly with us and to report any suspected violations of our Code of Conduct or applicable laws and regulations. We will take appropriate action in response to any such reports, including termination of our business relationship if necessary.
We have a zero-tolerance policy towards any form of corruption, and conduct regular internal training to ensure all employees are aware of our approach and to raise awareness.
Smartoptics strictly prohibits its employees from soliciting, accepting, or offering any form of bribe, kickback, or unethical benefit to any representative of a business partner or third party, as this is considered unlawful and goes against our values.
In the course of employment, any gifts or entertainment given or offered to a third party must be modest, appropriate, and directly related to business. They should comply with applicable laws and regulations, and conform to the recipient's organization policies or rules. All gifts and entertainment must be fully disclosed and transparent. Cash or cash equivalents shall never be offered, accepted, or requested in any form.
Money laundering and the funding of terrorist and criminal activities is strictly prohibited. It is therefore vital that employees are familiar with and comply with all applicable laws related to such matters.
Our business decisions are always made in the best interests of Smartoptics. Personal considerations or relationships are never to influence our decisions.
Smartoptics maintains political neutrality and refrains from engaging in politics or supporting any political initiatives. The company does not provide any financial support to political parties. All employees are expected to observe this principle and avoid any actions or statements that could be perceived as political.
Insider trading is strictly prohibited at Smartoptics. Employees are prohibited from trading in Smartoptics shares based on any material, non-public information that they may have about the company. Any employee found to be engaging in insider trading or aiding and abetting such activity will face disciplinary action, which may include termination of employment, and could also face legal or criminal proceedings. It is the responsibility of all employees to ensure that they are fully aware of and comply with all applicable laws and regulations regarding insider trading.
At Smartoptics, we prioritize the management of information and uphold the values of confidentiality, integrity, and accuracy. Our employees are required to maintain the confidentiality of sensitive information, which includes data pertaining to Smartoptics, customers, and colleagues. We also consider confidential any non-public information related to Smartoptics' customers, employees, suppliers, shareholders, processes, and internal documents.
We take necessary measures to comply with personal data regulations and privacy laws in the countries where we operate. To this end, we have implemented a Global Data Protection Policy that all employees are required to follow. This policy ensures that we adhere to applicable regulations and maintain the highest standards of data protection.
We are committed to protecting and respecting intellectual property, including our own and that of others. Employees are expected to use and protect company assets and resources responsibly and not for personal gain or external work. Smartoptics values the trust of our customers, partners, and suppliers and respects their intellectual property. Any unauthorized use of third-party intellectual property will not be tolerated and may result in disciplinary action.
Smartoptics recognizes that employees may feel uncomfortable raising an issue directly with the person involved. Therefore, we have a whistleblower function, which guarantees anonymity and the option to receive feedback if desired. Whistleblowers are protected and every report is handled with confidentiality.
Our whistleblowing system ensures that employees can report any concerns they have without fear of retribution or retaliation. We take every report seriously and investigate them thoroughly to ensure that any issues are addressed and resolved promptly. Smartoptics is committed to creating a safe and ethical work environment for all employees, and our whistleblower function is an essential part of achieving this goal.
We are ISO 14001:2015 and ISO 9001:2015 certified and the management system is continuously updated to ensure that we follow laws, regulations and risk management.
Our products are RoHS/REACH compliant as well as CE, UL/ETL, and TÜV Rheinland Certified. We are actively developing our products with a target to comply with NEBS level 3.
For all waste, we have engaged a recycle and disposal company in order to comply with the WEEE-regulation from the European Commission.
Our products are RoHS/REACH compliant as well as CE, UL/ETL, and TÜV Rheinland Certified. We are actively developing our products with a target to comply with NEBS level 3.
For all waste, we have engaged a recycle and disposal company in order to comply with the WEEE-regulation from the European Commission.
The group maintains liability insurance for the members of the board against liabilities that may arise from the performance of normal duties as board members. The limit of liability is NOK 10 million for each claim and per year.
The Board of Directors and the management confirm that the going concern assumption has been applied in preparing the annual accounts and that this assumption is realistic. The group has enjoyed a strong revenue growth over the past five years and has seen a steadily increasing profitability during the same period. The group's equity position and business momentum cater for favorable development over the coming years.
The Board of Directors has proposed to allocate the net income of NOK 14.6 million in the parent company to other equity and NOK 48.1 million to dividend, equal to NOK 0.5 per share.
The outlook for Smartoptics over the coming years is favorable, given the market situation, with adoption of open and disaggregated practices, as well as Smartoptics ability to develop new products and solutions, and addressing the customers needs. The ambition to reach USD 100 million in revenue by 2025/2026 remains firm, assuming that market conditions are unchanged.
There are no significant events affecting the group after the reporting period.
At the end of 2022 Smartoptics Group AS had 96 286 593 shares issued. The company also has 2 084 061 share warrants outstanding. Smartoptics Group AS was listed on Euronext Growth on June 3rd 2021, having the ticker SMOP. Listing price was 10.38 NOK.
Closing price for the Smartoptics share on Jan 3rd 2022 was 10.868 NOK. Closing price for the Smartoptics share on Dec 30th 2022 was 19.4 NOK.
The Smartoptics share is a part of Euronext Growth Allshare index. This index declined by 24.72% during 2022. The Smartoptics share price increased by 78.5% during 2022.
19 April 2023 Oslo, Norway
Thomas Ramm Chairman of the Board
Sara Heiner Asplund Board member
Einar Caspersen Board member
Karl Thedéen Board member
Magnus Grenfeldt Chief Executive Officer
| Consolidated statement of profit or loss | 2022 | 2021 | |
|---|---|---|---|
| Amounts in USD 1.000 | Notes | ||
| Revenue from contracts with customers | 3 | 57 367 | 45 851 |
| Other operating income | 3 | -1 | 51 |
| Total revenue and other operating income | 57 366 | 45 902 | |
| Direct cost of sales | -32 014 | -26 311 | |
| Employee benefit expenses | 4 | -11 958 | -10 983 |
| Other operating expenses | 5 | -2 552 | -2 379 |
| Total operating expenses | -46 524 | -39 673 | |
| Amortization of intangible assets | 9 | -324 | -407 |
| Depreciation | 10, 11 | -1 218 | -1 228 |
| Total depreciation and amortization | -1 542 | -1 636 | |
| Operating profit/(loss) | 9 300 | 4 594 | |
| Financial income | 6 | 40 | 19 |
| Financial expenses | 6 | -229 | -167 |
| Net foreign exchange gains (losses) | 6 | -253 | -149 |
| Net financial items | -442 | -297 | |
| Profit/(loss) before income tax | 8 858 | 4 297 | |
| Income tax | 7 | -2 069 | -765 |
| Profit/(loss) for the year | 6 789 | 3 532 | |
| Earnings per share in USD | |||
| Basic earnings per share | 8 | 0.071 | 0.038 |
| Diluted earnings per share | 8 | 0.070 | 0.038 |
| Consolidated statement of comprehensive income | |||
| Profit/(loss) for the year | 6 789 | 3 532 | |
| Other comprehensive income: | |||
| Items that might be subsequently reclassified to profit or loss: | |||
| Exchange differences on translation of foreign operations | 60 | 62 | |
| Item that are not reclassified to profit or loss: | |||
| Exchange differences on translation to another presentation currency | -2 395 | -453 | |
| Total comprehensive income for the year | 4 454 | 3 141 | |
| Total comprehensive income is attributable to: |
Owners of Smartoptics Group AS 4 454 3 141
| Consolidated statement of financial position | 31/12/2022 | 31/12/2021 | 01/01/2021 | |
|---|---|---|---|---|
| Amounts in USD 1.000 | Notes | |||
| Assets | ||||
| Non-current assets | ||||
| Intangible assets | 9 | 941 | 904 | 964 |
| Property, plant and equipment | 10 | 1 787 | 1 392 | 781 |
| Right-of-use assets | 11 | 2 380 | 2 301 | 478 |
| Non-current receivables against related party | 18 | - | - | 48 |
| Deferred tax assets | 7 | 1 326 | 3 254 | 4 130 |
| Total non-current assets | 6 433 | 7 851 | 6 401 | |
| Current assets | ||||
| Inventories | 21 | 15 423 | 12 095 | 8 147 |
| Trade receivable | 14 | 15 915 | 7 812 | 6 138 |
| Receviable to related party | 18 | 0 | (0) | 454 |
| Other current assets | 13 | 943 | 1 331 | 1 033 |
| Cash and cash equivalents | 15 | 5 660 | 9 380 | 4 651 |
| Total current assets | 37 940 | 30 619 | 20 424 | |
| Total assets | 44 374 | 38 470 | 26 825 | |
| Equity and liabilities | ||||
| Equity | ||||
| Share capital | 16 | 195 | 218 | 211 |
| Share premium | 16 | 12 801 | 14 307 | 4 357 |
| Other paid in capital | 8 | 152 | 170 | - |
| Foreign currency translation reserves | 188 | 128 | 67 | |
| Retained earnings | 14 269 | 8 327 | 7 242 | |
| Total equity | 27 605 | 23 150 | 11 878 | |
| Non-current liabilities | ||||
| Lease liabilities (non-current portion) | 11, 17 | 1 759 | 1 556 | 168 |
| Contract liabilities (non-current portion) | 3 | 2 297 | 1 574 | 1 311 |
| Other non-current liabilities | 17 | 1 120 | 1 724 | 2 246 |
| Total non-current liabilities | 5 176 | 4 854 | 3 725 | |
| Current liabilities | ||||
| Lease liabilities (current portion) | 11, 17 | 674 | 782 | 319 |
| Trade payable | 19 | 5 831 | 6 215 | 4 041 |
| Contract liabilities (current portion) | 3 | 1 818 | 1 379 | 980 |
| Current tax liabilities | 7, 19 | 868 | 59 | 187 |
| Other current liabilities | 17, 19 | 2 401 | 2 030 | 5 695 |
| Total current liabilities | 11 592 | 10 465 | 11 222 | |
| Total liabilities | 16 769 | 15 320 | 14 947 | |
| Total equity and liabilities | 44 374 | 38 470 | 26 825 |
19 April 2023 Oslo, Norway
Thomas Ramm Chairman of the Board
Sara Heiner Asplund Board member
Einar Caspersen Board member
Karl Thedéen
Board member
Magnus Grenfeldt Chief Executive Officer
| Consolidated statement of changes in equity | Note | Share capital |
Share premium |
Other paid in capital |
Transla tion dif ferance reserves |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|---|
| Amounts in USD 1.000 | |||||||
| Equity at 1 January 2021 | 21 | 211 | 4 357 | - | 67 | 7 242 | 11 878 |
| Profit/loss for the year | 3 532 | 3 532 | |||||
| Other comprehensive income: | |||||||
| Exchange differences on translation of foreign operations |
62 | 62 | |||||
| Exchange differences on translation to another presentation currency* |
-7 | -142 | - | -305 | -453 | ||
| Total comprehensive income/loss for the year | -7 | -142 | - | 62 | 3 228 | 3 141 | |
| Issuance of shares | 16 | 14 | 11 290 | 11 304 | |||
| Issuance of share warrants | 4, 8 | 170 | 170 | ||||
| Transaction costs on equity issues | 16 | -1 199 | -1 199 | ||||
| Dividend | 16 | -2 143 | -2 143 | ||||
| Equity at 31 December 2021 | 218 | 14 307 | 170 | 128 | 8 327 | 23 150 | |
| Profit/loss for the year | 6 789 | 6 789 | |||||
| Other comprehensive income: | |||||||
| Exchange differences on translation of foreign operations |
60 | 60 | |||||
| Exchange differences on translation to another presentation currency* |
-23 | -1 507 | -18 | -847 | -2 395 | ||
| Total comprehensive income/loss for the year | -23 | -1 507 | -18 | 60 | 5 942 | 4 454 | |
| Equity at 31 December 2022 | 195 | 12 801 | 152 | 188 | 14 269 | 27 605 |
*The currency translation differences arising from the translation to the presentation currency is not included as a translation differences reserves, but presented as part of the different categories of the equity. These translation differences cannot be recycled through profit and loss.
| Consolidated cash flow statement | 2022 | 2021 | |
|---|---|---|---|
| Amounts in USD 1.000 | Notes | ||
| Cash flows from operating activities | |||
| Profit/(loss) before income tax | 8 858 | 4 297 | |
| Adjustments for: | |||
| Depreciation and amortization | 9, 10 | 1 542 | 1 636 |
| Interest | 6 | 109 | 143 |
| Change in inventory | 23 | -3 328 | -3 996 |
| Change in trade receivable | 14 | -8 103 | -1 711 |
| Change in contract liabilities (deferred revenue) | 3 | 1 163 | 675 |
| Change in trade payable | 13 | -384 | 2 198 |
| Change in other current assets and other liabilities | 19 | 194 | -1 853 |
| Interest received | 6 | 40 | 19 |
| Net cash inflow from operating activities | 91 | 1 408 | |
| Cash flows from investing activities | |||
| Payment for property, plant and equipment | 10 | -1 121 | -1 167 |
| Payment for development cost | 9 | -457 | -341 |
| Other investing activities | - | 48 | |
| Net cash (outflow) from investing activities | -1 578 | -1 460 | |
| Cash flows from financing activities | |||
| Proceeds from issuance of ordinary shares | 16 | - | 10 091 |
| Proceeds from issuance of warrants | 16 | - | 170 |
| Dividend paid out | 16 | - | -2 143 |
| Downpayment of credit facility | 17 | - | -2 105 |
| Repayment of borrowing | 17 | -238 | -189 |
| Paid interest on borrowing | 17 | -149 | -81 |
| Repayments of lease liabilities | 17 | -743 | -807 |
| Net cash inflow from financing activities | -1 130 | 4 935 | |
| Net increase/(decrease) in cash and cash equivalents | -2 616 | 4 883 | |
| Cash and cash equivalents as of 1 January | 9 380 | 4 624 | |
| Effects of exchange rate changes on cash and cash equivalents | -1 104 | -127 | |
| Cash and cash equivalents as of 31 December | 5 660 | 9 380 |
Smartoptics Group AS, the holding company of the Smartoptics Group (the Group), is a limited liability company incorporated and domiciled in Norway, with its head office in Brynsalléen 2, 0667 Oslo. The Company is listed on Euronext Growth in Oslo, Norway and has the ticker "SMOP".
Smartoptics provides innovative optical networking solutions and devices for the new era of open networking. The group focuses on solving network challenges and increasing the customers efficiency. Smartoptics customer base includes thousands of enterprises, governments, cloud providers, Internet exchanges as well as cable and telecom operators.
Smartoptics leverages modern software design principles and enables customers increased flexibility by having an open network design approach. This allows the customers the freedom to remain flexible and reduce costs. The products are based on in-house developed hardware and software, enhanced through associated services.
These consolidated financial statements have been approved for issuance by the Board of Directors on 19th April 2023.
The general accounting policies applied in the preparation of these consolidated financial statements are set out below. Specific accounting principles are described in the relevant notes.
The consolidated financial statements of Smartoptics are prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU), and additional disclosure requirements in the Norwegian Accounting Act as effective of 31 December 2022.
The consolidated financial statements are presented in United States Dollar (USD), and have been rounded to the nearest thousand unless otherwise stated. As a result of rounding adjustments, amounts and percentages may not add up to the total.
The financial statements are prepared on a going concern basis. The financial statements have been prepared on a historical cost basis.
The Group's presentation currency is USD. Smartoptics Group has decided, as from December 2022, to present its financial statements in USD, since the share of revenue and expenses in USD is significant for the operational activities and has the main impact on the result of operations. The foreign exchange risk with fluctuation in currency exchange rates will therefore be minimized. The functional currency of the parent company is NOK, since the funds from financing activities, such as loans, and adminstration costs are based in NOK.
For consolidation purposes all subsidiaries with a different currency than the parent company is translated into NOK and the consolidated numbers are then translated into the presentation currency, USD, to the rate applicable at the balance sheet date. Income statements are translated at the average exchange rate that approximates the prevailing rate at the date of transaction. All exchange differences are recognized in other comprehensive income/(loss) as translation differences that might be recycled to profit or loss on disposal or partial disposal of the net investment. Smartoptics has chosen to use closing rate for transactions directly to equity (share capital, share premium and other paid in capital). The currency translation differences arising from the translation to the presentation currency is not included as a translation differences reserves, but presented as part of the different categories of the equity. These translation differences cannot be recycled through profit and loss.
Foreign currency transactions are translated into the functional currency using the exchange rates at the transaction date. Monetary balances in foreign currencies are translated into the functional currency at the exchange rates on the date of the balance sheet. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies are generally recognized in the consolidated statement of profit or loss.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Figures from subsidiaries with different account policies are amended to ensure consistent accounting policies for the Group.
If the Group loses control over a subsidiary it derecognizes the assets, liabilities, and non-controlling interest, and reclassifies to profit or loss, or transfers directly to retained earnings as appropriate, the amounts recognized in other comprehensive income/(loss) in relation to the subsidiary.
An asset is classified as current when it is expected to be realized or sold, or to be used in the Group's normal operating cycle, or falls due or is expected to be realized within 12 months after the end of the reporting period. Other assets are classified as non-current. Liabilities are classified as current when they are expected to be settled in the normal operating cycle of the Group or are expected to be settled within 12 months of the end of the reporting period, or if the Group does not have an unconditional right to postpone settlement for at least 12 months after the balance sheet date.
Smartoptics has not identified any separate segments in accordance with IFRS 8 Operating segments. Smartoptics operates on a group level, the products in each product group, Solutions, Devices and Software & Services are sold together, to the same customers and through the same channels. The Group's internal financial reporting is done on a product group and geographical split, however no seperate segments are used in this reporting.
Management has used estimates and assumptions that have affected assets, liabilities, revenues, expenses and information on potential liabilities. Future events may lead to these estimates being changed. Estimates and their underlying assumptions are reviewed on a regular basis and are based on best estimates and historical experience. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Two of the Group's customers represented over 10% of the total revenues for 2022 individually, 19% and 16%. In comparison, the same customers represented 8% and 16%, respectively, of the total revenue in 2021.
Management has, when preparing the financial statements; made certain significant assessments based on critical judgment when it comes to application of the accounting principles.
Material exercise of judgment and estimates relate to the following matters:
A limited amount of development costs is capitalized to the extent that a future financial benefit can be identified, development of an identifiable intangible asset and the expenses can be measured reliably. In the opposite case such costs are expensed when incurred. Capitalized development costs are amortized on a straight-line basis over its economic life. Research costs are expensed on an ongoing basis.
Revenue is accounted for in accordance with IFRS 15 Revenue from contract with customers. IFRS 15 requires an entity to identify the contract and the individual performance obligations, determine the transaction price, allocate the transaction price to the individual performance obligations and recognize revenue when or as performance obligations are satisfied. A performance obligation is satisfied when or as the customer obtains control of the goods or services delivered.
At Smartoptics performance obligations arise from the type of product. Each type of product has a related performance obligation. The different types of products are divided into solutions, devices and software & services.
Services provided by Smartoptics are purchased separately or with products sold by the company. Purchase of services can occur at the same time as purchase of goods or at a later stage. Deferred revenue from the sale of services is recognized in the income statement based on the duration of the contract period.
The group sells software and service contracts with a contract period from 3 months to 6 years. For contracts that are invoiced prior to the contract period, the revenue is booked on the balance sheet and recognized according to the contract period. Software and services include items that are invoiced as a one time fee and where the revenue is recognized at the point of sale, like software lincense fees, installation fees and licences upgrades.
| Revenue information | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| Solutions | 35 474 | 26 689 |
| Devices | 17 641 | 16 800 |
| Software & Services | 4 251 | 2 414 |
| Total revenue from contracts with customers | 57 366 | 45 902 |
| Timing of revenue recognition | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| Solutions products transferred at a point in time | 35 474 | 26 689 |
| Device products transferred at a point in time | 17 641 | 16 800 |
| Software & Services transferred at a point in time | 3 445 | 904 |
| Software & Services transferred over time | 805 | 1 510 |
| Total revenue from contracts with customers | 57 366 | 45 902 |
| Geographic split of revenues | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| EMEA | 26 951 | 20 178 |
| Americas | 27 927 | 22 639 |
| APAC | 2 489 | 3 085 |
| Total revenue from contracts with customers | 57 366 | 45 902 |
| Contract assets and contract liabilities | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1.000 | |||
| Contract liabilities (deferred revenue) - current | 1 818 | 1 379 | 980 |
| Contract liabilities (deferred revenue) - non-current | 2 297 | 1 574 | 1 311 |
| Total | 4 116 | 2 953 | 2 291 |
| Contract assets and contract liabilities | 2022 | 2021 | |
| Contract liabilites at 1 January | 2 966 | 2 291 | |
| New contract liabilites | 2 203 | 2 227 | |
| Revenue recognized in current year | -805 | -1 510 | |
| Exchange differences | -236 | -55 |
Contract liabilites at 31 December 4 115 2 953
The Group has a defined contribution plan for some of its employees. The Group's payments are recognized in the profit or loss as an employee benefit expenses for the year to which the contribution applies.
| Employee benefit expenses | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| Wages and salaries | 8 738 | 8 168 |
| Social security tax | 2 193 | 1 600 |
| Pension costs | 818 | 787 |
| Other benefits | 209 | 428 |
| Total | 11 958 | 10 983 |
| Number of employees | 83 | 75 |
The Group's Norwegian entities are obligated to follow the stipulations in the Norwegian Mandatory Occupational Pensions Act. The Group's pension scheme adheres to the requirements, as set in the Act.
| Management compensation | 2022 | 2021 | ||||||
|---|---|---|---|---|---|---|---|---|
| Wages | Pension | Bonus | Other benefits |
Wages | Pension | Bonus | Other benefits |
|
| CEO - Magnus Grenfeldt | 217 | 52 | 127 | 7 | 239 | 55 | 151 | 7 |
| CFO - Mikael Haag | 143 | 32 | 46 | - | 163 | 35 | 54 | 0 |
| CTO - Kent Lidström | 127 | 40 | 51 | 6 | 133 | 27 | 59 | 7 |
| COO - Carina Osmund | 130 | 26 | 40 | - | 6 | - | - | - |
| COO - Peter Puranen (former COO) | - | - | - | - | 119 | 22 | 28 | - |
| CMO - Per Burman | 118 | 24 | 47 | - | 136 | 26 | 42 | - |
| Total management compensation | 617 | 149 | 263 | 13 | 678 | 143 | 306 | 15 |
| Board of Directors | Director fee 2022 | Director fee 2021 |
|---|---|---|
| Thomas Ramm, Chairman | 62 | - |
| Karl Thedéen, Board Member | 31 | 20 |
| Sara H. Asplund, Board Member | 31 | - |
| Einar Caspersen, Board Member | 31 | - |
The CEO is paid through the subsidiary Smartoptics Sverige AB. The Group has not given loans or securities to the CEO, the Board of Directors or any other related parties.
The bonus to the CEO related to 2021 was SEK 700,000. The other key management received a bonus related to 2021 of SEK 1,216,000. Bonus for 2022 to the CEO was SEK 1,286,010 and to other key management SEK 1,854,977 and was paid out during Q1 2023.
Smartoptics Group AS has issued warrants to selected individuals within the company. The warrants have been purchased at fair market value by these individuals. The warrants have three-year vesting period, from June 2021 to June 2024. In total, 2 084 061 warrants have been issued and the warrants are first exercisable at the end of the three-year vesting period. The strike price for the warrents is NOK 12.98.
| Warrants held by key management | 2022 | 2021 |
|---|---|---|
| Magnus Grenfeldt | 867 031 | 867 031 |
| Mikael Haag | 325 136 | 325 136 |
| Kent Lidström | 325 136 | 325 136 |
| Per Burman | 216 758 | 216 758 |
| Carina Osmund | - | - |
| Total held by key management | 1 734 061 | 1 734 061 |
| Warrants held by other employees | 350 000 | 350 000 |
| Total warrants issued | 2 084 061 | 2 084 061 |
| Other operating expenses consists of the following | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| Facilities | 211 | 176 |
| Travel expenses | 509 | 162 |
| Marketing and representation | 1 057 | 517 |
| Other R&D and certification cost | 352 | 491 |
| Other operating expenses | 424 | 1 033 |
| Total other operating expenses | 2 552 | 2 379 |
| Specification of auditors' fees | 2022 | 2021 |
| Amounts in USD 1.000 | ||
| Statutory audit | 104 | 171 |
| Other non-assurance services | 21 | 32 |
| Tax advisory services | 7 | 3 |
| Total | 133 | 205 |
| Financial income and expenses | 2022 | 2021 |
|---|---|---|
| Amounts in USD 1.000 | ||
| Interest income from bank deposits | 40 | 19 |
| Financial income | 40 | 19 |
| Interest expense on borrowings | 149 | 81 |
| Net loss on foreign exchange | 253 | 149 |
| Interest on lease liabilities | 80 | 85 |
| Financial expenses | 482 | 315 |
| Net financial items | -442 | -297 |
Income tax expenses consist of taxes payable and changes to deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity.
Deferred tax assets and liabilities are calculated based on temporary differences between the carrying amount of assets and liabilities in the financial statement and their tax basis, together with tax losses carried forward at the balance sheet date. Deferred tax assets and liabilities are calculated based on the tax rates and tax legislation that are expected to apply when the assets are realized or the liabilities are settled, based on the tax rates and tax legislation that have been enacted or substantially enacted on the balance sheet date.
Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available, against which the assets can be utilized. Deferred tax assets and liabilities are not discounted. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. The entities included in the consolidated financial statements are subject to income tax in the countries where they are domiciled.
| Specification of income tax expense | 2022 | 2021 | |
|---|---|---|---|
| Income tax payable | 423 | 27 | |
| Change in deferred tax | 1 646 | 655 | |
| Total income tax expense | 2 069 | 682 | |
| Specification of deferred tax balances | 31/12/2022 | 31/12/2021 | 01/01/2021 |
| Temporary differences | |||
| Property, plant and equipment | -283 | -442 | -622 |
| Inventory | -284 | -108 | -278 |
| Deferred revenue | -2 679 | -2 018 | -1 522 |
| Profit & loss account | 64 | 90 | 116 |
| Net temporary differences | -3 181 | -2 478 | -2 305 |
| Tax losses carried forward | -2 844 | -12 313 | -16 560 |
| Non-recognized deferred tax assets | 94 | ||
| Basis for calculating deferred tax assets | -6 025 | -14 791 | -18 771 |
| Carrying value deferred tax assets | 1 326 | 3 254 | 4 130 |
| Reconciliation of effective tax rate: | 2022 | 2021 |
|---|---|---|
| Net income/(loss) before tax | 8 858 | 4 297 |
| Expected income tax assessed at the tax rate for the Parent company 22 % |
1 972 | 1 060 |
| Difference in tax rate for foreign profit | 63 | 9 |
| Adjusted for the tax effect of the following items: | ||
| Permanent differences | 35 | -255 |
| Other | - | -48 |
| Income tax expense (income) | 2 069 | 765 |
| Effective tax rate | 23.4% | 17.8% |
Most tax losses carried forward relate to the companies in Norway, due to this, there is no time-limit related to when the tax losses may be utilized.
The calculation of basic earnings per share is based on the profit attributable to ordinary shares using the weighted average number of ordinary shares outstanding during the year after the deduction of the average number of treasury shares held over the period.
The calculation of diluted earnings per share is consistent with the calculation of the basic earnings per share, but at the same time gives effect to all dilutive potential ordinary shares that were outstanding during the period, by adjusting the profit/loss and the weighted average number of shares outstanding for the effects of all dilutive potential shares, for example:
The profit or loss for the period attributable to ordinary shares is adjusted for changes in profit or loss that would result from the conversion of the dilutive potential ordinary shares.
The weighted average number of ordinary shares is increased by the weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary shares.
The calculations of earnings per share attributable to the ordinary equity holders of Smartoptics Group AS are based on the following net profit/(loss) and share data:
| Earnings per share | 2022 | 2021 |
|---|---|---|
| Basic earnings per share | 0.071 | 0.038 |
| Diluted earnings per share | 0.070 | 0.038 |
| Profit/(loss) for the year: | ||
| used for calculating basic earnings per share | 6 789 107 | 3 532 289 |
| used for calculating diluted earnings per share | 6 789 107 | 3 532 289 |
| Weighted average number of shares used as the denominator in calculating basic earnings per share |
96 286 593 | 93 743 910 |
| Weighted average number of shares outstanding for diluted ear nings per share*) |
96 322 038 | 93 743 910 |
| *The company has 2 084 061 potential dilutive shares from share warrants outstanding. |
Smartoptics Group AS has issued warrants to selected individuals within the company. The warrants have been purchased at fair market value by these individuals. The warrants have three-year vesting period, from June 2021 to June 2024. In total, 2 084 061 warrants have been issued and the warrants are first exercisable at the end of the three-year vesting period.
Intangible assets acquired separately that have a finite useful life are carried at cost less accumulated amortization and any impairment charges. Amortization is calculated on a straight-line basis over the assets' expected useful life and adjusted for any impairment charges.
Expenditures on research activities, undertaken with the prospect of gaining new technical knowledge and understanding, are recognized in profit or loss as incurred.
Expenditures on development activities are capitalized, if, and only if, all of the following conditions have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development
Capitalized development costs include costs directly attributable to development of the intangible, such as personnel expenses and consultancy services. Otherwise, such expenses are expensed as and when incurred.
Smartoptics received SkatteFUNN grants for the DCP-RO-ADM and DCP-404 projects totalling NOK 4.0 million (USD 0.4 million). The SkatteFUNN grant is recognized in the Profit and Loss statement as a reduction of payroll cost or as a reduction of capitalized development cost depending of the underlying accounting treatment of the cost that the grant is intended to cover.
| Intangible assets | ||
|---|---|---|
| Amounts in USD 1,000 | Product development | Total |
| Cost | ||
| Cost at 1 January 2021 | 2 037 | 2 037 |
| Additions | 341 | 341 |
| Translation difference | -63 | -63 |
| Cost at 31 December 2021 | 2 314 | 2 314 |
| Additions | 457 | 457 |
| Translation difference | -254 | -254 |
| Cost at 31 December 2022 | 2 517 | 2 517 |
| Amortization and impairment | ||
| Accumulated at 1 January 2021 | 1 042 | 1 042 |
| Amortization for the year | 407 | 407 |
| Translation difference | -39 | -39 |
| Accumulated at 31 December 2021 | 1 410 | 1 410 |
| Amortization for the year | 324 | 324 |
| Translation difference | -158 | -158 |
| Accumulated at 31 December 2022 | 1 576 | 1 576 |
| Carrying amount at 31 December 2021 | 904 | 904 |
| Carrying amount at 31 December 2022 | 941 | 941 |
Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment charges. Depreciation is calculated on a straight-line basis over the assets' expected useful life and adjusted for any impairment charges. Ordinary repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in operating profit. Major assets with different expected useful lives are reported as separate components.
Property, plant and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds its recoverable amount.
The difference between the asset's carrying amount and its recoverable amount is recognized in the income statement as an impairment loss. Property, plant and equipment that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
| Property, plant and equipment | ||
|---|---|---|
| Amounts in USD 1,000 | Equipment and movables | Total |
| Cost at 1 January 2021 | 2 136 | 2 136 |
| Additions | 1 167 | 1 167 |
| Translation difference | -198 | -198 |
| Cost at 31 December 2021 | 3 106 | 3 106 |
| Additions | 1 121 | 1 121 |
| Translation difference | -421 | -421 |
| Cost at 31 December 2022 | 3 805 | 3 805 |
| Depreciations and impairment | ||
| Accumulated at 1 January 2021 | 1 359 | 1 359 |
| Depreciations for the year | 477 | 477 |
| Translation difference | -122 | -122 |
| Accumulated at 31 December 2021 | 1 714 | 1 714 |
| Depreciations for the year | 521 | 521 |
| Impairment | 12 | 12 |
| Translation difference | -228 | -228 |
| Accumulated at 31 December 2022 | 2 019 | 2 019 |
| Carrying amount at 31 December 2021 | 1 392 | 1 392 |
| Carrying amount at 31 December 2022 | 1 787 | 1 787 |
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. The lease agreements do not impose any covenants.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
Amounts expected to be payable by the group under residual value guarantees
The exercise price of a purchase option if the group is reasonably certain to exercise that option, and
Payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs, and
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture
The Group's lease agreements include office rent, car leases and agreements for R&D equipment. Smartoptics has lease agreements with both fixed and variable payments, as some of the office leases includes a variable element, which is related to consumer price index adjustments.
During 2022 the lease contract for office rental in Oslo was renewed. The contract period is for 5 years and commenced on 1 October 2022. The office lease in Sweden and Norway has lease term of 60 months. R&D equipment and leasing of cars have lease terms of 36 months. Smartoptics have short-term leases for coffee machines and inventory space, which is expensed in the profit and loss statement according to IFRS 16.5. Average incremental borrowing rate is set to 4%.
Smartoptics AS has a bank guarantee to Nordea amounting to NOK 1.6 million (USD 0.16 million) to cover rent for Smartoptics Sverige AB.
| Leasing | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Buildings | 2 149 | 1 916 | 340 |
| Other | 231 | 385 | 135 |
| Total right-of-use assets | 2 380 | 2 301 | 475 |
| Useful life | 5 years | 5 years | 5 years |
| Depreciation method | Straight-line | Straight-line | Straight-line |
| Lease liabilities | |||
| Amounts in USD 1,000 | |||
| Current | 674 | 782 | 317 |
| Non-Current | 1 759 | 1 556 | 167 |
| Total lease liability | 2 433 | 2 338 | 484 |
| Amounts recognized in the statement of profit or loss | |||
| Depreciation of right of use asset | 686 | 753 | 391 |
| Interest expense | 80 | 85 | 23 |
| Expenses relating to short-term leases | 9 | 9 | 9 |
| Expenses relating to leases of low-value | 11 | 8 | 4 |
| Reconciliation of lease arising from financing activities | 2022 | 2021 |
|---|---|---|
| Opening balance 1 January | 2 338 | 484 |
| Cash flow | -743 | -807 |
| New leases | 1 084 | 2 646 |
| Translation differences | -245 | 15 |
| Closing balance 31 December | 2 433 | 2 338 |
| Maturity table schedule for lease liabilities | Due within 1 | Due within 2 | Due within 3 | Due within 4 | Due within |
|---|---|---|---|---|---|
| Amounts in USD 1,000 | year | years | years | years | 5 years |
| Leasing liabilities | 756 | 681 | 653 | 319 | 211 |
| Investment in subsidiaries | Year of acquisition/ incorporation |
Registered office |
Voting share |
Ownership share |
|---|---|---|---|---|
| Smartoptics AS | 2010/2004 | Norway | 100% | 100% |
| Smartoptics Sverige AB | 2011/2004 | Sweden | 100% | 100% |
| Smartoptics U.S Corp. | 2014/2014 | United States | 100% | 100% |
A financial instrument is a contract that gives rise to both a financial asset for one entity and a financial liability or equity instrument for another entity. Financial instruments are generally recognized as soon as the group becomes a party to the terms of the financial instrument.
Financial assets represent a contractual right by the Group to receive cash or another financial asset in the future. Financial assets include cash and cash equivalents, accounts receivable and withheld cash receivable. On initial recognition, a financial asset is measured at fair value, and classified for subsequent measurement at amortized cost; at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVTPL). Classification depends on the business model and, for some instruments, the entity's choice. Financial assets are derecognized when the rights to receive cash from the asset have expired or when the Group transferred the asset.
Financial liabilities represent a contractual obligation by the Group deliver cash in the future and are classified as either current or non-current. Financial liabilities include the convertible loan, contingent consideration, accounts payable and other financial liabilities. Financial liabilities are initially recognized at fair value, including transaction costs directly attributable to the transaction, and are subsequently measured at amortized cost. Financial liabilities are derecognized when the obligation is discharged through payment or when the Group is legally released from the primary responsibility for the liability.
The specification given below relates to financial statement line items containing financial instruments. Information is classified and measured in accordance with IFRS 9. Financial assets, classified as current and noncurrent, represent the maximum exposure the Group has towards credit risk as at the reporting date. All financial assets and financial liabilities at FAAC and FLAC in the table have an amortized cost that approximates fair value at the balance sheet date.
The Group has two non-current loans from Innovasjon Norge, one obtained in 2019 and one obtained in 2020. The loans are repaid on a quarterly basis and will be fully repaid in 2026 Q3. The total loan amount at the end of 2022 was NOK 15.2 million. The loans has a variable interest rate which at the end of the year was 5.70% and 5.95%. The financial covenant for these loans is that the group must maintain a minimum equity of 20% in relation to the total capital of the group.
| Financial instruments | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Financial assets at amortized cost | |||
| Trade receivable | 15 915 | 7 812 | 6 102 |
| Other financial assets | - | - | 821 |
| Cash and cash equivalents | 5 660 | 9 380 | 4 624 |
| Total | 21 574 | 17 192 | 11 546 |
| Financial liabilities | |||
| Liabilities at amortized cost | |||
| Trade payable | 5 831 | 6 215 | 4 017 |
| Borrowings | 1 543 | 1 724 | 2 233 |
| Bank overdraft facility | - | - | 2 163 |
| Total | 7 374 | 7 940 | 8 414 |
The group's exposure to various risks associated with the financial instruments is discussed in note 20 Financial Risk and Capital Management. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
Trade receivables are initially measured at fair value. Trade receivables are non-interest bearing and trading terms range from 30 to 90 days and therefore classified as current. The receivables are subsequently measured at amortized cost using the effective interest method, if the amortization effect is material, less loss allowance.
Due to the short-term nature of the trade receivables, their carrying amount is considered to be the same as the transaction price.
Historically Smartoptics has had negligible credit losses on trade receivables and zero has been accounted for during 2022. No further loss provisions are made for 2022.
| Trade receivable | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Trade receivable | 15 915 | 7 812 | 6 102 |
| Loss allowance | - | - | - |
| Total | 15 915 | 7 812 | 6 102 |
Cash and cash equivalents include bank deposits. Cash and cash equivalents in foreign currencies are translated at closing rate. The cash flow statement is presented using the indirect method.
| Cash and cash equivalents | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Bank deposits | 5 660 | 9 380 | 4 624 |
| Total cash and cash equivalents | 5 660 | 9 380 | 4 624 |
| Amounts in USD 1,000 | |||
| Restricted cash included in the above: |
| Withholding tax in relation to employee benefits | 50 | 58 | 29 |
|---|---|---|---|
The company has 96 286 593 ordinary shares with a par value of 0.02 NOK.
A dividend of NOK 0.50 per share has been proposed by the Board of Directors, totalling NOK 48,143,297.
| Share capital | Number of ordinary shares | Share capital |
|---|---|---|
| 1 January 2021 | 90 184 154 | 210 |
| Issued during the year | 6 102 439 | 14 |
| Currency translation differences | -6 | |
| 31 December 2021 | 96 286 593 | 218 |
| Issued during the year | - | - |
| Currency translation differences | -23 | |
| 31 December 2022 | 96 286 593 | 195 |
| # | Shareholders | Holding | Stake |
|---|---|---|---|
| 1 | Coretech AS | 31 783 599 | 33.01 % |
| 2 | K-Spar Industrier AS | 17 871 773 | 18.56 % |
| 3 | Kløvingen AS | 15 850 429 | 16.46 % |
| 4 | Danske Invest | 3 853 564 | 4.00 % |
| 5 | Ålandsbanken Fonder | 3 798 000 | 3.94 % |
| 6 | Rasmussengruppen AS | 2 408 477 | 2.50 % |
| 7 | Nordnet Bank AB | 2 276 166 | 2.36 % |
| 8 | Avanza Bank AB | 2 037 317 | 2.12 % |
| 9 | Magnus Grenfeldt | 1 857 489 | 1.93 % |
| 10 | Arrowhead AS | 1 752 793 | 1.82 % |
| 11 | DnB Bank ASA | 1 389 005 | 1.44 % |
| 12 | Toluma Norden AS | 1 000 000 | 1.04 % |
| 13 | AS Clipper | 963 391 | 1.00 % |
| 14 | Varner Invest AS | 963 391 | 1.00 % |
| 15 | Schroders | 685 000 | 0.71 % |
| 16 | DnB Luxembourg S.A. | 650 000 | 0.68 % |
| 17 | Karl Thedéen | 493 078 | 0.51 % |
| 18 | Bergen Kommunale Pensjonskasse | 481 695 | 0.50 % |
| 19 | Citibank | 401 019 | 0.42 % |
| 20 | Skandinaviska Enskilda Banken AB | 352 351 | 0.37 % |
| Others | 5 418 056 | 5.63 % | |
| Total number of shares | 96 286 593 | 100.0% |
The Group has two non-current loans from Innovasjon Norge, one obtained in 2019 and one obtained in 2020. The loans are repaid on a quarterly basis and will be fully repaid in 2026 Q3.
| Pledged assets | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Trade receivable | 8 453 | 4 502 | 3 388 |
| Inventory | 6 988 | 6 009 | 4 573 |
| Property, plant and equipment | 152 | 70 | 62 |
| Total pledged assets | 15 594 | 10 581 | 8 023 |
| Reconciliation of changes from financing cash flow 2021 |
Bank credit facility | Loans and borrowings |
Financial lease liabilities |
Total |
|---|---|---|---|---|
| Amounts in USD 1,000 | ||||
| Balance at 01/01/2021 | 2 105 | 2 173 | 484 | 4 762 |
| Changes from financing cash flows | ||||
| Repayment of borrowings | -2 105 | -189 | -807 | -3 101 |
| Interest paid | - | -81 | - | -81 |
| Total changes from financing cash flows | -2 105 | -270 | -807 | -3 183 |
| Non-cash changes | ||||
| Interest expense using effective interest method | 85 | 85 | ||
| Effect of changes in foreign exchange rates | -70 | -70 | ||
| New finance lease | 2 646 | 2 646 | ||
| Total non-cash changes | 2 662 | 2 662 | ||
| Balance 31/12/2021 | - | 1 984 | 2 338 | 4 241 |
| Non-current and current liabilities at 31 December 2022 |
Bank credit facility | Loans and borrowings |
Financial lease liabilities |
Total |
|---|---|---|---|---|
| Amounts in USD 1,000 | ||||
| Non-current liabilities | - | 1 120 | 1 759 | 2 879 |
| Current liabilities | - | 423 | 674 | 1 097 |
| Total | - | 1 543 | 2 433 | 3 976 |
| Reconciliation of changes from financing cash flows 2022 |
Bank credit facility | Loans and borrowings |
Financial lease liabilities |
Total |
|---|---|---|---|---|
| Amounts in USD 1,000 | ||||
| Balance at 01/01/2022 | - | 1 984 | 2 338 | 4 322 |
| Changes from financing cash flows | ||||
| Repayment of borrowings | - | -238 | -743 | -981 |
| Interest paid | -149 | - | -149 | |
| Total changes from financing cash flows | - | -387 | -743 | -1 130 |
| Non-cash changes | ||||
| Interest expense using effective interest method | 80 | 80 | ||
| Effect of changes in foreign exchange rates | -55 | -325 | -380 | |
| New finance lease | 1 084 | 1 084 | ||
| Total non-cash changes | -55 | 838 | 784 | |
| Balance 31/12/2022 | - | 1 543 | 2 433 | 3 977 |
Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have been eliminated on consolidation, and are not disclosed in this note.
| Number of shares held by the key management and BoD on 31 Dec 2022 | |||||
|---|---|---|---|---|---|
| Related party | Holding | Stake | Warrants | Ownership description | |
| Coretech AS | 31 783 599 | 33.01% | - | Chairman of Board, Thomas Ramm | |
| Kløvingen AS | 15 850 429 | 16.46% | - | Board member, Einar Caspersen | |
| Karl Thedéen | 493 078 | 0.51% | - | Board member | |
| Magnus Grenfeldt | 1 852 541 | 1.92% | 867 031 | CEO | |
| Mikael Haag | 248 060 | 0.26% | 325 136 | CFO | |
| Kent Lidström | 280 075 | 0.29% | 325 136 | CTO | |
| Per Burman | 280 075 | 0.29% | 216 758 | CMO | |
| Carina Osmund | 15 100 | 0.02% | - | COO |
| Transactions with related parties | ||||
|---|---|---|---|---|
| Related party | Relationship | Transaction type | 2022 | 2021 |
| Coretech AS | Company owned by Chairman |
Invoice for consultancy / travel expenses | 21 | 5 |
| Total | 21 | 5 |
The amounts in the table above are presented in other operating expenses and travel expenses.
| Balances with related parties | ||||||
|---|---|---|---|---|---|---|
| Related party | Relationship | Activity | Classification | 31/12/2022 | 31/12/2021 | 01/01/2021 |
| Smarter Holding AS | Parent company | Loan | Short term receivables | - | - | 452 |
| Coretech AS | Company owned by Chairman | Loan | Short term receivables | - | - | 321 |
| Related party | Relationship | Activity | 31/12/2022 | 31/12/2021 | 01/01/2021 | |
| Smarter Holding AS | Parent company | Loan | Long term receivables | - | - | 48 |
| 31/12/2022 | 31/12/2021 | 01/01/2021 | |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Trade payable | 5 831 | 6 215 | 4 017 |
| Other current payables, accrued expenses and public duties | 3 308 | 2 089 | 5 848 |
| Total | 9 140 | 8 304 | 9 866 |
The Group's risk management is predominantly controlled by the Finance department under policies approved by the Board of directors. The Finance department identifies, evaluates, and hedges financial risks in close co-operation with the group's operating units.
The Group is mainly exposed to the following risks: market risk (foreign exchange risk and interest risk), credit risk and liquidity risk.
The group is exposed to currency risks both for its transaction exposure and translation exposure. The Group has subsidiaries in Norway, Sweden and the United States. The foreign currency risk relates primarily to when the Swedish and the Norwegian entities have transactions in USD. Since most of the commercial contracts with customers and suppliers are based in USD, the foreign exchange risk is kept to a minimum, as this natural hedge reduces the exposure to exchange rate fluctuations. In the legal entities with a functional currency that is not USD, profit and loss effect will occur in in accounts receivable, accounts payable and bank account holdings. Fluctuations in currency exchange rates, particularly exchange rates between USD against NOK, SEK, EUR and GBP, have an impact on the Group's result of operations mainly related to payroll expenses and other operating expenses. The Group does not currently hedge currency exposure with the use of financial instruments.
The interest rate risk arises from long-term borrowings with variable rates, which expose an entity to cash flow interest rate risk. The Group's borrowings and receivables are carried at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.
During 2022, the Group's borrowings are denominated in NOK with a corresponding interest in NOK. The borrowings comprise of loans with variable rates (as described in note 17 Borrowings and securities/pledges) and no hedging instruments are currently being used. Management is comparing the interest rate on debts on a regular basis in relation to its effects on profitability.
Credit risk is the loss that the Group would suffer if a counterparty fails to perform its financial obligations. Should a counterparty fail to honor its obligations under its agreements with the entity, this could impair the group's liquidity and cause losses, which in turn could have an adverse effect on the Group's business, results of operations, cash flows, financial condition and/or prospects.
The Group is exposed to credit risk from its operating activities. The credit risk primarily relates to its trade receivables.
The Group has established procedures for credit evaluation of new customers and the risk that customers do not have the financial means to meet their obligations is considered low. Outstanding customer receivables are monitored on a regular basis and any overdue receivables are followed up closely internally. Overall, the group has experienced limited losses from trade receivables.
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Group's objective is to maintain sufficient cash and availability of funding through an adequate amount of credit facilities to meet obligations when due.
Smartoptics' management monitors forecasts of the group's liquidity reserve, and cash and cash equivalents based on expected cash flows. The Group keeps track of the liquidity requirements to ensure that there is sufficient cash to meet operational needs. Recurring revenues are invoiced in advance. In addition, the group's liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
As of 31 December 2022, cash and cash equivalents amounted to USD 5.7 million.
The group had a bank credit facility with a limit of NOK 26 million (USD 2.6 million), as of 31 December 2022 NOK 0 (USD 0) of this credit facility was utilized.
The Group defines capital as equity, including other reserves. The Group's main objective when managing capital is to ensure the ability of the Group to continue as a going concern and to meet all requirements imposed by external financing agreements in the form of covenants.
Considering all available information about the future of Smartoptics' operations, the management concludes that it is appropriate to assume the Group's ability to continue as a going concern. There are no circumstances that would cast any doubts on this conclusion as of the reporting period.
| Maturity table schedule for borrowings Amounts in USD 1,000 |
Due within 1 year |
Due within 2 years |
Due within 3 years |
Due within 4 years |
Due within 5 years |
|---|---|---|---|---|---|
| Loan principal | 423 | 423 | 423 | 275 | - |
| Loan Interest | 81 | 56 | 26 | 16 | - |
| Total | 504 | 479 | 449 | 290 | - |
Smartoptics uses weighted average calculations when measuring acquisition costs and the value of the inventory. Work in progress (WIP) is the value of products that are in production. It might take 2-12 weeks until the product is finished. Smartoptics recognize the costs of goods sold when the finished goods and systems are ready to be shipped to the customer.
| Inventory at 31.12 | 31/12/2022 | 31/12/2021 | 01/01/2021 |
|---|---|---|---|
| Amounts in USD 1,000 | |||
| Work in progress | 284 | 145 | - |
| Finished goods | 15 140 | 11 951 | 8 100 |
| Total inventory | 15 423 | 12 095 | 8 100 |
There are no significant events affecting the group after the reporting period.
| Statement of profit or loss | 2022 | 2021 | |
|---|---|---|---|
| Amounts in NOK 1.000 | Notes | ||
| Revenue | - | - | |
| Other operating income | - | - | |
| Total revenue and operating income | - | - | |
| Operating expenses | |||
| Cost of goods sold | - | - | |
| Payroll expenses | 2 | 7 025 | 4 688 |
| Depreciation, amortization & impairment | - | - | |
| Other operating expenses | 3 | 1 247 | 839 |
| Operating expenses | 8 272 | 5 527 | |
| Operating Profit | -8 272 | -5 527 | |
| Financial income and expenses | |||
| Intercompany interest income | 4 | 2 013 | 931 |
| Interest income | 4 | - | 89 |
| Other financials income | - | - | |
| Interest expense | - | - | |
| Group contributions | 5 | 86 660 | 33 836 |
| Net financial income and expenses | 88 673 | 34 856 | |
| Profit before tax | 80 401 | 29 329 | |
| Tax | 6 | -17 688 | -4 784 |
| Net profit/loss for the year | 62 712 | 24 545 | |
| Allocated as follows: | |||
| Transferred to other equity | 7 | 14 569 | 24 545 |
| Dividend | 7 | 48 143 | - |
| Total allocation | 62 712 | 24 545 |
| Balance sheet 31.12 | 2022 | 2021 | |
|---|---|---|---|
| Amounts in NOK 1.000 | Notes | ||
| Assets | |||
| Deferred tax assets | 4 | 6 027 | 23 715 |
| Financial assets | - | - | |
| Investment in subsidiaries | 8 | 42 782 | 42 782 |
| Non-current intercompany receivable | 5 | - | - |
| Total non-current assets | 48 809 | 66 497 | |
| Current assets | |||
| Receivable | |||
| Accounts receivable | - | - | |
| Receivable to related companies | 5 | 193 769 | 76 596 |
| Other receivable | - | - | |
| Total receivable | 193 769 | 76 596 | |
| Cash and cash equivalents | 9 | 20 454 | 50 784 |
| Total current assets | 214 222 | 127 379 | |
| Total Assets | 263 031 | 193 876 | |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 10,11 | 1 926 | 1 926 |
| Share premium reserve | 10 | 126 133 | 126 133 |
| Other paid-up equity | 10 | 1 501 | 1 501 |
| Other equity | 10 | 75 199 | 60 630 |
| Total equity | 204 758 | 190 188 | |
| Liabilities | |||
| Current liabilities | |||
| Accounts payable | 12 | - | |
| Tax payable | - | - | |
| Other current liabilities | 4,10 | 58 262 | 3 688 |
| Total liabilities | 58 273 | 3 688 | |
| Total equity and liabilities | 263 031 | 193 876 |
Thomas Ramm Chairman of the Board
Sara Heiner Asplund Board member
Einar Caspersen Board member
Karl Thedéen Board member
19 April 2023 Oslo, Norway
Magnus Grenfeldt Chief Executive Officer
| Cash flow statement | 2022 | 2021 | |
|---|---|---|---|
| Amounts in NOK 1.000 | Notes | ||
| Cash flow from operational activities | |||
| Profit before tax | 80 401 | 29 329 | |
| Taxes paid | 4 | - | - |
| Change in accounts payable | 12 | -3 | |
| Change in other items related to operating activities | 3,5 | -80 229 | -30 148 |
| Net cash flow from operating activities | 183 | -822 | |
| Cash flow from investing activities | |||
| Repayment of given loans | 5 | 0 | 6 987 |
| Issuing intercompany loans | 5 | -30 513 | -29 684 |
| Net cash flow from investing activities | -30 513 | -22 697 | |
| Cash flow from financing activities | |||
| Issuing share warrants | 8,9 | - | 1 501 |
| Repayment of issued loans | 5 | - | - |
| Issuing new shares | 8,9 | - | 89 074 |
| Payment of dividend | 8 | - | -18 900 |
| Net cash flow from financing activities | - | 71 675 | |
| Cash and cash equivalents at 1 January | 50 784 | 2 628 | |
| Net cash flow | -30 330 | 48 156 | |
| Cash and cash equivalents at 31 December | 20 454 | 50 784 |
Smartoptics Group AS is a Norwegian company. The financial statements have been prepared in accordance with the Norwegian Accounting Act of 1998 and generally accepted accounting principles in Norway.
The Financial Statements are prepared on the basis of going concern.
Interest income are recognized in the income statement when they are earned.
Monetary items, receivables and liabilities in the balance sheet denominated in other currencies than NOK are recorded at the year end exchange rates.
The tax expense in the income statement consists of tax payable for the period and changes in deferred tax. Deferred tax and deferred tax assets are calculated at 22 % based on the temporary differences which exist between accounting and tax values, and any tax loss carried forward at the end of the financial year.
Temporary differences which are reversed or may be reversed in the same period, have been offset and are presented net. Deferred tax assets regarding net tax-reducing differences that have not been offset and deferred tax asset regarding tax losses carrying forward, are recognized on the balance sheet to the extent that the tax benefit is assumed to be utilized through future taxable profit.
Deferred tax and deferred tax assets that can be capitalized are presented net on the balance sheet.
Tax reduction by intra-group contributions given and tax on intra-group contributions received, reported as a reduction of cost or directly against equity, are recognized directly towards tax on the balance sheet.
Deferred tax/deferred tax assets are calculated at nominal value.
Current assets and current liabilities normally consists of items that are due within one year after the balance sheet day, plus items related to the inventory cycle. Other items are classified as fixed assets/long-term liabilities.
Current assets are valued at the lowest value off acquisition cost and fair value. Current liabilities are recognized at their nominal value at the time.
Accounts receivable and other current receivables are recorded on the balance sheet at nominal value less provisions for doubtful debts. Provisions for doubtful debts are calculated on the basis of an individual assessment. For the remaining receivables, a general provision is estimated based on the expected loss.
Subsidiaries are valued according to the cost method in the company accounts. The investment has been assessed at acquisition cost for the shares unless impairment has been necessary. Impairment to fair value has been effectuated when impairment is not expected to be temporary and when it's considered necessary according to good accounting practice. Impairments are reversed when the basis for write-downs is no longer present.
Dividends, group contributions and other distributions are recognized as financial income in the same year as it is allocated in the giver's accounts. If the dividend/group contribution exceeds the share of earnings earned after the acquisition date, the excess part represent repayment of invested capital, and the distributions are deducted from the value of the investment in the balance sheet of the parent company.
For defined contribution plans, the company pay contributions to an insurance company. The company has no further payment obligation after the deposits have been paid. Deposits are classified as salary and personnel costs. Any prepaid deposits are capitalized as assets (pension funds) in case that the deposit can be refunded or reduce future payments.
The Management have used estimates and assumptions which has an impact on the income statement and the valuation of assets and liabilities, as well as uncertain assets and liabilities on the balance sheet date during the preparation of the annual accounts in accordance with generally accepted accounting principles.
The cash flow statement is based on the indirect method. Cash and cash equivalents includes cash, bank deposits and other short-term liquid investments
The company has not given loans or security to the CEO, the board or other related parties. The CEO is remunerated from the subsidiary Smartoptics Sverige AB. The company is not required to provide an occupational pension scheme. The company had on average 2 employee in 2022 and 1 employees in 2021.
| Amounts in NOK 1000 | 2022 | 2021 |
|---|---|---|
| Wages and salaries | 4 597 | 3 128 |
| Social security tax | 1 633 | 1 101 |
| Pension costs | 795 | 459 |
| Total | 7 025 | 4 688 |
| Management compensation | 2022 | 2021 | ||||||
|---|---|---|---|---|---|---|---|---|
| Wages | Pension | Bonus | Other benefits |
Wages | Pension | Bonus | Other benefits |
|
| CEO - Magnus Grenfeldt | 2 024 | 491 | - | 68 | 1 098 | 281 | 699 | 37 |
| CFO - Mikael Haag | 1 379 | 304 | - | - | 748 | 178 | 357 | - |
| Total management compensation | 3 404 | 795 | - | 68 | 1 846 | 459 | 1 056 | 37 |
| Board of Directors | Director fee 2022 | Director fee 2021 |
|---|---|---|
| Thomas Ramm, Chairperson | 450 | - |
| Karl Thedéen, Board Memeber | 225 | 190 |
| Sara H. Asplund, Board Memeber | 225 | - |
| Einar Caspersen, Board Member | 225 | - |
| Remuneration to the auditors | 2022 | 2021 |
|---|---|---|
| Statutory audit | 419 | 298 |
| Other non-audit services | 202 | 260 |
| Tax advisory services | 35 | - |
| Total remuneration to the auditors | 656 | 558 |
| Related party transactions | 2022 | 2021 |
|---|---|---|
| Interest income on loan to group companies | 2 013 | 931 |
| Interest income on loan to related parties | - | 89 |
| Receivable to group companies and repated parties | 2022 | 2021 |
| Receivable to group companies | 193 769 | 76 596 |
| Payable to group companies and repated parties | 2022 | 2021 |
| Payable to group companies | 10 493 | 3 688 |
| Financial Income | 2022 | 2021 |
|---|---|---|
| Interest income from related parties | - | 89 |
| Interest income from group companies | 2 013 | 931 |
| Group contributions from group companies | 86 660 | 33 836 |
| Total financial income | 88 673 | 34 856 |
| Remuneration to the auditors | 2022 | 2021 |
|---|---|---|
| Calculation of deferred tax | ||
| Net temporary differences | 635 | 793 |
| Tax loss carried forward | -28 031 | -108 590 |
| Basis for deferred tax asset in the balance sheet | -27 396 | -107 797 |
| Deferred tax asset | -6 027 | -23 715 |
| Deferred tax asset not recognized in the balance sheet | - | - |
| Deferred tax asset in the balance sheet | -6 027 | -23 715 |
| Basis for income tax expense, change in deferred tax and tax payable |
||
| Result before tax | 80 401 | 29 329 |
| Permanent differences | - | -7 584 |
| Basis for income tax expense | 80 401 | 21 745 |
| Change in temporary differences | 159 | 198 |
| Change in tax loss carried forward | -80 559 | -21 943 |
| Taxable income (basis for payable taxes in the balance sheet) | - | - |
| Components of the income tax expense | ||
| Sum payable tax | - | - |
| Change in deferred tax asset | 17 688 | 4 784 |
| Tax expense | 17 688 | 4 784 |
| Reconciliation of the tax expense | ||
| Result before tax expense | 80 401 | 29 329 |
| Calculated tax | 17 688 | 6 452 |
| Tax expense | 17 688 | 4 784 |
| Difference | - | -1 668 |
| The differences consists of: | ||
| 22% of permanent differences | - | -1 668 |
| Other differences | - | - |
| Sum explained differences | - | -1 668 |
| NOK 1000 | Share capital | Share premium reserve |
Other paid in capital |
Other equity | Total equity |
|---|---|---|---|---|---|
| Equity as of 01/01/2022 | 1 926 | 126 133 | 1 501 | 60 630 | 190 188 |
| Capital increase | |||||
| Dividend | -48 143 | -48 143 | |||
| Net profit | 62 712 | 62 712 | |||
| Equity as of 31/12/2022 | 1 926 | 126 133 | 1 501 | 75 199 | 204 758 |
Dividend of NOK 0.5 per share is purposed by the Board of Directors. Total of NOK 48 143 297
| Company | Office | Ownership | Voting share |
|---|---|---|---|
| Smartoptics AS | Oslo, Norway | 100% | 100% |
In addition to Smartoptics owned by Smartoptics Group AS there are two additional subsidiaries wholly owned by Smartoptics AS
| Company | Office | Ownership | Voting share |
|---|---|---|---|
| Smartoptics Sverige AB | Stockholm, Sweden | 100% | 100% |
| Smartoptics US Corp | New York, United States | 100% | 100% |
| NOK 1 000 | 2022 | 2020 |
|---|---|---|
| Bank deposits | 20 454 | 50 784 |
| Total cash and cash equvivalents | 20 454 | 50 784 |
| Number of shares | Nominal value | Total carrying amount | |
|---|---|---|---|
| Ordinary shares | 96 286 593 | 0.02 | 1 925 732 |
| Number of shares | |||
| Shares at 1 January 2021 | 90 184 154 | ||
| Issued during 2021 | 6 102 439 | ||
| Shares at 31 December 2021 | 96 286 593 | ||
| Issued during 2022 | - | ||
| Shares at 31 December 2022 | 96 286 593 |
| # | Shareholders | Holding | Stake |
|---|---|---|---|
| 1 | Coretech AS | 31 783 599 | 33.01 % |
| 2 | K-Spar Industrier AS | 17 871 773 | 18.56 % |
| 3 | Kløvingen AS | 15 850 429 | 16.46 % |
| 4 | Danske Invest | 3 853 564 | 4.00 % |
| 5 | Ålandsbanken Fonder | 3 798 000 | 3.94 % |
| 6 | Rasmussengruppen AS | 2 408 477 | 2.50 % |
| 7 | Nordnet Bank AB | 2 276 166 | 2.36 % |
| 8 | Avanza Bank AB | 2 037 317 | 2.12 % |
| 9 | Magnus Grenfeldt | 1 857 489 | 1.93 % |
| 10 | Arrowhead AS | 1 752 793 | 1.82 % |
| 11 | DnB Bank ASA | 1 389 005 | 1.44 % |
| 12 | Toluma Norden AS | 1 000 000 | 1.04 % |
| 13 | AS Clipper | 963 391 | 1.00 % |
| 14 | Varner Invest AS | 963 391 | 1.00 % |
| 15 | Schroders | 685 000 | 0.71 % |
| 16 | DnB Luxembourg S.A. | 650 000 | 0.68 % |
| 17 | Karl Thedéen | 493 078 | 0.51 % |
| 18 | Bergen Kommunale Pensjonskasse | 481 695 | 0.50 % |
| 19 | Citibank | 401 019 | 0.42 % |
| 20 | Skandinaviska Enskilda Banken AB | 352 351 | 0.37 % |
| Others | 5 418 056 | 5.63 % | |
| Total number of shares | 96 286 593 | 100.0% |
There are no significant events affecting the group after the reporting period.
To the General Meeting of Smartoptics Group AS
We have audited the financial statements of Smartoptics Group AS, which comprise:
In our opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors' report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors' report nor the other information accompanying the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of Directors' report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors' report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors' report and the other information accompanying the financial statements otherwise appear to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors' report or the other information accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors' report
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
For further description of Auditor's Responsibilities for the Audit of the Financial Statements reference is made to: https://revisorforeningen.no/revisjonsberetninger
Oslo, 19 April 2023 PricewaterhouseCoopers AS
Øystein Sandvik State Authorised Public Accountant (This document is signed electronically)
| Signers: | ||
|---|---|---|
| Name | Method | Date |
| Sandvik, Øystein Blåka | BANKID | 2023-04-19 17:49 |
- Closing page (this page) - The original document(s) - The electronic signatures. These are not visible in the document, but are electronically integrated.
This file is sealed with a digital signature. The seal is a guarantee for the authenticity of the document.
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