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SoftwareONE Holding AG Interim / Quarterly Report 2021
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Interim / Quarterly Report
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Q1 2021 Quarterly Report Q1 2021
Ørn Software Holding AS
Contents
| 4 | Letter from the CEO |
|---|---|
| 6 | Ørn Software – The Big Picture |
| 10 - 13 | Operational Development |
| Segment Real Estate Management | |
| Segment Industrial Maintenance & Quality Control | |
| Segment Energy & Sustainability Management | |
| Headquarters | |
| 16 | Financial Review |
| 18 | Events After the Reporting Date |
| 18 | Share information |
| 18 | Risk factors |
| 19 | Outlook |
| 19 | Financial calendar |
| 20 | Condensed Consolidated Financial Statements |
| 26 | Explanatory Notes to the Consolidated Financial Statements |
Letter from the CEO
The first quarter of 2021 has been eventful and busy for Ørn Software and the team, with continued growth, high product development activity and the preparation for a successful listing on the Euronext Growth stock exchange. Our revenue growth of 56 percent and the adjusted EBITDA of NOK 7.5 million serve as proof-points for Ørn Software being on the right track for our 2021 priorities and 2025 ambitions.
The positive development is driven by our customers' wish to increase efficiency and competitiveness by adapting digital tools, as well as corporate social responsibility combined with regulations related to the green shift. The estimated NOK 12 billion Nordic market for software within our segments continues to grow, and only NOK 2.6 billion is currently served. Our best-of-breed offering hits a sweet spot in a market highly affected by the ongoing industrial digitalization, as well as mega-trends like Smart Buildings, Industry 4.0 and the Green Shift.
These fundamentals enable Ørn Software to grow as our customers' digital adoption and activity increases over time, driving annual recurring revenues upward and providing an opportunity for up- and cross-selling. This was also the story in the first quarter of 2021, with an ARR growth of 69 percent to NOK 124 million, while our reported EBIT was affected by the special items from the listing process.
The listing on Euronext Growth attracted a significant interest from a wide range of quality investors and provides a solid platform for additional growth and expansion in the years to come. I would like to thank the entire Ørn Software team for their extraordinary efforts in what can only be described as unusual and busy times.
Ørn Software has ambitions of becoming a dominant European Software-as-a-Service company with digital solutions for industry and real estate. We have attractive underlying drivers and initiatives that will fuel a continued growth journey and reiterates our 2025 ambitions to our investors:
- Revenue growth (organic): ARR of NOK 300 million
- Long-term profitability: EBITDA margin >40%
In addition, Ørn Software has a strong M&A track record, with 9 acquisitions and an extensive M&A pipeline in the Nordics and the rest of Europe. Further acquisitions will increase ARR, broaden our geographical footprint, strengthen our product portfolio, and leverage our best-in-class sales capabilities to upsell and cross-sell. With our first reporting as a listed entity, and with Ørn Software's strong growth platform and outlook, we look forward to continuing to provide the big picture.
Sten-Roger Karlsen CEO
Ørn Software – The Big Picture
Most companies have fixed assets that need to be efficiently managed. Most companies need to continuously improve its efficiency to stay competitive. Implementing digital tools that are easy to use and simplify workflows, is an important part of meeting this growing need in assetheavy industries.
Ørn Software provides industry-leading digital asset management tools, to help users improve its efficiency and become more competitive. Ørn is focused on streamlining business processes, and this is done by collecting useful data, and by digitizing and automizing complex and resource intensive workflows. Ørn's solutions encourage human interaction and data sharing across disciplines, functions, and departments. Seeing the big picture is key to achieving operational success and reduced environ-
mental footprint.
Data is captured from SCADA systems, IoT, sensors and meters, and other systems are connected through APIs, to provide a real-time image and continuously enriching the solutions with valuable data. The solutions enable the users to make tactical, strategical, and operational decisions based on live data and historical trends. Consequently, Ørn's customers achieve reduced cost, increased uptime, extended asset lifetime, reduced environmental footprint and regulatory compliance.
The end user is equipped with mobile tools to handle day-to-day field work as efficiently as possible, while management has access to analytics and administration tools. Ørn's customers get an insight into all the details, while still having a complete overview.
Ørn provides its customers with THE BIG PICTURE.
E. Karstensen Fiskeoppdrett
- ARR NOK 124.1 million at the end of the quarter, a growth of +69% since Q1 2020
- Q1 2021 revenue NOK 31.2 million (+56% Y/Y)
- Adjusted EBITDA margin 24% (19% in Q1 2020)
- Successful listing on Euronext Growth 29 March raising new equity of NOK 250 million (gross), enabling continued push on targeted M&A
- Acquisition of Facilit closed in Q1, bringing NOK 16.5 million of ARR
- Subsequent event
- Acquisition of Landax signed in May 2021, bringing additional NOK 21.2 million of ARR and 540 new customers
Q1 2021 in Brief
Key figures ANNUAL RECURRING REVENUE (ARR)
REVENUE AND EBITDA ADJUSTED MARGIN
| Q1 2021 | Q1 2020 | Change | FY 2020 | |
|---|---|---|---|---|
| ARR | 124.1 | 73.2 | 69% | 107.1 |
| Revenue | 31.2 | 20.0 | 56% | 81.9 |
| Adjusted EBITDA | 7.5 | 3.3 | 127% | 21.5 |
| Adjusted EBITDA margin | 24.0% | 19.0% | 26.3% | |
| Net retention rate | 102% | 114% | 109% | |
| Churn | 1.3% | 2.3% | 3.7% | |
| Number of customers | 1,197 | 448 | 1,022 |
At the end of Q1 2021 Ørn Software had a customer base generating Annual Recurring Revenue (ARR) of NOK 124.1 million, which was 69% higher than at the end of Q1 2020. During Q1, Ørn Software increased its ARR with 17 million, driven by the acquisition of Facilit and continued organic growth affected by new sales, net upsell and price optimizations.
Churn rate in Q1 2021 was at 1.3 percent, compared to 2.3 percent in Q1 2020. Most contracts have 12 months upfront payment, with 3 months' notice for termination, thus most terminations during the year will end in Q1. The net retention rate was 102 percent in Q1, compared to 114 percent in Q1 2020. The relatively lower net retention rate for this quarter is mainly due to the fact that there has not been any significant price increase in 2021, the negative impact from a correction of ARR as of Q4 2020 of NOK -2.7 million and the reduced activity of NOK 1.5 million at one specific Swedish customer.
Number of customers has increased from 448 at the end of Q1 2020 to 1,197, primarily driven by M&A activities, but also to some extent new sales.
Ørn is continuing to invest in product development. As the product portfolio is growing through acquisitions, the initiative for establishing one common technology platform becomes increasingly important. The common platform will simplify deployment and shorten time to market for new features, as well as providing the customers with increased flexibility in terms of selecting the exact functionality they need.
Additionally, Ørn Software has during Q4 2020 and Q1 2021 increased its sales capacity through recruitment of additional sales personnel, with the objective to increase new sales and cross-sale going forward.
Post-merger integration processes related to the companies acquired at the end of 2020 and in 2021 are in progress and going as planned. The initial focus is to address low threshold synergies on the organizational and operational side, as well as to exploit the short-term commercial potential. In addition, it is important to unite the R&D initiatives in the group and adjust product strategies and roadmaps.
At the end of Q1 2021, the segment ARR was NOK 81.2 million, a growth of 68 percent Y/Y. The growth reflects the acquisitions made in 2020 and 2021, as well as strong development in new sale and upsell.
During Q1, ARR grew with NOK 18.5 million, particularly driven by the acquisition of Facilit and price optimizations. Churn was limited at 1.3 percent. Net retention rate in Q1 2021 was 102 percent, negatively impacted by reduced activity of NOK 1.5 million at one specific Swedish customer. ARR as of Q4 2020 has been corrected with NOK -2.7 million.
Adjusted for these two factors the organic growth was 5 percent in Q1 2021.
In Q4 2020 and Q1 2021, the focus has been to build a strong sales force within this segment. As a result, the new sale and cross-selling activity is significantly increased during Q1, and it is expected that this will start to materialize in increased organic growth in the second half of 2021.
Operating revenue in the segment was NOK 20.4 million, a growth of 55 percent.
At the end of Q1 2021, the segment ARR was NOK 27.8 million, a growth of 12 percent Y/Y. During Q1, the ARR grew with NOK 1.0 million, in particular driven by new sale and upselling. Churn was limited at 1.7 percent annualized.
The position within Industrial Maintenance & Quality Control continues to be strengthened through new sale and upselling. The digitalization pace is increasing in several industries, and the market for digital tools to replace spreadsheets and notebooks is continuously growing, increasing the number of inquiries from potential new customers.
The combination of Industrial Maintenance (View Maintenance) and Quality Control (InControl) is very well received in the aquaculture industry.
Operating revenue in the segment was NOK 7.1 million, a growth of 7 percent.
Operational Development
Segment Real Estate Management
Segment Industrial Maintenance & Quality Control
| Q1 2021 | Q1 2020 | Change | FY 2020 | |
|---|---|---|---|---|
| ARR | 81.2 | 48.4 | 68% | 65.3 |
| Revenue | 20.4 | 13.2 | 55% | 53.3 |
| Net retention rate | 102% | 115% | 108% | |
| Churn | 1.3% | 1.3% | 2.0% | |
| Number of customers | 440 | 160 | 108% | 335 |
| Q1 2021 | Q1 2020 | Change | FY 2020 | |
|---|---|---|---|---|
| ARR | 27.8 | 24.8 | 12% | 26.7 |
| Revenue | 7.1 | 6.5 | 9% | 26.9 |
| Net retention rate | 102% | 111% | 113% | |
| Churn | 1.7% | 4.2% | 7.0% | |
| Number of customers | 301 | 288 | 5% | 301 |
In Q2 2021, Ørn Software signed an agreement to acquire Landax. This acquisition will strengthen the Maintenance & Quality Control segment considerably with 540 new customers and an ARR of 21.2 million (20.6 million end of Q1 2021).
The segment consists of Entro IT, which was acquired in December 2020.
At the end of Q1 2021, the segment ARR was NOK 15.2 million. In the same quarter in 2020, the segment had no operations.
During Q1, the ARR grew with NOK 0.2 million, in particular driven by upselling. Churn was limited at 1.0 percent annualized.
The segment Energy & Sustainability Management is new to Ørn as of the end of 2020. Sales reps that have been hired during Q1 are currently under training. It is expected that the new sale will start picking up during the second half of 2021. The overall market for Energy & Sustainability Management solutions is expected to increase rapidly over the coming years, e.g. due to the introduction of the new EU Taxonomy framework.
Operating revenue in the segment was NOK 3.7 million, and the EBITDA margin was 46 percent.
Segment Real Estate Management continued
Segment Energy & Sustainability Management
| Q1 2021 | Q1 2020 | Change | FY 2020 | |
|---|---|---|---|---|
| ARR | 15.2 | - | NA | 15.0 |
| Revenue | 3.7 | - | NA | - |
| Net retention rate | 101% | - | - | |
| Churn | 1% | - | - | |
| Number of customers | 456 | 460 |
Skistar "Maintenance provides working lifts and satisfied customers."
Arnstein Akre, Maintenance Supervisor, Skistar:
Client testimonial
Financial Review
| Historical Group P&L | Q1 20 | Q2 20 | Q3 20 | Q4 20 | Q1 21 |
|---|---|---|---|---|---|
| Recurring revenue | 17,984 | 17,623 | 17,157 | 18,631 | 27,325 |
| Non-recurring revenue | 2,022 | 1,978 | 2,144 | 4,387 | 3,882 |
| Total revenue | 20,006 | 19,601 | 19,301 | 23,017 | 31,207 |
| COGS | -1,180 | -1,621 | -1,793 | -1,306 | -17,22 |
| Total OPEX | -14,931 | -12,956 | -12,956 | -17,694 | -37,709 |
| EBITDA | 3,895 | 5,023 | 4,937 | 4,018 | -8,224 |
| EBITDA margin | 19% | 26% | 26% | 17% | -26% |
| Special items | -3,652 | -15,703 | |||
| EBITDA adjusted | 3,895 | 5,023 | 4,937 | 7,670 | 7,479 |
| EBITDA adjusted margin | 19% | 26% | 26% | 33% | 24% |
| Depreciation and amortisation | -4,807 | -5,280 | -5,271 | -5,913 | -9,142 |
| Reported EBIT | -912 | -256 | -334 | -1,896 | -17,366 |
| Net financial income | -507 | -299 | -250 | -1,627 | 5,921 |
| Reported profit/loss before tax | -1,418 | -556 | -584 | -3,523 | -11,445 |
| Tax | 421 | 421 | 421 | 422 | 2,747 |
| Net income/loss | -997 | -135 | -163 | -3,101 | -8,698 |
Ørn Software Holding's consolidated revenues were NOK 31.2 million in Q1 2021. This was a growth of 56 percent compared to the same period in 2020. The revenue growth was primarily driven by the acquisitions of MainManager, Entro IT and Facilit. The group's organic revenue growth was 1.2%.
The gross profit margin of the group was 94 percent in Q1 2021, unchanged from Q1 2020.
The Group's EBITDA, adjusted for special items related to the capital raise and IPO, was NOK 7.5 million, an increase of 92 percent compared to the same quarter in 2020. EBITDA adjusted margin was 24%, compared to 19% in the same quarter in 2020, reflecting the scalability of Ørn Software's business.
Reported EBITDA, which includes special items related to the IPO of NOK 15.7 million, was negative NOK 8.2 million. Depreciations and amortizations were NOK -9.1 million in Q1 2021 compared to NOK -4.8 million in Q1 2020, reflecting increased activity in the group and the acquisitions.
Reported EBIT was NOK -17.4 million, affected negatively by the special items related to the IPO mentioned above. Net financial income was NOK 5.9 million, reflecting interest expenses of NOK 3.2 million and a currency gain of NOK 9.2 million related to the related to the company's debt denominated in SEK. Reported tax was positive with NOK 2.7 million, as a result of NOK -11.4 million, resulting in a Net income of NOK -8.7 million (NOK -1.0 million in Q1 2020).
Cash flow from operating activities in Q1 2021 was NOK 28 million, driven by changes in net working capital of NOK 42.8 million as a result of up-front payment from customers, effects related to IPO expenses and due public duties payable, which was offset by the net loss before tax of NOK 11.4 million and the non-cash gains related to currency fluctuations.
Cash flow from investing activities was -57.5 million, driven by the acquisition of Facilit and capex of NOK 9 million.
Net cash flow from financing activities was NOK 277.1 million, driven by the net proceeds from the equity capital increase ahead of the listing on Euronext Growth, and proceeds from long term debt according to the acquisition of Facilit.
Following the equity capital raise of gross NOK 250 million ahead of the IPO in March 2021, Ørn Software has a robust balance sheet and is well capitalized to deliver on the stated growth ambitions.
Total assets amounted to NOK 584.3 million (264.6 million at the end of 2020). Total current assets amounted to 340.3 million (83.2 million at the end of 2020), primarily driven by increased cash as a result of the equity capital raise. Cash and cash equivalents amounted to NOK 318.5 million (65.3 million at the end of 2020).
Non-current assets increased to 244.0 million (181.4 million at the end of 2020). The change was predominantly related to intangible assets, which increased to NOK 242.1 million (179.7 million at the end of 2020), driven by the acquisition of Facilit (please refer to note 6) and reallocation of PPA values from R&D and goodwill to customer contract (please refer to note 5).
Total liabilities were at 275.0 million (NOK 186.1 million at the end of 2020). Current liabilities increased to NOK 103.8 million (NOK 60.9 million at the end of 2020). Other non-current liabilities increased to NOK 153.6million (NOK 116.5 million at the end of 2020).
Cash flow
Financial position
21 May 2021, Ørn Software announced the acquisition the Norwegian quality management SaaS company Landax. At the end of 2020, Landax had an ARR of NOK 18.9 million. 2020 revenue was NOK 30.8. This represented an organic growth in ARR of 29% compared to 2019. During the first four months of 2021, Landax has increased its ARR with 14% to NOK 21.2 million (20.6 million end of Q1 2021). The 2020 EBITDA was NOK 10.1 million (NOK 6.0 million in 2019). The acquisition increases Ørn Software's ARR with 18%.
The transaction is based on an enterprise value of NOK 95 million and implies a multiple of 4.5x on ARR. The transaction will be settled with 80% cash at closing and 20% in Ørn Software shares, issued in line with board authorization. The transaction is expected to close in June 2021.
Ørn Software is a leading software company with digital solutions for industry and real estate management in the Nordic market. Through organic growth and targeted acquisitions, the company has significant growth ambitions both in the Nordic region and in Europe.
The market potential in the Nordic region is estimated at NOK 12 billion. By 2025, Ørn Software is targeting ARR of NOK 300 million based on organic growth. M&A driven growth comes in addition to this.
Ørn Software's business model, which is based on providing Software as a Service, is highly scalable. The company will increasingly move services over to shared platforms which, will add to the scalability. Along with the revenue growth the company targets an EBITDA margin enhancement up to at least 40 percent by 2025.
During Q4 2020 and Q1 2021, Ørn Software has added resources within sales and marketing, which is expected to increase the growth contribution from new sales during the second half of 2021 compared to Q1.
The company has several M&A objects in the near-term pipeline and expects to close additional acquisitions during the coming year.
At the end of Q1 2021 Ørn Software had 85,942,968 million shares. Average number of shares in Q1 2021 was 62,907,174. The private placement in connection with the IPO implied the issuance of 23,809,524 shares. The EGM granted approval to the Board to increase the share capital with approximately 20% 21 of May.
The company was listed on Euronext Growth 29 March 2021. The shares have since traded between NOK 10.00 and NOK 13.00 per share.
The company has approximately 165 shareholders, with the 20 largest shareholders holding 90% of the shares.
An overview of the 20 largest shareholders is available on the company web site.
Risk factors are described in the Information document prepared in connection with the listing on Euronext Growth, published 29 March.
Quarterly reporting:
- Q2 and 1H 2021: 3 September 2021
- Q3 2021: 19 November 2021
- Q4 2021: 4 March 2022
Events After the Reporting Date Outlook
Share information
Risk factors
Financial calendar
Condensed Consolidated Financial Statements
| Note | Q1 - 2021 | Q1 - 2020 | FY 2020 | Q4 - 2020 | |
|---|---|---|---|---|---|
| 01.01-31.03 | 01.01-31.03 | 01.01-31.12 | 01.01-31.03 | ||
| NGAAP - All amounts in NOK thousand | Unaudited | Unaudited | Audited | Unaudited | |
| Operating revenues and operating costs | |||||
| Total Operating Income | 3 | 31,207 | 20,006 | 81,925 | 23,017 |
| Cost of goods | 1,722 | 1,180 | 5,900 | 1,306 | |
| Salaries | 22,073 | 10,465 | 41,815 | 12,867 | |
| Depreciation and amortisation | 9,142 | 4,806 | 21,271 | 5,913 | |
| Other operating costs | 15,636 | 4,466 | 16,338 | 4,827 | |
| Total OPEX | 48,574 | 20,917 | 85,323 | 24,913 | |
| Operating profit | -17,366 | -912 | -3,398 | -1,896 | |
| Financial income and financial costs | |||||
| Other financial income | 9,231 | 0 | 760 | ||
| Other interest expenses | -3,150 | -506 | -2,300 | -1,627 | |
| Other financial cost | -160 | 0 | -1,144 | ||
| Result of financial items | 5,921 | -506 | -2,683 | -1,627 | |
| Reported EBIT | -11,445 | -1,418 | -6,081 | -3,523 | |
| Tax | 2,747 | 421 | 1,685 | 422 | |
| Net income | -8,698 | -997 | -4,396 | -3,101 |
Condensed Consolidated Statement of Income
Consolidated Statement of Financial Position
| ASSETS | Note | Q1 - 2021 31.03.2021 |
Q1 - 2020 31.03.2020 |
FY 2020 31.12.2020 |
Q4 - 2020 01.10-31.12 |
|---|---|---|---|---|---|
| NGAAP - All amounts in NOK thousand | Unaudited | Unaudited | Audited | Unaudited | |
| Non-current assets | |||||
| Intangible assets | |||||
| R&D | 5, 6 | 74,398 | 51,084 | 113,619 | 113,619 |
| Customer relationship | 5, 6 | 113,662 | 0 | 0 | 0 |
| Deferred tax assets | 0 | 1,937 | 0 | 0 | |
| Goodwill | 5, 6 | 54,009 | 19,366 | 66,050 | 66,050 |
| Total intangible assets | 242,068 | 72,387 | 179,669 | 179,669 | |
| Tangible assets | |||||
| Property, plant and equipment | 1,915 | 1,175 | 1,740 | 1,740 | |
| Total tangible assets | 1,915 | 1,175 | 1,740 | 1,740 | |
| Financial assets | |||||
| Investment in shares | 34 | 30 | 34 | 34 | |
| Long-term receivables | 0 | 250 | 0 | 0 | |
| Total financial fixed assets | 34 | 280 | 34 | 34 | |
| Total non-current assets | 244,017 | 73,841 | 181,443 | 181,443 | |
| Current assets | |||||
| Receivables | |||||
| Trade receivables | 11,507 | 6,234 | 9,148 | 9,148 | |
| Other current assets | 10,294 | 3,281 | 8,781 | 8,781 | |
| Total receivables | 21,801 | 9,515 | 17,929 | 17,929 | |
| Investments | |||||
| Cash and cash equivalents | 318,493 | 15,991 | 65,289 | 65,289 | |
| Total current assets | 340,294 | 25,506 | 83,218 | 83,218 | |
| Total assets | 584,311 | 99,347 | 264,660 | 264,660 |
| Equity and liabilities | Note | Q1 - 2021 31.03.2021 |
Q1 - 2020 31.03.2020 |
FY 2020 31.12.2020 |
Q4 - 2020 01.10-31.12 |
|---|---|---|---|---|---|
| NGAAP - All amounts in NOK thousand | Unaudited | Unaudited | Audited | Unaudited | |
| Paid-in capital | |||||
| Share capital | 8,594 | 4,661 | 6,075 | 6,075 | |
| Share premium | 358,151 | 60,425 | 104,965 | 104,965 | |
| Other equity | 1,071 | 89 | 879 | 879 | |
| Total paid-in equity | 367,817 | 65,175 | 111,919 | 111,919 | |
| Earned equity | |||||
| Other equity | -58,457 | -35,991 | -33,346 | -33,346 | |
| Total earned equity | -58,457 | -35,991 | -33,346 | -33,346 | |
| Total equity | 4 | 309,360 | 29,184 | 78,573 | 78,573 |
| Liabilities | |||||
| Provision for liabilities | |||||
| Deferred tax | 5, 6 | 17,516 | 0 | 8,581 | 8,581 |
| Total provisions for liabilities | 17,516 | 0 | 8,581 | 8,581 | |
| Other long-term debt | |||||
| Non-current interest-bearing debt | 7 | 153,610 | 28,612 | 116,554 | 116,554 |
| Other non-current liabilities | 0 | 4,852 | 0 | 0 | |
| Total non-current liabilities | 153,610 | 33,465 | 116,554 | 116,554 | |
| Short-term liabilities | |||||
| Convertible loans | 0 | 0 | 5,580 | 5,580 | |
| Accounts payable | 25,865 | 2,835 | 5,930 | 5,930 | |
| Payable tax | 549 | 0 | 63 | 63 | |
| Public duties payable | 18,597 | 8,761 | 5,878 | 5,878 | |
| Other current financial liabilities | 58,814 | 25,102 | 43,502 | 43,502 | |
| Total current liabilities | 103,825 | 36,698 | 60,953 | 60,953 | |
| Total liabilities | 274,950 | 70,163 | 186,087 | 186,087 | |
| Total equity and liabilities | 584,311 | 99,347 | 264,660 | 264,660 |
Condensed Consolidated Cash Flow Statement
| Q1 - 2021 | FY 2020 | |
|---|---|---|
| 01.01-31.03 | 44196 | |
| NGAAP - All amounts in NOK thousand | Unaudited | Audited |
| Operating activities | ||
| Profit/loss before tax | -11,445 | -6,081 |
| Depreciation and amortisation | 9,142 | 21,271 |
| Change in net working capital | 42,797 | 10,390 |
| Other non-cash items | -12,423 | 437 |
| Net cash flows from operating activities | 28,071 | 26,016 |
| Development of software and other intangible assets | -9,085 | -27,087 |
| Acquisition | -48,429 | -84,309 |
| Net cash flows from investing activities | -57,514 | -111,395 |
| Net proceeds from long-term debt | 48,189 | 98,661 |
| Net proceeds from share issue | 228,987 | 41,102 |
| Net cash flows from financing activities | 277,176 | 139,763 |
| Cash and cash equivalents at the beginning of the period | 65,289 | 2,320 |
| Net change in cash and cash equivalents | 247,733 | 54,384 |
| Cash and cash equivalents from acquisitions | 5,471 | 8,585 |
| Cash and cash equivalents at the end of the period | 318,493 | 65,289 |
E.g. gains/(losses) on cash and cash equivalents have been allocated to other non-cash items (cash flows from operating activities)
Glava
"With Maintenance, we see any problems before they occur"
Ole Jørgen Henriksen, Maintenance Supervisor, Glava Isolasjon
Client testimonial
About Ørn Software
Ørn Software, listed on Euronext Growth as of March 2021, is a Nordic provider of SaaS solutions enabling efficient operations and maintenance across a wide range of asset-heavy industries, including real estate, manufacturing, food & beverages, and aquaculture. The Group's software provides customers with improved insight through data-driven operations and contributes to increased efficiency and reduced costs through digitalization of rental processes, data-driven maintenance scheduling and energy optimization.
All of the above contribute to the lengthening of property and equipment lifespan, a key component of Ørn Software's value proposition. Furthermore, the Group's offering enables customers to reduce their environmental footprint and provides digital tools to meet reporting and regulatory requirements.
Close to 1,800 companies and 260,000 employees use Ørn Software's different SaaS-offerings every day, including a number of the biggest industrial and property management firms in the country.
Read more at www.ornsoftware.com
As of the 31st of March 2021, the consolidated financial statements of Ørn Software Holding AS consist of the following subsidiaries and granddaughters:
Ørn Software Holding AS, parent company
Ørn Software AS, daughter
- Ørn Software AB (formerly View Software Sweden AB), granddaughter
- Örn Software Ehf group (formerly MainManager Ehf group), granddaughter
- Entro IT AS group, granddaughter
- Facility Management AS group (Facilit), granddaughter
Facilit had bought the company Senix AS before we bought Facilit 8th March 2021. The other companies that is a part of the group have changed their name during the quarter.
The financial statements are prepared in accordance with NGAAP and there are no changes in the accounting principles since the annual accounts for 2020. Reference is therefore made to the note of principles in the annual accounts for 2020.
The company's revenues consist primarily of revenues related to "Software-as-a-Solution" services. Revenue recognition takes place on a straight-line basis in accordance with the underlying agreement, a large part of the company's agreements is recurring.
Note 1 – General information
Note 2 – Basis of preparation
Note 3 – Revenue
Explanatory Notes to the Consolidated Financial Statements
| NGAAP - All amounts in NOK thousand | Q1 - 2021 Unaudited |
Q1 - 2020 Unaudited |
FY 2020 Audited |
Q4 - 2020 Unaudited |
|---|---|---|---|---|
| Real Estate Management | ||||
| Recurring | 16,876 | 11,890 | 45,878 | 11,779 |
| Non-recurring revenue | 3,529 | 1,292 | 7,388 | 3,092 |
| Total revenue | 20,406 | 13,182 | 53,267 | 14,872 |
| Industrial Maintenance & Quality Control | ||||
| Recurring | 6,743 | 5,976 | 24,634 | 6,536 |
| Non-recurring revenue | 353 | 670 | 2,268 | 578 |
| Total revenue | 7,096 | 6,647 | 26,902 | 7,114 |
| Energy & Sustainability Management | ||||
| Recurring | 3,706 | 0 | 0 | 0 |
| Non-recurring revenue | 0 | 0 | 0 | 0 |
| Total revenue | 3,706 | 0 | 0 | 0 |
| Other income | 0 | 177 | 1,757 | 1,032 |
| Total Operating Income | ||||
| Recurring | 27,325 | 17,867 | 70,513 | 18,315 |
| Non-recurring revenue (incl. other income) | 3,882 | 2,139 | 11,413 | 4,702 |
| Total Operating Income | 31,207 | 20,006 | 81,925 | 23,017 |
Note 4 – Equity Note 6 – Business – Combinations
Note 5 – Intangible assets
| paid in equity | retained losses |
||||
|---|---|---|---|---|---|
| Share capital |
Share premium |
Other equity |
Other equity |
Total equity |
|
| NGAAP - All amounts in NOK thousand | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited |
| Equity as at 31.12.2020 (audited) Capital increase when converting debt |
6,075 130 |
104,965 5,450 |
879 | -33,346 | 78,573 5,580 |
| Capital increase by cash deposit | 2,389 | 247,736 | -16,155 | 233,970 | |
| Option scheme for management | 193 | 193 | |||
| Result in period | -8,698 | -8,698 | |||
| Currency differences regarding equity | -258 | -258 | |||
| Equity as at 31.03.2021 (unaudited) | 8,594 | 358,151 | 1,071 | -58,457 | 309,360 |
On 25th March, the company issued 23,892,497 shares, resulting in a net capital increase of NOK 250,125,291.23. Transaction costs (net of taxes) was NOK 16,155,010.20.
Ørn Software acquired Facility Management AS (Facilit) on March 8, 2021. Facility Management AS (Facilit) was established in 1999 and had a turnover of NOK 17 million in 2020. The company has 12 employees in Tromsø and Tønsberg and 174 customers. Facilit develops software for facility management, with customers in many industries across Norway and will strengthen our segment in Real Estate Management. The acquisition gives Ørn Software a 39% share of the Norwegian facility management market. The acquisition also provides Ørn with 12 highly skilled employees in Tromsø and Tønsberg. Globally, this is a rapidly expanding business area, and even better systems for sustainable management, operations, maintenance and development of property will be required in the future.
| Customer | ||||
|---|---|---|---|---|
| R&D | relationship | Goodwill | TOTAL | |
| NGAAP - All amounts in NOK thousand | Unaudited | Unaudited | Unaudited | Unaudited |
| Acquisition cost 31.12.2020 | 176,880 | 0 | 76,501 | 253,381 |
| Reclassification preliminary PPA | -44,985 | 72,921 | -21,790 | 6,146 |
| Additions through acquisition | 5,000 | 42,560 | 11,158 | 58,718 |
| Additions | 6,820 | 0 | 0 | 6,280 |
| Acquisition cost 31.03.2021 | 143,715 | 115,481 | 65,869 | 325,065 |
| Accumulated depreciation 31.12.2020 | 63,427 | 0 | 10,451 | 73,879 |
| Depreciation from acquisitions | 0 | 300 | 0 | 300 |
| Translation differences | -26 | 0 | 0 | -26 |
| Period's depreciation | 5,916 | 1,519 | 1,409 | 8,844 |
| Accumulated depreciation 31.03.2021 | 69,317 | 1,819 | 11,860 | 82,997 |
| Book value 31.03.2021 | 74,398 | 113,662 | 54,009 | 242,068 |
At the end of December 2020 the Company acquired Örn Software Ehf group (earlier MainManager Ehf group) and Entro IT AS, a preliminary purchase allocation ("PPA") was made, however due to acquisition at the end of the reporting period no amortization of intangible assets of the newly acquired entities were performed. During the quarter, the company updated the PPA, no changes to the total figures (except technical deferred tax), however a reclassification were made between R&D, Goodwill and customer relationship.
| Purchase Price Allocation (PPA) | Facility |
|---|---|
| Management | |
| 31.03.2020 | |
| NGAAP - All amounts in NOK thousand | Unaudited |
| R&D | 5,000 |
| Customer relationship | 42,260 |
| Property, plant and equipment | 325 |
| Deferred tax | 0 |
| Other long term receivables | |
| Total non-current assets | 47,585 |
| Current assets | |
| Trade and other receivables | 346 |
| Cash and cash equivalents | 8,712 |
| Total current assets | 9,058 |
| Total assets | 56,643 |
| Non-current liabilities | |
| Deferred tax arising from business combination | -9,835 |
| Non-current provisions and other liabilities | -285 |
| Total non-current liabilities | -10,120 |
| Current liabilities | |
| Trade and other payables | -558 |
| Current provisions and other liabilities | -8,694 |
| Total current liabilities | -9,252 |
| Total liabilities | -19,372 |
| Total identifiable net assets at fair value | 37,270 |
| Settled in cash | 48,429 |
| Seller's credit | |
| Goodwill arising on acquisition | 11,158 |
| R&D allocation | 3,818 |
| Deferred tax on R&D | -840 |
| Customer relationship allocation | 40,886 |
| Deferred tax on customer relationship | -8,995 |
| Total allocation | 46,027 |
The depreciation on R&D from the acquisition of Facilit is depreciated over 5 years. Customer contracts are depreciated over 12 years. Goodwill is amortized over 8 years.
Note 7 – Funding – Cash and Interest-bearing debt Alternative performance measures
Note 8 – Subsequent events
The group has a solid cash position at the end of March which amounts to NOK 318 million. The acquisition of Facilit was financed with a new tap issue from Ture Invest AB of NOK 48.4 million. The group has a total debt of SEK 163.7 million at the end of March. The book value of the interest-bearing debt is NOK 153.6 million after currency conversions.
The Group is funded through a SEK 500 million nominated facility loan agreement with Ture Invest AB. As of 31 March 2021, SEK 163.7 million is drawn on the facility loan. The Group complies with all financial covenants (see note 5 in the annual accounts of 2020). The notes shall be repaid in bullet repayment on the maturity date, 19 November 2024. Based on undrawn facilities and the cash position, the Group is funded for further growth.
On the 14th of May, there was held an extraordinary general meeting of the shareholders to increase the company's share capital by up to NOK 1,718,859.40, corresponding to approximately 20% of the Company's current share capital. Such authorization will provide the Board of Directors flexibility to finance further growth. The board's current board authorization is withdrawn from the time of registration of the board authorization proposed herein with the Norwegian Register of Business Enterprises.
May 21 2021 - Ørn Software has signed an agreement to acquire the Norwegian Quality Management Softwareas-a-Service (SaaS) company Landax, thus gaining a strong portfolio of new customers in new and existing sectors. The acquisition adds 540 new customers to Ørn Software's portfolio, including a range of large companies within Norwegian retail, logistics and industry. The acquisition also provides Ørn with 11 highly skilled employees in Norway, and a development team in Poland. At the end of 2020, Landax had an annual recurring revenue (ARR) of NOK 18.9 million. 2020 revenue was NOK 30.8 million. This represented an organic growth in ARR of 29% compared to 2019. During the first four months of 2021, Landax has increased its ARR with 14% to NOK 21.2 million. The 2020 EBITDA was NOK 10.1 million (NOK 6.0 million in 2019). The acquisition increases Ørn Software's ARR with 18%. Ørn's proforma ARR at the end of 2020 was NOK 107 million, after having grown 73% annually in the period 2017-2020.
The transaction is based on an enterprise value of NOK 95 million and implies a multiple of 4.5x on ARR. The transaction will be settled with 80% cash at closing and 20% in Ørn Software shares, issued in line with board authorization. The transaction is expected to close in June 2021.
Alternative performance measures ("APM") are used by the Group to provide a better understanding of the Group's underlying financial performance for the period. Annual recurring revenue (ARR) and adjusted EBITDA is also used by Management to drive performance in terms of target setting.
Each of the following APMs have been defined by the Group as follows:
- Adjusted EBITDA is defined as EBITDA adjusted for material items which are not regarded as part of underlying business performance for the period, such as costs related to acquisitions and divestments, restructuring costs and rebranding, as well as other material effects of a special nature.
- Annual recurring revenue is defined as at each point in time the annual value of contracted license revenue, that are considered recurring by nature, although the contract includes termination clauses that enable the customers, with a certain notification period, to terminate the customer agreement.
- Net Retention is the overall impact on the revenue generation from your existing customers.
- Churn rate is the rate at which your existing customers quit using your product in a given time period.
Adjusted EBITDA – Special Items
The company has defined certain operating cost items as special items, which combined had a negative effect of NOK 15.7 million in the first quarter 2021. NOK 6.9 million regarding salaries and mainly reflect change in employer's contribution to the option scheme bonuses and bonuses related to acquisition. NOK 8.8 million regarding other operating cost, and are related to IPO fees for commercial, financial and legal support. Similar items affected salaries and operating costs negatively by NOK 3.6 million in the last quarter of 2020. There were no similar items affected first quarter 2020.
Ørn Software Holding AS www.ornsoftware.com